Q3 2024 AXIS Capital Holdings Ltd Earnings Call
There will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star and then two please.
Please note. This event is being recorded I would now like to turn the conference over to Clifford Gallant Investor Relations. Please go ahead.
Speaker Change: Good morning, and welcome to our third 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 active capital Dotcom we.
We set aside an hour for todays call, which is also available as an audio webcast on our website.
Joining me on today's call are Vince <unk>, our president and CEO and Pete Vogt, our CFO and.
In addition, I would like to remind everyone that the statements made during this call, including the question and answer session, 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 the company's most recent report on Form 10-K R. R.
The report on Form 10-Q, and other reports the company files with the SEC. This includes the additional risks identified in the cautionary note regarding the forward looking statements in our earnings press release issued last night, we undertake no obligation to publicly update or revise any forward looking statements. In addition, our non-GAAP.
Measures may be discussed during this conference call. Reconciliations are included in our earnings press release and financial supplement.
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Speaker Change: Good day and welcome to the Access Capital 3rd quarter 2020 for earnings call. All participants will be in listen only mode. Should you need assistance please signally conference specialist by pressing the star key followed by Z-Rough.
Speaker Change: And with that I'll turn the call over to Vince.
Thank you Cliff good morning, and thank you for joining our call before we begin I'll take a moment to comment on the recent storms in their human toll our deepest thoughts are with the victims of Hurricane Helene and Milton. These catastrophe served as a reminder of the value that our industry brings I also express my gratitude to the access.
Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two.
Speaker Change: Claims team for the excellent work they are doing to support our customers.
Speaker Change: Please note this event is being recorded. I would now like to turn the conference over to Clifford Gallant
Let's now discuss some of the headline results from the third quarter.
This was a strong quarter practices as we continue to advance our underwriting strategy the sustained progress in our performance evidenced that the strategic principles that we shared at our Investor day are gaining traction.
Speaker Change: Investor Relations, please go ahead.
Clifford Gallant: Thank you, good morning and welcome to our third quarter 2024 Conference Golf. 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 actuscapital.com.
Speaker Change: Third quarter results highlight our consistency and driving profitable growth maintaining strong limits management improved resiliency in our portfolio continued focus on expense management and our ability to attract top talent supported by a balanced investment portfolio and strong reserves.
Clifford Gallant: We set it to our Parti-Age call, we also available as an audio webcast on our website.
Clifford Gallant: Joining me on today's call or Vince Tizzio, our President of the C.L. and Peepo, 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 historic facts, maybe forward-looking statements for the statements involved risk on certainties and assumptions.
In the quarter, we posted a five 8% group level catastrophe ratio against the backdrop of a currently estimated 40 billion and industry losses reflective of our actions to reduce volatility in our portfolio at.
Clifford Gallant: Actual Events and Results meet different materially from those projected in the forward-looking statements. You would have a variety of factors including the risk factor set forth in the company's most recent report on the Form 10K or our Quarterly Report on Form 10Q and other reports for company files with the SEC.
At present, we project $30 million in total losses from Hurricane Helene and we expect a similarly sized.
Clifford Gallant: This includes the additional rest identified in the cautionary note regarding the forward lifting statements in our earnings pressure release issued last night.
Market share of losses from Hurricane Milton It can be anticipated that the storm projections may marginally move as more information is gathered.
Clifford Gallant: We undertake no obligation to publicly update or revise any foreign-looking statements in addition our non-gap. But as measures may be discussed during this conference call, reconciliation are included on our earnings press release and financial supplement. And with that, I'll turn the call over to Vince.
Speaker Change: Nonetheless, we believe these are prudent estimates on the impact to our portfolio and highlight the attractiveness of our overall loss ratio, including the catastrophe losses.
In the quarter, we delivered an annualized ROE of 17, three and $64 65 in book value per share a 26% growth over the prior year quarter, we produced operating earnings per share of $2, 71% to 16% increase over the prior year quarter, our underwriting profitability.
Vince Tizzio: Thank you, Cliff. Good morning and thank you for joining our call. Before we begin, I'll take a moment to comment on the recent storms and their human toll. Our deepest thoughts are with the victims of Hurricane Haleen and Melton.
Vince Tizzio: These catastrophe serve as a reminder of the value that our industry brings. I also express my gratitude to the Access Claims team for the excellent work they are doing to support our customers.
<unk> continues to be strong with a combined ratio that was 93, one for the quarter and 91 six for the first nine months of the year.
Vince Tizzio: Let's now discuss some of the headline results from the third quarter. This was a strong quarter for access as we continue to advance our underwriting strategy.
Speaker Change: We produced a current accident year loss ratio of 61, five for the quarter and 59 four for the first nine months.
Vince Tizzio: The sustained progress in our performance evidences that the strategic principles that we shed at our investor day are gaining traction.
Speaker Change: Overall premiums were $1 9 billion in the quarter, including $585 million in new business and we're on track with our full year expectation that we shared with you during our second quarter call as I've commented in past call. We are continuing to target premium adequate short tail lines that align with our underwriting.
Vince Tizzio: Our third quarter results highlight our consistency in driving profitable growth.
Vince Tizzio: Laintaining Strong Limits Management.
Vince Tizzio: Inc. improved resiliency in our portfolio. Continued focus on expense management and our ability to attract top talent. Supported by a balanced investment portfolio and strong reserves.
<unk> and the needs of our brokers and customers our <unk> ratio was $12 one in the quarter as compared to 13, 5% in the prior year quarter.
Vince Tizzio: In the corner, we posted a 5.8% group-level catastrophe ratio against a backdrop of a currently estimated 40 billion in industry losses, reflective of our actions to reduce volatility in our portfolio.
Speaker Change: As a result of the actions we've taken thus far to improve efficiency and productivity through our how we were transformative initiatives.
And lastly, net investment income was a record $205 million.
Vince Tizzio: At present, we project 30 million in total losses from Hurricane Colleen and we expect a similar release size, market share of losses from Hurricane Milton.
Let's now move to our operating segments and we'll begin with insurance.
It was another strong quarter for our specialty insurance franchise highlighted by a healthy 94 combined ratio in X cat accident year combined ratio of 83, eight and premium production of one 5 billion a four 7% increase over the prior year period.
Vince Tizzio: It can be anticipated that the storm projections may marginally move as more information is gathered. Nonetheless, we believe these are prudent estimates on the impact to our portfolio and highlight the attractiveness of our overall loss ratio, including the catastrophe losses.
This included $482 million and new business premiums with property A&H credit and political risk as key drivers in the quarter. Our net written premium growth was 10% over the prior year. This increase reflects our confidence in our portfolio. As you can see we are keeping more of our own cooking.
Vince Tizzio: In the quarter, we delivered an annualized ROI of 173 and 6465 in book value per share, a 26% growth over the prior year quarter.
Vince Tizzio: We produced operating earnings per share of 271, a 16% increase over the prior year quarter. Our underwriting profitability continues to be strong, for the combined ratio that was 931 for the quarter, and 916 for the first nine months of the year.
As we've shared previously our reshaping of our primary casualty business should be predominantly completed by year end importantly, when excluding primary casualty. Our overall insurance segment produced six 4% growth as compared to the prior year quarter.
Vince Tizzio: We produce a current accident year-long ratio of 61.5 for the quarter and 59.4 for the first nine months.
