AXS - Earnings call transcript Q3 2019 | AXIS Capital Holdings Limited

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Operator

Good day, and welcome to the Third Quarter 2019 AXIS Capital Earnings Conference Call and Webcast. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the conference call over to Mr. Matt Rohrmann, Investor Relations. Mr. yours, is floor the sir. Rohrmann,

Matthew Rohrmann

quarter Good Thank to AXIS and September third Welcome ladies conference you, Capital XXXX. call the for Mike. our results to gentlemen. financial ended morning, discuss period and for XX, the

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

the copies, of Information our website you'd like Investor If at please visit section axiscapital.com.

our on through today's available as We call also the Information Benchimol, set and is Investor aside our me call, CEO; Vogt, an which website. section are Albert and of hour today's our audio webcast With for President an CFO. Pete

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

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

contain financial In addition, this presentation may non-GAAP measures.

section of supplement, call, For better Reconciliations the which a business. is release way our to run the representation is financial press our Information the our believe ex-PGAAP in found of this purposes which performance can basis, discuss on rate on of and website. best we are Investor our an earnings operating the be included of results

to like Albert. I'd to call that, turn Albert? over With the

Albert Benchimol

everyone, joining you morning, for our thank call. Thank you, Matt. Good and

this entire was factors on and this sure, catastrophes in a even these challenging credit earnings that particularly our with to our also our with There for higher we're aviation operating U.S. Caribbean, was be very reporting As be industry, lines. disappointed large a and of incidence losses, affected release, quarter. an Japan. noted midsize I in the loss quarter press To

pleased not the take that also we're the to individually made a strengthen within I'd where point, discuss our are and these context journey progress. To our like why continue reinsurance. few while my in our to show indicators our this of confident about and performance we've segments, progress results X minutes positive that to metrics, number To are we our that a insurance with down our we reflect results, by I'll to speaking address business. third by But quarter encouraged comments better break we're will of

First, let's talk insurance. about

quarterly insurance points. combined still absorbed the reflected by X came and lower over acquisition Our X ratio; of higher improved lower midsize This effects ratio, losses the attritional loss ratio, expense, lower a down acquisition cat on of point; a loss and which PGAAP incidence excluding expense.

and much G&A the bump development, what year as combined flat ratio see short-term ratio Excluding was ratio. XX% cats in by offset improved prior technical we a the was as at the

Let me explain.

premium of of use As we made and shed of amount of a the remediation portfolio, meaningful reinsurance. part our greater

of stronger-performing to that the base. for in short insurance necessary We the portfolio. is G&A pay our expense lower given confident while business. we net increasingly is delivering volume, the premium for clearly allowing ratio essentially basis, term years. profitability next improving loss writings flat us expense Reducing step to to is G&A loss with in for view X our dollar a our attractive XX%. As is insurance points these third improving the the and of on A and by premium and the resulting couple reduction of positioning, market acceptable a earned both an quarter premiums a demonstrate make expense more consequence insurance over the much coupled as given will volatility conditions, G&A increase premium price that a strong ratio I'm up up result, in the ratios are insurance actions down

reported year-to-date indicator is premiums reduction To the a in growth insurance that our gross X% of point, written good potential. not

Specifically, including growth well year, gross in grew business and parallel, highly in business of professionals remediating consider primary and writings less XX% markets than Indeed, this attractive rate by we business. also casualty, reduced had U.K. our that more business. in in in and were growth it. XX%, year-to-date. strong book Canada cyber, while In excess attractive liability XX% by our insurance over we and excess we attractive, been more design environmental we has of marine We've the

insurance addition, we're to shifting which more less volatility. towards of portfolio exhibit our tends exposure, more SME In

We're exacerbated the have the and last and believe we years impact not of calls, declines. that's because, over few I have years last reacting price several on actions is growing that as industry that in the said line, pricing that the to of loss with trends deteriorated we're seeing, negative every appropriately

Our currently acceptable strengthen continuing for view of segment add combined years, G&A us increases I seen to combined business year remains are pricing. ratio metrics lines last in X the would to right the is is a reported are insurance we're that the accident business that to the ratio. canceled about actions Thus, running and with an insurance mid-XXs. last that the book. points are in that par ex-cat our demonstrate year's, non-renewed even the still we've business core X and taking many the at with adjusting highly in our adding on These encouraging insurance not ratio on

reinsurance, we very disappointing reported a quarter. move to where Let's

reinsurance results volatility. reflect quarterly ex-cat normal quarterly Our

our than the the we experienced reinsurance that, year. large year ex-cat year-to-date, prior the However, still by for showing business the pointing big it's ratio combined accident this over progress worth Japan. But quarter point, out item losses more the is down was in X that

most given in improving expand conditions among of This the aligned client attractive presence market. as Japan took call, the with our high view we we that reinsurance advantage loyalty to within opportunity in our markets. market our noted long-term to strategy As rare a last earnings be Japan,

our and further increasing XXXX active more highly cat a In portfolio. to diversification Japanese addition, year be in our overall typhoon for proved Japan. exposure capital to Unfortunately, brought activity efficiency

from commitments perspective, However, believe that Japan growing receive we a is Japanese in appropriate call, the that to will longer-term confident our we continue the we're market. returns right for and to

that because business. that, we positive of our right while confident results areas deliver and attractive continuing in was conclude significant reinforcing to seeing many tough So quarter, the were will build the our let we're most there it team strategy. me growth that by and we that indicators that expect. have we're momentum, investors saying a It's the of our We're that

trends seeing in that the I'll But Later floor during I'll the on pass the to Pete. first, call, we're marketplace. speak

Peter Vogt

Thank you, morning, Albert, and good everyone.

