Given property pricing was down 13%, how do you view return expectations for the property business, including ACS?

Despite a 13% decline in property pricing, the business written still meets the company's mid-teens risk-adjusted return expectations. This is supported by significant compounded rate improvements over the past 8 years, a diversified portfolio, and robust Cat XL protection. “But at this point in time, it still meets our risk-adjusted returns.”

What makes the Funds at Lloyd's opportunity attractive, and is it an opportunistic trade or a sustainable part of the portfolio?

FA transactions are one-off annual deals where AXIS provides capacity to other Lloyd's syndicates, gaining exposure to niche specialty lines and geographies not easily accessible. These are viewed as an efficient use of capital with capped downside, and while selective, represent a mechanism to tap into specialty expertise. “I think what's important is these are sale transactions where AXIS is gaining exposure to products and geographies that we would not other easily be accessible to access.”

How are you balancing growth versus potential share repurchases, given slower buybacks in Q1?

Capital will primarily support growth, with approximately 50% of earnings expected to be deployed for this purpose. While Q1 buybacks were $60 million, this is not a run rate, and the company remains opportunistic, having approved an additional $300 million authorization. Management views the current valuation as a good opportunity for share repurchases. “I would say the $60 million that you've seen in the Q1, I would not assign that to be a run rate we're going to be opportunistic, and you could see that tick up through the year.”

AXS

AXIS Capital (AXS) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 30, 2026

Source: earnings call transcript

Executive summary

AXIS Capital Q1 FY26 — Strong Underwriting Performance and Strategic Growth

AXIS Capital delivered a strong Q1 FY26, marked by robust underwriting performance and strategic growth initiatives, particularly in its insurance segment. The company's focus on portfolio remediation and expanded classes drove an 11% increase in gross written premiums and an 18% operating ROE, while efficiency gains lowered the G&A ratio to 10.7%. Management remains disciplined in navigating market softening in property and cyber, actively reallocating capital to attractive markets and leveraging AI for operational efficiency.

Highlights

Achieved an annualized operating Return on Average Common Equity of 18% for the quarter.
Reported a strong combined ratio of 89.8%, with the Insurance segment at 86.3% (0.4% improvement year-over-year).
Gross written premiums increased by 11% to over $3 billion, driven predominantly by growth in attractive short-tail lines.
Consolidated G&A ratio improved to 10.7% from 11.9% a year ago, reaching a target level.
Operating cash flow was robust at $590 million, significantly up from $309 million in the prior year quarter.

Concerns

Property pricing was down 13% in the quarter, following an 8-year period of compounded rate increases.
Cyber rates were down 6% in the quarter, with group-level cyber growth down 7% due to a cautious underwriting stance.
Reinsurance long-tail lines writings were reduced by over $130 million or 24% as the market remains competitive.
Incurred a $23 million below-the-line charge for expense and restructuring actions during the quarter.
Experienced unrealized losses in the investment portfolio due to market fluctuations, creating a headwind to book value per share growth.

Guidance & targets

Category	Target	Timeline	Confidence
G&A Ratio (Consolidated)	11% medium materiality	FY26	High
Reinsurance Premiums Growth	down double digits medium materiality	FY26	Medium
Underlying Loss Ratio (Insurance ex-cat)	around 53.3% high materiality	FY26	High
Insurance Core Business Growth	low single digits medium materiality	FY26	High
Insurance Expanded Lines Growth	high single digits medium materiality	FY26	High
Capital Allocation to Growth	about 50% high materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Insurance Strong quarter with gross written premiums of almost $2 billion, driven by underlying business execution, expanded products, and AXIS Capacity Solutions (ACS) initiatives including Funds at Lloyd's transactions. Underlying loss ratio is in line with forecast. Combined ratio: 86.3%Combined ratio improvement YoY: 0.4%Underlying loss ratio: 53.3%Expanded classes as % of total insurance portfolio: 17%Expanded classes growth: high single-digitACS contribution to growth: 10 pointsCore business growth: low single-digitsCyber premium growth: $6MCyber production (YE23): $649MCyber production (YE25): $473MCyber as % of total insurance portfolio (YE23): 10.6%Cyber as % of total insurance portfolio (YE25): 6.6%	—	20%	—	$157M underwriting income
Reinsurance Continued selective growth in specialty product set, with short-tail lines growing significantly. Actively managing the cycle in casualty lines, resulting in a substantial reduction in long-tail writings due to competitive market conditions. Combined ratio: 92.7%Fee income: $20MShort-tail lines as % of total: 61% (up from 50% YoY)New business: $180M (70% from short-tail specialty)Long-tail lines writings reduction: $130M or 24%	—	-2%	—	$30M underwriting income

