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What changed in AXIS CAPITAL HOLDINGS LTD's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AXIS CAPITAL HOLDINGS LTD's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+637 added−607 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-27)

Top changes in AXIS CAPITAL HOLDINGS LTD's 2024 10-K

637 paragraphs added · 607 removed · 510 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

148 edited+32 added−48 removed159 unchanged
Biggest changeBUSINESS In this Form 10-K, references to "AXIS Capital" refer to AXIS Capital Holdings Limited and references to "we", "us", "our", "AXIS", the "Group" or the "Company" refer to AXIS Capital Holdings Limited and its direct and indirect subsidiaries and branches, including: AXIS Specialty Holdings Bermuda Limited, AXIS Specialty Limited ("AXIS Specialty Bermuda"), AXIS Specialty Limited (Singapore Branch), AXIS Specialty Investments Limited, AXIS Specialty Investments II Limited, AXIS Specialty UK Holdings Limited, AXIS Managing Agency Ltd., AXIS Corporate Capital UK Limited (corporate member which provides 70% capital support to AXIS Syndicate 1686 ("Syndicate 1686")), Novae Group Limited, AXIS UK Services Limited, AXIS UK Services Limited (Irish Branch), AXIS Underwriting Limited, AXIS Corporate Capital UK II Limited (corporate member which provides 30% capital support to Syndicate 1686), AXIS ILS, Ltd.
Biggest changeBUSINESS In this Form 10-K, references to "AXIS Capital" refer to AXIS Capital Holdings Limited and references to "we", "us", "our", "AXIS", the "Group" or the "Company" refer to AXIS Capital Holdings Limited and its direct and indirect subsidiaries and branches, including: AXIS Specialty Holdings Bermuda Limited, AXIS Specialty Limited ("AXIS Specialty Bermuda"), AXIS Specialty Limited (Singapore Branch), AXIS Specialty Insurance Limited ("AXIS Specialty Insurance Bermuda"), AXIS Specialty Investments Limited, AXIS Specialty Investments II Limited, AXIS Specialty UK Holdings Limited, AXIS Managing Agency Ltd., AXIS Corporate Capital UK Limited (corporate member that provided 70% capital support to AXIS Syndicate 1686 ("Syndicate 1686") through December 31, 2024), Novae Group Limited, AXIS UK Services Limited, AXIS UK Services Limited (Irish Branch), AXIS Underwriting Limited, AXIS Corporate Capital UK II Limited (corporate member that provided 30% capital support to Syndicate 1686 through December 31, 2024 and 100% capital support to Syndicate 1686 effective January 1, 2025 and 100% capital support to AXIS Energy Transition Syndicate 2050 ("Syndicate 2050")), AXIS ILS, Ltd., AXIS Reinsurance Managers Limited ("AXIS Reinsurance Managers"), AXIS Specialty Holdings Ireland Limited, AXIS Specialty Europe SE ("AXIS Specialty Europe"), AXIS Specialty Europe SE (UK Branch), AXIS Specialty Europe SE (Belgium Branch), AXIS Re SE, AXIS Re SE, Dublin (Zurich Branch) ("AXIS Re Europe"), AXIS Re SE Escritório de Representação No Brasil Ltda., AXIS Specialty Global Holdings Limited, AXIS Specialty U.S.
Cover is provided for a range of risks including data recovery and bricking, cyber-crime, liability and regulatory actions, business interruption, extortion, reputational harm, Payment Card Industry Data Security Standard and media liability. • Marine and Aviation : Marine provides cover for a range of exposures including offshore energy, renewable offshore energy, cargo, liability including kidnap and ransom, fine art, specie, and hull war.
Cover is provided for a range of risks including data recovery and bricking, cyber-crime, liability and regulatory actions, business interruption, extortion, reputational harm, Payment Card Industry Data Security Standard and media liability. • Marine and Aviation : Marine provides cover for a range of exposures including offshore energy, offshore renewable energy, cargo, liability including kidnap and ransom, fine art, specie, and hull war.
Our PMLs include assumptions regarding the location, size and magnitude of an event, the frequency of events, the construction type and a property’s susceptibility to damage and the cost of rebuilding the property. Loss estimates for non-U.S. zones will be subject to foreign exchange rates, although we may mitigate this currency variability from a book value perspective.
Our PMLs include assumptions regarding the location, size and magnitude of an event, the frequency of events, a property's construction type and susceptibility to damage, and the cost of rebuilding the property. Loss estimates for non-U.S. zones will be subject to foreign currency exchange rates, although we may mitigate this currency variability from a book value perspective.
We mitigate foreign currency risk by seeking to match our estimated insurance and reinsurance liabilities payable in foreign currencies with assets, including cash and investments that are denominated in the same currencies. Where necessary, we use derivative financial instruments for economic hedging purposes.
We mitigate foreign currency risk by seeking to match our estimated insurance and reinsurance liabilities payable in foreign currencies with assets, including cash and investments that are denominated in the same foreign currencies. Where necessary, we use derivative financial instruments for economic hedging purposes.
The primary focus of the underlying business is general liability, workers' compensation, auto liability, and excess casualty. • Accident and Health: includes personal accident, specialty health, accidental death, travel, life and disability reinsurance products which are offered on a proportional and catastrophic or per life excess of loss basis. • Professional Lines: provides protection for directors’ and officers’ liability, employment practices liability, medical malpractice, professional indemnity, environmental liability, cyber, and miscellaneous errors and omissions insurance risks.
The primary focus of the underlying business is general liability, workers' compensation, auto liability, environmental liability, and excess casualty. • Accident and Health: includes personal accident, specialty health, accidental death, travel, life and disability reinsurance products which are offered on a proportional and catastrophic or per life excess of loss basis. 7 • Professional Lines: provides protection for directors’ and officers’ liability, employment practices liability, medical malpractice, professional indemnity, cyber and miscellaneous errors and omissions insurance risks.
Our comprehensive benefits packages include health and welfare plans for employees and their families, retirement savings plans with employer contributions and work-life benefits, including parental leave policies, flexible work arrangements for eligible employees and charitable matching programs. At AXIS, we are committed to fair pay and delivering equal pay for equal work regardless of gender, race or other personal characteristics.
Our comprehensive benefits packages include health and welfare plans for employees and their families, retirement savings plans with employer contributions and work-life benefits, including parental leave policies, flexible work arrangements for eligible teammates and charitable matching programs. At AXIS, we are committed to fair pay and delivering equal pay for equal work regardless of gender, race or other personal characteristics.
We manage material third-party vendor risk, by, among other things, performing a thorough risk assessment on potential large vendors, reviewing a vendor’s financial stability, ability to provide ongoing service and business resilience planning. 30 Capital Management Our capital management strategy is to maximize long-term shareholder value by, among other things, optimizing capital allocation and minimizing our cost of capital.
We manage material third-party vendor risk, by, among other things, performing a thorough risk assessment on potential large vendors, reviewing a vendor’s financial stability, ability to provide ongoing service and business resilience planning. Capital Management Our capital management strategy is to maximize long-term shareholder value by, among other things, optimizing capital allocation and minimizing our cost of capital.
Aviation provides hull and liability, and specific war cover primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers. • Accident and Health: includes personal accident, travel insurance and specialty health products for employer and affinity groups, and pet insurance. • Credit and Political Risk: provides credit and political risk insurance products for banks, commodity traders, corporations and multilateral and export credit agencies.
Aviation provides hull and liability, and specific war cover primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers. • Accident and Health: includes personal accident, travel insurance and specialty health products for employer and affinity groups, and pet insurance. 6 • Credit and Political Risk: provides credit and political risk insurance products for banks, commodity traders, corporations, and multilateral and export credit agencies.
Intermediating contracts of insurance requires authorization by the FCA. 14 Under the Financial Services Act 2012, the FCA is a conduct regulator for all U.K. firms carrying on regulated activity in the U.K. while the PRA is the prudential regulator for U.K. banks, building societies, credit unions, insurers and major investment firms.
Intermediating contracts of insurance requires authorization by the FCA. Under the Financial Services Act 2012, the FCA is a conduct regulator for all U.K. firms carrying on regulated activity in the U.K. while the PRA is the prudential regulator for U.K. banks, building societies, credit unions, insurers and major investment firms.
In addition, we undertake ongoing risk assessments across all enterprise risks, the output of which is captured in our risk register, which is reviewed and reported through our governance structure. Insurance Risk Insurance risk is the inherent uncertainty as to the occurrence, amount and timing of insurance and reinsurance liabilities transferred to us through the underwriting process.
In addition, we undertake ongoing risk assessments across all enterprise risks, the output of which is captured in our Risk Register that is reviewed and reported through our governance structure. Insurance Risk Insurance risk is the inherent uncertainty as to the occurrence, amount and timing of insurance and reinsurance liabilities transferred to us through the underwriting process.
Refer also to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – Reserving Methodology – Reserving for Catastrophic Events' for further details. Claims Handling Risk In accepting risk, we are committing to the payment of claims and therefore these risks must be understood and controlled.
Refer also to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – Reserving Methodology – Reserving for Catastrophic Events' for further details. 26 Claims Handling Risk In accepting risk, we are committing to the payment of claims and therefore these risks must be understood and controlled.
Th is line of business includes primary and excess risks, some of which are catastrophe-exposed. • Liability: provides cover for primary and low to mid-level excess and umbrella commercial liability risks in the U.S. wholesale markets in addition to primary and excess of loss employers, public, and products liability business predominately in the U.K.
Th is line of business includes primary and excess risks, some of which are catastrophe-exposed. • Liability: provides cover for primary and low to mid-level excess and umbrella commercial liability, and environmental liability risks in the U.S. wholesale markets in addition to primary and excess of loss employers, public, and products liability business predominately in the U.K.
To maintain communication between underwriting and claims teams, claims personnel regularly report at underwriting meetings and frequently attend client meetings. 27 We foster a strong culture of review among our claims teams. This includes MIAs whereby senior claims handlers and/or external audit resources audit a sample of claim files.
To maintain communication between underwriting and claims teams, claims personnel regularly report at underwriting meetings and frequently attend client meetings. We foster a strong culture of review among our claims teams. This includes MIAs whereby senior claims handlers and/or external audit resources audit a sample of claim files.
AXIS Specialty Europe has notified the CBI of its intention to provide insurance services on a Freedom of Services basis in all EEA countries. 13 Solvency II also permits AXIS Specialty Europe to carry on insurance business in any EEA Member State under the principle of "Freedom of Establishment" subject to the prior approval of the CBI.
AXIS Specialty Europe has notified the CBI of its intention to provide insurance services on a Freedom of Services basis in all EEA countries. Solvency II also permits AXIS Specialty Europe to carry on insurance business in any EEA Member State under the principle of "Freedom of Establishment" subject to the prior approval of the CBI.
Since our inception in 2001, we have expanded our international presence, with underwriting offices in Bermuda, the U.S., Europe, Singapore, and Canada. Our disciplined underwriting approach coupled with a peer review process has enabled us to manage this growth in a controlled and consistent manner.
Since our inception in 2001, we have expanded our international presence, with underwriting offices in Bermuda, the U.S., Europe, and Canada. Our disciplined underwriting approach coupled with a peer review process has enabled us to manage this growth in a controlled and consistent manner.
AXIS Group Benefits LLC, a leading provider of voluntary, limited benefit, affordable health plans and other employee benefits coverage for hourly and part-time workers and their families, is an authorized insurance producer in all U.S. states except Hawaii.
AXIS Group Benefits LLC, a provider of voluntary, limited benefit, affordable health plans and other employee benefits coverage for hourly and part-time workers and their families, is an authorized insurance producer in all U.S. states except Hawaii.
We make available free of charge, through our internet website, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. 20 RISK AND CAPITAL MANAGEMENT Risk Management Framework – Overview Mission and Objectives The mission of Enterprise Risk Management ("ERM") is to promptly identify, assess, manage, monitor, and report risks that affect the achievement of our strategic, operational, and financial objectives.
We make available free of charge, through our internet website, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. 19 RISK AND CAPITAL MANAGEMENT Risk Management Framework – Overview Mission and Objectives The mission of Enterprise Risk Management ("ERM") is to promptly identify, assess, manage, monitor, and report risks that affect the achievement of our strategic, operational, and financial objectives.
AXIS Specialty U.S. is licensed to transact insurance and reinsurance throughout the U.S., except California, Iowa, Maine, New Mexico, New York and Wyoming. AXIS Surplus is eligible to write insurance on a surplus lines basis throughout the U.S., Puerto Rico and the U.S. Virgin Islands. Our U.S.
AXIS Specialty U.S. is licensed to transact insurance and reinsurance throughout the U.S., except California, Iowa, Maine, New Mexico, New York and Wyoming. AXIS Surplus is eligible to write insurance on a surplus lines basis throughout the U.S., Puerto Rico and the U.S. Virgin Islands. 11 Our U.S.
We believe that the achievement of our objectives will position us as a global leader in specialty risks, enabling us to deliver sustained profitable growth and increased shareholder value. 4 We aim to execute on our business strategy through the following multi-pronged approach: We offer a diversified range of products and services across market segments and geographies: Our position as a global specialty underwriter and provider of insurance and reinsurance solutions gives us insight into the opportunities and challenges in a variety of markets.
We believe that the achievement of our objectives will position us as a global specialty underwriting leader, enabling us to deliver sustained profitable growth and increased shareholder value. 4 We aim to execute on our business strategy through the following multi-pronged approach: We offer a diversified range of products and services across market segments and geographies: Our position as a global specialty underwriter and provider of insurance and reinsurance solutions gives us insight into the opportunities and challenges in a variety of markets.
AXIS Capital, AXIS Specialty Bermuda, AXIS Specialty Holdings Bermuda Limited, AXIS Specialty Investments Limited, AXIS ILS Ltd., AXIS Specialty Investments II Limited and AXIS Reinsurance Managers must comply with provisions of the Bermuda Companies Act 1981 of Bermuda, as amended ("Companies Act"), regulating the payment of dividends and distributions.
AXIS Capital, AXIS Specialty Bermuda, AXIS Specialty Insurance Bermuda, AXIS Specialty Holdings Bermuda Limited, AXIS Specialty Investments Limited, AXIS ILS Ltd., AXIS Specialty Investments II Limited and AXIS Reinsurance Managers must comply with provisions of the Bermuda Companies Act 1981 of Bermuda, as amended ("Companies Act"), regulating the payment of dividends and distributions.
As indicated in the table above, our modeled single occurrence 1-in-100-year return period PML for a Southeast U.S. hurricane, net of reinsurance, is approximately $131 million. According to our modeling, there is a one percent chance that on an annual basis losses incurred from a Southeast U.S. hurricane event could be in excess of $131 million.
As indicated in the table above, our modeled single occurrence 1-in-100-year return period PML for a Southeast U.S. hurricane, net of reinsurance, is approximately $160 million. According to our modeling, there is a one percent chance that on an annual basis losses incurred from a Southeast U.S. hurricane event could be in excess of $160 million.
We manage our portfolio holistically, aiming to construct the optimum balance of risks, consistent with our risk appetite and the development of our franchise. We nurture an ethical, entrepreneurial, disciplined and diverse culture that promotes outstanding client service, intelligent risk taking, operating efficiency, corporate citizenship and the achievement of superior risk-adjusted returns for our shareholders.
We manage our portfolio holistically, aiming to construct the optimum balance of risks, consistent with our risk appetite and the development of our franchise. We nurture an ethical, entrepreneurial, disciplined and inclusive culture that promotes outstanding client service, intelligent risk taking, operating efficiency, corporate citizenship and the achievement of superior risk-adjusted returns for our shareholders.
Operational Risk Operational risk represents the risk of loss as a result of inadequate processes, system failures, human error or external events, including but not limited to direct or indirect financial loss, reputational damage, customer dissatisfaction, and legal and regulatory penalties. Group Risk is responsible for coordinating and overseeing a group-wide framework for operational risk management.
Operational Risk Operational risk represents the risk of loss as a result of inadequate processes, system and network failures, human error or external events, including but not limited to direct or indirect financial loss, reputational damage, customer dissatisfaction, and legal and regulatory penalties. Group Risk is responsible for coordinating and overseeing a group-wide framework for monitoring operational risk management.
Our Business Continuity Management framework strives to protect critical business services and the functions that support these business services from these effects to enable us to carry out our core tasks in time and at the quality required. • We have developed a number of Information Technology ("IT") platforms, applications and security controls to support our business activities worldwide.
Our Business Continuity Management framework strives to protect critical business services and the functions that support these business services from these effects to enable us to carry out our core tasks on time and at the quality required. • We have developed a number of Information Technology ("IT") platforms, applications and security controls to support our business activities worldwide.
"Passporting" refers to the process by which a state has the discretion to defer to the determination by another state that a reinsurer is a reciprocal jurisdiction reinsurer, thereby excusing the approved reinsurer from collateral requirements in such state. Ireland Our Ireland domiciled insurer and reinsurer are subject to the Solvency II Directive (Directive 2009/138/EC), as amended (“Solvency II”).
"Passporting" refers to the process by which a state has the discretion to defer to the determination by another state that a reinsurer is a reciprocal jurisdiction reinsurer, thereby excusing the approved reinsurer from collateral requirements in such state. Ireland Our Ireland domiciled insurer and reinsurer are subject to the Solvency II Directive (Directive 2009/138/EC), as amended ("Solvency II").
In managing zonal concentrations, we aim to ensure that the geography of single events is suitably captured, but distinct enough that they track specific types of events. For example, our definition of Southeast wind encompasses five states, including Florida, while our definition of Gulf Wind encompasses four states, including Texas.
In managing zonal concentrations, we aim to ensure that the geography of single events is suitably captured, but distinct enough that they track specific types of events. For example, our definition of Southeast wind encompasses five states, including Florida, while our definition of Gulf of Mexico windstorm encompasses four states, including Texas.
The Finance Committee of our Board of Directors approves overall group asset allocation targets and investment policy to ensure that they are consistent with our overall goals, strategies and objectives. We also have an Investment and Finance Committee, comprised of members of our senior management team, which oversees the implementation of our investment strategy.
The Finance Committee of our Board of Directors approves overall group asset allocation ranges and investment policy to ensure that they are consistent with our overall goals, strategies and objectives. We also have an Investment and Finance Committee, comprised of members of our senior management team, which oversees the implementation of our investment strategy.
Conversely, there is a 99% chance that on an annual basis the loss from a Southeast U.S. hurricane will fall below $131 million. PMLs are based on results of stochastic models that consider a wide range of possible events, their losses and probabilities.
Conversely, there is a 99% chance that on an annual basis the loss from a Southeast U.S. hurricane will fall below $160 million. PMLs are based on results of stochastic models that consider a wide range of possible events, their losses and probabilities.
We are headquartered in Bermuda and have locations in the U.S., Canada and Europe including Dublin, London, Zurich and Brussels. We service the Latin America specialty insurance and facultative reinsurance market through London and our other locations. In addition, we provide specialty insurance and reinsurance solutions to the Asia Pacific region through our London, Zurich and Bermuda offices.
We are headquartered in Bermuda and have operations in the U.S., Canada, and Europe including Dublin, London, Zurich and Brussels, and Singapore. We service the Latin America specialty insurance and facultative reinsurance market through London and our other locations. In addition, we provide specialty insurance and reinsurance solutions to the Asia Pacific region through our London, Zurich and Bermuda offices.
As part of our strategic asset allocation process, different strategic asset classes are simulated and stressed to evaluate the ‘optimal’ portfolio, given return objectives and risk constraints. Our investments team manages asset classes to control aggregation of risk and provide a consistent approach to constructing portfolios and the selection process of external asset managers.
As part of our strategic asset allocation process, different strategic asset classes are simulated and stressed to evaluate the 'optimal' frontier, given return objectives and risk constraints. Our investments team manages asset classes to control aggregation of risk and provide a consistent approach to constructing portfolios and the selection process of external asset managers.
