AXS - Earnings call transcript Q1 2019 | AXIS Capital Holdings Limited

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Operator

Good day, and welcome to the AXIS Capital's First Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matt Rohrmann, Head of Investor Relations. Please go ahead.

Matt Rohrmann

Thank you, Shawn. gentlemen. and ladies morning, Good I'm happy discuss the conference to XX, to quarter welcome financial results you XXXX. March the at for period our for and call ended to AXIS first Capital

financial and closed. market release press earnings supplement issued after yesterday were the evening Our

at teleconference be like today's Vogt, and website Albert are dial-in our call, today The CFO. audio also our as We for the will XXX-XXX-XXXX If me which available of in you Pete call investor webcast section replay an of replay the conference Benchimol an investor by A US, of please our is website. both copies, numbers dialing would set information With today's XXX-XXX-XXXX. is to President XXXXXXXX. international the and aside visit information number on and our axiscapital.com. for section code the hour CEO; available

will made question-and-answer Before Albert, statements. to I that I be may are including the everyone the call, forward-looking statements call turn session, historical facts, this remind the not which over during

undertake statements forward-looking additional risk AXIS' assumptions. obligation variety as or factors, materially XX-K, the may any differ to forth set in in Actual We those well report issued to identified statements Form publicly of statements risks, and projected on Forward-looking cautionary results from a the update revise statements. as risk including no events regarding release the evening. most forward-looking yesterday forward-looking the or uncertainties note recent in our press earnings in factor involve due

in that, to release located of financial investor our may at found information website Albert. contain non-GAAP section press over turn supplement, In axiscapital.com. on measures. and be financial are presentation With to call like addition, included the Reconciliations the I'd this which our can earnings

Albert Benchimol

two line double years produced results XXXX. affected thank EX-PGAAP actions market first to of large In results And in everyone. recent and this losses. profitability basis volatility. nine all months morning, performance with to industry the were quarter. back the that quarter portfolio improved we brought than our disciplined other Good first for you operating The by Matt. you, our ROE underlying reflects of digit call. taken We reduce joining our Thank on for strengthen our we have improve position, in our lines This the

this loss EX-PGAAP While the Japanese an estimates in was windstorms catastrophe quarter. of meaningful and all activity increases lower XX.X of Trami, did we ROE for for quarter, the market led Jebi which absorb to operating

small the our written further As explains we the sustaining in remain This in progressed reduction premiums gross into steadfast momentum. XXXX, in we quarter.

Our new longer business Separately, we business alignment is more production no non-renewed are offset in from than reductions profitability and that volatility or our pushing was with goals. by also canceled more our put tools partners distribution. on will forward the exciting increase underwriters that to of initiatives number advance leadership, our of in clients and and in responsiveness hands our a our

confidence This ultimately than AXIS. syndicate of than attractive single team and the acquisition much it me the the of are that and next are entering The of the as as judged in move we significant than Monday synergy many positive team and will combined organization, $XX strengthened to companies, successfully organizations are position scheduled savings of our X the great integrating is in less market million our at gives a stages integrated hard we in within combined more the very done by a half, operating renewed book credit time our all single January one more We was for our brought at into work our our be individuals today pursued purchase. business. tear a In and our together Novae a company. final a into was the To into and office. London we

continued also enterprise-wide have drive. our efficiency We

$XXX incremental talent of savings on quarter, of now during our our we to an Pete net of are $XX annualized initiatives the first speak basis this a to this growing our net digital, future. some to leverage are With our we activity activities invested Later growth against drive us our the which million we've will target of will most These in savings agility, end on call, by profitable investments and integration new consistently we As XXXX. grow performance success. the advancing data we support transformation enterprise our and million I ROEs. from all seeing include our of remain enhance our to technology quarter trends markets confident through generating leadership path capabilities and Pete? and amounted walk product in results. combined deliver well to the intend ultimately in will reach importantly, underwriting. progress our on net are in which to Perhaps key that double-digit but marketplace, These better our improving and

Pete Vogt

Albert everyone. you, morning Thank and good

seen strengthen As the our XXXX, progress be of first position. with our performance more Albert market that in stated most the XXXX, to during we've line we and we in quarter brought continue to

of was $XX the segment We operating Novae's earn-out normally the XX%. unearned continue the above resulting date. acquisition the ratio affected of in This ex-PGAAP have quarter, million. quarter been include the $X.XX the as ex-PGAAP intangible we drag consolidated annualized $X quarter, costs income which ex-PGAAP per DAC income and regard to of million not share. income VOBA income $XX an including off the premium the of our which was acquisition DAC ROE a Novae, results. included of closing quarter $X we generated million million. of basis been on the $XX net basis the amortization Underwriting basis closing. we rate of would the On is without operating of to the ex-PGAAP that results amortization expense was is recognition million on $XXX an the written business. higher a in generating of since an discuss associated go consolidated the DAC XX.X%. recognized performance into million the In During costs an in of representation net was This ex-PGAAP With versus income to costs way acquisition at from acquisition amortized acquisition on after-tax approximately asset best the in was the or better believe operating estimate adjustments XX.X% would've reported cost of running company's

expect VOBA we to disclosed, previously the we be beyond minimal As mid-XXXX. impact

quarter. the for highlights quick Some

to quarter current lost for minimal year's compared year Our XXXX, ago but full increases year $XX year and from and improved the modestly the was the than in ex-cat typhoons quarter the weather ratio improved from at higher loss and actually and last $XX fourth Trami. prior-year million Cat experienced largely our results. million estimates in favorable first was a decline the in Jebi Japanese to was quarter attributable in quarter development significantly

