AXIS Capital at KBW Conference: Strategic Growth and Cautious Optimism

On Wednesday, 03 September 2025, AXIS Capital Holdings Ltd (NYSE:AXS) presented at the KBW Insurance Conference 2025, outlining its strategic initiatives and financial performance. The company highlighted its commitment to organic growth, talent acquisition, and disciplined capital management, while addressing challenges such as market stability and reinsurance liability. AXIS remains cautiously optimistic, focusing on long-term sustainable growth and adapting to market conditions.

Key Takeaways

• AXIS is focusing on organic growth but remains open to acquisitions, with a disciplined approach to capital allocation.
• The company aims for low 90s combined ratios in its reinsurance business.
• New initiatives contributed $250 million in premiums in Q2 2025.
• AXIS is leveraging data analytics to improve underwriting and reduce expenses.
• The company is cautious about casualty lines and market stability.

Financial Results

• AXIS aims for low 90s combined ratios in reinsurance, complementing its insurance operations.
• New and expanded initiatives from 2024 added $250 million in premiums to the insurance group in Q2.
• Risk assets in the investment portfolio increased from 14% to 17-18%, potentially reaching over 20%.
• The debt-to-capital ratio, including preferred shares, stood at 24.9% at the end of Q2, within the 20-30% comfort range.
• Recent actions include share repurchases.

Operational Updates

• Matthew Kirk will join AXIS as CFO in November, with Pete Vogt remaining through 2025 and advising in 2026.
• AXIS focuses on specialty lines within reinsurance, cautiously managing financial lines and liability.
• The company targets the smaller middle market through its wholesale distribution channel.
• North American business from MGAs accounts for about 14% of total insurance business.
• A reconstituted MGA strategy aims for profitable growth with aligned financial interests and collateral relationships.
• Data and analytics are being used to improve underwriting, with tools like tiering enhancing decision-making.

Future Outlook

• AXIS will maintain a cautious reinsurance liability appetite through 2025 due to market stability concerns.
• Ongoing investments in data, analytics, and AI are expected to become self-sustaining and reduce the expense ratio.
• The company aims to continuously improve quote and bind ratios through technological tools.
• AXIS remains cautious on casualty lines, maintaining a similar stance in 2025 while gathering more data.

Q&A Highlights

• AXIS competes for talent by fostering a strong culture and supporting specialist practitioners.
• Professional lines grew approximately 15% in Q2, with broad-based growth except for public D&O.
• The company is experimenting with pricing in the public D&O market, noting a flattening rating environment.
• AXIS monitors the potential impact of medical inflation on its pet health business.
• The company aims to consistently generate high-performance earnings and maintains a high bar for M&A considerations.

For a detailed understanding of AXIS Capital’s strategies and financial performance, refer to the full transcript below.

Full transcript - KBW Insurance Conference 2025:

Unidentified speaker, Interviewer: I mean, I can complain about it, but it’s not going to change. We are going to move along. Our next session has Vince Tivio, CEO of Axis and Pete Vogt, the CFO. And I’m going to gloss over the implicit awkwardness of this question and say, first of all, that I’ve been working with Pete for a long time, and I think he’s done a phenomenal job in terms of confidence and credibility.

In that context, can you talk about Matthew Kirk and what he’s going bring to AXIS?

Pete Vogt, CFO, AXIS: Well, good afternoon. It’s good

Vince Tivio, CEO, AXIS: to be with you. I would challenge you on the awkwardness. This is not challenging or awkward at all. Pete and I have been working a long time on the succession of his role. We’re so grateful for what Peter has contributed.

Peter will be with us throughout 2025. He’ll be signing the K. And so this is an orderly transition. It’s a body of work that we undertook together to find a colleague that first had a cultural fit with AXIS. Secondly, had a broad based experience set in FPA, capital management and understanding the specialty markets.

And so this was a deliberate search. In Matt Kirk, we found someone that we think is ideal to succeed Pete. He has all the attributes that I just referenced, and we’re excited about the partnership. Matt will start with us in November. But to be clear, Pete is going to be our CFO for all of 2025 and will serve as an adviser to me in 2026.

Unidentified speaker, Interviewer: That’s fantastic.

Vince Tivio, CEO, AXIS: He’s done a great job, as you know. Yes.

Unidentified speaker, Interviewer: And I haven’t always said that about everyone that I interact with because it’s not always true, but It’s been a great partner. I’m more than happy to acknowledge that. You’ve gotten some form of this question many times. But more recently, another prominent specialty insurer has said, okay, we’re out of reinsurance, right? They did a renewal rights deal.

How important is it to AXIS to have any reinsurance as an operating segment?

Vince Tivio, CEO, AXIS: So we appreciate the question. And the good news is the consistency of what we’ve said will hold true today. First, we’ve sized what we think the contribution of our reinsurance business would be. We’ve laid out a very clear product strategy. We have an emphasis on the specialty lines.