We have developed our PML estimates by combining judgment and experience with the outputs from the catastrophe model, commercially available from Verisk Analytics, Inc., which we also use for pricing catastrophe risk. This model covers the major peril regions where we face potential exposure.
We have developed our PML estimates by combining judgment and experience with the outputs from the catastrophe model, commercially available from Verisk Analytics, Inc., that we also use for pricing catastrophe risk. This model covers the major peril regions where we face potential exposure.
Additionally, we have included our estimate of non-modeled perils and other factors, which we believe provides us with a more complete view of catastrophe risk. Our PML estimates are based on assumptions that are inherently subject to significant uncertainties and contingencies.
Additionally, we have included our estimate of non-modeled perils and other factors, that we believe provides us with a more complete view of catastrophe risk. 25 Our PML estimates are based on assumptions that are inherently subject to significant uncertainties and contingencies.
For example, we reflect important features of our liabilities, such as maturity patterns and currency structures, on the asset side of the balance sheet by acquiring investments with similar characteristics. We supplement our asset-liability management with various internal policies and limits.
For example, we reflect important features of our liabilities, such as maturity patterns and foreign currency structures, on the asset side of the balance sheet by acquiring investments with similar characteristics. 27 We supplement our asset-liability management with various internal policies and limits.
We primarily transact in specialty markets, where risks are complex, and are also growing our transactional specialty business targeting the lower middle market. We invest in data and technology capabilities and tools to empower our underwriters and enhance the service that we provide to our customers.
We primarily transact in specialty markets, where risks are complex, and are also growing our transactional specialty business targeting the lower middle market. We invest in data and technology and are exploring AI capabilities and tools to empower our underwriters and enhance the service that we provide to our customers.
Risk Governance and Risk Management Organization The key elements of our governance framework, as it relates specifically to risk management, are described below: Board of Directors’ Level The Risk Committee of the Board of Directors ("Risk Committee") assists the directors in overseeing the integrity and effectiveness of our ERM framework and ensuring that our risk mitigation activities are consistent with that framework.
Risk Governance and Risk Management Organization The key elements of our governance framework, as it relates specifically to risk management, are described below: Board of Directors The Risk Committee of the Board of Directors ("Risk Committee") assists the directors in overseeing the integrity and effectiveness of our ERM framework and ensuring that our risk mitigation activities are consistent with that framework.
Traditional proportional and non-proportional reinsurance as well as structured solutions are offered. • Agriculture: provides protection for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations.
Traditional non-proportional and proportional reinsurance as well as structured solutions are offered predominantly relating to European exposures. • Agriculture: provides protection for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations.
The internal capital model is subject to regular updates and validations. 21 Risk Diversification As a global insurer and reinsurer with a wide product offering across different businesses, diversification is a key component of our business model and risk framework.
The internal capital model is subject to regular updates and validations. 20 Risk Diversification As a global insurer and reinsurer with a wide product offering across different businesses, diversification is a key component of our business model and risk framework.
While the Executive Committee is responsible overall for risk management, it has delegated some authority to the executive level Risk Management Committee ("RMC") consisting of the Chief Executive Officer, Chief Financial Officer, Chief Underwriting Officer, Chief Risk Officer, Chief Actuary - Reserving and Capital, and Chief Administrative and Legal Officer.
While the Executive Committee is responsible overall for risk management, it has delegated some authority to the executive level Risk Management Committee ("RMC") consisting of the President and Chief Executive Officer, Chief Financial Officer, Group Chief Underwriting Officer, Chief Risk Officer, Chief Actuary - Reserving and Capital, and Chief Administrative and Legal Officer.
The RPG, which includes, among others, our Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Chief Underwriting Officer and representatives from the business leadership team, approves each treaty placement and aims to ensure that appropriate diversification exists within our RSC approved counterparty panels. Facultative reinsurance provides risk transfer on a case by case basis.
The RPG, which includes, among others, our President and Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Group Chief Underwriting Officer and representatives from the business leadership, approves each treaty placement and aims to ensure that appropriate diversification exists within our RSC approved counterparty panels. Facultative reinsurance provides risk transfer on a case by case basis.
AXIS Specialty Europe operates under Freedom of Establishment in Belgium through its branch established in this jurisdiction. AXIS Specialty Europe also has a U.K. branch that transacts general insurance business in the U.K. and trades as AXIS Specialty London. The U.K. withdrew from the E.U. on January 31, 2020 and is now considered a third-country.
AXIS Specialty Europe operates under Freedom of Establishment in Belgium through its branch established in this jurisdiction. 13 AXIS Specialty Europe also has a U.K. branch that transacts general insurance business in the U.K. and trades as AXIS Specialty London. The U.K. withdrew from the EU on January 31, 2020 and is now considered a third-country.
It is important to consider that an actual event does not necessarily resemble one of the stochastic events and the specific characteristics of an actual event can lead to substantial differences between actual and modeled loss.
It is important to consider that an actual event does not necessarily resemble one of the stochastic events and the specific characteristics of an actual event can lead to substantial differences between actual and modeled losses.
Our PMLs take into account the fact that an event may trigger claims in a number of lines of business. For instance, our U.S. hurricane modeling includes the estimated pre-tax impact to our financial results arising from our catastrophe, property, engineering, energy, marine and aviation lines of business.
Our PMLs take into account the fact that an event may trigger claims in a number of lines of business. For instance, our U.S. hurricane modeling includes the estimated pre-tax impact to our financial results arising from our property lines of business including energy business, and our marine and aviation lines of business.
AXIS Specialty Europe is authorized to conduct business in 16 non-life insurance classes throughout the E.U. and the European Economic Area ("EEA"), which includes each of the Member States of the E.U. with the addition of Iceland, Liechtenstein and Norway. AXIS Specialty Europe may also write reinsurance business within the classes of insurance business for which it is authorized.
AXIS Specialty Europe is authorized to conduct business in 16 non-life insurance classes throughout the EU and the European Economic Area ("EEA"), which includes each of the Member States of the EU with the addition of Iceland, Liechtenstein and Norway. AXIS Specialty Europe may also write reinsurance business within the classes of insurance business for which it is authorized.
We also purchase proportional reinsurance for our accident & health, credit and surety, liability, motor, and professional lines reinsurance portfolios, which includes cessions to our Strategic Capital Partners. We use non-proportional reinsurance, whereby losses up to a certain amount (i.e., our retention) are borne by us.
We also purchase proportional reinsurance for our accident and health, credit and surety, liability, motor, professional lines, cyber, and marine and aviation reinsurance portfolios, which includes cessions to our strategic capital partners. We use non-proportional reinsurance, whereby losses up to a certain amount (i.e., our retention) are borne by us.
AXIS Re SE is authorized by the CBI as a composite reinsurer (non-life and life) in accordance with the Insurance Acts 1909 to 2000, as amended, repealed or replaced, the Central Bank Acts 1942 to 2014, as amended, repealed or replaced, and E.U. regulation applicable to reinsurance and statutory instruments made thereunder.
AXIS Re SE is authorized by the CBI as a composite reinsurer (non-life and life) in accordance with the Insurance Acts 1909 to 2000, as amended, repealed or replaced, the Central Bank Acts 1942 to 2014, as amended, repealed or replaced, and EU regulation applicable to reinsurance and statutory instruments made thereunder.
During 2022, AXIS Specialty Bermuda obtained reciprocal jurisdiction reinsurer status with Missouri as its lead state. Reinsurers licensed in reciprocal jurisdictions (which include E.U. member states, Bermuda, Japan and Switzerland) are not required to post reinsurance collateral if approved as reciprocal jurisdiction reinsurers.
During 2022, AXIS Specialty Bermuda obtained reciprocal jurisdiction reinsurer status with Missouri as its lead state. Reinsurers licensed in reciprocal jurisdictions (which include EU member states, Bermuda, Japan and Switzerland) are not required to post reinsurance collateral if approved as reciprocal jurisdiction reinsurers.
By actively embracing a variety of perspectives, experiences and backgrounds and ensuring equal treatment for all, we strive to make AXIS a more rewarding place to work.
Inclusion By actively embracing a variety of perspectives, experiences and backgrounds and ensuring equal treatment for all, we strive to make AXIS a more rewarding and inclusive place to work.
Solvency II covers three main areas: (i) the valuation of assets and liabilities and related solvency capital requirements; (ii) governance requirements including key functions of compliance, internal audit, actuarial and risk management; and (iii) legal entity and E.U. group reporting and disclosure requirements including public disclosures.
Solvency II covers three main areas: (i) the valuation of assets and liabilities and related solvency capital requirements; (ii) governance requirements including key functions of compliance, internal audit, actuarial and risk management; and (iii) legal entity and EU group reporting and disclosure requirements including public disclosures.
AXIS Specialty Europe AXIS Specialty Europe is a European public limited liability company incorporated as a non-life insurer under the laws of Ireland. It is a Societas Europaea (SE), or European society company, and has been registered in accordance with E.U. law.
AXIS Specialty Europe AXIS Specialty Europe is a European public limited liability company incorporated as a non-life insurer under the laws of Ireland. It is a Societas Europaea (SE), or European society company, and has been registered in accordance with EU law.
Per-risk treaties are an effective means of risk mitigation against large single losses (e.g., a large fire claim). • Catastrophe excess of loss – provides aggregate loss cover for our insurance portfolio against the accumulation of losses incurred from a single event (e.g., windstorm).
Per-risk treaties are an effective means of risk mitigation against large single losses (e.g., a large fire claim). • Catastrophe excess of loss – provides annual aggregate or per loss occurrence loss cover for our insurance portfolio against the accumulation of losses incurred from a single event (e.g., windstorm).
Singapore AXIS Specialty Bermuda conducts insurance and reinsurance business from its branch in Singapore, AXIS Specialty Limited (Singapore Branch), subject to the supervision of the BMA and the MAS. The BMA and the MAS impose significant regulations relating to capital adequacy, risk management, governance and audit and actuarial requirements.
Singapore AXIS Specialty Bermuda historically conducted insurance and reinsurance business from its branch in Singapore, AXIS Specialty Limited (Singapore Branch), subject to the supervision of the BMA and the MAS. The BMA and the MAS impose significant regulations relating to capital adequacy, risk management, governance and audit and actuarial requirements.
AXIS Reinsurance Managers is regulated by the BMA as an insurance manager. As an insurance manager, AXIS Reinsurance Managers is required to register with the BMA pursuant to the Insurance Act. AXIS Reinsurance Managers is also required to comply with the Insurance Manager Code of Conduct.
As an insurance manager, AXIS Reinsurance Managers is required to register with the BMA pursuant to the Insurance Act. AXIS Reinsurance Managers is also required to comply with the Insurance Manager Code of Conduct.
We recognize that our strength lies in our people, and therefore, one of our core strategies is to invest in and support our employees, including in the following areas of focus: Talent Development Investing in its people is a top priority for AXIS.
We recognize that our strength lies in our people, and therefore, one of our core strategies is to invest in and support our employees, including in the following areas of focus: Talent Development At AXIS, investing in our people is a top priority.
We attract, develop, retain and motivate teams of experts: We aim to attract and retain top talent in the industry and to motivate our employees to make decisions that are in the best interest of our clients and shareholders. We cultivate a culture that prioritizes ethics, risk awareness and achievement, while also promoting diversity, professionalism, responsibility, integrity, discipline and entrepreneurship.
We attract, develop, retain and motivate teams of experts: We aim to attract and retain top talent in the industry and to motivate our employees to make decisions that are in the best interest of our clients and shareholders. We foster a culture that prioritizes ethics, risk awareness and achievement, while also promoting inclusion, professionalism, responsibility, integrity, discipline and entrepreneurship.
AXIS Re SE is authorized to transact reinsurance throughout the E.U. and the EEA and is subject to Solvency II. AXIS Re SE conducts business through its branch in Zurich, Switzerland, trading as AXIS Re Europe (see ' Switzerland' below).
AXIS Re SE is authorized to transact reinsurance throughout the EU and the EEA and is subject to Solvency II. AXIS Re SE conducts business through its branch in Zurich, Switzerland, trading as AXIS Re Europe (see ' Switzerland' below).
The Audit Committee of the Board of Directors, which is supported by Internal Audit, is responsible for overseeing internal controls and compliance procedures, and also reviews with management and the Chair of the Risk Committee the Group’s policies regarding risk assessment and risk management. 22 Group Executive Level The Executive Committee formulates our business objectives and risk strategy within the overall risk appetite set by the Board of Directors.
The Audit Committee of the Board of Directors, which is supported by Internal Audit, is responsible for overseeing internal controls and compliance procedures, and also reviews with management and the Chair of the Risk Committee the Group’s policies regarding risk assessment and risk management. 21 Group Executives The Executive Committee formulates our business objectives and risk strategy within the overall risk appetite set by the Board of Directors.
Under proportional reinsurance, we cede an agreed percentage of the premiums and the losses and loss expenses on the policies we underwrite. We primarily use proportional reinsurance on our liability, professional lines and cyber insurance portfolios, as well as on select property insurance portfolios, where we protect against higher loss frequency rather than specific events.
Under proportional reinsurance, we cede an agreed percentage of the premiums and the losses and loss expenses on the policies we underwrite. We primarily use proportional reinsurance for our liability, professional lines and accident and health insurance portfolios, as well as on select property insurance portfolios, where we protect against higher loss frequency rather than specific events.
We have a centralized risk funding department, which coordinates external treaty reinsurance purchasing (including retrocession) across the Group and a separate AXIS ILS (Insurance Linked Securities) team, which coordinates the sourcing and structuring of third-party capital to support AXIS underwriting. Risk funding and AXIS ILS is overseen by our Reinsurance Purchasing Group ("RPG").
We have a centralized Risk Funding team which coordinates external treaty reinsurance purchasing (including retrocession) across the Group and a separate AXIS ILS (Insurance Linked Securities) team, which coordinates the sourcing and structuring of third-party capital to support our underwriting. Risk Funding and AXIS ILS teams are overseen by our Reinsurance Purchasing Group ("RPG").
AXIS Re SE AXIS Re SE is a European public limited liability company incorporated as a reinsurer under the laws of Ireland. AXIS Re SE is also a Societas Europaea (SE), or European society company, registered in accordance with E.U. law.
AXIS Re SE AXIS Re SE is a European public limited liability company incorporated as a reinsurer under the laws of Ireland. AXIS Re SE is also a Societas Europaea (SE), or European society company, registered in accordance with EU law.
Lloyd’s licenses can only be used if the Syndicate Business Forecast, agreed annually with Lloyd’s, names those countries. Lloyd’s also manages and protects the Lloyd’s network of international licenses, monitors syndicates’ compliance with Lloyd’s minimum standards and is responsible for setting both member and central capital levels.
Lloyd’s licenses can only be used if the Syndicate Business Forecast, agreed annually with Lloyd’s, names those countries. Lloyd’s also manages and protects the Lloyd’s network of international licenses, monitors syndicates’ compliance with Lloyd’s Principles for doing business and is responsible for setting both member and central capital levels.
Such measures are performed as and when required and include traditional capital management tools (e.g., dividends, share buy-backs, issuance of shares or debt) or through changes to our risk exposure (e.g., recalibration of our investment portfolio or changes to our reinsurance purchasing strategy). The TCR also considers an amount of capital beyond which capital could be considered "excess".
Such measures are performed as and when required and include traditional capital management tools (e.g., dividends, share buy-backs, issuance of shares or debt) or through changes to our risk exposure (e.g., recalibration of our investment portfolio or changes to our reinsurance purchasing strategy). We also consider an amount of capital beyond which capital could be considered "excess".
Credit Risk Aggregation Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Credit Risk Aggregation Credit Risk Relating to Cash and Investments Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Cash and Investments Credit Risk Relating to Reinsurance Recoverable Assets Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Reinsurance Recoverable on Unpaid and Paid Losses and Loss Expenses Credit Risk Relating to Premium Receivables Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Insurance and Reinsurance Premium Balances Receivable Credit Risk Relating to our Underwriting Portfolio We provide credit insurance primarily for lenders (financial institutions) and commodity traders seeking to mitigate the risk of non-payment from their borrowers and trading counterparties.
Credit Risk Aggregation Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Credit Risk Aggregation Credit Risk Relating to Cash and Investments Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Cash and Investments Credit Risk Relating to Reinsurance Recoverables Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Reinsurance Recoverable on Unpaid and Paid Losses and Loss Expenses 28 Credit Risk Relating to Premium B alances Receivable Refer to Item 8, Note 12 to the Consolidated Financial Statements 'Commitment and Contingencies' – Concentration of Credit Risk – Insurance and Reinsurance Premium Balances Receivable Credit Risk Relating to our Underwriting Portfolio We provide credit insurance primarily for lenders (financial institutions) and commodity traders seeking to mitigate the risk of non-payment from their borrowers and trading counterparties.
We underwrite a balanced portfolio of risks, including complex and volatile lines, moderating overall volatility with risk limits, diversification and risk management: Risk management is a strategic priority embedded in our organizational structure and we are continuously monitoring, reviewing and refining our enterprise risk management practices. We combine judgment and experience with data-driven analysis, enhancing our overall risk selection process.
We underwrite a balanced portfolio of risks, including complex and volatile lines, deploying capital within risk limits, diversification and risk management: Risk management is a strategic priority embedded in our organizational structure and we are continuously monitoring, reviewing, and refining our enterprise risk management practices. We combine judgment and experience with data-driven analysis, enhancing our overall risk selection process.
For example, in certain circumstances, we use forward contracts to economically hedge portions of our un-matched foreign currency exposures. 28 Liquidity Risk Liquidity risk is the risk that we may not have sufficient cash to meet our obligations when they are due or would have to incur excessive costs to do so.
For example, in certain circumstances, we use foreign exchange forward contracts to economically hedge portions of our unmatched foreign currency exposures. Liquidity Risk Liquidity risk is the risk that we may not have sufficient cash to meet our obligations when they are due or would have to incur excessive costs to do so.
We maintain excellent financial strength, characterized by financial discipline and transparency: Our total capital of $6.6 billion at December 31, 2023, as well as our high-quality and liquid investment portfolio and our operating subsidiary ratings of "A+" ("Strong") by Standard & Poor's and "A" ("Excellent") by the A.M. Best Company, Inc. ("A.M. Best") are key indicators of our financial strength.
We maintain excellent financial strength, characterized by financial discipline and transparency: Our total capital of $7.4 billion at December 31, 2024 as well as our high-quality and liquid investment portfolio and our operating subsidiary ratings of "A+" ("Strong") by Standard & Poor's and "A" ("Excellent") by the A.M. Best Company, Inc. ("A.M. Best") are key indicators of our financial strength.
AXIS Re SE may write reinsurance in Bermuda under Solvency II equivalence between Bermuda and the European Union ("E.U."). AXIS Managing Agency Ltd. may write general insurance and reinsurance in Bermuda using Lloyd's of London ("Lloyd's") licenses (refer to ' U.K. and Lloyd's of London' below). United States U.S.
AXIS Re SE and AXIS Specialty Europe SE may both write reinsurance in Bermuda under Solvency II equivalence between Bermuda and the European Union ("EU"). AXIS Managing Agency Ltd. may write general insurance and reinsurance in Bermuda using Lloyd's of London ("Lloyd's") licenses (refer to ' U.K. and Lloyd's of London' below). United States U.S.
Refer to Item 7 'Management’s Discussion and Analysis of Financial Condition and Results of Operations' for further details on our reportable segments and Item 8, Note 3 to the Consolidated Financial Statements ' Segment Information ' for further details on our reportable segments and a description of the geographic distribution of gross premiums written based on the location of our subsidiaries.
Refer to Item 7 'Management’s Discussion and Analysis of Financial Condition and Results of Operations' for further details on our reportable segments and Item 8, Note 3 to the Consolidated Financial Statements 'Segment Information' for further details on our reportable segments and a description of the geographic distribution of gross premiums written based on the location of our subsidiaries.