of basis, and During the annualized an $XX X.X%. was of a of ROE operating net X.X%. quarter, ROE On an ex-PGAAP million an $XX operating negative we loss million, generating our generated income ex-PGAAP annualized

these by the this impacted cat including Japanese $XXX announced primarily by of typhoons. results were recently and of Hurricane as items, of weather-related a adversely pretax couple million, Dorian Our were we quarter net and driven reinstatement losses losses, premiums

ex segment. in same the positive And last In offset rate the cat segments. both addition, the the the weather-related, due more segment improvement period and year some impact X.X trend point of this than year to ratio, in insurance claims over accident loss reinsurance increased across and by of volatility current area over

on of insurance better results at the ex-PGAAP results business. of This is basis, be this performance representation quarterly segment an on and As remarks relevant which insurance call, our mentioned performance to our believe basis. all a for our for ex-PGAAP my for way we the will Accordingly, Matt quarter. our is and best rate of group discuss group operating the beginning an the the results is regarding run

favorable reserve X and in quarter XXX.X%, favorable the combined mentioned increase details. group loss point the ratio level, increase ratio, combined the and and an of third quarter, ex-PGAAP came comparable was losses current decrease million accident cat to acquisition the of million current in XXXX. by of million points which ex-PGAAP We ago X.X with cat was from The year came from reported cost ex year well year. $XX was This $XX the that $XX as in points prior the X.X moment insurance prior is from into of over as of increase the year Moving development. weather-related which a net an quarter prior consolidated At consolidated development X.X of weather, driven points XX.X%, a I the reserve reinsurance. to ratio

is at year increase in over driven earned. XX.X% ratio expected. 'XX. point and The of the trended by premiums has by the of third we of increased consolidated decrease the the G&A in compared quarter The as year-to-date ratio to G&A course net The ratio was G&A X.X the down XX.X% expense

natural a is stated, As the Albert a book. consequence ratio increase of the in more building profitable G&A

expect advance will We and operational earned reverse transformation. our market further strengthening we this premiums as in grow

capital run to Regarding by to of $XXX $XX prior was remain Fee end strategic run year. the for net quarter, partners XXXX we the annual our million operational rate to transformation, year. to as our of flat on achieve savings from continue million schedule income compared essentially the next rate

$XX For of the year-over-year million, was year-to-date, income XX%. over a increase fee

move segments. to the Now we'll

in which strategy gross XX% decrease, premiums opportunities third million Primary have segment was Casualty to this quarter. you especially decrease almost quarter, our in lowering Excess U.S. $XX in insurance. Let's was U.S. to of in liability, relation and property to saw the decreases reduction by the insurance This the liability in property, the partially favorable increases offset indicated with that lines. with begin Casualty. due The reported calls. consistent a new we written during in business of Offsetting past in we is exposure, In

ex-PGAAP than period X.X combined XXX.X%, was points segment insurance ratio last lower which the was year. The same

in points almost third weather primarily losses pretax cat million, to $XX in XXXX. were to the the compared period the quarter, in same and to compared $XX was of quarter decrease cat year accident This Dorian, loss The million X.X XXXX. Hurricane ratio current attributable

seen As share we of down portfolio, have come year-over-year. weather-related we continued U.S. property to improve have market the storms our

offset by we business The as insurance all over current marine was is ex-PGAAP in favorable decrease more and property X.X earn in to accident decreased partially cat loss and in the experience acquisition over mix in by loss well professional lines. and premium XX.X%, of liability as the property points midsize ratio prior period. ratio, in from less driven in which XXXX. aviation changes in segment weather, well The point experience year were improvements insurance The trend as compared was lines. X decrease cost as by of as loss credit, segment ex rate favorable These third lines the quarter and quarter

increase in increase was A&H $XX partially by liability underperforming increase largely an move premiums from business timing. in were let's lines. the third the lines, reported written in segment. increases reinsurance the quarter. property gross of and cat, principally largely to offset The by and These A&H to The Now on to nonrenewals due in offset came related The segment reinsurance million catastrophe, businesses. property, liability

reinsurance current and we X.X points weather, of lines more down is combined as cat higher well portfolio. the in period The accident the prior the claims and improvement This was line. to by aviation of this quarter segment's year X.X reinsurance believe ex same of as ratio, The compared driven The current than volatility XX.X% XX.X loss which was surety over period, was was XXX.X%, higher indicative ratio, was cat year-to-date the and year year. points weather, loss in this the the and credit accident ratio third XXXX. last ex

by million was segment attributable Hurricane XX.X current weather-related and increased cat Dorian pretax period the of same in accident typhoons. the in Japanese and were to weather compares primarily points. cat year to reinstatement The million. loss This premiums, $XX losses, This reinsurance net and XXXX. $XXX The ratio

due to impact segment's was in due retro partially favorable $XX prior the business some higher principally X ratio in to last adjustments decrease point the reinsurance mix. acquisition by almost was property reporting of year. was The and features The reserve This development in loss-sensitive related late-claim million to of cost offset year lines. largely than changes centered contracts,

to Net investment the million comparable income of quarter XXXX. third $XXX for quarter was the

approximately of Our yield is X.X%, years. and duration new yield X.X portfolio our The is current is money X.X%. the book

or drag With net respect from the $X transaction, per VOBA on share. Novae was to tax the PGAAP adjustments after loss operating the DAC quarter, $X.XX in million approximately

As impact be point we've previously from this minimal forward. disclosed, will moving the VOBA DAC

by generated Lastly, and driven to common diluted per book partially dividends. quarter income increased X.X% This the net value to gains, share in offset net unrealized was by $XX.XX. principally

That summarizes our third turn I'll call the to With that, quarter results. over back Albert.

