Q2 2024 AXIS Capital Holdings Ltd Earnings Call

Good day and welcome to the second quarter 2024 AXIS Capital Earnings Call. All participants will be in listen-only mode.

Operator: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key then one on your telephone keypad.

Unknown Executive: Earnings call. All participants will be in listen-only mode. Should union assistance, please single a conference specialist by pressing the star key followed by zero.

Speaker Change: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Unknown Executive: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star or n1 on your telephone keypad. To withdraw your question, please press star or n2.

Speaker Change: After today's presentation, there will be an opportunity to ask questions.

Speaker Change: To ask a question, you may press star of N1 on your telephone keypad.

Unknown Executive: Please note, this event is being recorded.

Speaker Change: To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Cliff Gallant, Head of Investor Relations. Please go ahead.

Clifford Henry Gallant: To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Cliff Gallant, Head of Investor Relations. Please go ahead.

Clifford Gallant: I would now like to turn the conference over to Cliff Gallant, Head of Investor Relations. Please go ahead. Thank you.

Clifford Henry Gallant: Thank you. Good morning, and welcome to our second quarter 2024 conference. Our earnings press release and financial supplement were issued last night. If you would like copies, please visit the investor information section of our website at axiscapital.com.

Clifford Gallant: Good morning and welcome to our second quarter 2024 conference call. Our earnings press release and financial supplement were issued last night. If you would like copies, please visit the Investor Information section of our website at AXIS Capital.com. We set aside in our four days call, which is also available as an audio webcast on our website.

Clifford Henry Gallant: Thank you, good morning, and welcome to our second quarter 2024 conference call.

Clifford Henry Gallant: Our earnings press release and financial supplement were issued last night. If you would like copies, please visit the investor information section of our website at axiscapital.com. We set aside an hour for today's call, which is also available as an audio webcast on our website.

Clifford Henry Gallant: We have set aside an hour for today's call, which is also available as an audio webcast on our website. Joining me on today's call are Vince Tizzio, our President and CEO, and Pete Vogt, our CFO. In addition, I would like to remind everyone that the statements made during this call, including the question and answer sections, which are not historical facts, may be forward-looking statements. Forward-looking statements involve risks, uncertainties, and a sound basis. Actual events or results may differ materially from those projected in the forward-looking statements due to a variety of factors, including the risk factors set forth in the company's most recent report on the Form 10-K or a quarterly This includes the additional risks identified in the cautionary note regarding forward-looking statements in our earnings press release issued last week. We undertake no obligation to publicly update or revise any forward-looking statement.

Clifford Gallant: Joining me on today's call are Vince Tizio, our President CEO, and Pete Vogue, our CFO.

Speaker Change: Joining me on today's call are Vince Tizzio, our President and CEO , and Pete Vogt, our CFO .

Clifford Gallant: In addition, I would like to remind everyone that the statements made during this call, including the question and answer section, which are not historical facts, may be forward-looking statements. Forward-looking statements involve risks, uncertainties, and assumptions. Actual events or results may differ materially from those projected in the forward-looking statements due to a variety of factors, including the risk factors set forth in a company's most recent report on the Form 10-Q and other reports the company files with the SEC. This includes the additional risks identified in the cautionary note regarding forward-looking statements in our earnings press release issued last night.

Speaker Change: In addition, I would like to remind everyone that the statements made during this call, including the question and answer section, which are not historical facts, may be forward-looking statements. Forward-looking statements involve risks, uncertainties, and assumptions.

Speaker Change: Actual events or results may differ materially from those projected in the forward-looking statements due to a variety of factors, including the risk factors set forth in the company's most recent report on the Form 10-K or a quarterly report on Form 10-Q and other reports the company files with the SEC.

Speaker Change: This includes the additional risks identified in the cautionary note regarding forward-looking statements in our earnings press release issued last night.

Clifford Gallant: We undertake no obligation to publicly update or revise any forward-looking statements.

Clifford Gallant: In addition, non-GAAP financial measures may be discussed during this conference call. Reconciliation are included in our earnings press release and financial supplements.

Clifford Henry Gallant: In addition, non-GAAP financial measures may be discussed during this conference call. Reconciliations are included in our earnings press release and financial supplement. And with that, I'll turn the call over to Cliff. Thank you, Cliff.

Speaker Change: We undertake no obligation to publicly update or revise any forward-looking statements. In addition, non-GAAP financial measures may be discussed during this conference call. Reconciliations are included in our earnings press release and financial supplement.

Vincent Tizzio: And with that, I'll turn the call over to Vince. Thank you, Cliff. Good morning, and thank you for joining our call. During the second quarter, in the first half of the year, we continue to make strong progress against our stated strategy of achieving specialty underwriting leadership. Indeed, our performance during the quarter demonstrated advancements across the key metrics we outlined at our Investor Day this past May. Before unpacking our results, I'll take a moment to thank my access colleagues. We're operating in a dynamic market, requiring increased collaboration, consistency, and a resilient attitude. And I'm proud of our team's commitment to providing excellent service to our brokers and customers.

Vincent Christopher Tizzio: Good morning, and thank you for joining our call. During the second quarter and first half of the year, we continue to make strong progress against our stated strategy of achieving specialty underwriting leadership. Indeed, our performance during the quarter demonstrated advancements across the key metrics we outlined at our Investor Day this past May. Before unpacking our results, I'll take a moment to thank my AXIS colleagues.

Speaker Change: And with that, I'll turn the call over to Vince.

Vincent Christopher Tizzio: Thank you, Cliff. Good morning, and thank you for joining our call.

Vincent Christopher Tizzio: During the second quarter and first half of the year, we continue to make strong progress against our stated strategy of achieving specialty underwriting leadership.

Vincent Christopher Tizzio: Indeed, our performance during the quarter demonstrated advancements across the key metrics we outlined at our Investor Day this past May.

Vincent Christopher Tizzio: We're operating in a dynamic market, requiring increased collaboration, consistency, and a resilient attitude, and I'm proud of our team's commitment to providing excellent service to our brokers and customers. Let's now review some of the headline results from the second quarter. Our annualized operating ROE was 20%, driven by strength across the vast majority of our business lines. We produced operating earnings per share of 293, a 31.5% increase over the prior-year quarter and the highest quarterly operating earnings per share in the company's history.

Vincent Christopher Tizzio: and a resilient attitude and I'm proud of our team's commitment to providing excellent service to our brokers and customers.

Vincent Tizzio: Let's now review some of the headline results from the second quarter. Our annualized operating ROE was 20%, driven by strength across the vast majority of our business lines. We produced operating earnings per share of 293, a 31.5% increase over the prior year quarter, and the highest quarterly operating earnings per share in the company's history. Our diluted book value per share was 59.29. Overall, premiums were up 6.8%, driven by solid growth across both insurance and re-insurance, which were up approximately 8.4% over the prior year quarter, respectively. Our overall underwriting profitability remains strong, with a 90.4 combined ratio.

Vincent Christopher Tizzio: Our diluted book value per share was $59.29. Overall, premiums were up 6.8%, driven by solid growth across both insurance and reinsurance, which were up approximately 8 and 4 percentage points over the prior year quarter, respectively. Our overall underwriting profitability remains strong with a 90.4 combined ratio. Our attritional loss ratio improved a point versus the prior year quarter at 55.1. Net investment income increased by 40%, or $54 million, as compared to the prior year quarter.

Vincent Christopher Tizzio: We produce operating earnings per share.

Vincent Christopher Tizzio: Our diluted book value per share was $59.29.

Vincent Christopher Tizzio: Our overall underwriting profitability remained strong with a 90.4 combined ratio. Our attritional loss ratio improved a point versus the prior year quarter at 55.1.

Vincent Tizzio: Our nutritional loss ratio improved a point versus the prior year quarter at 551. Net investment income increased 40% or 54 million as compared to the prior year quarter.

Vincent Christopher Tizzio: Net investment income increased 40% or $54 million as compared to the prior year quarter.

Vincent Tizzio: Let's now move to our operating segments, and we'll start first with insurance. In the quarter, our insurance business performed very well. We generated a combined ratio of 879 with premium production of 1.8 billion, 17% net written premium growth, record new business premiums of 576 million with particularly strong contributions from our property lines. In North America, we continued to see a healthy demand for our specialty products and capabilities. New business was up 18% as compared to the prior year quarter. Within the wholesale channel, we saw submissions increase 24%, marking the 10th quarter in a row where submission growth has been double digits.

Vincent Christopher Tizzio: Let's now move to our operating segments, and we'll start first with insurance. In the quarter, our insurance business performed very well. We generated a combined ratio of 87-9, with premium production of $1.8 billion, 17% net written premium growth, and record new business premiums of $576 million, with particularly strong contributions from our property line. In North America, we continue to see a healthy demand for our specialty products and capabilities. New business was up 18% as compared to the prior year quarter.

Vincent Christopher Tizzio: Let's now move to our operating segments and we'll start first with insurance.

Vincent Christopher Tizzio: 17% net written premium growth, record new business premiums of $576 million with particularly strong contributions from our property lines.

Vincent Christopher Tizzio: In North America, we continue to see a healthy demand for our specialty products and capabilities.

Vincent Christopher Tizzio: Within the Wholesale Channel, we saw submissions increase 24%, marking the 10th quarter in a row where submission growth has been double digits. Two of our wholesale business units, Property and Excess Casualty, were up 25 and 16 percent, respectively, over the prior year quarter. As regards the new initiatives mentioned at Investor Day, our distribution partners' response is strong. It is early days, but our inland marine, and U.S. construction capabilities are

Vincent Tizzio: Two of our wholesale business units, property and excess casualty, were up 25% and 16%, respectively, over the prior year quarter. As regards the new initiatives mentioned at investor day, our distribution partner's response is strong. It is early days, but our inland marine, US construction capabilities are being recognized. Our expanded environmental team had a strong quarter and positive momentum. In addition, our dedicated wholesale lower middle market business is starting to take hold with 20% premium growth over the prior year quarter. We continue to cycle-manage the portfolio. By example, during the quarter, we continue to reshape our primary casualty, cyber small and delegated, and public DNO portfolios while refocusing our underwriting appetite to areas of opportunity.

Vincent Christopher Tizzio: Two of our wholesale business units, Property and Excess Casualty, were up 25% and 16% respectively over the prior year quarter.

Vincent Christopher Tizzio: As regards the new initiatives mentioned at Investor Day, our distribution partners' response is strong. It is early days, but our inland marine, U.S. construction capabilities are being recognized. Our expanded environmental team had a strong quarter and positive momentum.

Vincent Christopher Tizzio: Our expanded environmental team had a strong quarter and positive momentum. In addition, our dedicated wholesale lower middle market business is starting to take hold with 20% premium growth over the prior year quarter, and we continue to cycle manage the portfolio. By example, during the quarter, we continue to reshape our primary casualty, cyber small and delegated, and public D&O portfolios while refocusing our underwriting appetite to areas of opportunity. I'll speak more about this when we discuss market conditions. Moving to global markets, our results were highlighted by double-digit growth across a number of our lines, construction, global property, and credit. In the London market, we are observing increasing levels of competition.

Vincent Christopher Tizzio: In addition, our dedicated wholesale lower middle market business is starting to take hold with 20% premium growth over the prior year quarter.

Speaker Change: By example, during the quarter, we continued to reshape our primary casualty, cyber small and delegated, and public D&O portfolios while refocusing our underwriting appetite to areas of opportunity. I'll speak more to this when we discuss market conditions.

Vincent Tizzio: I'll speak more to this when we discuss market conditions. Moving the global markets, our results were highlighted by double-digit growth across a number of our lines: construction, global property, credit. In the London market, we are observing increasing levels of competition. However, our portfolio remains highly rate adequate and has a diverse product set of offerings to service a wide net of customers' needs and broker expectations. As previously shared, we launched our new energy transition syndicate on April 1st, and we're already seeing positive response from our distribution partners and encouraging signs that our syndicate over time will be a meaningful contributor in future years.