We have a very selective perspective on the financial lines business and a highly cautious underwriting appetite on the liability. More broadly, this business is a complement to our insurance business against the prism of, a, the sizing of the business, some 15% to 20 odd percent of our company’s total revenue Secondly, it’s a bottom line focused business that’s going to produce low 90s combined, a very healthy GA management. And provided that we can meet that test and continue to execute with that, this business plays an important role for AXIS. I’d remind you that the 2Q discrete combined ratio is another extension of consistency. Not since 2016 have we evidenced the kind of consistency in our underwriting results within our reinsurance business.

Pete, I don’t know if you want to add. No, I

Pete Vogt, CFO, AXIS: think you said it quite well. It definitely is there to complement our insurance business Meyer. And it does give us access to some specialty lines we don’t have on the insurance side, such as agriculture and mortgage, which we find quite attractive right now.

Unidentified speaker, Interviewer: Okay. So just as a quick follow-up to that. Is there any cost in terms of, I guess, potential reinsurance cedents that you compete with on the primary side being less interested?

Vince Tivio, CEO, AXIS: In our current underwriting appetite, that potentiality is diminished. Obviously, with a selective professional and a very cautious liability, we don’t think that, that’s a major challenge. Now as we continue to cycle manage and the marketplace changes, we’ll look at the calculus of what those two businesses can do for our company. But at the moment, we like our underwriting strategy.

Unidentified speaker, Interviewer: Okay, fantastic. One point that I want to emphasize, as I’ve done in prior meetings, is that I want to make sure that anyone in the room is getting the information that they’re looking for. If you have a question, please don’t hesitate to raise your hand, and we’ll get you the microphone, and you can ask whatever you want. But in the interim, I want to talk about the incentive compensation structure at AXIS, right? It’s a function of growth in diluted book value per share.

One component of it that’s been sort of very welcome positive development is reserve releases, which I think, to me, least, certainly signal great confidence in the reserve strengthening that was done, let’s call it, just under two years ago. How does that factor into the calculus of incentive compensation?

Vince Tivio, CEO, AXIS: It’s included. But bear in mind, if you go back to the reserve charge in December ’3 and you look at the compensation outcomes for Peter and myself, we certainly did not enjoy the overall success that came in that operating year, notwithstanding the reserve charge. So we think we’ve brought strong alignment to shareholder interest in our compensation formula, and it’s been working for us even in the recruitment of people into the organization.

Unidentified speaker, Interviewer: Okay. I’d love to talk about recruitment, if I can, just to jump off on that because I don’t know if I’m over interpreting, we just have more news stories of underwriters or of insurance producers moving from company to company, which to me sort of highlights the fact that there’s probably not enough talent to populate every insurance entity around there. Can you

Vince Tivio, CEO, AXIS: talk about how Axis is competing for talent in this marketplace? Well, first, we have humility that there is a war for talent. And secondly, we think a critical component of our recruitment strategy is the culture that we create within the company, the respect of the specialist practitioner, the support and having complementary capabilities and claims, actuarial, operations, technology, these all go into the calculus of one’s choice. And certainly, being a brand as respected in our chosen markets within distribution is certainly aiding that. And as you’ve mentioned and as we’ve discussed in the past, we’ve had no shortage of teams joining AXIS, and we continue to have that as a core part of our growth strategy and our capital use strategy.

Unidentified speaker, Interviewer: And I guess a follow-up with Pete. Is the associated expense tracking with what you would have anticipated in budgeting?

Pete Vogt, CFO, AXIS: Yes. Yes, we’ve done a very good job at being able to actually look out the next twelve, twenty four months at where we think expenses are going to And the key with these teams is actually they’ve done a very good job and we even talked about it on the second quarter call where our new and expanded initiatives from 2024 contributed about $250,000,000 of premium to the insurance group in the second quarter. And so when we bring these teams on, we know that there’s a G and A right away. We also have a plan. What’s the up ramp?

How long is it going to take them to get to like, I’ll call it, paying for themselves and then generating more. They’re all doing very, very well.

Unidentified speaker, Interviewer: Okay. But I’m going to infer from that, that there’s still additional progress as the $250,000,000 grows to Absolutely.

Vince Tivio, CEO, AXIS: Yes. The run rate on those new and expanded businesses is has a long road in front of it, and it’s being executed with the kind of discipline that we committed to subsequent to the reserve charge. We’re bringing in as much, excuse me, information management to support the ongoing portfolio construction of these businesses, and we like the signals exceedingly well.

Unidentified speaker, Interviewer: Okay. Fantastic. And again, looking around the room, if there are questions, please don’t hesitate, let me know. I want to talk about distribution because a theme that’s been emerging in specialty lines, in E and S, however you want to phrase it, is that the wholesale brokers prefer to work with wholesale only companies. That’s not always practical for individual lines of business.