Albert Benchimol

Pete. you, Thank

we'll a open questions. market conditions, of then quick and the up Let's for overview call do

of have recovery, the of largest no over years, we leadership and also in ones markets. the opportunity that the intense There's improvements the of now terms of denying The the now rate advantage X% price dislocations So with have our first. third year has have relevance on compared And exhibiting pricing has are take X% the stronger under as across the many second entering that but in business more the the to afflicted in in most The of the average our lines we're suffered many pricing, few pressure renewed been conditions third business and our the firming. in accelerated. pace was past as insurance the quarter increase X% market, and pain portfolio and attractive markets especially increases. to

specific increases E&S strongest Casualty were Let's to for XX%. up average at for The move reduced increases division, Excess business XX% approximately U.S. XX% U.S. in about Casualty to up rate XX% rates were quarter, X%. came at our while quarter. the our up than division came more close X%, while year-to-date. where in rates data. second close U.S. to straight the was program were Primary property In Overall, in

division, second X% are picking quarter. in coming Within American in the lines our at increases rate versus professional North up, X%

X% increases for in solutions Our so, our cyber company were nearly X% that or professional we D&O a and and specialty stabilizing increase mostly division unit, lines primary achieved some and cyber increases down basis, the saw commercial XX%, to for an E&O insurance be Small writes average opportunity over management Canadian business. on providing recent to private D&O price excess which increases. losses although flat of average appear were market, Overall, X%. year-to-date

were up well although insurance nearly London-based that the in increases for many excess our of division, XX% In our international are average rate there quarter, that were units level.

rate the was across average example, For marine book entire XX%. the increase almost

years. global in reduction Additionally, energy, program have been credit and property single books. double-digit terrorism renewable risk The were across results in we increases flat. is is achieved consolidated casualty was XX% of in up increase where book and and average average insurance in Overall, year-to-date political Most X.X%, up international overall at this from year. X.X% book, in X.X%. And book prior for to are up and renewed year-to-date professional digits, strong recent the our entire increase insurance came almost The year. units the only flat the the

hear into convinces lines. Everything that in be rate so to and activity seems Results will Large very loss we increasing. increases have been remain inadequate and see and us XXXX continue longer. many likely

we choice us the challenges stay are we're benefits Social in longer no will year year results. away. this prior AXIS well inflation is that very do Notwithstanding environment. face have to likely to most other than a in releases top underwriting rates Interest and will current this fade also likely confident lower concern, for improve Carriers of essentially quarter, than expected.

noted by growth levels earlier, we additional intend attractive more of grew XX% As year-to-date, appetite we to more expand profit and start lines lines I opportunity. than for as reach to our acceptable our

to reinsurance. Moving

that market appear be While at still improvements as expect coming not or dislocated retro does market, primary the ongoing renewals. we as to

marine, combined increases, reducing respond with we should commissions. aviation, casualty and professional reinsurance loss pricing will lines, in primary of recent and see ceding engineering, loss Excess treaties expect many benefit lines. pressure business, from underlying credit, to corrections rate proportional experience, strong For on including to

increases demand see reinsurance, driven for and by for in X/X year catastrophe expect another reinsurers. combined the results Caribbean America of unsatisfactory North increased As the upcoming covers, an we with ongoing markets renewals, to at

other Europe absence at the we in up the losses this On hand, flat recent large expect be Latin low years. or point, single and America given to of digits

including in significant later between would double-digit and could As course, that and show lot U.S. increases happen range, then. renewals loss-impacted we a the XXXX, now we move layers, into although, expect in to Japanese increases of midyear

market use our improve and conditions volatility. to aggregate will catastrophe exposure We these further

the in shaved progress this increased of peak share diversification underlying annual both using by shift across to make cat the expected and beyond geographic changes portfolio down the to quality. we've improve curve more cat-combined of the while Between curve third of reinsurance while improve and across are X XX% multiple XXXX. our improve and with to reductions book cat, I And you quarter our pricing we this to book, that ratio other exposures, It's loss third do made year. quarter that want continue points. outside by the in we of the XXXX volatility the the loss we made to profitability just cat entire year, insurance goal we levers than and in curve similar

more We improving the enterprise. across attachment are are and limits, pushing exclusions selection favorable for points and our risk

So but path. on to where to and necessary ongoing tangible conclude, are a long-term that was we've is investments and well markets company this also stronger great progress seen very to right seeing indicators deliver making opportunities, want The we're We're improving. growth. the become that making quarter, to we are growing profitable encouraging positioned a tough

line the open please for let's now Operator? questions. And

Operator

[Operator of Kumar come Buckingham from have Instructions]. Amit first we Research. the question will And

Amit Kumar

you might talk this forward. specific address to to to volatility this will you respond you losses. some portfolio. These questions. I quarters with a midsize impacted some despite the the repositioning get topic for these to wanted give And wanted investors how issue? few Albert, start losses steps that diminish to of I taking your confidence to about be going midsize several would results them have as sense can

Albert Benchimol

Amit, for you thank that question.

volatility credit But you insurance nature our large loss because on seen. some do XXs and really to lines. exactly average, what X of do experience those talk number lines. bankruptcies the first we're very with Half large the at X, in you lines, normal strong thing quarter to seeing. if quarter. about very, are these they look both credit bad you and get and of coming then with of been think losses this our the quarters, you've truly XX%, the in is And give in deal performance tend X, let's are that in in X, and reinsurance, is of There's that X, a lines the business I X that's

had So no half losses last of in quarters. our large where we've credit losses the credit X loss is essentially to quarter due this