Vincent Christopher Tizzio: However, our portfolio remains highly rate adequate and has a diverse product set of offerings to service a wide net of customers' needs and broker expectations. As previously shared, we launched our new Energy Transition Syndicate on April 1st, and we're already seeing positive responses from our distribution partners and encouraging signs that our syndicate, over time, will be a meaningful contributor in future years. Finally, our specialist capabilities in Marine War provide opportunistic growth while meeting our customers' needs.

Speaker Change: In the London market, we are observing increasing levels of competition, however, our portfolio remains highly rate adequate and has a diverse product set of offerings to service a wide net of customers' needs and broker expectations.

Vincent Tizzio: Finally, our specialist capabilities in marine war provided opportunistic growth while meeting our customers' needs.

Vincent Christopher Tizzio: Moving to our reinsurance business, we delivered an 89-3 combined ratio while generating $46 million in underwriting profits. These results reflect our continued progress in repositioning the business. During the quarter, we continued to lean into our specialty lines, including Credit Insurity, A&H, Cyber, and Agriculture, with specialty businesses growing more than twice the 4% we delivered for the reinsurance portfolio in total. We continue to see meaningful opportunities in cyber while maintaining prudent limit deployment and balance with our insurance portfolio. As for casualty and professional lines, we remain vigilant and selective, as we have not evidenced the degree of rate change and seating commission changes that we expected.

Vincent Tizzio: Moving to our re-insurance business, we delivered 89.3 combined ratio while generating 46 million in underwriting profit. These results reflect our continued progress in repositioning the business. During the quarter, we continued to lean into our specialty lines, including credit and security, A&H, cyber, and agriculture, with specialty businesses growing more than twice the 4% we delivered for the re-insurance portfolio in total. We continued to see meaningful opportunities in cyber while maintaining prudent limit deployment and balance with our insurance portfolio. As respects casually and professional lines, we remain vigilant and selective, as we have not evidenced the degree of rate change and seating commission changes that we expect.

Speaker Change: Moving to our reinsurance business, we delivered an 89.3% combined ratio while generating $46 million in underwriting profit.

Speaker Change: These results reflect our continued progress in repositioning the business.

Speaker Change: During the quarter, we continued to lean into our specialty lines, including Credit Insurity, A&H, Cyber, and Agriculture, with specialty businesses growing more than twice the 4% we delivered for the reinsurance portfolio in total.

Speaker Change: We continue to see meaningful opportunities in cyber while maintaining prudent limit deployment and balance with our insurance portfolio.

Speaker Change: As respects casualty and professional lines, we remain vigilant and selective as we have not evidenced the degree of rate change and seating commission changes that we expected.

Vincent Tizzio: During the 1-7 renewal season, we're approximately 13% of our businesses up for renewal. We saw continued positive submission flow in our targeted specialty growth lines, while we continue to navigate a competitive re-insurance market, particularly in professional and casualty lines.

Vincent Christopher Tizzio: During the 1-7 renewal season, when approximately 13% of our business is up for renewal, we saw continued positive submission flow in our targeted specialty growth lines while we continued to navigate a competitive reinsurance market, particularly in professional and casualty lines. I'll now take a moment to comment on overall market conditions. Conditions continue to be generally favorable, and premium adequacy across our portfolio remains strong for both new and renewal business. Within our insurance business, our limit profile remains virtually unchanged from prior quarters and aligns with our portfolio objectives.

Speaker Change: During the 1-7 renewal season, where approximately 13% of our business is up for renewal, we saw continued positive submission flow in our targeted specialty growth lines while we continued to navigate a competitive reinsurance market, particularly in professional and casualty lines.

Vincent Tizzio: I'll now take a moment to comment on overall market conditions. Conditions continue to be generally favorable, and premium adequacy across our portfolio remains strong for both new and renewal business. Within our in-insurance, our limit profile remains virtually unchanged from prior quarters and aligns with our portfolio objectives. In addition, we continue to mix shift toward short-tailed lines, which in the quarter formed 52% of our group gross premiums written, up approximately 4% as compared to the prior year quarter. These lines are strongly priced and match our underwriting capabilities and needs of our brokers and customers. In the quarter, we observed heightened competition in our property businesses.

Speaker Change: I'll now take a moment to comment on overall market conditions.

Speaker Change: Conditions continue to be generally favorable and premium adequacy across our portfolio remains strong for both new and renewal business.

Vincent Christopher Tizzio: In addition, we continued to make shifts toward short-tail lines, which in the quarter formed 52% of our group gross premiums written, up approximately 4% as compared to the prior year quarter. These lines are strongly priced and match our underwriting capabilities and needs of our brokers and customers. In the quarter, we observed heightened competition in our property business.

Speaker Change: In addition, we continued to make shifts toward short-tail lines, which in the quarter formed 52% of our group gross premiums written, up approximately 4% as compared to the prior year quarter.

Speaker Change: These lines are strongly priced and match our underwriting capabilities and needs of our brokers and customers.

Speaker Change: In the quarter, we observed heightened competition in our property businesses.

Vincent Tizzio: Notwithstanding, we continue to see strong submission flow and premium growth. We feel confident about our portfolio construction, particularly our average net limits, geographic spread of the business, parallel mix, and outbound event attachment point of 100 million, as we look toward what is forecasted as a busy third quarter when season. In liability, we have evidenced a resurgence of rate. Within our U.S. casually business, we continue to see double digit rate increases that continue to perform ahead of trend. U.S. primary casually and U.S. Excess casually were up 27% and 12% respectively. In our primary casually business, a book that we previously noted as being reshaped, written premium was down 52 million quarter over quarter.

Vincent Christopher Tizzio: Notwithstanding, we continue to see strong submission flow and premium growth. We feel confident about our portfolio construction, particularly our average net limit. Geographic Spread of the Business, Peril Mix, and Outbound's Event Attachment Point of $100 Million as we look toward what is forecasted as a busy third quarter wind season. In liability, we have evidenced a resurgence of rates within our U.S. casualty business, and continue to see double-digit rate increases that continue to perform ahead of trend. U.S. Primary Casualty and U.S.

Speaker Change: Notwithstanding, we continue to see strong submission flow and premium growth. We feel confident about our portfolio construction, particularly our average net limits.

Speaker Change: Geographic spread of the business, peril mix, and outbound event attachment point of 100 million as we look toward what is forecasted as a busy third quarter win season.

Speaker Change: In liability, we have evidenced a resurgence of rate. Within our U.S. casualty business, we continue to see double-digit rate increases that continue to perform ahead of trend.

Vincent Christopher Tizzio: Excess Casualty was up 27% and 12%, respectively. In our primary casualty business, a book that we previously noted as being reshaped, written premium was down $52 million quarter over quarter. We expect our repositioning of the business to last throughout the year. Excluding the actions within primary casualty, our insurance segment growth during the second quarter was over 11% as compared to the prior year. Finally, within liability reinsurance, rates were up close to double digits and ahead of trend.

Speaker Change: U.S. primary casualty and U.S. excess casualty were up 27 and 12 percent respectively.

Speaker Change: In our primary casualty business, a book that we previously noted as being reshaped, written premium was down $52 million quarter over quarter. We expect our repositioning of the business to last throughout the year.

Vincent Tizzio: We expect our reposition of the business to last throughout the year. Excluding the actions within primary casually, our insurance segment, growth during the second quarter, was over 11%, as compared to the prior year quarter. Finally, within liability reinsurance, rates were up close to double digits and ahead of trend. As I've commented in past calls, within insurance, we remain vigilant in managing our professional lines portfolio, particularly in public D&O, where pricing continues to be inadequate. This is being offset by the growth that we're driving across select premium adequate lines, such as our U.S. D&O business, which grew 10% in the quarter, and our transactional liability class, which grew 62% albeit of a relatively small base.

Speaker Change: Excluding the actions within primary casualty, our insurance segment growth during the second quarter was over 11% as compared to the prior year quarter.

Speaker Change: Finally, within liability reinsurance, rates were up close to double-digit and ahead of trend.

Vincent Christopher Tizzio: As I've commented in past calls within insurance, we remain vigilant in managing our professional lines portfolio, particularly in public D&O, where pricing continues to be inadequate. However, this is being offset by the growth that we're driving across select premium adequate lines, such as our USD&O business, which grew 10% in the quarter and our transactional liability class, which grew 62%, albeit off a relatively small base. As regards cyber, cyber... Continue focusing on growing the large account segment while selectively targeting and reshaping our small and delegated business.

Speaker Change: As I've commented in past calls within insurance, we remain vigilant in managing our professional lines portfolio, particularly in public D&O, where pricing continues to be inadequate.

Speaker Change: This is being offset by the growth that we're driving across select premium adequate lines such as our U.S. D&O business, which grew 10% in the quarter, and our transactional liability class, which grew 62%, albeit off a relatively small base.

Vincent Tizzio: As respect cyber, we continue focusing on growing the large account segment, while selectively targeting and reshaping our small and delegated businesses. By example, we expanded our partnership with Alpha Secure, an insure tech that blends cyber insurance with advanced diagnostics and security software, which will help enhance risk selection for our small cyber portfolio, while over time extending these capabilities to our broader cyber portfolio.

Speaker Change: As respects cyber...

Speaker Change: We continue focusing on growing the large account segment while selectively targeting and reshaping our small and delegated businesses.

Vincent Christopher Tizzio: By example, we expanded our partnership with Alpha Secure, an insurtech that blends cyber insurance with advanced diagnostics and security software, which will help enhance risk selection for our small cyber portfolio while, over time, extending these capabilities to our broader cyber portfolio, based on the performance across both segments. We're pleased with the second quarter. Our previously shared guideposts of producing 7-12% annual premium growth for insurance and single-digit growth for our reinsurance business are unchanged. Pete will give more details shortly.

Speaker Change: which will help enhance risk selection for our small cyber portfolio while over time extending these capabilities to our broader cyber portfolio.

Vincent Tizzio: Radio. Looking at the performance across both segments, we're pleased with the second quarter. Our previously shared guidepost of producing 7-12% annual premium growth for insurance and single-digit growth for our reinsurance business are unchanged. People give more detail shortly.

Speaker Change: Looking at the performance across both segments, we're pleased with the second quarter. Our previously shared guideposts of producing 7 to 12 percent annual premium growth for insurance and single-digit growth for our reinsurance business are unchanged. Pete will give more detail shortly.

Vincent Tizzio: Stepping back in the second quarter, we produced earning results that demonstrated what we said at our Investor Day. We grew our diluted book value per share and produced strong financial results. We drove profitable growth by leaning into our targeted specialty markets and tapping into new growth opportunities. We continued making improvements to our operating model to improve efficiency and productivity. And finally, we are making investments in our platform to align with our go-forward strategic imperatives. During the quarter, we made tangible progress in advancing our How We Work program to enhance all aspects of how we operate and go to market.

Vincent Christopher Tizzio: Stepping back, in the second quarter, we produced earnings results that demonstrated what we said on our investor day. We grew our diluted book value per share and produced strong financial results. We drove profitable growth by leaning into our targeted specialty markets and tapping into new growth opportunities. We continued making improvements to our operating model to improve efficiency and productivity. And finally, we are making investments in our platform to align with our Go Forward strategic imperative.

Peter John Vogt: Stepping back, in the second quarter we produced earning results that demonstrated what we said at our investor day.

Peter John Vogt: We continued making improvements to our operating model to improve efficiency and productivity. And finally, we are making investments in our platform to align with our Go Forward strategic imperatives.

Vincent Christopher Tizzio: During the quarter, we made tangible progress in advancing our How We Work program to enhance all aspects of how we operate and go to market. This includes implementing improvements focused on enhancing our organizational effectiveness and making investments to empower our colleagues and optimize their productivity while improving service quality.

Peter John Vogt: During the quarter, we made tangible progress in advancing our How We Work program to enhance all aspects of how we operate and go to market.

Vincent Tizzio: That includes implementing improvements focused on heightening our organizational effectiveness and making investments to empower our colleagues and optimize their productivity while improving service quality. We also continue to reinvest in the business to enable sustained profitable growth.

Peter John Vogt: This includes implementing improvements focused on heightening our organizational effectiveness and making investments to empower our colleagues and optimize their productivity while improving service quality.

