AXIS Capital's Growth Initiatives Impress; Competition A Drag
Zacks Investment Research | Sep 25, 2016 10:09PM ET
On Sep 23, 2016, we issued an updated research report on AXIS Capital Holdings Limited (NYSE:AXS) .
AXIS Capital continues to benefit from new business opportunities across its lines of business and also makes the most of the scopes available worldwide. These, in turn, help the insurer deliver growth in premiums.
AXIS Capital remains focused on augmenting its portfolio mix, and improving underwriting profitability. The insurer also strives to strengthen its casualty and professional lines in the insurance segment, particularly motor and reinsurance.
These apart, it undertakes strategic initiatives to accelerate growth.
The Zacks Rank #3 (Hold) property and casualty (P&C) insurer engages in effective capital deployment on the back of its operational strength, thereby enhancing shareholders’ value. These initiatives not only help it to retain investor confidence but also attract potential investors to the stock.
However, AXIS Capital is a P&C insurer and hence, remains exposed to catastrophe events. As a result, its underwriting results remain volatile.
Also, escalating expenses are a concern. To this end, the company intends to lower expenses by $50 million to $60 million by the end of 2017. Increasing competition in the reinsurance industry can also decelerate growth and lower profitability for AXIS Capital.
In the absence on any near-term catalysts fueling growth, the Zacks Consensus Estimate has been revised downward over the last 60 days.
Nonetheless, AXIS Capital continues fortify its Specialty Insurance, Reinsurance, and Accident and Health in expectations of long-term growth. The expected long-term earnings growth is currently pegged at 8.5%
Stocks to Consider
Some better-ranked insurers are National Interstate Corporation (NASDAQ:NATL) , Erie Indemnity Company (NASDAQ:ERIE) and Cincinnati Financial Corp. (NASDAQ:CINF) . While National Interstate and Erie Indemnity sport Zacks Rank #1 (Strong Buy), Cincinnati Financial carries Zacks Rank #2 (Buy). You can see Zacks Investment Research
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