And that a And if so are And the that's still see, you would what expect X, write lines of affected X very it's to be great result. average that's happened. business number bad but one, one. good. what credit, are good X, quarters, X you That

number the marine they those Number severity a facts couple the I the patterns, two, at higher caused When estimate big, small you've There's course, But read been businesses, talk which, occasional about and us these losses. look as a are not the and midsize, certainly the and our on are and you are midsize big going nothing just in to there's unusual think there's nothing frequency. And These the a think headlines otherwise, of or on, of all appetites there's underwriting revisit overall essentially of I literally around where where losses change in of cases quarters to aviation There you this. $X of large to losses. have the lead are frequency. in that lines. nothing unusual million. we risk

was good say will a losses. that I generally last for year midsize year

that, in points say seeing X a see the is losses we're the that average, would book. about What deterioration midsize here a analyzing But perhaps you year. result across I so will comparison not And is unusual. part higher that year-over-year. say spend every nothing We our book. poor a this. On It's but year-over-year time average lot of the X.X maybe I than point bad of

losses just using many in in prior is very indicator the that nothing quarter We compared reinsurance. spent this the large is in here points, by limits, of credit results frequency poor an And increasing reducing more this There quarter concentration quality is quarter. loss. not any improving is to a the an years have There runaway way of unusual attachment credit.

fact, be very, continue In strong. our credit very to results

Amit Kumar

also a loss Using helpful. link trend insurance. it as And that can you Okay. the answer backdrop, in let's on That's versus about talk maybe discussion a rate to second.

been about Primary sorry, the and last of I is questions pivot on the in -- as talked liability away Casualty growth you the from Excess property think getting since one and side, evening I've Casualty. the larger cat lines, you

there's debate we worse should tort give emerging loss that's cetera. investors' cost a What today? inflation, are than et social on jury develop awards, things Now another about including confidence climate, not that what talking inflation, where could area new

Albert Benchimol

areas. Excess and where in question, good very talk you very let But we're area to and me footing, think why. actually very, one tell casualty a happy number that we That's I'd is on be solid Casualty about a of and

years. So hear first X, for of shrunk were you'll all, back on few trends our limits. years, made calls book gross to changes we've if attachment points, to in X business of increasing reducing negative significant the many you of X, that last including actually the very that book and past years, over conference business, casualty We've go we

Excess what XXXX. limits an Casualty book in XX% of XXXX in is average So just example, it you the to net just literally in exposed give was

we've and taken to price so already, ratios a very on we taking significant Excess low on we we 'XX. those been example, and indicated changes. amount for we've had you, So demanding Casualty since retention And were as correction of that

indication we've we second negative that reserves. whenever liability, on The immediately is our it booked in thing seen any

on handle early believe got that book regards and reserves, in good you to very currently we very reserve, if we've the casualty position that any we're provide, bad believe is. we that triangle And we've that to a very look at you'll that see such good a our responsive we where taking our been on news so with the

be to we're XX% fair, increases. getting then price And

as are reductions to loss that You in not can assured very we ratios. taking anywhere close that rest

but our very are to of reserving I and I reflect heavy incorporate improvement, assumption we position that very, very in our this reserving. with free will And XX% we We an and so book. that We'll trend. very, assuming loss gift, a we're hope, think in casualty is not strong regard a show will are

exactly And I case, on the for would book. make same example, D&O our

about D&O. talk us heard You've

made in D&O that you already to because, reductions health then, book, book literally did. also reduce major just you we changes primary in limits. told back saw D&O would XXXX our in ago, D&O are they know would the You We we we reduce technology, point even make to at And we you to and trends public ago, significantly care. we we our that continued years significant that attachment that XX% X increased told on again, book. were told We point, the attachment we've higher increase we years And and X than U.S. that we public reduce would the that limits. points would

We trends. changes So our reinsurance 'XX We those that seeing we've book. those again expectation lines it and 'XX, professional in probably been making trends. of bringing as those we've reduced in started been peaked down,

grow good grow the So actions been the good that yet D&O. on. We is taking I now, we've actions, and is that those a to on not time public do time We've Casualty. actually in feel the a think early taking Excess on fact, been we right now think to

cautious So choose we grow. to where we're on being

Amit Kumar

trend insurance XXX think -- points. cost between XXX pricing the you do loss gap That I'll where loss makes are In headed we Where last points. side was cost versus on QX, I'm the -- now? In the And sense. it QX, was sorry, was The we are here? question. from re-queue.

Albert Benchimol

not at look increase a X%, basis remember, if we're a -- again, indicated X% lines XX, using XXX and you you which at on We're assuming you of you points. year-to-date using look that not year. if as -- you're XX to let's to really look think what get is going trends, But pricing next X% that book obviously, business increases, to loss you of the those. But I most going XX, be is trend basis, XX, when are long-term that, solidly longer-term earning go. I -- Again, at that we're X.X%, if that's giving on is you, at

the think I on going is average -- for let's clearly book losses, a results room that's rates year X% next remember, improvement based clearly, on with a to again, but of a that, trends in a not seeing. there's But because of couple a points higher. to for longer hundred we're of It's higher assume that kind than that's So we're book basis room that we what is loss long-term earning there X.X% improvement higher. are going than be

Operator

And next, Brian we have Meredith of UBS.

Brian Meredith

just on. I thing, midsize want the to go loss back whole going to Yes. what's been

unattractive Is elevated the coming perhaps I first six those guess I is, of industry property, row question runs in go mentioned into kind from? types of away that we generally of quarters call I kind speaking, think from some attractive. that a the -- as But see where XXXX largely is or, you should almost coming is unattractive off? business -- we it, that that that things. it's been -- as of like in insurance Because clearly going we've insurance the know business we've business? midsize, credit attractive it business is And these had

Albert Benchimol

Yes.

