AXIS Capital Reports Fourth Quarter 2021 Results
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(212) 940-3339; |
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(212) 715-3574; |
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AXIS CAPITAL REPORTS FOURTH QUARTER NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS OF
For the fourth quarter of 2021, the Company reports:
- Improvement of 2.3 points in current accident year combined ratio, excluding catastrophe and weather-related losses, compared to the prior year, to 89.5%
- Annualized retuon average common equity of 16.4%, and annualized operating retuon average common equity of 15.1%
- Book value per diluted common share of
$55.78
For the year ended 2021, the Company reports:
- Net income available to common shareholders of
$588 million , or$6.90 per diluted common share, and operating income of$436 million , or$5.12 per diluted common share - Improvement of 3.5 points in current accident year combined ratio, excluding catastrophe and weather-related losses, compared to the prior year, to 88.7%
- Retuon average common equity of 12.2%, and operating retuon average common equity of 9.1%
Pembroke,
Commenting on the fourth quarter 2021 financial results,
"This was a strong fourth quarter highlighted by an annualized operating ROE of 15%, a good finish to a year of meaningful progress. Our results provide further evidence that our work in recent years to reposition our portfolio is delivering its intended outcome, and we're committed to sustaining this momentum and producing consistent profitable growth.
In addition to driving significant improvement to our combined ratio, we continued to optimize balance and volatility in our portfolio as we drive PMLs lower across the entire curve. Further, we continued to capitalize on favorable market conditions to build upon our well-established positions in some of the best performing specialty insurance markets.
Within our Insurance segment, we delivered both record new business growth and total premium, as we produced the largest and most diversified insurance portfolio in the Company's history. Our insurance business produced a combined ratio of 91.6% for the full year, and we're focused on delivering performance in-line with the top ranks of the specialty insurance sector. Within our Reinsurance segment, which reported a full year combined ratio of 99%, we took substantial portfolio actions during the year and into the 1/1 renewals to improve the quality and reduce the volatility of the book, and we will continue to do so in 2022.
I'm proud of the commitment and agility demonstrated by our team, as we continued to navigate through a dynamic environment while producing the high level of service that our customers have come to expect from AXIS. We're excited for the future and focused on building on our progress and further increasing the value that we deliver to all of our stakeholders."
Tel. 441.496.2600 Fax 441.405.2600
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Consolidated Results*
- Net income available to common shareholders for the fourth quarter of 2021 was
$197 million , or$2.31 per diluted common share, compared to a net loss attributable to common shareholders of$(5) million , or$(0.06) per diluted common share, for the fourth quarter of 2020. - Net income available to common shareholders for the year ended
December 31, 2021 was$588 million , or$6.90 per diluted common share, compared to net loss attributable to common shareholders of$(151) million , or$(1.79) , for the same period in 2020. - Operating income1 for the fourth quarter of 2021 was
$182 million , or$2.13 per diluted common share1, compared to operating loss of$(16) million , or$(0.20) per diluted common share, for the fourth quarter of 2020. - Operating income1 for the year ended
December 31, 2021 was$436 million , or$5.12 per diluted common share1, compared to operating loss of$(174) million , or$(2.08) per diluted common share, for the same period in 2020. - Adjusted for dividends declared, book value per diluted common share increased by
$1.35 , or 2.5%, compared toSeptember 30, 2021 . - Adjusted for dividends declared, book value per diluted common share increased by
$2.38 , or 4.3%, over the past twelve months.
* Amounts may not reconcile due to rounding differences
1Operating income (loss) and operating income (loss) per diluted common share are non-GAAP financial measures as defined in SEC Regulation G. The reconciliations to the most comparable GAAP financial measures, net income (loss) available (attributable) to common shareholders and earnings (loss) per diluted common share, respectively, and a discussion of the rationale for the presentation of these items are provided later in this press release. Loss per diluted common share and operating loss per diluted common share for the quarter and year ended
Tel. 441.496.2600 Fax 441.405.2600
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Fourth Quarter Consolidated Underwriting Highlights2
- Gross premiums written increased by
$214 million , or 16%, to$1.6 billion with an increase of$211 million , or 19%, in the insurance segment, and an increase of$4 million , or 1%, in the reinsurance segment. - Net premiums written increased by
$162 million , or 21% ($160 million , or 20% on a constant currency basis3), to$947 million with an increase of$138 million , or 22%, in the insurance segment, and an increase of$23 million , or 15%, in the reinsurance segment.