And I was hoping you could talk about how Axis can balance those because you’ve got a decent array of distribution channels.

Vince Tivio, CEO, AXIS: Yes. First, we’ve been in the wholesale space almost since inception. And so we think we have intimate knowledge about the wholesale channel distribution. Secondly, a couple of years ago, we made a strong declaration within The U. S.

We created a wholesale only business unit. We added some four to five different products, widening our aperture and appetite to that incredibly important channel. And it’s a channel that not only pays a premium for those that know, like and trust one another, but it has to support its capability and innovation, product design, its ability to cycle manage throughout these different micro markets that we pointed to in the second quarter of our earnings announcement. And so we think that merely hanging a shingle and saying you’re in the wholesale space is not really a great strategy, that you have to have all of the component capabilities to meet that channel of distributions needs and expectations. And that’s the financial wherewithal of the offering.

It’s the artistry of the terms and condition remit. It’s having the claims paying capability that could be consistent. It’s having the consistency generally in how you’re calling for the business and how you’re trying to bring innovation to that segment. And there’s a whole bunch of innovation that’s going on in the wholesale channel. So if I can follow-up

Unidentified speaker, Interviewer: on that. You’ve talked about recruiting, and you’ve talked about this the importance of the relationships. How quickly can you provide the access, I’ll call it, umbrella of relationships with distribution to newer teams? Is that instant or does it take time?

Vince Tivio, CEO, AXIS: Well, it depends on whether or not the underwriting team that we’re recruiting is for the wholesale dedicated space or the retail space. And so as you know, most of the wholesale underwriters and teams that we attract come with their own following of relationships within the wholesale channel. That is in part figured into our calculus of why we’re attracting them to AXIS to begin with. So we try and bring in complementary talent that first starts with the culture, how they define success. It’s not merely about the top line.

It’s a bottom line focused underwriting approach.

Unidentified speaker, Interviewer: can follow-up on that on the logistical side. So you bring in a team, and they’ve got a relationship with a broker you maybe haven’t worked with in the past

Pete Vogt, CFO, AXIS: or haven’t worked as

Unidentified speaker, Interviewer: extensively. How important and maybe how quickly can you say, okay, we’ve got a relationship now because of this product, but we’ve got a whole bunch of other products that you might be able to distribute as well?

Vince Tivio, CEO, AXIS: Yes. So we view that in a couple of dimensions. The first is in instances where they’re complementing an existing capability of a product or a type of industry within a product, we expect the run rate of that person to take pretty immediate effect, certainly not instantly, but certainly within the first year that they’re underwriting our business, they’ll be accretive. In instances where we’re going into different segments within existing industry niches, construction, you’ve seen AXIS announce a number of construction underwriters in the last year. They’re going after segments of the construction space that we weren’t as substantial in.

That may take a little bit more time. Some of it’s trading off of the relationship of the people that we’ve brought in. Some of it is bringing us our stronger, broader product capability to that channel as well.

Unidentified speaker, Interviewer: Okay, great. And again, looking around the room, just to make sure I’m not overlooking anything. You’ve talked about a focus on penetrating the smaller middle market, if you will.

Vince Tivio, CEO, AXIS: Can you talk about, I guess,

Unidentified speaker, Interviewer: what led to that decision, which product lines you’re emphasizing and what the distribution tools are to build that book of business?

Vince Tivio, CEO, AXIS: Yes. So the premise for us was we viewed it as an underserved marketplace that was right in the wheelhouse of our wholesale distribution channel. We think it’s a vast market. We look at business concerns with $10,000,000 in receipts or turnover to $100,000,000 They buy up to a couple of $100,000 of an unbundled offering, and they really cascade across all of our product set. And we knew that, that was a market space that was underserved, that the response time by those against whom we compete wasn’t always optimal, that there was a need.

And so one, we wanted to meet the need. That’s part of why we think good specialists exist. Secondly, we knew we had the product knowledge. We’re leveraging our existing product capability. Third, we knew we had to enhance the operating capability, the cycle time, the speed of our quoting capabilities.

And fourth, we had to make sure that our actuarial insights and claims capabilities were up to snuff. And over these last two years, we’ve made considerable progress and grounded penetrating that customer segment, which is, again, in The United States through our wholesale channel that we view as vast, not growing going away, excuse me, and one that we’re gaining increasing capability at meeting and serving the need of.

Unidentified speaker, Interviewer: And how effective is the experience that you’ve got, whether it’s underwriting experience or actuarial data for larger accounts for this group of smaller accounts?

