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    AXS
    Earnings call· Jun 2026(Q2 FY26)

    AXIS CAPITAL HOLDINGS Q2 FY26 earnings call AXS

    Jul 29, 2026 Source

    Executive summary

    AXIS Capital Q2 FY26 — Strong Profitability Amidst Softening Market and Targeted Growth

    AXIS Capital delivered a solid quarter with strong profitability and consistent book value growth, navigating a softening market by focusing on disciplined, targeted growth in specialty lines. The company proactively adjusted loss picks and reduced exposure in competitive areas like reinsurance casualty, while leveraging diversified distribution and new capabilities like ACS to drive profitable expansion.

    Highlights

    5

    • Generated 14.3% annualized operating return on equity.

    • Achieved 15% year-over-year growth in diluted book value per share, marking the 15th consecutive quarter of growth.

    • Gross written premiums increased by 6% over the prior year to $2.7 billion, driven by strength in insurance.

    • Insurance segment delivered a strong 90% combined ratio and $119 million in underwriting income.

    • Fee income from AXIS Capacity Solutions (ACS) reached $4 million in the quarter, with a full-year target of $17 million.

    Concerns

    4

    • Observed softening market conditions and increasing competition, with property rates down 17% in the quarter.

    • Absorbed $31 million in losses from the Middle East conflict, classified as a cat event.

    • Insurance underlying loss ratio increased by 1.7 points year-over-year to 54%, reflecting evolving market conditions and increased prudence.

    • Reinsurance gross written premiums declined by 25% in the quarter due to cycle management in casualty lines.

    Guidance & targets

    6
    CategoryTargetConfidence
    Fee income from AXIS Capacity Solutions (ACS)
    $17 million
    medium materiality
    High
    Consolidated G&A ratio
    11%
    medium materiality
    High
    Effective tax rate
    19.2%
    low materiality
    Medium
    Share repurchases
    Continue to be active
    high materiality
    High
    Reinsurance gross written premiums
    Double-digit declines
    medium materiality
    High
    Insurance attritional loss ratio
    In this vicinity
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Insurance
    Strong quarter with significant premium generation and underwriting income, driven by expanded classes and ACS. Growth was disciplined, with cycle management in property and cautiousness in casualty lines. North American wholesale remains substantial, with retail showing upside potential.
    Core insurance portfolio growth: 2%ACS contribution to growth: 8%Expanded classes growth: 5%North American wholesale premiums: 68%North American retail premiums: 19%Delegated business: flat YoY, 13% of premiumsProperty rates: down 17%Liability growth: 8%Liability rates: up 7%US Excess Casualty shrunk: 4%US Excess Casualty rate change: 8%US excess casualty lower middle market growth: 22%Primary casualty shrunk YTD: 8%Primary casualty rate increase: 9%Professional growth: 16%Professional rate increase: 2%Cyber premiums reduced: 5%Cyber rate reductions: 7%
    		$2.2 billion15%—90% combined ratio, $119 million underwriting income, 84.5% current accident year ex-CAT combined ratio
    Reinsurance
    Executed targeted specialist reinsurance strategy, achieving 10th consecutive quarter of profitability. Significant reduction in premiums due to cycle management in professional and liability lines, particularly in North American portfolio expirations. New business heavily weighted towards short-tail lines.
    New business: $90 million (94% short-tail)Specialty short-tail lines: 51% of productionCurrent accident year loss ratio: 68.3%Liability rate change: 8.4% (down from 11.9% in Q2 FY25)Professional lines reduction: 58% of total reductionLiability lines reduction: 42% of total reduction
    		$440 million-25%—94.5% combined ratio

    Operational metrics

    33
    Annualized operating return on equity
    14.3%
    Q2 FY26

    Operating income was $211 million or $2.84 per diluted common share.

    Diluted book value per share growth
    15%YoY
    Q2 FY26

    15th consecutive quarter of growth.

    Group current accident year ex-cat combined ratio
    89%
    Q2 FY26
    GA ratio
    10.9%
    Q2 FY26
    Short tail premiums
    57%
    Q2 FY26

    Represents the mix of premiums predominantly within the insurance segment.

    Fee income from AXIS Capacity Solutions
    $4 million
    Q2 FY26

    Enabling greater gross lines on selected classes while maintaining net underwriting appetite.

    North American wholesale premiums
    68%
    Q2 FY26

    Represents share of North American insurance premiums from wholesale channel.

    North American retail premiums
    19%
    Q2 FY26

    Represents share of North American insurance premiums from retail channel, with continued upside potential.

