Axis Capital Q3 Earnings Call Highlights

Key Points

• Strong third-quarter results: Axis Capital reported $202 million in net income, $229 million in operating income and a 15.7% annualized operating return on equity. Gross premiums written increased 11% to $2.4 billion, while net investment income rose 14% to $211 million.
• Insurance growth remained robust but selective: Insurance premiums grew 13%, led by AXIS Capacity Solutions and expanded classes, though management reduced exposure where property and casualty pricing had become inadequate. The insurance segment produced a 92% combined ratio and $104 million of underwriting income.
• Capital returns continued despite catastrophe and war losses: Catastrophe and war-related losses totaled $75 million, lifting the consolidated combined ratio to 94%. AXIS repurchased $109 million of shares during the quarter and said it expects to remain active in buybacks, while reinsurance continues shifting toward shorter-tail business.

Axis Capital NYSE: AXS reported third-quarter 2026 net income available to common shareholders of $202 million, or $2.75 per diluted share, as the specialty insurer posted double-digit insurance premium growth, higher investment income and continued share repurchases.

Operating income was $229 million, or $3.12 per diluted share, producing an annualized operating return on equity of 15.7%, Chief Financial Officer Matt Kirk said on the company’s earnings call. Gross premiums written rose 11% year over year to $2.4 billion, including a 13% increase in insurance premiums and a 4% increase in reinsurance premiums.

President and Chief Executive Officer Vince Tizzio said the company’s diluted book value increased 7% over the trailing 12 months, or 14.4% excluding accumulated other comprehensive income. AXIS also repurchased $109 million of common shares during the quarter and has reduced its share count by approximately 16.6% since the fourth quarter of 2023.

Insurance Growth Led by ACS and Expanded Classes

The insurance segment wrote $1.9 billion in premiums during the quarter, up 13% from a year earlier. Tizzio said AXIS Capacity Solutions, or ACS, contributed 7 percentage points of that growth, while expanded classes contributed 5 percentage points and the core insurance portfolio accounted for the remainder.

New premiums written in insurance totaled $630 million. North American retail classes grew 16%, while submission flow in North America increased 15%. Tizzio also cited growth in marine, property, professional lines, accident and health, and ACS.

The insurance segment generated $104 million of underwriting income and a 92% combined ratio. Its current accident-year combined ratio excluding catastrophe losses was 87.2%.

Management said it remains selective as competitive conditions intensify in several markets. Property premiums grew 11%, while rates declined 10%. In excess and surplus property, rates were down 15%, and Tizzio said the company is becoming increasingly selective where pricing is no longer rational.

Liability rates rose 8%, broadly in line with loss trends, according to the company. AXIS reduced exposures where pricing did not meet its expectations. U.S. excess casualty rates increased 10%, but the company did not grow new premiums in that line, while its lower-middle-market excess casualty operation grew 23% where management viewed business as adequately priced.

Professional lines grew 16%, supported by errors and omissions business and expanded offerings such as allied health and environmental coverage. Cyber rates declined 4%, though premiums increased by $7 million, concentrated in targeted large-account business. Tizzio said AXIS remains “hypervigilant” in cyber because of an elevated risk environment that includes artificial intelligence-related concerns.

War and Catastrophe Losses Affected Combined Ratio

AXIS reported a consolidated combined ratio of 94%, compared with 89.4% in the prior-year quarter. Catastrophe and war-related losses totaled $75 million, or 4.6 percentage points, including $44 million of war losses and $31 million of catastrophe and weather-related losses.

The company recognized $15 million of favorable prior-year reserve development, or 0.9 percentage points, concentrated in shorter-tail lines. The current accident-year loss ratio excluding catastrophe and war-related losses was 57%, compared with 56.3% a year earlier.

The insurance attritional loss ratio rose 1.9 points to 54.2%, reflecting business mix and what Kirk described as market pressure from a more competitive property and casualty environment. The company expects those pressures to continue.

Marine war activity contributed about $100 million of earned premium during the quarter and had a modest benefit of roughly half a point on the insurance attritional loss ratio, Kirk said. Management said it expects to continue writing marine war and terrorism business in the fourth quarter, though the volume will depend on how the Iran conflict develops. Tizzio said acquisition costs on that business can range from 30% to 40%, depending on whether AXIS acts as lead or follow underwriter.

Reinsurance Portfolio Continues Shift Toward Shorter-Tail Business

Reinsurance premiums increased 4% to nearly $450 million, with specialty short-tail lines representing 57% of premiums. New business exceeded $70 million, with 60% of that total in short-tail lines. The reinsurance segment recorded a 92.4% combined ratio.

While reinsurance grew in the third quarter, Kirk said AXIS still expects full-year reinsurance premiums to decline by low double digits as growth in shorter-tail lines is offset by continued reductions in longer-tail business. Tizzio said the company has repositioned AXIS Re as a boutique specialist and has reported profits in the segment for 11 consecutive quarters.

ACS and other shorter-tail businesses, including pet and surety, contributed to a higher consolidated acquisition expense ratio of 22.5%, compared with 19.7% a year earlier. Kirk said these businesses carry higher commission costs but are managed for total underwriting economics, including potentially lower losses, lower internal expenses and fee income.

Fee income totaled $23 million, including $18 million that offset general and administrative expenses and $5 million reported as other insurance-related income. Management said ACS-related fee income broadly offsets the associated increase in acquisition expense.

Investment Income and Capital Returns Rise

Net investment income increased 14% to $211 million, supported by operating cash flow, a larger invested asset base and improving yields. Kirk said fixed-maturity investment income benefited from those factors, while alternative-investment gains can be more variable from quarter to quarter.

For the fourth quarter, Kirk said a broad estimate of about $200 million in overall net investment income “would not be a bad place” to start.

Management said AXIS has sufficient capital to support organic growth and shareholder returns simultaneously. Kirk said the company views its current share valuation as attractive and expects to remain active in repurchasing stock during the fourth quarter.

Tizzio said management is not providing 2027 growth guidance, but reiterated that the company intends to adjust exposures as markets change while pursuing areas where it believes risk-adjusted returns remain attractive.

About Axis Capital (NYSE:AXS)

Axis Capital Holdings Limited NYSE: AXS is a Bermuda-based specialty insurance and reinsurance company. Through its operating subsidiaries, the company provides coverage and risk-management solutions for businesses, institutions and other insurers facing complex or difficult-to-place risks.

AXIS offers a range of commercial property and casualty insurance products, including professional liability, cyber, marine, aviation, energy, environmental, political risk, credit and surety, and accident and health coverage.

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