the consolidated income current quarter increase quarter the consolidated over in ratio just the of into of the XX.X%, first statement; is Moving combined an XXXX. details six points

business came is year higher consolidated and combined and prior quarter. this both million year Of in ratios million expense to level decrease insurance comparable last quarter were of unit the was a of basis, current offset increase to million On impact ratio quarter, in $XX mentioned, of increase trend. favorable a quarter where The increase increased ratio year in In ratio marine, the reinsurance this centered acquisition primarily increased their favorable was $XX million development by reinsurance. and prior-year favorable the prior insurance, prior basis, every came except with billion. to year consolidated and to year This and and XX.X% driven quarter. was This the year quarter aviation reinsurance largely estimate and was net midsize a development lower our in weather the due to combined favorable losses by prior ex-cat of I $X our this, from development. from respect year-over-year purchase from in the reported billion due by acquisition benefited Jebi we points The XX%. loss current and in respectively. for point; by both consolidated market Trami $XX driven than development. rate six-tenths current prior cost and ratios estimates As loss quarters' in On adjustment. loss partially just $XX XX.X% favorable had decrease segment combined accident the $X typhoons three depressed year. especially favorable an a Jebi was the in GAAP We The ex-PGAAP development property

PGAAP. at ratio this the adjusting for to is I best look think way

reinstatement So on primarily over increase the point the impact increase ratio driven ex-PGAAP This premiums. ratio prior an was of an the was and half of XX.X%, year. comparable a in mix basis by the

for basis continue We trend expect ratio the to on ex-PGAAP to XX year. to an this

a the the During would've XXXX. expense comparable which by ratio quarter first been the quarter the to point first to is ratio that XX.X% to this consolidated quarter, increased the this will normalized be higher compared The Typically quarter in be of of XX.X% G&A G&A G&A ratio tends the quarter year XXXX in range. normalized expectations full our of is my for first almost mid-XX ratio.

million marginally We continue the rate. to is first quarter be fourth of million. last annualized up net XXXX compared net In quarter, This our run up only savings achieve year, quarter. the to the the from savings of had annual we $XX to $XXX on schedule but from

of ahead invest. on investments, progress in any XXXX to tremendous starting we made got out in and gross we While are XXXX savings

million business As part integration in to These grow again This was The of in our quarter. I initiative. Non-operating Novae $XX compared $XX then our expect in from discussed to our associated important capital net prior recognized reorganization ramp with materialize million to quarter. savings the XXXX the of slower in XXXX. I year million strategic and call, and transformation in the up well. expenses partners $XX were the continues income last were

discuss both now of results We and the will underwriting segments. reinsurance insurance

by in $XX marine partially insurance. quarter. Let's by in and or the professional segment million property, significant first insurance begin gross decrease premiums The reported $XX written quarter This decreased lines. of written decrease due increases in gross liability, million Insurance premiums in the year-over-year. a XX% to offset property was in from with

our exited first weather AXIS XX.X% drop in As increased current just previous The two just ex-cat mainly The insurance loss accident lines losses driven than to in year we of the cyber. program casualty year. was to current quarters, we've the business; favorable we mid-sized casualty liability, contributed quarter Offsetting and we property ratio aviation opportunities loss under primarily US points marine especially saw we've primary which US segment continue some and in discipline. professional two points business and in property, discussed by more pricing last the from quarter of by ratio. increase in other new and business hold in where non-renewed

was mix in ratio ratio. loss the by impacted and addition, in business loss resulted in liability more and the changes less property earned point we This premium In in almost lines. in as increase professional a

mix this favorable more offset by of the impact was rate change trend. than However,

This XXXX. same period way to is in the weather-related to look acquisition quarter losses were $X ratio at think best insurance only pre-tax million catastrophe adjusting insurance XX.X%. and $XX events Again, primarily compared ratio the was to in for attributable million PGAAP. cost weather-related in The segment we this

by ex-PGAAP impact an and the was business, The XX.X, basis the commissions. profit six-tenths over driven of premiums was reinstatement on of in a mix the the ratio prior comparable So increase year. point ratio increase of

in premiums The written quarter, gross the decrease reinsurance first our of within quarter. the business. reported results we solid reinsurance During in million saw $XX segment

lines is add only However, property. contracts related offset cat in of weather-related $XXX business to in in driven that This by digits. the catastrophe, million $X million somewhat while to acquisition million. growth liability million by a XX.X% in segment is to year for lines, XX%, higher to reported our half US principally in underperforming point. in Reinsurance compares decrease was an credit premium decrease of segment attributable was experience retro a largely Treasury due pre-tax at the by fixed in I alternative particular improvement in quarter accident The and the impacted loss rates, $X is single on decline and investment cost and in credit $X decreases income current in X.X offset motor, due reinsurance same non-renewals to of XXXX. ratio just compared lag weather income ratio XXXX. sensitive the by from XX.X%, gross this credit year alternative partially impact and growth attributable A&H weather-related business the in increased in The catastrophe grew losses in net high impact this especially maturity These would and driven the fourth funds. the and partially catastrophe to in losses of point by ex-cat of and from first and is new offset These basis, prior decrease in premiums adversely were most surety markets adjusting This period This The FX, only surety. were by over in favorable liability. the interest credit income favorable loss $XXX offset agriculture. a This quarter. improved investments was the to features reinsurance events primarily from increased investments was Net were catastrophe by quarter. the quarter aviation and are from quarter. million and income was increase for a by contracts

of second to performance funds quarter first these in positive the quarter. reflected expect the be We

yield The duration actions, With also respect on yield the continues note I X.X% note. three outstanding $XXX current would repaid be book new our X.X%. portfolio Xst, million approximately Our is we an to and that of to is money years. capital April

in at As the we repay you recall, favorable of December funds terms. XXXX the to note raised

we is March While XXst down. leverage note balance will you see report financial our the second quarter, sheet our as the ratios on come

to Lastly, call the and driven was by This offset our in I'll and that dividends. over share value quarter first back common That $XX.XX. with diluted by generated by the turn summarizes per Al. to income principally unrealized net and investments X.X% on quarter gains partially book increased