We distinguish between various forms of credit exposure including the risk of issuer default from instruments in which we invest, such as corporate bonds, counterparty exposure in a direct contractual relationship, such as reinsurance, the credit risk related to our premium receivables, including those from brokers and other intermediaries, and the risk we assume through our insurance contracts, such as our credit and political risk, and credit and surety lines of business.
We distinguish between various forms of credit exposure including the risk of issuer default from instruments in which we invest, such as corporate bonds, counterparty exposure in a direct contractual relationship, such as reinsurance or loss portfolio transfers, the credit risk related to our premium balances receivable, including those from brokers and other intermediaries, and the risk we assume through our insurance contracts, such as our credit and political risk, and credit and surety lines of business.
In 2023, we leveraged firming market conditions to grow in a number of attractive specialty lines insurance and treaty reinsurance markets and we continued to re-balance our portfolio towards less volatile lines of business. At December 31, 2023, we had common shareholders’ equity of $4.7 billion, total capital of $6.6 billion and total assets of $30.3 billion.
In 2024, we leveraged firming market conditions to grow in a number of attractive specialty lines insurance and treaty reinsurance markets and we continued to re-balance our portfolio towards less volatile lines of business. At December 31, 2024, we had common shareholders’ equity of $5.5 billion, total capital of $7.4 billion and total assets of $32.5 billion.
Bermuda Our Bermuda insurance operating subsidiary, AXIS Specialty Bermuda, is a Class 4 general business insurer subject to the Insurance Act 1978 of Bermuda and related regulations, as amended ("Insurance Act").
Bermuda Our Bermuda insurance operating subsidiary, AXIS Specialty Bermuda, is a Class 4 general business insurer subject to the Insurance Act 1978, amendments thereto and related regulations of Bermuda ("Insurance Act").
Environmental, Social and Governance (ESG) and sustainability have become major topics that encompass a wide range of issues, including climate change and other environmental risks. In line with our strategy, we have put in place a number of measures in order to identify, assess, manage, and monitor potential exposure to climate risks, for example physical, transition and liability risks.
Environmental risk and sustainability have become major topics that encompass a wide range of issues, including climate change and other environmental risks. In line with our strategy, we have put in place several measures to identify, assess, manage, and monitor potential exposure to climate risks, for example physical, transition and liability risks.
Models are continuously validated at the line of business and at a group level by our catastrophe model validation team. These validation procedures include sensitivity testing of models to understand their key variables and, where possible, back testing the model outputs to actual results.
Models are continuously validated at the line of business and at a group level by our exposure management center of excellence. These validation procedures include sensitivity testing of models to understand their key variables and, where possible, back testing the model outputs to actual results.
In certain circumstances, we use facultative reinsurance to complement treaty reinsurance by covering additional risks over and above what is already covered by treaties. Facultative reinsurance is monitored by the risk funding team.
In certain circumstances, we use facultative reinsurance to complement treaty reinsurance by covering additional risks over and above what is already covered by treaties.
This line of business also includes cover for losses arising from operational failures of machinery, plant and equipment, and electronic equipment as well as business interruption. The Company exited this line of business in 2020.
This line of business also includes cover for losses arising from operational failures of machinery, plant and equipment, and electronic equipment as well as business interruption.
In addition to the RMC, there is an established framework of separate yet complementary management committees and subcommittees, focusing on particular aspects of ERM including the following: Management Committees • The Operating Committee oversees the day-to-day operations of the organization, ensuring decisions are aligned and prioritized with our strategic goals and values. • The Global Underwriting Committee oversees the integrity and effectiveness of our Underwriting Governance Framework ensuring our underwriting activities are consistent with that framework. • The Investment & Finance Committee oversees the Group’s investment activities, which includes monitoring market risks, the performance of our investment managers and the Group’s asset-liability management, liquidity positions and investment policies and guidelines.
In addition to the RMC, there is an established framework of separate yet complementary management committees and sub-committees, focusing on particular aspects of ERM including the following: Management Committees • The Underwriting Committee oversees the integrity and effectiveness of our Underwriting Governance Framework ensuring our underwriting activities are consistent with that framework. • The Investment & Finance Committee oversees the Group’s investment activities, which includes monitoring market risks, the performance of our investment managers and the Group’s asset-liability management, liquidity positions and investment policies and guidelines.
Management is the 'owner' of risk management processes and is responsible for managing our business within defined risk limits. 23 The Chief Risk Officer, who reports to the Chief Financial Officer and the Chair of the Risk Committee leads our independent Group Risk function, and is responsible for oversight and implementation of the Group's ERM framework, as well as providing guidance and support for risk management practices.
The Chief Risk Officer, who reports to the Chief Financial Officer and the Chair of the Risk Committee leads our independent Group Risk function, and is responsible for oversight and implementation of the Group's ERM framework, as well as providing guidance and support for risk management practices.
The TCR defines the preferred level of capital needed to absorb shock losses and still satisfy our minimum solvency targets in relation to key capital benchmarks including our "own view" of risk from our internal capital model and regulatory and rating agency capital requirements, which are described below: • Internal risk capital - We use our internal capital model to assess the capital consumption of our business, measuring and monitoring the potential aggregation of risk at extreme return periods. • Regulatory capital requirements - In each country in which we operate, the local regulator specifies the minimum amount and type of capital that each of the regulated entities must hold in support of their liabilities and business plans.
We ensure our capital levels satisfy our minimum solvency targets including our own view of risk from our internal capital model and regulatory and rating agency capital requirements, which are described below: • Internal risk capital - We use our internal capital model to assess the capital consumption of our business, measuring and monitoring the potential aggregation of risk at extreme return periods. • Regulatory capital requirements - In each country in which we operate, the local regulator specifies the minimum amount and type of capital that each of the regulated entities must hold in support of their liabilities and business plans.
The markets in which we operate have historically been cyclical. During periods of reduced underwriting capacity, pricing and policy terms and conditions are generally more favorable for insurers and reinsurers. Conversely, during periods of excess underwriting capacity, defined by the availability of capital, competition can result in lower pricing and less favorable policy terms and conditions for insurers and reinsurers.
During periods of reduced underwriting capacity, pricing, and policy terms and conditions are generally more favorable for insurers and reinsurers. Conversely, during periods of excess underwriting capacity, defined by the availability of capital, competition can result in lower pricing and less favorable policy terms and conditions for insurers and reinsurers.
RMC Sub-Committees • The Exposure Management Committee oversees the Group's exposure management framework for catastrophe and non-catastrophe lines, including the validation of modeling, threats framework, accumulation practices and monitoring of management appetites. • The Reinsurance Security Committee ("RSC") sets out the financial security requirements of our reinsurance counterparties and approves counterparties, as needed. • The Internal Model Committee oversees the Group's internal model framework, including the key model assumptions, methodology and validation framework. • The Operational Risk Committee oversees the Group's operational risk framework for identifying, assessing, managing, monitoring, and reporting of operational risk and facilitates the embedding of effective operational risk management practices throughout the Group. • The Emerging Risks Working Group oversees the processes for identifying, assessing, managing, monitoring, and reporting current and potential emerging risks. • The Climate Change Working Group focuses specifically on climate-related risks and opportunities and oversees climate risk initiatives.
RMC Sub-Committees • The Exposure Management Committee oversees the Group's exposure management framework for catastrophe and non-catastrophe business, including the validation of modeling, threats framework, accumulation practices and monitoring of management appetites. • The Reinsurance Security Committee ("RSC") sets out the financial security requirements of our reinsurance counterparties and approves counterparties, as needed. • The Internal Model Committee oversees the Group's internal model framework, including the key model assumptions, methodology and validation framework. • The Operational Risk Committee oversees the Group's operational risk framework for identifying, assessing, managing, monitoring, and reporting of operational risk and facilitates the embedding of effective operational risk management practices throughout the Group. • The Emerging Risks Working Group oversees the processes for identifying, assessing, managing, monitoring, and reporting current and potential emerging risks and opportunities. • The Environmental Working Group replaced the Climate Change Working Group and focuses specifically on climate-related risks and opportunities and oversees climate risk initiatives. 22 Group Risk Management As a general principle, management in each of the lines of business and corporate functions is responsible in the first instance for the risks and returns of its decisions.
HUMAN CAPITAL MANAGEMENT AXIS Capital’s mission is not only to deliver strong financial results, but also to help our clients, brokers and partners navigate the challenges of a volatile world. We believe our employees distinguish us from our competitors and are critical to our success as an insurance and reinsurance company that leads with purpose.
HUMAN CAPITAL MANAGEMENT AXIS Capital’s mission is not only to deliver strong financial results, but also to help our clients, brokers and partners navigate the challenges of a volatile world. We believe our teammates distinguish us from our competitors and are critical to our success as a specialty underwriter that leads with purpose and lives our values every day.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther, a number of jurisdictions have implemented QDMTTs into domestic legislation but these taxes remain subject to a multilateral review process which is subject to ongoing development. Although domestic legislation implemented to effect the Model Rules is not applicable for the current accounting period, we operate in jurisdictions which intend to enact (or have enacted) such legislation.
Biggest changeA number of jurisdictions in which we operate have implemented the Model Rules into domestic legislation, including the implementation of QDMTTs, with effect for accounting periods starting on or after 31 December 2023. 50 Although domestic legislation implemented to affect the Model Rules is not expected to have a material effect on our global effective tax rate in the current accounting period, these taxes remain subject to a multilateral review process which is subject to ongoing development and the interpretation of these rules by tax authorities remains uncertain.
We could face unanticipated losses from war, terrorism, political unrest, and geopolitical uncertainty, and these or other unanticipated losses could have an adverse effect on our results of operations, financial condition or liquidity.
We could face losses from war, terrorism, political unrest, and geopolitical uncertainty, and these or other unanticipated losses could have an adverse effect on our results of operations, financial condition or liquidity.
Changes in regulations relating to climate change or our own leadership decisions implemented as a result of assessing the impact of climate change on our business may result in an increase in the cost of doing business or a decrease in premiums. The effects of emerging claim and coverage issues on our business are uncertain.
Changes in regulations relating to climate change or our own leadership decisions implemented as a result of assessing the impact of climate change on our business may result in an increase in the cost of doing business or a decrease in premiums. The effects of emerging claim and/or coverage issues on our business are uncertain.
However, a portion of gross premiums are written and ceded in currencies other than the U.S. dollar and a portion of gross and ceded loss reserves in currencies other than the U.S. dollar. In addition, a portion of our investment portfolio is denominated in currencies other than the U.S dollar.
However, a portion of gross premiums are written and ceded in currencies other than the U.S. dollar and a portion of gross and ceded loss reserves are in currencies other than the U.S. dollar. In addition, a portion of our investment portfolio is denominated in currencies other than the U.S. dollar.
AXIS Capital has no significant operations or assets other than its ownership of the shares of its operating insurance and reinsurance subsidiaries, AXIS Specialty Bermuda, AXIS Re SE, AXIS Specialty Europe SE, the Members of Lloyd's (AXIS Corporate Capital UK Limited and AXIS Corporate Capital UK II Limited), AXIS Re U.S., AXIS Specialty U.S., AXIS Surplus and AXIS Insurance Co.
AXIS Capital has no significant operations or assets other than its ownership of the shares of its operating insurance and reinsurance subsidiaries, AXIS Specialty Bermuda, AXIS Re SE, AXIS Specialty Europe SE, the Members of Lloyd's (AXIS Corporate Capital UK Limited and AXIS Corporate Capital UK II Limited), AXIS Re U.S., AXIS Specialty U.S., AXIS Specialty Insurance Limited, AXIS Surplus and AXIS Insurance Co.
The following factors, in addition to those described in other risk factors above, may have a material adverse effect on the market price of our common stock: • actual or anticipated variations in our quarterly results, including as a result of catastrophes or our investment performance; • any share repurchase program; • changes in market valuation of companies in the insurance/reinsurance industry; • changes in expectations of future financial performance or changes in estimates of securities analysts; 46 • fluctuations in stock market processes and volumes; • issuances or sales of common shares or other securities in the future; • the addition or departure of key personnel; • changes in tax law; and • announcements by us or our competitors of acquisitions, investments or strategic alliances.
The following factors, in addition to those described in other risk factors above, may have a material adverse effect on the market price of our common stock: • actual or anticipated variations in our quarterly results, including as a result of catastrophes or our investment performance; • any share repurchase program; • changes in market valuation of companies in the insurance/reinsurance industry; • changes in expectations of future financial performance or changes in estimates of securities analysts; • fluctuations in stock market processes and volumes; • issuances or sales of common shares or other securities in the future; • the addition or departure of key personnel; • changes in tax law; and • announcements by us or our competitors of acquisitions, investments or strategic alliances.
The definition of shareholder controller is set out in the Insurance Act but generally refers to a person who (i) holds 10% or more of the shares carrying rights to vote at a shareholders’ meeting of the registered insurer or reinsurer or its parent; (ii) is entitled to exercise, or control the exercise of, 10% or more of the voting power at any shareholders meeting of the registered insurer or reinsurer or its parent; or (iii) is able to exercise significant influence over the management of the registered insurer or reinsurer or its parent by virtue of its shareholding or its entitlement to exercise, or control the exercise of, the voting power at any shareholders’ meeting of the registered insurer or reinsurer or its parent company.
The definition of shareholder controller is set out in the Insurance Act but generally refers to a person who; (i) holds 10% or more of the shares carrying rights to vote at a shareholders’ meeting of the registered insurer or reinsurer or its parent; (ii) is entitled to exercise, or control the exercise of, 10% or more of the voting power at any shareholders meeting of the registered insurer or reinsurer or its parent; or 48 (iii) is able to exercise significant influence over the management of the registered insurer or reinsurer or its parent by virtue of its shareholding or its entitlement to exercise, or control the exercise of, the voting power at any shareholders’ meeting of the registered insurer or reinsurer or its parent company.
There can be no assurance that we will be successful in identifying, hiring or retaining successors on terms acceptable to us. 39 With few exceptions, generally only Bermudians, spouses of Bermudians or Permanent Resident Certificate holders (collectively, "Residents") may engage in any gainful occupation in Bermuda without an appropriate governmental work permit.
There can be no assurance that we will be successful in identifying, hiring or retaining successors on terms acceptable to us. With few exceptions, generally only Bermudians, spouses of Bermudians or Permanent Resident Certificate holders (collectively, "Residents") may engage in any gainful occupation in Bermuda without an appropriate governmental work permit.
Pressure from key stakeholders to comply with additional voluntary ESG-related initiatives or frameworks could also require us to make substantial investments in ESG matters, which could impact the results of our operations. ESG encompasses a wide range of issues, including climate change and other environmental risks, diversity and inclusion and governance standards.
Pressure from key stakeholders to comply with additional voluntary ESG-related initiatives or frameworks could also require us to make substantial investments in ESG matters, which could impact the results of our operations. ESG encompasses a wide range of issues, including climate change and other environmental risks, inclusion and governance standards.
Government, regulatory and judicial actions across multiple jurisdictions in relation to business interruption insurance have exacerbated the uncertainty by altering the interpretation of our contracts or extending or changing coverage (beyond the obligations set forth within those contracts or beyond what was intended by the parties). Certain U.S. and non-U.S. judicial and regulatory authorities, including U.S.
Government, regulatory and judicial actions across multiple jurisdictions in relation to business interruption insurance have exacerbated the uncertainty by altering the interpretation of our contracts or extending or changing coverage (beyond the obligations set forth within those contracts or beyond what was intended by the parties). 45 Certain U.S. and non-U.S. judicial and regulatory authorities, including U.S.
If a shareholder fails to respond to our request for information or submits incomplete or inaccurate information in response to a request by us, we may, in our sole discretion, eliminate the shareholder’s voting rights. 47 There are provisions in our bye-laws that may restrict the ability to transfer common shares and which may require shareholders to sell their common shares.
If a shareholder fails to respond to our request for information or submits incomplete or inaccurate information in response to a request by us, we may, in our sole discretion, eliminate the shareholder’s voting rights. There are provisions in our bye-laws that may restrict the ability to transfer common shares and which may require shareholders to sell their common shares.
If net income is insufficient to absorb a required increase in loss reserves, we would incur a net loss and could incur a reduction in capital. The failure of our loss limitation strategy could have a material adverse effect on our results of operations, financial condition or liquidity. We seek to mitigate loss exposure through multiple methods.
If net income is insufficient to absorb a required increase in loss reserves, we would incur a net loss and could incur a reduction in capital. 34 The failure of our loss limitation strategy could have a material adverse effect on our results of operations, financial condition or liquidity. We seek to mitigate loss exposure through multiple methods.
Successful integration may depend on, among other things, our 37 ability to effectively integrate acquired businesses or new personnel into our existing risk management and financial and operational reporting systems, our ability to effectively manage any regulatory issues created by our entry into new markets and geographic locations, our ability to retain key personnel and other operational and economic factors.
Successful integration may depend on, among other things, our ability to effectively integrate acquired businesses or new personnel into our existing risk management and financial and operational reporting systems, our ability to effectively manage any regulatory issues created by our entry into new markets and geographic locations, our ability to retain key personnel and other operational and economic factors.
Even if we are entitled to collateral in circumstances of default, such collateral may be illiquid or proceeds from such collateral when liquidated may not be sufficient to recover the full amount of the obligation. Our operating results may be adversely affected by currency fluctuations. Our reporting currency is the U.S. dollar.
Even if we are entitled to collateral in circumstances of default, such collateral may be illiquid or proceeds from such collateral when liquidated may not be sufficient to recover the full amount of the obligation. 40 Our operating results may be adversely affected by currency fluctuations. Our reporting currency is the U.S. dollar.
Compliance with data protection and privacy laws and regulations governing the processing of personal data and information is a legal requirement, and non-compliance may impede our services or result in increased costs. Failure to comply could result in material fines and/or penalties imposed by data protection and/or financial services regulators.
Compliance with data protection, privacy and cybersecurity laws and regulations governing the processing of personal information is a legal requirement, and non-compliance may impede our services or result in increased costs. Failure to comply could result in material fines and/or penalties imposed by data protection and/or financial services regulators.
Global climate change, and increasing regulation relating to climate change, may have an adverse effect on our results of operations, financial condition or liquidity. We are potentially exposed to different aspects of climate risk, specifically, physical, investment, liability and transition risks, as a result of climate change.
Global climate change, and increasing regulation relating to climate change, may have an adverse effect on our results of operations, financial condition or liquidity. We are potentially exposed to different aspects of climate risk, specifically, physical, credit, investment, liability and transition risks, as a result of climate change.
As a result, the full extent of liability under an insurance or reinsurance contract may not be known for many years after the contract is issued and a loss occurs. 34 If actual claims exceed loss reserves, our financial results could be adversely affected.
As a result, the full extent of liability under an insurance or reinsurance contract may not be known for many years after the contract is issued and a loss occurs. If actual claims exceed loss reserves, our financial results could be adversely affected.
Accordingly, we can offer no assurance that our loss reserves will be adequate to cover losses should they materialize beyond expectation. 32 We have limited terrorism coverage in our own reinsurance program for our exposure to catastrophe losses related to acts of terrorism.
Accordingly, we can offer no assurance that our loss reserves will be adequate to cover losses should they materialize beyond expectation. We have limited terrorism coverage in our own reinsurance program for our exposure to catastrophe losses related to acts of terrorism.
Additionally, catastrophic events and the effects of climate change could result in increased credit exposure to reinsurers and other counterparties with whom we transact business, declines in the value of investments we hold and disruptions to our physical infrastructure, systems and operations.
Additionally, catastrophic events and the effects of climate change could result in increased credit exposure to reinsurers and other counterparties with whom we transact business, declines in the value of investments we hold and disruptions to our physical infrastructure, systems, networks and operations.
There remains a risk that our financial condition or operating performance may be impacted by changes in our business model arising from climate change transition and by the performance of strategies we put in place to manage this transition.
In addition, there remains a risk that our financial condition or operating performance may be impacted by changes in our business model arising from climate change transition and by the performance of strategies we put in place to manage this transition.