So to for the that even loads, every large while $X going loss or when you pop fact good average is once talk unreasonable. not more. -- have in to you're about a midsize a first talk about million that's that the to there's are thing if claims business, again going X%-ish we And

a X, but believe, large X good were higher is issue. pretty loss it's I division, good. for over is that because, the is in quarters, what they worth, the bit news, So here is in period, what prior it's the the insurance true But the that last, that's

because losses seeing ratio. ratio have book If attritional loss the changes to not that loss you we made where strong they're our property many both midsize and from property we're book look loss the our so cat at ratio, improvements, are, coming significant in

there. not I'll ratio in only having couple every at when you're that is said, pops our The large I of credit. as that trade is So X losses combined in this look And good half sub-XX% seeing business. of business again, the you the in it it of is last property That quarters. you X quarters, quarter, place or take

think as don't everybody has in newspapers. at been a in caused And I been view But on aviation, lines, conservative the of cases, And there look want a you aviation to change large think And has losses to visible that. them give and very credit on the on which false take has them, venue I the distribution us I reading frankly, a more clearly disturbing. the and the see hope. don't I I

some year's it's hard still the reinsurance, reflects X% again, ratio minus in in be is the although really for loss midsize seeing a the of reinsurance our that about in or midsize a still ratio, to seeing those this on increase And the than losses, year are year-to-date the book, in better the with think losses. reduce good plus what's But quarter. in job to again, overall And any including going I year, what lot you're results volatility that a is even about X point we the they X year-to-date results work. results. were ex-cat last the insurance had reduction for loss and quarter we're

you the we every is but what And untoward this are losses no to and quarter, going try context I'm are. be and peeled want we're this this the good see. as result there's There's quarterly here. we of that way that We're frustrated with could. seeing as nothing portfolio, that an improved what I tell quarter is in reasonable you So way a to very in clear we've

Brian Meredith

could with do mitigate some ceded maybe would Is of reinsurance this? there you anything that

Albert Benchimol

optimized hand to to need last up you're if I on to reinsurance lower benefit, we're your a up substantially I shout-out because in million any loss it to realize you're a long-term amount I to And think fact. ceded our year, to giving And materially you're take one going we've diversification re to start and you giving on well our doing $X going of to ceded team take huge very to be your be re. own ceded have give reinsurers. than profits. a that diversification, to going going think you're line,

business a I'm that I shares as actually would the sit but I there happy better, reduce can makes with we we so think next business have and an and it -- is there's of year. more think argue gets opportunity I are to And better lot where is you quota to analysis, that of us for sense. down gets as that where so keep

Brian Meredith

you. makes Got Got That you. sense.

year, loss there's I aren't we say, XXXX, if improvement hey, everything of the you're listen, Albert, point, ratios next we would that something as kind seeing take insurance in therefore, in if wrong? kind into look underlying of industry, meaningful you saying, a So the at

Albert Benchimol

the we ratios Admittedly, mentioned very ourselves see canceled, with is to versus high-quality which strong bringing G&A to A, basis. I are on all year the down we're a world accident the book and ratio. build. platform those feeling to attention an and numbers we that have because, on those book confidence when expenses. are the the going to the now at lower going book, the as got do right to continuing to that in a we there But look non-renewed We're -- I that that great pay something you, book our to we're

we If action action I higher because that in more that it's industry us will the am will they on what on trends corrective loss do is expecting. And is don't, rate. take is we we demanding the underwriting, and of confident ratios And seeing any improve. corrective so than will take absolutely case the much will loss

Brian Meredith

one Got just you. last you. Got just curious. one, And

as and Novae? acquisitions of performing expected, obviously like they i.e, of of Aviabel Some kind you've the are late, made

Albert Benchimol

on Novae So book. the

we made I'll in told know, changes We 'XX Novae changes 'XX. acquired you of were There blunt. that 'XX. that additional were we book you making, be the [Indiscernible] As some we year. some to beginning and in

the the the very is world rate and good the really being XX markets tell one that book you that is top strongest London of is the strategic business. market, Some canceled positioning which in non-renewed we I right is that get to now telling us a business. now, that you will hurting I'm giving in have But part is opportunity of leader, of what demand that us

XX% increases of you, feeling So we're I saw this and take XX% have we we to the good teens really opportunity that in property business. indicated in average advantage on. marine, to in And the the that rate increase in so

us Obviously, or to of Novae composition need business in the but that, that lines well. book. nothing like our we own the there's book, unexpected think improve, very unusual of positions So just some of that they that some book, have

business so following: aviation. Aviabel, I that and down reducing was was to but was for is reason aviation very a better much think significantly, our not were as have believe was not small it the That better we a expensive acquisition the market us the was large reposition has of that business attractive. where market, that no help the book airline in still general longer gone market. found that a it a that And acquisition. that We We much great to

Aviabel $XX not And it a tends acquired back our really, It's shift general airlines, are the made. we towards it's large, well. and those large lines answer improving certainly back not million we've and and we was of cut from today more We've progress. so to away it result, want book. that on believe X a book the and continue it the it. that on risks an We've because there, where business overall, acquisitions Yes. to in But that acquisitions? huge. in acquisition those not fix company to where there monitor by of of seeing book. -- that literally aviation remains great better that it's I I expenses, And but the to But are cut It's so a better we are result. one we're report there yes. were still We wish It's performing? will and be,

Operator

with is Fargo. Greenspan Next Elyse Wells

Elyse Greenspan

with My book. the first question, sticking also insurance

away you expense that the is of of side ratio with also in part impact flat the guess G&A. the with terms premiums -- earned lower the of on loss from I what's So going guys pointed in to

think in you net point pricing and all do when going premiums -- actions we're all re-underwriting get can given where to complete net inflect the the gross positively? insurance getting that you're and to are So that these

