Axis quarterly profit booms despite catastrophe lossesPosted On: Jul. 27, 2016 12:00 AM CST
Axis Capital Holdings Ltd.'s second-quarter net income increased 76.4% from the second quarter of last year to $129.5 million, even though the Pembroke, Bermuda-based underwriters reported losses from natural disasters totaling an estimated $109 million.
“During the quarter, we were tested by 20 catastrophe and weather events globally generating estimated insured losses in excess of $19 billion — amongst the highest industry loss quarters in the last decade,” Albert Benchimol, president and CEO of Axis Capital, said in the earnings statement released Tuesday.
Net written premiums for the second quarter were up 6.4 % from the same period of 2015 to $1.00 billion, according to the Axis statement. The combined ratio deteriorated to 102.2% from 96.9% from the second quarter of the previous year.
Investment income for the second quarter was up 3.6% at $91.7 million, but down 22% for the first six months at $140.9 million from the year-ago period.
Mr. Benchimol acknowledged during a conference call with analysts Wednesday that Axis is “not happy” with its investment portfolio performance or overall profitability, but intended to continue to work on the portfolio to improve profitability in the future.
“You saw us get out of Australia, you have seen us get out of global excess casualty … a good chunk of this disappointment came from investment volatility, and we have gone to less volatile investments, moving away from hedge funds and into lines such as private equity and real estate debt,” he said.
Net income for the first six months of 2016 was $177.8 million, dropping 25.7% from the same time period in 2015, due to the catastrophe and weather losses that included the Fort McMurray, Alberta, wildfires, U.S. weather-related events, Japanese and Ecuadorian earthquakes and European floods, the statement said.
Net written premiums for the first half of 2016 increased 12.1% over the prior-year period to $2.69 billion, and the combined ratio deteriorated to 97.2% from 95.3%.