Catastrophes and weather events were a drag on AXIS Capital profits for both the full year 2019 and Q4, but the re/insurer nevertheless achieved significant improvements in its profitability for the year. It delivered a loss in the final quarter of the year, but kept them much lower than it had in Q4 2018.
AXIS reported net profit of $282 million for the year ended 2019, which included an estimated pre-tax loss of $336 million related to its catastrophe and weather-related business, net of reinsurance and reinstatement premiums.
In Q4 alone, the re/insurer reported a net loss of $10 million, again owing much to an estimated pre-tax loss of $140 million, net of reinsurance and reinstatement premiums, related to its catastrophe and weather-related business.
In 2018 it reported a profit of only $0.4 million for the full year, and a loss of $198 million for Q4 2018.
Meanwhile AXIS’ combined ratio crept up to 102.6 percent for 2019, compared to 99.9 percent for 2018. But the ratio fell to 107.3 percent for Q4 2019, from 117.3 percent in the same period of 2018.
Its gross written premiums were just under $3.68 billion for 2019, compared to nearly $3.8 billion the previous year. For Q4 alone it reported gross written premiums of $961.6 million, compared with $920.7 million in the same period the previous year.
Albert Benchimol, president and CEO of AXIS Capital, admitted the results had fallen short of expectations. "We did not deliver the financial results we expected in 2019, as our performance suffered from a record typhoon season in Japan, poor crop conditions in the US, as well as high loss activity in property and aviation lines,” he said.
“Notwithstanding these headwinds, our actions still enabled us to reduce our current year ex-cat loss ratio by over a point this year, bringing the reduction in our ex-cat loss ratio to more than three points over two years, with progress in both our insurance and reinsurance businesses,” he added.
Benchimol predicted favourable market conditions will prevail in 2020. "With the additional portfolio remediation that we executed in 2019, we entered the new year with a stronger book that has less inherent volatility,” he noted. “We have brought down PMLs, decreased limits, and exited or reduced our participation in underperforming businesses while pushing for more rate across the board.”
AXIS Capital, Albert Benchimol, Catastrophe