AXIS Capital Reports Net Income of $117.8M for Q2

Bermuda-based AXIS Capital Holdings Limited reported net income for the quarter of $117.8 million, or $0.81 per diluted share, compared to $30.0 million, or $0.22 per diluted share, for the second quarter ended June 30, 2002, an increase of $87.8 million, or $0.59 per diluted share. Net income for the six months ended June 30, 2003 rose 264 percent to $224.9 million, or $1.55 per diluted share, from $61.7 million, or $0.46 per diluted share, for the corresponding period in 2002.

Net income excluding net realized gains and losses on investments, net of tax for the second quarter of 2003 was $102.3 million, or $0.70 per diluted share, compared with $21.3 million, or $0.16 per diluted share, for the quarter ended June 30, 2002. Net income excluding net realized gains and losses on investments, net of tax for the six months ended June 30, 2003 was $198.4 million, or $1.36 per diluted share, compared with $52.3 million, or $0.39 per diluted share, for the six months ended June 30, 2002.

Shareholders’ equity has grown to $2.2 billion as at June 30, 2003. Diluted book value per share was $15.44, an increase of $1.48 or 10.6% from Dec. 31, 2002. Diluted book value per share is a non-GAAP financial measure. A reconciliation of this measure to shareholders’ equity is presented at the end of this release.

John Charman, president and CEO, commented “We are delighted to have produced such a strong set of financial results for our first reporting period as a public company. These results clearly demonstrate the differentiating AXIS franchise that has been built over the last eighteen months. All four of our underwriting segments are now fully operational, each has top quality ratings, excellent staff and well capitalized platforms from which we can not only sustain our profitability but, more importantly, from which we can generate future growth.”

Gross premiums written for the second quarter of 2003 were $551.5 million compared to $260.7 million for the second quarter 2002. Of these premiums written: $207.7 million were derived from global insurance compared to $163.5 million in the corresponding quarter of 2002; $120.1 million from global reinsurance compared to $97.2 million in the corresponding quarter of 2002; $171.1 million from U.S. insurance; and $52.6 million from U.S. reinsurance. The latter two segments began underwriting at the start of 2003; therefore, there are no comparatives for the periods in 2002. For the quarter ended June 30, 2003 compared to the quarter ended June 30, 2002, net premiums written rose to $449.8 million from $234.0 million and net premiums earned increased to $335.6 million from $94.5 million.

For the quarter ended June 30, 2003, net investment income, including realized gains of $15.7 million, was $31.6 million compared with $22.7 million, including realized gains of $8.7 million, for the quarter ended June 30, 2002.

During the second quarter of 2003, the company generated a combined ratio of 81.5 percent, a loss ratio of 58.3 percent and an expense ratio of 23.2 percent compared to 92.4 percent, 58.7 percent and 33.7 percent, respectively, for the second quarter of 2002.

Gross premiums written for the first six months of 2003 were $1,160.0 million compared to $526.4 million for the first six months of 2002. Of these premiums written: $451.3 million were derived from global insurance compared to $304.8 million in the corresponding period of 2002; $331.6 million from global reinsurance compared to $221.6 million in the corresponding period of 2002; $263.0 million from U.S. insurance; and $114.1 million from U.S. reinsurance. For the six months ended June 30, 2003 compared to the six months ended June 30, 2002, net premiums written increased to $990.0 million from $494.6 million and net premiums earned rose to $638.0 million from $150.1 million.

For the six months ended June 30, 2003, net investment income, including realized gains of $26.9 million, was $54.2 million compared with $43.3 million, including realized gains of $9.5 million, for the six months ended June 30, 2002.

During the first six months of 2003, the company generated a combined ratio of 77.5 percent, a loss ratio of 53.6 percent and an expense ratio of 23.9 percent compared to 87.8 percent, 56.5 percent and 31.3 percent, respectively, for the first six months in 2002.