Vince Tizzio: Overall, premiums were 1.9 billion in the quarter, including 585 million in new business. And we're on track with the full-year expectation that we shared with you during our second quarter call.
Across our casualty insurance lines, we are achieving a resurgence in rate, while driving targeted growth and attractive market.
Within our insurance property lines, we grew by 10% in the quarter a key driver continues to be our U S. Wholesale property unit, which produced growth by 18% over the prior year quarter, finding continued ample opportunities with a 35% increase in submissions were continuing to leverage this highly <unk>.
Vince Tizzio: As I've commented in past calls, we are continuing to target premium adequate short-tailed lines that align with our underwriting capabilities and the needs of our brokers and customers.
Vince Tizzio: Our GA ratio was 12.1 in the quarter as compared to 135 in the prior year quarter. A result of the actions we've taken thus far, to improve efficiency and productivity through our how we work transformative initiative.
Speaker Change: <unk> adequate class and are finding attractive opportunities, despite increasing competition, particularly in our international business.
Vince Tizzio: And lastly, Netten Vestminkum was a record 205 million.
Speaker Change: The North American strategic initiatives discussed at our Investor Day are also taking hold by example, our U S. Lower middle market units are continuing to gain traction producing 17% growth over the prior year quarter and 30% growth in policy count.
Vince Tizzio: Let's now move to our operating segments and we'll begin with insurance.
Vince Tizzio: He was another strong quarter for our specialty insurance franchise.
Vince Tizzio: highlighted by a healthy 90.4 combined ratio, an X-Cat accident your combined ratio of 83-8 and premium production of 1.5 billion, a 4.7% increase over the prior year period.
Moreover, $28 million of the $69 million of the insurance segment's total growth in the quarter came from new or expanded initiatives.
Moving to global markets, where we are ranked as an outperforming syndicate, we drove 5% growth in the quarter, while maintaining a portfolio that is highly premium adequate key growth drivers in the quarter included A&H property credit and political risk.
Vince Tizzio: The included $482 million and new business premiums with property, A&H, Credit and Political Risk of Key Drivers.
Vince Tizzio: In the quarter, our net written premium growth was 10% over the prior year. This increase reflects our confidence in our portfolio, as you can see we are keeping more of our own cooking.
As I've noted previously within our global markets, we are evidenced increasing competition, notably within our marine aviation and property lines. Our underwriters continue to practice disciplined and we're growing in the lines, where we want to grow and see premium adequacy.
Vince Tizzio: As we've shared previously, are we shaping of our primary casually business should be predominantly completed by your end. Importantly, when excluding primary casually, our overall insurance segment produced 6.4% growth as compared to the prior year quarter.
Further we continue to innovate and build new capabilities. One example is our energy transition syndicate launched earlier this year. The distribution response to the syndicate is growing and we anticipate the syndicate will be a more meaningful contributor to our business in the future.
Vince Tizzio: Across our casually insurance lines, we are achieving a resurgence in rate while driving targeted growth in attractive markets.
Vince Tizzio: Within our insurance property lines, we grew by 10% in the quarter.
Let's move to reinsurance in the quarter, we produced a 91 four combined ratio, while delivering $36 million an underwriting profit.
Vince Tizzio: A key driver continues to be our U.S. wholesale property unit, which produced growth by 18% over the prior year quarter, finding continued ample opportunities with a 35% increase in submissions.
We drove growth within our short tail specialty lines, which were up 7% propelled by new business in mortgage credit and surety during the quarter, we generated $103 million in new business.
Vince Tizzio: or continuing to leverage this highly premium adequate class and are finding attractive opportunities despite increasing competition for chickenly in our international business.
84% from our specialty lines.
We produced $409 million in premium in the quarter and eight 7% decrease versus the prior year as noted in the second quarter, we're navigating an increasingly competitive reinsurance market, particularly in casualty lines, where we are not evidenced the degree of rate change and ceding commission changes that meet our.
Vince Tizzio: The North American Strategic Initiative discussed that our investor day are also taking hold. By example, our U.S. lower middle market units are continuing to gain traction, producing 17% growth over the prior year quarter, and 30% growth in policy count.
Vince Tizzio: Moreover, $28 million of the $69 million of the insurance segments total growth in the quarter came from new or expanded initiatives.
Speaker Change: Our expectations.
Speaker Change: As a result in the third quarter, albeit not as significant renewal period for us we have seen a reduction in our longer tail lines of approximately 17%. This was due to a combination of timing and underwriting discipline as we've reshaped or nonrenewed certain large seasons.
Vince Tizzio: Moving to global markets where we are ranked as an outperforming syndicate, which drove 5% growth in the quarter while maintaining the portfolio that is highly premium adequate. Key growth drivers in the quarter included A&H, property, credit, and political risk.
Let's talk about how we see our position in the market today the environment.
<unk> continues to be generally positive the access portfolio as premium adequate and delivering against our risk adjusted return expectations. We remain optimistic about our ability to leverage our broad and diverse product set and distribution channel relationships.
Vince Tizzio: As I've noted previously, within our global markets, we are evidenceing increasing competition, notably within our Marine, Aviation and Property lines. Our under-artist continues to practice discipline and we're growing in the lines where we want to grow and see premium adequacy.
Speaker Change: Unpack this further.
Vince Tizzio: Further, we continue to innovate and build new capabilities. One example is our energy transition syndicate launched earlier this year. The distribution response of the syndicate is growing, and we anticipate the syndicate will be a more meaningful contributor to our business in the future.
In North America, our PC business, excluding financial lines continues to grow driven by rate increases in the quarter. We also grew our short tail global market businesses, which remain highly premium adequate.
Across the business, we continue to mix shift toward our highly premium adequate short tail lines, which in the quarter comprised 51% of our group gross premiums written up approximately 4% as compared to the prior year quarter proper.
Vince Tizzio: Let's move to reinsurance.
Vince Tizzio: In the quarter we produce a 91-4 Combined Ratio.
Vince Tizzio: While delivering 36 million in underwriting process. We drove growth within our short-tailed specialty lines, which were 7% propelled by new business in mortgage, credit, and sureday. During the quarter, we generated 103 million in new business with 84% from our specialty lines.
Property remains an attractive market. While we are seeing increased competition, we continue to be well positioned and believe that the continued market momentum remains further Harvey was supported by our insurance property segments portfolio construction, our average net limits of $1 7 million or geographic spread of the.
Vince Tizzio: We produce 49 million in premium in the quarter and 8.7% decrease versus the prior year.
Vince Tizzio: As noted in the second quarter, we're navigating an increasingly competitive reinsurance market, particularly in casually lines, where we are not evidencing the degree of rate change and seeding commission changes that meet our expectations.
Speaker Change: And 30, 35% of the premium written in the quarter was generated from non cat exposures as just one example, supporting our portfolio construction.
In liability, we are continuing to see strong rate momentum, particularly in our insurance business, yielding 11, 8% rate change in the quarter ahead of trend in fact looking across our U S. Casualty business. We continue to see double digit rate increases that are ahead of trend.
Vince Tizzio: As a result in the third quarter albeit not a significant renewal period for us.
Vince Tizzio: We have seen a reduction in our longer-tail lines of approximately 17%. This was due to a combination of timing and underwriting discipline as we've reshaped or non-renewed certain large sedans.
U S primary casualty and U S excess casualty were up 20% and 12% respectively.
Vince Tizzio: Let's talk about how we see our position in the market today.