AXS operating KPIs by quarter

AXS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Combined ratio	89.8% First, an annualized return on average common equity of 17%, a combined ratio of 89.8% gross written premiums of $3.1 billion, up nearly 11% over the prior year, driven predominantly by growth in attractive short-tail lines with short tail lines now constituting 60% of our overall premiums. Source: earnings call transcript	93.1% The combined ratio was 93.1%. Source: earnings call transcript	+3.3 pt
Combined ratio Insurance	86.3% It was a strong quarter for our insurance business, highlighted by premium generations of $1.98 billion, underwriting income of $157 million, representing a 17% increase year-over-year and a combined ratio of 86.3%, a 0.4% improvement over the prior year. Source: earnings call transcript	90% It was a strong quarter for our Insurance business, highlighted by premium generation of $2.2 billion, which was up 15% over the prior year, underwriting income of $119 million, a 90% combined ratio and a current accident year ex-CAT combined ratio of 84.5%. Source: earnings call transcript	+3.7 pt
Combined ratio Reinsurance	92.7% We produced a combined ratio of 92.7% and underwriting income of $30 million and fee income of $20 million. Source: earnings call transcript	94.5% We generated $90 million in new business with 94% coming from short-tail lines, and we produced a 94.5% combined ratio. Source: earnings call transcript	+1.8 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Ryan Specialty Strategic partnership, performing as expected.

The Ryan deal is performing as expected, contributing to ACS initiatives.

Alpha Secure Partnership to support middle market cyber strategy and risk diagnosis.

AXIS has a partnership and financial interest in Alpha Secure, which helps prosecute the middle market cyber strategy by providing risk diagnosis capabilities and surveillance throughout the policy period.

Risks & headwinds

Property pricing pressure Q1 FY26

Pricing was down 13% in Q1 FY26.

Mitigation:Maintaining a diversified portfolio with low single-digit million average net limits, balanced peril and geographic mix, and Cat XL protection attaching at $100 million per event. Business written continues to meet underwriting return expectations.

Cyber market competitiveness and rate pressure Q1 FY26

Rates were down 6% in Q1 FY26; group growth was down 7%.

Mitigation:Maintaining a cautious underwriting stance, selectively deploying capacity between insurance and reinsurance platforms, managing exposures, and steering capital towards the best returns. Focus on large accounts with strong hygiene standards.

Geopolitical uncertainty (Middle East conflict) Q1 FY26

Approximately 1/3 of Q1 FY26 cat losses ($48 million total) related to the conflict.

Mitigation:Actively monitoring exposures, practicing vigilance, supporting customers, and having a clear understanding of limits and exposures. A $15 million provision was thoughtfully put up, with expectations for some increase as time proceeds.

Technological disruption and intensifying cyber threats (AI) Ongoing

Discussed, not quantified.

Mitigation:Providing specialty solutions, focusing on large account segments with strong hygiene standards, and leveraging partnerships like Alpha Secure for risk diagnosis and surveillance to address emerging exposures.

Social inflation in U.S. casualty market Ongoing

Discussed, not quantified.