Albert Benchimol

to to the say is speak progress points. technical that ratio insurance actually that. delivering I'll down higher amount So not came in guess I we that should results. absorbed the minimize of I shown still is by a and want that losses what X We're about a talking

the the sorry, certainly insurance more, results. do We're but there still We're in in to book. been property progress book. intending being -- So has is progress insurance in shown significant there the

that the premium us can handle profitable factors. of the more grow obviously clearly But improve we're we is I that the the regards we're also reduce in Brian, to find are the that -- lines books on quota at good XXXX of opportunities. of of some mentioned One focused is the can keep now we some where looking with this ratio where think the that with And and where we of attractive book can I so things X business expenses on to accordingly. our secondly, shares, as a is reducing it's inflection looking one we to curve, combination looking do that. of G&A

that XXXX. give to that at negative at we the as look to but But... as that. Peter, as the a ratio loath frame, G&A specific the had "impact" early time beginning projections, we've expect look turn on tell I can of that we I'm should our you start should

Peter Vogt

I we've Yes. side, about middle UPR mean get off. UPR should as year. think down that more about we growth by the year, as as business the into be that canceled running is we That, next we next indicated, I have, -- of think I the the

by some to markets start we us on by next is do as in that favorable growth momentum crystal for be ball into -- long year the as next get some positive the time we second if therefore, I'd say. what the into I think to So have growth I continue there of but the year, lines. insurance don't show the get there a half that, are should

indications going more next pull have the operational into and that I we On all our continue that to the year. sure to year, get as ratio effectively transformation of make the insurance reflects hard we're book. G&A, down take we another still at be doing, the able And into we expect to of to look we'll in see will and that, we're it size G&A expenses planning and on think next

Albert Benchimol

levers or X those. can short we on the working guess, and X pull, we'll I So that answer we've is got be

Elyse Greenspan

does alluded at see this so about in don't so helpful. the think year then XXXX? That's that you an -- in canceled of to insurance, Or will terms impacting business the and points margins? of have the out from And of Okay. non-renewed the somewhat you that we that X does circle still to impact end in

Albert Benchimol

could you an of to would that say I going Elyse, first half see still impact through the XXXX.

so tails indicated, all depends they canceled in how we it on things of a those perform we lot quarter. had on As certain a them,

and actually was up books That This on It line is some it. cat one bid well. didn't had jumped canceled the book to also. perform quarter, the It that really us. of exposure actually -- cat

coverholders runs of that it lot again, as So canceled. and off, a we was MGAs

eye a through at our something it, keep was it's there that on on and next to the keep I'm expect need tail but a least of first I my quarter So going to bit for we of eye half every year. on

Elyse Greenspan

another losses? also And Do then Hagibis of you both on losses cat, in fourth can of quarter within you so which third a maybe quarter? in be a of you in it in Okay. Just have soon those wildfires, to sense And have some the other events in the the know kind quarter of us thumb terms California. fourth might the took typhoon events. too are rule I typhoon size relation with guys Japan, give the U.S. the of But There's then California ongoing, Japan. we sizable and with kind

Albert Benchimol

mean with say AIR really to don't to Hagibis, what what I'd which estimate $XX billion, is is yet. it an is Well, quite was regard know $X wide. billion we had I

Jebi. lower that's what our it something larger but So we've talked to than probably than Faxai with will we expect be cedent, given

I would they as aggregate Japanese it's Japan, associated we exhausted, somewhere could you somewhere we know tell The the fourth higher won't to And with see tell noted there. that Jebi. from impacting had market thing impacted increase were that we with quarter. were you our so a losses saw is, market not so couple so we will by be will in those our only really Jebi release, did is share we I -- And treaties Faxai. with press What than we regard -- be in

Operator

have we of Kinar Yaron Next, Goldman Sachs.

Yaron Kinar

in I have missed of call. and credit the I'm a part risk previously so shrinkage and guess lines and aviation premiums. seeing But I first material political are first that been then in the Those both question, insurance, apologize if I emphasized.

and simple changed? And So maybe you risk. political guess, as that -- additional Albert, larger-airline-business-to-general-aviation you're then creating the Is out aviation, I have doing specifically, just pressure shift that's shift in a as credit it that what's in thoughts you on premiums And pointed there? from

Albert Benchimol

Yes.

not improvement move. just aviation, and on So per so further frankly, the quite in we're book is insurance se, enough right the reductions seeing

that political works, And deal there's and literally credit been there's no so it's one market we're time, a conditions. the and risk, at business. business -- regard reacting renewal way With to just to

we it And risk every evaluate depending less. we conditions, comes. take And the market as or on so more

is there volume are never on We line. budget that people with actually the our very clear credit a for

fact wanted. we There you point, underwrite of want to of it. you right we're ones in sources the as down large took really But so overly many. how credit, will some line know, which, is that weren't but careful slowing There the now, one the we've at the there's are concerned. seen, where, limits very you be are pick not up, a that we couple it's question as So that of opportunities a credit

see of was in opportunities wanted appetite that the to we this that this so not changing question see simply didn't our And credit. a the but fact we credit, just quarter, for

Yaron Kinar

loss Japan. industry? Or than Okay. that And you be it that clarifying Jebi. for that the smaller is then for that question. specifically? shifting AXIS The Hagibis Is expect to guess I you to one estimate said