    Delegated business premiums
    13%flat YoY
    Q2 FY26

    Represents share of insurance premiums from delegated business.

    Group cyber premiums reduction
    30%
    Q2 FY26

    Reduction at a group level due to rate reductions and pressure on premium adequacy.

    Net income available to common shareholders
    $251 million
    Q2 FY26
    Diluted common share EPS
    $3.38
    Q2 FY26
    Annualized ROE
    17%
    Q2 FY26
    Operating income
    $211 million
    Q2 FY26
    Diluted common share operating EPS
    $2.84
    Q2 FY26
    Acquisition expense ratio
    20.8%up from 19.8% in Q2 FY25
    Q2 FY26

    Up due to emphasis on growth in shorter tail lines, which carry higher commission costs (pet, surety, ACS-sourced, specialty reinsurance credit).

    Fee income
    $22 million
    Q2 FY26

    Includes insurance-related and other income, offsets to G&A, and ILS investments.

    Consolidated G&A ratio
    10.9%vs 11.6% in Q2 FY25
    Q2 FY26

    Dollar spend on G&A was essentially flat year-over-year; achieved target level presented 2 years ago.

    Insurance net written premium growth
    6%
    Q2 FY26

    Below gross premium growth, partially reflecting normalization of Q1 net faster than growth and increased property sessions.

    Property sessions (reinsurance)
    37%up from 30%
    Q2 FY26

    Increased at midyear renewals while maintaining $100 million cat XOL attachment.

    Insurance underlying loss ratio
    54%1.7 points higher YoY
    Q2 FY26

    Reflects evolving market conditions and prudent action in loss picks.

    Fixed maturities NII growth
    9%YoY
    Q2 FY26

    Driven by strong cash flow and higher book yield, partially offset by capital return to investors.

    Effective tax rate
    19.2%
    Q2 FY26

    Expected to run in this range for the foreseeable future.

    Capital returned to shareholders
    $122 million
    Q2 FY26

    Through dividends and share repurchases.

    Dividends
    $33 million
    Q2 FY26
    Share repurchases
    $89 millionup from $60 million in Q1 FY26
    Q2 FY26

    Remaining authorization of $263 million.

    Insurance underlying book growth
    low single digits
    Q2 FY26
    Insurance expanded products and initiatives growth
    mid-single-digit range
    Q2 FY26
    E&S property rates
    down 22%
    Q2 FY26

    Specific rate decline in E&S property within the broader property market.

    Reinsurance gross written premiums decrease (Q1)
    2%QoQ
    Q1 FY26

    Provided for context on full-year reinsurance decline.

    Reinsurance gross written premiums decrease (YTD)
    10%
    YTD Q2 FY26

    Expected to be broadly where they end the year.

    Gross premium mix (Insurance)
    83%
    Q2 FY26

    Represents the proportion of gross premiums from the Insurance segment.

    Gross premium mix (Reinsurance)
    16%
    Q2 FY26

    Represents the proportion of gross premiums from the Reinsurance segment.

    Industry KPIs

    9
    MetricValueDetails
    Combined ratio93.1%%
    Capital returns$122 millionUSD
    ROE operating ROE14.3%%
    Catastrophe losses$80 millionUSD
    Book value per share15%%
    Net investment income$182 millionUSD
    Net premiums written earned$2.7 billionUSD
    Renewal rate change pricing—
    Prior year reserve development$15 millionUSD

    Product announcements

    3
    ProductTypeDetails
    AI and Technology Strategylaunch
    Group COO Roleupdate
    How We Work programupdate

    Deals & partnerships

    1
    Ryan SpecialtyRAC Re transaction, supporting MGUs

    The RAC Re transaction involved liability lines, contributing $21 million and a 10% rate change. AXIS is evaluating the continuance of MGUs supported by this partnership in year 2.

    Risks & headwinds

    5
    Softening Market ConditionsQ2 FY26

    Property rates down 17%; E&S property rates down 22%; Cyber rates down 7%

    Mitigation: Disciplined and targeted growth towards specialty short lines; cycle management; proactive loss pick adjustments; leaning into diversification of product, customer segments and deep specialty expertise.

    Middle East Conflict LossesQ2 FY26 and ongoing

    $31 million in Q2 FY26; industry losses $2.5 billion to $3 billion YTD

    Mitigation: Close monitoring of exposures; underwriting controls among the most conservative; long-standing profitability in terrorism and marine war specialist classes; supporting long-standing insurers.

