AXIS Capital Holdings Ltd. announced an estimated net claims provision of $300 million, pre-tax, for the first quarter related to catastrophe and other weather-related events. This amount includes estimated pre-tax claims of $235 million for the COVID-19 pandemic.
The company’s estimated net claims provision for COVID-19 is largely attributable to property-related coverages, but also includes event cancellation and accident & health coverages, based on a global shelter-in-place order that remains in effect until July 31, 2020.
Other-weather related events of $65 million, pre-tax, include regional weather events in the United States, UK floods and Australia wildfires.
AXIS Capital said it is seeing continuous improvement in its current accident year loss ratios, excluding catastrophe and weather-related losses for its insurance and reinsurance businesses for the quarter.
Separately, the Company expects to report a full limit loss of $10 million associated with the World Health Organization (WHO) pandemic swap.
In addition, the company expects to report net investment income of $93 million for the quarter, reduced from $107 million in the first quarter of 2019, primarily attributable to lower hedge fund returns.
The company also expects to report net unrealized losses of $61 million ($55 million excluding foreign exchange movements) attributable to its equity securities portfolio and net unrealized losses of $275 million ($224 million excluding foreign exchange movements) attributable to its fixed maturities portfolio, due to the significant decline in equity and credit markets at March 31, 2020.
“While COVID-19 continues to create unprecedented challenges and uncertainty for all carriers, we believe AXIS is well-positioned to manage through the pandemic,” commented Albert Benchimol, president and CEO of AXIS Capital.
“We entered 2020 with strong capital adequacy, a high-quality investment portfolio, and a well-balanced book of business. Our portfolio optimization actions are delivering tangible results,” he added.
“We have confirmed that most of our contracts do not provide coverage that applies to the current situation. Nevertheless, we have written policies that will respond to this pandemic. We are already processing claims and making payments where coverage exists. We proudly stand by our promise to be there for our customers in their time of need,” Benchimol said.
“We believe that the estimate that we have provided appropriately reflects losses that have been incurred assuming the shelter in place lasts through July 31st.”
Source: AXIS Capital Holdings
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