Axis Capital Holdings Limited · NYSE:AXS
Axis Capital — Investor Presentation (August 2020)
25 slides from Axis Capital's investor presentation, Aug 6, 2020
Slide 1: Investor Meetings 2Q - 2020
Investor Meetings 2Q - 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement CAUTIONARY NOTE REGARDING FORWARD - LOOKING STATEMENTS This document contains “forward - looking statements” within the meaning of section 27 A of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of 1934 . All statements, other than statements of histo
Slide 3: Vision: Global Leadership in Specialty Risks
Vision: Global Leadership in Specialty Risks Targeting top - quintile profitability with industry average volatility Hybrid model – Insurance & Reinsurance Franchise anchored in leadership positions in key markets and distribution relationships Strong relationships with distributors & clients based
Slide 4: AXIS Capital at a Glance
Pro Lines Property Liability Marine A&H/Other Aviation Credit & Political Risk Terrorism AXIS Capital at a Glance 1 Exchange / Ticker NYSE / “AXS” Market Capitalization 1 $3.5 Billion Gross Premium Written $6.9 Billion Leading Global Underwriter - E&S P&C - Lloyd’s - U.S. Professional Lines - Global
Slide 5: AXIS: The Profitable Growth Engine
AXIS : The Profitable Growth Engine • Margin Improvement: Major repositioning of the portfolio over the past 3 years will continue driving improving results • Leading Market Position: Over 80% of AXIS’ portfolio is in markets seeing the strongest improvements including E&S Property, E&S Casualty, Ll
Slide 6: AXIS Responds to the Pandemic
• 100% of staff is working remotely with no loss in production or capabilities; Engagement scores have grown • Utilizing remote collaboration and meeting technology to keep teams connected, informed and safe, and we also provided a stipend for office and technology equipment. • Allowing for flexible
Slide 7: Pricing momentum expected to continue into 2021
Insurance: • Rates were up 15% across the book in 2Q20 vs 10% in 1Q20 and 7% in 2Q19 • Average rate increases of ~12% for YTD2020 • Rate increases seen in almost every line of business and achieving double - digit rate increases in numerous Property, Casualty and Marine classes Reinsurance: • Pricin
Slide 8: Executing the Strategy
Executing the Strategy 7 Ex - PGAAP Ex - Cat AY Combined Ratio (1) Further information regarding ex - PGAAP data is available in the Company's Investor Financial Supplements for the fourth quarter 2017 through the second quarter 2020. AXIS has positioned itself to excel in the current firming P&C ma
Slide 9: Underwriting Actions Drive Improving Performance
61.7% 60.6% 59.3% 57.5% 55% 58% 60% 63% 65% FY18 FY19 1H19 1H20 Group: Underwriting Actions Drive Improving Performance 8 Group Ex - Cat AY Loss Ratio Improvement Loss ratio improvement driven by: • Enhanced pricing, improved terms/conditions and lower limits drive improved loss ratios coupled with
Slide 10: Insurance Segment: Underlying Loss Ratio Improvement
58.0% 56.0% 54.7% 54.3% 53.5% 3.3% 2.5% 2.3% 3.2% 1.5% 44% 48% 52% 56% 60% 64% 2017 2018 2019 1H19 1H20 Continuing Lines Ex-cat AY Loss Ratio Exited Lines Impact 58.5% 57.0% 54.9% 57.5% Insurance Segment: Underlying Loss Ratio Improvement 9 Portfolio Changes Driving Improving Loss Ratios: • 6.4 poin
Slide 11: Reinsurance Segment: Underlying Loss Ratio Improvement
65.6% 64.8% 64.0% 61.0% 60.4% 58% 60% 62% 64% 66% 68% 2017 2018 2019 1H19 1H20 Ex-cat AY Loss Ratio Reinsurance Segment: Underlying Loss Ratio Improvement 10 Portfolio Changes Driving Improving Loss Ratios: • 5.2 points of underlying margin improvement since YE2017 • Pricing momentum expected into 1
Slide 12: Significant Reduction in Cat Exposure
Significant Reduction in Cat Exposure Reduces Volatility and Enhances Capital Efficiency Southeast Wind Single Event PML’s 1 2020 Catastrophe Tower Highlights ($ in millions) $200 $300 $400 $500 $600 $700 $800 2Q18 2Q19 2Q20 1 in 50 1 in 100 1 in 250 • In 2020 the lower portion of the PML curve was
