AXIS Capital Holdings Limited AXS posted first-quarter 2025 operating income of $3.17 per share, beating the Zacks Consensus Estimate by 20%. The bottom line increased 23.3% year over year.
The insurer’s results reflected solid underwriting income, improved investment income, and higher premiums across the segments, offset by escalating expenses. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Quarterly Operational Update of AXS
Total operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 5.9%. The top line, however, rose 8.2% year over year on higher net premiums earned and net investment income.
Net investment income jumped 24% year over year to $208 million, primarily attributable to income from cash and cash equivalents, higher returns on alternative investments and income from fixed maturities attributable to increased yields on the portfolio. Our estimate was $193.8 million.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited Quote
Total expenses in the quarter under review rose 11.3% year over year to $1.3 billion, attributable to higher net losses and loss expenses and acquisition costs. Our estimate was $1.3 billion.
Pre-tax catastrophe and weather-related losses, and net of reinsurance were $49 million. It includes $32 million attributable to California Wildfires. The remaining losses were primarily attributable to other weather-related events. This compares unfavorably with the year-ago loss of $20 million.
AXIS Capital’s underwriting income of $163.4 million increased 12.2% year over year. Our estimate was $194.7 million. The combined ratio improved 90 basis points (bps) to 90.2.
AXIS Capital’s Segment Results
Insurance: Gross premiums written improved 5.2% year over year to $1.6 billion, attributable to all lines of business with the exception of cyber lines, which decreased in the quarter, principally due to a lower level of premium associated with program business. The metric matched our estimate.
Net premiums earned increased 10% year over year to $1 billion. Our estimate was $1 billion.
Underwriting income of $134.5 million climbed 9.4% year over year. Our estimate was $201.6 million. The combined ratio deteriorated 10 bps to 86.7.
Reinsurance: Gross premiums written rose 5.4% year over year to $1.1 billion. The improvement was primarily attributable to new business in professional lines and credit and surety lines, the timing of renewals in professional lines and liability lines, together with the restructuring of a significant contract in liability lines. It was partially offset by a decline in line sizes in accident and health lines, and decreased line sizes and nonrenewal in motor lines. The metric matched our estimate.
Net premiums earned declined 2.8% year over year to $330.7 million. Our estimate was $392.6 million.
Underwriting income of $28.9 million increased 27.5% year over year. Our estimate was pegged at a loss of $6.9 million. The combined ratio improved 350 bps year over year to 92.3.
Financial Update of AXS
AXIS Capital exited the first quarter with cash and cash equivalents of $2.76 billion, up 28.6% from the end of 2024.
Debts were $1.3 billion at quarter-end, up 0.02% from the 2024-end level.
As of March 31, 2025, book value per share grew 1.9% from the end of 2024 to $66.48, driven by net income and net unrealized investment gains. It was partially offset by common share repurchases and share dividends of 44 cents per share.
Annualized return on average common equity was 13.7% in the first quarter, which contracted 1,840 bps year over year.
AXIS Capital’s Capital Deployment
On Feb. 19, 2025, AXIS Capital's board approved a new share repurchase program for up to $400 million of the company's common shares.
As of March 31, 2024, AXIS Capital had $160 million of remaining authorization under the board-authorized share repurchase program for common share repurchases.
AXS Zacks Rank
AXIS Capital currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
Arch Capital Group Ltd. ACGL reported first-quarter 2025 operating income of $1.54 per share, which beat the Zacks Consensus Estimate by 12.4%. The bottom line, however, declined 37.1% year over year. Gross premiums written improved 8.9% year over year to $6.4 billion. Net premiums written climbed 10.5% year over year to $4.5 billion on higher premiums written across its Insurance and Reinsurance segments.
Net investment income grew 15.6% year over year to $378 million and beat our estimate of $436.2 million. The Zacks Consensus Estimate was pegged at $415 million. Operating revenues of $4.5 billion rose 21.2% year over year, driven by higher net premiums earned and net investment income. It missed the Zacks Consensus Estimate by 0.9%.
RLI Corp. RLI reported first-quarter 2025 operating earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 4.5%. The bottom line, however, decreased 9.2% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 10.7% year over year, driven by higher net premiums earned and net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.9%.
Gross premiums written increased 5% year over year to $491 million. This uptick can be attributed to the solid performance of the Casualty segment (up 13.5%). Our estimate was $577.9 million. Net investment income increased 12% year over year to $36.7 million. The Zacks Consensus Estimate was pegged at $38.6 million, while our estimate for the metric was $38.9 million. The investment portfolio’s total return was 1.3% in the quarter.
Cincinnati Financial Corporation CINF reported first-quarter 2025 operating loss of 24 cents per share, narrower than the Zacks Consensus Estimate of a loss of 61 cents. CINF had reported an operating income of $1.72 per share in the prior-year quarter. The year-over-year decrease of $309 million was primarily due to a $356 million increase in after-tax catastrophe losses.
Total operating revenues in the quarter under review were $2.6 billion, which missed the Zacks Consensus Estimate by 2.5%. The top line, however, improved 13.3% year over year. Net written premiums climbed 11% year over year to $2.5 billion. Investment income, net of expenses, increased 14% year over year to $280 million, as bond interest grew 24% and stock portfolio dividends declined 7%. The figure was higher than our estimate of $274.8 million.
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