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Quarters ended |
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KEY RATIOS |
2021 |
2020 |
Change |
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Current accident year loss ratio, excluding catastrophe and weather- |
54.3% |
57.4% |
(3.1 pts) |
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related losses4 |
|||||
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Catastrophe and weather-related losses ratio |
4.3% |
18.4% |
(14.1 pts) |
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Current accident year loss ratio |
58.6% |
75.8% |
(17.2 pts) |
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Prior year reserve development ratio |
(0.7%) |
(0.6%) |
(0.1 pts) |
Net losses and loss expenses ratio
Acquisition cost ratio
General and administrative expense ratio
Combined ratio
Current accident year combined ratio, excluding catastrophe and weather-related losses
|
57.9% |
75.2% |
(17.3 pts) |
||
|
20.4% |
21.3% |
(0.9 pts) |
||
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14.8% |
13.1% |
1.7 pts |
||
|
93.1% |
109.6% |
(16.5 pts) |
||
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89.5% |
91.8% |
(2.3 pts) |
||
- Pre-taxcatastrophe and weather-related losses, net of reinsurance, were
$54 million ($42 million , after-tax), (Insurance:$23 million ; Reinsurance:$32 million ) or 4.3 points, primarily attributable to Quad-state tornadoes, the December Convective Storms which principally impacted theU.S. Southwest and the Upper Midwest, and other weather-related events, compared to$198 million , (Insurance:$118 million ; Reinsurance:$80 million ) or 18.4 points, in 2020, which included$125 million , or 11.6 points, attributable to the COVID-19 pandemic. - No change to the net loss estimate of
$360 million established in 2020 for the COVID-19 pandemic. - Net favorable prior year reserve development was
$9 million (Insurance:$5 million ; Reinsurance:$4 million ),
compared to$7 million (Insurance:$4 million ; Reinsurance:$2 million ) in 2020.
- All comparisons are with the same period of the prior year, unless otherwise stated.
3Amounts presented on a constant currency basis are non-GAAP financial measures as defined in SEC Regulation G. The constant currency basis is calculated by applying the average foreign exchange rate from the current year to prior year amounts. The reconciliations to the most comparable GAAP financial measures and a discussion of the rationale for the presentation of these items are provided in this press release.
4The current accident year loss ratio, excluding catastrophe and weather-related losses, was calculated by dividing the current accident year losses less estimated pre-tax catastrophe and weather-related losses, net of reinsurance by net premiums earned less reinstatement premiums.
Tel. 441.496.2600 Fax 441.405.2600
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Full Year Consolidated Underwriting Highlights
- Gross premiums written increased by
$859 million , or 13% ($786 million or 12% on a constant currency), to$7.7 billion with an increase of$845 million , or 21%, in the insurance segment and an increase of$14 million , or 1%, in the reinsurance segment. - Net premiums written increased by
$590 million , or 14% ($523 million or 12%, on a constant currency), to$4.9 billion with an increase of$537 million , or 23%, in the insurance segment and an increase of$53 million , or 3%, in the reinsurance segment.
