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Axis beats estimates to post $131m profit

Albert Benchimol, CEO of Axis Capital

Axis Capital Holdings Ltd shook off the impact of US weather-related catastrophes to post net income of $131 million in the fourth quarter.

Operating income totalled $101 million, or $1.14 per share, comfortably beating the 87 cents per share consensus forecast of analysts tracked by Yahoo Finance.

Full-year net income for the Bermudian insurer and reinsurer was $465 million for 2016, compared to $602 million the year before.

Pre-tax losses attributed to catastrophes including Hurricane Matthew totalled $59 million during the last three months of the year.

Albert Benchimol, the chief executive officer of Axis, said the company was working hard towards a more stable earnings profile — a move that had borne fruit in a catastrophe-hit fourth quarter.

“The strength of our operating results in the fourth quarter — which included Hurricane Matthew and other US weather-related events, and 11 per cent growth in our full-year operating earnings per share despite continued market pressure and elevated global cat losses — demonstrates the progression of our initiatives to deliver a more stable and growing earnings profile,” Mr Benchimol said.

“Our growth in diluted book value per share adjusted for dividends was 10 per cent over the year, a strong result in light of the higher interest rates in the quarter.

“Our core operating performance strengthened in both the quarter and full year, as the improvements we have put in place allowed us to absorb higher industry cat losses and to navigate negative market conditions while still delivering for our customers, our partners in distribution, and our shareholders.”

Mr Benchimol highlighted Axis’s efforts to diversify by expanding its reach into Dubai, continental Europe and Latin America, by recruiting new teams and offering new products, and by growing strategic capital partnerships highlighted by the launch of Harrington Re.

In 2016, Axis wrote gross premiums of $5 billion, up $366 million or 8 per cent on 2015.

The company achieved a combined ratio of 95.9 per cent for the full year and 96.7 per cent for the quarter.

Axis said it returned $644 million to shareholders in dividends and share repurchases that reduced the company’s share count by 11 per cent.

The company has also announced a $1 billion share repurchase authorisation programme for 2017.