Vince Tivio, CEO, AXIS: We can leverage part of the information management that we have inside the company. I have built a number of these businesses for other large organizations over my career. I come to this customer segment with a demonstrated knowledge and a belief in its wherewithal within our portfolio and its retention and profit outlook benefit over the intermediate term. So there is a lot of focus, a lot of work, and I congratulate the North American leadership team for what they’re doing and how they’re executing this actual strategy. Fantastic.

Yes.

Unidentified speaker, Interviewer: One topic that’s become increasingly sensitive recently is the topic of MGAs and outsourced underwriting. There is a, I’ll call it, glib assumption that, well, if it’s not their balance sheet, they’re going to underwrite terribly. Axis gets business through MGAs. Can you talk about your processes for evaluating and sustaining underwriting discipline when you give them the pen as it were?

Vince Tivio, CEO, AXIS: Well, reserve charges create humility for any good underwriter, it seems to me. And when we executed our reserve charge, included within that was a component of our U. S. Program business, which was all delegated. And there was a laundry list of lessons to have be learned.

And so we reconstituted that strategy. And the first thing that we did was bring in new leadership to run our North American business. The second, of course, is we decided on a complement of definitions. The first was how do we align financial interest between ourselves and our MGA. And there’s a variety of methods that we undertook there, including who controls the claims, what loss picks govern the trigger of the profit commission agreements.

The second was making sure that we had a collateral relationship with these entities. Our former strategy had a number of one off program relationships where we knew no one else in that firm beyond the owner who could have been a mom and pop size shop. Today, we’re transacting with substantial MGA partners that tie to broader relationships within AXIS. Additionally, we’re bringing a focus to the instances of the product that we want to use, MGAs. If you look at two important contributions in North America, which, by the way, is about 14% of our business in insurance comes from MGAs in North America.

You think about our relationship with Fetch in the pet offering of A and H. You think about our partnership with Dual in the provision of surety. These are two instances that we think showcase the definitions I just gave you. Lastly, we think there’s a lot of innovation left in the MGA space that combines both traditional risk transfer with the utilization of third party capital, ILS and other vehicles that aggregate our appetite of risk in different lines of business. And we think there’s a lot that still has to come from that segment in the form of innovation.

And then finally, we will exhaust all of our risk transfer capabilities, look selectively at our MGA relationships and make certain that we’re solving for: a, a customer segment that we can’t reach b, an efficiency play that we can attain in the immediate term and c, a reliance and relationship with the practitioners that we’re betting on that will meet our immediate expectations of a return. And we think that, combined with the innovation work that we’re doing with existing MGUs and MGAs, will really pave a profitable growth journey for AXIS. Can we

Unidentified speaker, Interviewer: extrapolate from that? Like as you develop or enhance the skills to ensure underwriting profitability, adequate underwriting from MGAs, we’re certainly hearing of more and more MGA formation, more and more MGA registration. Can we think about that as a or how should we think about that as a source of future growth for AXIS? In other words, if you can do this well, probably you can apply it to other lines of business.

Vince Tivio, CEO, AXIS: It will play a role. And I go back to what Pete said. If you think about the new and expanded, we had some over $200 odd million of new and expanded premium hitting our 2Q discrete. So it will play a role. It won’t be the majority of the role, though, either.

Unidentified speaker, Interviewer: Right. Okay. Fair enough. And again, if there are questions in the room, please let me know. You mentioned Setch, but I want to dig a little bit.

There are a number of insurance lines of business where the technical name doesn’t really get to the heart of what is actually being covered. I always say Inland Marine and Accident and Health are two of those. Can you talk to us about Axis’ accident and health? I wasn’t sure I’d get that out right. Book, what’s in there?

What are

Vince Tivio, CEO, AXIS: the growth opportunities for that? Yes. So we’ll tag team this, Pete. In the insurance business, it’s predominantly a pet accident and health business. It’s supplemented and complemented by a travel business travel accident and personal accident capability out of Lloyd’s.

In the reinsurance business of Axis, we have a medical stop loss and a limited medical liability portfolio. They’re non contiguous. They’re non aggregating with one another. But it’s a bottom line focused business unit. It’s contributing meaningfully on both sides of the equation.

And the status of the marketplaces for both are in different places. We have a lot of caution on the medical side in our reinsurance business. We have a strong growth ambition that is supported by profit on our pet business. And we have a selective Lloyd’s business that’s led by a really good team and long standing practitioners. I don’t know if I’ve missed No,

Pete Vogt, CFO, AXIS: I think you covered it all. Okay.

Unidentified speaker, Interviewer: I was going ask on I’m going to ask this two different ways. The first on the Pet side. I know we hear a lot about medical inflation. I don’t know if that’s relevant on the Pet Health side either currently or as a concern going forward.

Vince Tivio, CEO, AXIS: Well, I think you have to have a rigorous filing component to the product strategy in pet. It does play a role. We have a strong team. It’s an admitted offering. And it’s part of something that Pete and I monitor carefully to make certain that we’re keeping pace with the filings in order to observe not only inflation, but all forms of rate need that we observe in the portfolio.