In addition, capital market participants have created alternative products that are intended to compete with insurance and reinsurance products. New and alternative capital inflows in the insurance/reinsurance industry and the retention by 36 insured and cedants of more business may cause an excess supply of insurance and reinsurance capital.
In addition, capital market participants have created alternative products that are intended to compete with insurance and reinsurance products. New and alternative capital inflows in the insurance/reinsurance industry and the retention by insured and cedants of more business may cause an excess supply of insurance and reinsurance capital.
Operational Risk Operational risk represents the risk of loss as a result of inadequate processes, system failures, human error or external events, including but not limited to direct or indirect financial loss, reputational damage, customer dissatisfaction, and legal and regulatory penalties.
Operational Risk Operational risk represents the risk of loss as a result of inadequate processes, system and network failures, human error or external events, including but not limited to direct or indirect financial loss, reputational damage, customer dissatisfaction, and legal and regulatory penalties.
A downgrade, 38 withdrawal or negative watch/outlook by any independent rating agency could cause our competitive position in the insurance/reinsurance industry to suffer and make it more difficult for us to market our products.
A downgrade, withdrawal or negative watch/outlook by any independent rating agency could cause our competitive position in the insurance/reinsurance industry to suffer and make it more difficult for us to market our products.
Additionally, by the end of 2025, AXIS has committed to phasing out any existing investments in companies in the thermal coal or oil sands industries that exceed its policy thresholds in its fossil fuel policy.
Additionally, by the end of 2025, AXIS Capital has committed to phasing out any existing investments in companies in the thermal coal or oil sands industries that exceed its policy thresholds in its fossil fuel policy.
Therefore, if our Irish tax resident companies have an effective tax rate of less than 15%, the QDMTT may adversely affect our results. Changes in Irish tax law could adversely affect us.
Therefore, if our Irish tax resident companies have an effective tax rate of less than 15%, the QDMTT may adversely affect our results. 52 Changes in Irish tax law could adversely affect us.
There is additionally a risk that certain elements of our business cease to be viable as a result of climate change 'transition' risks, which relate to losses driven by policy, legal, technological, and market changes to address climate risks and include changes in consumer behavior, shareholder preferences, and any additional regulatory and legislative requirements, such as carbon taxes.
There is additionally a risk that certain elements of our business cease to be viable as a result of climate change transition risks, which relate to losses driven by policy, legal, technological, and market changes to address climate risks and include changes in consumer behavior, shareholder preferences, and any additional regulatory and legislative requirements, such as carbon taxes.
We may be liable to tax under the Corporate Income Tax Act 2023 of Bermuda, which may have an adverse effect on our results of operations.
We will be liable to tax under the Corporate Income Tax Act 2023 of Bermuda, which may have an adverse effect on our results of operations.
The loss of any of our key executives or the inability to attract, hire and retain other highly qualified personnel (whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees) could adversely affect our ability to conduct our business.
The loss of any of our key executives or the inability to attract, hire and retain senior management and other highly qualified personnel (whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees) could adversely affect our ability to conduct our business.
Failure to manage these risks in the development of new lines of businesses could materially and adversely affect our business, financial condition and results of operations. New regulations relating to the U.K.'s withdrawal from the E.U. could adversely affect us. In January 2020, the U.K. ceased to be a member of the EU ("Brexit").
Failure to manage these risks in the development of new lines of businesses could materially and adversely affect our business, financial condition and results of operations. 37 New regulations relating to the U.K.'s withdrawal from the EU could adversely affect us. In January 2020, the U.K. ceased to be a member of the EU ("Brexit").
When establishing our single point best estimate of loss reserves at December 31, 2023, management considered actuarial estimates and applied informed judgment regarding qualitative factors that may not be fully captured in actuarial estimates.
When establishing our single point best estimate of loss reserves at December 31, 2024, management considered actuarial estimates and applied informed judgment regarding qualitative factors that may not be fully captured in actuarial estimates.
An increase in premium rates is often offset by an increased supply of insurance and reinsurance capacity, via capital driven by new entrants, new capital market instruments and structures and/or the commitment of additional capital by existing insurers and reinsurers.
An increase in premium rates is often followed by an increased supply of insurance and reinsurance capacity, via capital driven by new entrants, new capital market instruments and structures and/or the commitment of additional capital by existing insurers and reinsurers.
A shutdown or inability to access one or more of our outsourcers' facilities, a power outage, or a failure of one or more of our outsourcers' information technology, telecommunications or other systems could significantly impair our ability to perform such functions on a timely basis.
A shutdown or inability to access one or more of our outsourcers' facilities, a power outage, or a failure of one or more of our outsourcers' information technology, telecommunications or other systems and networks could significantly impair our ability to perform such functions on a timely basis.
If we successfully purchase reinsurance, we may be unable to collect amounts due to us. A reinsurer’s insolvency, inability or refusal to make payments under the terms of its reinsurance agreement with us, could have a material adverse effect on our business because we remain liable to the insured.
If we successfully purchase reinsurance or execute portfolio transactions, we may be unable to collect amounts due to us. A reinsurer’s insolvency, or inability or refusal to make payments under the terms of its reinsurance agreement with us, could have a material adverse effect on our business because we remain liable to the insured.
It is possible that our approach to transfer pricing may become subject to greater scrutiny from the tax authorities in the jurisdictions in which we operate, which may lead to transfer pricing audits in the future. General Risk Factors Future changes in accounting standards may adversely impact our reported financial results.
It is possible that our approach to transfer pricing may become subject to greater scrutiny from the tax authorities in the jurisdictions in which we operate, which may lead to transfer pricing audits in the future. General Risk Factors Future changes in current accounting practices may adversely impact our reported financial results.
As a result, the occurrence of one or more catastrophe events could have a material adverse effect on our results of operations, financial condition or liquidity. Risks from cybersecurity threats are dynamic and fast evolving, and could be exacerbated by geopolitical tensions, including hostile actions taken by nation-states and terrorist organizations.
As a result, the occurrence of one or more catastrophe events could have a material adverse effect on our results of operations, financial condition or liquidity. Risks from cybersecurity threats and other data security incidents are dynamic and fast evolving, and could be exacerbated by geopolitical tensions, including hostile actions taken by nation-states and terrorist organizations.
The actual final cost of settling claims outstanding at December 31, 2023, as well as claims expected to arise from the unexpired period of risk, is uncertain.
The actual final cost of settling claims outstanding at December 31, 2024, as well as claims expected to arise from the unexpired period of risk, is uncertain.
In addition, some of our directors and officers reside outside the U.S., and all or a substantial portion of our assets and the assets of such persons are located in jurisdictions outside the U.S.
In addition, some of our directors and officers reside outside the U.S., and a substantial portion of our assets and the assets of such persons are located in jurisdictions outside the U.S.
The rate of legal and regulatory change, particularly in the UK and Ireland, has been increasing in recent years, with initiatives such as Consumer Duty in the UK and the Individual Accountability Framework in Ireland adding to the regulatory burden on our operating entities.
The rate of legal and regulatory change, particularly in the U.K. and Ireland, has been increasing in recent years, with initiatives such as Consumer Duty in the U.K. and the Individual Accountability Framework in Ireland adding to the regulatory burden on our operating entities.
Although this Supervisory Statement is directed towards national supervisory authorities, it does set out how EIOPA expects third country branches to be supervised across the European Union. In Ireland, the Central Bank of Ireland has published its response to this Supervisory Statement, and made its expectations of the insurers clear.
Although this Supervisory Statement is directed towards national supervisory authorities, it does set out how EIOPA expects third country branches to be supervised across the EU. In Ireland, the Central Bank of Ireland ("CBI") has published its response to this Supervisory Statement and made its expectations of the insurers clear.
If the Bermuda corporate income tax is not regarded as a covered tax for the purposes of Pillar Two in other jurisdictions, this may have a material impact on our future effective tax rate. Our non-U.S. companies may be subject to U.S. tax that may have an adverse effect on our results of operations.
This guidance may cause a portion of the Bermuda corporate income tax to not be regarded as a covered tax for purposes of Pillar Two in other jurisdictions, this may have a material impact on our future effective tax rate. Our non-U.S. companies may be subject to U.S. tax that may have an adverse effect on our results of operations.
In addition, any data breach may have an adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences. Our business relies on the processing of data in many jurisdictions and the movement of data across national borders.
In addition, any data breach may have an adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences. Our business relies on the processing of data, including personal information, in many jurisdictions and the movement of such data across national borders.
In addition, our exposure to cybersecurity incidents potentially includes exposure through “non-affirmative” coverages, meaning risks and potential losses associated with policies where cybersecurity risk is not explicitly included or excluded in the policy terms and conditions.
In addition, our exposure to cybersecurity incidents potentially includes exposure through "non-affirmative" coverages, meaning risks and potential losses associated with policies where cybersecurity risk is not explicitly included or excluded in the policy terms and conditions.
Interest rates and credit spreads are highly sensitive to many factors, including governmental and central bank monetary policies, inflation, domestic and international economic and political conditions, corporate profitability and other factors beyond our control. In 2023, the U.S.
Interest rates and credit spreads are highly sensitive to many factors, including governmental and central bank monetary policies, inflation, domestic and international economic and political conditions, corporate profitability and other factors beyond our control.
While we believe that loss reserves at December 31, 2023 are adequate, new information, events or circumstances, unknown at the original valuation date, may lead to future developments in ultimate losses being significantly greater or less than the loss reserves currently provided.
While we believe that loss reserves at December 31, 2024 are adequate, new information, events or circumstances, may lead to future developments in ultimate losses being significantly greater or less than the loss reserves currently provided.
In the case of proportional reinsurance treaties, we seek per occurrence limitations or losses and loss expenses ratio caps to limit the impact of losses from any one event. In proportional reinsurance, the reinsurer shares a proportional part of the premiums and losses of the reinsured. We also seek to limit our loss exposure through geographic diversification.
In the case of proportional reinsurance treaties, we seek per occurrence limitations or losses and loss expenses ratio caps to limit the impact of losses from any one event. In proportional reinsurance, the reinsurer shares a proportional part of the premiums and losses of the reinsured.
The insurance industry is undergoing extensive technological change. There is increasing focus by traditional insurance industry participants, technology companies, including new insurance technology companies ("InsurTech") and others on using technology and innovation (including artificial intelligence, digital platforms, data analytics, and robotics), to disrupt and/or enhance current business models and operations. This includes market-wide enabling technology initiatives (e.g.
The insurance industry is undergoing extensive technological change. There is increasing focus by traditional insurance industry participants, technology companies, including new insurance technology companies ("InsurTech") and others, on using technology and innovation (including artificial intelligence, digital platforms, data analytics, and robotics) to disrupt and/or enhance current business models and operations.
We face counterparty risk whenever we purchase reinsurance or retrocessional reinsurance, and inflation and industry catastrophic losses have heightened this risk as counterparties experience economic strains and uncertainty.
We face counterparty risk whenever we purchase reinsurance or retrocessional reinsurance, or enter into loss portfolio transactions. Inflation and industry catastrophic losses have heightened this risk as counterparties experience economic strains and uncertainty.
We may be adversely impacted by economic and social inflation Our operations, like those of other insurers and reinsurers, are susceptible to the effects of economic and social inflation because premiums are established before actual losses and loss expenses are known.
Our operations, like those of other insurers and reinsurers, are susceptible to the effects of economic and social inflation because premiums are established before actual losses and loss expenses are known.
While we do not believe that we are systemically important, as defined in Dodd-Frank, Dodd-Frank or additional federal or state regulation that is adopted in the future could impose significant burdens on us, impact the ways in which we conduct our business and govern our subsidiaries, increase compliance costs, increase the levels of capital required to operate our subsidiaries, duplicate state regulation and/or result in a competitive disadvantage. 45 Our European insurance and reinsurance entities are subject to local laws that implement the Solvency II Directive.
While we do not believe that we are systemically important, as defined in Dodd-Frank or additional federal or state regulation that is adopted in the future could impose significant burdens on us, impact the ways in which we conduct our business and govern our subsidiaries, increase compliance costs, increase the levels of capital required to operate our subsidiaries, duplicate state regulation and/or result in a competitive disadvantage.
Services, Inc., have a permanent establishment in the U.K. Accordingly, we expect that none of our non-U.K. resident companies, other than AXIS Specialty Europe and AXIS Specialty U.S. Services, Inc., will be subject to U.K. tax.
Accordingly, we expect that none of our non-U.K. resident companies, other than AXIS Specialty Europe and AXIS Specialty U.S. Services, Inc., will be subject to U.K. tax.
Consequently, the insolvency, inability or unwillingness of any of our present or future reinsurers to make timely payments to us under the terms of our reinsurance or retrocessional agreements could have a material adverse effect on our results of operations, financial condition, or liquidity. Our reliance on brokers subjects us to credit risk.
Consequently, the insolvency, inability or unwillingness of any of our present or future reinsurers to make timely payments to us under the terms of our reinsurance or retrocessional agreements or portfolio transactions contracts could have a material adverse effect on our results of operations, financial condition, or liquidity.
While we have not experienced a recent disruption or security breach, to the extent any such disruption or breach results in a loss or damage to our data, or inappropriate disclosure of our confidential information or that of others, it could impact our operations, cause significant damage to our reputation, affect our relationships with our customers and clients, lead to claims against us under various data privacy laws, result in regulatory action and ultimately have a material adverse effect on our business or operations.
While we have not experienced a material cybersecurity incident, to the extent any such incident results in a loss or damage to our data, or inappropriate disclosure of our confidential, personal, proprietary or other information or that of others, it could impact our operations, cause significant damage to our reputation, affect our relationships with our customers and clients, lead to claims against us under various data privacy laws, result in regulatory action, fines, damages, injunctions, or penalties and ultimately have a material adverse effect on our business or operations.
Geopolitical uncertainty regarding a variety of domestic and international matters, such as the U.S. political and regulatory environment and the potential for default by U.S., Canadian and by one or more European sovereign debt issuers, could have a material adverse effect on our results of operations, financial condition or liquidity.
Geopolitical uncertainty regarding a variety of domestic and international matters, such as the U.S. political and regulatory environment and the potential for default by U.S., Canadian or by one or more European sovereign debt issuers, could have a material adverse effect on our results of operations, investment portfolio, financial condition or liquidity. 32 We may be adversely impacted by economic and social inflation.
Such events could also result in negative publicity and damage to our reputation and cause us to lose business, which could therefore have a material adverse effect on our results of operations or financial condition. 44 Our insurance and reinsurance subsidiaries are subject to supervision and regulation.
Such events could also result in negative publicity and damage to our reputation, distract our management and technical personnel, adversely affect the demand for our products and services and cause us to lose business, which could therefore have a material adverse effect on our results of operations or financial condition. 44 Our insurance and reinsurance subsidiaries are subject to supervision and regulation.
A Bermuda court may, however, impose civil liability, including the possibility of monetary damages, on us or our directors and officers in a suit brought in the Supreme Court of Bermuda if the Bermuda court considers that it has jurisdiction to hear and decide any such claim.
A Bermuda court may, however, impose civil liability, including the possibility of monetary damages, on us or our directors and officers in a suit brought in the Supreme Court of Bermuda if the Bermuda court considers that it has jurisdiction to hear and decide any such claim. 47 There are provisions in our organizational documents that may reduce or increase the voting rights of our shares.
This tax will likely have a material impact on our effective tax rate. 50 Broadly, the Bermuda corporate income tax is intended to be treated as a covered tax for the purposes of Pillar Two and therefore no double taxation is expected to arise from these rules and the top-up taxes under Pillar Two in other jurisdictions.
Broadly, the Bermuda corporate income tax is intended to be treated as a covered tax for the purposes of Pillar Two and therefore no double taxation is expected to arise from these rules and the top-up taxes under Pillar Two in other jurisdictions.
In Belgium, the National Bank of Belgium has not yet made any public announcement regarding the EIOPA Supervisory Statement. As change the status quo by the National Bank of Belgium could impact Lloyd’s Insurance Company S.A., and consequently AXIS Managing Agency Limited. We continue to monitor this situation closely.
In Belgium, the National Bank of Belgium has not yet made any public announcement regarding the EIOPA Supervisory Statement. As Lloyd's is a key platform for AXIS, a change to the status quo by the National Bank of Belgium could impact Lloyd’s Insurance Company S.A., and consequently AXIS Managing Agency.
If any of our non-U.K. companies is liable to DPT, our results could be materially adversely affected. 51 In accordance with the Model Rules on Pillar Two, the U.K. government has enacted legislation to implement a QDMTT which seeks to ensure that U.K. tax resident companies have an effective tax rate in excess of 15% (broadly, this is determined in line with effective tax rates under the Model Rules on Pillar Two).
In accordance with the Model Rules on Pillar Two, the U.K. government has enacted legislation to implement a QDMTT which seeks to ensure that U.K. tax resident companies have an effective tax rate in excess of 15% (broadly, this is determined in line with effective tax rates under the Model Rules on Pillar Two).
Any deterioration in these factors could result in the brokers advising our clients to place their business with other insurers and reinsurers. In addition, these brokers also have, or may in the future acquire, ownership interests in insurance and reinsurance companies that may compete with us; these brokers may then favor their own insurers and reinsurers over other companies.
In addition, our brokers also have, or may in the future acquire, ownership interests in insurance and reinsurance companies that may compete with us. These brokers may then favor their own insurers and reinsurers over other companies.
Future legislation in the U.S. may arise in an effort to harmonize US tax law with OECD Pillar Two initiatives. No assurance may be given that future legislative, administrative, or judicial developments will not produce an adverse U.S. tax consequence to us. If any such adverse developments do occur, our results of operations may be materially adversely affected.
Future legislation in the U.S. may arise in an effort to harmonize U.S. tax law with OECD Pillar Two initiatives. No assurance may be given that future legislative, administrative, or judicial developments will not produce an adverse U.S. tax consequence to us.
The U.K. network of double tax treaties does not offer protection from a DPT charge. In the event that the rules apply to certain arrangements, upfront payment of the U.K. tax authority’s estimate of the deemed tax liability may be required.
The U.K. network of double tax treaties does not offer protection from a DPT charge. In the event that the rules apply to certain arrangements, upfront payment of the U.K. tax authority’s estimate of the deemed tax liability may be required. If any of our non-U.K. companies is liable to DPT, our results could be materially adversely affected.
We have exposure to unexpected losses resulting from acts of terrorism, political unrest and geopolitical instability, including, but not limited to, events related to Russia’s invasion of Ukraine, the Israel-Hamas conflict and the associated conflict in the Red Sea and in many regions of the world.
We have exposure to losses, both through underwriting and investments, resulting from acts of terrorism, political unrest and geopolitical instability, including, but not limited to, events related to Russia’s invasion of Ukraine, the conflict in the Middle East and in many regions of the world.
Changes in global climate conditions may further increase the frequency and severity of natural catastrophe activity and losses. Similarly, changes in global political and economic conditions may increase both the frequency and severity of man-made catastrophe events. Our business also has exposure to global or nationally occurring pandemics caused by highly infectious and potentially fatal diseases.
Secondary perils, for example severe convective storms, may also become increasingly impactful. Similarly, changes in global political and economic conditions may increase both the frequency and severity of man-made catastrophe events. Our business also has exposure to global or nationally occurring pandemics caused by highly infectious and potentially fatal diseases.
Our non-U.K. companies may be subject to U.K. tax that may have an adverse effect on our results of operations. We intend to operate in such a manner so that none of our non-U.K. companies are resident in the U.K. for tax purposes and that none of our non-U.K. resident companies, other than AXIS Specialty Europe and AXIS Specialty U.S.
We intend to operate in such a manner so that none of our non-U.K. companies are resident in the U.K. for tax purposes and that none of our non-U.K. resident companies, other than AXIS Specialty Europe and AXIS Specialty U.S. Services, Inc., have a permanent establishment in the U.K.
We may experience losses or gains resulting from fluctuations in the values of these non-U.S. currencies. Although we manage our foreign currency exposure through matching of our major foreign-denominated assets and liabilities, as well as through use of currency derivatives, there is no guarantee that we will successfully mitigate our exposure to foreign exchange losses due to unfavorable currency fluctuations.
