Axis Capital Holdings Limited

Good day and welcome to the second quarter Access Capital 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 your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Cliff Gallant, Head of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to our second quarter, 2026 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 Tizzio, our President and CEO, and Matt Kirk, our CFO. 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 risk, 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 by 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. With that, I'll turn the call over to Vince.

Thank you, Cliff. Good morning, and thank you for joining our call. Before sharing my prepared remarks, I want to first acknowledge the incredible efforts expended by my colleagues around the world in delivering strong first half results that are aligned to our strategic focus and ambition. This was a solid quarter where Axis continued its track record of delivering consistent profitable growth, and our results included 14.3 annualized operating return on equity, A 15% year-over-year growth in diluted book value per share, our 15th consecutive quarter in doing so. Our performance was generated against the backdrop of a market impacted by several trends. As has been widely reported in the industry, market conditions are softening and we are observing increasing competition and pricing pressure more broadly across the micro markets I've described in past calls. However, Terms and conditions and limits have remained largely intact, and Axis continues to lean into attractive specialty markets where we see premium adequacy and risk-adjusted returns that meet our standards. Second, the Iran conflict has generated year-to-date industry losses that is believed to be in the range of $2.5 to $3 billion. In the quarter, Axis reported $31 million in losses from this conflict, which is classified as a CAC. and many more. Both are specialist classes where Axis participates as a lead market with a strong and long established reputation. Thus far, the business remains premium adequate and I'll note that our underwriting controls are among the most conservative in the market and that our team is very closely monitoring the situation on the ground. Lastly, This was a quarter with some 21 billion in industry catastrophe losses, which were lower year over year. But the composition continues to shift. 18 billion of the industry cat losses in the quarter came from severe convective storms. These perils are becoming more frequent, more geographically dispersed, and more costly per event. And during the quarter, Axis absorbed 49 million in losses from FCS activity, which was well within our expectations. Let's now unpack the quarter. Access generated a 93 combined ratio, 89% current accident year ex-cat combined ratio, 10.9 GA ratio, which is in line with our expectations, and we produced gross written premiums of $2.7 billion, up 6% over the prior year. Our growth was disciplined and targeted towards specialty short lines, predominantly within our insurance segment. In the quarter, Short Tail represented 57% of our premiums, including 59% in insurance and 51% in reinsurance. Moreover, the growth was achieved even as we cycle managed within our reinsurance portfolio, reducing our premiums by 25% as we continued to practice vigilance in liability and professional. Our growth in the quarter was aligned with our strategic focus, and supported by the investments that we've made in recent years to broaden our capabilities. Our expanded classes, which are largely in short tail lines, continue to deliver profitable growth as we further expanded our share in markets where access has historically been underrepresented. Second, as discussed in previous calls, our access capacity solutions capability is continuing to match our underwriting expertise and third-party capital appetite to meet our customers' needs. ACS is enabling greater gross lines on selected classes that are premium adequate while maintaining our net underwriting appetite. Fee income from ACS was close to $4 million in the quarter and we expect this to grow to about $17 million for the full year. Let's now move on to our segment results and we'll begin with insurance. It was a strong quarter for our insurance business, highlighted by premium generation of $2.2 billion which was up 15% over the prior year. Underwriting income of 119 million, a 90% combined ratio and a current accident year XCAT combined ratio of 84.5. Unpacking our insurance results further, our core insurance portfolio generated about 2% of the growth in the quarter. ACS contributed about 8% and we drove about 5% of our insurance growth from our expanded classes. Our progress within insurance is achieved as we further lean into our multivariate channels of distribution. Indeed, we've developed and introduced propositions that give us greater and more diversified access to targeted specialty lines in our key markets. In North America, within the wholesale channel, our reputation and brand recognition and wallet share is substantial. And in the quarter, 68% of our North American insurance premiums came from wholesale. Submission flow remains healthy at 20%. We are pursuing a number of attractive opportunities within the North American retail segment that are not in conflict with our wholesale business. And nearly 19% of our North American insurance premiums in the quarter came from retail. And we see continued upside potential. Our delegated business was flat year over year, representing about 13% of premiums. And finally, and our London market business. We are a top syndicate with lead propositions in a number of lines and maintain a largely short tail portfolio with highly specialized capabilities. Let's now step back and look more deeply at insurance market conditions and Axis's posture. In my outset comments, I noted the softening market conditions that we are observing are now broadly across most