Unidentified speaker, Interviewer: Okay. And then same question on the reinsurance side, if you’re stop There, I assume that just the nature of the product is sort of leverage inflation.

Pete Vogt, CFO, AXIS: By definition. Right. Yes.

Unidentified speaker, Interviewer: Okay. And the market is still absorbing the rate increases that are necessary for that.

Vince Tivio, CEO, AXIS: It’s selective on the reinsurance side, which is why you’ve seen the results that you’ve seen from Axis on the insurance side. We’ve been very transparent about where the growth is coming from, and we like the trade comfortably.

Unidentified speaker, Interviewer: Okay. Fantastic. Is that mostly domestic, the where the risk resides?

Pete Vogt, CFO, AXIS: Yes, it is. Okay. Yes.

Unidentified speaker, Interviewer: If we can shift gears a little bit to Professional Lines, which again covers a lot of stuff, probably with very different pricing dynamics. Can you talk about what’s in the access book? And well, I’ll start there, and then I’ll have a follow-up.

Vince Tivio, CEO, AXIS: Yes. So Pete, I would welcome TAG team because in the SEC, the way we report professional may not be easily understood to our investors. We include environmental, allied health, Arizona emissions, public D and O, private D and O, just name a few. And so this is a business in the second quarter that grew approximately 15%. It had strong contributions from all those segments except public D and O.

So it was broad based growth in the professional classes. It had an emphasis in our newer and expanded classes of Allied Health as well as our continuing business of MediaPro, our old architects and engineer portfolio. They all contributed well. We continue to execute a very strong private company book of business on D and O. And our international team is continuing to execute its niche portfolio.

And as I said in the 2Q call, we’re observing a flattening out of the public D and O rating environment. We will test pricing stability here on out and see whether or not we think there’s a fair trade. At the moment, we said there isn’t, but we’ll be highly selective. Anything I missed there?

Pete Vogt, CFO, AXIS: No. Think we also have financial institutions. They’re included in the professional lines. That saw some growth in the second quarter. So it’s kind of a broad based growth across professional lines.

And I would say that at this point, public D and O is less than 2% of the professional lines premium. So that gets to be de minimis for the insurance. So we’ll see what happens to that market over the next couple of years, but we’ve really driven it down given where we saw pricing over the last two, two point five years.

Unidentified speaker, Interviewer: Fantastic. If the go ahead, I’m sorry.

Vince Tivio, CEO, AXIS: I’d just add to the FI. I think it’s a critical point that Pete made. If you think about the renewal right transaction that we acted actioned with Markel, that business has been coming over in the third quarter. We’ll report out its contribution, but it’s really leveraging off of an established reputation of financial institution, professional underwriting that AXIS has earned certainly well before my journey. It’s got a number of teammates that have been with the firm for more than a decade and have done a really good job.

So I’m really pleased with what that portfolio is creating.

Unidentified speaker, Interviewer: Okay. And I know it’s just September, and I don’t know, not that much time has passed since the second quarter call. But we’ve been hearing fairly consistently about this green shoots or at least flattening of public company D and O. Is that still holding true? In other words, do we see that initial momentum of better pricing?

Vince Tivio, CEO, AXIS: I think it’s selective. I mentioned that we’ve been experimenting with pricing some of the business that continues to come in as submission opportunity. I think it’s quite selective. I don’t think there’s a universal theme that we would attach. I think we’re going to approach it with the bottom line focus that we committed to our shareholders to deliver in all of what we do, but we think a good specialist does experiment with what we see out there as potential trends or new opportunities.

Pete Vogt, CFO, AXIS: Okay. And I did want to talk

Unidentified speaker, Interviewer: a little bit about trends because we hear about social inflation, and these are, call it, medium- longer tail lines of business. Is the social inflation that’s been a huge issue in commercial auto and related lines of business, how does that manifest itself in the various subsegments of Professional Lines book?

Vince Tivio, CEO, AXIS: Well, there’s different trend assumptions that are going to drive each of those different products. I think the reliance our shareholders can take is this is an underwriting model that’s fairly well integrated between its claims actuarial and underwriting functions that the kind of financial results that we’ve been posting these past several years ought to give some confidence that we’re going to be timely. We’re not going to be reactive, and we’re going to try and maintain as anticipatory a posture on pricing the business as adequately as we can. And we’ve built a number of tools to help safeguard that over the last couple of years.

Unidentified speaker, Interviewer: Okay. Fantastic. Sort of an interesting story there I want to pass along is that Vince and I were traveling in London, and he was evaluating construction projects very much from the perspective of an underwriter saying, hey, there’s a risk that we would be uncomfortable with and stuff like that. And that very clearly to me highlighted your mindset as an underwriter’s underwriter. When you bring on talent,

Vince Tivio, CEO, AXIS: how much

Unidentified speaker, Interviewer: guidance oversight are you providing given that mindset?

