2007 was a "milestone year" for the six-year-old Bermuda reinsurer, says CEO John Charman
AXIS Capital has reported net income available to common shareholders for the fourth quarter of 2007 of $306m, compared with net income of $281m for the corresponding period in 2006.
Operating income for the fourth quarter of 2007 was $296m, compared with $284m for the fourth quarter of 2006.
Operating income for the full year of 2007 was $1,050m, compared with $950m for 2006. This same item excluding foreign exchange gains, net of tax, for 2007 was $1,035m, compared with $919m for 2006.
The company’s combined ratio improved by 2.9 ratio points to 70.8% for the quarter and by 2.0 ratio points to 75.3% for the year.
Capital management initiatives during the year included $305m of share repurchases. Also, in December 2007, the board approved a 12% increase in the quarterly common dividend to $0.185 per common share.
Commenting on the fourth quarter results, John Charman, chief executive officer and president of AXIS Capital stated: “I am proud that our established, high-quality global franchise in both the insurance and reinsurance markets has delivered over $1bn in annual earnings in just the sixth year since our inception.
“This achievement is unparalleled in our sector. During this milestone year, AXIS increased diluted book value per share by 23% and we returned more than $400m to shareholders through share repurchases and dividends.
“During this extraordinarily turbulent time throughout the financial services sector, the strength and solidity of the AXIS balance sheet speaks for itself. The consistency, stability and diversity of our management team, our operations and our earnings stand us in extremely good stead for the challenging times ahead.”
The reinsurance segment reported underwriting income for the quarter of $102m, which was comparable with the fourth quarter of 2006. The segment’s combined ratio was 73.0% compared with 71.4% in the prior period quarter.
For the full year, the reinsurance segment reported underwriting income of $364m, up 17% from the prior year. This increase was primarily due to a higher level of net favorable prior year reserve development.
Our reinsurance segment reported gross premiums written in the quarter of $64m, down 61% from the fourth quarter of 2006.
The reduction was primarily related to increased retentions by cedants as well as a property proportional treaty written in the fourth quarter of 2006 with a 16-month term.
For the full year, the reinsurance segment reported gross premiums written of $1,551m, which was in line with the prior year.