Back to top

Analyst Blog

Zacks Equity Research

Rating Action on AXIS Capital

AXS

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

A.M. Best Co. reiterated the issuer credit ratings (“ICR”) of ‘bbb+’ and all existing debt ratings of AXIS Capital Holdings Limited (AXS - Analyst Report). Concurrently, the rating agency reiterated the financial strength rating (“FSR”) of A (Excellent) and ICR of ‘a+’ of AXIS Specialty Limited, its operating unit. The outlook remains positive.

The ratings affirmation came on the back of strong risk-adjusted capitalization, continued better operational results and strong enterprise risk management. AXIS Capital has remained focused on delivering solid underwriting profitability along with a balanced risk profile.

With an expanded book of business (short to medium-tail lines of business with more emphasis on specialty risks including property, marine and political risk, besides property catastrophe coverages) and widespread global footprint, the company is well positioned amidst a weak macro environment in casualty market.

AXIS Capital has substantial exposure to catastrophe losses. This, along with weak casualty market condition dwarfs the positives. Also, A.M. Best continues to keep vigilance transition time as the higher management has been undergoing several changes over time.

Rating affirmations or upgrades from credit rating agencies play an important part in retaining investor confidence in the stock as well as maintaining creditworthiness in the market. On the other hand, rating downgrade adversely affects the business, besides increasing cost of future debt issuances. We believe strong scorings with rating agencies will help it write more business going forward.

Ratings could be revised upward if AXIS Capital continues to post solid operational results along with maintaining solid risk-adjusted capital levels.

Rating and/or outlook are subject to downgrade if the company fails to deliver favorable operational results, incurs massive catastrophe or investment losses, and experiences considerable adverse loss reserve development erosion in risk-adjusted capital.

We retain our Neutral recommendation on AXIS Capital Holdings Limited. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term. ACE Limited (ACE), which closely competes with AXIS Capital, shares a Zacks #3 Rank.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%