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AXIS Capital Provides Information on Losses Impacting First Quarter 2011 Results

^{Published on 2011-03-21 13:25:24 - Market Wire}
 

PEMBROKE, Bermuda--([ BUSINESS WIRE ])--AXIS Capital Holdings Limited (aAXIS Capitala or the aCompanya) (NYSE: AXS) today estimated that the total net impact of the New Zealand earthquake and loss events in Australia that have occurred to date in the first quarter of 2011 will be between $275-$315 million. Loss estimates are pre-tax and net of reinstatement premiums.

The total net impact of the New Zealand earthquake in the first quarter of 2011 is expected to be between $185-$215 million. The total net impact of loss events in Australia that have occurred to date in the first quarter of 2011 is expected to be between $90-$100 million. The Company has assumed a total loss to the vast majority of its reinsurance treaties exposed to the New Zealand earthquake, including a significant treaty exposed to a government-owned provider of residential earthquake coverage. Losses for the New Zealand earthquake and loss events in Australia that have occurred to date in the first quarter of 2011 are expected to primarily impact the reinsurance segment of the Company. The net impact from the New Zealand earthquake to the Companya™s insurance segment is not expected to exceed $20 million due to reinsurance coverage limiting net retentions in the segment and the net impact of the loss events in Australia are not expected to be material to this segment.

The Companya™s loss estimate ranges for the New Zealand earthquake and the loss events in Australia are primarily based on the Companya™s ground-up assessment of individual contracts and treaties in the affected regions and are consistent with the Companya™s market position in the respective regions impacted by these catastrophe events. Other information considered in developing net loss estimates includes current industry insured loss estimates, market share analysis, catastrophe modeling analysis and limited information from clients, brokers and loss adjusters. AXIS Capital currently estimates that industry losses will be in the range of $8-$12 billion for the New Zealand earthquake and in excess of $6 billion for the loss events in Australia that have occurred to date in the first quarter of 2011.

The Company has initiated its estimation process in connection with expected losses related to the recent earthquake and tsunami in Japan. Current industry loss estimates for this event from property catastrophe modeling agencies range from $12-$35 billion. The Company believes it is too early to issue an industry loss estimate or a Company loss estimate at this time. However, based on its modeling of earthquake events in Japan, the Company does not expect its share of industry losses emanating from its reinsurance segment to exceed 1.3% of total industry loss and the net impact to the Companya™s insurance segment is not expected to exceed $25 million due to reinsurance coverage limiting net retentions in the segment.

The Companya™s loss estimates are preliminary and subject to significant uncertainty as there is very limited actual loss data at this time.

AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholdersa™ equity at December 31, 2010 of $5.6 billion and locations in Bermuda, the United States, Europe, Singapore, Canada and Australia. Its operating subsidiaries have been assigned a rating of aA+a (aStronga) by Standard & Poora™s and aAa (aExcellenta) by A.M. Best. AXIS Capital and AXIS Specialty Finance LLC have been assigned senior unsecured debt ratings of A- (stable) by Standard & Poora™s and Baa1 (stable) by Moodya™s Investors Service. For more information about AXIS Capital, visit our website at [ www.axiscapital.com ].

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements contained in this release include our expectations regarding market conditions and information regarding our estimates of losses related to natural disasters. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause actual events or results to be materially different from our expectations include the occurrence and magnitude of natural and man-made disasters; actual claims exceeding our loss reserves; the failure of any of the loss limitation methods we employ; the effects of emerging claims and coverage issues; the failure of our cedants to adequately evaluate risks; interest rate and/or currency value fluctuations; general economic conditions; and the other factors set forth in our most recent report on Form 10-K, Form 10-Q and other documents on file with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.