AXIS sees profit drop for Q2 but says efforts to improve efficiency are paying off

AXIS Capital reported a net loss for the first half of 2020 but a net profit for Q2, emphasising the broader health of the business and the opportunities to capitalise on firming market conditions going forward.

AXIS reported net profit of $112 million for Q2, down from $166 million in Q2 2019. For the first half of the year the re/insurer reported a net loss of $73 million. In the same period of 2019 it generated a profit of $265 million.

Gross written premiums for the quarter were $1.7 billion, an increase of $68 million versus the corresponding period for 2019. For the first six months of the year AXIS reported gross written premiums of $4.1 billion, down $84 million from the previous year.

AXIS’ combined ratio for Q2 was 94.7 percent, down from 96.1 percent in Q2 2019. For the first six months of 2020 the combined ratio shot up to 107.1 percent, having been 96.5 percent in the same period of 2019.

Albert Benchimol, president and chief executive of AXIS Capital, described it as a “solid quarter,” highlighting an approximately 3 point reduction in its expense ratio. “The sustained improvements that we’ve seen in recent quarters is further evidence that the actions that we’ve taken over the past three years to strengthen our portfolio and operating efficiency, and reduce volatility, are increasingly showing through in our results,” he said.

Benchimol added: "The investments that we’ve made to strengthen AXIS’ market position are also enabling us to capitalise on firming conditions, particularly in markets that are seeing the most impactful changes. Moreover, we’re seeing improved pricing across nearly every line of business that we write, highlighted by average rate increases of 15 percent in the quarter throughout our Insurance segment.”