Axis Capital Holdings Limited

Good morning and welcome to Axis Capital third quarter 2020 earnings call. All participants will be in listen-only mode. Any assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be opportunity to ask questions. Please note that this event is being recorded. I'd like to turn the conference over to Mr. Matt Worman, head of investor relations. Please go ahead.

Thank you, Nick. Good morning, ladies and gentlemen. I'm happy to welcome you to our conference call to discuss the financial results for Axis Capital for the third quarter and period ended September 30th, 2020. R&D's press release, financial supplement, and 10Q were issued yesterday evening after the market closed. If you'd 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. This is also available through the investor information section of our website. With me today are Albert Benchimol, our President and CEO, and Pete Vogt, our CFO. Before I turn the call over to Albert, I will 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 companies' most recent report on Form 10-K and other reports the company files with the SEC. This includes the company's Form 10-Q, the quarter ended September 30, 2020, as well as the additional risks identified in the cautionary note regarding forward-looking statements in our earnings press release. We undertake no obligation to update or revise publicly any forward-looking statements. In addition, this presentation may contain non-GAAP financial measures. Reconciliations are included in our earnings press release and financial supplement. With that, I'll turn the call over to Albert.

Thank you, Matt. Good morning, everyone, and thank you for joining our third quarter conference call. This has been a year of two stories for Axis, one of exceptional catastrophe activity and but also one where our repositioning over the past few years, which continues into 2020, is delivering demonstrably strong positive impact. First and foremost, our hearts go out to all who've been impacted by the pandemic, storms, wildfires, and other calamities. We're committed to delivering on the promise we've made to our customers, to stand by them in times of need with our industry-leading claims service. On a reported basis, this has been one of our more challenging years, with a combined ratio of 115 in the quarter and 110 for the year to date. The reasons are evident to all of us. We're experiencing the impacts from the global COVID-19 pandemic, and this is compounded by a highly active year in terms of natural catastrophes. Indeed, with Storm Zeta, 2020 has matched 2005's record in the number of named storms. Our CAT losses in the quarter were $240 million, or 22 points. For the year to date, we've recognized $576 million in combined CAT and COVID losses, contributing 18 points to our year-to-date combined ratio. On the other hand, it's also a year of undeniable progress for Axis. Our ex-CAT current year combined ratio at 92.4 for both the quarter and the year to date is clear evidence that our repositioning is delivering tangible results. It's a five-point improvement over the prior year, continuing the positive trend that we've been seeing for several quarters. On an XCAD basis, we're seeing improvement in almost every line. Even in our property and catastrophe lines, our recent risk and volatility reduction activities have served us well. By way of illustration, In 2018, industry cat losses were about $71 billion, and we lost 9.6% of common equity to cats. Last year, industry cat losses were about $50 billion, and we lost 8.3% of common equity to cats. This year, we estimate year-to-date industry cat losses at about $65 billion, excluding COVID. And while industry cat losses are close to 30% higher than the full year 2019, our common equity loss to cats this year was down to 7.1%. Even if we had no further cat losses in the fourth quarter, that would make 2020 the fifth worst year for industry cat losses in the history of our company. However, in terms of common equity loss to cats, 2020 would rank only 10th. This improvement is primarily due to the ongoing reduction of our catastrophe-related exposures, most recently in the frequency end of the curve. While this naturally impacts our overall premium growth, we believe it comes with the benefit of a stronger portfolio that delivers both superior profitability and lower volatility. We're confident that our improving trend can be sustained as we're rigorously pushing for improved pricing and growing where rates, terms, and conditions are adequate, but also continuing to exercise discipline in strengthening, reducing, or exiting books of business that do not offer sufficient profit potential. Our industry segment grew gross premiums written by 5%, and we saw strong rate increases as well as significant amounts of new business growth. This was offset by actions we took to prune our portfolio, coupled with headwinds we faced due to the economic climate. All in, we're confident that we're growing where we should be, and taking disciplined actions where necessary. Our reinsurance segment had a 23 percent reduction in gross premiums written in a lower volume quarter. This is the continuation of the repositioning we've been reporting to you since the beginning of this year, accentuated by some timing issues and premium adjustments. On a year-to-date basis, reinsurance GPW is down 12 percent, in line with the 10 percent reduction that we reported in the six-month period. Peter will speak more about the movements by line in this report. But before I pass the floor on to Peter, I want to highlight that we are effectively executing on the COVID-19 technical response plan that we shared with you earlier in the year. You will recall the plan had three operating priorities. The first was to stand up the organization to sustain operating capabilities and client centricity. Our staff and IT team have responded superbly and our customers are telling us that we haven't missed a beat. We're receiving and processing more submissions and binding more policies this year, even under remote work conditions, a testament to the agility of our team. The second operating priority was to minimize the downside. This was reflected in lower PMLs across the curve and increasing our underwriting guidelines to reduce exposure to industries that were most likely to be affected by the pandemic. or its economic impacts. A material reduction in our credit lines is a natural consequence of these actions. And the third operating priority is to prepare access to participate strongly in the recovery. And we're well on our way to doing just that, identifying and adding resources to lines and markets where we expect attractive conditions. All the while, we remain on the sidelines or continue to improve books that are not yet providing the desired results. As I'll discuss later when I report on market conditions, this is affirming, but not a hard market. Lower levels of favorable development, social inflation, the pandemic, more frequent natural catastrophes, and lower interest rates drive the need for substantial price increases. And in many lines, it may take increases beyond 2021 before we reach adequate risk-adjusted returns. This remains an underwriter's market. There are excellent opportunities out there, but there are still many unattractive lines and markets to be avoided. With the strength of our talent, our positioning in the markets showing the most impressive corrections, and our relationships with our producers and customers, we're confident that Access is well-placed to make the most of the attractive opportunities and to continue to improve our book of business and results. as we build a global leader in specialty risks. I'll now pass the floor to Pete, who will walk us through the financials, and I'll come back to talk more about pricing, and I'll have our Q&A. Pete?