Vincent Christopher Tizzio: We also continue to reinvest in the business to enable sustained, profitable growth. This includes further enhancing our claims and operations capabilities, advancing digitization and automation initiatives to increase our agility and response time, and improving our tools, technology, and platform. In summary, it has been a very strong first half of the year for AXIS as we continue to execute on our strategy. I'll now turn the call over to Pete for a more detailed discussion of our finances. Thank you, Vince, and good morning, everyone.

Vincent Tizzio: This includes further enhancing our claims and operations capabilities, advancing digitization and automation initiatives to increase our agility and response time, improving our tools, technology, and platforms. In summary, it has been a very strong first half of the year for access as we continue to execute on our strategy.

Peter John Vogt: We also continue to reinvest in the business to enable sustained profitable growth.

Peter John Vogt: This includes further enhancing our claims and operations capabilities, advancing digitization and automation initiatives.

Peter John Vogt: to increase our agility and response time, improving our tools, technology, and platforms.

Peter John Vogt: In summary, it has been a very strong first half of the year for AXIS, as we continue to execute on our strategy. I'll now turn the call over to Pete for a more detailed discussion of our financials.

Peter Vogt: I'll now turn the call over to Pete for a more detailed discussion of our financials. Thank you, Vince, and good morning, everyone. Access had a very strong performance in the quarter. Our net income available to common shareholders was $204 million or $2.40 per deluty common share, which resulted in annualized ROE of 16.2% and drove our book value per deluty common share to $59.29 at quarter end. An increase of nearly 10% year-to-date and adjusted for dividends, up nearly 20% over the past 12 months. Our operating income was $250 million, or $2.93 per deluty common share. The highest quarterly operating EPS in our company's history, which resulted in an annualized operating ROE of 20%.

Peter John Vogt: AXIS had a very strong performance in the quarter. Our net income available to common shareholders was $204,000,000, or $2.40 per diluted common share, which resulted in an annualized ROE of 16.2% and drove our book value per diluted common share to $59.29 at quarter end, an increase of nearly 10% year-to-date, adjusted for dividends up nearly 20% over the past 12 months. Our operating income was $250 million, or $2.

Peter John Vogt: The highest quarterly operating EPS in our company's history, which resulted in an annualized operating ROE of 20%. Looking at our consolidated results, Our company-wide gross premiums written grew 6.8% to $2.4 billion, our highest second quarter ever. We continue to see attractive pricing across most lines of business. Our quarterly combined ratio was an excellent 90.4%, generating $161 million of underwriting income, marking our highest ever accident year underwriting income for a quarter. Our current accident year loss ratio, XCAT and weather, was an excellent 55.1%. Our loss picks continue to be consistent.

Peter Vogt: Looking at our consolidated results, our company-wide gross premiums written grew 6.8% to 2.4 billion, our highest second quarter ever as we continue to see attractive pricing across most lines of business. Our quarterly combined ratio was an excellent 90.4%, generating 161 million of underwriting income, marking our highest ever accident year underwriting income for a quarter. Our current accident year-loss ratio ex-cat and weather was an excellent 55.1%. Importantly, our loss picks continue to be consistent with the learnings from our in-depth reserve review conducted at the end of last year. While it's only been six months since our year-end reserve action.

Peter John Vogt: which resulted in an annualized operating ROE of 20%.

Peter John Vogt: Looking at our consolidated results.

Peter John Vogt: Our company-wide gross premiums written grew 6.8% to $2.4 billion, our highest second quarter ever, as we continue to see attractive pricing across most lines of business.

Peter John Vogt: Our quarterly combined ratio was an excellent 90.4%, generating $161 million of underwriting income, marking our highest ever accident year underwriting income for a quarter.

Peter John Vogt: Our current accident year loss ratio, XCAT and weather, was an excellent 55.1%.

Peter John Vogt: These are learnings from our in-depth reserve review conducted at the end of last year. Well, it's only been six months since our year-end reserve action. Early data has reinforced our confidence that the actions were appropriate, and we made no changes to the prior period. We did experience 47 million cats in the quarter, resulting in a 3.6% cat loss ratio. Natural Catastrophes and Weather-Related Losses $38 million, accounting for 2.9 points of the cat loss, with an additional $9 million, or 7 tenths of a point, resulting from losses due to the Red Sea conflict.

Peter John Vogt: Importantly, our loss picks continue to be consistent with the learnings from our in-depth reserve review conducted at the end of last year.

Peter Vogt: Actions early data has reinforced our confidence that the actions were appropriate, and we made no changes to prior period reserves. We did experience 47 million in cats in the quarter, resulting in a 3.6% cat-loss ratio. Natural catastrophes and weather-related losses with 38 million, accounting for 2.9 points of the cat-loss ratio. With an additional 9 million or 7 tenths of a point, resulting from losses due to the Red Sea conflict. Our PPML's are large US natural catastrophes, including a California earthquake or a Southeast hurricane. Each of these events remains well below 5% of shareholder equity at the 1-250-year pearl mark.

Peter John Vogt: Well, it's only been six months since our year-end reserve actions.

Peter John Vogt: Early data has reinforced our confidence that the actions were appropriate and we made no changes to prior period reserves.

Peter John Vogt: We did experience 47 million in cats in the quarter, resulting in a 3.6% cat loss ratio.

Peter John Vogt: Natural Catastrophes and Weather Related Losses were 38 million, accounting for 2.9 points of the Cat Loss Ratio.

Peter John Vogt: with an additional $9 million, or 7 tenths of a point, resulting from losses due to the Red Sea conflict.

Peter John Vogt: Our PPMLs are large U.S. natural catastrophes, including a California earthquake or a Southeast hurricane. However, each of these events remains well below 5% of shareholder value at the 1 and 250 year peril. We renewed our Outwards Insurance Property Program, and the renewal went very well. Specifically, within our Worldwide Cat Occurrence XOL, we increased our ground-up indemnity event protection from $415 million to $565 million and maintained our treaty event attachment point of $100 million. While we are taking advantage of market opportunities, growing ourinsurancepropertybook.com, our event PMLs have remained steady. Consolidated G&A expense ratio, including corporate, was 11.4%, down from 13.3% a year ago.

Peter John Vogt: Our PPMLs are large U.S. natural catastrophes.

Peter John Vogt: including a California earthquake or a southeast hurricane.

Peter John Vogt: Each of these events remains well below 5% of shareholder equity at the 1 in 250 year peril mark.

Peter Vogt: In the quarter, we renewed our Outwards Insurance Property Program. The renewal went very well. Specifically, within our worldwide cat occurrence, XOL, we increased our ground-up indemnity event protection from 415 million to 565 million, and maintained our treaty event attachment point of $100 million. While we are taking advantage of market opportunities and growing our insurance property book materially, our event PMLs have remained steady. The consolidated GNA expense ratio, including corporate, was 11.4%, down from 13.3% a year ago. We have previously said that, as we execute on how we work, we expected our dollar spend to decline, and sure enough.

Peter John Vogt: In the quarter, we renewed our Outwards Insurance Property Program.

Peter John Vogt: The renewal went very well.

Peter John Vogt: Specifically, within our worldwide CAT occurrence XOL, we increased our ground-up indemnity event protection from $415 million to $565 million.

Peter John Vogt: and maintained our treaty event attachment point of $100 million.

Peter John Vogt: While we are taking advantage of market opportunities and growing our insurance property book materially, our event PMLs have remained steady.

Peter John Vogt: The consolidated G&A expense ratio, including corporate, was 11.4%, down from 13.3% a year ago.

Peter John Vogt: We have previously said that as we execute on how we work, we expect that our dollar spend will decline. And sure enough, our year-to-date GNA spend is down 7%, even as we have grown our premium value. I want to be clear that the expense improvement we are experiencing this quarter is the result of several successive actions we have taken over the past year to optimize our Target Operating Model and Progress Underlying Processes.

Peter John Vogt: We have previously said that as we execute on how we work, we expect that our dollar spend to decline, and sure enough, our year-to-date G&A spend is down 7% even as we have grown our premium volume.

Peter Vogt: Our year-to-date GNA spend is down 7%, even as we have grown our premium volume. I want to be clear that the expense improvement we are experiencing this quarter is the result of several successive actions we have taken over the past year to optimize our target operating model and progress underlying processes. Our actions have been decisive but thoughtful as we strived for operating excellence. In that effort, as we have told you, we will also continue to make investments in our company, whether it be adding to our talent pool, implementing new operating systems, or expanding capabilities. So, as we continue to invest in the company, we expect a degree of year-over-year improvement; experience this quarter may not continue into the second half of this year.

Peter John Vogt: I want to be clear that the expense improvement we are experiencing this quarter is the result of several successive actions we have taken over the past year to optimize our target operating model and progress underlying processes.

Peter John Vogt: Our actions have been decisive but thoughtful, as we strive for operating excellence. In that effort, as we have told you... We will also continue to make investments in our..., whether it is by adding to our talent pool, implementing new operating systems, or expanding capabilities. As we continue to invest in the company, we suspect the degree of year-over-year improvement experienced this quarter may not continue into the second half of this year. However, we remain committed to the target we previously shared with you: GNA Ratio below 11%, full year 2026. This quarter included $14 million in reorganization expenses, which is essentially the cost of severance and outplacement, as we reduced head count across several areas during the quarter.

Peter John Vogt: Our actions have been decisive but thoughtful as we strived for operating excellence.

Peter John Vogt: In that effort, as we have told you, we will also continue to make investments in our company, whether it by adding to our talent pool, implementing new operating systems, or expanding capabilities.

Peter John Vogt: So, as we continue to invest in the company, we expect a degree of year-over-year improvement experienced this quarter may not continue into the second half of this year.

Peter Vogt: However, we remain committed to the target we previously shared with you of a GNA ratio below 11% for the full year 2026.

Peter John Vogt: However, we remain committed to the target we previously shared with you of a G&A ratio below 11% for the full year 2026.

Peter Vogt: This quarter included 14 million of reorganization expenses, which is essentially the cost of severance and outplacement, as we reduced headcount across several areas during the quarter.

Peter John Vogt: This quarter included $14 million of reorganization expenses.

Peter John Vogt: which is essentially the cost of severance and outplacement as we reduced head count across several areas during the quarter.

Peter Vogt: Now let's move on and discuss our segment results in more detail. Insurance had a strong quarter. Gross premiums written will 1.8 billion, and increase of 7.7% compared to the prior year, and our highest volume quarter ever for insurance. For most of our book, pricing remains at... We see opportunity to put capital to work at attractive returns above our long-term targets. Let me discuss a few lines of business. Property was a major driver of growth this quarter across most classes. We saw a premium growth well into the double digits in E&S property, renewable energy onshore, construction, and global property.

Peter John Vogt: Now let's move on and discuss our segment results in more detail. Insurance had a strong quarter. Gross premiums written were $1.8 billion, an increase of 7.7% compared to the prior year and our highest volume quarter ever for insurance. Across most of our book, pricing remains adequate, and we see opportunity to put capital to work at attractive returns. Above Our Long-Term Targets, Let me discuss a few lines of business. Property was a major driver of growth this quarter across most classes. We saw premium growth well into the double digits. E&S Property, Renewable Energy Onshore.

Peter John Vogt: Now let's move on and discuss our segment results in more detail.

Peter John Vogt: Insurance had a strong quarter. Gross premiums written were $1.8 billion, an increase of 7.7% compared to the prior year, and our highest volume quarter ever for insurance.

Peter John Vogt: Across most of our book, pricing remains adequate.

Peter John Vogt: We see opportunity to put capital to work at attractive returns above our long-term targets.

Speaker Change: Let me discuss a few lines of business.

Speaker Change: Property was a major driver of growth this quarter across most classes.

Speaker Change: We saw premium growth well into the double digits in E&S property, renewable energy onshore, construction, and global property.

Peter John Vogt: Construction and Global Properties, Pricing remains very attractive, although, as Vince discussed, the rate of improvement has slowed, and U.S. Casualty. We are very careful in pursuing growth, and overall, in the quarter, we are down about 5%. Breaking it down, we are growing in U.S. AXIS cash, where the rate was 12% ahead of the high single-digit loss trend, and we continue to see good opportunities. The growth we're seeing in excess casualty is more than offset by the reshaping we're executing in primary casualty that Vince spoke about earlier. To give you a sense of magnitude, excluding the primary casualty reshaping, our insurance liability growth rate would have been approximately 14%. Lastly, an ANA.