Vince Tivio, CEO, AXIS: So first, we try to attract persons of experience clearly for the benefit of their underwriting insights. Secondly, we collaborate on our view of risk. And the view of risk is not just a model. A specialist underwriter is not living off of models. And they’re bringing their subject matter domain, their knowledge of the peculiarities, the nuances and risks that aren’t always covered just in empirical data.

It’s their experience. It’s their view of the risk. It’s the geography. It’s the safety. It’s a number of considerations.

And so I think it’s a collaboration. And Mara, we don’t attract people with the kind of success that we’ve enjoyed, have certainly under, let’s call it, a 7% voluntary turnover ratio, a greater than 80% engagement score in our company by having an environment that people don’t want to join, right? We’ve got a pretty neat environment that people are attracted to, the culture. And so you have to assume implicit in that is when we hire underwriters, we’re respecting their subject matter knowledge. We’re welcoming it.

We want to invite the discussion of their view of risk that may be different than ours, and we test it. That’s That’s how we do helpful. One follow-up,

Unidentified speaker, Interviewer: if I can. I was hoping to better understand the process of vetting underwriters. Sometimes, and this is just like one example, it’s not all of them, you have a good underwriter at a company that doesn’t have great results. So if we were to look from the outside, look at schedule, people would say, okay, that’s not good. How do you confirm that underwriter X is actually good at what he or she does?

Vince Tivio, CEO, AXIS: Well, we don’t ask them to bring their individual P and L. You learn this by reputation. You learn this through the question and answer part of the interview processes that we undertake. You go through a bunch of scenarios with people and talk about risks, and you gain a pretty good insight from that. But certainly, we don’t ask for proprietary information.

We compete in a landscape where people do create their own brand identity and knowledge and awareness. And so it’s a process, and it’s a process that’s detailed in the way that I just outlined for you.

Unidentified speaker, Interviewer: Okay. Fantastic. I want to talk about, I guess, data and digital investments.

Vince Tivio, CEO, AXIS: And I was hoping that

Unidentified speaker, Interviewer: you could explain, in the specialty world, where so much is dependent on underwriting expertise, experience and judgment, how you’re leveraging data to make better underwriting decisions?

Vince Tivio, CEO, AXIS: We look at this in a number of different lenses. The first was creating an ability to leverage the twenty odd year worth of data that Axis has created, complement that leveraging with third party information that we can buy through ISO and other third parties that information management is available. Secondly, it’s defining the utility because of your direct point. A specialist isn’t a block of terms and conditions that are exact on every transaction. There’s a lot of manuscript wordings.

But there are pattern recognitions and other deducements you can take from the investments we’ve made in our data and analytic capability. It’s led out of our Chief Underwriting Officers unit today. And we’ve been doing quite a bit of work there to perfect our utility of this information. I would reason with you, it’s contributing to our strong underwriting results, certainly within our insurance business, the kind of combined ratios that we’re posting, I think, give evidence of the confidence we have in our health of business. And I think our data and analytics are playing a role there, whether it’s through our tiering tools or a whole other range of capabilities.

Pete, I don’t know. Yes.

Pete Vogt, CFO, AXIS: I think the key there is something like a tiering tool. It doesn’t give a black and white answer to the underwriter, but it gives it a sense of where we think the risk is playing on a tier, whether it’s something they should go after or not. But then the underwriter, especially with a lot of the management reporting we see can look at it and say, I’ve got an exclusion or I don’t have an exclusion. So therefore that isn’t necessarily in the data, but the data is pointing me to look at something. And then therefore, if I’ve got that exclusion, hey, I can actually quote this is going to be a good risk for If I don’t have it, you know what, I’m going stay away from this.

So it’s a combination of driving the data to, I’ll call it, educate and inform the underwriter, so they can make a better decision as they’re looking at the entirety of the quote.

Unidentified speaker, Interviewer: Great. And if we look forward, I’ll say, years arbitrarily, what do you expect to be able to do from a data and analytics perspective in two years that right now you can’t?

Vince Tivio, CEO, AXIS: So I think there’ll be certain products that are homogeneous enough where risk selection insights can be relied upon with greater emphasis on the outputs of the data and analytic capabilities that we’re building. I think Pete said it exactly right. It will complement the ability to have a conversation on more complicated business that isn’t necessarily picked up in models. And then lastly, I think that there’s a boundaryless set of opportunities that will come from the emergence of what AI is doing within our company, more broadly, the industry. And we think it’s only going to get better at perfecting cycle times, perfecting over time risk selection insights.