Speaker Change: In fiber, we further reshaped our portfolio in the quarter, we continued to pivot away from select delegated business that no longer meets our risk appetite or profitability targets. Our focus remains on growing the large account segment and in the quarter. We grew North America large by 13%.
Vince Tizzio: The Environment continues to be generally positive. The Actress portfolio is pre-meamatically and delivering against our risk adjusted return expectations.
Vince Tizzio: We remain optimistic about our ability to leverage our broad and diverse products set and distribution channel relationships.
Vince Tizzio: Let me unpack this further.
Further we're pleased with the progression of our partnership with Alpha secure where in the quarter. We produced increases in both submission count and new business premiums as I've commented in the past, we continued to leverage our ability to to deploy cyber capacity through both our underwriting businesses.
Vince Tizzio: In North America, our PC business, excluding financial lines, continues to grow, driven by rating increases in the quarter. We also grew our short-tail global market businesses, which remain highly-primimatically.
Vince Tizzio: Across the business, we continue to make shift toward our highly premium adequate short-tail lines, which in the quarter comprised 51% of our group, Gross Premiums written, up approximately 4% as compared to the prior year quarter.
Speaker Change: In the quarter, our reinsurance cyber writings were up $6 million or 40%. We are confident in our strong premium adequacy prudent limit deployment and accumulation management between both insurance and reinsurance.
Vince Tizzio: Property remains in attractive market, while we are seeing increased competition, we continue to be well positioned and believe that the continued market momentum remains.
Speaker Change: Stepping back our performance thus far in 2024 reinforces our confidence that our actions to strengthen our business are taking hold and indeed, we are continuing to produce earnings results that are consistent with our long term target of generating top quartile diluted book value per share growth at.
Vince Tizzio: Further, our viewers supported by our insurance property segments portfolio construction.
Vince Tizzio: Our average net limit to 1.7 million, our geographic spread of the business, and 35% of the premium written in the quarter was generated from non-chat exposures. I just want example supporting our portfolio construction.
It reinforces our confidence in the strategy that we discussed at Investor day.
Speaker Change: Our results demonstrate that we continue to operate in attractive markets and our global platform allows us to make choices about where we think we can most effectively compete indeed, the diversity of our platform. Both in terms of product and distribution gives us the capability to lean into attractive markets at any point in their respective cycles, enabling us.
Vince Tizzio: In liability, we are continuing to see strong rate momentum, particularly in our insurance business, yielding 11.8% rate change in the quarter ahead of trend.
Vince Tizzio: He's in fact looking across our U.S. casually business, we continue to see double-digit rate increases that are ahead of trend.
Speaker Change: To produce consistent profitable growth and mid teens Roe.
Vince Tizzio: U.S. primary casually and U.S. excess casually were up 20% and 12% respectively.
And the current market environment, we believe in our continue ability to generate profitable growth as we position access through the cycle. We are not only continuing to grow our core products, but are leveraging our global capabilities geographically and in adjacent customer segments are reduced G&A ratio in the quarter.
Vince Tizzio: In Fiber, we further reshaped our portfolio. In the quarter, we continue to pivot away from select, delegated business that no longer meets our risk appetite or profitability target.
Vince Tizzio: Our focus remains on growing the large account segment and in the quarter we grew North America large by 13%. Further, we're pleased with the progression of our partnership with Alpha Secure. We're in the quarter we produce increases in both submission count and new business premiums.
Give to the prior year has been the result of further actions as we continue to rigorously improve how we operate and become a more integrated and efficient company. This also shows the effectiveness of our how we work initiative, where we continue to make smart investments in our business spanning data and analytics technology and of course talent.
Vince Tizzio: As I've commented in the past, we continue to leverage our ability to deploy, cyber-capacity through both our underwriting businesses.
As part of our technology investments, we are focused on leveraging the transformative power of AI throughout our business.
Vince Tizzio: In the quarter, our re-insurance cyberwritings were up 6 million or 40%. We are confident in our strong, pretty, madacrasy, crude-and-limit deployment and accumulation mass of between both insurance and reinsurance.
A key opportunity area is leveraging AI to enhance our submission and underwriting processes and we've recently announced expanded partnerships with EMEA NII, driven AI driven document and E mail ingestion platform and six fold to help augment our data submission processing.
Vince Tizzio: Stepping back, our performance thus far in 2024 reinforces our confidence that our actions to strengthen our business are taking hold. Indeed, we are continuing to produce earnings results that are consistent with our long-term, target of generating top quartiles diluted bull-falued for shared growth.
We continue to invest in these capabilities and of course people and during the quarter, we added talent, including a number of executive hires within our North American operations.
Vince Tizzio: It reinforces our confidence and the strategy that we discuss an investor day.
We also announced the appointment of a strong successor to our long time head of global markets, Mark Gregory who has decided to retire in March of 2025, I'll take a moment to congratulate mark and extend our deep appreciation for his outstanding leadership and partnership to me and sorrow.
Vince Tizzio: A results demonstrate that we continue to operate in attractive markets.
Vince Tizzio: and our global platform allows us to make choices about where we think we can most effectively compete. Indeed, the diversity of our platform, both in terms of product and distribution.
Vince Tizzio: gives us the capability to lean into attractive markets at any point in their respective cycles enabling us to produce consistent, profitable growth and mid-teens are a week.
Speaker Change: Mitchell, we have identified an excellent leader to succeed Mark and we look forward to soon welcoming her to our company.
Vince Tizzio: In the current market environment, we believe in our continued ability to generate profitable growth. As we position ashes through the cycle, we are not only continuing to grow our core products, but are leveraging our global capabilities geographically and in adjacent customer segments.
Speaker Change: Finally, our reserves remained strong with favorable development in the quarter, our balanced investment portfolio and our share repurchase demonstrate our commitment to managing our capital efficiently.
In summary.
Speaker Change: For both the third quarter and the first nine months of 2024, we executed strongly on our strategy, while producing consistent profitable growth and book value per share growth when we evaluate the quarter with the most scrutiny survive we're pleased with the progress.
Vince Tizzio: Our reduced GNA ratio in the quarter relative to the prior year.
Vince Tizzio: has been the result of further actions as we continue to rigorously improve how we operate and become a more integrated and efficient company.
Vince Tizzio: This also shows the effectiveness of our how we work initiative, where we continue to make smart investments in our business spanning data and analytics, technology and of course talent. As part of our technology investments, we are focused on leveraging the transformative power of AI throughout our business.
Speaker Change: We go into the end of the year with confidence and the humility to continue to serve the needs of our customers in this very dynamic risk environment. We're excited for our future and deeply committed to helping axis realize its full potential.
Speaker Change: I'll now turn the call over to Pete for a more detailed discussion of our financials.
Vince Tizzio: A key opportunity area is leveraging AI to enhance our submission and underwriting processes and we recently announced expanded partnerships.
Thank you Vince and good morning, everyone.
Speaker Change: <unk> had a very strong performance in the quarter.
Pete: Our net income available to common shareholders was $173 million or $2 <unk>.
Vince Tizzio: with Mia and AI-driven document and email and gestion platform and sixfold to help all augment our data submission processing.
Speaker Change: Per diluted common share, which resulted in annualized Roe of 13%.
Vince Tizzio: We continue to invest in these capabilities and, of course, people. And during the quarter, we added talent, including a number of executive powers within our North American operations.