Peter Vogt: Pricing remains very attractive, although, as Vince discussed, the rate of improvement has slowed. In U.S. casualty, we are very careful in pursuing growth. In overall, in the quarter, we are down about 5%. Breaking it down, we are growing in U.S. access casualty, where rate was 12% ahead of high single-digit loss trend, and we continue to see good opportunities. The growth we are seeing in excess casualty is more than offset by the reshaping we are executing in primary casualty that Vince spoke about earlier. To give you a sense of magnitude, excluding the primary casualty reshaping, our insurance liability growth rate would have been approximately 14%.

Speaker Change: Pricing remains very attractive, although as Vince discussed, the rate of improvement has slowed.

Vincent Christopher Tizzio: In U.S. casualty, we are very careful in pursuing growth, and overall in the quarter, we are down about 5%.

Vincent Christopher Tizzio: Breaking it down, we are growing in U.S. AXIS casualty, where rate was 12% ahead of high single-digit loss trend.

Speaker Change: and we continue to see good opportunities.

Speaker Change: The growth we are seeing in excess casualty is more than offset by reshaping we are executing in primary casualty that Vince spoke about earlier.

Speaker Change: To give you a sense of magnitude, excluding the primary casualty reshaping, our insurance liability growth rate would have been approximately 14%.

Peter Vogt: Lastly, in A&H, we note that we had double-digit growth, which is being driven by good growth in North America pet insurance. In our first quarter call, we stated an expectation of 7% to 12% growth in insurance for this year, and our expectation remains in that range, but we favor the lower end. Net-ridden premium in the quarter was up 17%, benefitting from the gross premium growth, as well as the restructuring of an outward re-insurance treaty, which resulted in a 34% session rate for this quarter. When normalized, the session rate was approximately 36%. The insurance combined ratio was an outstanding 87.9%, including 4.8% of cat and weather-related losses, resulting in a 116 million of underwriting income.

Peter John Vogt: We note that double-digit growth is being driven by good growth in North America pet insurance. In our first quarter call, we stated an expectation of 7-12% growth in insurance for this year. And our expectation remains in that range, but we favor the lower end. Net written premium in the quarter was up 17%, benefiting from gross premium growth, as well as the restructuring of an outwards reinsurance treaty which resulted in a 34% session rate for this quarter. When normalized, the session rate was approximately 36%. The insurance combined ratio was an outstanding 87.9%, including 4.8% of CAT and weather-related losses.

Speaker Change: Lastly, in A&H, we note that we had double-digit growth.

Speaker Change: which is being driven by good growth in North America pet insurance.

Speaker Change: In our first quarter call, we stated an expectation of 7 to 12 percent growth in insurance for this year, and our expectation remains in that range, but we favor the lower end.

Speaker Change: Net written premium in the quarter was up 17%, benefiting from the gross premium growth as well as the restructuring of an outwards reinsurance treaty which resulted in a 34% session rate for this quarter. When normalized, the session rate was approximately 36%.

Speaker Change: The insurance combined ratio was an outstanding 87.9%, including 4.8% of CAT and weather-related losses.

Peter John Vogt: Resulting in $116 million of underwriting. The current accident year loss ratio for XCAT and weather was 51.8%, which compares to 51.5% in the prior year and continues to be consistent across recent quarters. Additionally, the acquisition cost ratio of 19.6 was up over the prior year, reflecting a mix of business change as we favor short tail lines and lower Seating Commissions in ProLines and Saibot, given our treaties have renewed. Consistent Seating Commissions this year, we would expect the ratio to be fairly consistent going forward. Now let's move on to the reinsurance sector. Gross premiums were up 4.3% in the quarter.

Peter Vogt: The current vaccine year lost ratio X cat and weather was 51.8%, which compares to 51.5% in the prior year, and continues to be consistent across recent quarters. Additionally, the acquisition cost ratio of 19.6 was up over the prior year, reflecting mix of business change, as we favor short tail lines and lower seating commissions in pro lines and cyber. Given our treaties have renewed with consistent seating commissions this year, we would expect the ratio to be fairly consistent going forward.

Speaker Change: Resulting in $116 million of underwriting income.

Speaker Change: The current accident year loss ratio XCAT and weather was 51.8%, which compares to 51.5% in the prior year and continues to be consistent across recent quarters.

Speaker Change: Additionally, the acquisition cost ratio of 19.6 was up over the prior year, reflecting mix of business change as we favor short tail lines and lower seating commissions in pro lines and cyber.

Speaker Change: Given our treaties have renewed with consistent seating commissions this year, we would expect the ratio to be fairly consistent going forward.

Peter Vogt: Now let's move on to the re-insurance segment. Gross premiums were up 4.3% in the quarter, as we continue to build our specialty-focused business. As I mentioned on our first quarter call, the first quarter benefited by some timing of a few contract renewals, a number of rich, which were new business in 2Q of last year, thus having a negative impact on this 2Q. Again, this quarter we benefited from timing between renewals from the third quarter to the second quarter. As a result, despite the high single-digit growth year to date, we are maintaining our expectation for mid-single-digit growth for the full year—with a particularly difficult comparison in 3Q.

Speaker Change: Now let's move on to the reinsurance segment.

Peter John Vogt: We continue to build our specialty-focused business. As I mentioned on our first quarter call, the first quarter benefited from some timing of a few contract renewals. A number of which, new business in 2Q of last year, thus having a negative impact on this too. Again, this quarter we benefited from timing between renewals. 3rd quarter to the 2nd quarter.

Speaker Change: Gross premiums were up 4.3% in the quarter as we continue to build our specialty focused business.

Speaker Change: As I mentioned on our first quarter call, the first quarter benefited by some timing of a few contract renewals.

Speaker Change: A number of which were new business in Q2 of last year.

Speaker Change: Thus having a negative impact on this 2Q.

Speaker Change: Again, this quarter we benefited from timing between renewals from the third quarter to the second quarter.

Peter John Vogt: As a result, despite the high single-digit growth year-to-date, we are maintaining our expectation for mid-single-digit growth for the full year, with a particularly difficult comparison in three. I wanted to highlight that our growth in professional lines of nine... entirely driven by growth in cyber reinsurance. Without cyber, pro-lines would have been down year over year.

Speaker Change: As a result, despite the high single-digit growth year-to-date, we are maintaining our expectation for mid-single-digit growth for the full year, with a particularly difficult comparison in 3Q.

Peter Vogt: I wanted to highlight that our growth in professional lines of 9% was entirely driven by growth in cyber re-insurance, and without cyber, pro lines would have been down year over year. Net written premiums declined versus prior year quarter as we are seeding more business to our strategic capital partners. We would expect the seeding percent of approximately 37% to be maintained throughout the year. Our re-insurance team remains focused on the bottom line, and we are pleased with the much-improved consistency in the results. The combined ratio is 89.3%, with an X-cat and weather loss ratio of 64.2%, both very solid.

Speaker Change: I wanted to highlight that our growth in professional lines of 9%

Speaker Change: was entirely driven by growth in cyber reinsurance.

Speaker Change: And without cyber, pro-lines would have been down year over year.

Peter John Vogt: Net written premiums declined versus the prior year quarter as we are ceding more business to our strategic capital partners. We would expect the seeding percent of approximately 37% to be maintained throughout the year. Our reinsurance team remains focused on the bottom line, and we are pleased with the much improved consistency in the results. The combined ratio is 89.3%, with an XCAT and weather loss ratio of 64.2%, both very solid.

Speaker Change: Net written premiums declined versus prior year quarter as we are ceding more business to our strategic capital partners.

Speaker Change: We would expect the seeding percent of approximately 37% to be maintained throughout the year.

Speaker Change: Our reinsurance team remains focused on the bottom line, and we are pleased with the much-improved consistency in the results.

Speaker Change: The combined ratio is 89.3% with an XCAT and weather loss ratio of 64.2%. Both very solid.

Peter Vogt: Our acquisition cost ratio of 22.3% is consistent with recent quarters, with some variability reflecting the impact of profit commissions associated with loss sensitive features. Our re-insurance GNA ratio of 2.5% is down from 4.6% in the prior year quarter. The improvement in GNA ratio is driven equally from lower spending and from higher third-party capital fees, which increased to 14 million in the quarter, up from 9 million a year ago.

Peter John Vogt: Our acquisition cost ratio of 22.3% is consistent with recent quarters, although there is some variability reflecting the impact of profit commissions. Associated with Law Center, our reinsurance G&A ratio of 2.5% is down from 4.6% in the prior year quarter. Improvement in the G&A ratio is driven equally from lower spending and from higher third-party capital, which increased to $14 million and a quarter, up from $9 million a year ago.

Speaker Change: Our acquisition cost ratio of 22.3% is consistent with recent quarters, with some variability reflecting the impact of profit commissions associated with loss-sensitive features.

Speaker Change: Our reinsurance G&A ratio of 2.5% is down from 4.6% in the prior year quarter.

Speaker Change: The improvement in G&A ratio is driven equally from lower spending.

Speaker Change: and from higher third-party capital fees.

Speaker Change: which increased to $14 million in the quarter, up from $9 million a year ago.

Peter Vogt: We also had a company record level of investment income at $191 million, up 40% from the prior year in the quarter, driven by a higher yield on a larger fixed income portfolio, and in part by alternatives reporting positive returns versus a loss in the prior year quarter. The fixed income portfolio reported $154 million of income, up 24% over the prior year quarter, benefiting from higher yields and strong operating cash flow. The overall outlook remains positive as our book yield on fixed income securities was 4.4% at quarter end, while the new million for the first half of the year.

Peter John Vogt: We also had a company record level of investment income at $191 million, up 40% from the prior year in the quarter. This was driven by a higher yield on a larger fixed income portfolio and in part by Alternatives reporting positive returns versus a loss in the prior year quarter. The Income Portfolio reported $154 million of income, up 24% over the prior year quarter, benefiting from higher yields. The overall outlook remains positive as our book yield on fixed income securities was 4.4% at quarter end, while the new money yield was 5.7%. We continue to generate excellent operating cash flow, which was $902 million for the first half of the year. Our effective tax rate in the quarter was 16%.

Speaker Change: We also had a company record level of investment income at $191 million, up 40% from the prior year in the quarter, driven by a higher yield on a larger fixed income portfolio.

Speaker Change: and in part by alternatives reporting positive returns versus a loss in the prior year quarter.

Speaker Change: The Fixed Income Portfolio reported $154 million of income, up 24% over the prior year quarter, benefiting from higher yields and strong operating cash flow.

Speaker Change: The overall outlook remains positive, as our book yield on fixed income securities was 4.4% at quarter end, while the new money yield was 5.7%, and we continue to generate excellent operating cash flow, which was $902 million for the first half of the year.

Peter Vogt: Our effective tax rate in the quarter was 16%, a bit higher than what we've typically reported, as more of our profitability occurred in our higher tax geographies. We're producing substantial capital today. The priority for capital is to advance our strategic goals, whether it be growth opportunities, both organic and hiring of new teams, or investing in our capabilities, such as at-scale adoption of digital and analytic capabilities. However, despite our share price hitting new highs in the quarter, we view repurchase of our own shares as an attractive option for utilizing our capital. In the quarter, we return $76 million to shareholders through $38 million of common share dividends and $38 million of share repurchases.

Peter John Vogt: A bit higher than what we've typically reported as more of our profitability occurred in our higher tax geography. We're producing substantial capital. The priority for capital is to advance our strategic goals, whether it be growth opportunities, both organic and the hiring of new employees, or investing in our capabilities, such as At Scale Adoption, Digital, and Analytic Capabilities.

Speaker Change: Our effective tax rate in the quarter was 16%.

Speaker Change: A bit higher than what we've typically reported as more of our profitability occurred in our higher tax geographies.

Speaker Change: We're producing substantial capital today.

Speaker Change: The priority for capital is to advance our strategic goals.

