Company: AXS-PE
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0001214816-25-000115
Chunk: 67

Company: AXIS CAPITAL HOLDINGS LTD
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 1
Chunk 67
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 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 Bermuda net deferred tax asset.

The decrease in ROACE for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily driven by income tax expense, foreign exchange losses, and increases in average common shareholders' equity and net investment losses, partially offset by increases in net investment income and underwriting income and a decrease in reorganization costs.

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 net deferred tax asset.

The increase in operating ROACE for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily driven by increases in net investment income and underwriting income, partially offset by income tax expense and an increase in average common shareholders' equity.

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Book Value per Diluted Common Share

We consider book value per diluted common share to be an appropriate measure of returns to common shareholders, as we believe growth in book value on a diluted basis will ultimately translate into appreciation of our stock price.

During the three