Axis Capital Holdings Limited · NYSE:AXS
Axis Capital — Keefe, Bruyette and Woods 2009 Insurance Conference
24 slides from Axis Capital's conference presentation, Sep 10, 2009
Slide 1: AXIS Capital – Keefe, Bruyette and Woods 2009 Insurance Conference
Exhibit 99.1 AXIS Capital Keefe, Bruyette and Woods 2009 Insurance Conference New York, NY David Greenfield, CFO
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Cautionary Statement Regarding Forward-looking Statements 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 m
Slide 3: AXIS Capital – Overview
AXIS Capital – Overview Well-diversified leader in the global P&C markets Established global insurance and reinsurance platforms Well-diversified mix of specialty and niche businesses Geographic diversification globally Disciplined and proven underwriter Proven steward of capital (generated profitab
Slide 4: Consistent and Strong Franchise
Consistent and Strong Franchise Since our inception, our return on equity has averaged 16.5% Franchise performed strongly in 2008 Despite the third most costly catastrophe on record, an unprecedented financial market meltdown and continued intense market competition, we achieved a return on equity o
Slide 5: AXIS Underwriting Has Outperformed
AXIS Underwriting Has Outperformed Average P&C Combined Ratio 2004-2008 (1) Company A 69.9% Class of 2005 Company B 70.3% 85.7% Company C 89.8% Company D 91.6% Average of Peers 91.8% Company E 92.4% Company F 92.5% Company G 92.8% Company H 92.9% Company I 93.8% Average of Peers Excluding Public Ber
Slide 6: AXIS Capital – Global Specialty Insurer & Reinsurer
AXIS Capital – Global Specialty Insurer & Reinsurer Well-positioned to navigate all phases of insurance/reinsurance cycle with established, diversified presence in both insurance and reinsurance markets globally GPW by Segment GPW by Source TTM GPW = $3,490 M 2008 GPW = $3,390 million Bermuda 25.4%
Slide 7: Soft Market Execution Successful
Soft Market Execution Successful Robust global platform built deliberately at the “right” time allowed access to wide array of business supporting execution of soft- market strategy Price adequacy varied by line and by geography Critically, terms and conditions have not deteriorated significantly We
Slide 8: AXIS Insurance – GPW and Combined Ratio Since Inception
AXIS Insurance – GPW and Combined Ratio Since Inception ($ in millions) $2,070 2,100 $2,039 $1,920 $1,875 $1,842 1,800 $1,743 $1,607 1,500 1,200 900 $794 600 300 0 2002 2003 2004 2005 2006 2007 2008 TTM 6/30/09 Combined Ratio: 62% 68% 81% 93% 72% 69% 81% 84% Property Marine Casualty Terrorism Aviati
Slide 9: AXIS Re – GPW and Combined Ratio Since Inception
AXIS Re – GPW and Combined Ratio Since Inception ($ in millions) 1,800 $1,748 $1,539 $1,551 $1,548 (2) $1,519 (1) 1,500 1,200 $1,093 900 $667 600 $314 300 0 2002 2003 2004 2005 2006 2007 2008 TTM 6/30/09 Combined Ratio: 62% 66% 85% 106% 78% 76% 92% 91% Catastrophe Property Professional Lines Credit
Slide 10: AXIS Insurance – Highlights
AXIS Insurance – Highlights TTM 6/30/09 GPW by Line of Business Total GPW = $1,743 M Pricing is broadly firming with loss-affected and capital- Other <1% consuming lines firming Liability 13% significantly Property 30% Current margins within the company’s target range Professional Lines 37% Franchis
Slide 11: AXIS Insurance – Strategic Global Presence
AXIS Insurance – Strategic Global Presence North America • Nationwide network of 11 offices in U.S. • Flexibility to write on admitted Europe and non-admitted basis in all 50 states • London and Dublin • Top 15 E&S carrier in the U.S. • Surplus-lines eligible in 48 U.S. states • Canada Branch • Free
Slide 12: AXIS Re – Highlights
AXIS Re – Highlights Focus on non-life treaty TTM 6/30/09 GPW by Line of Business reinsurance diversified across Total GPW = $1,748 M products Engineering / Other Maintain balance between 6% Liability 13% proximity to client and long-term Catastrophe 28% returns (Strategically located centers in NY,