We know through the investment we made with Sixfold and Mia on our ingest function as just one example of our underwriting process. The cycle time benefit, the time it takes an underwriter to quote cycle time, the inherent ability to translate a number of underwriting rules around the quality of a submission is paying dividends. And it’s not more than a year that we’ve had this tool inside the house of Axis. So we think there is a future positive potential on the dimension of expense rationalization and certainly, predictiveness in outcome of underwriting results. We’re not there yet.

It’s a journey, and we’re going to have a lot of humility, mindfulness of the expense that comes with this, but look for the returns in the short term as empirically as we can identify them.

Unidentified speaker, Interviewer: Okay. That’s helpful. If we I know you’ve put out very clear G and A guidance. I’m wondering, when we talk about investments in data and analytics and AI, etcetera, do we get to a point where the efforts are self sustaining and we have a drop in the expense ratio because you no longer need to build anything even though you need to maintain it? Is that even a reasonable way of thinking about this business?

Pete Vogt, CFO, AXIS: That’s a that is a reasonable way to think about it, Meyer. But I think as we think, say, two, three years out, don’t know what’s still coming, right? And so our expectation is we’re going to need to continue to invest in these capabilities such that we can continue to enhance them to provide not only a better, I’ll call it this way, a better service experience because a lot of this is going to be service to the brokers, we’ll be able to quote quicker. But it’s also going to help the G and A ratio, but it should help growth. So as we think about the investments we’re making, it’s a combination of better decisioning, better G and A, but then also better growth.

And so we’re kind of looking at it on all three dimensions as we invest in the data and analytics platforms we’re looking at.

Unidentified speaker, Interviewer: And if I’m understanding correctly, so you’ve got better G and A on an absolute basis, better growth further enhances G and

Pete Vogt, CFO, AXIS: Yes, that’s right. You get a twofer, if you will, right? You get leverage, but you should also be able to spend less money.

Unidentified speaker, Interviewer: Right. Okay.

Vince Tivio, CEO, AXIS: And the great thing is it’s already evidencing itself just in the improvement in our quote and bind ratios against our target classes, which goes to a part of what Pete was talking about. We’re already clinically seeing the benefit of some of the tools that we brought in to the House of Access to help our underwriters accelerate and get to more of the opportunity that otherwise they couldn’t in the past.

Unidentified speaker, Interviewer: Simply because of time.

Vince Tivio, CEO, AXIS: That’s exactly what’s right.

Unidentified speaker, Interviewer: Okay. No, that’s helpful. And that’s something it took me a while to understand, not being a technology person myself. Sure. Access over the last couple of years has sort of adjusted its profile.

The most obvious example is the withdrawal from property catastrophe reinsurance and some other smaller lines. And then there’s the LPT. Those are, I’m going to say this, correct me if I’m wrong, largely played out in terms of the income statement impacts. How does those impact your capital flexibility, your investment allocation, the secondary ramifications of being a differently profiled business?

Vince Tivio, CEO, AXIS: I’ll start and then Pete can kindly complement. At the Investor Day presentation, we laid out really a strategic ambition, and part of that includes the actions that you summarized. But importantly, we talked about how we viewed capital. We talked about its utility and focus. We talked about investing in the business, teams, product capabilities.

We talked about how we work and bringing investments in technology, data analytics, AI and people, of course. We then talked about an opportunism mindset in respect to share repurchases, and you’ve seen quite a bit of share repurchase from us. You finally saw a definition of a bar of M and A, inorganic. But just before that, you also saw a recognition that when you’re a company that’s producing 70 odd percent of your revenue in insurance increasingly and consistently, that your view of how you manage your outbound reinsurance strategy has to be evaluated, and you’ve seen our response. We’ve retained more.

Secondly, you’ve seen our investment strategy maintain its discipline and its core focus, but have the leverage and the ability of being more of a predominant insurance company than a reinsurance company. Pete, don’t know if you want

Pete Vogt, CFO, AXIS: to Yes, those are all very valid on how we’re thinking about capital. I would say it does change your mindset a little bit when you think about capital too, Meyer, because we’ve lost some of the which is where we wanted to go, the earnings volatility that we had when we were in that particular business. We were just as a firm overall somewhat overweight property and we decided we’re going to play on the insurance side. But when we think about it now and we think about capital quarter to quarter, if you will, the third quarter is still a cat quarter for us because we’re

Unidentified speaker, Interviewer: in the

Pete Vogt, CFO, AXIS: insurance business. But probably the highs that used to be there or the lows that used to be there with the property cat isn’t quite the same. So we can think about capital in a different vein. You’ve also seen from an operating leverage point of view, we’ve been able to actually run at a higher operating leverage, We used to have to run pretty low because we had that high cat component of our premium. Since that’s now gone down, we’ve been able to actually move up and get more operating leverage out of our underwriting segment.