Speaker Change: Whether it be growth opportunities, both organic and the hiring of new teams, or investing in our capabilities, such as at-scale adoption of digital and analytic capabilities.

Peter John Vogt: Despite our share price hitting new highs in the quarter, we view repurchasing our own shares as an attractive option for utilizing our capital. We returned $76 million to shareholders. 38 million of common share dividends and 38 million of share repurchase. In closing, we're very pleased with the results today, and we're looking forward to the second half of the year with. We'd be happy to take your questions. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: However...

Speaker Change: Despite our share price hitting new highs in the quarter, we view repurchase of our own shares as an attractive option for utilizing our capital.

Speaker Change: In the quarter, we returned $76 million to shareholders through $38 million of common share dividends and $38 million of share repurchases.

Peter Vogt: In closing, we're very pleased with the results today, and we're looking forward to the second half of the year with optimism.

Speaker Change: In closing, we're very pleased with the results to date and we're looking forward to the second half of the year with optimism.

Unknown Executive: We'd be happy to take your questions.

Unknown Executive: We will now begin the question and answer session. To ask a question, you may press star at the one on your telephone keypad. If you were using a speaker phone, please pick up your hands up before pressing request, pressing the keys.

Speaker Change: We'd be happy to take your questions.

Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Yaron Kinar with Jefferies. Please go ahead. Thank you. Good morning.

Unknown Executive: If at any time your question has been addressed, and you would like to withdraw your question, please press star, then two. At this time, we will post momentarily to a similar roster.

Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

Yaron Kinar: The first question comes from Yaron Kinar with Jeffries. Please go ahead. Thank you. Good morning. In your opening comments, you said that the early data reinforces your confidence in the reserve actions you took in the fourth quarter. Can you elaborate on that a little bit and maybe also touch on specifically the greener accident years of 2023? And I ask that, obviously, it's given the intense investor focus on reserves that has really come to forefront this quarter. Yeah, thanks for the question, Yaron. The first thing I'd say is we do do and completed a full review of our reserves in the quarter.

Speaker Change: The first question comes from Yaron Kinar with Jefferies. Please go ahead.

Yaron Joseph Kinar: Excuse me. Pete, in your opening comments, you said that the early data reinforces your confidence in the reserve actions you took in the fourth quarter. Can you maybe elaborate on that a little bit and maybe also touch on specifically the greener accident years 2020 through 23? And I ask that, obviously, given the intense investor focus on reserves that has really been in the forefront this quarter? Yeah, thanks for the question Yaron. The first thing I'd say is that we did and completed a full review of our reserves in the quarter. We do that every quarter.

Yaron Joseph Kinar: Thank you. Good morning. Excuse me. Pete, in your opening comments, you said that the early data reinforces your confidence in the reserve actions you took in the fourth quarter.

Yaron Joseph Kinar: Can you maybe elaborate on that a little bit and maybe also touch on specifically the greener accident years 2020-23 and I ask that obviously given the intense industrial focus on reserves that has really come to the forefront this quarter.

Peter John Vogt: Thanks for the question, Yaron. The first thing I'd say is we do do and completed a full review of our reserves in the quarter. We do that every quarter, so we did a full grounds up review of all the classes.

Peter Vogt: We do that every quarter. So we did a full grounds-up review of all the classes. I'd say our philosophy remains the same. We will take bad news as soon as we see it quickly. And we will wait for good news to really be substantiated through the results over time before we actually see any good news. Having said that, as we did the reviews this quarter, when we looked at all the data, we looked at, I'll call it the pay data that we're looking at. We looked at closed claims data. And we did this review with our claims team and our actual world team, both pricing and reserving.

Peter John Vogt: So we did a full ground-up review of all the classes. I'd say our philosophy remains the same; we will take bad news as soon as we see it, quickly, and we will wait for good news to really be substantiated through the results over time before we actually see any good. Having said that, as we did the reviews this quarter, when we looked at all the data, we looked at, I'll call it the paid data that we're looking at, we looked at closed claims data, and we did this review with our claims team and our actuarial team, both pricing and reserving, we felt very confident about the assumptions that we used for all the accident years with the performance and the results that we did in the fourth quarter

Peter John Vogt: I'd say our philosophy remains the same. We will take bad news as soon as we see it quickly, and we will wait for good news to really be substantiated through the results over time before we actually see any good news.

Speaker Change: Having said that, as we did the reviews this quarter, when we looked at all the data, we looked at, I'll call it the paid data that we're looking at, we're looking at closed claims data, and we did this review with our claims team and our actuarial team.

Peter Vogt: We felt very confident about the assumptions that we used for all the accident years with the results, with the performance and the results that we did in the fourth quarter. I would remind you that when we did the fourth quarter, the 425 million included 177 million of liability reserve increases for the 20 to 22 accident years. And we did increase our 2023 loss picks in the fourth quarter on the liability lines. So when we took those actions, we on leveled everything for what we saw with our higher severity as well as the elongation that we talked about at the time with development patterns.

Speaker Change: Both pricing and reserving, we felt very confident about the assumptions that we used for all the accident years.

Speaker Change: with the performance and the results that we did in the fourth quarter.

Peter John Vogt: I would remind you that when we did the fourth quarter... 425 million included $177 million of liability reserve increases for the 20-22 axis. And we did increase our 2023 loss picks in the fourth quarter on the liability lines. So when we took those actions, we leveled everything for what we saw with our higher severity as well as the elongation that we talked about at the time with the development patterns. And as we said, you know, it's early days still, but we feel very good about the strength of our reserves and everything we're seeing with regard to those data. It's actually holding, and we feel very good about where we are. I don't know. Vince, if you'd like to add something to that,

Speaker Change: I would remind you that when we did the fourth quarter, the $425 million included $177 million of liability reserve increases for the 20-22 accident years.

Speaker Change: and we did increase our 2023 loss picks in the fourth quarter on the liability lines.

Speaker Change: So when we took those actions, we un-leveled everything for what we saw with our higher severity as well as the elongation that we talked about at the time with the development patterns.

Vincent Tizzio: And as we said, you know, it's early days still, but we feel very good about the strength of our reserves, and everything we're seeing with regard to those data points is actually holding, and we feel very good about where we are. I don't know if it's going to add to that. I think you covered all of it, Pete. The only thing I'd remind you're on by is we also on leveled the loss ratio assumptions from the assessment that we took at 4Q. And the point you made around the claim integration insights is a very good point, especially relating to the patterns that we're observing around closed claims without payments, Iran.

Speaker Change: And as we said, you know, it's early days still, but we feel very good about the strength of our reserves and everything we're seeing with regard to those data points.

Vincent Christopher Tizzio: are actually holding, and we feel very good about where we are. I don't know, Vince, if you'd like to add something to that? I think you've covered all of it, Pete. The only thing I'd remind you're on by is we also on-leveled the loss ratio assumptions.

Vincent Christopher Tizzio: I think you covered all of it, Pete. The only thing I'd remind Yaron of is that we also on-leveled the loss ratio assumptions from the assessment that we took at 4Q. And the point you made around the claim integration insights is a very good point, especially relating to the patterns that we're observing around closed claims without payments, Yaron. There's a fairly tight and integrated process between our claims and reserving actuaries, and it gives Pete and myself increasing confidence. Thank you; I appreciate that.

Vincent Christopher Tizzio: from the assessment that we took at 4Q. And the point you made around the claim integration insights...

Vincent Christopher Tizzio: is a very good point, especially relating to the patterns that we're observing around closed claims without payments, Yaron. There's a fairly tight and integrated process between our claims and reserving actuaries, and it gives Pete and myself increasing confidence.

Vincent Tizzio: There's a fairly tight and integrated process between our claims and reserving actuaries. And it gives Pete and myself increasing confidence. Thank you. I appreciate that. And then my second question, maybe to you, Pete, you talked about share still being a very attractive option for utilizing capital: buybacks. Sorry. But I don't think that you conducted any additional buybacks since the Investor Day. And if I'm correct in that, keep maybe elaborate on why that would not the why you did. Ron, this is Vince. So as Pete mentioned in his opening remarks, we found that the work we were doing relative to how we work would have precluded us from going into the market and buying back our shares.

Yaron Joseph Kinar: And then my second question, maybe to you, Pete, you talked about shares still being a very attractive option for utilizing capital buybacks, sorry. But I don't think that you conducted any additional buyback since investor day. And if that, if I'm correct, in that case, maybe elaborate on why that would not be the reason you did, Yaron, this is Vince.

Vincent Christopher Tizzio: Thank you, I appreciate that. And then my second question, maybe to you Pete, you talked about Share still being a very attractive option for utilizing capital, buybacks, sorry.

Speaker Change: But I don't think that you conducted any additional buybacks since the investor day. And if I'm correct in that, can you maybe elaborate on why you didn't?

Vincent Christopher Tizzio: So, as Pete mentioned in his opening remarks, we found that the work we were doing relative to how we work would have precluded us from going into the market and buying back our shares. It was a decision that we took with the knowledge that we had around the actions that we were undertaking in the quarter. We've maintained the same view that we shared at investor day, that we believe our stock is not priced to its fullest potential.

Speaker Change: Yaron, this is Vince. So as Pete mentioned in his opening remarks,

Yaron: We found that the work we were doing relative to how we work

Vincent Tizzio: It was the decision that we took with the knowledge that we had around the actions that we were undertaking in the quarter. We've maintained the same view that we shared at the investor day that we believe our stock is not priced to its fullest measure. We will opportunistically and strategically look to buy back shares in the future. As you know, coming out of our most recent board meeting, we saw it and obtained an additional authorization of $300 million without any time restriction. So we will continuously evaluate and be opportunistic in our share repurchase approach. Pete, I don't know if you want to add.

Peter John Vogt: would have precluded us from going into the market.

Peter John Vogt: and Buying Back Our Shares.

Peter John Vogt: It was a decision that we took with the knowledge that we had around the actions that we were undertaking in the quarter.

Peter John Vogt: We've maintained the same view that we shared at the Investor Day, that we believe our stock is...

Vincent Christopher Tizzio: We will opportunistically and strategically look to buy back shares in the future. As you know, coming out of our most recent board meeting, we saw it and obtained an additional authorization of $300 million without any time restriction. So we will continuously evaluate and be opportunistic in our share repurchase approach. Peter, I don't know if you want to add anything.

Peter John Vogt: is not priced to its fullest.

Speaker Change: Measure.

Speaker Change: We will opportunistically and strategically...

Speaker Change: look to buy back shares.

Speaker Change: In the future, as you know, coming out of our most recent board meeting, we sought and obtained...

Speaker Change: and additional authorization of $300 million without any time restriction.

Speaker Change: So we will continuously evaluate and be opportunistic in our share repurchase approach.

Peter John Vogt: Yeah, the only thing I'd add is you can see it in the quarter, Yaron. We took $14 million of below-the-line charges associated with restructuring. The vast majority of that was severance and outplacement costs for a number of employees that we left in it, and all those actions happened in June. Since we knew those actions were going to happen in June, kind of at the end of May, we felt we had material, non-public information, and so, out of an abundance of caution, we didn't buy any shares; we didn't trade. That makes sense. Thanks so much.

Vincent Tizzio: Yeah, the only idea is you can see it in the quarter year on. We took $14 million below-the-line charges associated with restructuring. The vast majority of that was severance and out placement costs for a number of employees that we left in. All those actions happened in June. Since we knew those actions would happen in June, kind of at the end in May, we felt we had material, non-public information. And so, out of abundance of caution, we didn't buy any shares; we didn't trade. That makes sense. Thanks so much. You're welcome.

Joshua David Shanker: Our next question comes from Josh Shanker with Bank of America. Please go ahead.

Speaker Change: Peter, I don't know if you want to add. Yeah, the only thing I'd add is you can see it in the quarter you're on. We took $14 million of below-the-line charges associated with restructuring.

Peter: The vast majority of that was severance and outplacement costs for a number of employees that we left in it, and all those actions happened in June .

Speaker Change: Since we knew those actions were going to happen in June , kind of at the end of May we felt we had material, non-public information, and so out of abundance of caution we didn't buy any shares, we didn't trade.