Albert Benchimol

were to Actually, clear, we No. talking be people. to

Singapore that share team lot are our members gotten fact, tell we've prepared some conference. in at they They a you is of not it people information. right. get want the And of customers right we In now to to -- can all to talking

they're embarrassed prior losses. in think I

would I Hagibis -- that the it maybe a smaller, industry. I to size Jebi, kind think think are saying could little if that's people guess, there was a but be be the of of

compared reasons tend larger to the have losses to to worth, to flood For going not the Hagibis going what be easy flooding losses substantial one because that modeling losses to is it's versus they tend as losses. prior of is is that traditional residential. be industrial And be commercial wind and

either lot so more a it flooded isn't the idiosyncratic, there's And isn't. plant or

it think And than But so that sense loss closer modeling Jebi-type it to to may likely everybody more a is is there's answers, caution I a I Faxai-type of to be may certain a up. holding so or get think loss. not it's right the you

think were are be our than market with a regard because us, it bigger. our it bigger I Jebi-type shares if old loss, Jebi-type loss would to

aggregate guide that not was hand, through, Faxai one-shot basically to they're the now low I Peter from you extrapolate paid to treaties trying and what had other think to some exposure On been Faxai because have do to was a deal.

was that, in not I So had we higher should in the the affect lower at fact That in -- indication... concentration the us that Faxai a Hagibis. layers was the way same the believe,

Peter Vogt

That is don't what loss I estimate All that hearing Yes. to our estimates industry yes. yet. are we're have the pretty we was that an broad. is would say indication, And

Albert Benchimol

Yes.

Yaron Kinar

up that keep you exposure year, wind as of in severe events? just would assuming Japan, you see the remains any Or changes, expect you next that frequency look into do your same? given there, higher exposure trends the with these your Okay. rates loss And roughly

Albert Benchimol

No. that. appreciate I

really to to we the exposure, exposure be maybe this so improve shift portfolio. we And did balance I to we in that think overall But real between it opportunity our our we I have the do do to exposures portfolio, to would Japanese had Japanese needed layers. a be fair, terms portfolio. what think that the optimize looking in maybe year want we of in around

based are available, a it increasing question on simply renewals the of than it's So optimizing that it. rather

Operator

have we of Reitenbach next, Sean And KBW.

Sean Reitenbach

would keep rates looks they premium XXXX? growth like look firming, similar written are, you that gross suspect for reinsurance Assuming as XXXX will

Albert Benchimol

down would because rates changes sure the will we I our what answer as are you grow I'm we can not imagine, a through basis, not do we on to just we're we're large that would we'd I looking will to can gross I that to X get. cat year, do terms I take entire to literally in took that much might -- going of that our line as expectations rate aggregate what And in and question exposure, achievable. probably the curve earlier, plan mentioned and in be over of XX% on the But you we that loss that. more as think clients we say looking every speak. as as cat I because loss market think

that write all expect rate we're So going we're the I get. to can take to going we benefit of that --

But We you on you terms make basis cat, unlikely various on are the a see next improvements saw that in to year. to continue some layers. of are will gross where at large we growth

responsive would I be As we other to the lines, think the opportunities. to

Sean Reitenbach

your overarching That's out probably hurt thoughts And very Okay. not Lloyd's came positioning? helpful. any the and helps Blueprint that One how have on you to that secondly, the on do then positioning,

Albert Benchimol

Neal that secondly, So of member Lloyd's the let the happy I be the of of whatever give speaking not that. a as as council. on think say I I'm to aware CEO have to am I Lloyd's, I But AXIS, particular, answer of in, I'm you, needed make probably believe so Council and funk perspective, business. XX John for of year out XX, they From to London in market were in and XX, our Lloyd's. speak Lloyd's, we always of changes get real Bruce the -- some to the from what that

to making, range improve that so take a think, the all payment account create to way that we a platform, are broad looking in the from And to technology, large changes improving capabilities the small of claims right I think risks. making It's and write advantage the faster I they're direction. to digital processes

do service to those capabilities customer, to All ultimately, relates decisions. better leveraging digital the and of better it make initiatives cheaper,

is Then are introduction in the which heard Lloyd's. new there box, facilitate -- to entrepreneurial of about you've a into business the syndicate

increase Lloyd's leverage very, very leverage and more greater business for think bringing third-party base. I our premium that's good a into to way capital. costs the platform of That's and looking ways over a to good

market. right of to that So market have And say the make initiatives significant would that participation -- are factors benefit of and moving Lloyd's there the are a if of all short of stronger obvious same intent. blueprint the have but positive it the in would from our the those much we I a would make even even direction. goals if Lloyd's And the progress, that fall we all be strongly improvements. but It's within obvious strong very success, within they level -- they're It's move number that going same they're all not all going not to at speed.

Operator

from come Bank. of question Deutsche next Shanker the will And Josh

Joshua Shanker

Accident Yes. business deemphasizing. why and the were might today Can line on completely before If great it bit that understood going lane, never not a what's there? the going was initial And to we years obviously, history the & now, goals. that was your And take as be a be for and as XX down years ago? little it's talk designs robust it's even about I a of XX really and stroll Albert, I've AXIS attractive CEO, business. remember a Health you're one differentiators you What X little

Albert Benchimol

Okay.

the it. So want not in issue grow to particular action and cut are it to in in business heading book. performance. important was best you're we're the still in that our our business, want that is deemphasizing I see this we we of our very are grow issue that this business treaty us. to And simply to quality canceled with was meaningful wasn't America. year The treaty the continuing It's large terms it. A&H and the an thing that moving But to what direction seeing partner. the that -- I to not so year a wrong It continuing reinsurance in continues we direction, with first our North regard treaty. in treaty. that -- a to correct just was that we We're a It A&H for wrong simply that say A&H a you was we grow it is is the actually It's is to business a reinsurance improve couldn't thought -- deemphasizing continue insurance and

But have the When to build -- at business the me our platform. a A&H build it back. a to initially was -- time, was let was was take launched, retail goal to A&H

think we wholesale amount time, within recognized a a of that AXIS retail I not a that reasonable is company. company,

we was be needed And that the or XXXX the change the so of would A&H the done in say wholesale it we've the we and that. really and business, time so business the reinsurance strategy and between to the into change big more business launched That focus to the I so.