Unidentified speaker, Interviewer: That makes perfect sense. Are we done reshaping the investment portfolio? The premise of this question is that all else equal, reinsurance is longer tailed and on the property side, more volatile. As you withdraw from that component of it, you should be able to take a little bit more risk on the investment income side of things without Absolutely disrupting the overall

Pete Vogt, CFO, AXIS: agree with that. And you think you’ve seen this over the last couple of years, we’ve actually increased the amount of risk assets we have. It’s gone from about 14% to 17%, 18%. We have a margin there. We like to be at least 15%.

Now we’ll go up to 20%, even a little over 20%. But that’s going be based upon what we see as the opportunity there. So that team is evaluating what’s the right time to go on risk, what will we do. I’d say today, we’re holding some powder dry. We’re not exactly leaning in totally to the risk market, but it does give us the opportunity in the future when we see opportunity to take more risk on the investment portfolio because we derisk, if you will, a bit on the underwriting side.

Unidentified speaker, Interviewer: Perfect. And then I have two related follow-up questions to that. You’ve been, I would say, in retrospect, very appropriately cautious on casualty lines. You did not lean into them in 2023, 2024. Where are we in terms of that market being appropriate?

And how does that influence the investment strategy?

Vince Tivio, CEO, AXIS: I think that the caution we bring to liability reinsurance will remain in effect certainly throughout 2025. When you think about the transformational work we’ve done at AXIS, the body of work within claims that we’ve undertaken to give us the kind of confidence in the performance of our business broadly, The continued landscape of our cedents, the changes that they’re making in their claims processes announced and otherwise shown through border rows, the caution generally on whether or not the new normal of the backlog is virtually gone now, is there enough sort of pattern recognition of the stability? I think not. And I think we’ll maintain a fairly cautious reinsurance liability appetite for the balance of 2025. So how do we think about it?

We think about it through the prism of our shareholders’ lens, which is we want to be a very consistent earnings generator. We want to be as high performance as we can in the delivery of those results. And we want to be prudent in where we’re placing our bets. And that’s an area where we’re going to be exceedingly cautious.

Unidentified speaker, Interviewer: Okay, fantastic. I’m looking around the room because it’s probably the last chance for a question from the floor. And in the absence of that, I want to talk about debt to capital. Right now, your debt to capital ratio, I believe, below 20%. Typically, the specialty P and C space is in the 20% to 30% range.

How do you think about that? What are the internal constraints and potentialities that the current below average leverage implies? Yes. So I agree with you, it’s typically in the 20%

Pete Vogt, CFO, AXIS: to 30%. When we look at it, we’ll look at not only our debt, but we’ll add our preferreds to that.

Vince Tivio, CEO, AXIS: We’ve about

Pete Vogt, CFO, AXIS: $550,000,000 of preferred. When you add that at 2Q, we’re at 24,900,000.0 So virtually right in the middle there. So that does give us the ability that if we want to move up, we can get to the high 20s. But right now, we’re very comfortable with where we are. Right now, we’ve got very good costs on the cost of the debt.

And we have nothing really coming due until 2027. We’ll reevaluate it at that point. But right now, it’s in a very good comfort zone. Embedded in that,

Unidentified speaker, Interviewer: and I don’t want put words in your mouth, so I’m asking this, is that the 20% to 30% range is kind of right. Does that premise sound

Pete Vogt, CFO, AXIS: right to you? That premise does sound right to me. Some of it does depend on why it moves. And we saw a lot of not only access, but the industry kind of move way up in the leverage when we saw interest rates spike up and we saw AOCI had a big negative component to it on unrealized. Well, there’s a reason it went up, but that wasn’t a fundamental business reason.

So some of it is why you are moving around in that range. But we do feel comfortable when you just look at it fundamentally that you’re in that 20% to 30% range.

Unidentified speaker, Interviewer: Okay. And then I have time for one more question, so I’m going throw this in. You’ve talked about interest in inorganic growth. And I’m certainly not asking for specifics. But I’m wondering as if we can pretend for a second that there’s one pricing cycle instead of the dozens that we actually have.

As the pricing cycle decelerates, does that provide more opportunities for inorganic growth?

Vince Tivio, CEO, AXIS: We love the organic story of what we’ve generated to date and feel highly optimistic about what our core business can continue to generate. And we point as evidenced our second quarter half year results as evidence of that. Having said that, we don’t live under a rock. We’re observant to the external landscape. We’ll continue to attach a very high bar to any such consideration.

We have a number of core strategies, and they were laid out at the Investor Day. We’ll lean into that strategy. And if something meets the threshold, we’ll act. But at the moment, we like our organic strategy, and

Unidentified speaker, Interviewer: we think it’s meeting our shareholder interests. Fantastic. And with that, we’re just about at the end of our time. So please join me in thanking Vincent Peep for a very informative session.

Vince Tivio, CEO, AXIS: Thank you.

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