AXIS Capital Holdings Limited Q4 FY2025 earnings call

Management Statements

• Vince Tizzio highlighted 2025 as an excellent year with 18% increase in diluted book value per common share to $77.20, 18% operating return on equity, record gross written premiums of $9.6 billion (+7% yoy), and combined ratio of 89.8% (lowest full year since 2010). Key messages included being built for all seasons, poised for profitable growth via new/expanded business classes, disciplined cycle management, strong global distribution model, and performance culture.
• Pete Vogt discussed financials: net income available to common shareholders for 2025 was $978 million ($12.35 per diluted common share), operating income $1 billion, G&A ratio 12.4% for 2025, investment income $767 million. The company had a strong capital position, returning $139 million in dividends and $888 million in share repurchases in 2025.

Operational Highlights

• Continued investment in How We Work transformation program, leveraging technology and AI.
• AXIS Capacity Solutions (ACS) showed early progress, tapping into third-party capital and generating new business/underwriting fee income.
• Favorable reserve development in 2025, with $23 million in insurance and $7 million in reinsurance released.

Insurance

• 2025: Record gross written premiums of $7.2 billion (9% increase yoy), record new premiums written of $2.4 billion, record underwriting income of $597 million (40% increase yoy), combined ratio of 86% (3 percentage point improvement yoy). North America saw gross written premiums up 10% due to strategic investments, while Global Markets had a 6% increase in gross written premiums with key drivers in marine, energy, and construction.
• Reinsurance: 2025 gross written premiums of $2.5 billion (low single-digit increase yoy), combined ratio of 92.6%, underwriting income of $128 million. The reinsurance segment had a cautious stance in liability and professional lines, with potential for double-digit volume decrease in 2026 but confidence in portfolio profitability.

Guidance

• Insurance: Confidence in mid- to high single-digit growth in gross written premiums while maintaining premium adequacy.
• Reinsurance: Potential for double-digit volume decrease in 2026 but confidence in portfolio profitability.
• Expense ratio: Aiming for 11% G&A ratio by leveraging investments in efficiency from How We Work program.

Risks

• Market dynamics: Geopolitical tension, economic uncertainty, war, climate volatility, energy transition, and technological disruption impacting the risk landscape.
• Cyber: Escalating risk landscape with increasing ransomware attacks and AI-enabled threats, putting downward pressure on price adequacy.
• Reinsurance market: Challenging conditions with cautious stance in liability and professional lines, leading to potential volume decrease and need for bottom line focus.

Q: Andrew Kligerman on expense ratio and margin sustainability A: Pete Vogt discussed G&A ratio glide path, aiming for 11% G&A ratio by normalizing for variable compensation, and Vince Tizzio highlighted leverage from investments in operating model.

Q: Yaron Kinar on expense ratio and talent movement A: Pete Vogt and Vince Tizzio discussed variable comp as a headwind but willingness to invest in growth if opportunity arises, with focus on 11% G&A ratio target.

Q: Christian Trost on paid and incurred trends A: Vincent Tizzio discussed mix shift, investment in claims organization, and placing trends in broader context with confidence in reserve position.

Q: Jing Li on low middle market growth and competitive landscape A: Vincent Tizzio discussed sustained momentum in lower middle market due to customized solutions, partnerships, and technology investments, with ongoing competition but positive outlook.

Q: Joshua Shanker on third-party underwriting A: Vincent Tizzio discussed delegated business representing ~32% of volume, structural changes in delegated space, and confidence in staying power of wholesale dedicated MGUs.

Q: Andrew Andersen on RAC Re growth expectation A: Peter Vogt and Vincent Tizzio discussed mid- to high single-digit growth for insurance excluding RAC Re, with RAC Re impact seen in 2026-2028.

Q: Charles Lederer on attritional loss ratio and capital return A: Vincent Tizzio and Peter Vogt discussed mix shift impact on attritional loss ratio, with expectation of ~1 point change, and prioritization of organic growth over buybacks with opportunistic share repurchases.