Joshua Shanker: Our next question comes from Josh Shankar with Bank of America. Please go ahead. Yeah, thank you. I trust the reserve reviews were done in great care. And I noticed that the unfavorable or fabled up was zero, which is an unusual number. There are some other companies that put up zero. You guys go through hundreds of millions of dollars' worth of reserve reviews. Company number zero is no change whatsoever. There are plenty of companies who put up that zero numbers. Actually, one of those companies that in the end, the plan is if there's not a major change to round the reserve advocacy or an angry to zero.

Speaker Change: That makes sense. Thanks so much.

Speaker Change: You're welcome.

Speaker Change: Our next question comes from Josh Shanker with Bank of America. Please go ahead.

Joshua David Shanker: Yeah, thank you. I trust the reserve reviews were done with great care, and I noticed that the unfavorable or favorable amount was zero, which is an unusual number. There are some other companies that put up zero. You know, you guys go through hundreds of millions of dollars worth of reserve reviews. To come up with the number zero, it means no change whatsoever.

Joshua David Shanker: Yeah, thank you. I trust the reserve reviews were done in a...

Joshua David Shanker: Great care. And I noticed that the unfavorable or favorable result was zero, which is an unusual number. There are some other companies that put up zero. You know, you guys go through hundreds of millions of dollars worth of reserve reviews.

Speaker Change: It's company number zero, it means no change whatsoever. There are plenty of companies who put up that zero number. AXIS is one of those companies that in the end, the plan is if there's not a major change to round the reserve adequacy or inadequacy to zero.

Peter John Vogt: There are plenty of companies who put up zero numbers. AXIS is one of those companies that, in the end, the plan is to, if there's not a major change, round the reserve adequacy or inadequacy to zero. Yeah, I would say, Josh, this is Pete. When we go through the process, what we're looking at is what we think the ultimate loss picks are on these lines of business. And with all the data we had, we felt very good and comfortable, actually reinforced with the assumptions we had.

Peter Vogt: Yeah, I would say, Josh, when we go through the process, what we're looking at is what we think the ultimate loss picks are on these lines of business. And with all the data we had, we felt very good and comfortable, actually reinforced with the assumptions we had. So, because of that, the ultimate loss picks didn't change. And so to your point, there is some rounding that happens. It's just when you look at it in millions, it actually turns down to zero. So there were puts and take something, we're better than you thought in something not quite as good, but in aggregate, everything is sort of balanced to zero.

Peter John Vogt: So because of that, the ultimate loss picks didn't change. And so to your point, there is some rounding that happens. It's just that when you look at it in millions, it actually turns down to zero. So there were puts and takes, some things were better than you thought, and some things not quite as good, but in aggregate, everything sort of bounced back to zero. Yeah, I would say everything balanced to zero because the ultimate loss picks we thought were actually right on point.

Peter John Vogt: I would say, Josh, this is Pete, when we go through the process, what we're looking at is what we think the ultimate loss picks are on these lines of business. And with all the data we had, we felt very good and comfortable, actually reinforced with the assumptions we had. So because of that, the ultimate loss picks didn't change. And so to your point, there is some rounding that happens. It's just when you look at it in millions, it actually, it turns down to zero.

Speaker Change: So there were puts and takes, some things were better than you thought and some things not quite as good, but in aggregate everything sort of balanced to zero.

Peter Vogt: Yeah, I would say everything balanced to zero because the ultimate loss picks we thought were actually right on point. So when I look at it by accident, when we look at it by accident year, there really wasn't any movements versus accident year that had anything to do with the ultimate expectation of claims. And when we look at it by line of business, when you look at the queue, you'll see it by line of business, you've seen zero cross. We did have movement in the first quarter. You know, if you recall in the first quarter, we had some negative come out of the aviation area due to some losses that were materializing out of 2019 that were negative.

Joshua David Shanker: Yeah, I would say everything balanced to zero because the ultimate loss picks we thought were actually right on point. So when I look at it by accident, when we look at it by accident here, there really wasn't any movement.

Peter John Vogt: So when I look at it by accident, when we look at it by accident year, there really wasn't any movement versus accident year that had anything to do with the ultimate expectation of claims. And when we look at it by line of business, when you look at the Q, you'll see it by line of business, you've seen zero across. We did have movement in the first quarter.

Joshua David Shanker: versus accident year that had anything to do with the ultimate expectation of claims. And when we look at it by line of business, when you look at the queue, you'll see it by line of business you've seen zero across.

Joshua David Shanker: Now, if you recall, in the first quarter, we had some negatives come out of the aviation area due to some losses that were materializing out of 2019 that were negative, and that was offset by some positives that we saw on the property line. Okay, and then following up just a little bit on this share repurchase issue. I don't know what the future brings.

Joshua David Shanker: We did have movement in the first quarter. Now, if you recall, in the first quarter, we had some negative come out of the aviation area due to some losses that were materializing out of 2019 that were negative, and that was offset by some positives that we saw on the property line.

Peter Vogt: And that was offset by some positives that we saw in the property line.

Joshua Shanker: Okay, and then follow them, but just a little bit on this sharey purchase issue. I don't know what the future brings. I think you're investing your business. Doing a wonderful job doing it. Who knows what the actual results will be as things mature. We know where the share price is today, and we know where your book value is today. Given that situation, as you report, thereings and now the severance costs are out of the equation. When we think about earning an 18% ROE in a company that's been de-risked from cat risk over time, trading at probably at or maybe even below year ahead of book value.

Joshua David Shanker: I think you're investing in your business and doing a wonderful job doing it. Who knows what the actual results will be as things mature? We know where the share price is today, and we know where your book value is today. You know, given that situation, as you reported earlier and now that severance costs are out of the equation, when we think about earning, you know, an 18% ROE in a company that's been de-risked from cat risk over time, trading at probably at or maybe even below year-ahead book value, can you go through the capital sort of math on whether share repurchases are better or worse than investing in your own business?

Speaker Change: Okay, and then, just a little bit on this share repurchase issue. I don't know what the future brings. I think you're investing in your business, doing a wonderful job doing it. Who knows?

Peter Vogt: Can you go through the capital sort of math on whether sharey purchases are better or worse than investing in your own business? And I know you can do both, but one thing you probably feel confidence your share price isn't going to be $70 or $74 forever. Investing your business, you can do it anytime. Can you buy back your shares at this level at any time? Hey Josh, this is Pete. What I'll tell you is number one, I do think our operating ROE in the quarter was about $19.9. And I think today we're trading above, at least we're trading above tangible book as well as full book.

Speaker Change: Thank you for joining us. Thank you. Thank you.

Speaker Change: and I know you can do both, but one thing you probably feel confident is your share price isn't going to be $70 or $74 forever. Investing your business you can do at any time. Can you buy back your shares at this level at any time?

Peter John Vogt: And I know you can do both, but one thing you probably feel confident is your share price isn't going to be $70 or $74 forever. Investing in your business you can do at any time. But can you buy back your shares at this level at any time? Hey Josh, this is Pete.

Peter John Vogt: What I'll tell you is, um... Number one, I do think our operating ROE in the quarter was about 19.9, and I think today we're trading, you know, at least we're trading above tangible book as well as full book. So we do think that the stock price is moving in the right direction. But to your point, we believe it should go higher.

Speaker Change: Hey Josh, this is Pete. What I'll tell you is...

Joshua David Shanker: Number one, I do think our operating ROE in the quarter was about 19.9, and I think today we're trading above tangible book as well as full book. So we do think that the stock price is moving in the right direction. But to your point, we believe it should go higher.

Peter Vogt: So we do think that the stock price is moving in the right direction. But to your point, we believe it should go higher. I'd say that a good use of capital or number one use of capital continues to be investing in the business. And we believe right now with the price attic we see, we're seeing, we're getting returns in excess of our long term targets. And we'd like to continue to invest in the business by bringing on more teams, by building out our infrastructure, and by also building our capabilities. Having said that, I think you're correct; our new $300 million we will use opportunistically.

Peter John Vogt: I'd say that a good use of capital, our number one use of capital, continues to be investing in the business, and we believe right now, with the price adequacy we're seeing, we're getting returns in excess of our long-term targets. And we'd like to continue to invest in the business by bringing on more teams, by building out our infrastructure, and by also building our capabilities. Having said that, I think you

Joshua David Shanker: I'd say that a good use of capital, our number one use of capital, continues to be investing in the business and we believe right now with the price adequacy we're seeing, we're getting returns in excess of our long-term targets.

Joshua David Shanker: by building out our infrastructure.

Peter John Vogt: Our new $300 million will be used opportunistically, and it will be based upon where we see the market dynamics as well as our results over a quarter. We do expect our results to be less volatile going forward, and all that will take that into account as we think about share repurchases in the future. Peter, I think you covered a majority of it, and just reminding Josh and others, when we spoke about the capital walk at Investor Day, we outlined our philosophy around capital management.

Vincent Tizzio: And it will be based upon, you know, where we see the market dynamics, as well as our results over a quarter. We do expect our results to be less volatile going forward. And all that will take it into account as we think about share repurchases over the future.

Joshua David Shanker: Our new $300 million we will use opportunistically, and it will be based upon where we see the market dynamics as well as our results over a quarter. We do expect our results to be less volatile going forward, and all that will take taken into account as we think about share repurchases over the future.

Vincent Tizzio: Pete, I think you covered a majority of it and just reminding Josh and others, when we spoke through the capital walk at the Investor Day, we outlined our philosophy around capital management. We've taken a successive set of actions to transform the organization and design and focus of its underwriting strategy, its cost structure. And of course, as part of seeking and obtaining the board authorization of additional share repurchase, it's certainly contemplated in our overall strategy. But, as Pete noted, we're going to continue to make investments in our operating platform, continue to bring in teams of underwriters, and it will certainly be accounted for in our calculus.

Vincent Christopher Tizzio: We've taken a successive set of actions to transform the organization in design, in focus of its underwriting strategy, its cost structure, and, of course, as part of seeking and obtaining the board authorization for additional share repurchase, it's certainly contemplated in our overall strategy. But, as Pete noted, we're going to continue to make investments in our operating platform, continue to bring in teams of underwriters, and that will certainly be accounted for in our calculation.

Joshua David Shanker: the board authorization of additional share repurchase. It's certainly contemplated in our overall strategy, but as Pete noted, we're going to continue to make investments in our operating platform, continue to bring in teams of underwriters, and it will certainly be accounted for in our calculus.

Vincent Tizzio: And I guess you indulge me in one more on those lines. If we get to the end of third quarter and the buyback hasn't resumed, would you be surprised? Well, it's certainly not going to speculate as to the third quarter. What we're focused on today is advancing the underwriting strategy, making certain that our underwriters have the tools and sufficient capital to go to market to ensure that our continued work in delivering really spectacular results. It's sustained, Josh. Thank you very much. See that?

Speaker Change: And I guess you'll indulge me on one more along those lines, if we get to the end of third quarter and the buyback hasn't resumed, would you be surprised?

Vincent Christopher Tizzio: And I guess if you'll indulge me on one more along those lines, if we get to the end of the third quarter and the buyback hasn't resumed, would you be surprised? Well, I'm certainly not going to speculate as to the third quarter. What we're focused on today is advancing the underwriting strategy, making certain that our underwriters have the tools and sufficient capital to go to market to ensure that our continued work in delivering really spectacular results is sustained. Josh

Speaker Change: Well, it's certainly not going to speculate as to the third quarter. What we're focused on today is advancing the underwriting strategy, making certain that our underwriters have the tools and sufficient capital to go to market to ensure that our continued work in delivering really spectacular results is sustained. Josh.

Brian Meredith: Our next question comes from Brian Meredith with UBS. Please go ahead. Yeah, thanks. First question. I want to dive in a little bit into the insurance underlying loss ratios or loss pegs you guys are putting up. Incredibly attractive, and if I look at them, maybe kind of on a year of your basis, my assumption is they're probably down when you kind of factor in some of the reserve development actions you took at the end of last year. So Peter's wondering if you could dive in a little bit, you know, how what is kind of driving that is in a mix.

Brian Robert Meredith: Thank you very much. Our next question comes from Brian Meredith with UBS. Please go ahead.