This drove our book value per diluted common share to <unk> $64 65 at quarter end, an increase of nearly 20% year to date.
Vince Tizzio: We also announced the appointment of a strong successor.
Our operating income was $230 million or $2 71 per diluted common share.
Vince Tizzio: to our long time head of global markets, Mark Gregory, who has decided to retire in March of 2025.
Speaker Change: Resulting in an annualized operating Roe.
Speaker Change: A 17, 3%.
Vince Tizzio: I'll take a moment to congratulate Marr and extend our deep appreciation for his outstanding leadership and partnership to me. In Sarah Mitchell, we have identified an excellent leader to succeed Marr and we look forward to soon welcoming her to our company.
Looking at our consolidated results.
Speaker Change: Our companywide gross premiums written grew one 6% to $1 9 billion, our highest production third quarter ever.
And we continue to see attractive opportunities across most lines of business.
Vince Tizzio: Finally, our reserves remain strong with favorable development in the quarter. Our balance investment portfolio and our share-repearches demonstrate our commitment to managing our capital sufficiently.
Our quarterly combined ratio was an excellent 93, 1%, despite hurricanes Helene and barrel.
Our current accident year loss ratio ex cat and weather was a superb 55, 7%.
Vince Tizzio: In summary, but for both the third quarter and the first nine months of 2024, we executed strongly on our strategy while producing consistent, profitable growth and both value per share growth.
Importantly, our loss picks continued to be consistent with the learnings from our in depth Reserve review conducted at the end of last year. Moreover, the underlying data and patterns. We see in our quarterly reviews have continued to increase our confidence in our overall reserve position.
Vince Tizzio: When we evaluate the quarter with the most scrutiny of I, we are pleased with the progress.
Vince Tizzio: We're going to the end of the year with confidence and the humility to continue to serve the needs of our customers in this very dynamic risk environment. We're excited for our future and deeply committed to helping access realize its full potential. I'll now turn the call over to Pete for a more detailed discussion of our financials.
In the quarter as Vince noted, we continued to adhere to our philosophy of wanting to see sustained positive momentum before releasing reserves and we recorded a release of $8 million in the quarter.
Pete: Thank you, Vincent. And good morning, everyone. Access had a very strong performance in the quarter.
The current accident year cat loss ratio was five 8%.
We experienced $78 million of cats in the quarter.
Our net income available to Commentshare holders was $173 million for $2.4 per deluded Commentshare which resulted in an annualized ROI of 13%.
With the largest portion generated by hurricane so lean and barrel at $43 million.
Speaker Change: As a company.
Our five and 10 year average historical third quarter, Nat cat loss ratios or 13, 6% and 15, 8% respectively.
Pete: The Strove Art Book Value for Deluded Common Share to $64.65 a quarter end An increase of nearly 20% year-to-date
With approximately $40 billion in industry natural cats this quarter.
Pete: Our operating income was 230 million or $2.71 per diluted common share resulting in an annualized operating ROI of 17.3%.
It affirms our current portfolio is being much less volatile than it used to be as we see our current cat loss ratio substantially below those historic averages.
Looking at our consolidated results.
Pete: Our company, why grows premiums written grew 1.6% to 1.9 billion. Our highest production third quarter ever, and we continue to see attractive opportunities across the most blinds of business.
Looking out at the fourth quarter industry loss estimates for Hurricane Milton still range widely.
Speaker Change: From lows of $20 billion to highs of near 50 billion with the cleanup of ethylene slowing the settlement process for.
Pete: Our poorly combined ratio was an excellent 93.1% despite Hurricane Celine and Burrell.
For Axis, we expect our share of the eventual industry loss to be similar to our low share of the industry's Helene loss, implying a loss estimate in the range of between $50 million to $100 million.
Pete: Our current accident year lost ratio Xcat and weather was a superb 55.7%
Pete: Importantly, our lost picks continue to be consistent.
Our <unk>, our large U S natural catastrophes <unk>.
Pete: with the learnings from our in-depth reserve review conducted at the end of the last year. Moreover, the underlying data and patterns we see in our poorly reviews have continued to increase our confidence in our overall reserve position.
Speaker Change: Including a California earthquake, where a southeast hurricane.
Each of these events remains well below 5% of shareholder equity at the 1% to $2 50 year apparel Mark.
While we are taking advantage of market opportunities and growing our insurance property book materially.
Pete: In the quarter has been noted, we continue to adhere to our philosophy of wanting to see sustained positive momentum before releasing reserves and we recorded a release of $8 million in the quarter.
Speaker Change: Our event <unk> have remained steady.
Speaker Change: The consolidated G&A expense ratio, including corporate was 12, 1% down from 13, 5% a year ago.
Pete: The current accident year cat loss ratio is 5.8%. We experienced 78 million dollars of cats in the quarter, with the largest portion generated by hurricanes, to lean and burl at 43 million dollars.
Our quarterly G&A dollar spend was down over 7% versus the same period in 2023.
The expense improvement we are experiencing is not simply cost cutting.
Pete: As a company, our five-and-tang year average historical third quarter Nat Catwast ratios are 13.6% and 15.8% respectively.
Speaker Change: But the result of thoughtful and careful actions as we strive to optimize our operating model.
Where needed we will make investments in our company, whether it would be by adding to our talent pool.
Pete: with approximately $40 billion in industry natural cats this quarter.
Implementing new operating systems are expanding capabilities.
It affirms our current portfolio as being much less volatile than it used to be. As we see our current catwalk ratio, substantially below those historic averages.
Speaker Change: These investments could create some fluctuation in our G&A ratio. However, we remain committed to the target. We previously shared with you.
G&A ratio below 11% for the full year of 2026.
Looking out at the fourth quarter, industry law system is for Hurricane Milton still arranged widely, from loads of 20 billion to highs of near 50 billion with the cleanup of the lean, slowing the settlement process.
Speaker Change: Now, let's move on and discuss our segment results in more detail.
Speaker Change: Insurance had a strong quarter gross premiums written were $1 5 billion, an increase of four 7% compared to the prior year and our highest volume third quarter ever for insurance.
For access, we expect our share of the eventual industry laws to be similar to our low share of the industry's heline laws.
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.
Pete: and applying a loss estimate in the range of between 50 to $100 million.
RPPMLs are large US natural catastrophes.
Speaker Change: Let me discuss a few lines of business.
including a California earthquake or a Southeast Hurricane.
Property was a major driver of growth this quarter being up 10%.
Pete: Each of these events remains well below 5% of shareholder equity at the 1 in 250 year pearl mark.
We saw particular strength in E&S property, which was up 18% as well as strength in onshore renewable energy and our growing presence in lower middle markets.
While we're taking advantage of market opportunities and growing our insurance property book materially.
Speaker Change: Premium adequacy remains highly attractive although as Vince discussed competition is growing.
Arvitt PML, every main steady.
The consolidate G&A expense ratio, including corporate, was 12.1% down from 13.5% a year ago.
And liability U S excess casualty drove growth as it grew 11% driven by the 12% rate increase that Vince mentioned earlier.
Our quarterly GNA dollar spend was down over 7% versus the same period in 2023.
This growth was mostly offset by a decline in gross premiums written in our primary casualty business.
The Expense Improvement we're experiencing is not simply cost-cutting.
Where rate increases of 20% or above trend, but premiums declined as we are reshaping that book.