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Years ended |
||||||
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KEY RATIOS |
2021 |
2020 |
Change |
|||
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Current accident year loss ratio, excluding catastrophe and weather- |
55.1 % |
57.7 % |
(2.6 pts) |
|||
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related losses |
||||||
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Catastrophe and weather-related losses ratio |
9.5 % |
17.7 % |
(8.2 pts) |
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Current accident year loss ratio |
64.6 % |
75.4 % |
(10.8 pts) |
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Prior year reserve development ratio |
(0.7%) |
(0.3%) |
(0.4 pts) |
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Net losses and loss expenses ratio |
63.9 % |
75.1 % |
(11.2 pts) |
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Acquisition cost ratio |
19.6 % |
21.3 % |
(1.7 pts) |
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General and administrative expense ratio |
14.0 % |
13.2 % |
0.8 pts |
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Combined ratio |
97.5 % |
109.6 % |
(12.1 pts) |
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Current accident year combined ratio, excluding catastrophe and |
88.7 % |
92.2 % |
(3.5 pts) |
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weather-related losses |
||||||
- Pre-taxcatastrophe and weather-related losses, net of reinsurance and reinstatement premiums, were
$443 million ($378 million , after-tax), (Insurance:$175 million ; Reinsurance:$268 million ) or 9.5 points, primarily attributable to Hurricane Ida,Winter Storms Uri and Viola, which principally impacted the state ofTexas , July European floods, and other weather-related events, compared to$774 million (Insurance:$443 million ; Reinsurance:$330 million ), or 17.7 points, in 2020, which included$360 million , or 8.2 points, attributable to the COVID-19 pandemic. - No change to the net loss estimate of
$360 million established in 2020 for the COVID-19 pandemic. - Net favorable prior year reserve development was
$32 million (Insurance:$18 million ; Reinsurance:$14
million), compared to$16 million (Insurance:$9 million ; Reinsurance:$7 million ) in 2020.
Tel. 441.496.2600 Fax 441.405.2600
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Segment Highlights
Insurance Segment
Quarters ended
|
($ in thousands) |
2021 |
2020 |
Change |
Gross premiums written
Net premiums written
Net premiums earned
Underwriting income (loss)
Underwriting ratios:
Current accident year loss ratio, excluding catastrophe and weather- related losses
Catastrophe and weather-related losses ratio
Current accident year loss ratio
Prior year reserve development ratio
Net losses and loss expenses ratio
Acquisition cost ratio
Underwriting-related general and administrative expense ratio Combined ratio
Current accident year combined ratio, excluding catastrophe and weather-related losses
nm - not meaningful is defined as a variance greater than +/-100%
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19.1% |
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766,694 |
628,233 |
22.0% |
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722,369 |
589,770 |
22.5% |
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81,673 |
(66,002) |
nm |
||
|
50.8% |
56.1% |
(5.3 pts) |
||
|
2.9% |
20.0% |
(17.1 pts) |
||
|
53.7% |
76.1% |
(22.4 pts) |
||
|
(0.6%) |
(0.7%) |
0.1 pts |
||
|
53.1% |
75.4% |
(22.3 pts) |
||
|
18.9% |
20.0% |
(1.1 pts) |
||
|
16.7% |
15.9% |
0.8 pts |
||
|
88.7% |
111.3% |
(22.6 pts) |
||
|
86.4% |
92.0% |
(5.6 pts) |
||
- Gross premiums written increased by
$211 million , or 19%, primarily attributable to increases in professional lines, liability, property, and marine lines driven by new business and favorable rate changes. - Net premiums written increased by
$138 million , or 22%, reflecting the increase in gross premiums written in the quarter. - Pre-taxcatastrophe and weather-related losses, net of reinsurance, were
$23 million , primarily attributable to Quad-state tornadoes, and other weather-related events, compared to$118 million in 2020, which included$67 million , or 11.4 points, attributable to the COVID-19 pandemic. - The current accident year loss ratio, excluding catastrophe and weather-related losses, decreased by 5.3 points in the fourth quarter, compared to the same period in 2020, principally due to the impact of favorable pricing over loss trends and generally improved loss experience in several lines of business.
- The acquisition cost ratio decreased by 1.1 points in the fourth quarter, compared to the same period in 2020, primarily due to an increase in ceding commissions.
- The underwriting-related general and administrative expense ratio increased by 0.8 points in the fourth quarter, compared to the same period in 2020, mainly driven by an increase in performance-related compensation costs and personnel costs, partially offset by an increase in net premiums earned.
Tel. 441.496.2600 Fax 441.405.2600
- 5 -
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