AXIS CEO Benchimol says COVID-19 losses overshadowed 'an excellent quarter'
Losses from the COVID-19 pandemic overshadowed what otherwise would have been "an excellent quarter" for AXIS Capital Holdings, according to chief executive Albert Benchimol. The re/insurer's outlook is revised to 'negative' by Fitch Ratings due to its deteriorating combined ratio and foreseeable results.
The Bermuda-based re/insurer reported a net loss of $185 million for the first quarter of 2020, compared with the net income of $98 million in the prior year quarter.
The firm's gross premiums written decreased by 6 percent year on year to $2.4 billion, with a decline of 14 percent in the reinsurance segment, only partially offset by an increase of 11 percent in the insurance segment.
The company suffered pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, of $300 million. This included $235 million loss due to the COVID-19 pandemic, primarily associated with property related coverages, event cancellation, and accident and health coverages.
Overall, the combined ratio for the first quarter 2020 reached 119.8 percent, compared with 96.9 percent in Q1 2019.
Benchimol said: "As our industry and society continue to navigate the challenges brought on by COVID-19, our primary thoughts are with the people, families and communities that have been directly impacted by the pandemic, and with the health and safety of our staff.
"Like all (re)insurers, our financial results have been impacted by COVID-19. The losses from the pandemic overshadowed what otherwise would have been an excellent quarter for AXIS. The first quarter was highlighted by a more than 4 point improvement in our ex-PGAAP current accident year ex-cat combined ratio with better results across our losses, acquisition costs and general and administrative expenses. This continued improvement is driven by our efforts over the past few years to enhance profitability within our portfolio, enhance operating efficiency, and deliver growth across our most attractive lines.
Benchimol added: "We have a well-balanced book of business, great relationships with our producers, and – despite the remote work environment – we are continuing to deliver the same high level of service to our customers.
"Our actions are grounded in our corporate purpose, a belief that we exist to help people, organizations and communities during their time of need. We proudly stand by our clients and partners in distribution as we together navigate this transformed environment."