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We retain our Outperform recommendation on AXIS Capital Holdings Ltd. (AXS - Analyst Report) following its fourth-quarter results, where loss per share was narrower than the Zacks Consensus Estimate. The company also has a new share buyback program in its kitty. This property and casualty insurer presently carries a Zacks Rank #2 (Buy).

Why Reiterate?

AXIS Capital’s fourth-quarter 2012 operating loss of 23 cents per share was narrower than the Zacks Consensus Estimate of a loss of $1.18.

Following the release of the fourth-quarter results, the Zacks Consensus Estimate for 2013 has gone up 3.6% to $4.05 per share as 7 of 12 estimates moved north. Moreover, the Zacks Consensus Estimate for 2014 has also increased 4% to $4.15 per share as 5 of 11 estimates were raised.

New business opportunities across AXIS Capital’s lines of business and geography have helped the company achieve growth in premium writings. The Insurance sector in particular, continues to drive solid numbers. AXIS Capital expects gross premiums written to increase in 2013, given favorable pricing momentum sustains in the primary insurance market.

AXIS remains strongly capitalized. Its financial flexibility remains very strong, with a debt-to-total capital ratio of 14.7%. AXIS Capital is maintaining the trend of boosting shareholder value through share buybacks and dividend hikes. The approval of a dividend hike of 4% in Dec 2012 marked the 9th consecutive year of dividend increase. The board also approved a $750 million share buyback program.

We believe that conservative underwriting practices will help the company remain well capitalized. New business generation and platform expansion will also aid the company fuel its top-line growth.

Other Stocks to Consider

Among other property and casualty insurers, stocks like Cincinnati Financial Corp. (CINF - Analyst Report), XL Group plc (XL - Analyst Report) and EMC Insurance Group Inc. (EMCI - Snapshot Report) presently carry a Zacks Rank #1 (Strong Buy) and are worth considering.

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