AXIS RETURNS TO PROFIT FOR THE FIRST HALF

Bermuda-based re/insurer Axis has reported net income of $324.9m for H1 2012, up from a loss of $264.3m in the same period last year, on gross written premiums of $2.54bn, down from $2.59bn in H1 2011. The combined ratio for the half improved to 93.6% from 129.1%. For the second quarter Axis estimated a pre-tax impact of $55m as a result of US weather events, net of reinstatements. Axis also upwardly revised by $22m the impact of Q1 US weather events, although it noted that "this amount was fully contained within the incurred-but-not-reported reserves established at March 31, 2012". For Q2 the net income rose to $189.1m, from $110.3m in Q2 2011, on GWP of $1.01bn, down from $1.05bn. There was a net favourable prior year reserve development of $75m pre-tax, up from $61m in Q2 2011. This reduced the combined ratio by 8.7pp (Q2 2011, 6.1pp). Net investment income for the quarter was $74m, down 26% year on year. For the first half, net investment income declined to $190.5m from $210.7m. CEO Albert Benchimol said that "the market environment for our businesses is showing ongoing improvement, and our underwriting operations are executing as expected in the current transitional market. Growth is strong in markets that have shown improvement in pricing and in lines where investment in product or geographic expansion in recent years is gaining traction". He said that in other areas, Axis had been "actively optimizing portfolio composition to expand margin".