Axis Capital Holdings Limited

Good morning and welcome to the Access Capital third quarter 2025 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. And to withdraw your questions, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Cliff Gallant. Head of Investor Relations and Corporate Development. Please go ahead, sir.

Thank you. Good morning, and welcome to our third quarter 2025 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 accesscapital.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 Vo, our CFO. 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 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. In the third quarter, our team once again delivered excellent results as the momentum and our performance further accelerated. The transformation we have undertaken has now demonstrated sustained profitable growth underpinned by an enhanced operating platform with new capabilities, products, and a highly focused team. In the quarter, we delivered a 14% year-over-year increase in diluted book value per common share at $73.82. 18% annualized operating return on equity. 20% increase in operating earnings per share over the prior year quarter at 325. Premiums of $2.1 billion, our highest third quarter ever, up nearly 10% over the prior year, including $670 million in new business. And finally, a combined ratio of 89.4. We are achieving these results in a changing risk landscape, with many different micro markets at play. Our strategy positions us well to compete in this environment. Premium adequacy across our aggregated portfolio is solid. We are actively cycle managing and leaning in where it is prudent. The investments we're making in people, products, and platforms are creating value. Indeed, the further acceleration of our premium growth in insurance is bolstered by our new and expanded lines of business. Additionally, we continue to draw upon third-party capital partnerships while bringing innovative product capabilities to meet the diverse needs of our distribution partners. By example, we launched Access Capacity Solutions, which during the quarter transacted its first deal, a partnership with Ryan's specialty. Through our How We Work program, we are continuing to strengthen all aspects of our operations and how we go to market. In the quarter, we made continued strides in modernizing our underwriting platform while leveraging emerging technologies and AI to drive efficiency, improve decision-making, and support scalable growth. I'll share several examples. We've implemented a highly modern application platform across all business units and functions with very little legacy technology that is improving speed to market, heightening accuracy, and reducing manual effort and cost. We are presently applying AI solutions in all forms, custom and packaged, within applications, on user desktops, and in all cases driving productivity increases. We've deployed the first release of our next generation underwriting platform in North America, advancing how we ingest, route, and review submissions while enhancing our overall efficiency. These advancements reflect the pledge that we made at our investor day to invest $100 million into our operational infrastructure. Capitalizing on our excess capital position, we have been accelerating and expanding these efforts, particularly in supporting our new business lines. We see these investments as a key to advancing our profitable growth ambition. We are also deepening our relationship with our distribution partners. In a broker survey conducted this year, our customers recognized Axis with top quartile net promoter scores while distinguishing our company for its specialty leadership and ranking us ahead of the market for our underwriting knowledge and solutions-oriented approach. None of these results can be achieved without a highly engaged and disciplined team. The Axis culture we've developed and deep commitment of our people is exciting and enabling our progress. During the quarter, we have added talent to our underwriting teams throughout the globe. And on the corporate side, we notably announced Matt Kirk as our future CFO, succeeding Pete. Let's now dig deeper into our segment results. We'll start with insurance. Our insurance segment, again, delivered an outstanding quarter, highlighted by record third quarter premium production of $1.7 billion, or 11% over the prior period, new premium written of $570 million, a current accident year XCAT combined ratio of 83.3, and record underwriting income of $153 million, up 55% over the prior year. In North America, we produced stellar results with premiums up 12% and submission volume up 18% in the quarter. as we continue to capitalize on the investments we've made in expanding our product offerings and in enhancing our underwriting platforms, yielding greater efficiency gains. Our lower middle market strategy is generating sustained acceleration and strengthened value. In our global markets division, results were strong and premiums were up 9%. In the quarter, our growth came from lead product positions in the London market, notably marines, energy, and construction. Importantly, these classes remain premium adequate and have a robust pipeline. With respect to broader market conditions within insurance, we continue to observe an evolving risk environment. But overall, the competitive landscape is disciplined. Let's unpack this further for access. In liability, rates were up 10% in the quarter with 8% growth. We generated a 12% rate increase and 11% growth within our U.S. excess casualty business. Within this business, we continue to lean into the highly premium adequate wholesale lower middle market segment. Our casualty portfolio is well managed, and within wholesale distribution, our excess casualty unit is recognized for its thought leadership and disciplined underwriting. As respects property, we grew our property book 8% with rate changes varying widely across our many classes. Illustrating this, we see greater competition in large account E&S business, but are still observing rate increases in small account business in our international book. We serve customers through eight property underwriting units across the world, which are all seeing differing degrees of competition, and we benefit from the diversity of our customer segmentation in these units. An increasing contributor is our lower middle market property unit, which evidenced continued growth in the quarters. Our property underwriting strategy remains disciplined and enjoys premium adequacy, an average net limit in the low single digits, a well-balanced peril and geographic mix, and is backed by a CAT XOL protection that attaches at $100 million per event. In professional, we grew 18%. The majority of our growth came from transactional liability and E&O. We are encouraged by the increasing contributions that we are continuing to see from our new and enhanced product offerings, including design professional, allied health, and environmental. As respects management liability, we continue to drive reasonable growth within our private D&O business. As respects public D&O, consistent with the last quarter comments, we continue to observe that pricing is flattening out. Within cyber, we observe industry ransomware attacks as increasing, but thus far not being reflected in our claim counts. That said, we are seeing the increased competition of MGAs and surplus capacity have placed unwarranted downward pressure in pricing dynamics. We have maintained our underwriting discipline, which is reflected in our selective approach in the quarter. In addition, we have now completed the reshaping of our delegated cyber book, We are strengthening our capabilities in our cyber risk advisory services, which help policyholders increase their organizational preparedness and resilience. We are focused on strengthening our SME presence globally and notably in the United States through our partnership with Alpha Secure. As respects our reinsurance business, we continue to generate strong bottom line performance with our seventh straight quarter of consistent profitability. Our reinsurance underwriting strategy remains highly disciplined and focused on select specialty lines. In the quarter, we produced 6% premium growth. Specialty short tail lines contributed 91% of our new business premiums, a combined ratio of 92, and underwriting income of $35 million. Reflective of our disciplined approach, we are increasingly vigilant in navigating liability and professional lines. Consistent with past comments, we generally do not view seating commissions nor the rate environment for these lines, particularly in North America, to be in keeping with our return expectations. Taken together, this was another strong quarter for Axis. Across the micro markets of specialty insurance and reinsurance, we see an increasing need for tailored risk solutions. Thus, we see Axis as a very well-positioned to support our customers and importantly, our distribution partners, while at the same time, rewarding our shareholders with sustained and attractive returns. We are building on our momentum. We are leveraging our capital position, the talent of our team, and the support of our distribution partners to lean into our new and expanded lines as well as identifying new avenues to drive profitable growth. We are investing in our infrastructure and operations, embracing technology and AI. We're excited for our future, and we believe the best is yet ahead for Axis. And with that now, I'll pass the floor to Pete for his comments.