Axis Capital Holdings Limited · NYSE:AXS
Axis Capital — J.P. Morgan Insurance Conference 2011
20 slides from Axis Capital's conference presentation, Mar 29, 2011
Slide 1: AXIS Capital J.P. Morgan Insurance Conference 2011
Exhibit 99.1 AXIS Capital J.P. Morgan Insurance Conference 2011 New York, NY Albert Benchimol, CFO March 29, 2011
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Statements in this presentation that are not historical facts, including statements regarding our estimates, beliefs, expectations, intentions, strategies or projections, may be “forward-looking statements” within the meaning of the U.S. federal securities laws, including the
Slide 3: AXIS – Who we Are
AXIS – Who we Are Bermuda-domiciled Specialty Insurer and Reinsurer Founded 2001; IPO – 2003; $4.4 Bn market value (1) at 3/23/2011 $3.75 Bn GWP in 2010 Underwriting-led, Diversified Specialty Insurer and Reinsurer with Strong Risk Management Culture Strong Balance Sheet Multi-Platform Approach Well
Slide 4: AXIS Insurance
AXIS Insurance Development of AXIS Insurance GPW ($ in millions) 4
Slide 5: AXIS Reinsurance
AXIS Reinsurance Development of AXIS Reinsurance GPW ($ in millions) 5
Slide 6: AXIS Performance – Share Price to Fully Diluted Book Value
AXIS Performance – Share Price to Fully Diluted Book Value Book value per share (1) CAGR since 6/30/03 (IPO) 13.4% Total value creation per share (2) CAGR since 6/30/03 (IPO) 15.2% AXS Share Price Diluted Book Value (1) Total Value Creation (2) (1) Diluted book value per share calculated using Treas
Slide 7: Key Highlights
Key Highlights 2010 Financial Results GPW Growth 4.6% Combined Ratio 88.7% Operating ROACE 12.4% Diluted Book Value per Share Growth 17.0% Total Value Creation (1) 19.6% 2010 combined ratio of 88.7% includes 8.6 points of catastrophes (2) and 10.6 points of favorable prior year reserve development.
Slide 8: Superior Balance Sheet Strength
Superior Balance Sheet Strength High Quality, Liquid and Conservative Balance Sheet High-quality Prudent Approach to Superior Capitalization Investments Reserving Total Investments and Cash Gross Net ($ millions) of $12.6 Bn of which: Reserves Reserves ($ millions) ($ millions) Common Equity $5,125
Slide 9: Estimates of Loss from Q1 2011 Events
AXIS Estimates of Loss from Q1 2011 Events AXIS Group Industry Net Loss Loss Estimates (1) Estimates Comments Christchurch, $185-$215M $8-$12 Bn • Assumes total loss to vast NZ Earthquake majority of exposed reinsurance treaties • Insurance segment net loss not to exceed $20 million Australia Q1 $90
Slide 10: AXIS Re Japan EQ Market Share Analysis
AXIS Re Japan EQ Market Share Analysis AXIS Re Net PML Curves - % Share of Industry Loss - Japan EQ 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 0 10 20 30 40 50 60 Industry Loss (US$ Billions) 95% Confidence Interval Mean Market Share 5% Confidence Interval 10
Slide 11: Top Market Losses since 2001
Top 15 Market Losses since 2001 Estimated Total AXIS Estimated Insured Share of Losses AXIS Net Loss Insured ($ in billions) ($ in millions) Losses 1 Hurricane Katrina 2005 $65 $818M 1.3% 2 Tohoku Japan EQ* 2011 25 (1) N/A <1.3% 3 Hurricane Ike 2008 20 395 2.0% 4 Hurricane Wilma 2005 13.5 225 1.7% 5
Slide 12: Underwriting Outperformance
AXIS Underwriting Outperformance Average P&C Combined Ratio (1) 2002-2010 Source: Company Reports, SNL Note: Peers are Bermuda (re)insurers excluding Bermuda Class of 2005. (1) P&C operations only. Includes corporate expenses. 12
Slide 13: Excellent Long-term Value Creation
Excellent Long-term Value Creation Total Value Creation CAGR (12/31/04 – 12/31/10)¹ Source: Company Reports, SNL Note: Peers are Bermuda (re)insurers excluding Bermuda Class of 2005. (1) Total Value Creation calculated as change in diluted book value per share plus cumulative declared dividends. 13
Slide 14: The Case for a Broad P&C Market Turn
The Case for a Broad P&C Market Turn Low interest rate environment Absence of underwriting cash flow Deceleration of favorable reserve development Increasing pressure on accident year loss ratios Accumulation of recent large losses Catastrophe model change with RMS version 11 Increasing regulatory i
Slide 15: Property Cat Situation Overview
Property Cat Situation Overview Accumulation of recent large losses in excess of $60B combined with U.S. catastrophe model change expected to positively impact upcoming renewals February September December January February March April June/July January 2010 2010 2010 2011 2011 2011 2011 2011 2012 U.
Slide 16: Leveraged to Improving Lines of Business
Leveraged to Improving Lines of Business ($ in millions) 2010 % of Group Line of Business GPW GPW Profitability Comment Reinsurance Segment More than 50% of Catastrophe $453 12% ? 2010 GPW came from Property 355 9% lines impacted Professional lines 288 8% positively subsequent to Credit and bond 254
Slide 17: Underwriting Objectives - 2011
Underwriting Objectives - 2011 Manage risk Maintain quality of our seasoned portfolio Prepare to accelerate when the market turns • Transformation initiative to increase productivity of intellectual capital at AXIS • Continue to build global footprint A&H strategic initiative • Primary product focus
Slide 18: Investment and Financial Objectives - 2011
Investment and Financial Objectives - 2011 Protect Book Value and Total Returns in Rising Rate Environment Defend investment income in a low rate and spread environment • Maintain exposure to investment-grade spread assets • Manage duration Optimize risk-adjusted returns • Diversify away from intere
Slide 19: Efficient Capital Management
Efficient Capital Management Share Repurchases $820 Common Dividends $750 Common Equity Raised $444 $418 $404 $298 $250 $102 $78 $11 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -$250 2001-2011 YTD (Billions) -$750 Total Common Equity Raised $2.1 Common Dividends $0.8 Share Repurchases (authori
Slide 20: The Case for AXIS
The Case for AXIS Unique underwriting skill set • Disciplined peer review process Diversified platform • Insurance and reinsurance • Multiple lines and markets Excellent financial strength Track record of superior performance Ideally positioned to capitalize on market opportunities 20
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