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AXIS Capital (AXS) Q4 Earnings & Revenues Top Estimates
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AXIS Capital Holdings Limited (AXS - Free Report) posted fourth-quarter 2022 operating income of $1.95 per share, which beat the Zacks Consensus Estimate by about 14.7% and beat our estimate of $1.55. The bottom line dropped 8.5% year over year.
The insurer’s results reflected higher net premiums earned, partially offset by a decrease in net investment income and lower expenses. The combined ratio was affected by Winter Storm Elliot, and other weather-related events.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Total operating revenues of $1.5 billion increased 8.6% year over year on higher net premiums earned and net investment income. The top line beat the consensus estimate as well as our estimate of $1.4 billion.
Net investment income decreased 14.8% year over year to $147.1 million.
Total expenses increased 16.3% year over year to $1.4 billion, attributable to net losses and loss expenses, acquisition costs, general and administrative expenses and interest expense and financing costs
Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, decreased 15.2% year over year to $64 million. The losses were due to Winter Storm Elliot and other weather-related events. AXIS Capital’s underwriting income was $132 million, down 2.8%. The combined ratio deteriorated 100 basis points (bps) to 94.1.
Segment Results
Insurance: Gross premiums written improved 12% year over year to $1.4 billion, driven by increases in property and liability lines due to new business and favorable rate changes, and marine and aviation, and accident and health lines due to new business. Net premiums earned increased 15% year over year to $830.5 million.
Underwriting income of $123.4 million increased 51.1% year over year. The combined ratio improved 350 bps to 85.2. Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, increased 43.5% year over year to $33 million.
Reinsurance: Gross premiums written increased 16.2% year over year to $287.9 million on increases in credit and surety lines driven by increased line sizes and new business, and increases in motor and professional lines associated with favorable market conditions. Net premiums earned decreased 1.1% year over year to $509.6 million.
Underwriting income of $8.9 million plunged 83.7%. The combined ratio deteriorated 850 bps year over year to 98.8. Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, decreased 6.2% year over year to $30 million.
Full-Year Highlights
Operating income of $5.81 per share beat the Zacks Consensus Estimate of $5.57. The bottom line increased 13.5% year over year.
Total operating revenues of $5.6 billion increased 7.8% year over year and beat the estimate of $5.5 billion.
Net premiums written increased 7% to $5.3 billion, driven by a 17% increase in the Insurance segment, partially offset by a 7% decrease in the Reinsurance segment.
Underwriting income of $358.9 million was up 35% year over year. The combined ratio improved 170 bps to 95.8%.
Financial Update
AXIS Capital exited 2022 with cash and cash equivalents of $1.2 billion, down 10.9% from the 2021 level. Debts were $1.3 billion at year-end, up 0.1% from the 2021-end level.
Book value per share decreased 15.7% to $48.31 as of Dec 31, 2022.
Annualized operating return on equity was 11.1% in 2022, up 200 bps year over year.
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily due to the higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.
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AXIS Capital (AXS) Q4 Earnings & Revenues Top Estimates
AXIS Capital Holdings Limited (AXS - Free Report) posted fourth-quarter 2022 operating income of $1.95 per share, which beat the Zacks Consensus Estimate by about 14.7% and beat our estimate of $1.55. The bottom line dropped 8.5% year over year.
The insurer’s results reflected higher net premiums earned, partially offset by a decrease in net investment income and lower expenses. The combined ratio was affected by Winter Storm Elliot, and other weather-related events.
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 $1.5 billion increased 8.6% year over year on higher net premiums earned and net investment income. The top line beat the consensus estimate as well as our estimate of $1.4 billion.
Net investment income decreased 14.8% year over year to $147.1 million.
Total expenses increased 16.3% year over year to $1.4 billion, attributable to net losses and loss expenses, acquisition costs, general and administrative expenses and interest expense and financing costs
Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, decreased 15.2% year over year to $64 million. The losses were due to Winter Storm Elliot and other weather-related events. AXIS Capital’s underwriting income was $132 million, down 2.8%. The combined ratio deteriorated 100 basis points (bps) to 94.1.
Segment Results
Insurance: Gross premiums written improved 12% year over year to $1.4 billion, driven by increases in property and liability lines due to new business and favorable rate changes, and marine and aviation, and accident and health lines due to new business. Net premiums earned increased 15% year over year to $830.5 million.
Underwriting income of $123.4 million increased 51.1% year over year. The combined ratio improved 350 bps to 85.2. Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, increased 43.5% year over year to $33 million.
Reinsurance: Gross premiums written increased 16.2% year over year to $287.9 million on increases in credit and surety lines driven by increased line sizes and new business, and increases in motor and professional lines associated with favorable market conditions. Net premiums earned decreased 1.1% year over year to $509.6 million.
Underwriting income of $8.9 million plunged 83.7%. The combined ratio deteriorated 850 bps year over year to 98.8. Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, decreased 6.2% year over year to $30 million.
Full-Year Highlights
Operating income of $5.81 per share beat the Zacks Consensus Estimate of $5.57. The bottom line increased 13.5% year over year.
Total operating revenues of $5.6 billion increased 7.8% year over year and beat the estimate of $5.5 billion.
Net premiums written increased 7% to $5.3 billion, driven by a 17% increase in the Insurance segment, partially offset by a 7% decrease in the Reinsurance segment.
Underwriting income of $358.9 million was up 35% year over year. The combined ratio improved 170 bps to 95.8%.
Financial Update
AXIS Capital exited 2022 with cash and cash equivalents of $1.2 billion, down 10.9% from the 2021 level. Debts were $1.3 billion at year-end, up 0.1% from the 2021-end level.
Book value per share decreased 15.7% to $48.31 as of Dec 31, 2022.
Annualized operating return on equity was 11.1% in 2022, up 200 bps year over year.
Leverage deteriorated 250 basis points to 22%.
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 Other Insurers
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily due to the higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.