Slide 13: AXIS Capital – H1 2009 Results
AXIS Capital – H1 2009 Results ($ in millions) Consolidated AXIS Re AXIS Insurance Gross Premiums Written Gross Premiums Written Gross Premiums Written 4.7% 17.4% (10.0%) $1,347 $2,138 $2,238 $1,148 $990 $891 H1 2008 H1 2009 H1 2008 H1 2009 H1 2008 H1 2009 Consolidated Net Income to Consolidated Com
Slide 14: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Significant reserve redundancies since inception Nearly all from short-tail lines Cautious approach to medium and long-tail lines reflected in limited releases from these lines Proactive reserving Reserving for major cats Professional lines Credit-exposed lines Str
Slide 15: Net Reserve Position
Net Reserve Position ($ in millions) IBNR represents 69% ($3.5 Bn) of net reserves at June 30, 2009 AXIS Insurance AXIS Re Net IBNR Reserves = $1,566 Net IBNR Reserves = $1,967 Total Net Reserves = $2,240 Total Net Reserves = $2,878 $1,500 $1,183 $1,200 $923 $970 $857 $838 $900 $789 $476 $600 $491 $
Slide 16: High Quality, Well-Diversified Investment Portfolio
High Quality, Well-Diversified Investment Portfolio (As of June 30, 2009) Total Cash and Investments: $10.9 Billion Total Portfolio Allocation Total Portfolio Ratings Allocation Corporates 24% AAA 19% Agency MBS 21% Foreign Govt Agency AA 3% 7% Non Agency CMBS US 7% Govt/Agency/Cash & Cash & Cash A
Slide 17: Strong Cash Flow and Investment Income
Strong Cash Flow and Investment Income ($ in millions) Investment Income from Cash/Fixed Income (1) $500 $461 $474 $400 $369 $300 $246 Cumulative Cash Flow from 1/1/04 $197 $200 $157 $8,346 $7,895 $8,000 $100 $6,369 $6,000 $0 $4,796 $4,000 $3,183 $2,000 $1,600 Investment Income from All Other (1) $5
Slide 18: Financial Flexibility
Financial Flexibility ($ in millions) 6/30/09 Capitalization Ratios Debt / Total Capital 9.2% Debt + Preferred / Total Capital 18.5% $6,000 $5,658 $5,409 499 $4,912 $4,960 499 $5,000 250 499 250 499 250 250 $4,011 250 250 $4,000 $3,737 250 250 499 499 250 $3,000 250 4,659 4,409 $2,000 3,913 3,961 3,
Slide 19: AXIS Risk Framework
AXIS Risk Framework Board Review and approve recommendations of Board Risk Committee Risk Committee of the Board Assist Board in its oversight and review of risks to which AXIS is exposed To provide a reasonable framework under which AXIS’s key objectives can be achieved Review (and recommend for ap
Slide 20: Principles of our Risk Framework
Principles of our Risk Framework Controlled risk taking: our financial strength and sustainable value creation are integral to our existence We operate within a clearly defined risk policy and risk control framework Clear accountability: we operate on the principle of delegated and clearly defined a
Slide 21: Earnings Quality through Organic Growth Initiatives
Earnings Quality through Organic Growth Initiatives We are prepared to execute hard market strategy in many P&C lines and continue to improve overall earnings quality with ongoing strategic initiatives. • Enhancing operational fit • Acquisitions of underwriting teams / integration of Distribution-or
Slide 22: AXIS Has Delivered Excellent Returns…
AXIS Has Delivered Excellent Returns… AXIS has increased dividend every year since we began paying dividends 12/31/03 – 12/31/08 Actual Average Annual Growth in Diluted BVPS 10.1% Dividends 2.9% (as % of beginning diluted BVPS) Average Annual Value Creation (1) 13.0% Average ROACE 15.7% Average Oper
Slide 23: Bermuda Performance 2004 - 2008
Bermuda Performance 2004 - 2008 Cumulative Value Average Annual Value Company Creation (2004-2008) Creation (2004-2008) Company A 101.3% 15.8% 72.1% 13.0% Company C 69.5% 12.8% Company D 68.5% 12.1% Company E 62.8% 11.1% Company F 57.6% 11.4% Company G 51.4% 9.4% Company H 45.2% 13.5% Company I 45.0
Slide 24: Questions?
Questions? David Greenfield, CFO
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