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AXIS Capital's (AXS) Q4 Earnings & Revenues Beat Estimates

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AXIS Capital Holdings Limited (AXS - Free Report) reported adjusted fourth-quarter 2021 earnings of $2.13 per share, which beat the Zacks Consensus Estimate by 58%. The bottom line rebounded from the year-ago loss of 20 cents.

The company’s results reflected higher gross premiums written as well as an increase in net investment income and lower expenses.

Full-Year Highlights

In 2021, AXIS Capital delivered an operating income of $5.12 per share, beating the Zacks Consensus Estimate of $4.34 per share. Moreover, the bottom line improved from the year-ago quarter’s operating loss of $2.08 per share.

Total operating revenues of $5.18 billion beat the consensus mark of 5.12 billion and also increased 10.1% year over year.    

Quarterly Operational Update

Total operating revenues of $1.4 billion outpaced the Zacks Consensus Estimate by 11.2%. The top line also rose 15% year over year on higher net premiums earned and net investment income.

Gross premiums written increased 16% year over year to about $1.6 billion, largely driven by a 19% increase in the Insurance segment and a 1% increase in the Reinsurance segment.

Net investment income increased 17% year over year to nearly $128 million, primarily due to positive returns from other investments in 2021.

Total expenses in the quarter under review decreased 8.8% year over year to $1.2 billion, attributable to lower net losses and loss expenses, foreign exchange losses and amortization of value of business acquired.

AXIS Capital incurred an underwriting loss of $136 million compared with the prior-year quarter’s loss of $80.8 million. The combined ratio improved 1650 basis points (bps) to 93.1%.

Segment Results

Insurance: Gross premiums written improved 19.1% year over year to $1.3 billion, primarily attributable to increases in professional lines, liability, property, and marine lines driven by new business and favorable rate changes.
Net premiums earned rose 22.5% year over year to $722.4 million.

Underwriting income totaled $81.6 million in contrast to the year-ago quarter’s loss of $66 million. The combined ratio improved 2260 bps to 88.7%.

Reinsurance: Gross premiums written in the fourth quarter increased 1.5% year over year to $247.8 million, primarily attributable to increases in motor and agriculture lines due to new business.

Net premiums earned increased 3.6% year over year to $515.4 million.
Underwriting income was $54.3 million against the year-ago quarter’s loss of $14.8 million. The combined ratio improved 1150 bps year over year to 90.8%.

Financial Update

AXIS Capital exited 2021 with cash and cash equivalents of $844.6 million, down 6.4% over the level at 2020 end.

Debts were $1.3 billion at 2021 end, up 0.09% from 2020-end level.

Book value per share increased 1.2% year over year to $55.78 as of Dec 31, 2021. The increase was driven by net income generated. It was partially offset by a decrease in net unrealized gains reported in other comprehensive income and common share dividends declared.

Operating return on equity totaled 15.1% in the fourth quarter against (1.4%) in the year-ago period.

Dividend Update

The company announced a dividend of 43 cents per share in the reported quarter, which represents an increase of 2.4% and is the 18th consecutive year the insurer has increased dividends since its initial public offering in 2003. Over the past year, total dividends declared amounted to $1.69 per share.

Zacks Rank

AXIS Capital currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

The Travelers Companies’ (TRV - Free Report) bottom line beat the Zacks Consensus Estimate for the fourth quarter of 2021 and increased 6% year over year. Total revenues increased 7% from the year-ago quarter to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.

Net written premiums increased 10% year over year. The combined ratio deteriorated 130 basis points (bps) year over year.

Brown & Brown’s (BRO - Free Report) bottom line beat the Zacks Consensus Estimate by 10.5% and rose 31.2% from the year-ago figure.

Adjusted revenues of $739 million beat the Zacks Consensus Estimate by 1.5% and rose 15.1% year over year on higher commissions and fees. Commissions and fees grew 15.3% year over year to $737.9 million. Investment income however plunged 80% year over year to $0.2 million.

The Progressive Corporation’s (PGR - Free Report) bottom line beat the Zacks Consensus Estimate of 99 cents. However, the bottom line declined 43.2% from the year-ago quarter. Net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago.

Net premiums earned grew 14% to nearly $11.6 billion. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.