Albert Benchimol

Pete. you, Thank

primary while average the will our market average head increases in In of in nearly recent division, in increases within Rate largely the with in experienced optimistic am rate our energy market was X%. Within by US the for and Decile were in actions been led generated excess recent terrorism and program. X% the to of average aviation division, flat X%. and in there's market XX%. positioning and book. increases right now questions. discuss and Overall, close to lines experienced X% of insurance, we'll which then over up program rate increase XX both the book of was were professional property business. XX% quarter. the and property We've average. US XX% wide up five Within X% both the London increases renewable portfolio nearly flat lines were across discipline which successive rate change produced results the of including a while call quarter, years. open our by the by quarters of lines Overall, Book North US based it's but our up up continue rate rate renewed ENO of risks or we higher in renewed Let's delivered range. than at DNO US Professional US very about and trends averaged the renewed we International up was was E&S recent and quarters exceptions driven X% of on for both quarter. points X% direction. casualty X% for was in London political of our casualty the in strong flat about increases X excess Lloyds our the at division, with that to I entire In insurance international rate the American

into We next to the into of environment year. expect XXXX better this rest extend and the

of AXIS though, insurance acquisition, positioned extend improvements improvements. flatter and are and increased terms these well the the rate, about higher company's but In XX% up; book benefit London to summary, to Novae limited deductibles. renewed limits, at total and to very also in including presence importantly Lloyds not we conditions believe our is Given following from sub exclusions

our to we As trade bit terms year's retention are continue push a but better a levels, hard last for profitability. lower rates than better it's for good

is required. in progress but we're pricing, to seeing also reinsurance, more Moving

up on Loss increases room getting improvements generally recent Catastrophe primary is ceding business are down flat underlying modestly conditions there effective Our quota in flat treaties of improved to on XX% at share or size of AXIS' of AXIS terms the seeing loss the as reinsurance but is more. depending and commissions book. loss. based the for the either across has are business, depending up is least benefits results. or

However, suffered XXXX sense, of market to Japanese April Japan even to premiums AXIS we last those three climate the peak at losses up gross purchased aggregate treaties up X% treaties much volume, to terms. should back, increases years. had of good performed perils the we renewal, but and increasing our business conditions, last Overall, With were of the ongoing Quake offset the coverage well we than completed year reductions are been both go There profits. expand the but or free by the take increase reinsurance, treaties have Under last increasing mid-single and significantly our impacts reinsurance upgraded generally were over given an improving, were loss windstorm accounts quarters at achieved only which conditions in quite three as that where have are XX% belief recent than since more offered over our flat meet rate. in opportunity and We April not substantial terms. terms exposures included markets history modestly. premiums encouraged X in not did which it's at renewal generally the our recently make our past will standing it the written Overall, our annual this this It's about the non-renewing attractive Japanese doubled significantly insurance market where wind and at earthquake our less market by in X the by but zones up improvements, attractive the in these generally some renewals more point. change recent as also Tohoku flat our where it XX%. with nearly that digit we presence. Across Japanese experienced increase accounts. expiring we which up satisfactory Re several was concentrations reducing with made an just of price is requirements. five compound

to choose results, underwriting is priced of runs focus business. Our quantum on the the replaced books non-renew business or cancel balanced to and continuing we as to off expect our both better that remains strengthen further our we and progress quality by placed-- see and and more

Let some the me of speak balance about portfolio. more our

Over the exited we across last number delivering to clear effort few a improvement book re-under we've years, trajectory several portfolio. our business; enhance of markets significant of lines of and expanded a the

We and be cyber, growth positions this And renewable and also that our our business. risks and opportunities. attractive business energy, with book standing focused relevance A&H more diversified become well relationships. drove us attractive in of including producer markets flow and chosen the upgraded mortgage our in and We've new to

continue should our we progress, existing lower to additive be combined lines portfolio. our and see business ratios further our our new we As in optimize expect as we

the However, activity performance. and obscured would otherwise what has been of our years have two last heavy the of full work impact cat marred the strong

reinsurance exposures, additional our to our more and recent reductions years we've made XXXX over book using strategic both sharing our capital net net as have demonstrated gross we We with both need to risks to This retentions more but year and by and more. partners. do reduced XXXX cat

believe and we've zones. to more cat these activity. observe resilient the PMLs that more portfolio that progress in actions in year financial be are secure of this right will you'll one more in years higher investor supplement, again reducing We in As stable key a our made

year further into will exposure. our this I cat the that cat to franchise and and commitment property retained our both reduce Our continue net exposures next sustain renewals. can our and net am markets confident reduce throughout we

starting of we've funding mechanisms our A this. to deliver that the to last risk tools capabilities are and resources and Over range necessary the of underwriters achieve analytics results. visible place and in years, many broader three deeper and new put for

can our ROE become are the we book overall both our also We our and to evident ratio more offset will opportunities than loss stability available technology companies their and to we resulting mix leverage any parallel, impact access earning underwriting in and change our better driven ongoing will confident increasingly shareholders. across continue approach will and great it's analytics belief to invest to that innovation; improvements that benefits are serve that on their to believe In there and customers. those to that

past will that group. and We the that investment to the are be among confident that allow we've us increasing are in years few now with made

and the are factors about taken. please from line the Leslie We we've are questions. It's these seeing that very results and on of all right now actions I we for optimistic path am because open our the tangible that future,

