Company: AXS-PE
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001214816-25-000056
Chunk: 296

Company: AXIS CAPITAL HOLDINGS LTD
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 296
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) Decrease in Allowance for Expected Credit Losses, Fixed Maturities, Available for Sale

2024 versus 2023: The allowance for expected credit losses decreased by $7 million in 2024 compared to $1 million in 2023, primarily related to the sale of securities. Refer to Item 8, Note 5(i) to the Consolidated Financial Statements 'Investments'.

(Increase) Decrease in Allowance for Expected Credit Losses, Mortgage Loans

2024 versus 2023: The allowance for expected credit losses increased by $17 million in 2024 compared to $6 million in 2023, primarily related to commercial mortgage loans exposed to the office sector. Refer to Item 8, Note 5(d) to the Consolidated Financial Statements 'Investments'.

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Impairment Losses

The impairment losses (refer to 'Critical Accounting Estimates – Impairment losses' for further details) recognized in net income were as follows:

2024 versus 2023: Impairment losses in 2024 were $nil compared to impairment losses of $13 million in 2023. The impairment losses in 2023 were principally due to impairments of non-investment grade corporate debt securities that we intended to sell or where we determined that it was more likely than not that we were required to sell securities before their anticipated recovery. 

Change in Fair Value of Investment Derivatives

We economically hedge foreign exchange exposure with derivative contracts.

During 2024, foreign exchange hedges resulted in $2 million of net gains which primarily related to securities denominated in pound sterling and euro which experienced volatility during 2024. 

During 2023, foreign exchange hedges resulted in $1 million of net losses which primarily related to securities denominated in pound sterling and euro which experienced volatility during 2023. 

Our derivative instruments are not designated as hedges. Therefore, net unrealized gains (losses) on the hedged securities were recorded in accumulated other comprehensive income (loss) in total shareholders’ equity.

Total Return

Our investment strategy is to take a long-term view by actively managing our investment portfolio to maximize total return within certain guidelines and constraints. In assessing returns under this approach, we include net investment income, net investment gains (losses), the change in unrealized gains (losses) on fixed maturities, and interest in income (loss) of equity method investments generated by our investment portfolio. 

Total return on cash and investments was as follows: