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AXIS Capital's (AXS) Q1 Earnings Beat, Revenues Rise Y/Y

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AXIS Capital Holdings Limited AXS posted first-quarter 2021 operating income of 97 cents per share, beating the Zacks Consensus Estimate by 49.2%. The bottom line rebounded from the year-ago loss of $1.94 per share.

The company’s results reflect higher gross premiums written as well as increase in net investment income and lower expenses.

Axis Capital Holdings Limited Price, Consensus and EPS Surprise

Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Axis Capital Holdings Limited Price, Consensus and EPS Surprise

Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited Quote

Quarterly Operational Update

Operating revenues of about $1.2 billion increased 4.1% year over year. Gross premiums written improved 4% year over year to about $1.3 billion, largely driven by a 17% increase in the Insurance segment, which was partially offset by 4% decrease in the Reinsurance segment.

Net investment income increased 22.6% year over year to $114 million, primarily driven by higher returns from other investments.

Total expenses in the quarter under review decreased 12.1% year over year to $1.1 billion, attributable to lower net losses and loss expenses, acquisition costs, interest expense and financing costs plus amortization of intangible assets, reorganization expenses and amortization of value of business acquired.

Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, were $110 million primarily attributable to Winter Storms Uri and Viola, principally related to the state of Texas, and other weather-related events. This compares favorably with the year-ago loss of $300 million.

AXIS Capital’s underwriting income of $40.2 million rebounded from prior-year quarter’s loss of $196.8 million. Combined ratio improved 2090 basis points (bps) to 98.9

Segment Results

Insurance: Gross premiums written improved 17.3% year over year to $1.1 billion primarily attributable to increases in professional lines, property, marine and liability lines driven by new business and favorable rate changes.

Net premiums earned increased 9.6% year over year to $616.3 million.

Underwriting income of $38.8 million rebounded from the year-ago loss of $122.6 million. Combined ratio improved 2810 bps to 93.8.

Reinsurance: Gross premiums written decreased 3.9% year over year to $1.4 billion, primarily attributable to decreases in motor, engineering and catastrophe lines due to non-renewals and decreased line sizes associated with repositioning of the portfolio, partially offset by selective increases in liability lines driven by favorable market conditions.

Net premiums earned declined 7.4% year over year to $487.4 million.

Underwriting income of $1.4 million rebounded from year-ago quarter’s loss of $74.1 million. Combined ratio improved 1210 bps year over year to 100.2

Financial Update

AXIS Capital exited the first quarter with cash and cash equivalents of $1.7 billion, up 3.8% over the level at 2020 end.

Debts were $1.3 billion at quarter end, up 0.02% from 2020-end level.

Book value per share increased 7% year over year to $53.03 as of Mar 31, 2021.

Operating return on equity was 9.9% in the first quarter.

Dividend Update

The company announced a dividend of 42 cents per share in the reported quarter.

Zacks Rank

AXIS Capital currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies TRV, W.R. Berkley Corporation WRB and RLI Corporation’s RLI earnings beat the Zacks Consensus Estimate.

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