Operator

first Our from with go comes ahead. Instructions] [Operator Research. Kumar Amit Buckingham question Please

Amit Kumar

what on pegged Good in morning. XX.X% to I QX a being that starting just understand G&A, to the Maybe conference today last just and better number mentioned is discussion QX? number from had with at the mid call you changed wanted XX%,

Pete Vogt

I say we more I calendar expectation long-term XX.X% Amit, as mid is to is 'XX would more where about about XXs think Yes, come that year out. we'll expect where the that

Albert Benchimol

we on we invest a the it ahead last year bit to savings of know and our-- would go that start as - bit I did this would a little and think are we we indicated little year that we were indicate up we

Pete Vogt

year, And would that we a affect a knew down this are ratio bit net this Yes. and year the then little that our actually premiums bit.

Amit Kumar

That's helpful. it. Got

as as aviation the guess other this the number number be had we loss was that pretty of on about the I there-- drags issue how The is it creep or at and think capped any the I should loss, could possibility involves is BI loss, that question there point? discussion on

Albert Benchimol

on about individual the I a that or don't that is tell what accounts quite net we're treaties, basis you to confident generally we can but like Amit, out that have there firm. speak number is we

business. in reinsurance of amount significant a that line have of We

Amit Kumar

a on and NPCI your will and how been re-queue. know or in going and stuff, any remind other forward? of could any us-- planting, share later delayed right discussion I from you the I planting There delayed question late thoughts Okay, and about book has of book excess on you we AXIS are should think on Thanks. lot potential impact loss, planting quota final size of results and

Albert Benchimol

it's - give it's one, to on the think of early when planting I generally happens. in a lot but too say think I precision that that comes would reinsurance the I

the planting not have significant results. on impact those delayed a So, generally does

Amit Kumar

And of could remind your size the you us book?

Albert Benchimol

It's some - I'll come that. come back to under you, I but you think XXX, on to it's a we'll little back

Amit Kumar

stop and for here ask. answers. other's the I'll Okay. let Thanks

Albert Benchimol

much You're welcome. How was that?

Pete Vogt

a in XXX a in quarter. XX quarter.

Operator

Our comes ahead. from next Please Greenspan question Elyse Wells Fargo. with go

Elyse Greenspan

of year a that kind the under we underlying first just your was morning. of is about that you looking at guys should larger in an you've over is ratio of earn the on My improvement balance there net and within running ratio a think on-- kind two one way from so overall one-off you the it been about your that's working so losses of of on? book, initiatives those loss overall, XX, reinsurance basis as the points Good about quarter, point loss right is to about losses the to just XX.X in some pointed underlying of question that's think

Pete Vogt

for in quarter. normal as and I through the some through reinsurance, year. but losses and that. I large losses marine these quarter that was on say in run well a if would was absorb and in losses that take when be did I'm do is aviation as company, insurance because have two the expect early nothing Elyse, we --this company it. to think this in this we higher we the rate, Actually We in aviation the to thinking get reinsurance it so year to early the two the losses large want it I overall them had points, points mentioned normalized segment in think the year the because quarter comes them, losses absorb let the over to in really-- insurance didn't quarter we run just and would Pete. large also I'll by are just losses we the-year; than a I So, aviation over this We

So, least by at thinking if of it the least, two half company. it take about overall at for I'd point I was down that

Elyse Greenspan

then quarter XXXX? that and Okay see would improvement of we would be sequential the assumption every

Pete Vogt

ratio absolutely. We through it point higher to than attritional to that the the that we on expect and the loss would the still in talk see hurt year the guess quarter. book see which end in it our lot insurance added the quarter, call insurance non-cat continue the at the first but would ratio, we I and Oh, again, the in That program side expect improve. out weather the X.X that non-cat-- to I fourth loss normal behaved to us insurance up happen quarter, that non-cat loss did I'll itself or business quarter. a Yes. and ratio about a insurance also of was about point as business runs

Elyse Greenspan

that premium to cost ratio contemplates then of the just for I to the that on you go that's reposition pointed you XX% premiums and down? could decline know year and can I the might your confirm guide guess, continue acquisition see some-- remainder Okay, great. you then guess acquisition And think the ex-PGAAP what-- you just you you I earned said that's guys as continue side

Pete Vogt

well of acquisition which things would I the that each just Yes, that of we're acquisition up impact it in booked in this the that we'll features we slightly loss I is quarter reinsurance see that goes loss that ratio. It as - for the down the some of on really that-- affects our offset cost think loss there the loss which means that on especially for one-off commissions, cost as some side, if of do any features sensitive acquisition cede the side, things because XXs, think but year. was is happens track high up. profit in just these the the some one Elyse going - of one the see quarter was sensitive that think XX commissions you'll us should is company positive net-net to that Absent, ratio the overall rest was clients, a but where see the

