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Axis boss blasts ‘failing’ industry

Axis Capital CEO John Charman has uncorked a verbal spray on the insurance industry after heavy competition contributed to a 41% slump in first-half net profit.

The Bermuda-based insurer reported $US275 million ($328 million) in first-half net profit, well down on the $US469 million ($560 million) earned in the same period last year.

Second-quarter net profit fell to $US159 million ($190 million) from $US231 million ($276 million) last year.

Insurance operations returned just $US16 million ($19 million) in second-quarter underwriting income as reinsurance contributed the lion’s share with $US125 million ($149 million).

“I am disappointed that the insurance market has failed to harden more broadly when it is so blindingly obvious that is the path it should and must take,” Mr Charman said.

“The need for change is obvious, but the courage to change is lacking.”

Mr Charman showed more faith in the “disciplined pricing” evident in the reinsurance market.

Axis achieved net written premium growth for the half of 2.5% with $US1.4 billion ($1.7 billion), with a combined ratio of 80.4%. Investment income fell 5% to $212 million ($253 million).