Pete: But the result of thoughtful and careful actions as we strive to optimize our operating model.
Speaker Change: We expect the reshaping to be substantially completed by the end of this year and if market conditions remain attractive we would expect growth in 2025.
When needed, we will make investments in our company, whether it be by adding to our talent pool, implementing new operating systems or expanding capabilities.
Lastly in A&H, we note that we had double digit growth.
These investments could create some fluctuation in our DNA ratio. However, we remain committed to the target we previously shared with you of a DNA ratio below 11% for the full year of 2026.
This growth is being driven by the expansion of our North America Pet insurance business.
Speaker Change: Overall for insurance, we maintain our gross premiums growth outlook of being at the low end of the $7 to 12% range for the full year of 2024.
Now let's move on and discuss our segment results in more detail.
Insurance had a strong quarter. Gross Premium's written will 1.5 billion, and increase of 4.7% compared to the prior year, and our highest volume third quarter ever for insurance.
The insurance combined ratio was an outstanding 94%, including 7% of cat and weather related losses, resulting in $99 million of underwriting income.
Cross most of our book, Pricing Remains, Attequate, and we see opportunity to put capital to work at attractive returns above our long-term targets.
Our current accident year loss ratio ex cat and weather was 52, 3% consistent with what we've reported in recent quarters.
Pete: Let me discuss a few lines of business.
Speaker Change: Additionally, the acquisition cost ratio of 19, 9% was up over the prior year, reflecting mix of business change as we favor short tail lines as well as the impact of lower ceding commissions from lower pro lines and cyber business.
Property was a major driver of growth this quarter, being up 10%. We saw a particular strength in E&S property, which was up 18%. As well as strength in unsharing noble energy and our growing presence in low and middle markets.
Now, let's move on to the reinsurance segment.
Creamy Maticalcy remains highly attractive, although as Vince discussed, competition is growing.
Gross premiums were down eight 7% in the quarter as I mentioned on our second quarter call that quarter benefited from timing between renewals from the third quarter to the second quarter, creating a particularly difficult third quarter comparison.
Pete: In liability, US excess casualty drove growth as it grew 11% driven by the 12% rating increase that Vince mentioned earlier.
Speaker Change: Nonetheless, we maintain our expectation of mid single digit growth for the full year and I would note that year to date, which makes it which takes some of the timing noise out of the numbers the growth is up 5%.
This growth is mostly offset by the climb in gross premiums written in our primary casualty business.
We're rating creases of 20% or above trend, but premiums declined as we are reshaping that book.
Liability lines, we're maintaining a tough stance and being highly selective and as a result, this quarter reflected the restructuring and non renewal of a couple of significant contracts.
We expect the reshaping to be substantially completed by the end of this year and if market conditions remain attractive, we would expect growth in 2025.
Lastly, in A&H, we know that we had double digit growth.
In A&H, we saw decreased line sizes as our clients retained a higher portion of their business.
This growth is being driven by the expansion of our North America patent insurance business.
I would note that for net written premiums the growth numbers are highly skewed in the quarter due to the closing of the monarch deal in the prior year quarter.
Pete: Overall, for insurance, we maintain our gross premiums growth outlook of being at the low end of the 7-12% range for the full year of 2024.
Our reinsurance team remains focused on the bottom line and we are pleased with the consistency in the results.
The insurance combined ratio was an outstanding 90.4% including 7% of cat and weather related losses.
Speaker Change: The combined ratio was 91, 4% with an ex cat and weather loss ratio of 66% both very solid.
Pete: Resulting in $99 million of underwriting income.
Our acquisition cost ratio of 29% reflects some positive variability around the impact of profit commissions associated with loss sensitive features.
Our current accident year lost ratio, X-Cat and Weather was 52.3% consistent with what we've reported in recent quarters.
Additionally, the acquisition cost ratio of 19.9% was up over the prior year, reflecting mix of business change as we favor short-tail lines.
Our reinsurance G&A ratio of three 6% is down from four 2% in the prior year quarter.
The improvement in G&A ratio is driven from lower spending and from higher third party capital fees, which increased to $14 million in the quarter up from $10 million a year ago.
as well as the impact of lower seating commissions from lower prolines in cyber business.
Now let's move on to the reinsurance segment.
Speaker Change: Investment income in the quarter was a record $205 million up 33% from the prior year. It was driven mainly by higher yield on a larger fixed income portfolio and in part by a good quarter for alternative investments.
Rose premiums were down 8.7% in the quarter. As I mentioned on our second quarter call, that quarter benefited from timing between renewals from the third quarter to the second quarter, creating a particularly difficult third quarter comparison.
Fixed income portfolio reported a $163 million of income.
Nonetheless, we maintain our expectation of mid-single-digit growth for the full year. And I would know that year-to-date, which takes some of the timing noise out of the numbers, the growth is up 5%.
Speaker Change: Up 23% 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 four 4% at quarter end, while the new money yield was four 9% and we continue.
and liability lines were maintaining a tough stance in being highly selective. And as a result, this court reflected the restructuring and non-renewal of a couple of significant contracts.
To generate excellent operating cash flow.
Speaker Change: Our effective tax rate in the quarter was 21%.
In E&H, we saw decreased line sizes as our clients retained a higher portion of their business.
Speaker Change: Higher than our typical historical rate as we had particularly strong profitability and a higher tax geographies.
I note that for net written premiums, the growth numbers are highly skewed in the quarter due to the closing of the monarch deal in the prior year quarter.
Priority for capital is to advance our strategic goals, whether it be growth opportunities, both organic and the hiring of new teams are investing in our capabilities such as at scale adoption of digital and analytic capabilities.
Pete: Our Reinsurance team remains focused on the bottom line and we are pleased with the consistency in the results.
The combined ratio is 91.4% for the next cat and weather loss ratio 66% both very solid.
Speaker Change: However, despite our share price hitting a new high in the quarter, we view repurchase of our own shares as an attractive option for utilizing our capital.
Our acquisition cost ratio of 20.9%, reflects some positive variability around the impact of profit commissions associated with law-sensitive features.
In the quarter, we returned $77 million to shareholders through $37 million of common share dividends and $40 million of share repurchases.
Our re-insurance G&A ratio of 3.6% is down from 4.2% in the prior year quarter
In closing, we're very pleased with the results today.
Speaker Change: For the year and we look forward to closing the year on a strong note and look forward to another strong year of 2025.
The Improvement and GNA ratio is driven from low-spending and from higher third party capital fees.
Speaker Change: And with that we'd be happy to take your questions.
which increased to 14 million in the quarter up from 10 million a year ago.
Speaker Change: We will now begin the question and answer session.
Pete: Investment income in the quarter was a record 25 million, up 33% in the prior year. It was driven mainly by higher yield on a larger fixed income portfolio and in part by a good quarter for alternative investments.
Session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two our first question comes from Andrew Klingerman with.
The fixing company portfolio reported 163 million of income, up 23% over the prior year for, benefiting from higher yields and strong operating cash flow.
Speaker Change: TD Cowen. Please go ahead.
Speaker Change: Hey, good morning so.
The overall outlook remains positive as our book yield on fixing come securities was 4.4% at Corret, while the new money yield was 4.9% and we continue to generate excellent operating cash flow.
Just thinking about the reserving.
It looks like you had some very nice for leases I think they were in the short tail lines and nothing occurred on long tail casualty.
Andrew Klingerman: So thinking about last year in the fourth quarter, you took a very sizable.