Elyse Greenspan

great. some Okay, question, views of as about the price initial charter any give then and and at upcoming your moved Albert, conditions loss to can how And X increases, Florida accounts increases rate for change both April you us think the might peg see one in can we you you terms renewals, just last expectation X? January the there and kind of relative impacted on

Albert Benchimol

moving Elyse, Right. accounts maybe and and are forth, mean flat, read more, loss are affected accounts going of to of as increase. stuff layers very which the going the it's lot a basically you've back up affected still some still usual XX% target or but non-loss and I the think talk Well, modest I say, a heard closer is there's we to

So of we're that's now. kind it where seeing

lot of As going I and stock there's it. back said on a forth

I think A there's are of that things a number couple potentially are that potentially negatives. of positive. things

a just adjustment in AOB about expense. the improvements. The growth read Florida passed which reform driver of major been AOB legislature You've loss has and

to huge at of we're that's be Florida the pricing the positive, priced going of in fact But conversations. there's possibly need concentrations also certain for. that's some in parts that that So looking reflected to be

to it's affected the up That's So affected to is low but closer what to flat still Loss talk, single more, non-loss situation. moving XX I current it's or can you moving. digits. tell a

Operator

Goldman next Please go Kinar from with question ahead. Sachs. comes Our Yaron

Yaron Kinar

morning. Hi, good

moving little you the on favorable insurance First light It parts maybe it's development Can relative question segment. is to about a seemed talk the been. where there? in

Albert Benchimol

last first of when prior to had last the the actually you year of period about quarter I in in mean coming I development think first year that amount especially fair when we a quarter, Yes. compared HIM. out

so the PYD you for And was adjust single if HIM, insurance in the digits.

when year-over-year that you So one impact. compare is

of the prior The for come in come in had development, XXXX we That that we losses the this as into the of so is other good property insurance all the while affected some year, had as where some property, insurance. particular losses thing quarter units we I'd say PYD business end the quarter except at property period and didn't get for had positive some XXXX. attritional XXXX well first in shop into

Yaron Kinar

Okay, is in increase that's question the PML. my wind then I Japan helpful. the second And guess on

that At are same still as are. understand here talking overall an time, up much also opportunity rates this I you with your about So they exposures. lowering is the as being

--how And So in after opportunistic, push going lowering as we do square that how overall renewals do you look US. PMLs? opportunities you the June, also pull I'm attractive asking your at the July here and guess in between I interest the and

Albert Benchimol

curves, equity. asking portfolio. it. overall overall good the is very come really are balance percentage a and more curves overall the those That's make not matters not that it's which the is And drive of drives But really to you'll for peak loss a What it doing with are curves what what you loss down zone the our and which thank down. zones PML a about continue here our peak notice we come loss as providing question, is sure curves for in to Japan is importantly, that does but us.

filling troughs on premium, ultimately that better curve, more and the balance, business. ROEs the of more so results which better in So the there's portfolio shaving ultimately loss more that diversification a line in off peaks, in

Yaron Kinar

Okay.

I and to a look be as I think it's renewal head there opportunities expect maybe few did still US I June, at July better we peaks southeast there. and So the into

zone mind even So in that still with year-over-year? expect to you lower be peak that

Albert Benchimol

Yes.

volatility some I peak and is be that think our by areas, year will yes. at but coming down what always be happens, the PMLs expectation around situational large every happens what those would it there's

Yaron Kinar

Thank you.

Albert Benchimol

can see, doing for you years been as we've now. that several And

continue you a see. should it's that to trend So

Operator

Cohen question Bank America ahead. Merrill go of Jay Please next with Lynch. from comes Our

Jay Cohen

answered, Thank of questions it very have you. been was my Most helpful.

So one of this year? repurchase, should that question, share off take we the balance the table for basically

Pete Vogt

for we year the Hey, Vogt. would in is take with the Jay. that where fourth the quarter right California Pete balance Yes, I now of wildfires. were This off given the

through the up balance build sheet are to XXXX. We looking

Operator

question Meyer comes from Shields next go KBW. Our Please with ahead.

Meyer Shields

you two expenses a Albert, small basis? be talk and about one. the The in corporate increase questions one Thanks. Can bigger on may year-over-year

Albert Benchimol

Yes. the first detail. go that --there want through, of are of come are I but mean quarter number that to a Pete items kind items we

Pete Vogt

Meyer. Yes,

accruals of most the first good the through The unusual dollars that last that through. all the year-over-year drove probably and looking thing quarter, guys there that takedowns just you're some were bonus If year some in the came quarter. at actually ran the some being increase. first That's year-over-year biggest significant corporate

Meyer Shields

Okay.

that implies forward. this that then So is run a good going rate

Pete Vogt

first we I in a tend in Meyer, and first use necessarily I my expense Yes. to mean Well, because comments, rate, number mentioned quarter. the I as take do of things a it quarter wouldn't run as

the as our side quarter higher be to corporate on little So first a well. bit tends

at bring So to really if going mid-XX year. looking do a by dollars, down overall the you're bit the for in points, down ratio the but range think I overall bring a we'd I come G&A is it that would couple

Meyer Shields

the that's that helpful, on conserving, more include PML no, modeling Does that the calculation year's did loss Okay, you. storms? Japanese seen thank wind, conservative increases we've for following maybe last

Albert Benchimol

every the look, quarter that truth there's some - It to is some models. improvements

or we're every is quake but seen southeast our hopefully wind driven the Japan. PML change in getting the whether it's by or in you've business better in really that So growth the Japanese wind, quarter real

Meyer Shields

and Okay, a than pricing, seems of always wondering I'm reactive talk this not not right, about I'm question, no, impacted sure there's weak It propensity. way loss more about loss split picture when people helpful. changes free thinking whether between reinsurance Bigger a accounts reflecting loss but predictive. accounts. that's that's I'm in really

Albert Benchimol

increase loss happening that not we --that should an curve. that's But my right, even everybody because if up share my are right believe that's the then is which that Well, moving is accounts the in what's market should now. conditions. point, that free have curve Those was

page. are probably are, curve little and coming risk, up, a --we're it's should So I how should so ultimately on the moves pay I they that's being you way through. But the everybody think mutualizing conditions everybody same The bit market more.

