Axis Capital says profit grew 13.8% in the first quarter to $US156 million ($197.58 million), thanks to lower expenses, higher reinsurance and investment income, and the suspension of its share repurchase program.

In January the Bermuda-based company announced it would merge with PartnerRe to create the world’s fifth-largest reinsurer, with annual gross written premium (GWP) of more than $US10 billion ($12.66 billion). However, last month Italian company Exor made a $US6.4 billion ($8.1 billion) counter-bid for PartnerRe.

The Axis share repurchase program cost $US15 million ($18.99 million) in the first quarter compared with $US179 million ($226.69 million) in the corresponding period last year.

It has been suspended until the merger is complete.

Axis’ first-quarter GWP fell 4% to $US1.7 billion ($2.15 billion), with reinsurance premium returns down 12%. The combined operating ratio deteriorated to 94.3% from 91.9%.

Net investment income was up 10.8% to $US92 million ($116.51 million).

Total expenses dropped 9.7% in the first quarter to $US803 million ($1.01 billion).

President and CEO Albert Benchimol says diluted book value grew 3% in the quarter and by 13% over the past year, adjusted for dividends.

“Our solid underwriting results reflected low catastrophe and weather-related losses, ongoing favourable reserve development and a broadly diversified, well-constructed portfolio of risks.”

He says Axis believes the merger with PartnerRe is in the best interests of shareholders, clients, brokers and employees.