AXIS Capital's Q1 2025 Earnings Call: Unpacking Contradictions in Premium Growth, Expense Ratios, and Pricing Trends

Premium growth expectations, expense ratio normalization, property pricing trends, reinsurance loss ratio trends, and insurance premium growth expectations are the key contradictions discussed in AXIS Capital Holdings Limited's latest 2025Q1 earnings call



Strong Financial Performance and Book Value Growth:
- AXIS Capital reported an annualized operating return on equity of 19.2% and a record diluted book value per common share of $66.48 for Q1 2025.
- The company's operating earnings per share increased by 23% to $3.17 compared to the prior year quarter.
- This performance was attributed to consistent portfolio management, effective risk management, and a favorable loss ratio environment despite significant natural catastrophe events.

Premium Growth and Underwriting Discipline:
- AXIS Capital achieved record premiums of $2.8 billion, representing a 5% increase, with $738 million in new premiums.
- The insurance segment premiums grew by 8%, excluding remediation in cyber and primary casualty lines.
- Growth was driven by targeted class expansion and a strong focus on underwriting discipline, particularly in premium adequacy and risk-adjusted return expectations.

Investment Income and Share Repurchase:
- Net investment income increased by 24% to $208 million, supported by a strong alternative portfolio performance.
- AXIS Capital opportunistically repurchased $440 million in shares during the quarter.
- These actions reflect the company's robust capital position and confidence in its share value, allowing for capital deployment to enhance shareholder returns.

Market Conditions and Rate Dynamics:
- The company experienced a 7.1% rate change across property lines, with varying impacts across geographic regions.
- The rate change was primarily due to increased competition in London, while the U.S. market showed more moderation.
- AXIS maintained discipline in rate adjustments, ensuring premium adequacy and continued focus on profitable growth opportunities.