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AXIS Capital (AXS) Q2 Earnings Beat on Solid Underwriting
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AXIS Capital Holdings Limited (AXS - Free Report) posted second-quarter 2024 operating income of $2.93 per share, beating the Zacks Consensus Estimate by 16.2%. The bottom line increased 31.4% year over year.
The quarterly results of AXS reflected improved underwriting income across both segments, income from fixed maturities portfolio, an increase in property, credit and political risk, and accident and health lines, as well as lower expenses.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Total operating revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.8%. The top line, however, rose 6.8% year over year on higher net investment income and net premiums earned.
Net premiums written increased 9% to $1.6 billion, driven by a rise of 17% in the Insurance segment, partially offset by an 11% decline in the Reinsurance segment.
Net investment income jumped 40% year over year to $191 million, primarily attributable to income from fixed maturities portfolio due to increased yields. The Zacks Consensus Estimate for the metric was pegged at $172.3 million. Our estimate was $168.6 million.
Total expenses in the quarter under review decreased 0.1% year over year to $1.2 billion due to lower general and administrative expenses. Our estimate for the same was $1.1 billion.
Pre-tax catastrophe and weather-related losses and net of reinsurance were $47 million, wider than the year-ago loss of $32 million, primarily attributable to the Red Sea Conflict.
AXIS Capital’s underwriting income of $161 million increased 8.5% year over year. Our estimate was $143.6 million.
The combined ratio improved 110 basis points (bps) to 90.4%. The Zacks Consensus Estimate was pegged at 94.5. Our estimate was 89.5.
Segment Results
Insurance: Gross premiums written improved 7.7% year over year to $1.8 billion, primarily attributable to an increase in property, credit and political risk, as well as accident and health lines due to new business, and marine and aviation lines owing to premium adjustments. It was partially offset by a decrease in cyber lines, principally due to a reduction in premiums associated with program business, and liability lines owing to underwriting actions taken to reposition the portfolio.
Net premiums earned increased 13.7% year over year to $958.2 million.
Underwriting income of $115.6 million increased 0.9% year over year. The combined ratio deteriorated 150 bps to 87.9. The Zacks Consensus Estimate for the combined ratio was pegged at 86.5.
Reinsurance: Gross premiums written increased 4.3% year over year to $626.1 million. The increase was primarily attributable to new business, improved line sizes and the timing of renewals, partially offset by a decrease in premium adjustments and a decline in credit and surety lines due to the timing of renewals of significant contracts.
Net premiums written decreased 18.1% year over year to $346.2 million.
Underwriting income of $45.5 million increased 34.5% year over year. The combined ratio improved 400 bps year over year to 89.3. The Zacks Consensus Estimate for the combined ratio was pegged at 117.7.
Financial Update
AXIS Capital exited the second quarter with cash and cash equivalents of $1.2 billion, up 14.5% from the 2023-end level.
Debts were $1.3 billion at quarter-end, which remained flat from the 2023-end level.
Book value per share increased 9.7% from the 2023-end level to $59.23 as of Jun 30, 2024.
Annualized operating return on average common equity was 19.9% in the second quarter, which expanded 270 bps year over year.
Capital Deployment
As of Jun 30, 2024, AXIS Capital had $300 million remaining authorization under the board-authorized share repurchase program for common share repurchases.
Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year. Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion. Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. The Zacks Consensus Estimate was pegged at $252 million. Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion. Our estimate was $2.2 billion. In its P&C insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.
RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The Zacks Consensus Estimate was pegged at $37.4 million. Total expenses increased 9.5% year over year to $314.8 million. Our estimate was $331.7 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
CNA Financial Corporation (CNA - Free Report) reported second-quarter 2024 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 1.6%. However, the bottom line increased 5.3% year over year. Total operating revenues of CNA Financial were $3.1 billion, up 6.7% year over year. The top line beat the Zacks Consensus Estimate by 1.3%. Net written premiums of Property & Casualty Operations increased 6% year over year to $2.6 billion.
Net investment income rose 7.4% year over year to $618 million. Our estimate for net investment was $601.1 million. The Zacks Consensus Estimate was pegged at $592.3 million. Total claims, benefits and expenses increased 7.3% to $2.6 billion. Our estimate was $2.5 billion. Catastrophe losses were $82 million, wider than a loss of $68 million in the year-ago quarter. Underwriting income declined 10.1% year over year to $124 million. Our estimate was $175.3 million.
