Company: AXS-PE
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001214816-25-000149
Chunk: 145

Company: AXIS CAPITAL HOLDINGS LTD
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 2
Chunk 145
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 the common shareholders' equity balances at the beginning and end of the period.

(2)Annualized operating return on average common equity ("operating ROACE") is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to the most comparable GAAP financial measure, annualized ROACE, and a discussion of the rationale for its presentation is provided in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation'.

(3)Book value per diluted common share represents total common shareholders’ equity divided by the number of diluted common share outstanding, determined using the treasury stock method. 

Return on Average Common Equity and Operating Return on Average Common Equity

Our objective is to generate superior returns on capital that appropriately reward common shareholders for the risks we assume and to grow revenue only when we expect the returns will meet or exceed our requirements. We recognize that the nature of underwriting cycles and the frequency or severity of large loss events in any one year may challenge the ability to achieve a profitability target in any specific period. 

ROACE reflects the impact of net income (loss) available (attributable) to common shareholders, including net investment gains (losses), foreign exchange losses (gains), reorganization expenses, interest in income (loss) of equity method investments and amortization of Bermuda net deferred tax asset in 2025 and Bermuda net deferred tax asset in 2024 ("Bermuda deferred tax").

The decrease in ROACE for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily driven by foreign exchange losses, increases in average common shareholders' equity and income tax expense, and interest in loss of equity method investments, partially offset by net investment gains, an increase in underwriting income, and a decrease in reorganization expenses.

The decrease in ROACE for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily driven by income tax expense, foreign exchange losses, an increase in average common shareholders' equity, and a decrease in interest in income of equity method investments partially offset by net investment gains, increases in underwriting income and net investment income, and a decrease in reorganization expenses.

Operating ROACE excludes the impact of net investment gains (losses), foreign exchange losses (gains), reorganization expenses, interest in income (loss) of equity method investments and Bermuda deferred tax