Our effective tax rate in the quarter was 21%. Higher than our typical historical rate, as we had particularly strong profitability in our higher tax geographies.
Charge on those long tail casualty lines.
Or at some point I think Pete just cited that youre being very selective in reinsurance and you non renewed several lot liability contracts. So the question for you is as we go into the fourth quarter I'm, assuming maybe another study what might give us some confidence that.
The priority for capital is to advance our strategic goals, 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.
Pete: However, despite our share price hitting a new high in the quarter, we view repurchased of our own shares as an attractive option for utilizing our capital.
That reserves are on track, particularly in the more recent accident years.
Andrew Good morning, it's Vince <unk>. Thank you for your question. So I think the confidence that we can convey first is the first nine months of reported results secondly, the context against which we took the charge in the fourth quarter of 2023, and the specificity that we detailed on the underlying.
In the quarter, we return $77 million to shareholders, $37 million of common shared dividends, and $40 million of shared purchases.
In closing, we're very pleased with the results today.
Speaker Change: And Peter, the year end, will have followed a close in the year on a strong note, and will have followed to another strong year 2025.
Lines of business and the resulting actions that we took not only in trend assumptions loss ratio picks and our view of risk you've seen through the first nine months in our insurance business a willingness to reshape our primary casualty business at the expensive of growth. Similarly throughout the first nine months we've commented strongly.
Pete: And with that, we'll be happy to take your questions.
Speaker Change: We will now begin the question in the answer section.
Pete: Fession.
To ask a question, you may press star then one on your touch-toe zone. If you are using a speaker zone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Andrew Clingerman with TD Cowan. Please go ahead.
Andrew Klingerman: On our position in reinsurance liability at the end of 2024, we will undertake our normal third party independent review of our reserve position, we are working with confidence towards the year end and I'll turn it over to Pete for any additional color.
Andrew Clingerman: Hey, Good Morning. So, just thinking about the reserve thing.
The only color I'd add a little bit of specificity as Andrew if we go back to what we did at year end 2023, I would remind everyone. We did take a sizable charge in our liability lines in total liability was 407 million out of the $4 25.
It looked like you had some very nice releases. I think they were in the short-tail lines and nothing occurred on the Long-tail casualty.
So, thinking about last year in the fourth quarter, you took a very sizable.
Speaker Change: Of that $4 $777 million was associated with years 'twenty to 'twenty. Two so we were not ignoring those years as we did our study at year end 'twenty three and actually took some significant action and then as I think about 24 since we knew what we were looking at in the underlying.
Charge on those long-tail casual T-lines.
I've heard some of planting peaches cited that you're being very selective and lean insurance and you non-renewed several liability contracts.
So the question for you is, is as we go into the fourth quarter, assuming maybe another study, what might give us some confidence that reserves are on track, particularly in the more recent, after the years.
Speaker Change: Our expected loss picks for 2024 representative of all of those learnings and actually in that fourth quarter. As we were ending 23, that's when we put the plan in place to remediate and reshape our primary casualty book. So so all of those actions were taken into account and were forethought for us coming into 'twenty four so have.
Pete: Andrew Good Morning, it's Vince Tizzio.
Thank you for your question. So I think the confidence that we can convey first is the first nine months of reported results.
Said that I'd also say, we do do a full reserve every quarter, we sit down with the actuaries and we actually sit down with the claims team the actuarial team and the underwriting team and have a very full drains up process and the patterns that we're seeing as a team reinforce what we did at year end 2023, and we feel good about that as well.
Secondly, the context against which...
Pete: We took the charge in the fourth quarter of 2023 and the specificity that we detailed on the underlying lines of business and the resulting actions that we took. Not only in trend assumptions, law ratio picks and our view of risk.
Andrew Klingerman: Sit here today.
Very helpful and my follow up is around the <unk>.
You've seen through the first nine months in our insurance business, a willingness to reshape our primary casually business at the expense of growth. Similarly, throughout the first nine months, we've commented strongly on our position in reinsurance liability.
Speaker Change: Property markets and insurance.
We're just hearing on a lot of these conference calls buzz about wholesaling being more competitive large global accounts, London market Vince.
At the end of 2024, we will undertake our normal third party independent review of our reserved position. We are working with confidence toward the year end and I'll turn it over to Pete for any additional color.
Speaker Change: You alluded to it earlier.
And Youre growing your property business I think I think net written premium you decided to 10% and 18% in the E&S. So whats, giving you the confidence there to kind of keep pushing that growth in insurance.
The only color I had, a little bit of specificity is Andrew, if we go back to what we did at year end 2023. I'd remind everyone we did take sizable charge in our liability lines in total liability was 47 million out of the 425.
Speaker Change: Andrew.
There's a number of factors that give us continued underwriting confidence firstly, it's the portfolio construction.
and I have that 407, 177 million was associated with years 20 to 22. So we were not ignoring those years as we did our study at year and 23 and actually took some significant action.
Andrew Klingerman: Certain of the sightings I shared in my opening remarks, it is the spread of risk geographically by construction type. The average net limits. It is our <unk>. It is our distribution of apparel combined with the fact that in the quarter, 36% of our written premiums came from non <unk>.
and then as I think about 24, since we knew what we were looking at in the underlying, you know, our expected lostics for 2024, the representative of all those learnings.
Cats. Moreover, it's a global business and we're able to we have between the different marketplaces. The principal property component of the Axis organization comes out of our E&S business, whereas you know we have freedom of form right. We continue to see exceptional submission activity I would acknowledge that there is a <unk>.
Pete: and actually in that fourth quarter as we were ending 23, that's when we put the plan in place to remediate and reshape our primary casualty book. So, although the actions were taken into account and were forethought for us coming into 24.
So having said that, I also say we do do a full reserve every quarter. We sit down with the actuaries and we actually sit down with the claims team, the actual team and the underwriting team and have a very full drains up process.
Moderating of price changes of course in the property market, but we continue to remain exceedingly premium adequate and meeting our risk adjusted return expectations.
Pete: and the patterns that we're seeing as a team reinforce what we did at year in 2023 and we feel good about that. You know, as we sit here today.
I'll leave it therapy, if you want to add Thats fine.
I would reinforce vince's point that as we look at property today. After multiple years of rate increases that we are looking at really solid premium adequacy across our property book.
Very helpful, and my follow-up is around the property markets and insurance.
Pete: Lula.
You know we're just hearing on a lot of these conference calls buzz about.
Speaker Change: Thanks, so much.
Speaker Change: Thank you Andrew.
You know, wholesaling being more competitive, large global accounts, London market, Vincent, you do a lot of years.
And the next question comes from Deane Chris.
Hello, with K BW. Please go ahead.
Deane Chris: Hi, I wanted to start with the core loss ratio in insurance.
and you're growing your property business. I think that written pre-mini, you decided 10% and 18% in the in-ass. So what's giving you the confidence there to keep pushing that growth in insurance?
I know it ticked up a bit year over year and sequentially I was just wondering if.
Speaker Change: That higher.
Speaker Change: Contemplate an updated view of loss trends or additional conservatism baked into those numbers.
Vincent: Andrew, there's a number of factors that give us continued underwriting confidence.
This is Vince good morning, So I would just tell you that the eight tenths of a point that you were referring to in our insurance business is really just the continued result of our prudence there was nothing.
Firstly, it's the portfolio construction.