Slide 13: PML's Have Reduced Across the Curve
PML’s Have Reduced Across the Curve 1 12 AXIS has reduced its PML’s across the distribution to mitigate volatility (1) Aggregate Exceedance Probability (AEP) PML’s shown in chart above • The 2017 net cat losses would be ~55% lower under the current in - force program
Slide 14: AXIS is a Growing Manager of Third Party Capital
AXIS is a Growing Manager of Third Party Capital Strategic Capital Partners Fee Income (1) Strategic Capital Partners AUM Growth Premium Ceded to Strategic Capital Partners ($ in millions) ($ in millions) $1,003 $778 $489 $304 $105 $49 2019 2018 2017 2016 2015 2014 13 $6.3 $8.5 $21.8 $36.0 $48.0 $80
Slide 15: Executing Expense Management Initiatives
Executing Expense Management Initiatives 14 Focused Expense Management: • Achieved our operational and integration savings initiative ahead of targeted timeframe • During 1Q20 announced $50 million of expense cuts from our 2020 budget in recognition of the economic and market uncertainties • Systema
Slide 16: On the Front Foot for Profitable Insurance Growth
Profitable Growth Accelerating • Grew core lines of business where rates are adequately and AXIS has the underwriting expertise, market relevance, and platfor m t o drive sustainable profitable growth • Growth in lines such as Marine Cargo, Cyber and Renewable Energy continue to provide strong doubl
Slide 17: Strategic Reinsurance Growth: Where it Matters
-80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% Agriculture Engineering Catastrophe Credit & Surety Property Motor Pro Lines Liability Reinsurance GPW Growth 1H20 vs 1H19 Strategic Reinsurance Growth: Where it Matters AXIS has been focused on profitable growth where risk selection and rate ad
Slide 18: Much More Efficient Use of Capital
17 Much More Efficient Use of Capital Current and Historical Capitalization ($ in millions) (1) Eliminated due to maturity in April 2019; pre - funded with November 2017 offering of 4.00% senior notes due 2027 (2) Refinanced with $300m senior notes maturing in 2029 and $425m junior subordinated note
Slide 19: Active Capital Management
18 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20 Cumulative Shares Repurchased Cumulative Dividends Active Capital Management (1) Dollars in millions AXIS has returned over $6 billion to shareholders since inc
Slide 20: Leading Insider Ownership
19 Leading Insider Ownership AXIS Insiders Continue to Personally Invest in the Company 1 • AXIS has amongst the highest levels of insider ownership vs. peers • The entrepreneurial momentum continues to expand in the third quarter 2.4% 3.1% 0.7% 1.8% 0.9% 2.8% 3.1% 0.7% 1.8% 1.0% 5.1% 3.1% 0.7% 1.7%
Slide 21: Key Drivers of Recent Progress
Key Drivers of Recent Progress 1 Cat Loss Ratio: Improved 12.9 points Acquisition Ratio: 22.3% in FY2019 G&A Expense Ratio: Flat at 13.9% GPW Growth Achieving Significant Progress Across the Platform In the past five years, AXIS has implemented significant change to its platform and portfolios 20 Im
Slide 22: Corporate Social Responsibility at AXIS
Corporate Social Responsibility at AXIS Philanthropy – supporting charitable causes that align with our values; Donated $1 million to Covid - 19 relief effort Diversity & Inclusion – implementing practices to enhance D&I within our Company as well as the larger profession Corporate Purpose: Living o
Slide 23: Our Purpose, Strategic Vision and Values
Our Purpose, Strategic Vision and Values 22 Our Purpose ( who we are ) Our Strategic Vision ( what we do ) Our Values ( how we do it ) We are One AXIS. We build positive energy and a collaborative environment where diversity of teams and perspectives is respected and valued. We insist on a culture o
Slide 24: 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 Completed repositioning of the portfolio. Pace of underwriting margin improvement should continue given ongoin
Slide 25: AXIS
AXIS
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