Although we manage our foreign currency exposure through matching of our major foreign-denominated assets and liabilities, as well as through use of currency derivatives, there is no guarantee that we will successfully mitigate our exposure to foreign exchange losses due to unfavorable currency fluctuations.
Such investment may result in significant costs to our business and may require us to modify certain of our business practices. In addition, enforcement actions, investigations and the imposition of substantial fines and penalties by regulatory authorities as a result of data security incidents and privacy violations have increased dramatically over the past several years.
In addition, enforcement actions, investigations and the imposition of substantial fines and penalties by regulatory authorities as a result of data security incidents and privacy violations have increased dramatically over the past several years.
There are provisions in our organizational documents that may reduce or increase the voting rights of our shares. Our bye-laws generally provide that shareholders have one vote for each common share held by them and are entitled to vote, on a non-cumulative basis, at all meetings of shareholders.
Our bye-laws generally provide that shareholders have one vote for each common share held by them and are entitled to vote, on a non-cumulative basis, at all meetings of shareholders.
Anti-takeover provisions in our bye-laws could impede an attempt to replace our directors or to effect a change in control, which could diminish the value of our common shares. Our bye-laws contain provisions that may make it more difficult for shareholders to replace our directors and could delay or prevent a change of control that a shareholder might consider favorable.
Our bye-laws contain provisions that may make it more difficult for shareholders to replace our directors and could delay or prevent a change of control that a shareholder might consider favorable.
Ireland, along with other member states, has consistently resisted any movement towards standardized corporate tax rates or tax base in the E.U. The Government of Ireland has also made clear its commitment to retain the 12.5% rate of corporation tax.
Over the past number of years, various EU. member states have, from time to time, called for harmonization of the corporate tax base within the EU Ireland, along with other member states, has consistently resisted any movement towards standardized corporate tax rates or tax base in the EU The Government of Ireland has also made clear its commitment to retain the 12.5% rate of corporation tax.
Furthermore, enhanced competition could drive innovation, technological change and changing customer preferences in the markets in which we operate, and these changes could pose other risks to our businesses. For example, they could result in increasing expenses as we make investments to innovate our products and services.
Furthermore, enhanced competition could drive innovation, technological change and changing customer preferences in the markets in which we operate, and these changes could pose other risks to our businesses.
If, however, investment income earned by AXIS Specialty Europe or AXIS Re SE is deemed to be non-trading income, Irish corporation tax could apply to such investment income at a rate higher than the general 12.5% rate, and our results of operations could be materially adversely affected. 52 Changes in tax laws resulting from the proposals included in the European Commission’s draft third Anti-Tax Avoidance Directive ("ATAD III") could materially adversely affect us.
If, however, investment income earned by AXIS Specialty Europe or AXIS Re SE is deemed to be non-trading income, Irish corporation tax could apply to such investment income at a rate higher than the general 12.5% rate, and our results of operations could be materially adversely affected.
The impact of catastrophe events in years 2023, 2022 and 2021 included the recognition of the net losses and loss expenses of: • $138 million, in the aggregate, primarily related to Cyclone Gabrielle and other weather-related events in 2023; • $403 million, in the aggregate, primarily related to Hurricane Ian, the Russia-Ukraine war, Winter Storm Elliot, June European Convective Storms, and the COVID-19 pandemic in 2022; and • $443 million, in the aggregate, primarily related to Hurricane Ida, U.S.
The impact of catastrophe events in years 2024, 2023 and 2022 included the recognition of the net losses and loss expenses of: • $226 million, in the aggregate, primarily related to Hurricanes Milton, Helene, and Beryl, and the Red Sea Conflict in 2024; • $138 million, in the aggregate, primarily related to Cyclone Gabrielle and other weather-related events in 2023; and • $403 million, in the aggregate, primarily related to Hurricane Ian, the Russia-Ukraine war, Winter Storm Elliot, June European Convective Storms, and the COVID-19 pandemic in 2022. 31 These events materially reduced net income in the years noted.
The E.U. has sought to harmonize the response of member states to the BEPS reports via the Anti-Tax Avoidance Directives ("the ATAD and the ATAD II"). The ATAD and the ATAD II require all E.U. member states to apply certain specified anti-avoidance measures, including a controlled foreign companies regime, limitations on interest deduction and anti-hybrid rules.
The ATAD and the ATAD II require all EU member states to apply certain specified anti-avoidance measures, including a controlled foreign companies regime, limitations on interest deduction and anti-hybrid rules.
In addition to these considerations, changes in the frequency and severity of losses suffered by insureds and insurers may affect the cycles of the insurance and reinsurance business significantly, which in turn could affect our business, results of operations or financial condition. 31 Our results of operations, financial condition or liquidity could be adversely affected by the occurrence of natural and man-made disasters, as well as outbreaks of pandemic or contagious diseases.
In addition to these considerations, changes in the frequency and severity of losses suffered by insureds and insurers may affect the cycles of the insurance and reinsurance business significantly, which in turn could affect our business, results of operations or financial condition.
Pandemics or other outbreaks of contagious diseases and efforts to mitigate their spread have had, and could in the future have, widespread impacts on the way we operate. The spread of COVID-19 and mitigating measures caused unprecedented disruptions to the global economy and normal business operations across sectors and countries, including the sectors and countries in which we operate.
The spread of COVID-19 and mitigating measures caused unprecedented disruptions to the global economy and normal business operations across sectors and countries, including the sectors and countries in which we operate. Future pandemics or other outbreaks of contagious diseases may result in similar or worse economic implications and disruptions.
Furthermore, insurance policies provided by third parties may not cover us if we experience a significant loss from these risks. 42 If we experience difficulties with technology and/or data security, our ability to conduct our business might be adversely affected. While technology can streamline many business processes and ultimately reduce the cost of operations, technology initiatives present certain risks.
If we experience difficulties with technology and/or data security, our ability to conduct our business might be adversely affected. While technology can streamline many business processes and ultimately reduce the cost of operations, technology initiatives present certain risks.
Further to this, increased regulatory scrutiny in the form of reviews and inspections can put a strain on our resources.
Further to this, increased regulatory scrutiny in the form of reviews and inspections can put a strain on our resources. Further to this, we are seeing an increase in both the pace of, and severity of, regulatory change in Bermuda.
Conversely, in certain jurisdictions, when the insured or ceding insurer pays premiums for these policies to brokers for payment to us, these premiums might be considered to have been paid to us and the insured or ceding insurer will no longer be liable to us for those amounts, whether or not we have actually received the premiums from the broker.
Although the law is unsettled and depends upon the facts and circumstances of the particular case, in some jurisdictions, if a broker fails to make such a payment, we might remain liable to the insured or ceding insurer for the deficiency. 41 Conversely, in certain jurisdictions, when the insured or ceding insurer pays premiums for these policies to brokers for payment to us, these premiums might be considered to have been paid to us and the insured or ceding insurer will no longer be liable to us for those amounts, whether or not we have actually received the premiums from the broker.
These attacks and incidents have included, or may in the future include: unauthorized access, viruses, malware or other malicious code, ransomware, deceptive social engineering campaigns (also known as "phishing" or "spoofing"), loss or theft of assets, employee errors or malfeasance, third-party errors or malfeasance, as well as system failures and other security events.
These cyberattacks and other data security incidents have included, or may in the future include: viruses, malware or other malicious code, ransomware, software bugs, deceptive social engineering campaigns (also known as "phishing" or "spoofing"), credential stuffing, account takeovers, loss or theft of assets, employee errors or malfeasance, third-party errors or malfeasance, as well as system and network failures and other similar security events, which could result in the loss of, unauthorized access to or disclosure of, or the misuse or misappropriation of, confidential, personal, proprietary or other information.
We could be materially adversely affected if managing general agents, general agents, coverholders, other producers and third-party administrators in our program business exceed their underwriting and/or claims settlement authorities or otherwise breach obligations owed to us.
Despite this, our PML estimates are subject to a high degree of uncertainty, and actual losses from catastrophe events may differ materially. We could be materially adversely affected if managing general agents, general agents, coverholders, other producers and third-party administrators in our program business exceed their underwriting and/or claims settlement authorities or otherwise breach obligations owed to us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeKey components of our cybersecurity risk management program include: • risk assessments designed to help identify cybersecurity risks to our critical systems, information, and services. • a security team principally responsible for managing (1) our cybersecurity policies & risk assessment processes, (2) our security controls & testing, (3) identifying vulnerabilities and managing remediation, and (4) our cybersecurity monitoring & incident response. • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes. • managing a cybersecurity awareness and training program that covers employees and contractors who access internal systems. • a cybersecurity incident response plan that includes procedures for responding to various types of cybersecurity incidents and tested through periodic tabletop exercises. • a third-party security risk assessment team, which is involved with identifying, assessing, and controlling risks that occur due to interactions with third parties including vendors and procurement. • a cyber risk assessment process to assist in assessing the security posture of third parties. • restricted physical access to critical areas, servers, and network equipment. • business continuity and disaster response plans.
Biggest changeKey components of our cybersecurity risk management program include: • risk assessments designed to help identify cybersecurity risks to our critical systems, information, and services. • a security team principally responsible for managing (1) our cybersecurity policies & risk assessment processes, (2) security architecture and engineering, (3) identifying vulnerabilities, managing remediation, and testing of our security controls, and (4) our cybersecurity monitoring & incident response. • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes. • managing a cybersecurity awareness and training program that covers employees and contractors who access internal systems. • a cybersecurity incident response plan that includes procedures for responding to various types of cybersecurity incidents and tested through periodic tabletop exercises. • a third-party security risk assessment team, which is involved with identifying, assessing, and controlling risks that occur due to interactions with third parties including vendors and procurement. • restricted physical access to critical areas, servers, and network equipment. • support of our business continuity and disaster response plans.
In 2023, our Board and Risk and Audit Committees received periodic updates throughout the year on cybersecurity matters, and these updates are part of their standing agendas. These updates include reports regarding items such as cybersecurity strategies, program effectiveness, key risks and performance metrics related to the Company’s information security program and the Company’s mitigating controls.
In 2024, our Board and Risk and Audit Committees received periodic updates throughout the year on cybersecurity matters, and these updates are part of their standing agendas. These updates include reports regarding items such as cybersecurity strategies, program effectiveness, key risks and performance metrics related to the Company’s information security program and the Company’s mitigating controls.
Cybersecurity incidents are responded to by a multi-disciplinary Incident Response team and if appropriate, escalated to our Cybersecurity Disclosure Committee, Executive Management, and the Board. The level of escalation will vary depending on the severity and scope of the cyber incident.
Cybersecurity incidents are responded to by a multi-disciplinary Incident Response team and if appropriate, escalated to our Cybersecurity Disclosure Subcommittee, Executive Management, and the Board. The level of escalation will vary depending on the severity and scope of the cyber incident.
We have designed our enterprise-wide information security program consistent with industry standards using the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
We have designed our enterprise-wide information security program consistent with industry standards using the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Risk assessment, risk-based analysis, and judgment are used to select security controls to address risks.
Impact of Material Risk We have not experienced a material cybersecurity incident; however, financial institutions face risks from threat actors that focus on attacks of critical information systems infrastructure assets, disruption to operations, and ransomware groups that steal data, encrypt systems, and demand a payment.
Impact of Material Risk To date, no cybersecurity incidents have materially impacted the Company, including the Company's business strategy, results of operations, or financial conditions. However, financial institutions face risks from threat actors that focus on attacks of critical information systems infrastructure assets, disruption to operations, and ransomware groups that steal data, encrypt systems, and demand a payment.
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As described above, we utilize a risk-based approach and judgment to determine the security controls to implement, and it is possible we may not implement appropriate controls if we do not recognize or underestimate a particular risk.
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In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks and events, and when detected by security tools or third parties, may not always be immediately understood or acted upon.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We maintain leased office facilities in Bermuda, the U.S., Europe, Singapore, and Canada. In January 2023, we sold the building in which our office in Dublin, Ireland was located. We renew and enter into leases in the ordinary course of business as required.
Biggest changeITEM 2. PROPERTIES We maintain leased office facilities in Bermuda, the U.S., Europe, Singapore, and Canada. We renew and enter into leases in the ordinary course of business as required. Our global headquarters is located at AXIS House, 92 Pitts Bay Road, Pembroke HM 08, Bermuda.
Our global headquarters is located at AXIS House, 92 Pitts Bay Road, Pembroke HM 08, Bermuda. We believe that our office space is sufficient for us to conduct our operations for the foreseeable future.
We believe that our office space is sufficient for us to conduct our operations for the foreseeable future.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(b) Includes shares repurchased from employees to satisfy personal withholding tax liabilities that arise on the vesting of share-settled restricted stock units. (c) On December 8, 2022, our Board of Directors authorized a new share repurchase program for up to $100 million of our common shares, effective January 1, 2023 through December 31, 2023.
Biggest change(b) Includes shares repurchased from employees to satisfy personal withholding tax liabilities that arise on the vesting of share-settled restricted stock units under our 2017 Long-Term Equity Compensation Plans. (c) At June 30, 2024, authorization under the Company's share repurchase program approved in December 2023 was exhausted.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common shares are listed on the New York Stock Exchange under the symbol "AXS". On February 23, 2024, the number of holders of record of our common shares was 16.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common shares are listed on the New York Stock Exchange under the symbol "AXS". On February 21, 2025, the number of holders of record of our common shares was 17.
Share repurchases may be effected from time to time in the open market or privately negotiated transactions, depending on market conditions. 56 Performance Graph Set forth below is a line graph comparing the dollar change in the cumulative total shareholder return on the Company's Common Shares from December 31, 2018, through December 31, 2023, as compared to the cumulative total return of the Standard & Poor's 500 Stock Index and the cumulative total return of the Standard & Poor's Property-Casualty Insurance Index.
The new share repurchase program is open-ended, allowing us to repurchase its shares from time to time in the open market or privately negotiated transactions, depending on market conditions. 56 Performance Graph Set forth below is a line graph comparing the dollar change in the cumulative total shareholder return on the Company's Common Shares from December 31, 2019, through December 31, 2024, as compared to the cumulative total return of the Standard & Poor's 500 Stock Index and the cumulative total return of the Standard & Poor's Property-Casualty Insurance Index.
Issuer Purchases of Equity Securities Common Shares The following table shows information regarding the number of common shares repurchased in the quarter ended December 31, 2023: Period Total number of shares purchased (a) (b) Average price paid per share Total number of shares purchased as part of publicly announced programs Maximum number (or approximate dollar value) of shares that may yet be purchased under the programs (c) October 1-31, 2023 14 $57.62 — $100 million November 1-30, 2023 29 $57.92 — $100 million December 1-31, 2023 66 $55.45 — $100 million Total 109 — $100 million (a) In thousands.
Issuer Purchases of Equity Securities Common Shares The following table shows information regarding the number of common shares repurchased in the quarter ended December 31, 2024: Period Total number of shares purchased (a) (b) Average price paid per share Total number of shares purchased as part of publicly announced programs (a) Maximum number (or approximate dollar value) of shares that may yet be purchased under the programs (c) (d) October 1-31, 2024 4 $79.72 — $260 million November 1-30, 2024 418 $85.45 413 $225 million December 1-31, 2024 271 $92.45 268 $200 million Total 693 681 $200 million (a) In thousands.
The chart depicts the value on December 31, 2019, 2020, 2021, 2022, and 2023, of a $100 investment made on December 31, 2018, with all dividends reinvested. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/30/2022 12/29/2023 AXIS Capital Holdings Limited $100.00 $118.26 $104.19 $116.49 $119.56 $126.18 S&P 500 P&C Index $100.00 $125.87 $134.63 $160.58 $190.89 $211.53 S&P 500 Index $100.00 $131.49 $155.68 $200.37 $164.08 $207.21
The chart depicts the value on December 31, 2020, 2021, 2022, 2023, and 2024 of a $100 investment made on December 31, 2019, with all dividends reinvested. 12/31/2019 12/31/2020 12/31/2021 12/30/2022 12/29/2023 12/31/2024 AXIS Capital Holdings Limited $100.00 $88.10 $98.50 $101.10 $106.70 $174.90 S&P 500 P&C Index $100.00 $106.96 $127.58 $151.65 $168.05 $227.67 S&P 500 Index $100.00 $118.40 $152.39 $124.79 $157.59 $197.02
On December 7, 2023, our Board of Directors renewed its authorization for the repurchase of up to $100 million of our common shares, effective January 1, 2024, through December 31, 2024.
(d) On May 16, 2024, the Company's Board of Directors approved a new share repurchase program for up to $300 million of common shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeReinsurance Segment Results for the reinsurance segment were as follows: Year ended December 31, 2023 % Change 2022 % Change 2021 Revenues: Gross premiums written $ 2,215,761 (16%) $ 2,629,014 (7%) $ 2,822,752 Net premiums written 1,343,605 (29%) 1,885,150 (7%) 2,031,739 Net premiums earned 1,622,081 (20%) 2,026,171 (2%) 2,058,511 Other insurance related income 22,693 81% 12,514 (42%) 21,633 Expenses: Current accident year net losses and loss expenses (1,077,572) (1,465,739) (1,507,835) Prior year reserve development (235,529) 9,183 14,049 Acquisition costs (352,482) (444,179) (437,490) Underwriting-related general and administrative expenses (79,373) (106,585) (107,552) Underwriting income (loss) $ (100,182) $ 31,365 $ 41,317 Ratios: % Point Change % Point Change Current accident year loss ratio, excluding catastrophe and weather-related losses 64.8 % 2.2 62.6 % 2.7 59.9 % Catastrophe and weather-related losses ratio 1.6 % (8.1) 9.7 % (3.6) 13.3 % Current accident year loss ratio 66.4 % (5.9) 72.3 % (0.9) 73.2 % Prior year reserve development ratio 14.6 % 15.0 (0.4 %) 0.2 (0.6 %) Net losses and loss expenses ratio 81.0 % 9.1 71.9 % (0.7) 72.6 % Acquisition cost ratio 21.7 % (0.2) 21.9 % 0.6 21.3 % Underwriting-related general and administrative expense ratio 4.9 % (0.4) 5.3 % 0.2 5.1 % Combined ratio 107.6 % 8.5 99.1 % 0.1 99.0 % 67 Gross Premiums Written : Gross premiums written by line of business were as follows: % Change Year ended December 31, 2023 2022 2021 2022 to 2023 2021 to 2022 Liability $ 642,801 29 % $ 719,831 27 % $ 722,931 26 % (11 %) — % Accident and health 396,668 18 % 411,891 16 % 398,641 14 % (4 %) 3 % Professional lines 379,222 17 % 400,807 15 % 353,671 13 % (5 %) 13 % Credit and surety 351,083 16 % 298,565 11 % 208,108 7 % 18 % 43 % Motor 201,466 9 % 239,794 9 % 279,966 10 % (16 %) (14 %) Agriculture 126,300 6 % 128,012 5 % 86,128 3 % (1 %) 49 % Marine and aviation 62,260 3 % 93,371 4 % 73,968 3 % (33 %) 26 % Run-off lines Catastrophe 30,175 1 % 222,810 9 % 492,397 16 % (86 %) (55 %) Property 21,513 1 % 103,492 4 % 213,406 8 % (79 %) (52 %) Engineering 4,273 — % 10,441 — % (6,464) — % (59 %) nm Total run-off lines 55,961 2 % 336,743 13 % 699,339 24 % (83 %) (52 %) Total $ 2,215,761 100 % $ 2,629,014 100 % $ 2,822,752 100 % (16 %) (7 %) nm – not meaningful Gross premiums written in 2023 decreased by $413 million, or 16% ($365 million, or 14%, on a constant currency basis), compared to 2022.
