Bermuda-based AXIS Capital Holdings Limited has reported a net loss of $150 million for the fourth quarter of 2023 on the back of previously announced net adverse prior year reserve development of $425 million, as the firm’s combined ratio deteriorated by 30.5 percentage points to 124.6%.
The re/insurer announced last week that it opted to strengthen its reserves in the final quarter of last year attributable to its insurance and reinsurance segments in liability lines and professional lines.
Year-on-year, the firm’s prior year reserve development ratio increased 34.2 percentage points to 33.6% in Q4 2023, while the net losses and loss expense ratio jumped 31.5 percentage points to 91.1%.
Pre-tax weather related losses, net of reinsurance, were $26 million split $23 million in the insurance segment, and $3 million in the reinsurance segment.
The Q4 2023 combined ratio deteriorated to 124.6% from 94.1% in Q4 2022.
Across the group, gross premiums written (GPW) increased by $26 million, or 1%, to $1.8 billion with an increase of $113 million, or 8% in the insurance segment, partially offset by a decrease of $87 million, or 30% in the reinsurance segment.
Net premiums written (NPW) decreased by $24 million, or 2% to $1.1 billion with an increase of $83 million, or 9% in the insurance segment, offset by a decrease of $107 million, or 51% in the reinsurance segment.
The insurance division fell to an underwriting loss of $61.7 million in Q4 2023 with a combined ratio of 106.7%
Within the reinsurance segment, AXIS has reported an underwriting loss of $212 million with a combined ratio of 162.8%.
For the full year 2023, AXIS has reported a combined ratio of 99.9% compared with 95.8% in 2022, as the prior year reserve ratio increased 8.6 percentage points to 8.1%.
Pre-tax catastrophe and weather-related losses, net of reinsurance, were $138 million for the year, split $111 million in insurance and $27 million in reinsurance.
For the year, net adverse prior year reserve development was $412 million, split $176 million in insurance and $236 million in reinsurance.
GPW increased by $142 million, or 2%, to $8.4 billion in 2023 with an increase of $555 million, or 10% in the insurance segment, partially offset by a decrease of $413 million, or 16% in the reinsurance segment.
NPW decreased by $161 million, or 3% to $5.1 billion with an increase of $381 million, or 11% in the insurance segment, offset by a decrease of $542 million, or 29% in the reinsurance segment.
For the year, the firm’s insurance business produced underwriting income of $260.9 million compared with $327.3 million in 2022, with a combined ratio of 92.5%.
However, the reinsurance business fell to an underwriting loss of $100.2 million in 2023 compared with a gain of $31.4 million a year earlier, with a combined ratio of 107.6%.
On the asset side of the balance sheet, the re/insurer has announced net investment income of $186.9 million for the quarter and $611.7 million for the full year 2023, compared with $147 million and $418.8 million, respectively, in 2022.
All in all, AXIS has reported net income of $346 million, and operating income of $486 million for 2023.
Vince Tizzio, President and CEO of AXIS Capital, commented: “This was a transformative year for AXIS, one where we further elevated all aspects of how we operate and go to market, and we believe the Company is on a clear path to becoming a specialty underwriting leader. We’re capitalizing on favorable conditions in our chosen specialty markets while exhibiting underwriting discipline and strong cycle management. This was evidenced by our operating income of $486 million and a 4.5 point year-over-year improvement in the current accident year combined ratio to 91.8%.
“We’re energized by the continued profitable growth within our core specialty insurance business, highlighted by year-over-year increases in premium generation of 10% including new business premiums of 18%, and an excellent current accident year combined ratio of 87.4%. In parallel, we further solidified our repositioning of AXIS Re as a focused specialist reinsurer with increased profitability and reduced volatility.
“In 2023, through our ‘How We Work’ program, we made significant improvements to our operational infrastructure, while investing in talent, and becoming a more efficient and consistent company. We look ahead to 2024 with excitement. We have a robust global platform, strong and deep relationships with our customers, a great team and culture – and we’re relentlessly committed to taking this Company to the next level.”