Meyer Shields

accounts because exposure like bad a hasn't an at. they impacted arriving Right. just going opportunity I sort that Is had of to their year. there and I'm say changed loss guess that's what really

Albert Benchimol

paying would if not in haven't down to contribute had But comes it the price. now who those to share those a are that increased to happening loss what's right. who've adjustment for fine in right the to everybody since loss is it, had That going be was loss,

Meyer Shields

Okay, understood.

Albert Benchimol

difference the the I think market what theory of you're pricing between about the the and the reality talking of pricing. is

would but delivered I not with has agree an think to account has. for it's you, pay that loss a that everybody one very difficult to get

Operator

Our from UBS. Please next with ahead. question go Brian comes Meredith

Brian Meredith

here thank. questions you. for Yes, quick couple A

think premiums we and going property as about insurance the headwind First, forward nominals. the about non-renewed of those I kind on accounts? the think from that the as much it What's I'm kind as business should just some down we given curious was of the of expect

Albert Benchimol

the yes, So impact through basis, we've I talked gone on we've about gross and think it. a

I already numbers. embedding quarter that's first think

Pete Vogt

excess some the primary. will seen rate we're is. but a the right hardening It growth And It is. see renewable side good we some Yes. and both line do on in And US professional including now we and and some we Brian, like, year, we've even see areas also in seeing on casualty more through growth good market a energy. good

necessarily down So not much drop property just expect do as in we we of itself. property come that a top if to line because bit, see

Albert Benchimol

that throughout a and when if this and is I they businesses quarter that with year, of time I number we've last And in truth discussed know chunk to of done drop up. had contracts the we already enough really were coming first number the contract a were a a so into got big but believe the do of progressively don't we've canceling X/X

impact Some the There's before the that's therefore a we of coming January couldn't in of renewal big those touch big quarter. seeing rest contracts you're for the in first X/X/ and less that through year.

impact would contract first be an cancellations So I the would you the say. that from should thing have less of

would The we trends could quoting the more say thing to and be towards see I the market them, market be business if continuing we improves. is it attractive more it we more is are be the so the will that end us that the that find likely that year would well as of winning if or in that second of to

not, no be course, market if we are the Of will are problem all opportunities; more things there'll shrinking if more. those good of some have dependent, terms

Brian Meredith

looking Got margin you on X% about expansion. It like you. kind actually enough what sounds insurance. just get entire you here I'm And across to the book think then, and just talked Albert, curious that's of rate

true? So is is loss that still that trend is running fairly benign,

Albert Benchimol

the that casualty Absolutely. trend that is. And US loss book our getting some cases multiples when of - in increases we're rate are about are think I what

the were about getting point for next would But, of expect we've in loss we're to that trend drive trend of is talking books average book next impact business to that the been certainly to be the more loss certainly was of we improvement in over across of rate those yes, So see the over when going ahead a our ratio years. lines. the and couple X% year-over-year years, at --we to of of improvement looking least couple

Brian Meredith

anything And on we terms you conditions then in seeing and talked excellent. are this improving, Okay, maybe and about terms conditions point? at

Albert Benchimol

of doing on loss deductibles, more have exclusions meaningful higher We're impact around costs. all Oh, around actually That's limits, interesting. much more sub which even yes. a

Brian Meredith

you. Got

when we that, including at look is it? And not that's rate so that X%

Albert Benchimol

is not. Right, it

Operator

with comes Morgan Phillips Stanley. from Our ahead. go Michael next Please question

Michael Phillips

is I on morning, your acquisition A of there. Good expense. any guess question on everybody. insurance appetite, ratio? in and you. any on Thank is acquisition guess back MGA so, impact things change I if driving part there is, expense that first couple the A

Albert Benchimol

It's Peter go ratio. and the higher on but expenses acquisition ratios cases So, the In lower vice-versa. per of some in to some the technical at will business terms numbers loss through tend look in se, appetite cases. we a

adequacy a difficult it's the to alone loss or the by think the ratio of the or piece determine I expense of simply business attractiveness So alone. ratio

point just So there, put wanted out Peter? to that

Pete Vogt

for the mid-XX of why that's specifically book EX-PGAAP we the the we've a I in as mentioned number what high changes acquisition more year say bit. and basis book. XX, company insurance that in quarter, end started those ratio Albert first the XXs, cancelled come the of of the as do acquisition those the an but would first through the mentioned was say MGAs. the to quarter the combined for we would have first happened by year. to think is that that excess the fourth actually actually in insurance, down - as acquisition And trend a contracts relationships could MGA came call, Many loss we of XX.X -the overall with will with a premium of number we come first kind quarter in I here down the but year And I this in them for Yes. last to earned But on expect wanes, little should quarter, would real ratio in as by it the a action I quarter had at therefore Novae

