Axis Capital Holdings Limited · NYSE:AXS
Axis Capital — Q1 2021 Earnings Presentation
23 slides from Axis Capital's earnings presentation, Apr 29, 2021
Slide 1: Investor Meetings Post – 1Q21
Investor Meetings Post – 1Q21
Slide 2: Safe Harbor Statement
Safe Harbor Statement CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical
Slide 3: Vision: Global Leadership in Specialty Risks
Vision: Global Leadership in Specialty Risks Targeting top-quintile profitability with industry average volatility Consistent Commitment Hybrid model – Insurance & Reinsurance to Our Franchise anchored in leadership positions in key Strategy markets and distribution relationships Strong relationship
Slide 4: Leading Specialty Insurer and Global Reinsurer
Leading Specialty Insurer and Global Reinsurer We provide our clients and distribution partners with a broad range of risk transfer products and services, meaningful capacity and solid financial strength AXIS at a Glance1 Total FY2020 GPW: $6.8 billion Exchange / Ticker NYSE / “AXS” Insurance Market
Slide 5: AXIS Responds to the Pandemic
AXIS Responds to the Pandemic Throughout the global COVID-19 pandemic, we have: (i) been committed to the health, safety and wellness of our employees, (ii) focused on sustaining excellent service to our clients and distribution partners and (iii) supported our communities through philanthropic givi
Slide 6: AXIS: A Profitable Growth Engine
AXIS: A Profitable Growth Engine • Margin Improvement: Major repositioning of the portfolio over the past 3 years should continue to drive improvements in underlying results • Attractive Market Position: Over 85% of AXIS’ insurance portfolio is in the markets seeing strong rate improvements includin
Slide 7: Pricing Momentum Continues into 2021
Pricing Momentum Continues into 2021 Insurance: Cumulative Insurance Rate Improvements • Rates continue to be increase in the double digits • Average rate increases of ~15% for full-year 2020 and continued to rise at similar levels in 1Q21 150 • Rate increases seen in almost every line of business a
Slide 8: Accelerating Profitable Insurance Growth
Accelerating Profitable Insurance Growth Price firming in the insurance market continues to accelerate in virtually every line of business which should drive future growth $1,200 Insurance Segment GPW Changes Targeting Profitable Growth1 Millions $1,104 $1,103 $1,100 $5 $1 $1,038 $8 $1,000 $968 $962
Slide 9: Strategic Distribution Benefits
Strategic Distribution Benefits Accessing high quality business through the best distribution channels provides for margin improvement FY2020 Insurance Segment: Strategic Distribution S P E C I AL TY / W H O LE S AL E BIG 3 O TH E R GPW Growth Rate Change Acquisition Cost Accelerating Profitable Gro
Slide 10: Profitable Reinsurance Growth: Where it Matters
Profitable Reinsurance Growth: Where it Matters AXIS has been focused on profitable growth where risk selection and rate adequacy drive sound underwriting decisions Reinsurance rates are expected to continue firming as mid-year renewals approach Reinsurance GPW Growth Q1 2021 vs Q1 2020 Strong rate
Slide 11: Executing the Strategy
Executing the Strategy AXIS has positioned itself to excel in the current firming P&C market and the underwriting performance is producing tangible results Group Ex-Cat AY Combined Ratio 100% 97.6% 97.1% 95% 93.50% 92.2% 90% 89.20% 85% 80% FY2018 FY2019 FY 2020 1Q20 1Q21 EX-PGAAP Ex-Cat AY Combined
Slide 12: Group: Underwriting Actions Drive Improving Performance
Group: Underwriting Actions Drive Improving Performance Group Ex-Cat AY Loss Ratio 65% 61.7% 60.6% 60% 57.7% 57.1% 55.1% 55% 50% FY2018 FY2019 FY2020 1Q20 1Q21 Loss ratio improvement driven by: • Enhanced pricing, improved terms/conditions and lower limits drive improved loss ratios coupled with gre