of the market. For Axis, we are leaning into our diversification of product, customer segments, and deep specialty expertise to drive disciplined and targeted growth while cycle managing where needed. I'll now provide observations across several lines of business. Within property, in the quarter, gross premiums were up 21%, fueled in substantial part from our ACS capability. On a net basis, our book has shrunk by 15% in the quarter as we increased our reinsurance sessions on our property treaty. within our property portfolio, rates were down 17% in the quarter. As this market now transitions more rapidly into a softer environment requiring deepened cycle management, we take confidence in our starting point. We've built a portfolio with premium adequacy and an average net limit that remains in low single digit millions that is well balanced in peril and geographic mix and also backed by a CATXOL protection that attaches at 100 million per event. In liability, we grew 8% in the quarter, primarily through rate increases of 7%. Our premium dispersion was spread across USXS Casualty, a substantial business. It shrunk 4% and delivered rate change of 8%. This book remains premium adequate. Our dedicated USXS Casualty Lower Middle Market Unit delivered 22% growth and is also premium adequate. In our previously announced RAC re-transaction, liability lines contributed 21 million and delivered a rate change of 10%. I'll note that our primary casualty business, an area where we've maintained a cautious stance, has shrunk by 8% on a year-to-date basis and has yielded a 9% rate increase. In professional, growth in the quarter was 16%, with a rate increase of 2%. A key driver was E&O, where we continue to lean into our expanded classes, including Allied Health and Design Pro to name two. Our growth in professional was also supported through the RAC RE partnership. Within cyber, in the quarter, we reduced premiums by 5%. Rate reductions in cyber continued and were 7%, adding pressure to premium adequacy. At a group level, We've reduced our premiums by 30%. Let's now move to our reinsurance segment. In the quarter, we executed against the targeted specialist reinsurance strategy that we've been discussing with you over the last several years. In the second quarter, Access Re generated its 10th consecutive quarter of profitability. We produced $440 million in premiums and more than half, 51% of our production, came from specialty short-tail lines. We generated 90 million in new business with 94% coming from short-tail lines and we produced a 94-5 combined ratio. We're enjoying excellent premium adequacy across all of our specialty lines with the exception of our A&H employer stop-loss business where we are seeing continued pressure and competition. This quarter, approximately 22% of our reinsurance premiums for the year were up for renewal. As noted earlier, we shrunk our reinsurance book by 25% in the quarter. Nearly all the reduction came from lines that we've previously pointed to as being cycle managed. Professional lines contributed 58% of the reduction in premiums and liability contributed 42%. Our reinsurance strategy and value proposition remains consistent as we look to the future Our focus continues to be on specialist classes supported by highly selective and disciplined liability and professional appetites. Stepping back across the company, we continue to add talent to complement our team and support our ambition. I'll share just two recent examples. Tony Izzo joined Axis as our chief commercial officer and is helping us even further elevate an already strong global distribution platform. Within our operations team, we have added Raheel Jagani as our head of AI and technology strategy, serving in a new leadership role that will be the bridge between strategy, business value, and execution of AI and emerging technologies across our enterprise. I'll add that for three years through our How We Work program, we have strengthened Axis' operating foundation, simplifying processes, embedding agile ways of working, and piloting AI across underwriting, claims and operations. By creating the group COO role announced last quarter, we took a deliberate and strategic step to bringing together the functions that shape enterprise execution as an integrated team under a single leader. This is a structural response to how our industry and the risk environment within specialty is evolving. And it is enabling us to scale AI, protect underwriting discipline, and translate transformation investments into measurable financial outcomes. In the third quarter, we will celebrate the 25th anniversary of Axis. Our company was born in the aftermath of September 11th, when our founders answered the call within the market for specialized products during a time of global uncertainty. Just as we did then, today, Axis stands apart for its specialist capabilities, its talents, and its expertise in helping our customers navigate a volatile world. In the last several years, Axis has made tremendous strides propelled by our discipline and consistency in execution, its straight spoken style of management, its strong caliber of talent, excellent customer service and our relentless focus on delivering value to our shareholders over time. We covet the trust that we've earned and we will endeavor to further advance our strategy and realize our ambition of being the best specialist underwriter in the world. In closing, this was a solid quarter for Axis. We acknowledge the market has become softer and we have a strong and resilient portfolio that is built for the market ahead. We continue to see attractive risk-adjusted return business to target and maintain within our portfolio. We also expect to continue to realize the benefits from the investments we're making in products, distribution, technology, and talent. Finally, our strategy is predicated on generating long-term value creation for our shareholders. With that, I'll now pass the floor to Matt for his comments.