AXIS Capital (AXS) Q4 Earnings and Revenues Top Estimates
AXIS Capital Holdings Limited AXS posted fourth-quarter 2023 operating income of $2.94 per share, in contrast to the Zacks Consensus Estimate of a loss of $1.25. The bottom line increased 50.8% year over year.
The insurer’s results reflected higher premiums written, net investment income and increased underwriting income.
Quarterly Operational Update
Total operating revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.7%. The top line however declined 2.1% year over year on lower premiums earned.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited Quote
Net premiums written decreased 2% to $1.1 billion, attributable to a 51% decline in the Reinsurance segment, partially offset by a 9% increase in the Insurance segment. Our estimate was $1 billion.
Net investment income increased 27.2% year over year to $187 million, primarily driven by an increase in income from the fixed maturities portfolio due to increased yields. Our estimate was $185.2 million.
Total expenses in the quarter under review increased 21.8% year over year to $1.7 billion due to higher net losses and loss expenses. Our estimate for the same was also $1.7 billion.
Catastrophe and weather-related losses and net of reinsurance were $25.9 million, narrower than the year-ago loss of $63.6 million.
AXIS Capital incurred an underwriting loss of $274.1 million against the year-ago income of $132 million.
The combined ratio deteriorated 3050 basis points (bps) to 124.6. The Zacks Consensus Estimate was pegged at 115, while our estimate was 131.
Segment Results
Insurance: Gross premiums written improved 7.7% year over year to $1.6 billion, driven by increases in all lines of business, with the exception of professional lines, which decreased in the quarter, principally due to the unattractive pricing environment for U.S. public D&O business.
Our estimate for gross premiums was $1.5. billion. Net premiums earned increased 9.4% year over year to $969.9 million. Our estimate was $885.6 million.
Underwriting loss was $61.7 million versus year-ago income of $123.7 million. The combined ratio deteriorated 2150 bps to 106.7. The Zacks Consensus Estimate for combined ratio was pegged at 81.
Reinsurance: Gross premiums written decreased 30.2% year over year to $200.9 million, attributable to a lower level of positive premium adjustments in the quarter compared with the prior year and the timing of renewals of significant contracts. Our estimate was $315.3 million.
Net premiums earned decreased 51.2% year over year to $102.4 million. Our estimate was $119.5 million.
Underwriting loss was $212.4 million versus the year-ago income of $8.9 million. The combined ratio deteriorated 6400 bps year over year to 162.8. The Zacks Consensus Estimate for combined ratio was pegged at 135.
Full-Year Highlights
Operating income of $9.85 per share increased 69.5% from 2022. Revenues of $5.7 billion increased 2.2%.
Net premiums written decreased 2% to $5.1 billion.
Underwriting income of $ 160.8 million plunged 55.2% year over year. Combined ratio deteriorated 410 basis points.
Financial Update
AXIS Capital exited 2023 with cash and cash equivalents of $1.4 billion, up 1.4% from the 2022 end level.
Debt was $1.3 billion at quarter-end, up 0.1% from the 2022-end level.
Book value per share increased 15.1% from 2022 end to $54.06 as of Dec 31, 2023, driven by net unrealized investment gains reported in accumulated other comprehensive income (loss), partially offset by net loss for the period, and common share dividends declared.
Annualized operating return on average common equity was 11%, which contracted 10 bps year over year.
Capital Deployment
AXIS Capital is authorized to buy back $100 million shares through Dec 31, 2024.
Zacks Rank
AXIS Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies TRV reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. TRV witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
The Progressive Corporation’s PGR fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. PGR’s premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Progressive’s combined ratio improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s WRB fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
