AXIS reports solid underwriting result across insurance and reinsurance as premiums swell

Bermudian re/insurer AXIS Capital has reported net income of $286 million and $1.1 billion for the fourth quarter and full year 2024, respectively, as the company’s insurance and reinsurance segments produced an underwriting profit for both periods, despite elevated catastrophe activity.

AXIS Capital’s President and CEO, Vince Tizzio, has described 2024 as an “excellent year” for the carrier, as the firm grew both its insurance and reinsurance operations and generated a strong underwriting result across the business.

Starting with the fourth quarter 2024 performance, and AXIS has announced that gross premiums written (GPW) increased 11% to $2 billion, with growth of 7% in insurance to $1.7 billion and growth of 37% to $275 million in reinsurance.

AXIS attributes the growth in reinsurance to accident and health lines driven by new business, and motor, accident and health, and professional lines largely due to premium adjustments. The growth in the insurance segment came from increases in property, accident and health, and credit and political risk lines driven by new business.

Group-wide, net premiums written (NPW) rose 14% to $1.2 billion with an increase of 9% in insurance to $1.1 billion and growth of 64% in reinsurance to $167 million.

For the quarter, pre-tax catastrophe and weather-related losses, net of reinsurance, totalled $81 million, of which $80 million relates to insurance and just $1 million to reinsurance. $59 million of the total is attributable to Hurricane Milton.

Also in the quarter, AXIS benefited from net favourable prior year reserve development of $16 million, split $12 million insurance and $4 million reinsurance. This is a reverse from Q4 2023 when the re/insurer booked $425 million of net unfavourable prior year reserve development.

The firm’s Q4 combined ratio strengthened considerably from 124.6% in 2023 to 94.2% in 2024, as the net loss and loss expense ratio fell 30.7 percentage points to 60.4%, offsetting a higher impact from catastrophe and weather-related losses.

By segment, AXIS’ reinsurance operation performed well in the fourth quarter of 2024, generating underwriting income of $39.1 million compared with a loss of more than $212 million in the prior year. The reinsurance combined ratio strengthened by 71.9 percentage points to 90.9%.

The firm’s insurance segment also produced an underwriting profit in the quarter of $90.5 million, which is an improvement on the loss of $61.7 million seen in Q4 2023. The segment’s combined ratio moved from 106.7% in Q4’23 to 91.2% in Q4’24.

While the quarterly underwriting result improved, the investment result dipped year-on-year, with a rise in net investment income offset by net realized losses on the sale of fixed maturities and net unrealized losses on bond mutual funds included in equity securities, as well as a decrease in the market value of the firm’s fixed maturities portfolio attributable to increased yields. This all led to a total negative investment result of $133.7 million.

Turning to the full year 2024 performance, and net income spiked to $1.1 billion from $346 million in 2023, as operating income increased to $952 million from $486 million.

Group-wide, GPW increased 8% to $9 billion, with 8% growth to $6.6 billion in insurance and 8% growth to $2.4 billion in reinsurance. AXIS attributes the growth in reinsurance premiums to all lines of business, with the exception of liability lines and run-off lines largely associated with new business and increased line sizes. For insurance, AXIS says that the growth is also attributable to all business lines, with the exception of cyber lines and liability lines.

NPW across the group increased 13% to $5.8 billion with growth of 13% to $4.3 billion in insurance, and growth of 12% to $1.5 billion in reinsurance.

The full year 2024 combined ratio strengthened by 7.6 percentage points to 92.3%, despite a higher catastrophe and weather-related losses ratio of 4.3%.

Pre-tax catastrophe and weather-related losses, net of reinsurance, hit $226 million for AXIS in 2024, of which $216 million hit its insurance segment and just $10 million the reinsurance business. Of the total, $111 million relates to Hurricanes Milton, Helene, and Beryl, with $13 million attributable to the Red Sea Conflict.

As in the quarter, AXIS also booked net favourable prior year reserve development of $24 million for 2024, split $16 million insurance and $8 million reinsurance, compared with net unfavourable prior year reserve development of $412 million in 2023.

Within the reinsurance segment, AXIS has reported full year 2024 underwriting income of $143.6 million compared with a loss of $100.2 million in 2023, as the combined ratio moved down from 107.6% to 91.8%.

In the insurance segment, the underwriting result improved by 64% to $427.9 million for 2024 compared with $260.9 million for 2023, as the combined ratio strengthened by 3.4 percentage points to 89.1%.

In terms of investments, AXIS’ full year 2024 net investment income increased year-on-year and despite a slight increase in investment losses when compared with 2023, the total investment result was solid at $764.4 million.

“2024 was an excellent year for AXIS. We delivered on the financial and operational guideposts that we shared at our Investor Day this past May, highlighted by an operating return-on-equity of 18.6% and 20.7% growth in diluted book value per share,” said CEO Tizzio.

“2024 was an excellent year for AXIS. We delivered on the financial and operational guideposts that we shared at our Investor Day this past May, highlighted by an operating return-on-equity of 18.6% and 20.7% growth in diluted book value per share.

“As a global leader in specialty underwriting, we continued to find attractive opportunities for growth. In our Insurance business, profitability was highlighted by an 89.1% combined ratio for the full year and we grew 7.7%, to reach $6.6 billion in premiums. Our Reinsurance business is producing strong, consistent profits with a 91.8% combined ratio for the full year while growing 7.9% to $2.4 billion in premiums.

“In 2024, we made significant strides in enhancing our operating model through our ‘How We Work program’. This included building new capabilities, investing in technology and data, and adding strong talent to complement our existing team. As we progress into 2025, we believe AXIS is poised to build on its positive momentum, while leveraging our specialty expertise to help our customers navigate an increasingly dynamic risk landscape,” he added.

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