AXIS Capital Holdings Ltd. Q1 FY2025 earnings call

• 2025 started strong with AXIS building on positive momentum. Annualized operating return on equity was 19.2%, record diluted book value per common share $66.48, operating earnings per share $3.17 (23% increase y-o-y).
• Record premiums of $2.8 billion, 5% growth, including $738 million in new premiums. All-in combined ratio 90.2% despite over $55 billion in natural catastrophe losses, AXIS' share of cat losses less than 10 basis points.
• Portfolio designed to perform even against outsized catastrophe events. Serves customers with customized and innovative specialty solutions.
• Through the How We Work program, G&A ratio improved by over 1%, with investments in technology, operating platforms, underwriting, and claims capabilities.

Insurance Segment

• Produced an overall combined ratio of 86.7%, current accident year ex-CAT combined ratio of 83.4%.
• Gross premiums written $1.7 billion, up 5% over prior year quarter, including $547 million in new premiums. North America saw 9% growth with 21% higher submission flow, especially in E&S lines. Recently launched business units like commercial surety, environmental, and ocean marine contributed, with the dedicated wholesale lower middle market unit growing 41% in the quarter.
• Revenue contribution: Insurance premiums grew 8% ex-primary casualty and cyber lines.

Reinsurance Segment

• Delivered a 92.3% combined ratio. Gross premiums written $1.1 billion, up about 5%.
• Growth in targeted classes such as A&H, renewable energy, and marine species. Specialty food classes saw $191 million in new business, 48% from short tail specialty lines.
• Revenue contribution: Reinsurance premiums up 5% in the quarter.

• Expect mid- to high single-digit net written premium growth for the balance of 2025.
• On track to achieve G8 ratio target of 11% by 2026.
• Cyber remediation work expected to be completed by end of third quarter, reshaping approximately $60 million of delegated cyber business.

• Uncertainty from trade disruption, geopolitical tensions, and market volatility.
• Potential impact on loss costs, particularly in first party lines (property and cargo) due to tariffs.
• Possible impact on growth in certain lines of business if tariff uncertainty persists.
• Volatility in financial markets.

Q: Andrew Kligerman asked about property pricing, where Vince Tizzio responded that rate change in property was due to geographic performance and portfolio construct, with continued cycle management to meet risk-adjusted returns.

A: Vince Tizzio stated that in the quarter, property rate was off negative 7.1%, with more competitive London market vs US, and continued cycle management to ensure risk-adjusted returns.

Q: Andrew Kligerman inquired about net written premium growth, with Vince Tizzio and Pete Vogt responding that excluding unusual items, mid- to high single-digit growth is viable, with strong submission growth in North America.

A: Vince Tizzio mentioned mid- to high single-digit net written premium growth is reasonable, and Pete Vogt noted net earned premium growth of 10% in insurance, with focus on retaining premium adequate business.

Q: Christian Getzoff asked about expense ratio and reinsurance underlying loss ratio, with Pete Vogt responding that Q1 expense ratio was normalized, and reinsurance underlying loss ratio of 68.4% was a good run rate with no significant aviation losses impacting it.

A: Pete Vogt said Q1 expense ratio was almost normalized with expense leverage from How We Work, and reinsurance underlying loss ratio was a good run rate with no significant aviation losses in the quarter.