AXIS Capital Holdings Ltd. said its net income dropped during the 2015 second quarter versus a year ago, becoming the latest carrier adversely affected, in part, by a drop in investment income. High marine losses also hurt.

The Bermuda insurer and reinsurer, which is hoping to merge with PartnerRe, booked net income of $63 million for the period, or $0.63 per diluted common share. That compares with $191 million, or $1.79 per diluted common share, for the second quarter of 2014.

Albert Benchimol, president and CEO of AXIS Capital, said the company continued to make progress despite market challenges.

“Notwithstanding a more challenging market environment, we continued to make progress on our underwriting initiatives, and deliver growth in the more attractive lines and markets,” Benchimol said in prepared remarks.

He said results during Q2 reflect improvements to the AXIS portfolio in recent months, but also “unusually high large loss experience in the marine line of business.”

Benchimol assured shareholders that AXIS is confident that its progress in “distribution and portfolio management initiatives position us strongly to differentiate our value proposition for all of our stakeholders.”

Additional AXIS’ second quarter highlights include:

• Gross premiums written decreased 3 percent (1 percent on a constant currency basis) to $1.2 billion, with a 10 percent dip (9 percent on a constant currency basis) in the reinsurance segment’s premiums written. This was partially offset by 1 percent growth in the insurance segment (3 percent on a constant currency basis);
• Net premiums written decreased 5 percent (3 percent on a constant currency basis) to $947 million;
• Net premiums earned decreased 6 percent (4 percent on a constant currency basis) to $941 million;
• Combined ratio of 96.9, compared to 90.8 over the same period last year;
• Current accident year loss ratio of 68.5 percent, compared to 65.1 percent;
• Estimated natural catastrophe and weather-related pre-tax net losses of $39 million, primarily related to weather losses in the U.S. and Australia, compared to $36 million incurred during the second quarter of 2014;
• Pre-tax net losses of $40 million in insurance marine lines, driven by the impact of large industry events;
• Net favorable prior year reserve development of $65 million (benefiting the combined ratio by 6.9 points), compared to $85 million (benefiting the combined ratio by 8.5 points);
• Pre-tax merger costs related to the proposed merger with PartnerRe Ltd. of $8 million included in corporate expenses;
• Net investment income of $89 million, compared to $115 million in Q2 2014;
• Net cash flows from operations of $144 million, compared to $241 million a year ago;
• Following the signing of a definitive merger agreement with PartnerRe Ltd. on January 25, 2015, the company has suspended its open market share repurchase program until the closing date of the amalgamation transaction;
• Dividends declared of $0.29 per common share, with the total common dividends declared of $1.14 per share over the past twelve months.

Source: AXIS Capital Holdings