Biggest changeUnderwriting-Related General and Administrative Expense Ratio The underwriting-related general and administrative expense ratio decreased to 12.4% in 2024 from 13.7% in 2023, mainly driven by increases in net premiums earned, partially offset by an increase in performance-related compensation costs. 68 Reinsurance Segment Results for the reinsurance segment were as follows: Year ended December 31, 2024 % Change 2023 % Change 2022 Revenues: Gross premiums written $ 2,390,304 8% $ 2,215,761 (16%) $ 2,629,014 Net premiums written 1,506,806 12% 1,343,605 (29%) 1,885,150 Net premiums earned 1,380,199 (15%) 1,622,081 (20%) 2,026,171 Other insurance related income 30,627 35% 22,693 81% 12,514 Expenses: Current accident year net losses and loss expenses (921,181) (1,077,572) (1,465,739) Prior year reserve development 8,114 (235,529) 9,183 Acquisition costs (303,636) (352,482) (444,179) Underwriting-related general and administrative expenses (50,513) (79,373) (106,585) Underwriting income (loss) $ 143,610 $ (100,182) $ 31,365 Ratios: % Point Change % Point Change Current accident year loss ratio, excluding catastrophe and weather-related losses 66.0 % 1.2 64.8 % 2.2 62.6 % Catastrophe and weather-related losses ratio 0.7 % (0.9) 1.6 % (8.1) 9.7 % Current accident year loss ratio 66.7 % 0.3 66.4 % (5.9) 72.3 % Prior year reserve development ratio (0.5 %) (15.1) 14.6 % 15.0 (0.4 %) Net losses and loss expenses ratio 66.2 % (14.8) 81.0 % 9.1 71.9 % Acquisition cost ratio 22.0 % 0.3 21.7 % (0.2) 21.9 % Underwriting-related general and administrative expense ratio 3.6 % (1.3) 4.9 % (0.4) 5.3 % Combined ratio 91.8 % (15.8) 107.6 % 8.5 99.1 % 69 Gross Premiums Written : Gross premiums written by line of business were as follows: % Change Year ended December 31, 2024 2023 2022 2023 to 2024 2022 to 2023 Liability $ 616,333 26 % $ 642,801 29 % $ 719,831 27 % (4 %) (11 %) Accident and health 436,296 18 % 396,668 18 % 411,891 16 % 10 % (4 %) Professional lines 421,846 18 % 379,222 17 % 400,807 15 % 11 % (5 %) Credit and surety 417,717 17 % 351,083 16 % 298,565 11 % 19 % 18 % Motor 238,961 10 % 201,466 9 % 239,794 9 % 19 % (16 %) Agriculture 150,373 6 % 126,300 6 % 128,012 5 % 19 % (1 %) Marine and aviation 82,274 3 % 62,260 3 % 93,371 4 % 32 % (33 %) Run-off lines Catastrophe 10,823 1 % 30,175 1 % 222,810 9 % (64 %) (86 %) Property 3,130 — % 21,513 1 % 103,492 4 % (85 %) (79 %) Engineering 12,551 1 % 4,273 — % 10,441 — % nm (59 %) Total run-off lines 26,504 2 % 55,961 2 % 336,743 13 % (53 %) (83 %) Total $ 2,390,304 100 % $ 2,215,761 100 % $ 2,629,014 100 % 8 % (16 %) nm – not meaningful Gross premiums written in 2024 increased by $175 million, or 8% , compared to 2023.
A change in initial premium estimates of this magnitude would not have a material impact on pre-tax net income, after consid ering current losses and loss expenses ratios together with acquisition cost ratios. However, larger variations, positive or negative, are possible. Net Premiums Earned Premiums are earned evenly over the period during which we are exposed to the underlying risk.
A change in initial premium estimates of this magnitude would not have a material impact on pre-tax net income, after consid ering current losses and loss expenses ratios together with acquisition cost ratios. However, larger variations, positive or negative, are possible. Net Premiums Earned Premiums are earned over the period during which we are exposed to the underlying risk.
However, we manage our investment portfolio in such a way that unrealized and realized foreign exchange losses (gains) on our investment portfolio, including unrealized foreign exchange losses (gains) on our equity securities and foreign exchange losses (gains) realized on the sale of our available for sale investments and equity securities recognized in net investment gains (losses) and unrealized foreign exchange losses (gains) on our available for sale investments in other comprehensive income (loss), generally offset a large portion of the foreign exchange losses (gains) arising from our underwriting portfolio, thereby minimizing the impact of foreign exchange rate movements on total shareholders' equity.
However, we manage our investment portfolio in such a way 82 that unrealized and realized foreign exchange losses (gains) on our investment portfolio, including unrealized foreign exchange losses (gains) on our equity securities and foreign exchange losses (gains) realized on the sale of our available for sale investments and equity securities recognized in net investment gains (losses) and unrealized foreign exchange losses (gains) on our available for sale investments in other comprehensive income (loss), generally offset a large portion of the foreign exchange losses (gains) arising from our underwriting portfolio, thereby minimizing the impact of foreign exchange rate movements on total shareholders' equity.
Therefore, it would be inappropriate to take each of the amounts and add them together in an attempt to 101 estimate total volatility. Additionally, it is noted that in some instances, for example the projection of catastrophe estimates or credit and political risks estimates, development patterns are not appropriate as more bespoke techniques are used.
Therefore, it would be inappropriate to take each of the amounts and add them together in an attempt to estimate total volatility. Additionally, it is noted that in some instances, for example the projection of catastrophe estimates or credit and political risks estimates, development patterns are not appropriate as more bespoke techniques are used.
While we believe that these are reasonably likely scenarios, we do not believe this sensitivity analysis should be considered an actual reserve range. Reinsurance Recoverable on Unpaid Losses and Loss Expenses In the normal course of business, we purchase facultative and treaty reinsurance protection to limit ultimate losses and to reduce loss aggregation risk.
While we believe that these are reasonably likely scenarios, we do not believe this sensitivity analysis should be considered an actual reserve range. 103 Reinsurance Recoverable on Unpaid Losses and Loss Expenses In the normal course of business, we purchase facultative and treaty reinsurance protection to limit ultimate losses and to reduce loss aggregation risk.
For corporate debt and structured securities, we measure the country of risk exposure based on a number of factors including, but not limited to, location of management, principal operations and country of revenues. An analysis of our fixed maturities portfolio by major asset classes is detailed below: Non-U.S.
For corporate debt and structured securities, we measure the country of risk exposure based on a number of factors, including but not limited to location of management, principal operations and country of revenues. 85 An analysis of our fixed maturities portfolio by major asset classes is detailed below: Non-U.S.
Other privately held investments also includes investments in private company investment funds focusing on financial services technology companies with an emphasis on insurance technology companies ("private company investment funds "). The fair values of private company investment funds are estimated using NAVs as advised by external fund managers or third-party administrators.
Other privately held investments includes investments in private company investment funds focusing on financial services technology companies with an emphasis on insurance technology companies ("private company investment funds "). The fair values of private company investment funds are estimated using NAVs as advised by external fund managers or third-party administrators.
Our available for sale ("AFS") investment portfolio is the largest component of consolidated total assets, and it is a multiple of shareholders’ equity. As a result, impairment losses could be material to our results of operations and financial condition particularly during periods of dislocation in financial markets.
Our available for sale ("AFS") investment portfolio is the largest component of total assets, and it is a multiple of shareholders’ equity. As a result, impairment losses could be material to our results of operations and financial condition particularly during periods of dislocation in financial markets.
The net gain incurred by the AXIS Re SE, the Irish reinsurance company, resulted in the release of a valuation allowance of $25 million against the net deferred tax assets of AXIS Re SE and AXIS Re Europe, the Swiss branch of the Irish reinsurance company, of which $12 million was released in net income (loss) and $13 million was released in other comprehensive income (loss).
The net gain incurred by AXIS Re SE, the Irish reinsurance company, resulted in the release of a valuation allowance of $25 million against the net deferred tax assets of AXIS Re SE and AXIS Re Europe, the Swiss branch of the Irish reinsurance company, of which $12 million was released in net income (loss) and $13 million was released to other comprehensive income (loss).
Refer to Item 8, Note 2 to the Consolidated Financial Statements 'Basis of Presentation and Significant Accounting Policies' for further details. • The second estimate is the amount of the reinsurance recoverable balance that we believe ultimately will not be collected from reinsurers.
Refer to Item 8, Note 2 to the Consolidated Financial Statements 'Basis of Presentation and Significant Accounting Policies' for further details. 104 • The second estimate is the amount of the reinsurance recoverable balance that we believe ultimately will not be collected from reinsurers.
Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – Reserving Methodology – Actuarial Analysis' for a description of the reserve estimation methods, Expected Loss Ratio Method ("ELR Method"), Loss Development Method (also referred to as the "Chain Ladder Method" or "Link Ratio Method") and Bornhuetter-Ferguson Method ("BF Method") which are commonly employed by our actuaries together with a discussion of their strengths and weaknesses. 96 Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – Reserving Methodology – Key Actuarial Assumptions', which notes that the most significant assumptions used in our quarterly loss reserving process are expected loss ratios ("ELRs) and loss development patterns.
Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – Reserving Methodology – Actuarial Analysis' for a description of the reserve estimation methods, Expected Loss Ratio Method ("ELR Method"), Loss Development Method (also referred to as the "Chain Ladder Method" or "Link Ratio Method") and Bornhuetter-Ferguson Method ("BF Method") which are commonly employed by our actuaries together with a discussion of their strengths and weaknesses. 98 Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – Reserving Methodology – Key Actuarial Assumptions', which notes that the most significant assumptions used in our quarterly loss reserving process are expected loss ratios ("ELRs") and loss development patterns.
Best An "opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations". A (Stable) (2) "Excellent ability to meet ongoing insurance obligations" The 'A' category is the third highest rating out of fourteen.
Best An "opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations". A (Stable) "Excellent ability to meet ongoing insurance obligations" The 'A' category is the third highest rating out of fourteen.
However, factors such as those described in Item 1A ' Risk Factors' could cause actual events or results to differ materially from the underlying assumptions and estimates which could lead to a material adverse impact on our results of operations, financial condition, or liquidity. 95 Reserve for Losses and Loss Expenses Overview We believe the most significant accounting judgment we make is the estimate of reserve for losses and loss expenses ("loss reserves").
However, factors such as those described in Item 1A ' Risk Factors' could cause actual events or results to differ materially from the underlying assumptions and estimates which could lead to a material adverse impact on our results of operations, financial condition, or liquidity. 97 Reserve for Losses and Loss Expenses Overview We believe the most significant accounting judgment we make is the estimate of reserve for losses and loss expenses ("loss reserves").
Ratings outlooks ('Positive', 'Negative' and 'Stable') are assigned to indicate a rating’s potential direction over an intermediate term, generally defined as 36 months. Moody’s Investors Service "Opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations." A2 (Stable) (3) "Offers good financial security" The 'A' category is the third highest out of nine rating categories.
Ratings outlooks ('Positive', 'Negative' and 'Stable') are assigned to indicate a rating’s potential direction over an intermediate term, generally defined as 36 months. Moody’s Investors Service "Opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations." A2 (Stable) (2) "Offers good financial security" The 'A' category is the third highest out of nine rating categories.
We expect the majority of development for an accident year or underwriting year to be recognized in the subsequent one to three years. 97 Factors that contribute additional uncertainty to estimates for longer tail business include, but are not limited to: • potential volatility of actuarial estimates, given the number of years of development it takes to produce a significant incurred loss as a percentage of ultimate losses; • inherent uncertainties about loss trends, claims inflation (e.g., medical, judicial, social) and general economic conditions; and • the possibility of future litigation, legislative or judicial change that may impact future loss experience relative to prior industry loss experience relied on in reserve estimation.
We expect the majority of development for an accident year or underwriting year to be recognized in the subsequent one to three years. 99 Factors that contribute additional uncertainty to estimates for longer tail business include, but are not limited to: • potential volatility of actuarial estimates, the number of years of development it takes to produce a significant incurred loss as a percentage of ultimate losses; • inherent uncertainties about loss trends, claims inflation (e.g., medical, judicial, social) and general economic conditions; and • the possibility of future litigation, legislative or judicial change that may impact future loss experience relative to prior industry loss experience relied on in reserve estimation.
Accordingly, dividend policy is an integral part of the value we create for shareholders. Our Board of Directors has approved quarterly common share dividends for twenty consecutive years.
Accordingly, dividend policy is an integral part of the value we create for shareholders. Our Board of Directors has approved quarterly common share dividends for twenty one consecutive years.
As the underlying business incepts throughout the contract term which is typically one year, and the underlying business typically has a one year coverage period, these premiums are generally earned evenly over a 24-month period. 105 Fair Value Measurements of Financial Assets and Liabilities Fair value is defined as the price to sell an asset or transfer a liability (i.e., the "exit price") in an orderly transaction between market participants.
As the underlying business incepts throughout the contract term which is typically one year, and the underlying business typically has a one year coverage period, these premiums are generally earned evenly over a 24-month period. 107 Fair Value Measurements of Financial Assets and Liabilities Fair value is defined as the price to sell an asset or transfer a liability (i.e., the "exit price") in an orderly transaction between market participants.
Our intent and ability to issue securities pursuant to this registration statement will depend on market conditions at the time of any proposed offering. 93 Financial Strength Ratings Operating subsidiaries Our principal insurance and reinsurance operating subsidiaries are assigned financial strength ratings from internationally recognized rating agencies, including Standard & Poor’s, A.M. Best, and Moody’s Investors Service.
Our intent and ability to issue securities pursuant to this registration statement will depend on market conditions at the time of any proposed offering. 95 Financial Strength Ratings Operating subsidiaries Our principal insurance and reinsurance operating subsidiaries are assigned financial strength ratings from internationally recognized rating agencies, including Standard & Poor’s, A.M. Best, and Moody’s Investors Service.
For example, if assumed loss development pattern for insurance property business was three months shorter with no accompanying change in ELR assumption, loss reserves may decrease by approximately $42 million. Each of the impacts detailed in the tables is estimated individually, without consideration for any correlation among key assumptions or among lines of business.
For example, if assumed loss development pattern for insurance property business was three months shorter with no accompanying change in ELR assumption, loss reserves may decrease by approximately $63 million. Each of the impacts detailed in the tables is estimated individually, without consideration for any correlation among key assumptions or among lines of business.
Restricted Assets Refer to Item 8, Note 5(j) to the Consolidated Financial Statements 'Investments'. 88 LIQUIDITY AND CAPITAL RESOURCES Liquidity Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet the short-term and long-term cash requirements of its business operations. We manage liquidity at the holding company and operating subsidiary level.
Restricted Assets Refer to Item 8, Note 5(j) to the Consolidated Financial Statements 'Investments'. 90 LIQUIDITY AND CAPITAL RESOURCES Liquidity Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet the short-term and long-term cash requirements of its business operations. We manage liquidity at the holding company and operating subsidiary level.
At December 31, 2023, the use of different assumptions could have a material effect on the allowance for expected credit losses. To the extent the creditworthiness of our reinsurers deteriorates due to an adverse event affecting the reinsurance industry, such as a large number of catastrophes, uncollectible amounts could be significantly greater than the allowance for expected credit losses.
At December 31, 2024, the use of different assumptions could have a material effect on the allowance for expected credit losses. To the extent the creditworthiness of our reinsurers deteriorates due to an adverse event affecting the reinsurance industry, such as a large number of catastrophes, uncollectible amounts could be significantly greater than the allowance for expected credit losses.
Their pricing methodologies include mapping securities based on trade data, bids or offers, observed spreads and performance on newly issued securities. They may also establish pricing through observing secondary trading of similar securities. At December 31, 2023 and 2022, we did not adjust any pricing provided by independent pricing services.
Their pricing methodologies include mapping securities based on trade data, bids or offers, observed spreads and performance on newly issued securities. They may also establish pricing through observing secondary trading of similar securities. At December 31, 2024 and 2023, we did not adjust any pricing provided by independent pricing services.
We may redeem these shares on or after November 7, 2021 at a redemption price of $2,500 per Series E preferred share (equivalent to $25 per depositary share) (refer to Item 8, Note 15 to the Consolidated Financial Statements 'Shareholders' Equity' for further details ) .
We could redeem these shares on or after November 7, 2021 at a redemption price of $2,500 per Series E preferred share (equivalent to $25 per depositary share) (refer to Item 8, Note 15 to the Consolidated Financial Statements 'Shareholders' Equity' for further details) .
Reserving for Credit and Political Risk Business Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – 'Net incurred and Paid Claims Development Tables by Accident Year – Insurance segment – Insurance Credit and Political Risk' for details of this line of business and the associated key actuarial assumptions.
Reserving for Credit and Political Risk Business Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – 'Net incurred and Paid Claims Development Tables by Accident Year – Insurance segment – Insurance Credit and Political Risk' and 'Reserve for Losses and Loss Expenses – 'Net incurred and Paid Claims Development Tables by Accident Year – Reinsurance segment – Reinsurance Credit and Surety' for details of this line of business and the associated key actuarial assumptions.
To the extent that reinsurers do not meet their obligations under the reinsurance agreements, we remain liable. Consequently, we are exposed to credit risk associated with reinsurance recoverable on unpaid losses and loss expenses ("reinsurance recoverables") to the extent that any of our reinsurers are unable or unwilling to pay claims.
To the extent that reinsurers do not meet their obligations under the reinsurance agreements, we remain liable. Consequently, we are exposed to credit risk associated with reinsurance recoverable on unpaid and paid losses and loss expenses to the extent that any of our reinsurers are unable or unwilling to pay claims.
Independent Actuarial Review On an annual basis, we use an independent actuarial firm to provide an actuarial opinion on the reasonableness of loss reserves for each of our operating subsidiaries and statutory reporting entities as these actuarial opinions are required to meet various insurance regulatory requirements.
Independent Actuarial Review On an annual basis, we engage an independent actuarial firm to provide an actuarial opinion on the reasonableness of loss reserves for each of our operating subsidiaries and statutory reporting entities as these actuarial opinions are required to meet various insurance regulatory requirements.
(2) In the ordinary course of business, we renew and enter into new leases for office space which expire at various dates (refer to Item 8, Note 13 to the Consolidated Financial Statements ' Leases ' for further details).
(2) In the ordinary course of business, we renew and enter into new leases for office space that expire at various dates (refer to Item 8, Note 13 to the Consolidated Financial Statements ' Leases ' for further details).
The impairment losses in 2023 and 2022 were principally due to impairments of non-investment grade corporate debt securities that we intended to sell or where we determined that it was more likely than not that we were required to sell securities before their anticipated recovery. 73 Change in Fair Value of Investment Derivatives We economically hedge foreign exchange exposure with derivative contracts.
The impairment losses in 2023 were principally due to impairments of non-investment grade corporate debt securities that we intended to sell or where we determined that it was more likely than not that we were required to sell securities before their anticipated recovery. Change in Fair Value of Investment Derivatives We economically hedge foreign exchange exposure with derivative contracts.
At December 31, 2023, the U.S. operations had a deferred tax asset of $54 million for the unrealized losses on its fixed maturities that were recorded in other comprehensive income (loss).
At December 31, 2023, the U.S. operations had a deferred tax asset of $41 million for the unrealized losses on its fixed maturities that were recorded in other comprehensive income (loss).
Sensitivity Analysis While we believe that loss reserves at December 31, 2023 are adequate, new information, events or circumstances may result in ultimate losses that are materially greater or less than provided for in our loss reserves.
Sensitivity Analysis While we believe that loss reserves at December 31, 2024 are adequate, new information, events or circumstances may result in ultimate losses that are materially greater or less than provided for in our loss reserves.
Refer to Item 8, Note 2 to the Consolidated Financial Statements 'Basis of Presentation and Significant Accounting Policies' for further details. At December 31, 2023, the allowance for expected credit losses was $37 million (2022: $31 million). We have not written off any significant reinsurance recoverable balances in the last three years.
Refer to Item 8, Note 2 to the Consolidated Financial Statements 'Basis of Presentation and Significant Accounting Policies' for further details. At December 31, 2024, the allowance for expected credit losses was $43 million (2023: $37 million ). We have not written off any significant reinsurance recoverable balances in the last three years.