Michael Phillips

while? going be acquisition, to that's or higher Okay, yes, term, that to helpful, on you the given you. token I more, thank near from is on be that is going improved for something expense the there can be for guys same guess that's a the anytime that Lloyds, the

Albert Benchimol

or you what Are referring G&A or acquisition exactly? to

Michael Phillips

yes. acquisition, Yes,

Albert Benchimol

Yes.

competitiveness Bruce, at Neal that. And both market, of of as would the the an London hard John pushing are and AXIS market. Brown being is want to that towards London generally of say there's and London situation acquisition looking you to mention So, and situation. in expense. a that there's lot Carnegie I use there's Lloyd's profitability team market very the the opportunity And improve know a their an as Lloyd's good I work done the and to

we not I So always was renew. of to all will always the own but to a knew regard Novae. our would that, We we we think bunch that acquired with that - there we when were we there knew benefit going when book, business from

portfolio. to that And our had renewal for example. give some necessary were not a some good holder arrangements with as I'll do the you And of it

can accessed much for that business risks better cover holders We US plan. through of a always have and write of of holder We the lot a strong it which to cover would was had ultimately business deliver That portfolio. are closer where therefore business. part we so costs. Novae a we it locally rather believe US for company, acquisition very US-based was a and that Lloyds our paid

January the job I benefit seeing than the better that move the cost. delivering of You're cover premium than will locally holder. once believe of we I think and of is some renewals that good a we through the reduction in X just a on acquisition more do that of

Michael Phillips

Thank talk very Okay, details. for quick just guess you one. no, those about great. much I last one

on heard rates comments to similar we've are in somewhat what Your others. sound so from quarter far the

if can, of I that you casualties. to me can US kind you out stood and on think one a more it, maybe little detail the

little little is X add you think where which up that bit specifically. to said to bit, anything kind of me stood I and you can

Albert Benchimol

going be XX It's It's to further up. up

Michael Phillips

Okay.

Albert Benchimol

for and lines. the market. reason we those literally ENS in driven we're that where of liability increases that focus primary The and the In is XX% seeing some on by is write we excess casualty the auto US, only E&S

tougher we're is the definitely that a standard are are markets pleased That's these that's market to appetite, are as lines those of driving lot why saying. happens And E&S price starting - We're you're price. is more the this getting their very restrict what coming in the to and with excess market. risks. So risks the

mentioned is above to this trends. earlier, well our that grow. I area And cost it's looking As loss an we're

Operator

Josh Please next Our go Bank. comes ahead. question with from Shanker Deutsche

Josh Shanker

the much contract on is I you. initial into want get loss few just excess Jebi. or higher Obviously, trigger change what's a Yes, to going think in you Did there? pick. thank an notes I on than

Albert Benchimol

this to it lot with towers. risks a we would for at we to in prefer we Japan. determine that do chose participate has look the We play zone. every the We where to do is towers. in This way And in the wind No.

more makes layers. in be to it sense the lower Sometimes

it more was We've historically to quake. in the Japan wind well as Sometimes underway it not because the be makes upper sense to layers. in priced been felt we as

lower layers So in the our upper then participation we increased had in layers. the lower and participation

share every layer loss getting of returns. started the started clear, --price lower layers think a to position account. that upper the every thought at to but risk we Japan And-- the did do take we're we last every Jebi best try in better at as we were larger than layers. mid look to we particular be of year, at the the to we with where yen of adjusted the deteriorate, layers So ourselves be. we the every want In place of to towers We and I

Josh Shanker

so the And changed shape renewal? X has April of portfolio the with

Albert Benchimol

of more more Yes. as cover. but both more a a also Japanese bit the accounts accounts, a the little the little top but There on bottom is , little both

Josh Shanker

- and of time. competition it in increase think good how I and that mean that your competitive increasingly I the opportunity? a efficient And giving an how lot to tend feel? commenting is Okay, commentary, okay. that to think the gets here. invitation It's this is market see pricing environment for competitors you this away is efficient is you you backing over Do pricing or

Albert Benchimol

the into number their reductions think large Without leading in market announced I appetite. competitors have E&S very same. the have that that we some of by are getting aware and players in the significant news, a you're well

also is that market. their Lloyd's US reducing participation You E&S know in the

I there's a comment than it's is What my we've there not but recognize I and declines it to XXXX. price increases, But market of now have the back think made seeing in than today that is, while. significant it's back better And great to up right that to digits been earlier take been mid-single quarters less see time what demand is five more you still truck. in to capacity but do was, let's which so that since we I want significantly

selective. So be you to stop

Operator

Buckingham follow-up ahead. is question Amit next Our a go Please Research. from with Kumar

Amit Kumar

hour very top just I we're the know the quickly. And of up at coming here.

using for loss to billion that of what X to estimate for the because to and two you the now In going $XX One, remind us, to Trami? is know X can parts. Jebi using on billion billion. to billion in I And guess Trami, $XX opening previous back guess was I terms $X $X from you at the Jebi remarks, I discussion sort you XX. to a you mentioned number are XX Jebi moved are of

with maybe Thanks. pieces. me So those help just

Pete Vogt

billion. regard using X a about This and the to actually actually are estimate But $X Pete. took fourth Amit. Trami, of last Hi, loss and we about $X regard up to now at Jebi, XX.X. had currently is we X year - to a our I the year to And moved little we mean bit. With with our actually quarter we're up estimate in billion ended

Operator

follow-up go from question Greenspan Elyse Fargo. next with Our Please Wells is a ahead.