Joshua David Shanker: Thank you very much.

Joshua David Shanker: You got it.

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

Brian Robert Meredith: Yeah, thanks. First question, I want to dive in a little bit into the insurance underlying loss ratios or loss specs you guys are putting up incredibly attractive. And if I look at them, maybe kind of on a year's basis, my assumption is they're probably down when you kind of factor in some of the reserve development actions you took at the end of last year. So, Peter, I was wondering if you could dive in a little bit, you know, what is kind of driving that. Is it a mix?

Brian Robert Meredith: Yeah, thanks. First question, I wanted to dive in a little bit into the insurance underlying loss ratios or loss specs you guys are putting up. Incredibly attractive and

Brian Robert Meredith: If I look at them maybe kind of on a year-over-year basis, my assumption is they're probably down when you kind of factor in some of the reserve development actions you took.

Peter John Vogt: We've heard companies talking about maybe increasing loss picks on liability a little bit just because of the questions about tort inflation. Maybe give us a little color on what's going on there and why they continue to kind of trend downwards here. Yeah, so Brian, this is Pete. I would say I use the word consistent.

Brian Meredith: We've heard companies talking about maybe increasing loss pegs on liability a little bit just because of the questions on tort inflation. Maybe give us a little color and what's going on there and why they continue to kind of trend downwards here.

Speaker Change: the questions on tort inflation, maybe give us a little color on what's going on there and why they continue to kind of trend downwards here.

Peter Vogt: Yeah, so Brian, this is Pete. I would say I use the word consistent. I think our traditional loss ratio, you know, X cat and weather has been very consistent when we look year over year, but to your point, there are two really drivers underneath there. One is we do have a mix shift. As you've noticed, we are selling more short tail business, especially in the insurance business. And that's up probably four, five percent when I think about the mix shift. And if I looked overall, we would have expected that to maybe drop the loss ratio by about a point.

Peter John Vogt: I think our attritional loss ratio, you know, XCAT and weather has been very consistent when we look year over year. But to your point, there are two really big drivers underneath there. One is that we do have a mix shift. As you've noticed, we are selling more short-tail business, especially in the insurance business. And that's up probably four or 5% when I think about the mix shift. And if I looked overall, we would have expected that to maybe drop the loss ratio by about a point.

Peter John Vogt: Yeah, so Brian , this is Pete. I would say, I'd use the word consistent. I think our attritional loss ratio, you know, XCAT and weather has been very consistent when we look year-over-year, but to your point, there are two really drivers.

Speaker Change: We do have a mix shift. As you've noticed, we are selling more short tail business, especially in the insurance business, and that's up probably 4-5% when I think about the mix shift.

Speaker Change: And if I looked overall, we would have expected that to maybe drop the loss ratio by about a point.

Peter John Vogt: That is being offset because, as I mentioned earlier, when we did our fourth quarter review in the long tail lines, we moved our long tail loss picks up, and we unleveled them for 20, 21, 22, as well as 23. And so we're actually booking to that higher loss pick in our long tail liabilities, which is about a point higher.

Peter Vogt: That is being offset because, as I mentioned earlier, when we did our fourth quarter review in the long tail line, we moved our long tail loss picks up and we on leveled it for 2021, 22 as well as 23. And so we're actually booking to that higher loss pick in our long tail liabilities. And that's about a point higher. So the two are offsetting to create that consistent. I'm going to call it 52 plus or minus. You're seeing in the insurance attritional loss ratio. Does that make some sense?

Speaker Change: And so we're actually booking to that higher loss pick in our long tail liabilities, and that's about a point higher. So the two are offsetting to create that consistent, I'm going to call it 52 plus or minus you're seeing in the insurance attritional loss ratio. Does that make some sense?

Brian Robert Meredith: So the two are offsetting to create that consistent, I'm going to call it 52 plus or minus you're seeing in the insurance attritional loss ratio. Does that make some sense? Yeah, it makes a lot of sense. It's really, really helpful. And then the second question, I guess, more for Vince here, I guess, two parts here. One, maybe you can talk a little bit about why writing cyber is more attractive right now from a reinsurance perspective than maybe on the primary side.

Brian Meredith: Yeah, it makes a lot of sense, really, really helpful.

Brian Meredith: And then the second question, I guess more for Vince here. I guess two part here. One, maybe talk a little bit about why writing cyber is more attractive right now from a reinsurance perspective than maybe on a primary side. And then the second part to that, obviously, there was a pretty major headline event, CrowdStrike. What do you think that does to the dynamics of the cyber market here going forward? Will it cause some firmness? Is it going to make any changes, you think, to policy forms or anything as you look forward here? Thank you, Brian.

Speaker Change: I guess two-part here. One, maybe you can talk a little bit about why...

Speaker Change: Writing cyber is more attractive right now from a reinsurance perspective than maybe on a primary side. And then the second part to that, obviously there was a pretty, you know, major headline event, CrowdStrike.

Brian Robert Meredith: And then the second part to that, obviously, there was a pretty, you know, major headline event, CrowdStrike. What do you think that does to the dynamics of the cyber market here going forward? Will it cause some volatility?

Speaker Change: What do you think that does to the dynamics of the cyber market here going forward? Will it cause some firmness? Is it going to make any changes, you think, to policy forms or anything as you look forward here?

Vincent Christopher Tizzio: Is it going to make any changes, you think, to policy forms or anything as you look forward here? Thank you, Brian. So first, with respect to Cyber Re, we announced a quarter or so ago an interest in leaning into our reinsurance business. We saw an opportunity to provide solutions for our students, and from the access point of view, we did so in a way that we feel is premium adequate. First, secondly, being able to be executed with lost caps so that we're not creating conflict with our insurance portfolio. And finally, we would like the secedent portfolios, the information set that we were able to obtain and understand in a very detailed way, we felt comfortable with the risk.

Vincent Tizzio: So first, with respect to cyber read, we announced a quarter or so ago an interest in leaning into our reinsurance business. We saw an opportunity to provide solutions to our sedans. And from the access point of view, we did so in a way that we feel is premium adequate. First, secondly, being able to be executed with lost caps so that we're not creating conflict with our insurance portfolio. And finally, we liked the sedent portfolios, the information set that we were able to obtain in understanding in a very detailed way. We felt comfortable with the risk.

Speaker Change: Thank you Brian . So first with respect to Cyber Re, we announced a quarter or so ago an interest in leaning into our reinsurance business. We saw an opportunity to provide solutions to our students.

Speaker Change: And from the AXIS point of view, we did so in a way that we feel is premium adequate.

Speaker Change: First...

Speaker Change: Secondly, being able to be executed with loss caps so that we're not creating conflict with our insurance portfolio.

Vincent Christopher Tizzio: And we saw it as an offset to the changing insurance landscape in the small and delegated segments where we have cut back, and we've shrunk. In terms of CrowdStrike, we think this is an opportunity for the market to reset appropriately. When you think about the business interruption language associated within the primary forms, when you think about the waiting periods and the application of those waiting periods across different industries, we think it's an important opportunity for companies to take stock. AXIS is comfortable with CrowdStrike not creating any impact on our financials at this time.

Speaker Change: And finally, we liked the sedent portfolios, the information set that we were able to obtain in understanding in a very detailed way. We felt comfortable at the risk.

Vincent Tizzio: And we saw it as an offset to the changing insurance landscape in the small and delegated segments where we have cut back and we shrunk in terms of CrowdStrike. We think this is an opportunity for the market to reset appropriately when you think about the business interruption language associated within the primary forms when you think about the waiting periods and the application of those waiting periods across different industries. We think it's an important opportunity for companies to take stock. Access is comfortable with CrowdStrike, not creating any impact to our financial at this time. Obviously, this will develop over a successive period.

Speaker Change: In terms of CrowdStrike...

Speaker Change: We think this is an opportunity for the market to reset appropriately when you think about...

Vincent Christopher Tizzio: Obviously, this will develop over a successive period. But we're very comfortable with what we see now. But we think more importantly, for the industry, language change around contingent BI, language around clarity on non-malicious events, and certainly the waiting periods will come under increasing scrutiny. Great, thank you. Our next question comes from Elyse Greenspan with Wells Fargo. Please go ahead. Hi, thanks. Good morning.

Speaker Change: The Business Interruption Language associated within the primary forms.

Speaker Change: When you think about the waiting periods...

Speaker Change: and the application of those waiting periods across different industries. We think it's an important opportunity for companies to take stock. AXIS is comfortable with CrowdStrike not creating any impact to our financials at this time. Obviously, this will develop over a successive period, but what we see now, we're very comfortable with what we've seen. But we think more importantly for the industry, language change around contingent BI.

Vincent Tizzio: But what we see now, we're very comfortable with what we've seen. But we think, more importantly, for the industry, language change around contingent B.I. Language around clarity on non-military events. And certainly, the waiting periods will come under increasing scrutiny. Thank you.

Speaker Change: Language around clarity on non-malicious events and certainly the waiting periods will come under increasing scrutiny.

Elyse Greenspan: Our next question comes from Elyse Greenspan with Wells Fargo. Please go ahead. Hi, thanks. Good morning. My first question, I guess, going back to the insurance margin discussion. So 51, 8 in the quarter. Based on, I know you mentioned, you know, there's kind of a shift, you know, towards some short airlines, right, which could help that number.

Elyse Beth Greenspan: My first question, I guess going back to the insurance margin discussion. So 51.8 in the quarter, based on, as you mentioned, there's kind of a shift, you know, towards some short tail lines, right, which could help that number, based on your view of pricing, and business mix, as well as loss trend. Do you view that as, you know, a sustainable level for the insurance business? Certainly, within 24, Elyse, we don't see any material change whatsoever. Okay, and then on the reinsurance side, right? Maybe like a similar question, right?

Speaker Change: Great, thank you.

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

Elyse Beth Greenspan: Hi, thanks. Good morning. My first question, I guess going back to the insurance margin discussion, so $51.8 in the quarter.

Elyse Beth Greenspan: Based on, I know you mentioned, you know, there's kind of a shift, you know, towards some short-tail lines, right, which could help that number. Based on your view of pricing and business mix, as well as lost trend, does that view, do you view that as, you know, a sustainable level for the insurance business?

Elyse Greenspan: Based on your view of pricing and business mix, as well as lost trend, does that view, do you view that as, you know, a sustainable level for the insurance business? Certainly, within 24, at least we don't see any material change whatsoever.

Speaker Change: Certainly, within 24, Elyse, we don't see any material change whatsoever.

Elyse Greenspan: Okay, and then on the reinsurance side, right, maybe like a similar question, right, the underlying loss ratio was 64 point, you know, just over 64% in the quarter. You guys have said mid 60s was kind of the target for that business after you exited, probably in category. It seems like it's a little bit better than plan.

Speaker Change: Okay, and then on the reinsurance side right the maybe like a similar question right the underlying loss ratio was

Elyse Beth Greenspan: The underlying loss ratio was 64 points, you know, just over 64% in the quarter. You guys had said the mid-60s was kind of the target for that business after you exited property in CAT RE. It seems like it's a little bit better than planned. You know, how do you think was there anything one-off in that loss ratio in the quarter? And how do you view the sustainability of that number? Yeah, Elyse, this is Pete. I would say there really wasn't anything one-off in that quarter.

Peter Vogt: You know, how do you, was there anything one off in that loss ratio in the quarter and how do you view the sustainability of that number?

Peter Vogt: Yeah, Elyse, this is Pete. I would say there really wasn't anything one-off in that quarter. It had some benefit in the marine area, but that was actually offset by the ad engineering that we mentioned in the press release. So I would, you know, if you're thinking reinsurance that mid 60s or 64 or 65, you know, I think that's where we expect that business to perform as we go on a go forward basis.

Peter John Vogt: It had some benefit in the marine area, but that was actually offset by the ad engineering that we mentioned in the press release. So I would, you know, if you're thinking reinsurance in the mid-60s, so 64, 65, you know, I think that's, we think that's where we expect that business to perform as we go on a go-forward basis. Okay, and then maybe one more on buyback. I know you guys mentioned there were some charges related to that How We Work program in Q2. Would there be subsequent charges, or I guess now that we know that there could be charges, would, I'm just trying to get a sense of whether subsequent action there would preclude you from additional buyback?