Slide 13: Insurance Segment: Underlying Loss Ratio Improvement
Insurance Segment: Underlying Loss Ratio Improvement Insurance Ex-Cat AY Loss Ratio 64% 61.3% 60% 3.6% 58.5% 57.0% 2.7% 56% 2.3% 55.1% 57.7% 54.2% 0.7% 0.8% 55.9% 52.3% 52% 54.7% 54.4% 53.5% 48% 52.3% 44% FY2017 FY2018 FY2019 FY2020 1Q20 1Q21 Continuing Lines Ex-Cat AY Loss Ratio Exited Lines Impact
Slide 14: Reinsurance Segment: Underlying Loss Ratio Improvement
Reinsurance Segment: Underlying Loss Ratio Improvement Reinsurance Ex-Cat AY Loss Ratio 67% 65.6% 64.8% 65% 64.0% 63% 61% 60.6% 60.2% 59% 58.6% 57% 55% FY2017 FY2018 FY2019 FY2020 1Q20 1Q21 Portfolio Changes Driving Improving Loss Ratios: • 7.0 points of underlying margin improvement since YE 2017 d
Slide 15: Continuing Operational Improvements
Continuing Operational Improvements Underwriting-related G&A Expenses $600 Millions $519.2 $505.7 $500 $478.0 $400 $300 $200 $130.0 $132.7 $100 FY2018 FY2019 FY2020 1Q20 1Q21 Focused Expense Management: • Modest compensation/headcount increases lead to slightly higher G&A dollars in 1Q21 • Headcount
Slide 16: ROE Accretive Capital Partnerships
ROE Accretive Capital Partnerships Strategic Capital Partners AUM Growth Strategic Capital Partners Fee Income (1) $2.0bn ($ in millions) $1.5bn $80.3 AUM Growth ($bn) $1.0bn $0.5bn $60.5 $0.0bn 2015 2016 2017 2018 2019 2020 $48.0 Harrington AVRL Other Strategic Partners Alturas Premium Ceded to Str
Slide 17: Interest Rates Remain a Headwind to Investment Income
Interest Rates Remain a Headwind to Investment Income Net Investment Income $500 Millions $478.6 $438.5 $400 $349.6 $300 $200 $114.2 $93.1 $100 $0 FY2018 FY2019 FY2020 1Q20 1Q21 • 1Q21 investment income was aided by strong returns from alternative assets, but the headwind from low interest rates is
Slide 18: Achieving Significant Progress Across the Platform
Achieving Significant Progress Across the Platform In the past five years, AXIS has implemented significant change to its platform and portfolios Key Drivers of Recent Progress Improvement Targets3 vs. FY20 • Sus tained pricing improvements Well positioned for profitable growth in all GPW Growth 1 •
Slide 19: Furthering Our Commitment to ESG and Corporate Citizenship
Furthering Our Commitment to ESG and Corporate Citizenship AXIS has long been a values-based organization and since 2018, we have been scaling our ESG and Corporate Citizenship program, overseen by the Corporate Governance and Nominating Committee ENVIRONMENT DIVERSITY, EQUITY & INCLUSION Enhancing
Slide 20: Our Purpose, Strategic Vision and Values
Our Purpose, Strategic Vision and Values In a world filled with risk and uncertainty, we give people and Our Purpose organizations the confidence they need to pursue their goals and (who we are) ambitions. Our Strategic Vision Be leaders in our chosen markets, standing apart for delivering (what we
Slide 21: Conclusion
Conclusion AXIS is a leading specialty insurer and global reinsurer Strong franchise with superior position in chosen specialty markets that are exhibiting the most attractive opportunities Pace of underwriting margin improvement should continue given ongoing portfolio improvements and acceleration
Slide 22: Appendix I
Appendix I Note: On October 2, 2017, we acquired Novae Group plc (“Novae”). At the acquisition date, we identified value of business acquired (“VOBA”) which represents the present value of the expected underwriting prof it within policies that were in-f orce at the closing date of the transaction. I
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