Bermudian re/insurer AXIS Capital Holdings Limited has reported a net loss of $10 million for the fourth-quarter of 2019 and a combined ratio of 107.3%, with the firm’s reinsurance segment falling to an underwriting loss in both periods.
The Q4 net loss compares with a net loss of $198 million in the same period a year earlier. For the full-year 2019, AXIS Capital’s net income reached $282 million, which is up significantly on the $0.4 million posted in 2018.
For the quarter, AXIS Capital saw its combined ratio improve from 117.3% in Q4 2018 to 107.3%. However, for the full-year, the insurer and reinsurer’s combined ratio weakened from 99.9% in 2018 to 102.6% in 2019.
Commenting on the firm’s results, President and Chief Executive Officer (CEO), Albert Benchimol, said: “We did not deliver the financial results we expected in 2019, as our performance suffered from a record typhoon season in Japan, poor crop conditions in the U.S., as well as high loss activity in property and aviation lines.
“Notwithstanding these headwinds, our actions still enabled us to reduce our current year ex-cat loss ratio by over a point this year, bringing the reduction in our ex-cat loss ratio to more than three points over two years, with progress in both our Insurance and Reinsurance businesses.
“With the additional portfolio remediation that we executed in 2019, we entered the new year with a stronger book that has less inherent volatility. We have brought down PMLs, decreased limits, and exited or reduced our participation in underperforming businesses while pushing for more rate across the board. At the same time, we’re focused on driving growth in our most attractive lines. We’re also working with our partners in distribution to use our expanding digital capabilities to create new business growth in desirable smaller accounts.”
Overall, gross premiums written increased by 8% to $1.3 billion and net premiums written by 4% to $786 million. 22% of growth in net premiums written was experienced in the reinsurance segment, which offset a 1% decline in the insurance segment.
For the full-year, gross premiums written fell by 0.2% to $6.9 billion, while net premiums written declined by 4% to $4.5 billion.
AXIS Capital’s insurance segment returned to underwriting profit in Q4 and full-year 2019 at more than $29.6 million and $44 million, respectively. In Q4, the insurance segment posted a combined ratio of 94.9% versus 106.3% in the same period last year.
For the full-year, the re/insurer’s insurance segment combined ratio weakened slightly to 98.1%, compared with 96.9% a year earlier.
In its reinsurance segment, AXIS Capital has reported an improved performance although it did still fall to an underwriting loss in the fourth-quarter, of $78.9 million, posting a combined ratio of 113.5%. For the full-year, the firm’s reinsurance unit fell to a $15.5 million underwriting loss, versus an underwriting gain of $46.5 million a year earlier, while the unit’s combined ratio weakened from 98.4% to 101.2%.
Turning to investments, and the company’s net investment income of $118 million for Q4 is up $4 million against the same period in 2018. Net realized and unrealized gains recognized in net income for Q4 were $43 million, versus net realized and unrealized losses of $73 million in Q4 2018.
“With pricing momentum accelerating, we believe that favorable market conditions will sustain through 2020, driving more lines of business to pricing adequacy and providing us with more opportunities to leverage our market position to generate profitable growth,” said Benchimol.