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AXIS Capital (AXS) Q2 Earnings Beat on Solid Underwriting
AXIS Capital Holdings Limited (AXS - Free Report) posted second-quarter 2024 operating income of $2.93 per share, beating the Zacks Consensus Estimate by 16.2%. The bottom line increased 31.4% year over year.
The quarterly results of AXS reflected improved underwriting income across both segments, income from fixed maturities portfolio, an increase in property, credit and political risk, and accident and health lines, as well as lower expenses.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited Quote
Quarterly Operational Update
Total operating revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.8%. The top line, however, rose 6.8% year over year on higher net investment income and net premiums earned.
Net premiums written increased 9% to $1.6 billion, driven by a rise of 17% in the Insurance segment, partially offset by an 11% decline in the Reinsurance segment.
Net investment income jumped 40% year over year to $191 million, primarily attributable to income from fixed maturities portfolio due to increased yields. The Zacks Consensus Estimate for the metric was pegged at $172.3 million. Our estimate was $168.6 million.
Total expenses in the quarter under review decreased 0.1% year over year to $1.2 billion due to lower general and administrative expenses. Our estimate for the same was $1.1 billion.
Pre-tax catastrophe and weather-related losses and net of reinsurance were $47 million, wider than the year-ago loss of $32 million, primarily attributable to the Red Sea Conflict.
AXIS Capital’s underwriting income of $161 million increased 8.5% year over year. Our estimate was $143.6 million.
The combined ratio improved 110 basis points (bps) to 90.4%. The Zacks Consensus Estimate was pegged at 94.5. Our estimate was 89.5.
Segment Results
Insurance: Gross premiums written improved 7.7% year over year to $1.8 billion, primarily attributable to an increase in property, credit and political risk, as well as accident and health lines due to new business, and marine and aviation lines owing to premium adjustments. It was partially offset by a decrease in cyber lines, principally due to a reduction in premiums associated with program business, and liability lines owing to underwriting actions taken to reposition the portfolio.
Net premiums earned increased 13.7% year over year to $958.2 million.
Underwriting income of $115.6 million increased 0.9% year over year.
The combined ratio deteriorated 150 bps to 87.9. The Zacks Consensus Estimate for the combined ratio was pegged at 86.5.
Reinsurance: Gross premiums written increased 4.3% year over year to $626.1 million. The increase was primarily attributable to new business, improved line sizes and the timing of renewals, partially offset by a decrease in premium adjustments and a decline in credit and surety lines due to the timing of renewals of significant contracts.
Net premiums written decreased 18.1% year over year to $346.2 million.
Underwriting income of $45.5 million increased 34.5% year over year. The combined ratio improved 400 bps year over year to 89.3. The Zacks Consensus Estimate for the combined ratio was pegged at 117.7.
Financial Update
AXIS Capital exited the second quarter with cash and cash equivalents of $1.2 billion, up 14.5% from the 2023-end level.
Debts were $1.3 billion at quarter-end, which remained flat from the 2023-end level.
Book value per share increased 9.7% from the 2023-end level to $59.23 as of Jun 30, 2024.
Annualized operating return on average common equity was 19.9% in the second quarter, which expanded 270 bps year over year.
Capital Deployment
As of Jun 30, 2024, AXIS Capital had $300 million remaining authorization under the board-authorized share repurchase program for common share repurchases.
Zacks Rank
AXIS Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year. Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion. Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. The Zacks Consensus Estimate was pegged at $252 million. Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion. Our estimate was $2.2 billion. In its P&C insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.
RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The Zacks Consensus Estimate was pegged at $37.4 million. Total expenses increased 9.5% year over year to $314.8 million. Our estimate was $331.7 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
CNA Financial Corporation (CNA - Free Report) reported second-quarter 2024 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 1.6%. However, the bottom line increased 5.3% year over year. Total operating revenues of CNA Financial were $3.1 billion, up 6.7% year over year. The top line beat the Zacks Consensus Estimate by 1.3%. Net written premiums of Property & Casualty Operations increased 6% year over year to $2.6 billion.
Net investment income rose 7.4% year over year to $618 million. Our estimate for net investment was $601.1 million. The Zacks Consensus Estimate was pegged at $592.3 million. Total claims, benefits and expenses increased 7.3% to $2.6 billion. Our estimate was $2.5 billion. Catastrophe losses were $82 million, wider than a loss of $68 million in the year-ago quarter. Underwriting income declined 10.1% year over year to $124 million. Our estimate was $175.3 million.