Monday, insurance and reinsurance provider Axis Capital Holdings Ltd. (AXS), said its profit doubled in the fourth quarter from a year-ago on higher premium earned and higher investment income.
Axis Capital's fourth quarter profit jumped to $282.06 million or $1.87 per share from $130.85 million or $0.88 per share in the year-ago period.
On an average, 11 analysts polled by Thomson Reuters expected earnings of $1.31 per share for the quarter. Analysts' estimates typically exclude one-time items.
In comparison, property-casualty insurer Ace, Ltd. (ACE) reported a fourth-quarter profit that beat analysts' expectations and increased to $953 million or $2.81 per share from $20 million or $0.06 per share in the year-earlier quarter.
Axis Capital's total revenue increased to $867.55 million from $579.25 million in the prior-year period.
Analysts expected revenue of $341.10 million for the fourth-quarter.
The company's net premiums earned increased 8% to $713.61 million from $658.28 million a year ago. Net investment income for the quarter was $118.17 million, compared to a net investment loss of $26.01 million in the prior-year quarter due to improved investment market conditions for the company's alternative investment portfolio.
The return on other investments was 4.5% this quarter, reflecting a strong performance from holdings in hedge and credit funds. Net realized investment gains during the quarter were $6 million, compared to $33 million net realized investment losses in the prior year quarter.
Axis Capital's operating income was $276 million or $1.83 per share, up from $163 million or $1.09 per share for the year-earlier period.
Segment-wise, the insurance wing reported an underwriting income of $85.93 million, down 11% from $96.61 million in the year-ago period. Underwriting results for the quarter includes other insurance related income of $28 million relating to cancellation and settlement of an insurance derivative contract with longevity risk. Combined ratio for the quarter 81.6%, compared to 60.2% in the prior year quarter. The segment's accident year loss ratio for the quarter increased 18.8 points to 76.9%, driven by an increase in credit and political risk loss ratio.
Gross premiums written increased 5% to $470.74 million from $448.94 million in the year-ago quarter due to growth in the company's property and marine lines of business. Gross premiums also reflects new business, pricing improvement on marine lines of business and a change in certain renewal dates.
The reinsurance segment underwriting income rose 9% to $128.58 million from $118.88 million in the year-earlier period due to a 12% growth in net premiums earned. The segment's combined ratio of 68.3% was largely unchanged from the year-ago quarter's. The current year loss ratio for the quarter decreased 5.8 points to 56.8%, driven by a lower level of loss activity on property and credit and bond reinsurance business compared to the prior year quarter.
For the full-year, net income increased to $461.01 million or $3.07 per share from $350.50 million or $2.26 per share for the prior year. Revenue increased to $2.814 billion from $2.810 billion in the previous year. Analysts expected full-year earnings of $4.58 per share on revenues of $2.80 billion.
Operating income for the full year was $766 million or $5.10 per share, compared with $436 million or $2.81 per share last year.
AXS closed Monday's regular trading at $28.69, up $0.13 or 0.46%, on the NYSE.
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