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AXIS Capital's (AXS) Q1 Earnings Beat on Solid Underwriting
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AXIS Capital Holdings Limited (AXS - Free Report) posted first-quarter 2022 operating income of $2.09 per share, beating the Zacks Consensus Estimate by 20.1%. The bottom line increased two-fold year over year.
The insurer’s results reflect higher net premiums earned as well as increased underwriting income and improved combined ratio. It was offset by a decrease in net investment income and higher expenses.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Total operating revenues of $1.3 billion missed the Zacks Consensus Estimate by 2.6%. The top line however rose 11% year over year on higher net premiums earned and other insurance-related income. It was partially offset by lower net investment income.
Net investment income decreased 20.2% year over year to $91 million, primarily attributable to lower gains from other investments.
Total expenses in the quarter under review increased 0.8% year over year to $1.1 billion, attributable to higher net losses and loss expenses, acquisition costs, increased general and administrative expenses, higher interest expense and financing costs and amortization of intangible assets.
Pre-tax catastrophe and weather-related losses, net of reinsurance, were $60 million, primarily attributable to the Russia-Ukraine war, Eastern Australia floods, and other weather-related events. This compares favorably with the year-ago loss of $110 million.
AXIS Capital’s underwriting income of $138.8 million increased more than threefold year over year. The combined ratio improved 750 basis points (bps) to 91.4.
Segment Results
Insurance: Gross premiums written improved 20.3% year over year to $1.3 billion, primarily attributable to increases in professional lines, liability, and property lines driven by new business and favorable rate changes.
Net premiums earned increased 22.2% year over year to $752.8 million. Underwriting income of $94.4 million increased more than two-fold year over year. The combined ratio improved 630 bps to 87.5.
Reinsurance: Gross premiums written decreased 8.7% year over year to $1.3 billion, primarily attributable to decreases in catastrophe, motor, and property lines due to non-renewals and decreased line sizes. It was partially offset by increases in accident and health, and credit and surety lines driven by new business. The timing of renewals contributed to the increase in accident and health lines.
Net premiums earned increased 3.7% year over year to $505.4 million. Underwriting income of $44.4 million surged 31-fold year over year. The combined ratio improved 770 bps year over year to 92.5.
Financial Update
AXIS Capital exited the first quarter with cash and cash equivalents of $1.7 billion, up 29.5% over the level from 2021 end.
Debts were $1.3 billion at quarter-end, up 0.02% from the 2021-end level.
Book value per share decreased 6.8% from 2021 end to $51.97 as of Mar 31, 2022, due to net unrealized losses reported in other comprehensive income and common share dividends declared. It was partially offset by net income generated.
Annualized return on equity was 12% in the first quarter, which expanded 210 bps year over year.
Dividend Update
AXIS Capital announced a dividend of 43 cents per share in the reported quarter.
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year.
Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%.
RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter.
Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.
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AXIS Capital's (AXS) Q1 Earnings Beat on Solid Underwriting
AXIS Capital Holdings Limited (AXS - Free Report) posted first-quarter 2022 operating income of $2.09 per share, beating the Zacks Consensus Estimate by 20.1%. The bottom line increased two-fold year over year.
The insurer’s results reflect higher net premiums earned as well as increased underwriting income and improved combined ratio. It was offset by a decrease in net investment income and higher expenses.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited Quote
Quarterly Operational Update
Total operating revenues of $1.3 billion missed the Zacks Consensus Estimate by 2.6%. The top line however rose 11% year over year on higher net premiums earned and other insurance-related income. It was partially offset by lower net investment income.
Net investment income decreased 20.2% year over year to $91 million, primarily attributable to lower gains from other investments.
Total expenses in the quarter under review increased 0.8% year over year to $1.1 billion, attributable to higher net losses and loss expenses, acquisition costs, increased general and administrative expenses, higher interest expense and financing costs and amortization of intangible assets.
Pre-tax catastrophe and weather-related losses, net of reinsurance, were $60 million, primarily attributable to the Russia-Ukraine war, Eastern Australia floods, and other weather-related events. This compares favorably with the year-ago loss of $110 million.
AXIS Capital’s underwriting income of $138.8 million increased more than threefold year over year. The combined ratio improved 750 basis points (bps) to 91.4.
Segment Results
Insurance: Gross premiums written improved 20.3% year over year to $1.3 billion, primarily attributable to increases in professional lines, liability, and property lines driven by new business and favorable rate changes.
Net premiums earned increased 22.2% year over year to $752.8 million.
Underwriting income of $94.4 million increased more than two-fold year over year. The combined ratio improved 630 bps to 87.5.
Reinsurance: Gross premiums written decreased 8.7% year over year to $1.3 billion, primarily attributable to decreases in catastrophe, motor, and property lines due to non-renewals and decreased line sizes. It was partially offset by increases in accident and health, and credit and surety lines driven by new business. The timing of renewals contributed to the increase in accident and health lines.
Net premiums earned increased 3.7% year over year to $505.4 million.
Underwriting income of $44.4 million surged 31-fold year over year. The combined ratio improved 770 bps year over year to 92.5.
Financial Update
AXIS Capital exited the first quarter with cash and cash equivalents of $1.7 billion, up 29.5% over the level from 2021 end.
Debts were $1.3 billion at quarter-end, up 0.02% from the 2021-end level.
Book value per share decreased 6.8% from 2021 end to $51.97 as of Mar 31, 2022, due to net unrealized losses reported in other comprehensive income and common share dividends declared. It was partially offset by net income generated.
Annualized return on equity was 12% in the first quarter, which expanded 210 bps year over year.
Dividend Update
AXIS Capital announced a dividend of 43 cents per share in the reported quarter.
Zacks Rank
AXIS Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year.
Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%.
RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter.
Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.