Axis Capital Holdings Limited

Good day and welcome to the Access Capital Third Quarter 2024 Earnings Call. 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 star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Clifford Gallant, Investor Relations. Please go ahead.

Thank you. 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 activecapital.com. We 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 Tuzio, 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 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 the company's most recent report on the Form 10-K, or our quarterly 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 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 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 and their human toll. Our deepest thoughts are with the victims of Hurricane Helene and Milton. These catastrophes 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. 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. The sustained progress in our performance evidences that the strategic principles that we shared at our investor day are gaining traction. Our third quarter results highlight our consistency in 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. In the quarter, we posted a 5.8 percent 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. At present, we project 30 million in total losses from Hurricane Helene, and we expect a similarly sized market share of losses from Hurricane Milton. 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. In the quarter, we delivered an annualized ROE of 17.3 and 64.65 in book value per share, a 26 percent growth over the prior year quarter. We produced operating earnings per share of 271, a 16 percent increase over the prior year quarter. Our underwriting profitability continues to be strong with a combined ratio that was 93.1 for the quarter and 91.6 for the first nine months of the year. We produced a current accident year loss ratio of 61.5 for the quarter and 59.4 for the first nine months. 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. As I've commented in past calls, we are continuing to target premium adequate short tail lines that align with our underwriting capabilities and the needs of our brokers and customers. Our GA ratio was 12.1 in the quarter as compared to 13.5 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. And lastly, net investment income was a record $205 million. 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 90.4 combined ratio, an ex-cat accident year combined ratio of 83.8, and premium production of $1.5 billion, a 4.7% increase over the prior year period. This included $482 million in 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. 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 6.4 percent growth as compared to the prior year quarter. Across our casualty insurance lines, we are achieving a resurgence in rate while driving targeted growth in attractive markets. Within our insurance property lines, we grew by 10 percent 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. We're continuing to leverage this highly premium adequate class and are finding attractive opportunities despite increasing competition, particularly in our international business. 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 percent growth over the prior year quarter and 30 percent growth in policy count. 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 percent 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. As I've noted previously, within our global markets, we are evidencing increasing competition, notably within our marine, aviation, and property lines. Our underwriters continue to practice discipline and we're growing in the lines where we want to grow and see premium adequacy. 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. Let's move to reinsurance. In the quarter, we produced a 91-4 combined ratio, while delivering $36 million in underwriting profit. We drove growth within our short-tailed specialty lines, which were up 7 percent, propelled by new business in mortgage, credit, and surety. During the quarter, we generated $103 million in new business with 84 percent from our specialty lines. We produced $409 million in premium in the quarter, an 8.7 percent 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 evidencing the degree of rate change and seating commission changes that meet our expectations. As a result, in the third quarter, albeit not a 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 reshaped or non-renewed certain large seatings. Let's talk about how we see our position in the market today. The environment continues to be generally positive. The Axis portfolio is 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. Let me unpack this further. 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 make shift toward our highly premium adequate short tail lines, which in the quarter comprise 51% of our group gross premiums written, up approximately 4% as compared to the prior year quarter. 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, our view is supported by our insurance property segments portfolio construction, our average net limits of 1.7 million, our geographic spread of the business, and 35 percent of the premium written in the quarter was generated from non-CAT exposures. That's 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. U.S. primary casualty and U.S. excess casualty were up 20% and 12% respectively. In cyber, 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%. 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 continue to leverage our ability to deploy cyber capacity through both our underwriting businesses, 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. 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 quartile diluted book value per share growth. It reinforces our confidence in the strategy that we discussed at Investor Day. 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 to produce consistent profitable growth and mid-teens ROE. 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. Our reduced G&A ratio in the quarter relative 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. As part of our technology investments, we are focused on leveraging the transformative power of AI throughout our business. A key opportunity Aerie is leveraging AI to enhance our submission and underwriting processes, and we recently announced expanded partnerships with MIA, an AI-driven document and email ingestion platform, and Sixfold to help augment our data submission processing. 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. We also announced the appointment of a strong successor to our longtime 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. In Sarah Mitchell, we have identified an excellent leader to succeed Mark, and we look forward to soon welcoming her to our company. Finally, Our reserves remain 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, 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 of eye, we are pleased with the progress. 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.