Net investment losses reported in 2023 mainly reflected net realized losses on the sale of corporate debt, U.S. government and Non-Agency CMBS, partially offset by net unrealized gains on equity securities. Net investment losses reported in 2022 mainly reflected net realized losses on the sale of corporate debt, U.S. government and Agency RMBS and net unrealized losses on equity securities.
Net investment losses reported in 2023 mainly reflected net realized losses on the sale of corporate debt, U.S. government and Non-Agency CMBS, partially offset by net unrealized gains on equity securities.
(2) Includes U.S. government-sponsored agencies, residential mortgage-backed securities ("RMBS") and commercial mortgage-backed securities ("CMBS"). (3) Non-investment grade and non-rated securities. At December 31, 2023, fixed maturities had a weighted average credit rating of AA- (2022: AA-), a book yield of 4.2% (2022: 3.5%), and an average duration of 3.0 years (2022: 3.0 years).
(2) Includes U.S. government-sponsored agencies, residential mortgage-backed securities ("RMBS") and commercial mortgage-backed securities ("CMBS"). (3) Non-investment grade and non-rated securities. At December 31, 2024, fixed maturities had a weighted average credit rating of A+ (2023: AA-), a book yield of 4.5% (2023: 4.2%), and an average duration of 2.8 years (2023: 3.0 years).
We monitor capital adequacy on a regular basis and will seek to adjust our capital base according to the needs of our business (refer to Item 1 'Risk and Capital Management' for further details).
We monitor capital adequacy on a regular basis and adjust our capital base according to the needs of our business (refer to Item 1 'Risk and Capital Management' for further details).
Results of operations for 2023 were impacted by natural and man-made catastrophe activity (refer to 'Underwriting Results – Insurance segment – Current Accident Year Loss Ratio' and 'Underwriting Results – Reinsurance segment – Current Accident Year Loss Ratio' for further details).
Results of operations for 2024 were impacted by natural and man-made catastrophe activity (refer to 'Underwriting Results – Insurance segment – Current Accident Year Loss Ratio' and 'Underwriting Results – Reinsurance segment – Current Accident Year Loss Ratio' for further details).
(2) The average cash and investments balance is calculated by taking the average of the monthly fair value balances. (3) Pre-tax total return on cash and investments excluding foreign exchange movements is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K.
(2) The average cash and investments balance is the average of the monthly fair value balances. (3) Pre-tax total return on cash and investments excluding foreign exchange movements is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K.
(3) On May 31, 2022, Moody's Investors Service revised its outlook from negative to stable due to improved core underwriting profitability and reduced catastrophe risk exposure.
(2) On May 31, 2022, Moody's Investors Service revised its outlook from negative to stable due to improved core underwriting profitability and reduced catastrophe risk exposure.
In addition, we have $10 million of unfunded commitments related to our commercial mortgage loans portfolio and $16 million of unfunded commitments related to our corporate debt portfolio. (4) Refer to Item 8, Note 10(a) to the Consolidated Financial Statements ' Debt and Financing Arrangement s' for further details.
In addition, we have $9 million of unfunded commitments related to our commercial mortgage loans portfolio and $94 million of unfunded commitments related to our corporate debt portfolio. (4) Refer to Item 8, Note 10(a) to the Consolidated Financial Statements ' Debt and Financing Arrangement s' for further details.
Fixed Maturities and Equity Securities At December 31, 2023, the fair values of 94% (2022 : 93%) of total fixed maturities and equity securities were based on prices provided by globally recognized independent pricing services where we have a current and detailed understanding of how their prices were derived.
Fixed Maturities and Equity Securities At December 31, 2024, the fair values of 94% (2023: 94%) of total fixed maturities and equity securities were based on prices provided by globally recognized independent pricing services where we have a current and detailed understanding of how their prices were derived.
We believe that showing net income (loss) available (attributable) to common shareholders exclusive of after-tax net investment gains (losses), foreign exchange losses (gains), reorganization expenses and interest in income (loss) of equity method investments reflects the underlying fundamentals of our business.
We believe that showing net income (loss) available (attributable) to common shareholders exclusive of after-tax net investment gains (losses), foreign exchange losses (gains), reorganization expenses, interest in income (loss) of equity method investments and Bermuda net deferred tax asset reflects the underlying fundamentals of our business.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our results of operations for the years ended December 31, 2023 and 2022, and our financial condition at December 31, 2023 and 2022.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our results of operations for the years ended December 31, 2024 and 2023, and our financial condition at December 31, 2024 and 2023.
For discussion of our results of operations and changes in financial condition for year ended December 31, 2022, compared to year ended December 31, 2021, refer to Part II, Item 7.
For discussion of our results of operations and changes in financial condition for year ended December 31, 2023, compared to year ended December 31, 2022, refer to Part II, Item 7.
(5) Refer to Item 8, Note 14 to the Consolidated Financial Statements 'Earnings Per Common Share' for further details. 79 Rationale for the Use of Non-GAAP Financial Measures We present our results of operations in a way we believe will be meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance.
(3) Refer to Item 8, Note 14 to the Consolidated Financial Statements 'Earnings Per Common Share' for further details. 80 Rationale for the Use of Non-GAAP Financial Measures We present our results of operations in a way we believe will be meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance.
Reorganization expenses in 2022 included severance costs and impairments of computer software assets mainly attributable to our exit from catastrophe and property reinsurance lines of business which was part of an overall approach to reduce our exposure to volatile catastrophe risk.
Reorganization expenses in 2022 primarily related to severance costs and impairments of computer software assets mainly attributable to our exit from catastrophe and property reinsurance lines of business which was part of an overall approach to reduce our exposure to volatile catastrophe risk.
Securities that are not rated are excluded from weighted average calculations. At December 31, 2023, the fair value of fixed maturities not rated was $17 million (2022: $31 million). 83 In addition to managing credit risk exposure within our fixed maturities portfolio we also monitor the aggregation of country risk exposure on a group-wide basis.
Securities that are not rated are excluded from weighted average calculations. At December 31, 2024, the fair value of fixed maturities not rated was $3 million (2023: $17 million). In addition to managing credit risk exposure within our fixed maturities portfolio we also monitor the aggregation of country risk exposure on a group-wide basis.
These securities are evaluated for intent or requirement to sell at a loss. 107 RECENT ACCOUNTING PRONOUNCEMENTS At December 31, 2023, there were no recently issued accounting pronouncements that we have not yet adopted that we expect could have a material impact on our results of operations, financial condition or liquidity.
These securities are evaluated for intent or requirement to sell at a loss. 109 RECENT ACCOUNTING PRONOUNCEMENTS At December 31, 2024, there were no recently issued accounting pronouncements that we have not yet adopted that we expect could have a material impact on our results of operations, financial condition or liquidity.
The fair value of the variable yield security was determined using an externally developed discounted cash flow model. At December 31, 2023, the estimated fair value of these investments was $87 million (2022: $136 million). Refer to Item 8, Note 6 to the Consolidated Financial Statements 'Fair Value Measurements' for further details.
The fair value of the variable yield security was determined using an externally developed discounted cash flow model. At December 31, 2024, the estimated fair value of these investments was $92 million (2023: $87 million). Refer to Item 8, Note 6 to the Consolidated Financial Statements 'Fair Value Measurements' for further details.
At December 31, 2023, non-agency RMBS had an average duration of 4.0 years (2022: 4.6 years) and weighted average life of 5.6 years (2022: 6.7 years). Commercial MBS CMBS mainly include investment grade bonds originated by non-agencies. At December 31, 2023, 98% (2022: 99%) of our CMBS were rated AA or better.
At December 31, 2024, non-agency RMBS had an average duration of 4.3 years (2023: 4.0 years) and weighted average life of 5.4 years (2023: 5.6 years). Commercial MBS CMBS mainly include investment grade bonds originated by non-agencies. At December 31, 2024, 99% (2023: 98%) of our CMBS were rated AA or better.
On January 29, 2024, Standard and Poor's removed AXIS Capital Holdings Limited and related securities from Negative CreditWatch affirming the credit rating of AXIS Capital Holding Company at A- (Stable). In addition, Standard & Poor's also reaffirmed the A+ Financial Strength and issuer credit ratings on all core operating subsidiaries, with a Stable outlook.
On January 29, 2024, Standard and Poor's removed AXIS Capital Holdings Limited and related securities from Negative CreditWatch and affirmed the Issuer Credit Rating of AXIS Capital Holding Company at A- (Stable). In addition, Standard & Poor's also reaffirmed the A+ Financial Strength and issuer credit ratings on all core operating subsidiaries (Stable).
We believe the dividend/distribution capacity of AXIS Capital’s subsidiaries, which was $0.9 billion at December 31, 2023, will provide AXIS Capital with sufficient liquidity for the foreseeable future. Operating Subsidiaries AXIS Capital’s operating subsidiaries primarily derive cash from the net inflow of premiums less claim payments related to underwriting activities and from net investment income.
We believe the dividend/distribution capacity of AXIS Capital’s subsidiaries, that was $1.4 billion at December 31, 2024 (2023: $0.9 billion) will provide AXIS Capital with sufficient liquidity for the foreseeable future. Operating Subsidiaries AXIS Capital’s operating subsidiaries primarily derive cash from the net inflow of premiums less claim payments related to underwriting activities and from net investment income.
Financing activities • Financing cash outflows in 2023 were principally due to dividends paid to common and preferred shareholders of $184 million, and the repurchase of common shares of $24 million, partially offset by the receipt of the Federal Home Loan Bank advances of $5 million. • Financing cash outflows in 2022 were principally due to dividends paid to common and preferred shareholders of $180 million, and the repurchase of common shares of $49 million, partially offset by the receipt of the Federal Home Loan Bank advances of $79 million. • The declaration and payment of future dividends and share repurchases is at the discretion of our Board of Directors and will depend on many factors including, but not limited to, our net income, financial condition, business needs, capital and surplus requirements of our operating subsidiaries and regulatory and contractual restrictions, including those detailed in our credit facilities (refer to 'Capital Resources – Share Repurchases' below for further details).
Financing activities • Financing cash outflows in 2024 were principally due to the repurchase of common shares of $216 million, dividends paid to common and preferred shareholders of $182 million, and the repayment of the Federal Home Loan Bank advances of $19 million. • Financing cash outflows in 2023 were principally due to dividends paid to common and preferred shareholders of $184 million, and the repurchase of common shares of $24 million, partially offset by the receipt of the Federal Home Loan Bank advances of $5 million. • The declaration and payment of future dividends and share repurchases is at the discretion of our Board of Directors and will depend on many factors including, but not limited to, our net income, financial condition, business needs, capital and surplus requirements of our operating subsidiaries and regulatory and contractual restrictions, including those detailed in our credit facilities (refer to 'Capital Resources – Share Repurchases' below for further details).
At December 31, 2023, the weighted average estimated subordination percentage of the portfolio was 37% (2022: 38%), which represents the current weighted average estimated percentage of the capital structure subordinated to the investment holding that is available to absorb losses before the security incurs the first dollar loss of principal.
At December 31, 2024, the weighted average estimated subordination percentage of the portfolio was 34% (2023: 37%), which represents the current weighted average estimated percentage of the capital structure subordinated to the investment holding that is available to absorb losses before the security incurs the first dollar loss of principal.
In this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), we present underwriting-related general and administrative expenses, consolidated underwriting income (loss), operating income (loss) ( in total and on a per share basis ), operating return on average common equity ("operating ROACE"), amounts presented on a constant currency basis and pre-tax total return on cash and investments excluding foreign exchange movements, which are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K.
In this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), we present underwriting-related general and administrative expenses, consolidated underwriting income (loss), current accident year loss ratio, catastrophe and weather-related losses ratio, current accident year loss ratio, excluding catastrophe and weather-related losses, operating income (loss) ( in total and on a per share basis ), operating return on average common equity ("operating ROACE"), amounts presented on a constant currency basis and pre-tax total return on cash and investments excluding foreign exchange movements, which are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K.
Reorganization expenses in 2022 included severance costs and impairments of computer software assets mainly attributable to our exit from catastrophe and 80 property reinsurance lines of business which was part of an overall approach to reduce our exposure to volatile catastrophe risk.
Reorganization expenses in 2022 primarily related to severance costs and impairments of computer software assets mainly attributable to our exit from catastrophe and property reinsurance lines of business which was part of an overall approach to reduce our exposure to volatile catastrophe risk.
Any adjustments to minimum or deposit premiums are recognized in the period in which they are determined. Gross premiums written for excess of loss reinsurance contracts accounted for 39% and 43% of the reinsurance segment’s gross premiums written for the years ended December 31, 2023 and 2022, respectively.
Any adjustments to minimum or deposit premiums are recognized in the period in which they are determined. Gross premiums written for excess of loss reinsurance contracts accounted for 40% and 39% of the reinsurance segment’s gross premiums written for the years ended December 31, 2024 and 2023, respectively.
Operating Income (Loss) Operating income (loss) represents after-tax operational results exclusive of net investment gains (losses), foreign exchange losses (gains), reorganization expenses and interest in income (loss) of equity method investments.
Operating Income (Loss) Operating income (loss) represents after-tax operational results exclusive of net investment gains (losses), foreign exchange losses (gains), reorganization expenses and interest in income (loss) of equity method investments and Bermuda net deferred tax asset.
Refer to ' Critical Accounting Estimates – Reserve for Losses and Loss Expenses – Reserving for Credit and Political Risk Business' for further details. 102 At December 31, 2023, reinsurance recoverables as a percentage of loss reserves was 38% (2022: 38%).
Refer to ' Critical Accounting Estimates – Reserve for Losses and Loss Expenses – Reserving for Credit and Political Risk Business' for further details. At December 31, 2024, reinsurance recoverables as a percentage of loss reserves was 40% (2023: 38%).
At December 31, 2023, the estimated fair value of our investments in these funds was $836 million (2022: $856 million). Refer to Item 8, Note 6 to the Consolidated Financial Statements 'Fair Value Measurements' for further details. CLO-Equity Securities The fair values of CLO-Equities are estimated using a discounted cash flow model prepared by an external investment manager.
At December 31, 2024, the estimated fair value of our investments in these funds was $808 million (2023: $836 million). Refer to Item 8, Note 6 to the Consolidated Financial Statements 'Fair Value Measurements' for further details. CLO-Equities The fair values of CLO-Equities are estimated using a discounted cash flow model prepared by an external investment manager.
Our effective tax rate, which is calculated as income tax expense (benefit) divided by income (loss) before tax including interest in income (loss) of equity method investments, was 6.5%, 9.0%, and 9.2% in 2023, 2022, and 2021, respectively.
Our effective tax rate, which is calculated as income tax expense (benefit) divided by income (loss) before tax including interest in income (loss) of equity method investments, was (5.4%), 6.5%, and 9.0% in 2024, 2023, and 2022, respectively.
At December 31, 2023, the estimated fair value of our investments in these funds was $21 million (2022: $nil). Refer to Item 8, Note 6 to the Consolidated Financial Statements 'Fair Value Measurements' for further details.
At December 31, 2024, the estimated fair value of our investments in these funds was $30 million (2023: $21 million). Refer to Item 8, Note 6 to the Consolidated Financial Statements 'Fair Value Measurements' for further details.
Reorganization expenses are primarily driven by business decisions, the nature and timing of which are not related to the underwriting process. Therefore, these expenses are excluded from consolidated underwriting income (loss). Amortization of intangible assets including the value of business acquired ("VOBA") arose from business decisions, the nature and timing of which are not related to the underwriting process.
Reorganization expenses are primarily driven by business decisions, the nature and timing of which are not related to the underwriting process. Therefore, these expenses are excluded from consolidated underwriting income (loss). Amortization of intangible assets arose from business decisions, the nature and timing of which are not related to the underwriting process.
At December 31, 2023, agency RMBS had an average duration of 5.2 years (2022: 5.7 years). Non-agency RMBS mainly include investment grade bonds originated by non-agencies. At December 31, 2023, 98% (2022: 94 % ) of our non-agency RMBS were rated AA or better.
At December 31, 2024, agency RMBS had an average duration of 5.2 years (2023: 5.2 years). Non-agency RMBS mainly include investment grade bonds originated by non-agencies. At December 31, 2024, 98% (2023: 98 % ) of our non-agency RMBS were rated AA or better.
In 2023, book value per diluted common share increased by 15%, driven by net income for the year, and net unrealized investment gains reported in accumulated other comprehensive income (loss), partially offset by common dividends declared.
In 2024, book value per diluted common share increased by 21%, driven by net income for the year, and net unrealized investment gains reported in accumulated other comprehensive income (loss), partially offset by common dividends declared.
ROACE reflects the impact of net income (loss) available (attributable) to common shareholders, including net investment gains (losses), foreign exchange losses (gains), reorganization expenses, and interest in income (loss) of equity method investments.
ROACE reflects the impact of net income (loss) available (attributable) to common shareholders, including net investment gains (losses), foreign exchange losses (gains), reorganization expenses, interest in income (loss) of equity method investments and Bermuda net deferred tax asset.
At December 31, 2023, the average duration of unearned premiums for credit and political risk line of business w as 5.7 years (2022: 5.4 years). 103 Reinsurance Segment The reinsurance segment provides cover to cedants (i.e., insurance companies) on an excess of loss or on a proportional basis.
At December 31, 2024, the average duration of unearned premiums for credit and political risk line of business w as 5.6 years (2023: 5.7 years). 105 Reinsurance Segment The reinsurance segment provides cover to cedants (i.e., insurance companies) on an excess of loss or on a proportional basis.
The increase was primarily driven by increases in gross premiums earned in property, liability, marine and aviation, accident and health, credit and political risk, and cyber lines, together with a decrease in ceded premiums earned in professional lines.
The increase was primarily driven by increases in gross premiums earned in property, accident and health, marine and aviation, and credit and political risk lines, together with decreases in ceded premiums earned in professional lines and cyber lines.
Loss Ratio The components of the loss ratio were as follows: Year ended December 31, 2023 % Point Change 2022 % Point Change 2021 Current accident year loss ratio 66.4 % (5.9) 72.3 % (0.9) 73.2 % Prior year reserve development ratio 14.6 % 15.0 (0.4 %) 0.2 (0.6 %) Loss ratio 81.0 % 9.1 71.9 % (0.7) 72.6 % Current Accident Year Loss Ratio The current accident year loss ratio decreased to 66.4% in 2023 from 72.3% in 2022.
Loss Ratio The components of the loss ratio were as follows: Year ended December 31, 2024 % Point Change 2023 % Point Change 2022 Current accident year loss ratio 66.7 % 0.3 66.4 % (5.9) 72.3 % Prior year reserve development ratio (0.5 %) (15.1) 14.6 % 15.0 (0.4 %) Loss ratio 66.2 % (14.8) 81.0 % 9.1 71.9 % Current Accident Year Loss Ratio The current accident year loss ratio increased to 66.7% in 2024 from 66.4% in 2023.
The execution of our business strategy in 2023 included the following: • growing in a number of attractive specialty lines insurance and treaty reinsurance markets including U.S. excess and surplus lines, North America professional lines and Lloyd's specialty insurance business; • re-balancing our portfolio towards less volatile lines of business, that carry attractive returns while deploying capital within risk limits, diversification and risk management; • investing in attractive growth markets and advancing capabilities to address more transactional specialist business targeting the lower middle market with our key distribution partners; • leveraging our global platform to introduce our products and services to new regions including the expansion of our London specialty lines to North America markets; • continuing the implementation of a more focused distribution strategy while building mutually beneficial relationships with clients and partners; • improving the effectiveness and efficiency of our operating platforms and processes; • investing in data and technology capabilities, and tools to empower our underwriters and enhance the service that we provide to our customers; • utilizing reinsurance markets and third-party capital relationships; • fostering a positive workplace environment that enables us to attract, retain and develop top talent; and • growing our corporate citizenship program to give back to our communities and help contribute to a more sustainable future.