Mitigation:Leaning into opportunistic growth in international liability businesses for diversification, and exhibiting a disciplined stance in U.S. casualty (U.S. Excess Casualty writings down 2%, Primary Casualty volume down 28%).

What to watch in Q2 FY26

Consolidated G&A Ratio

FY26

Current 10.7%

Target 11%

Why it matters

Indicates the company's ability to maintain efficiency gains and manage expenses while investing in growth initiatives.

For the full year, we are still targeting 11%, and I would remind you that as we discussed on the fourth quarter call, we will continue to make attractive investments when opportunities arise and reward our high performers.

Find out whether AXS delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you provide color on reserve developments for 2021-2024, given some competitors reported unfavorable developments?

Management is comfortable with their loss reserve position, noting an $18 million release from short-tail lines. They emphasize a philosophy of being slow to recognize good news and deliberate with concerns, and maintain a cautious underwriting stance in casualty classes.

“I think overall, we're comfortable with our loss reserve position. I mentioned our philosophy that we are going to be slow to recognize good news and very deliberate when we have concerned.”

asked by Andrew Kligerman · answered by Matthew Kirk

2 min read 6 chapters

Detailed narrative

Strategic Portfolio Repositioning and Growth Drivers

AXIS is actively repositioning its portfolio, emphasizing growth in insurance while being more selective in reinsurance. This strategy leverages third-party structures like Funds at Lloyd's (FA transactions) and strategic reinsurance vehicles to enhance client relevance and sustain top-line momentum. These mechanisms also help manage net exposure and generate fee income, reflecting a disciplined approach to cycle management.

The company's expanded classes, which are largely short-tail, now constitute 17% of the total insurance portfolio and are a key growth engine.

Strong Insurance Segment Performance

The insurance business delivered a strong quarter, with gross written premiums increasing by 20% to nearly $2 billion and achieving an 86.3% combined ratio. This growth was driven by continued execution in the core business, high single-digit growth from expanded classes, and approximately 10 points from AXIS Capacity Solutions (ACS).

ACS includes FA transactions, which provide capital-efficient exposure to niche specialty lines, and strategic use of reinsurance to align interests with distribution partners while managing net appetite.

Selective Reinsurance Strategy

In the reinsurance segment, gross written premiums were down 2%, with a combined ratio of 92.7%. The segment saw healthy growth of 20% in targeted short-tail lines such as A&H and credit and surety, which contributed $180 million in new business.

Conversely, long-tail lines writings were reduced by over $130 million or 24% due to competitive market conditions and risk-adjusted returns not meeting expectations, indicating active cycle management.

AI and Operational Efficiency Initiatives

AXIS is making significant advancements in leveraging AI and data analytics to enhance efficiency and productivity. Key initiatives include auto-ingestion, which has improved submission routing time by over 65% in its initial rollout, and a next-generation underwriting platform that has reduced quote cycle time by up to 30%.

These investments contribute to a flat G&A dollar spend year-over-year, allowing the company to write more high-quality business on the same expense base and purposefully scale headcount.

Market Dynamics and Underwriting Discipline

The company continues to navigate dynamic micro markets, with property pricing down 13% and cyber rates down 6%. Despite these pressures, AXIS maintains underwriting discipline, ensuring business meets risk-adjusted return expectations. Capital is being reallocated to attractive markets, and a cautious stance is maintained in areas like U.S. casualty and London market property lines.

Management emphasizes that terms, conditions, and limits are generally holding, and premium adequacy is observed across most of the business.

Capital Management and Shareholder Returns

AXIS maintains a strong financial position, returning $93 million to shareholders in Q1 FY26 through $33 million in dividends and $60 million in share repurchases. An additional $300 million share repurchase authorization was approved by the Board. Management indicated an opportunistic approach to buybacks, with approximately 50% of generated earnings expected to support organic growth, while still seeing current valuation as a good opportunity for share repurchases.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.