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Higher catastrophe losses drove a weaker combined ratio despite continued shareholder returns.
AXIS Capital Holdings Limited (AXS - Free Report) reported second-quarter 2026 operating income of $2.84 per share, which missed the Zacks Consensus Estimate of $3.23 and fell 12.1% year over year.
The quarterly results reflected higher net premiums earned and continued premium growth. However, higher catastrophe losses, lower net investment income and increased operating expenses weighed on performance.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Total operating revenues of $1.7 billion marginally missed the Zacks Consensus Estimate by 1%. The top line rose 7.4% year over year on higher premiums earned. Net premiums written decreased 1.8% to $1.6 billion, reflecting lower premiums in the Reinsurance segment, partially offset by growth in the Insurance segment.
Net investment income decreased 3% year over year to $181.6 million, due to lower income from alternative investments and cash. The Zacks Consensus Estimate was pegged at $208.7 million.
Total expenses in the reported quarter increased 6.2% year over year to $1.4 billion due to higher net losses and loss expenses, acquisition costs and reorganization expenses. Our estimate was pegged at $1.4 billion.
Pre-tax catastrophe and weather-related losses, net of reinsurance, totaled $152 million, including $95 million from natural catastrophes. The remaining $57 million was attributable to weather-related events.
AXIS Capital’s underwriting income of $142.9 million decreased 24.5% year over year. The combined ratio deteriorated to 93.1 in the second quarter from 88.9 a year ago, reflecting higher catastrophe and weather-related losses. The Zacks Consensus Estimate was pegged at 93.2. Our estimate was 93.8.
Segment Results
Insurance: Gross premiums written improved 15.3% year over year to $2.2 billion. Our estimate was $2.1 billion. Net premiums earned increased 14.9% year over year to $1.2 billion, driven by premium growth across most business lines. Our estimate was $1.1 billion.
Underwriting income of $119.4 million decreased 21.3% year over year. The combined ratio deteriorated 470 basis points to 90. The Zacks Consensus Estimate for the combined ratio was pegged at 89.7.
Reinsurance: Gross premiums written decreased 24.7% year over year to $439.5 million, mainly due to lower renewals and portfolio optimization compared to our estimate of $554.9 million. Net premiums earned declined 8% year over year to $331.8 million. Our estimate was pinned at $399.5 million.
Underwriting income of $23.6 million decreased 37.3% year over year. The combined ratio deteriorated 250 basis points to 94.5. The Zacks Consensus Estimate for the combined ratio was pegged at 94.1.
AXS’ Financial Update
AXIS Capital exited the second quarter with cash and cash equivalents of $780 million, down 4.9% from the 2025-end level. Debt remained essentially unchanged at $1.32 billion.
Shareholders' equity increased 2.3% from the 2025-end level to $6.5 billion.
Book value per diluted common share was $79.01, up from $78.19 as of Dec. 31, 2025.
Annualized operating return on average common equity (operating ROACE) was 14.3%, down from 19% a year ago.
Capital Deployment
AXIS Capital returned $84 million to common shareholders in the second quarter, including $52 million in share repurchases and $32 million in dividends. The company also declared a quarterly dividend of 44 cents per common share.
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%.
Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines, a 2% drop in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. Renewal pure price increases averaged 6.5%, down from 9.9% in the prior-year quarter.
Chubb Limited (CB - Free Report) reported second-quarter 2026 core operating earnings of $7.26 per share, which beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. Stronger P&C underwriting, record investment income, and higher life insurance income supported results.
Net premiums earned increased 5.8% to $13.89 billion. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%, reflecting a lower share of premiums consumed by claims and expenses. Our estimate was $1.15 billion.
Principal Financial Group, Inc.’s (PFG - Free Report) second-quarter 2026 operating earnings of $2.50 per share beat the Zacks Consensus Estimate by 7.3%. The bottom line increased 16% year over year. Revenues rose 6.4% year over year to $3.99 billion, which missed the consensus mark of $4.09 billion by 2.4%.
Total expenses increased 7.6% year over year to $3.41 billion. Benefits, claims and settlement expenses rose 8.3% to $1.99 billion, while operating expenses increased 8.1% to $1.40 billion. Non-GAAP operating earnings climbed 12% to $547 million. Excluding significant variances, operating earnings advanced 13% to $528.7 million, reflecting growth across the operating segments. Net income attributable to PFG declined 1% to $403.4 million.