Peter Vogt

yes. XXXX,

Albert Benchimol

a more one retail markets compete platform better where market, create have "You let's and don't to And we success." what? truly more to a When business. it back rather our behind and it the a know relevant shift try -- took We to And to we the we hand so truly have market. wholesale the than that retail with said, platform in of A&H chance

help a that an goals business. you're it didn't making moving wrong we this $X the progress. that. retail business, million then, since was is large that retail you? moving a original from performance that correct build been billion year once a just we business. is $XXX a in to underwriting correction it's to meet didn't so so our right and and good changed seeing to delivering in treaty Does profit wholesale, we And building But that the wanted of All the It's obviously direction, focus direction. It's perhaps

Joshua Shanker

on these Okay. ratios? quarters. into scale That's this few earned me timing continue a material of the appreciate we really that. when next the changes underwriting benefit sort see for that in I Can difference actions assume we'll premium of then see taking great. you you're the loss quarter, I make And the of

Albert Benchimol

need to we're that now. by I start Again, them seeing saying

ratios You're declining seeing the today. loss

we've made You're our to because that of in America changes share North book. property of seeing cat declining our losses the

So are... there

Joshua Shanker

Albert. for ratios loss for attritional low, versus You're it's right, thought my hard on I margins process... less to us see Actually, ex-cat higher guess. margins the cat It's ex-cat sometimes is business low that's exposed,

Albert Benchimol

had of X.X we the point a the ex-cat the at the you're quarter, higher loss what losses. day, that ratio you this saying. still reduction had in appreciate end I But a notwithstanding fact midsize

And that on so certainly, real every And continue to expect to we deliver the that's progress. quarter.

as out. the work think that I actions their have we way made that

example, the which for staying the for Peter tune this So discontinued first half got a the is business, a year -- declining believe, X around year at we've about points, rate, to spoke about the into hurting of of that to us I fact next second but Pete?

Peter Vogt

Yes.

Albert Benchimol

versus benefits. ago, going writing And of as those more So we that just as continues see to business wrote a already benefits. year, seeing It's we improve. to today. we're out, those that I'm the And years a we that earn are confident business earn will X.X we we see of that different the start today more to we're book book absolutely the will benefits. more see

Joshua Shanker

Yes, seeing yes. quarter Well, look next forward it I XXXX. in

Albert Benchimol

As do I.

Operator

follow-up And Kumar of from Buckingham a next, Amit have we Research.

Amit Kumar

it's know make the this so quick. I at of hour, the top I'll

initial ratio and few back book. you at combined going credit or it XX%? clean-up a questions. running loss a remarks, your a to Did the was of one, ratio say Number on Just Albert, XXs

Albert Benchimol

XXs. XXs the Combined and in

Amit Kumar

now? sorry, it. right out buying or repurchasing stock Number That's your from I'm are helpful. you -- blacked Got two,

Albert Benchimol

No, not. we're

Amit Kumar

stock reacting And any with how capital today? the management on is thoughts

Peter Vogt

plan authorization right stock a place have not do We in now.

Albert Benchimol

that blackout, But the other fact we... Okay. there's than no

Peter Vogt

There's blackout. no

have we not get could Board but it, place Although an authorization right we approve now. the in plan to do

Albert Benchimol

saying we'll a the think look at with out years. lot the sheet look I and opportunities and it's at think down sit that the strengthened We'll our year. X sit down, I worth next we'll planning. has last point, that we have our our at -- balance Board we'll To over look

out way acquired we We're working equity down, we took the you the additional our leverage some we're Novae. so We're We'll year. at next year, was this stronger our at time a and balance the in definitely leverage back As it than when position. we'll a we'll last take for But taking so our know, bringing sheet position is and with up. Board. sit down plan down, look

Amit Kumar

And question performance we that? the think -- on I you book. reinsurance how from ag to thoughts ag an impact know and an the any MPCI other it. Any is QX about Got should have

Albert Benchimol

that know I had it be don't indication that negative. we've would any

you Let was we a as the to that But on check can bit in But recent you me tell go that. there that. come review. most could and went through I back back more little it, I on surprise no

Amit Kumar

there was you or final was addressed? know not QX question. a Did miss I cat. that Did you -- Got I on know I it. wildfire? very detailed gave California on And Or Dallas losses that? question Hagibis. the miss a answer I the did on comment

Albert Benchimol

of which was non-cat nothing the is as Dallas too that there. just still said, major unusual of burning. was to there's the They're obviously. weather consider event," And still a event, I wildfire, not a event type "PCS think one event we overall. just it these be California but We on early,

Operator

session. time, you remarks? our showing any we're questions. no Benchimol, further and We'll have this question-and-answer gentlemen, conclude did At Mr. closing ahead go

Albert Benchimol

take Thank some. I'll very you operator, much,

your at call. the said are continue So confident that the remain this of And seeing in right all participating the moving thank metrics in that for But satisfied just direction. beginning you we're we're with that and understand I the confirm call, as not we we frustration. I results, to these

execute will our that right on our to success We have strategy. the continue grounded and be to strategy, in ability

improving team You speaking is We again to the focused be can to look that entire going nothing soon. results. on assured forward rest than doing Goodbye. you other with

Operator

lines. this management Thank conference a also concluded. time to thank you, time, sir, the team. for your And At has the and The and Take may you day. everyone. great have call now disconnect rest your you care, again, of

AXIS Capital Holdings Limited (AXS) 30 Oct 192019 Q3 Earnings call transcript