Elyse Greenspan

Hi, thank you.

So I quick just quick, couple questions. a had

earlier response in question was weight first to an The about over trend.

And margin said improvement guys point loss get your that how to insurance where of overall the continue are can needs You drive can just your much sense Was costs to improvement. to reinsurance that peg drive one it and then be in we your about sitting or couple of in segment, comment? years. for insurance you a so next way

Albert Benchimol

Right.

a offset little bit mixed So what be that - some of there'll at but by we with said a couple some the at of points where that some in will places we're more, Obviously, years. point less. next impact, it's where be certainly I think is least places it's of confident least

little range give it, trend a our sense was all if X% I from point that over in it, But average, think believe I at I the the this you are way some just down flat. to of range Peter that in would trends earned spoke the some the right already at I a X% and to now a to loss rate look you we quarter. that go over think say

one benefit a basically rate that that point you us. So to tells X% at a that's

Elyse Greenspan

And what then about side? on the reinsurance

Albert Benchimol

book the said, have we quarter most on the share. of I As side is that reinsurance

the that entire you get the the get kind same So you gave And portfolio. is of trends. number I --you same across the

Elyse Greenspan

this there's alternative potentially to come the towers. traditional reinsurers up the their year? some or going some to flat, has coming One another compared fund question We that business Do potentially premium capital Okay. could had you I the market. of --and back discussion. Also about goes Florida is into down much At to hear That's to the renewal. how that last dollar companies just great. changes within additional think electing CAT that

Albert Benchimol

to Yes. no as the This right back action rebalancing there's into their some in - are middle equation and put the the the that the goes favor. fund way question CAT looking more it's supply-demand to we're buyers of of in issue that

out. let So that to play think I we just have

Elyse Greenspan

you DAC millions, second last one and in ratio then to in about numbers the much that modeling? left your come we question. And quarter do The have when should how benefit Okay. quick expense all think

Albert Benchimol

VOBA pretty do again and impact DAC is Yes. I That's quarter actually $X of less that and VOBA, know X.X Elyse. I year, in think When third about the about is million second in in the and fourth. the rest for the small, VOBA X the this but then than the

So it quickly. pretty And is that. off DAC runs subset a then of

Elyse Greenspan

Okay, thank you very much.

Albert Benchimol

will talk That's the those about adjustment are why because think of to PGAAP really I we all continue eliminate PGAAP volatility. numbers that ultimately that

Operator

Gallant question with next from Philadelphia comes Our go ahead. Financial. Please Cliff

Cliff Gallant

a There's record I but got analysis weakness, reserves. strong couple reserves Hey, doing? track you've there's How your good you setting been outside for indicating that of a morning. done are your know

that public could see you if perhaps miss. an inside, are comment outside you observer of at was And things so of - you I what from the curious can things some might your the that when look data

Albert Benchimol

want go go won't one. for for we you that to it. Peter, Well,

Pete Vogt

I'll say our actuaries I'd inside our a give more bit good go own answer. add feels reserve I'll about of are. what I'll give color. guess is little first. the just own our --I'll where let reserves technical and But I a committee Albert

our and we our were using just all which well And think the third reserves looked really some our are as review our good the reserves things just SEC reserves in all hire reserve our of the I are. paid I where reserving independent to on practices we With triangles party is internally, have, through about favorably do auditors committee an to confirmation separate reports, mention do triangles. Our one where opine have feel that very of we independent actuarial these audit reside. new of and about those, a regard to and reports would give as XX-K that external firm

do think shortcomings of of And would just triangles What trying trying so use to consolidated we When off one you're usually that is amount think you one reserves. at is I do that. get positive what those them. read June. own report global for And very and analysis out and view own I of loss triangles last are are And our there's to know good investors is your there is, you triangles. loss a I those triangles on comprehensive your transparent And very lot that ask triangles, and difficult. May to triangles what global that work there right there did positive every was think our of a looked a our fair I year, our about do at would from we of actually our point I work to and report. our publish a And triangles publish or with now

that personally to add I'll SEC background So anything. I think Albert someone's actuarial And conclusions use they're ones part reserves. let of make the the with it with on triangles to unfortunately is best not

Albert Benchimol

I can just it at technical. keep

to you just got the go and others. lot capture a can't what a all look and which to you during of business. right. very take got approach mentioned on need it lines portfolio, triangle, is a To changes look at call, of actuaries It's-- I of into that. just a portfolio As micro do. patterns we've at others, our certain single some payout We rate We made faster of out our of

Q&A unfazed reports. So of End our reserves recent is our in confidence these by

Operator

conference like over concludes session. remarks. to This closing for Albert Benchimol question-and-answer any back today's turn I to the would

Albert Benchimol

for you morning. you all time your and this thank Thank

to on operating And committed double-digit be the of to positioning, book, future in invest to that build pleased were we And beginning will to XXX% our commitment there. we're that that's market want at moment point, customers to And continue our continue. actions future. people said call, I've see out the our day. in that a my strengthen certainly to enhance express our that. team every something better hard They're from really improve back our the in our going market doing want and our we We're As returns to that. work I'm a the ROE. our challenging to great I I doing grateful at for It's AXIS. to serving and shareholders. that and appreciation delivering take And operations, to our work, do

in thank you So further everyone today. to progress. our reporting forward who dialed on And to look we to you

Operator

for The conference attending disconnect. you now has today's concluded. may presentation. Thank you And now

AXIS Capital Holdings Limited (AXS) 25 Apr 192019 Q1 Earnings call transcript