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AXIS Capital Q2 Earnings Miss Estimates on Higher Catastrophe Losses
Key Takeaways
AXIS Capital Holdings Limited (AXS - Free Report) reported second-quarter 2026 operating income of $2.84 per share, which missed the Zacks Consensus Estimate of $3.23 and fell 12.1% year over year.
The quarterly results reflected higher net premiums earned and continued premium growth. However, higher catastrophe losses, lower net investment income and increased operating expenses weighed on performance.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited Quote
AXS’ Quarterly Operational Update
Total operating revenues of $1.7 billion marginally missed the Zacks Consensus Estimate by 1%. The top line rose 7.4% year over year on higher premiums earned.
Net premiums written decreased 1.8% to $1.6 billion, reflecting lower premiums in the Reinsurance segment, partially offset by growth in the Insurance segment.
Net investment income decreased 3% year over year to $181.6 million, due to lower income from alternative investments and cash. The Zacks Consensus Estimate was pegged at $208.7 million.
Total expenses in the reported quarter increased 6.2% year over year to $1.4 billion due to higher net losses and loss expenses, acquisition costs and reorganization expenses. Our estimate was pegged at $1.4 billion.
Pre-tax catastrophe and weather-related losses, net of reinsurance, totaled $152 million, including $95 million from natural catastrophes. The remaining $57 million was attributable to weather-related events.
AXIS Capital’s underwriting income of $142.9 million decreased 24.5% year over year. The combined ratio deteriorated to 93.1 in the second quarter from 88.9 a year ago, reflecting higher catastrophe and weather-related losses. The Zacks Consensus Estimate was pegged at 93.2. Our estimate was 93.8.
Segment Results
Insurance: Gross premiums written improved 15.3% year over year to $2.2 billion. Our estimate was $2.1 billion. Net premiums earned increased 14.9% year over year to $1.2 billion, driven by premium growth across most business lines. Our estimate was $1.1 billion.
Underwriting income of $119.4 million decreased 21.3% year over year. The combined ratio deteriorated 470 basis points to 90. The Zacks Consensus Estimate for the combined ratio was pegged at 89.7.
Reinsurance: Gross premiums written decreased 24.7% year over year to $439.5 million, mainly due to lower renewals and portfolio optimization compared to our estimate of $554.9 million. Net premiums earned declined 8% year over year to $331.8 million. Our estimate was pinned at $399.5 million.
Underwriting income of $23.6 million decreased 37.3% year over year. The combined ratio deteriorated 250 basis points to 94.5. The Zacks Consensus Estimate for the combined ratio was pegged at 94.1.
AXS’ Financial Update
AXIS Capital exited the second quarter with cash and cash equivalents of $780 million, down 4.9% from the 2025-end level. Debt remained essentially unchanged at $1.32 billion.
Shareholders' equity increased 2.3% from the 2025-end level to $6.5 billion.
Book value per diluted common share was $79.01, up from $78.19 as of Dec. 31, 2025.
Annualized operating return on average common equity (operating ROACE) was 14.3%, down from 19% a year ago.
Capital Deployment
AXIS Capital returned $84 million to common shareholders in the second quarter, including $52 million in share repurchases and $32 million in dividends. The company also declared a quarterly dividend of 44 cents per common share.
AXS’ 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
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%.
Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines, a 2% drop in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. Renewal pure price increases averaged 6.5%, down from 9.9% in the prior-year quarter.
Chubb Limited (CB - Free Report) reported second-quarter 2026 core operating earnings of $7.26 per share, which beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. Stronger P&C underwriting, record investment income, and higher life insurance income supported results.
Net premiums earned increased 5.8% to $13.89 billion. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%, reflecting a lower share of premiums consumed by claims and expenses. Our estimate was $1.15 billion.
Principal Financial Group, Inc.’s (PFG - Free Report) second-quarter 2026 operating earnings of $2.50 per share beat the Zacks Consensus Estimate by 7.3%. The bottom line increased 16% year over year. Revenues rose 6.4% year over year to $3.99 billion, which missed the consensus mark of $4.09 billion by 2.4%.
Total expenses increased 7.6% year over year to $3.41 billion. Benefits, claims and settlement expenses rose 8.3% to $1.99 billion, while operating expenses increased 8.1% to $1.40 billion. Non-GAAP operating earnings climbed 12% to $547 million. Excluding significant variances, operating earnings advanced 13% to $528.7 million, reflecting growth across the operating segments. Net income attributable to PFG declined 1% to $403.4 million.