Speaker Change: Yeah, Elyse, this is Pete. I would say there really wasn't anything one-off in that quarter. It had some benefit.

Speaker Change: In the marine area, but that was actually offset by the engineering that we mentioned in the press release.

Speaker Change: I would, you know, if you're thinking reinsurance, that mid-60s, so 64, 65, you know, I think that's, we think that's where we expect that business to perform as we go on a go-forward basis.

Elyse Greenspan: Okay, and then maybe one more on buyback. I know you guys mentioned there were some charges related to that How We Work program in the Q2. Would there be subsequent charges? Or I guess now because we know that there could be charges. Would I'm just trying to get a sense of subsequent action there would preclude you from additional buyback?

Speaker Change: Okay and then maybe one more on buyback. I know you guys mentioned there were some charges related to that How We Work program in the Q2.

Speaker Change: Would there be subsequent charges or I guess now because we know that there could be charges, would, I'm just trying to get a sense of subsequent action there would preclude you from additional buyback.

Peter Vogt: Yeah, this is Elyse, Pete. Now I'll let Vince expand on this, but as we sit here today, we don't expect any additional below-the-line charges with regards to the How We Work program. Yeah, at least we don't have any in our sites. No, and you'll certainly hear more about our investments as the year unfolds in the remaining five months. There's quite a bit of work that still remains. It's a multi-year program in how we work, but we'll leave it there.

Elyse Beth Greenspan: Yeah, this is Elyse, Pete. Now I'll let Vince expand on this. But as we sit here today, we don't expect any additional below-the-line charges with regard to the How We Work program. At least, we don't have any in our sites.

Speaker Change: Yeah, this is Elyse, Pete, and I'll let Vince expand on this, but as we sit here today, we

Vincent Christopher Tizzio: We don't expect any additional below the line charges.

Peter John Vogt: No, and you'll certainly hear more about our investments as the year unfolds. In the remaining five months, there's quite a bit of work that still remains. It's a multi-year program called How We Work, but we'll leave it there. Thank you. You're welcome. Our next question comes from Meyer Shields with KBW. Please go ahead. Great, thank you, good morning.

Speaker Change: with regards to the How We Work program, which we don't have any in our sites. No, and you'll certainly hear more about our investments as the year unfolds. In the remaining five months, there's quite a bit of work that still remains. It's a multiyear program in How We Work, but we'll leave it there.

Elyse Greenspan: Thank you. You're welcome.

Meyer Shields: Our next question comes from Meyer Shields with KBW. Please go ahead. Great. Thank you.

Meyer Shields: So I guess you both have emphasized the fact that you're shifting towards a shorter tail line. But I guess when we take a step back, let me say, okay, property rate increases are decelerating, and casualty rates are re-accelerating. How sustainable is the current mixed shift relative to the opportunities that the market is going to present over the next 12 months? You know, Meyer, this is Vince.

Speaker Change: Thank you.

Speaker Change: You're welcome.

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

Vincent Tizzio: You both have emphasized the fact that you're shifting towards short-tailed line, but I guess when we take a step back, let me say a proper rate increases are decelerating and side casualty are re-accelerating. How sustainable is the current mixed shift relative to the opportunities that the market's going to present over the next 12 months? You know, Meyer, this has been, I think, for the balance of the year, the mix will look just as we're reporting. As you know, from prior representations, we are reshaping our primary casualty business in North America. We have grown our excess casualty business quite substantially.

Meyer Shields: You both have emphasized the fact that you're shifting towards shorter tail lines, but when we take a step back and say property rate increases are decelerating and casualty are re-accelerating, how sustainable is the current mixed shift?

Speaker Change: Relative to the opportunities that the market is going to present over the next 12 months.

Vincent Christopher Tizzio: I think for the balance of the year, the mix will look just as we're reporting. As you know from prior discussions, we are reshaping our primary casualty business. In North America, we have grown our excess casualty business quite substantially, and we're developing new underwriting appetites in our liability classes. Generally, Mike, our North American executive leadership is putting a lot of effort and time toward that endeavor. Over time, next year, I would expect our liability writings to start to show the benefit of this reinvestment of underwriting tools appetite as we continue. Now, whether or not that's going to materially change the shift in the immediate term, I don't see that in the immediate term, but over time, for sure. Okay, that's helpful.

Meyer Shields: You know Meyer, this is Vince. I think for the balance of the year the mix will look

Meyer Shields: Just as we're reporting, as you know from prior...

Speaker Change: representations, we are reshaping our primary casualty business in North America. We have grown our excess casualty business quite substantially. We are developing new underwriting appetites in our liability classes generally. Our North American executive leadership is putting a lot of effort and time.

Vincent Tizzio: We are developing new underwriting appetites in our liability classes generally. Our North American executive leadership is putting a lot of effort and time toward that endeavor. Over time, next year, I would expect our liability writings to start to show the benefit of this reinvestment of underwriting tools appetite as we continue.

Meyer Shields: Toward that endeavor, over time, next year, I would expect our liability writings to start to show the benefit of this reinvestment of underwriting tools appetite as we continue. Now whether or not that's going to materially make shift in the immediate term, I don't see that in the immediate term, but over time for sure.

Vincent Tizzio: Now, whether or not that's going to materially mix shift in the immediate term, I don't see that in the immediate term, but over time for sure. Okay, that's helpful. Thank you.

Vincent Tizzio: You also talked about adding kings, and I was hoping you'd give us sort of knows you what the current market for underwriting talent is and where the obviously not names, but where the opportunities are. Yeah, so it's an active, connective specialty market for talent. There's certainly a premium being paid, and there's equally a premium being paid for the kind of culture of the organization, the tools that are being provided to the underwriters in order to execute their role, the empowerment that they're seeking. And so we've been reasonably successful at creating an environment that allows for those attributes to be satisfied.

Meyer Shields: You've also talked about adding teams, and I was hoping you'd give us sort of an overview of what the current market for underwriting talent is and where the, obviously not names, but where the opportunities are. Yeah, so it's an active specialty market for talent. There's certainly a premium being paid, and there's equally a premium being paid for the kind of culture of the organization, the tools that are being provided to the underwriters in order to execute their role, and the empowerment that they're seeking.

Speaker Change: You've also talked about adding teams. I was hoping you could give us an overview of what the current market for underwriting talent is and where the opportunities are.

Speaker Change: It's an active specialty market for talent. There's certainly a premium being paid, and there's equally a premium being paid for the kind of culture of the organization, the tools that are being provided to the underwriters in order to execute.

Meyer Shields: And so we've been reasonably successful at creating an environment that allows for those attributes to be satisfied. We will continue to add to the number of investments we've made across a variety of product capabilities that include North America but also in our global markets portfolio equally. And so we'll continue to be on the talent search. In terms of representation, we don't believe in having one targeted company. We've enjoyed the trust of colleagues from a number of prior companies, but there isn't one particular company that has, in any meaningful way, contributed to that. We're seeking out attributes, culture, and attitude, and, of course, the capability of the person.

Speaker Change: their role, the empowerment that they're seeking. And so

Speaker Change: We've been reasonably successful at creating...

Vincent Tizzio: We will continue to add to the numbers, the numbers of investments we've made across a variety of product capabilities that include North America, but as well in our global markets portfolio equally. And so we'll continue to be on the town search in terms of representation. We don't believe in having one targeted company. We've enjoyed the trust of colleagues from a number of prior companies. There isn't one particular company that has, in any meaningful way, contributed to that. We're seeking out attributes and culture and attitude, and of course capability of the person.

Speaker Change: An environment that allows for those attributes to be satisfied.

Speaker Change: We will continue to add to the numbers of investments we've made.

Speaker Change: across a variety of product capabilities.

Speaker Change: that include North America, but as well in our global markets portfolio equally. And so we'll continue to be on the town search. In terms of representation, we don't believe in having one targeted company. We've enjoyed the trust of colleagues from a number of prior companies. There isn't one particular company.

Speaker Change: that has in any meaningful way contributed to that. We're seeking out attributes and culture and attitude and of course capability of the person. So that's our mantra.

Vincent Tizzio: So that's our mantra. Great. Thanks a lot.

Vincent Christopher Tizzio: So that's our mantra. Great. Thanks so much. Again, if you have a question, please press star then 1. We have a follow-up question from Josh Shanker. Please go ahead.

Joshua Shanker: Again, if you have a question, please press star, then one. We have a follow-up question from Josh Shanker. Please go ahead. Yeah, just a quick one. Of course, there's a lot of talk about professional line pricing and the trends. And you guys have shrunk your exposure in the primary market. But on the reinsurance market, it looks like the exposure increase or at least you wrote a lot more. Is there something different going on in excess layers than there isn't the more central layers? Well, people unpacked that for you. Yeah, actually, Josh, I think Vince might have a lure to this in his comments.

Speaker Change: Great. Thanks so much.

Joshua David Shanker: Yeah, just a quick one. Of course, there's been a lot of talk about professional lines, pricing, and trends, and you guys have shrunk your exposure in the primary market. But on the reinsurance market, it looks like your exposure increased, or at least you wrote a lot more. Is there something different going on in the excess layers than there is in the more central layers?

Speaker Change: Again, if you have a question, please press star then 1. We have a follow-up question from Josh Shanker. Please go ahead.

Peter John Vogt: Now, will people unpack that for you? Yeah, actually, Josh, I think Vince might have alluded to this in his comments, but when we look at reinsurance professional lines, you're right, it was up 9% in the quarter year-over-year. When we take cyber out of that, because cyber in reinsurance is reported through professional lines, the rest of professional lines is actually down 8% year over year. So to your point, we are seeing that pressure on professional lines in the reinsurance space also. If it hadn't been for the growth in cyber, pro lines would actually have been down year over year.

Joshua David Shanker: Yeah, just a quick one. Of course, there's been a lot of talk about professional lines, pricing, and the trends, and you guys have shrunk your exposure.

Joshua David Shanker: In the primary market, but on the reinsurance market, it looks like the exposure increased or at least eroded a lot more. Is there something different going on in excess layers than there is in the more central layers?

Speaker Change: Now we'll people unpack that for you. Yeah, actually, Josh, I think Vince might have allured to this in his comments, but when we look at reinsurance professional lines, you're right, it was up 9% in the quarter year-over-year.

Peter Vogt: But when we look at reinsurance professional lines, you're right; it was up 9% in the quarter year over year. When we take cyber out of that because cyber in reinsurance is reported through professional lines, the rest of professional lines is actually down 8% year over year. So, to your point, we are seeing that pressure and professional lines in the reinsurance space also. And if it hadn't been for the growth in cyber, pro lines actually would have been down year over year. Thank you.

Speaker Change: When we take cyber out of that because cyber in reinsurance is reported through professional lines

Joshua David Shanker: The rest of professional lines is actually down 8% year over year. So, to your point, we are seeing that pressure in professional lines in the reinsurance space also. If it hadn't been for the growth in cyber, pro lines actually would have been down year over year.

Unknown Executive: Let's conclude our question and answer session.

Vincent Christopher Tizzio: Thank you. This concludes our question and answer session. I would like to turn the conference back over to CEO Vince Tizzio for any closing remarks. In summary, it's been a very strong quarter and first half year for AXIS. We look forward to reporting our continued progress in our third quarter call. Thank you very much. The conference has now concluded. Thank you for attending today's...

Speaker Change: Thank you.

Vincent Tizzio: I would like to turn the conference back over to CEO Vince Sivio for any closing remarks. Thank you for joining today's call. In summary, it's been a very strong quarter and first half year for Access. We look forward to reporting our continued progress in our third quarter call. Thank you very much.

Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to CEO Vince Tizzio for any closing remarks.

Vincent Christopher Tizzio: Thank you for joining today's call. In summary, it's been a very strong quarter and first half year for AXIS. We look forward to reporting our continued progress in our third quarter call. Thank you very much.

Unknown Executive: The conference is now concluded. Thank you for attending today's presentation.

Unknown Executive: You may now disconnect.