Vincent: It's certain of the sightings I shared in my opening remarks. It is the spread of risk geographically by construction type, the average net limits.
Just positive or changing in the underlying I would draw your attention to our financial supplement and page 10, where you would see over the last several quarters.
Vincent: It is our PMLs. It is our distribution of peril combined with the fact that in the quarter 36% of our written premium came from non-cats.
Speaker Change: Our loss ratio ranges between 51, five and as high as 52 six.
There really isn't anything else to report Theres, some mix shift in that and Pete do you want to say anything else I would say, it's very consistent with what we've seen this this year Dean where we did increase the liability picks over 2023 based on what we saw at year end 'twenty three and that's still consistent this year, and then thats actually being somewhat offset by the mix change on.
Moreover, it's a global business and we're able to weave between the different marketplaces. The principal property component of the Access Organization comes out of our E&S.
Pete: Business, whereas you know we have freedom of form, right? We continue to see exceptional submission activity. I would acknowledge that there is a moderating of price changes, of course, in the property market, but we continue to remain exceedingly premium adequate and meeting our risk-adjusted return expectations.
<unk> on more shorter tail lines of business. So.
Speaker Change: What we've seen sort of sequentially is just there's some noise.
Speaker Change: Got it I appreciate that.
I'll leave it there if you want to add to it's fine. No, the only I'd read for Vince's point that as we look at property today after multiple years of rating increases that we are looking at really solid premium adequacy of course our property book.
And then in your prepared remarks, you sort of talked about.
Cyber insurance I was wondering kind of what you need to see in the market to sort of return to growth when theyre in take lots of a defensive stance within the insurance line.
Pete: Thanks so much.
Okay. This is Vince.
Thank you, Andrew.
Let me say first that we have a substantial cyber business.
And the next question comes from Dean Crisitello with KBW. Please go ahead.
We are where schools, we are well trained and strong underwriters what we've done in 2024 has reshaped the delegated component and that has resulted in an impact on growth. What we've done is focus more from a hygiene perspective on the larger concerns making certain that we can bring to bear our tech.
Dean Crisitello: Hi. I wanted to start with the core loss ratio in insurance. I know it's picked up a bit year over year and sequentially. I was just wondering if, you know, that higher pick, you know, contemplates an updated view of loss trends or it's just additional conservatism baked into those numbers?
Nicole acumen and make certain that these entities have the wherewithal to underwrite through the cycle with us. Additionally, we chose a partner an alpha secure to help us address what is indisputably a very large customer segment. The upper end of small lower end of middle and we have exceeding trust based on the risk analytics.
Dean Crisitello: This is Vince. Good morning.
So I would just tell you that the eight-tenths of a point that you're referring to in our insurance business is really just a continued result of our prudence.
There was nothing...
I would draw your attention to our financial supplement.
and Page 10, where you would see over the last...
That partnership importantly in the quarter.
Dean Crisitello: several quarters.
Our loss ratio ranges between 51.5 and as high as 52.6.
Speaker Change: Our U S cyber business grew about eight 3%.
And we continue to see plenty of opportunity, but frankly as we've said after crowd strike.
There really isn't anything else to report. There's some makeshift in that. And Pete, do you want to say anything else? Yeah, I'd say it's very consistent with what we've seen this year, Dean, where we did increase the liability picks over 2023 based on what we saw at year-end 23, and that's still consistent this year.
Speaker Change: We're working with humility in the class, we're making certain that our limit profile. Our risk selection criteria is maintained and I would give a shout out to our incident command or team that was launched back in June really providing some services to our our primary insured demonstrating being.
and then that's actually being somewhat offset by the mixed change on more shorter tail lines business. So, you know, any what we've seen sort of sequentially is just just some noise.
Available to them for inquiry, but also in the event of a loss. So we feel really good about the momentum that we're gaining we acknowledged that we're taking a short term hit on the written premium side, but we are a long term participant in the market.
Got it. I appreciate that.
And then in your prepared remarks, you sort of talked about, you know, the cyber insurance. I was wondering sort of what you need to see in the market to sort of return to growth when they're and take, you know, less of a defensive stance within the insurance line.
Thank you.
Speaker Change: Yeah.
And the next question comes from Elyse Greenspan with Wells Fargo. Please go ahead.
Okay, this is Vince.
Let me say first that we have a substantial cyber business.
Hi, Thanks, Good morning, My first question.
We are schooled. We are well.
Mentioning light on the insurance margin I think you guys did adjust your tax rate.
Vince Tizzio: trained and strong underwriters. What we've done in 2024 is reshape the delegated component, and that has resulted
At the end of last year and started this year with last year's review.
in an impact on growth.
Speaker Change: So I'm just trying to get a sense is there any movement that you saw during the year or anything.
What we've done is focus more from a hygiene perspective on the larger concerns.
Speaker Change: Now that you have in mind as we go into <unk>.
making certain that we can bring to bear our technical acumen and make certain that these entities have the wherewithal to underwrite through the cycle with us. Additionally, we chose a partner in Alpha Secure to help us address what is indisputably a very large customer segment, the upper end of small, lower end of middle, and we have exceeding trust based on the risk analytics of that partnership. Importantly, in the quarter, our U.S. cyber business grew about 8.3%.
Fuel in the here and then I think.
You guys had mentioned right.
You, obviously did a real deep dive last year that is.
With Dolby and in depth with you, but I think not as much of a <unk> can you just update us on like this year is <unk> relative to years past.
Speaker Change: Hey, Elyse this is Peter I'll handle that as we look at the data that we have this year as I mentioned in my prepared remarks, especially when we look at a lot of the keys, we changed where we changed our trend assumptions and we changed our development patterns those were really important and you've actually heard others in the industry now talking about that in 2024 based.
Vince Tizzio: and we continue to see plenty of opportunity. But frankly, as we've said, after CrowdStrike...
Upon the changes we made at the end of last year, we still feel very confident about those changes and what we did in our reserves and so that that gets to my comments about as we look at the data and we look at the patterns. We're seeing we still feel very positive about the changes that we did last year.
being available to them for inquiry, but also in the event of a loss. So we feel really good about the momentum that we're gaining. We acknowledge that we're taking a short-term hit on the written premium side, but we're a long-term participant in the market.
As we think about is going into year end, we will actually have once again.
Speaker Change: Outside actuarial firm give us an independent opinion and that will bring us to us. So we'll get another pair of outside eyes looking at our results.
Speaker Change: Thanks for watching!
We will not do the same I'll call. It in depth review, we did with the claims department last year, but I would say this that the interaction that we now have between our new claims had our new <unk> head of actuarial reserving and Vince and I and Dan Draper, our <unk> in the quarter highly interactive that process is solid and it happens every.
Vince Tizzio: Thank you. Thank you.
And the next question comes from Elise Greenstein with Wells Fargo. Please go ahead.
Hi, thanks. Good morning. My first question, you know, you were mentioning right on the insurance margin, right, that you guys, you know, did adjust your picks, right, you know, at the end of last year, started this year with last year's review.
Quarter, So we feel real good about where we go as we are heading into year end.
Speaker Change: Thanks.
Vince Tizzio: So, I'm just trying to get a sense, is there any movement that you saw during the year or anything, you know, that you have in mind as we go into just...
Speaker Change: And then on.
Just property pricing and I think my question is both primary and from the reinsurance side.
