AXIS Capital Holdings Limited (AXS - Free Report) reported first-quarter 2017 earnings of 59 cents per share that missed the Zacks Consensus Estimate by 27%. Also, earnings declined 45% from the year-ago quarter.
The company had to bear the impact of the Ogden rate change in the U.K., executive severance and retirement costs, and an impairment of an equity-method investment alongside high catastrophe and weather-related losses in the quarter.
AXIS Capital’s net income plummeted 85% year over year to 6 cents per share.
Operational Update
Operating revenues of about $1.04 billion lagged the Zacks Consensus Estimate of $1.07 billion. However, revenues increased 15% year over year.
Gross premiums written declined 2% year over year to approximately $1.9 billion due to 7% lower premiums written in reinsurance segment. However, a 4% increase in premiums written in Insurance segment limited the downside.
Net investment income more than doubled to $98.7 million.
Total expense in the quarter increased 17% year over year to $992.3 million.
AXIS Capital’s underwriting income plunged 83% year over year to $16.4 million. Combined ratio deteriorated 1020 basis points (bps) to 102.1%. Catastrophe and weather-related pre-tax net losses widened to $35 million from $14 million in the year-ago quarter.
Segment Result
Insurance Segment: Gross premiums written increased 6% year over year owing to new business in accident, and health & professional lines.
Net premiums earned increased 5% year over year on premium growth in accident and health lines, as well as property lines.
Underwriting income of $6 million declined 23% from the year-ago quarter. Combined ratio deteriorated 110 bps to 97.2%.
Reinsurance Segment: Gross premiums written in the quarter decreased 7% year over year to $1.2 billion, largely due to a lower level of premiums written on a multi-year basis.
Net premiums earned improved 4% year over year on premium growth in agriculture, liability, motor, and catastrophe lines.
Underwriting income of $3 million declined from $82 million in the year-ago quarter. Combined ratio deteriorated 1620 bps year over year to 98.5%.
Financial Update
AXIS Capital exited the quarter with cash and cash equivalents of $1.2 billion, up 12% from the 2016-end level.
Cash used in operation was $36 million as against $14 million used in the year-ago quarter.
As of Mar 31, 2017, diluted book value per share was $58.89, up 5% year over year.
Operating return on equity was 4% compared with 7.7% in year-ago quarter.
Share Repurchase and Dividend Update
The company repurchased 2.2 million shares for $151 million shares. AXIS Capital has $836 million remaining authorization under the common shares’ repurchase program up to Dec 2017.
The company declared a dividend of 38 cents per common share.
Zacks Rank
AXIS Capital presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among the other players from the insurance industry that have reported their first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
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AXIS Capital Holdings Limited (AXS - Free Report) reported first-quarter 2017 earnings of 59 cents per share that missed the Zacks Consensus Estimate by 27%. Also, earnings declined 45% from the year-ago quarter.
The company had to bear the impact of the Ogden rate change in the U.K., executive severance and retirement costs, and an impairment of an equity-method investment alongside high catastrophe and weather-related losses in the quarter.
AXIS Capital’s net income plummeted 85% year over year to 6 cents per share.
Operational Update
Operating revenues of about $1.04 billion lagged the Zacks Consensus Estimate of $1.07 billion. However, revenues increased 15% year over year.
Gross premiums written declined 2% year over year to approximately $1.9 billion due to 7% lower premiums written in reinsurance segment. However, a 4% increase in premiums written in Insurance segment limited the downside.
Net investment income more than doubled to $98.7 million.
Total expense in the quarter increased 17% year over year to $992.3 million.
AXIS Capital’s underwriting income plunged 83% year over year to $16.4 million. Combined ratio deteriorated 1020 basis points (bps) to 102.1%. Catastrophe and weather-related pre-tax net losses widened to $35 million from $14 million in the year-ago quarter.
Segment Result
Insurance Segment: Gross premiums written increased 6% year over year owing to new business in accident, and health & professional lines.
Net premiums earned increased 5% year over year on premium growth in accident and health lines, as well as property lines.
Underwriting income of $6 million declined 23% from the year-ago quarter. Combined ratio deteriorated 110 bps to 97.2%.
Reinsurance Segment: Gross premiums written in the quarter decreased 7% year over year to $1.2 billion, largely due to a lower level of premiums written on a multi-year basis.
Net premiums earned improved 4% year over year on premium growth in agriculture, liability, motor, and catastrophe lines.
Underwriting income of $3 million declined from $82 million in the year-ago quarter. Combined ratio deteriorated 1620 bps year over year to 98.5%.
Financial Update
AXIS Capital exited the quarter with cash and cash equivalents of $1.2 billion, up 12% from the 2016-end level.
Cash used in operation was $36 million as against $14 million used in the year-ago quarter.
As of Mar 31, 2017, diluted book value per share was $58.89, up 5% year over year.
Operating return on equity was 4% compared with 7.7% in year-ago quarter.
Share Repurchase and Dividend Update
The company repurchased 2.2 million shares for $151 million shares. AXIS Capital has $836 million remaining authorization under the common shares’ repurchase program up to Dec 2017.
The company declared a dividend of 38 cents per common share.
Zacks Rank
AXIS Capital presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among the other players from the insurance industry that have reported their first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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