AXIS Capital Holdings reported a drop in 2017 first quarter net income and a climb in its combined ratio, a trend reflecting both one-time costs plus more catastrophe and weather-related losses.

The Bermuda-based insurer and reinsurer booked $5 million in net income, or $0.06 per diluted common share for Q1, versus $38 million, or $0.41 per diluted common share during Q1 2016.

AXIS Capital President and CEO Albert Benchimol blamed a variety of one-time factors, including executive severance and retirement costs, an impairment of an equity-method investment and higher catastrophe and weather-related losses.

Benchimol, in prepared remarks, also blamed the Ogden rate change. The UK broker GibbsDenley defines this on its website as rate used to adjust personal injury claims to compensate for interest a claimant will earn by investing it, “to ensure that they are never under-or over compensated.” But the UK recently cut the rate from 2.5 percent to -0.75 percent, which will increase what insurers must pay claimants, and applies to all personal injury damages awarded from March 20 onward. Gibbs Denley noted that insurers will have to boost their reserves on existing claims to meet obligations for court-ordered awards, something that will make auto, employers liability, public liability and products liability insurance more expensive.

AXIS said its overall combined ratio hit 102.1 for the quarter, versus 91.9 in the 2016 first quarter.

Among the result highlights:

• AXIS’s insurance segment produced $694 million gross written premium, 6 percent higher than $653 million over the same period a year ago. The spike came from professional, accident and health lines.

• Insurance segment net premiums written jumped 7 percent in the 2017 first quarter compared to last year. Net premiums earned grew 5 percent year-over-year.

• Net investment income landed at $99 million, compared to $49 million in Q1 2016.

• Pre-tax catastrophe and weather-related ne losses were $35 million, compared to $14 million a year ago.

• The Ogden rate exchange left a pre-tax impact of $59 million in Q1, including the previously announced increase in prior year reserves of $50 million.

• Reinsurance segment gross written premiums of $1.2 billion reflect a 7 percent decrease from the $1.3 billion figure generated in the 201§ first quarter.

• Reinsurance net premiums written dropped 17 percent year-over-year, reflecting lower premiums written and a jump in premiums ceded to strategic capital partners during the quarter.

• Reinsurance net premiums earned grew 11 percent in Q1 2017 compared to Q1 2016, thanks to agriculture, liability, motor and catastrophe lines premiums growth. This was offset partially by the retrocession to Harrington Re Ltd.

• Reinsurance segment underwriting income hit $3 million during the quarter, versus $82 million in the Q1 2016 first quarter.

Source: AXIS Capital Holdings Ltd.