Axis CEO sees ‘price momentum accelerating’
Axis Capital Holdings booked full-year net income of $282 million in 2019, having ended the year with a fourth-quarter loss of $10 million.
The Bermudian-based insurer and reinsurer was hit with estimated pretax catastrophe losses of $140 million in the October through December period.
Axis reported that “pricing momentum continues to build across substantially all lines of business”.
The fourth-quarter loss of $10 million narrowed from $198 million in the corresponding period of 2018. Operating income for the quarter, which strips out one-off items, was $4 million, or five cents per diluted common share, in line with estimates of analysts tracked by Yahoo Finance.
Albert Benchimol, chief executive officer of Axis Capital, has an upbeat outlook.
“With pricing momentum accelerating, we believe that favourable market conditions will sustain through 2020, driving more lines of business to pricing adequacy and providing us with more opportunities to leverage our market position to generate profitable growth,” Mr Benchimol said.
Looking back on the previous year, he said: “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.
“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.
“With the additional portfolio remediation that we executed in 2019, we entered the new year with a stronger book that has less inherent volatility. We have brought down PMLs (probable maximum losses), decreased limits, and exited or reduced our participation in underperforming businesses while pushing for more rate across the board.
“At the same time, we're focused on driving growth in our most attractive lines. We're also working with our partners in distribution to use our expanding digital capabilities to create new business growth in desirable smaller accounts.”
Adjusted for dividends, book value per diluted common share increased by $7.47, or 15 per cent, over the past 12 months.
Investors welcomed the earnings report today: Axis's shares gained more than 4.5 per cent by 1.37pm Bermuda time on New York's Nasdaq Stock Exchange.