• Operating Return on Equity: 18.6% for the full year 2024.
• Book Value: $65.27 per share, representing 20.7% growth compared to the prior year.
• Operating Earnings Per Share: $11.18, a 98% increase over the prior year.
• Combined Ratio: 92.3% for the year, with a 7.6 point improvement over the prior year.
• Full Year Premiums: $9 billion, up 7.8% over the prior year.
• Net Investment Income: $759 million for the year.
• Share Repurchase Program: $200 million utilized over the course of the year.
• Insurance Combined Ratio: 89.1% for 2024.
• Insurance Premiums: $6.6 billion, up 7.7% over the prior year.
• Reinsurance Combined Ratio: 91.8% for 2024.
• Reinsurance Premiums: $2.4 billion, growing nearly 8% over the prior year.
• Net Income Available to Common Shareholders: $1.05 billion for the full year, or $12.35 per diluted common share.
• Gross Premiums Written: Exceeded $9 billion for the full year, with 8% growth.
• Quarterly Combined Ratio: 94.2% for the fourth quarter.
• Quarterly Net Income: $286 million or $3.38 per diluted common share.
• Quarterly Operating Income: $252 million or $2.97 per diluted common share.
• Investment Income: $196 million for the fourth quarter, up 5% over the prior year quarter.

• Warning! GuruFocus has detected 7 Warning Sign with DOV.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Axis Capital Holdings Ltd (NYSE:AXS) reported a strong operating return on equity of 18.6% for 2024.
• The company achieved a record operating earnings per share of $11.18, marking a 98% increase over the prior year.
• Gross premiums written exceeded $9 billion for the year, reflecting an 8% growth.
• The insurance segment delivered a combined ratio of 89.1% for the year, indicating strong underwriting performance.
• Net investment income reached a record $759 million, driven by higher yields on a larger fixed income portfolio.

Negative Points

• The company noted increasing competition in global markets, particularly within property, marine, and aviation units.
• There is a continued impact of social inflation on liability lines, posing challenges for the industry.
• The cyber risk landscape is evolving with more sophisticated attacks, requiring constant adaptation.
• The expense ratio for the quarter was higher than expected at 13.7%, partly due to accruals for variable compensation.
• The reinsurance segment faced greater competition in the UK motor class, impacting rate levels.

Q & A Highlights

Q: Vince, I think I heard you say that US casualty rates in the fourth quarter in insurance were up 29%. Did I hear that right? And what's your outlook for 2025, should we see similar rate increases? Also, I'm hearing there's some softness in reinsurance casualty pricing. Could you talk about that and why the disconnect? A: Yes, you heard correctly. We expect double-digit rates to persist in 2025 for liability. Regarding reinsurance liability, we've been cautious since 2023. We continue to price with a resurgence of rate in liability reinsurance, maintaining a cautious underwriting appetite until circumstances change.

Q: Could you give a little color on how you think you're going to be exposed to the wildfires? A: For AXIS, this will not be a material event. We are a commercial underwriter in California, not in the high net worth residential space. Our market share is approximately 10 to 12 basis points. Our accounting of claims to date is fairly insubstantial.

Q: I want to start with the loss experience in US casualty. Are claims patterns still consistent with the assumptions you set last year? A: Yes, based on the studies and reserves set at the end of 2023, we feel confident in those reserves and the loss picks for 2024 in our casualty lines. The data and underlying claims patterns reinforce our confidence.

Q: Any update on the Bermuda DTA and what could potentially happen here in 2025? A: The OECD guidance suggests adjustments in time, likely before 2027. The current Bermuda ETA is expected to be acceptable for 2025 and 2026. Thereafter, adjustments may be needed, impacting cash rather than the DTA itself.

Q: Given the reshaping of the portfolio, anything happened at [1.1] on your seeded reinsurance or anything contemplated in 2025? A: We had about five placements at [1.1], notably in cyber outbound reinsurance, which was successful. We bought more tail cover and improved our cede by about 4 points. We also assumed an additional 4 percentage points in cyber at this renewal.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.