AXIS Capital comments on first quarter 2020 financial results

AXIS Capital Holdings Limited has announced an estimated net claims provision of $300 million, pre-tax, for the first quarter related to catastrophe and other weather-related events. This amount includes an estimated net claims provision of $235 million, pre-tax, for the COVID-19 pandemic.

The Company's estimated net claims provision for COVID-19 is largely attributable to property related coverages, but also includes event cancellation and accident & health coverages, and considers a global shelter in place order that remains in effect until July 31, 2020. Other-weather related events of $65 million, pre-tax, includes regional weather events in the United States, U.K. floods and Australia wildfires.

AXIS Capital notes continuous improvement in its current accident year loss ratios excluding catastrophe and weather-related losses for its insurance and reinsurance businesses for the quarter.

Separately, the Company expects to report a full limit loss of $10 million associated with the WHO pandemic swap. The loss is recorded in other insurance related income (loss).

In addition, the Company expects to report net investment income of $93 million for the quarter, reduced from $107 million in the first quarter of 2019, primarily attributable to lower hedge fund returns. The Company also expects to report net unrealized losses of $61 million ($55 million excluding foreign exchange movements) attributable to its equity securities portfolio and net unrealized losses of $275 million ($224 million excluding foreign exchange movements) attributable to its fixed maturities portfolio, due to the significant decline in equity and credit markets at March 31, 2020.

Albert Benchimol, President and CEO of AXIS Capital commented

"COVID-19 has disrupted both society and the (re)insurance marketplace on a global scale. We have experienced its impact in our homes and in the communities where we live and work. Our foremost concerns are with the health and safety of our staff, and the well-being of all those directly affected by the virus. We also extend our deepest gratitude to the heroes who are on the front lines fighting the pandemic, including our healthcare workers and first responders.

"While COVID-19 continues to create unprecedented challenges and uncertainty for all carriers, we believe AXIS is well-positioned to manage through the pandemic. We entered 2020 with strong capital adequacy, a high-quality investment portfolio, and a well-balanced book of business. Our portfolio optimization actions are delivering tangible results. Our focus continues to be on providing our clients and partners in distribution with the same high level of service that they have come to expect from us. AXIS transitioned seamlessly to a remote work model and we are deeply appreciative to our staff for their tremendous resilience and commitment to advancing our business, as we navigate a rapidly evolving environment.

"We have confirmed that most of our contracts do not provide coverage that applies to the current situation. Nevertheless, we have written policies that will respond to this pandemic. We are already processing claims and making payments where coverage exists. We proudly stand by our promise to be there for our customers in their time of need.

"We believe that the estimate that we have provided appropriately reflects losses that have been incurred assuming the shelter in place lasts through July 31st."

The Company continues to evaluate information associated with the ongoing COVID-19 pandemic. The Company’s actual results may differ from the foregoing preliminary results, and such differences may be material.

AXIS Capital's results will be discussed during its conference call on Tuesday, May 5, 2020 at 9:30 AM (EDT).

Authored by AXIS Capital