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AXIS Capital Reports Q4 Earnings Growth Despite Higher Expenses

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Key Takeaways

  • AXS Q4 operating EPS hit $3.25, beating estimates by 9.4% on higher earned premiums and underwriting income
  • Net premiums written rose 13%, led by insurance growth, offsetting lower investment income
  • AXS improved its combined ratio to 90.4% as underwriting income jumped 42% despite catastrophe losses

AXIS Capital Holdings Limited (AXS - Free Report) reported fourth-quarter 2025 operating income of $3.25 per share, which outpaced the Zacks Consensus Estimate by 9.4% and rose 9.4% year over year.

The strong performance was driven by higher net premiums earned and net investment gains, partially offset by higher expenses.

AXS’s Quarterly Operational Update

Total operating revenues of $1.7 billion beat the Zacks Consensus Estimate by 5.2%. The top line rose nearly 9% year over year on higher premiums earned.

Net premiums written rose 13% to $1.4 billion with an increase of 14% in the Insurance segment, and growth of 5% in the Reinsurance segment.

Net investment income decreased 4.5% year over year to $187 million, due to lower income from cash and fixed maturities. The Zacks Consensus Estimate was pegged at $198 million. Our estimate was $215 million.

Total expenses in the quarter increased 16.6% year over year to $1.4 billion due to higher net losses and loss expenses, acquisition costs, general and administrative expenses and foreign exchange losses. Our estimate was pegged at $1.2 billion.

Pre-tax catastrophe and weather-related losses and net of reinsurance were $30 million, including $17 million attributable to Hurricane Melissa and other weather-related events.

AXIS Capital’s underwriting income of $184 million increased 42% year over year. The combined ratio improved to 90.4 in the quarter from 94.2 a year ago, reflecting stronger underwriting performance. The Zacks Consensus Estimate was pegged at 91. Our estimate was 91.2.

Segment Results

Insurance: Gross premiums written improved 11.7% year over year to $1.9 billion. Our estimate was $1.8 billion. Net premiums earned increased 13.3% year over year to $1.2 billion. This gain is attributable to most lines of business. Our estimate was $1 billion. 
Underwriting income of $157.6 million increased 74.2% year over year. The combined ratio improved 470 basis points to 86.5. The Zacks Consensus Estimate for the combined ratio was pegged at 94.

Reinsurance: Gross premiums written increased 13% year over year to $310.7 million, primarily attributable to new business in motor lines, and credit and surety lines, together with premium adjustments in credit and surety lines. Our estimate was $372 million. Net premiums earned increased 4.2% year over year to $365.6 million. Our estimate was $400 million.
Underwriting income of $26.6 million decreased 31.9% year over year. The combined ratio deteriorated 300 basis points, up 93.3%. The Zacks Consensus Estimate for the combined ratio was pegged at 103.

Full-Year Highlights

The company reported full-year 2025 operating income of $12.92 per share, which outpaced the Zacks Consensus Estimate by 1.9% and rose 15.6% year over year.

Total operating revenues of $6.5 billion beat the Zacks Consensus Estimate by 1.2%. The top line rose 6.7% year over year on higher net investment gains and higher premiums earned.

Net premiums written increased 6% to $6.1 billion, driven by a 9% increase in the Insurance segment, partially offset by a 1% decline in the Reinsurance segment.

Underwriting income was $725 million, reflecting a 27% year-over-year increase. The combined ratio improved 250 basis points to 89.8 from 92.3 a year ago.

Financial Update

AXIS Capital exited the fourth quarter with cash and cash equivalents of $820.3 million, down 61.7% from the 2024-end level. Debt was $1.3 billion at quarter-end, up 0.1% from the 2024-end level.

Book value per diluted common share was $77.20, up 18.3% from the Dec. 31, 2024, level.

An annualized operating ROACE of 18.1% reflected strong capital efficiency despite easing from 18.6% a year ago.

Capital Deployment

AXIS repurchased $888 million of common shares in full-year 2025, underscoring its commitment to reducing share count and enhancing earnings per share.

The company also declared and paid a quarterly cash dividend of 44 cents per share, resulting in total annual common share dividends of $139 million for 2025.

AXS’s Zacks Rank

AXIS Capital currently has 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 2025 core income of $11.13 per share, which beat the Zacks Consensus Estimate by 32% and improved 22% year over year. Travelers’ total revenues increased 3.2% from the year-ago quarter to $12.4 billion, primarily driven by higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 0.08%.

Net written premiums increased 1% year over year to a record $10.8 billion. Net investment income increased 10.3% year over year to $1 billion. The figure matched the Zacks Consensus Estimate. Travelers witnessed an underwriting gain of $1.7 billion, up 21.7% year over year. The consolidated underlying combined ratio of 82.2 improved 180 bps year over year.

Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2025 adjusted earnings of 93 cents per share beat the Zacks Consensus Estimate by 2.1%. The bottom line increased 8.1% year over year.

Total revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.1%. The top line improved 35.7% year over year. Adjusted EBITDAC was $529 million, up 35.6% year over year. EBITDAC margin remained unchanged year over year at 32.9%. Investment income and other income increased 17.3% year over year to $27 million.

The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2025 earnings per share of $4.67 beat the Zacks Consensus Estimate by 5.2%. The bottom line increased 14.4% year over year.

Operating revenues increased 10.6% year over year to $22.49 billion and beat the consensus estimate by 2.5%. Net premiums earned grew 10% to $21 billion. The reported figure surpassed the Zacks Consensus Estimate of $20.9 billion.

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