The execution of our business strategy in 2024 included the following: • growing in a number of attractive specialty lines insurance and treaty reinsurance markets including U.S. excess and surplus lines and Lloyd's specialty insurance business; • re-balancing our portfolio towards less volatile lines of business, that carry attractive returns while deploying capital within risk limit tolerance, diversification criteria and risk management strategy; • investing in attractive growth markets and advancing capabilities to address more transactional specialist business targeting the lower middle market with our key distribution partners; • leveraging our global platform to introduce our products and services to new regions including the continued expansion of our North America product capabilities; • continuing the implementation of a more focused distribution strategy while building mutually beneficial relationships with clients and partners; • improving the effectiveness and efficiency of our operating platforms and processes through our "How We Work" program; • investing in data and technology, and exploring AI capabilities and tools, to empower our underwriters and enhance the service that we provide to our customers; • utilizing reinsurance markets and third-party capital relationships; • fostering a positive workplace environment that enables us to attract, retain and develop top talent; and • growing our corporate citizenship program to support our communities and help contribute to a more sustainable future.
To the extent declared, dividends accumulate, with respect to each dividend period, in an amount per share equal to 5.50% of the liquidation preference per annum (equivalent to $137.50 per Series E preferred share and $1.375 per depositary share).
Dividends on the Series E preferred shares are non-cumulative. To the extent declared, dividends accumulate, with respect to each dividend period, in an amount per share equal to 5.50% of the liquidation preference per annum (equivalent to $137.50 per Series E preferred share and $1.375 per depositary share).
During 2023, foreign exchange hedges resulted in $1 million of net losses which primarily related to securities denominated in pound sterling and euro which experienced volatility during 2023. During 2022, foreign exchange hedges resulted in $8 million of net gains which primarily related to securities denominated in pound sterling and euro which experienced volatility during 2022.
During 2024, foreign exchange hedges resulted in $2 million of net gains which primarily related to securities denominated in pound sterling and euro which experienced volatility during 2024. During 2023, foreign exchange hedges resulted in $1 million of net losses which primarily related to securities denominated in pound sterling and euro which experienced volatility during 2023.
We expect that, if necessary, approximately $13.6 billion of cash and invested assets at December 31, 2023 could be available in one to three 90 business days under normal market conditions.
We expect that, if necessary, cash and invested assets of approximately $15.2 billion at December 31, 202 4 (2023 $13.6 billion) could be available in one to three business days under normal market conditions.
At December 31, 2023 , we recorded an allowance for expected credit losses of $11 million (2022: $12 million) and for the year ended December 31, 2023, we recorded impairment losses of $13 million ( 2022: $13 million) (refer to 'Net Investment Income and Net Investment Gains (Losses)' for further details).
At December 31, 2024 , we recorded an allowance for expected credit losses of $4 million (2023: $11 million) and for the year ended December 31, 2024, we recorded impairment losses of $nil ( 2023: $13 million) (refer to 'Net Investment Income and Net Investment Gains (Losses)' for further details).
At December 31, 2023, letters of credit outstanding were $325 million (refer to Item 8, Note 10 to the Consolidated Financial Statements 'Debt and Financing Arrangements' for further details). 92 Common Equity During the year ended December 31, 2023, common eq uity increased by $623 million.
At December 31, 2024, letters of credit outstanding were $235 million (2023: $325 million) (refer to Item 8, Note 10 to the Consolidated Financial Statements 'Debt and Financing Arrangements' for further details). 94 Common Equity During the year ended December 31, 2024, common eq uity increased by $826 million.
We review these premium estimates on a quarterly basis and any adjustments to premium estimates are recognized in the period in which they are determined. Gross premiums written on a line slip or proportional basis accounted for 16% and 15% of the segment’s gross premiums written for the years ended December 31, 2023 and 2022, respectively.
We review these premium estimates on a quarterly basis and any adjustments to premium estimates are recognized in the period in which they are determined. Gross premiums written on a line slip or proportional basis accounted for 6% of the segment’s gross premiums written for the years ended December 31, 2024 and 2023.
At December 31, 2023, the estimated fair value of our indirect investment in CLO-Equities was $5 million (2022: $5 million).
At December 31, 2024, the estimated fair value of our indirect investment in CLO-Equities was $nil (2023: $5 million).
We examined the need for a valuation allowance and after considering all positive and negative evidence concluded a valuation allowance against its net unrealized investment losses in the U.S. was not required. 76 FINANCIAL MEASURES We believe that the following financial indicators are important in evaluating performance and measuring the overall growth in value generated for common shareholders: Year ended and at December 31, 2023 2022 2021 Return on average common equity (1) 7.9 % 4.3 % 12.2 % Operating return on average common equity (2) 11.0 % 11.1 % 9.1 % Book value per diluted common share (3) $ 54.06 $ 46.95 $ 55.78 Cash dividends declared per common share $ 1.76 $ 1.73 $ 1.69 Increase (decrease) in book value per diluted common share adjusted for dividends $ 8.87 $ (7.10) $ 2.38 (1) Return on average common equity ("ROACE") is calculated by dividing net income (loss) available (attributable) to common shareholders for the year by the average common shareholders' equity determined using the common shareholders' equity balances at the beginning and end of the year.
We examined the need for a valuation allowance and after considering all positive and negative evidence concluded a valuation allowance against its net unrealized investment losses in Bermuda was not required. 77 FINANCIAL MEASURES We believe that the following financial indicators are important in evaluating performance and measuring the overall growth in value generated for common shareholders: Year ended and at December 31, 2024 2023 2022 Return on average common equity (1) 20.5 % 7.9 % 4.3 % Operating return on average common equity (2) 18.6 % 11.0 % 11.1 % Book value per diluted common share (3) $ 65.27 $ 54.06 $ 46.95 Cash dividends declared per common share $ 1.76 $ 1.76 $ 1.73 Increase (decrease) in book value per diluted common share adjusted for dividends $ 12.97 $ 8.87 $ (7.10) (1) Return on average common equity ("ROACE") is calculated by dividing net income (loss) available (attributable) to common shareholders for the year by the average common shareholders' equity determined using the common shareholders' equity balances at the beginning and end of the year.
The reconciliation to general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $133 million, $130 million, and $126 million for 2023, 2022, and 2021, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Expenses (Revenues), Net '' for further details on corporate expenses.
The reconciliation to general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $130 million, $133 million, and $130 million for 2024, 2023, and 2022, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Expenses (Revenues), Net' for further details on corporate expenses.
Cash provided by operating activities can fluctuate due to timing differences between the collection of premiums and reinsurance recoverables and the payment of losses and loss expen ses, and the payment of premiums to reinsurers. • Operating cash inflows increased in 2023 compared to 2022, primarily attributable to an increase in interest and dividends received from our investment portfolio and an increase in premiums received, partially offset by a decrease in reinsurance recoverables received and an increase in payments of premiums to reinsurers.
Cash provided by operating activities can fluctuate due to timing differences between the collection of premiums and reinsurance recoverables and the payment of losses and loss expenses, and the payment of premiums to reinsurers. • Operating cash inflows increased in 2024 compared to 2023, primarily attributable to increases in premiums received, reinsurance recoverables received, and interest and dividends received from our investment portfolio together with a decrease in payments of premiums to reinsurers partially offset by an increase in payments of losses and loss expenses.
Net losses and loss expenses, gross of reinstatement premiums, included estimates of ultimate losses for catastrophe and weather-related losses of $138 million in 2023, $404 million in 2022 and $450 million in 2021.
Net losses and loss expenses, gross of reinstatement premiums, included estimates of ultimate losses for catastrophe and weather-related losses of $226 million in 2024, $138 million in 2023 and $404 million in 2022.
At December 31, 2023, certain of AXIS Capital’s operating subsidiaries (the "Participating Subsidiaries") had a $500 million letter of credit facility available from Citibank Europe plc ("Citibank") (the "$500 million Facility").
At December 31, 2024, certain of AXIS Capital’s operating subsidiaries (the "Participating Subsidiaries") had a $300 million letter of credit facility available from Citibank Europe plc ("Citibank") (the "$300 million Facility").

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Currency Risk The following table presents a sensitivity analysis of total net foreign currency exposures: AUD CAD EUR GBP JPY Other Total At December 31, 2023 Net managed assets (liabilities), excluding derivatives $ 38,348 $ 430,256 $ (452,726) $ (145,992) $ (43,047) $ 56,012 $ (117,149) Foreign currency derivatives, net (23,240) (403,952) 401,195 127,122 24,317 (114,294) 11,148 Net managed foreign currency exposure 15,108 26,304 (51,531) (18,870) (18,730) (58,282) (106,001) Other net foreign currency exposure — 175 (555) (59) — — (439) Total net foreign currency exposure $ 15,108 $ 26,479 $ (52,086) $ (18,929) $ (18,730) $ (58,282) $ (106,440) Net foreign currency exposure as a percentage of total shareholders’ equity 0.3 % 0.5 % (1.0 %) (0.4 %) (0.4 %) (1.1 %) (2.0 %) Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement (1) $ 1,511 $ 2,648 $ (5,209) $ (1,893) $ (1,873) $ (5,828) $ (10,644) At December 31, 2022 Net managed assets (liabilities), excluding derivatives $ 11,331 $ 302,679 $ (538,845) $ (411,773) $ (36,346) $ 48,959 $ (623,995) Foreign currency derivatives, net 7,160 (312,269) 505,623 271,022 32,097 (74,438) 429,195 Net managed foreign currency exposure 18,491 (9,590) (33,222) (140,751) (4,249) (25,479) (194,800) Other net foreign currency exposure — 102 (1,199) (924) — 995 (1,026) Total net foreign currency exposure $ 18,491 $ (9,488) $ (34,421) $ (141,675) $ (4,249) $ (24,484) $ (195,826) Net foreign currency exposure as a percentage of total shareholders’ equity 0.4 % (0.2 %) (0.7 %) (3.1 %) (0.1 %) (0.5 %) (4.2 %) Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement (1) $ 1,849 $ (949) $ (3,442) $ (14,168) $ (425) $ (2,448) $ (19,583) (1) Assumes 10% appreciation in underlying currencies relative to the U.S. dollar.
Biggest changeForeign Currency Risk The following table presents a sensitivity analysis of total net foreign currency exposures: AUD CAD EUR GBP JPY Other Total At December 31, 2024 Net managed assets (liabilities), excluding derivatives $ 87,511 $ 366,541 $ (344,739) $ 15,836 $ (38,893) $ 88,887 $ 175,143 Foreign currency derivatives, net (69,834) (356,150) 290,800 36,430 35,648 (112,409) (175,515) Net managed foreign currency exposure 17,677 10,391 (53,939) 52,266 (3,245) (23,522) (372) Other net foreign currency exposure — 55 (607) 19 — 1 (532) Total net foreign currency exposure $ 17,677 $ 10,446 $ (54,546) $ 52,285 $ (3,245) $ (23,521) $ (904) Net foreign currency exposure as a percentage of total shareholders’ equity 0.3 % 0.2 % (0.9 %) 0.9 % (0.1 %) (0.4 %) — % Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement (1) $ 1,768 $ 1,045 $ (5,455) $ 5,229 $ (325) $ (2,352) $ (90) At December 31, 2023 Net managed assets (liabilities), excluding derivatives $ 38,348 $ 430,256 $ (452,726) $ (145,992) $ (43,047) $ 56,012 $ (117,149) Foreign currency derivatives, net (23,240) (403,952) 401,195 127,122 24,317 (114,294) 11,148 Net managed foreign currency exposure 15,108 26,304 (51,531) (18,870) (18,730) (58,282) (106,001) Other net foreign currency exposure — 175 (555) (59) — — (439) Total net foreign currency exposure $ 15,108 $ 26,479 $ (52,086) $ (18,929) $ (18,730) $ (58,282) $ (106,440) Net foreign currency exposure as a percentage of total shareholders’ equity 0.3 % 0.5 % (1.0 %) (0.4 %) (0.4 %) (1.1 %) (2.0 %) Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement (1) $ 1,511 $ 2,648 $ (5,209) $ (1,893) $ (1,873) $ (5,828) $ (10,644) (1) Assumes 10% appreciation in underlying currencies relative to the U.S. dollar.
At December 31, 2023 and 2022, we also invested in alternative investments including multi-strategy funds, direct lending funds, private equity funds, real estate funds, CLO-Equities and other privately held investments. These investments are also exposed to market risks, with the changes in fair values immediately reported in net income (loss).
At December 31, 2024 and 2023, we also invested in alternative investments including multi-strategy funds, direct lending funds, private equity funds, real estate funds, CLO-Equities and other privately held investments. These investments are also exposed to market risks, with the changes in fair values immediately reported in net income (loss).
Sensitivity Analysis The following is a sensitivity analysis of our primary market risk exposures at December 31, 2023 and 2022. Our policies to address these risks in 2023 were not materially different from 2022.
Sensitivity Analysis The following is a sensitivity analysis of our primary market risk exposures at December 31, 2024 and 2023. Our policies to address these risks in 2024 were not materially different from 2023.
At December 31, 2023, 95% (2022: 94%) of fixed maturities are classified as available for sale, therefore changes in fair values caused by changes in interest rates and foreign currency exchange rates have an immediate impact on other comprehensive income (loss), total shareholders’ equity and book value per common share but do not have an immediate impact on net income (loss).
At December 31, 2024, 96% (2023: 95%) of fixed maturities are classified as available for sale, therefore changes in fair values caused by changes in interest rates and foreign currency exchange rates have an immediate impact on other comprehensive income (loss), total shareholders’ equity and book value per common share but do not have an immediate impact on net income (loss).
The global equity portfolio is managed to a benchmark composite index, which consists of a blend of the S&P 500 and MSCI World indices. Changes in the underlying indices have a corresponding impact on the overall portfolio. At December 31, 2023, the fair value of equity securities was 109 $295 million (2022: $277 million).
The global equity portfolio is managed to a benchmark composite index, which consists of a blend of the S&P 500 and MSCI World indices. Changes in the underlying indices have a corresponding impact on the overall portfolio. At December 31, 2024, the fair value of equity securities was $323 million (2023: $295 million).
At December 31, 2023, the fair value of multi-strategy funds was $25 million (2022: $33 million). At December 31, 2023, the impact of an instantaneous 15% decline in the fair value of our investment in multi-strategy funds woul d be $4 million (2022 : $5 million ), on a pre-tax basis.
At December 31, 2024, the fair value of multi-strategy funds was $25 million (2023: $25 million). At December 31, 2024, the impact of an instantaneous 15% decline in the fair value of our investment in multi-strategy funds woul d be $4 million (2023 : $4 million ), on a pre-tax basis.
At December 31, 2023, the impact of a 20% decline in the overall market prices of our equity exposures would be $59 million (2022: $55 million), on a pre-tax basis. Our investment in multi-strategy funds has significant exposure to equity strategies with net long positions.
At December 31, 2024, the impact of a 20% decline in the overall market prices of our equity exposures would be $65 million (2023: $59 million), on a pre-tax basis. 111 Our investment in multi-strategy funds has significant exposure to equity strategies with net long positions.
Equity Price Risk Our portfolio of equity securities, excluding the bond mutual funds, has exposure to equity price risk. This risk is defined as the potential loss in fair value resulting from adverse changes in stock prices.
However, this exposure is largely mitigated by the short duration of the underlying securities. Equity Price Risk Our portfolio of equity securities, excluding the bond mutual funds, has exposure to equity price risk. This risk is defined as the potential loss in fair value resulting from adverse changes in stock prices.
Other Net Foreign Currency Exposure In 2023, other net foreign currency exposure primarily consisted of residual foreign currency exposure from externally managed portfolios where the external manager hedges the foreign currency exposure. During 2022, our emerging market debt securities portfolio which was included in other net foreign currency exposure, was liquidated. 110
Other Net Foreign Currency Exposure In 2024, other net foreign currency exposure primarily consisted of residual foreign currency exposure from externally managed portfolios where the external manager hedges the foreign currency exposure. During 2023, other net foreign currency exposure primarily consisted of residual foreign currency exposure from externally managed portfolios where the external manager hedges the foreign currency exposure. 112
The analysis is performed at the security level and aggregated to the asset category levels. 108 The following table presents the estimated pre-tax impact on the fair value of fixed maturities classified as available for sale due to an instantaneous increase in the U.S. yield curve of 100 basis points and an additional 100 basis point credit spread widening for corporate debt, non-agency commercial MBS and residential MBS, ABS and municipal bond securities: Fair value Potential adverse change in fair value Increase in interest rate by 100 basis points Widening of credit spreads by 100 basis points Total At December 31, 2023 U.S. government and agency $ 3,007,528 $ (81,945) $ — $ (81,945) Non-U.S. government 723,959 (22,534) — (22,534) Agency RMBS 1,634,661 (84,719) — (84,719) Securities exposed to credit spreads: Corporate debt 4,474,172 (151,894) (158,759) (310,653) CMBS 839,696 (18,120) (21,917) (40,037) Non-agency RMBS 153,396 (6,158) (5,849) (12,007) ABS 1,242,971 (10,436) (36,132) (46,568) Municipals 158,359 (6,234) (6,336) (12,570) $ 12,234,742 $ (382,040) $ (228,993) $ (611,033) At December 31, 2022 U.S. government and agency $ 2,639,330 $ (78,870) $ — $ (78,870) Non-U.S. government 562,029 (15,428) — (15,428) Agency RMBS 1,202,785 (68,760) — (68,760) Securities exposed to credit spreads: Corporate debt 4,255,556 (149,860) (160,439) (310,299) CMBS 947,778 (23,016) (29,792) (52,808) Non-agency RMBS 133,534 (6,086) (5,779) (11,865) ABS 1,429,527 (9,673) (47,191) (56,864) Municipals 156,355 (6,814) (7,197) (14,011) $ 11,326,894 $ (358,507) $ (250,398) $ (608,905) U.S. government agencies have a limited range of spread widening.
The analysis is performed at the security level and aggregated to the asset category levels. 110 The following table presents the estimated pre-tax impact on the fair value of fixed maturities classified as available for sale due to an instantaneous increase in the U.S. yield curve of 100 basis points and an additional 100 basis point credit spread widening for corporate debt, non-agency commercial MBS and residential MBS, ABS and municipal bond securities: Fair value Potential adverse change in fair value Increase in interest rate by 100 basis points Widening of credit spreads by 100 basis points Total At December 31, 2024 U.S. government and agency $ 2,802,986 $ (60,634) $ — $ (60,634) Non-U.S. government 729,939 (22,143) — (22,143) Agency RMBS 1,184,845 (61,576) — (61,576) Securities exposed to credit spreads: Corporate debt 4,842,190 (154,058) (166,011) (320,069) CMBS 819,608 (21,745) (24,749) (46,494) Non-agency RMBS 122,536 (5,287) (5,090) (10,377) ABS 1,539,832 (17,343) (35,727) (53,070) Municipals 110,817 (3,675) (3,751) (7,426) $ 12,152,753 $ (346,461) $ (235,328) $ (581,789) At December 31, 2023 U.S. government and agency $ 3,007,528 $ (81,945) $ — $ (81,945) Non-U.S. government 723,959 (22,534) — (22,534) Agency RMBS 1,634,661 (84,719) — (84,719) Securities exposed to credit spreads: Corporate debt 4,474,172 (151,894) (158,759) (310,653) CMBS 839,696 (18,120) (21,917) (40,037) Non-agency RMBS 153,396 (6,158) (5,849) (12,007) ABS 1,242,971 (10,436) (36,132) (46,568) Municipals 158,359 (6,234) (6,336) (12,570) $ 12,234,742 $ (382,040) $ (228,993) $ (611,033) U.S. government agencies have a limited range of spread widening.
Removed
However, this exposure is largely mitigated by the short duration of the underlying securities. Our investment in CLO-Equities is also exposed to interest rate risk, but an increase in the risk-free yield curve of 100 basis points would have an insignificant impact on its fair value.

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