    Severe Convective Storms (SCS)Q2 FY26 and ongoing

    $49 million in Q2 FY26; $18 billion industry cat losses from SCS in Q2 FY26

    Mitigation: Losses were well within expectations; portfolio built with premium adequacy; average net limit in low single-digit millions; well-balanced in peril and geographic mix; backed by cat XOL protection at $100 million per event.

    Casualty Market CompetitivenessQ2 FY26 and ongoing

    Rate increases in casualty lines not where they need to be; US Excess Casualty shrunk 4%; Primary casualty shrunk 8% YTD

    Mitigation: Highly selective and disciplined growth in casualty businesses; shrinking exposure in areas with insufficient rates; focusing on lower middle market and ACS where acceptable pricing is found.

    A&H Employer Stop-Loss Business PressureQ2 FY26 and ongoing

    Increased competitive pressures

    Mitigation: Cycle management and reduction of the reinsurance book.

    What to watch in Q3 FY26

    5

    Insurance underlying loss ratio

    Rest of FY26
    Current54% (up 1.7 points YoY)
    TargetStability or further adjustment based on market conditions

    Why it matters

    Indicates the company's ability to manage pricing adequacy and loss trends in a softening market.

    I would say what we've reported in our attritional loss ratio in the quarter is not a bad barometer of what we expect to see for the rest of the year.

    Q&A highlights

    6

    Was the 1.7pt increase in insurance loss ratio primarily due to property, or also casualty? Are casualty rates keeping pace with loss costs?

    The loss ratio change is largely driven by property, but also continued caution in casualty. While some casualty units (lower middle market, ACS) found acceptable pricing, the larger excess casualty business shrunk due to rate pressure. The change reflects mix shift to short-tail and responsiveness to pricing landscape to maintain premium adequacy.

    “The rate -- excuse me, the loss ratio change that we actioned in the quarter is driven in large part by property, but also our continued cautiousness and stance within casualty lines.”

    asked by Andrew Kligerman · answered by Vincent Tizzio

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Focus and Market Conditions

    AXIS continues to lean into attractive specialty markets, maintaining premium adequacy despite softening market conditions and increasing competition. The company's strategic focus on short-tail lines is evident, with 57% of total premiums derived from these lines in Q2 FY26, including 59% in insurance and 51% in reinsurance. This disciplined approach allows AXIS to target profitable growth while managing market pressures🌐.

    02

    AXIS Capacity Solutions (ACS) Impact

    The AXIS Capacity Solutions (ACS) capability is playing a significant role in the company's growth strategy. ACS enables AXIS to write greater gross lines in selected classes that meet premium adequacy standards, while effectively managing its net underwriting appetite. This initiative contributed to insurance growth and generated $4 million in fee income during Q2 FY26, with expectations to reach $17 million for the full year.

    03

    Catastrophe and Conflict Losses

    During Q2 FY26, AXIS absorbed $49 million in losses from severe convective storms, which was within the company's modeled expectations. Additionally, the company reported $31 million in losses from the Middle East conflict, primarily impacting its terrorism and marine war businesses. These conflict-related losses are classified as cat events and are believed to be part of a broader industry loss range of $2.5 billion to $3 billion year-to-date.

    04

    Underwriting Discipline and Portfolio Management

    AXIS is actively cycle managing its portfolio in response to market changes. This includes a 25% reduction in reinsurance premiums in Q2 FY26, primarily in professional and liability lines, which were identified as areas of increased competition. In the insurance segment, property sessions were increased from 30% to 37% at mid-year renewals, demonstrating a proactive approach to protecting the balance sheet and managing exposures.

    05

    Talent and Technology Investment

    The company is making strategic investments in talent and technology to support its long-term ambition. Recent hires include a Chief Commercial Officer and a Head of AI and Technology Strategy. Through its 'How We Work' program, AXIS is strengthening its operating foundation by simplifying processes, embedding agile methodologies, and piloting AI across underwriting, claims, and operations to translate transformation investments into measurable financial outcomes.

    06

    Loss Ratio Adjustments and Market Responsiveness

    The insurance underlying loss ratio increased by 1.7 points year-over-year to 54%, reflecting accelerating softening in the property market, where rates were down 17% (E&S property down 22%), and a more competitive environment in casualty lines. Management emphasized that this adjustment is a prudent response to evolving market conditions, aimed at maintaining premium adequacy and ensuring sustainability and predictability in results.

    AI-generated summary of the company’s earnings call. Not investment advice.