Axis CEO: previous actions tempered losses
Axis Capital Holdings made a loss of $38 million, or 46 cents per share, in the fourth quarter, down from a profit of $131 million, or $1.48 per share, a year ago.
The combined ratio for the quarter rose to 100.7 per cent, compared to 96.7 per cent, for the same period in 2016.
Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, were $133 million.
Albert Benchimol, president and CEO of Axis Capital, said the fourth quarter brought “significant catastrophe activity, higher attritional property losses, the ongoing effects of the Ogden rate change in the UK, and the cumulative impact of several years of intense competition”.
For the full year, Axis made a loss of $416 million, or $4.94 per share, compared to a profit of $465 million in 2016.
Mr Benchimol said: “Although our loss for the year is clearly disappointing, we operate in an industry that experiences occasional high-severity events.
“To balance against this, we manage our risks to ensure we remain strong and able to provide the seamless, high-quality protection our clients and partners in distribution have come to expect of us.
“The actions we have taken over recent quarters to reduce earnings volatility have helped to temper the impact to our financial results in a period where industry catastrophe losses were in excess of $100 billion.”
Noting the 7.5 per cent decrease in diluted book value per share of $53.88 at the end of the year, he said that was not unreasonable when compared to the scale of market losses observed during the period.
“Notwithstanding the industry backdrop, it was a very successful quarter and year from an organisational development perspective, as we closed on the acquisition of Novae and made further progress on strategic initiatives, all of which have contributed to the delivery of a much stronger platform with differentiated positioning and leadership positions in key markets.
“This was the first quarter in which we included Novae in our financial reporting and, as such, there are a number of moving parts in our results.
“We remain pleased with the progress we have made thus far in integrating this business into Axis and laying the groundwork to realise significant value from the transaction.
“Our experience to date indicates the strategic and financial benefits from the acquisition of Novae will exceed our initial expectations.”
Mr Benchimol added: “As we look ahead, our stronger industry positioning and increased relevance in our core markets have allowed us to take advantage of improving market conditions at recent renewals, and establish positive momentum as we move past the 1/1 renewals and deeper into 2018, to deliver enhanced profitability.”
During the fourth quarter, Axis's net premiums written increased to $729 million, up 57 per cent, while for the full year net premiums were $4 billion, a rise of 7 per cent.
For the year, the company's combined ratio rose from 95.9 per cent to 113.1 per cent.