Vince Tizzio: the annual review this year. And then I think you guys had mentioned, right, you obviously did a real big deep dive last year that it would still be an in-depth review, but I think not as much of a deep dive. Can you just update us on, like, this year's process relative to years past?
I know you guys don't write the business operators can kind of see what what's going on there.
Her like mixed commentary so far this earning season just in terms of what could come out of that too pollyanna and Milton.
So what are your expectations for primary and then if you have a view on reinsurance property rates and just the impacts of the recent storms.
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Vince Tizzio: Hey Lisa, this is Pete. I'll handle that. You know, as we look at the data that we have this year, as I mentioned in my prepared remarks, especially when we look at a lot of the keys we changed, where we changed our trend assumptions and we changed our development patterns.
Speaker Change: Well I think Alicia good morning, It's <unk> I think we sized for you in our prepared remarks.
What we think the impact would be to our organization and you saw I think convincingly the $5 eight catastrophe ratio I think that the property market remains dynamic I think that there is across the globe receding right certainly occurring I think that.
you know, those were really important. And you've actually heard others in the industry now talking about that in 2024.
Vince Tizzio: Based upon the changes we made at the end of last year, we still feel very confident about those changes and what we did in our reserves. And so that gets to my comments about as we look at the data and we look at the patterns we're seeing, we still feel very positive about the changes that we did last year.
There is a lot of risk profile changes that are going on if you look at our portfolio of 35% is non cat, it's a competitive market, but bear in mind, we're predominantly through the wholesale channel here in the United States I don't really have a view of our property reinsurance other than to to share the sort of comments that came out of the <unk>.
Yeah, as we think about us going into year-end, we will actually, you know, have, once again...
outside actuarial firm give us an independent opinion and that'll bring us to us So we'll get another pair of outside eyes looking at our results
Speaker Change: Monte Carlo Conference.
We will not do the same, I'll call it in-depth review we did with the claims department last year.
But for axis.
As a vehicle for property remains on our insurance business. It's a global business. We've got about eight different businesses, providing one form or another of property or onshore in our E&S property units in the quarter performed well and theyre performing well against a very strong premium adequate portfolio with very good construction.
But I would say this, that the interaction that we now have between our new claims head, our new head of actuarial reserving, and Vince and I, and Dan Draper, our CUO in the quarter, highly interactive. You know, that process is solid and happens every quarter. So, we feel real good about where we go as we're heading into year end.
On underlying risk selection criteria, including limit deployment.
Thanks. And then on, you know, just property pricing and I think my question is both primary and from the reinsurance side.
Thanks, and then my last question.
Speaker Change: <unk> qualified.
Following the quarter in both segments, but there was some timing and mix initiatives that drove that.
I know you guys don't write the business but probably just you know can kind of see what's what's going on there. We've heard like mixed commentary so far this earnings season just in terms of what could come out of you know the two Helene and Milton. What are your expectations for you know primary and then if you have a view on you know reinsurance property rates and just the impacts of the recent storms?
Based on your view of underlying market conditions, how do you think premium growth will trend in both business and 25 I recognize it's a dynamic market and based on how you.
See things today.
What kind of growth expectations for next year.
Our lease expense again, what I would say is firstly, we're not done with our plan of 2025, but I think the expectation of our shareholders should have is one we're not going to grow at the expense of profitability. We've shown courage in 2024 to sacrifice top line in certain businesses. We've commented on them in the past public D&O.
Speaker Change: I think we sighed for you in our prepared remarks.
Speaker Change: what we think the impact would be to our organization and you saw I think convincingly the 5.8
Speaker Change: I think that the property market remains dynamic. I think that there is, across the globe, a receding rate.
Speaker Change: No primary casualty.
Delegated cyber just named three and then reinsurance our team is doing a bang up job at leaning into the specialty lines, having said that look we're a growth company, we still see opportunity to grow our business and we do see green shoots and I would really point importantly to the very good work of our North American team you may recall.
certainly occurring. I think that there is...
a lot of risk profile.
changes that are going on. If you look at our portfolio, 35% is non-CAT. It's a competitive market, but bear in mind we're predominantly through the wholesale channel here in the United States.
I don't really have a view of property reinsurance other than to share the sort of comments that came out of the Monte Carlo conference, but for Axis it's...
Speaker Change: Lease at the Investor Day, we commented on some $600 million of new initiatives and we felt pretty good about the sizing of those opportunities theyre, new and expanded initiatives, but in a discrete way in the third quarter, almost 40% of the growth of our insurance business that $69 million year over year came for.
Vince Tizzio: It's vehicle for property, remains on our insurance business, it's a global business. We've got about eight different businesses providing one form or another of property. Our onshore, our ENS property units in the quarter performed well, and they're performing well against a very strong premium adequate.
New and expanded initiatives. So I feel very good about the teams' readiness to profitably grow and 25 I'm not going to give you order or size at this point, but I think the bumper sticker is we're going to put up profits over premium growth and we do feel that there is plenty of market to grow our premium adequate portfolio.
portfolio with very good construction on underlying risk selection criteria including limit deployment.
Thanks. And then my last question, you know, premium growth, right, is, you know, did slow in the quarter on both segments, but there was some timing and...
Speaker Change: Thank you.
and business initiatives that drove that.
Thank you.
Speaker Change: based on your view of underlying market conditions, how do you think premium growth will trend in both businesses in 2025? I recognize it's a dynamic market but based on how you see things today, you know, what's kind of growth expectations for next year?
This concludes our question and answer session I would like to turn the conference back over to Vince <unk> for any closing remarks.
Vince: Thank you. Thank you for joining today's call in summary, it's been a strong quarter for axis and we're very proud of the financial results that we delivered they are aligned with our Investor day expectations. Finally, thank you to my colleagues at Axis worldwide for the great work that they're doing their focus on our customers our brokers.
Vince Tizzio: You know, Elise, it's Vince again. What I would say is, firstly, we're not done with our plan of 2025, but I think the expectation our shareholders should have is
Exceeding the service expectations. Thank you very much this completes today's call.
Vince Tizzio: delegated cyber to just name three. And in reinsurance, our team is doing a bang-up job at leaning into the specialty lines. Having said that, look, we're a growth company. We still see opportunity to grow our business.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
And we do see green shoots. And I would really point, importantly, to the very good work of our North American team. You know, you may recall, Elise, at the Investor Day, we commented on some $600 million of new initiatives.
And we felt pretty good about the sizing of those opportunities, their new and expanded initiatives. But in a discreet way, in the third quarter, almost 40% of the growth of our insurance business, that's $69 million year over year, came from new and expanded initiatives. So I feel very good about the team's readiness to profitably grow in 25. I'm not going to give you order or size at this point, but I think the bumper sticker
We're going to put profits over premium growth and we do feel that there's plenty of markets to grow our premium adequate portfolio.
and John O'Neill. Thank you. Thank you.
Thank you.
Vince Tizzio: Thank you.
Vince Tizzio: Thank you.
This concludes our question and answer session. I would like to turn the conference back over to Vince Tizzio for any closing remarks.
Thank you. Thank you for joining today's call. In summary, it's been a strong quarter for Axis.
And we're very proud of the financial results that we delivered. They're aligned with our Investor Day expectations. Finally, thank you to my colleagues at Axis worldwide.
for the great work that they're doing, their focus on our customers, our brokers and exceeding the service expectations. Thank you very much. This completes today's call.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.