Axis Capital Holdings Limited · NYSE:AXS
Axis Capital — Credit Suisse Insurance and Asset Management Conference (November 2007)
17 slides from Axis Capital's conference presentation, Nov 14, 2007
Slide 1: AXIS Capital Credit Suisse Insurance and Asset Management Conference
AXIS Capital Credit Suisse Insurance and Asset Management Conference Dennis Reding, COO November 14, 2007
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: Non-GAAP Disclosure
Non-GAAP Disclosure We have presented diluted book value per common share calculated using the “if converted” method, which is a non-GAAP financial measure. This measure takes into account the effect of the full conversion of our outstanding stock options, warrants, restricted stock and phantom stoc
Slide 4: AXIS at a Glance
$4.4 billion common equity and $5.4 billion total capital 724 employees in Bermuda, Europe, U.S. and Australasia Ratings of A (S&P - positive), A2 (Moody’s - stable) and A (AM Best - stable) $3.7 billion in gross premiums written (GPW) during trailing twelve months (TTM¹) GPW by Segment TTM GPW = $3
Slide 5: AXIS Offers Differentiation and Focus
AXIS Offers Differentiation and Focus Highly experienced management and team of specialists in knowledge-based business High-quality risk-adjusted returns Global platform in both insurance and reinsurance already built for longevity and value creation through all product cycles Strategic initiatives
Slide 6: Diversified Strategic Footprint
Diversified Strategic Footprint 2002 $1.1Bn 2003 $2.3Bn 2004 $3.0Bn 2005 $3.4Bn 2006 $3.6Bn 2007 + Bermuda London-market Worldwide specialty lines portfolio U.S. excess & surplus lines U.S. professional lines renewal rights (D&O) Bermuda professional lines (D&O) E&O team European professional lines
Slide 7: Quality, Sustainability and Profitability
Quality, Sustainability and Profitability Loss ($ in millions) 70.4% 73.6% 84.4% 101.8% 77.3% Total Expense Ratio Loss Ratio ’02-’06 Average Combined Ratio: 81.5% Well-balanced portfolio preserved capital in ‘05 despite unprecedented Atlantic wind activity Return on Average Common Equity Net Income
Slide 8: 2002 – 2006 Risk/Return Comparison
2002 – 2006 Risk/Return Comparison Montpelier XL Platinum Aspen AWAC Max Re Endurance ACE Everest Partner Re Arch Capital White Mountains Renaissance Re 2% 4% 6% 8% 10% 12% 14% 16% 18% 5 10 15 20 25 30 35 40 Source: Benfield Quarterly FY 2006 Capital Returns, March 2007 Of companies with short-tail
Slide 9: Strong YTD 2007 Results
Strong YTD 2007 Results Consolidated Gross Premiums Written 4.2% AXIS Re Gross Premiums Written 8.1% AXIS Insurance Gross Premiums Written 0.7% Consolidated Combined Ratio = (1.8%) 26.1% Consolidated Net Income Consolidated Net Investment Income 16.1% ($ in millions) Consolidated GPW up modestly com
Slide 10: Current State of the Cycle
Current State of the Cycle Peak reached, but price declines vary by line Majority of business, aside from the more volatile lines (e.g. aviation and terrorism), at or above adequate level Continued focus on accessing more business for review Risk selection critical at this point in the cycle Targete
Slide 11: Balance of Earnings Quality and Select Growth
Balance of Earnings Quality and Select Growth Specialist business in small-to-medium enterprise segment New Products Further Enhancements of Risk Management We continue to reduce premium writings where pricing is inadequate and to strive for growth when opportunities meet or exceed our profitability
Slide 12: Origins of Select Markets
Origins of Select Markets ($ in millions) Property Other Specialty Professional Lines Casualty $94 $249 $355 Marine Note: Media Pro GPW is included in professional lines in above chart. $22 $1 $0 $50 $100 $150 $200 $250 $300 $350 2002 2003 2004 2005 2006
Slide 13: Navigating the Select Markets Global Landscape
Initiate Expansion in U.S. Targeted Global Growth Canada U.K. / Europe Australasia Navigating the Select Markets Global Landscape E&O D&O A&H
Slide 14: Strategic Initiatives in Capital Risk Solutions
Strategic Initiatives in Capital Risk Solutions Coverage sought for risks placed in the capital markets: Protection of the issuance either through Political Risk or Credit-enhanced policies offered for bond holders at large Specific entities seeking protection for their own book Opportunity to diver
Slide 15: Financial Objectives to Drive Shareholder Value
Financial Objectives to Drive Shareholder Value Outperform in value creation (book value per share + dividend growth) over long-term for shareholders Sufficient potential profit to absorb major events (capital preservation) Strong balance sheet supported by disciplined reserving and characterized by
Slide 16: Shareholder Value Creation
Shareholder Value Creation Diluted Book Value Per Share (1) (1) Calculated using the “if converted” method. Accumulated Dividends Paid Diluted book value per share + Accumulated dividends Diluted book value per share plus accumulated dividends have grown at an annualized rate of 17.2% from 2002 thro
Slide 17: Non-GAAP Disclosure: Reconciliation of Diluted Book Value per Share
Non-GAAP Disclosure Reconciliation of Diluted Book Value per Share to Basic Book Value per Share At September 30 ( in thousands, except per share) 2007 2006 2005 2004 2003 2002 Common shareholders' equity 4,443,592 $ 3,912,647 $ 3,012,351 $ 3,238,064 $ 2,817,148 $ 1,961,033 $ Shares outstanding 145,