Axis Capital Holdings (AXS) risk factors, FY2025 10-K

Other

1. 01The insurance and reinsurance business is historically cyclical, and we expect to experience periods with excess underwriting capacity and unfavorable premium rates49% rewritten
2. 02Our results of operations, financial condition or liquidity could be adversely affected by the occurrence of natural and man-made disasters, as well as outbreaks of pandemic or contagious diseases, which might not have been factored in for the original pricing due to uncertain return periods of these losses28% rewritten
3. 03We could face losses from war, terrorism, political unrest, and geopolitical uncertainty, and these or other unanticipated losses could have an adverse effect on our results of operations, financial condition or liquidity26% rewritten
4. 04We may be adversely impacted by economic and social inflation
5. 05We are potentially exposed to different aspects of climate risk, specifically, physical, credit, investment, liability and transition risks, as a result of climate change31% rewritten
6. 06Additionally, catastrophic events and the effects of climate change could result in increased credit exposure to reinsurers and other counterparties with whom we transact business, declines in the value of investments we hold and disruptions to our physical infrastructure, systems, networks and operations44% rewritten
7. 07business model arising from climate change transition and by the performance of strategies we put in place to manage this transitionNew
8. 08The effects of emerging claim and/or coverage issues on our business are uncertain
9. 09If actual claims exceed loss reserves, our financial results could be adversely affected
10. 10The failure of our loss limitation strategy could have a material adverse effect on our results of operations, financial condition, or liquidity42% rewritten
11. 11If we choose to purchase reinsurance, we may be unable to do so on favorable terms or at all
12. 12We could be materially adversely affected if managing general agents, general agents, coverholders, other producers, and third-party administrators in our program business exceed their underwriting and/or claims settlement authorities or otherwise breach obligations owed to us

Strategic Risk

1. 13Competition and consolidation in the insurance/reinsurance industry could reduce our growth and profitability52% rewritten
2. 14Our business depends on keeping pace with technological developmentsNew
3. 15Global economic conditions could adversely affect our business, results of operations or financial condition23% rewritten
4. 16In connection with the implementation of our corporate strategies, we face risks associated with the acquisition or disposition of businesses, the entry into new lines of business, the integration of acquired businesses and the growth and development of these businesses
5. 17Regulators’ concerns relating to corporate substance may have an adverse impact on usNew
6. 18Since we depend on a few brokers for a large portion of our revenues, loss of business provided by any one of them could have a material adverse effect on our business29% rewritten
7. 19A downgrade in our financial strength or credit ratings by one or more rating agencies could adversely affect our business, results of operations, financial condition or liquidity
8. 20We may require additional capital in the future, which may not be available or may only be available on unfavorable terms
9. 21Our inability to obtain the necessary credit could adversely affect our ability to offer reinsurance in certain markets
10. 22We could be adversely affected by turnover of senior management, the loss of one or more key executives, an inability to attract and retain qualified personnel or by the inability of an executive to obtain a Bermuda work permit88% rewritten
11. 23Increasing scrutiny and evolving expectations from investors, customers, regulators, policymakers and other stakeholders regarding environmental, social and governance matters may adversely affect our reputation or adversely impact our share price, demand for our securities and business and results of operationsNew
12. 24Pandemics or other outbreaks of contagious diseases and efforts to mitigate their spread have had, and could in the future have, widespread impacts on the way we operate

Market Risk

1. 25Market risk is the risk that our financial instruments, which include derivatives, may be negatively impacted by movements in financial market prices or rates such as interest rates, credit spreads, equity securities' prices and foreign currency exchange rates
2. 26The performance of our cash and investments portfolio has a significant impact on our financial results. A failure to successfully execute our investment strategy could have a significant impact on our results of operations or financial condition
3. 27Our operating results may be adversely affected by currency fluctuations
4. 28Our underwriting activities may expose us to liquidity risks
5. 29If we successfully purchase reinsurance or execute portfolio transactions, we may be unable to collect amounts due to us48% rewritten
6. 30Our reliance on brokers subjects us to credit risk
7. 31Certain of our policyholders and intermediaries may not pay premiums owed to us due to insolvency or other reasons

Operational Risk

1. 32Operational risk represents the risk of loss as a result of inadequate processes, system and network failures, human error or external events, including but not limited to direct or indirect financial loss, reputational damage, customer dissatisfaction, and legal and regulatory penalties
2. 33We rely on our processes, people, and systems to maintain our operations and manage the operational risks inherent to our business. Any errors, omissions or misconduct by our employees or third-party agents in the execution of these processes may result in financial losses
3. 34If we experience difficulties with technology and/or data security, our ability to conduct our business might be adversely affected73% rewritten
4. 35Our business may be adversely affected if third-party service providers fail to satisfactorily perform certain technology and business process functions

Regulatory Risk

1. 36Regulatory risk represents the risk arising from our failure to comply with legal, statutory or regulatory obligations
2. 37Potential government intervention in our industry as a result of recent events and instability in the marketplace for insurance products could hinder our flexibility and negatively affect the business opportunities that may be available to us in the market20% rewritten
3. 38The EU has adopted amendments to Solvency II which entered into force on 28 January 2025. Member states have two years to transpose the directive with application effective from 30 January 2027New
4. 39Our business is subject to certain laws and regulations relating to sanctions and foreign corrupt practices, the violation of which could have a material adverse effect on our financial condition and operating results

Risks Related to the Ownership of our Securities

1. 40The price of our common shares may be volatile27% rewritten
2. 41Our ability to pay dividends and to make payments on indebtedness may be constrained by our holding company structure
3. 42AXIS Capital is a Bermuda company and it may be difficult to enforce judgments against it or its directors and executive officers
4. 43There are provisions in our organizational documents that may reduce or increase the voting rights of our shares
5. 44There are provisions in our bye-laws that may restrict the ability to transfer common shares and which may require shareholders to sell their common shares
6. 45Applicable insurance laws may make it difficult to effect a change of control of our company
7. 46(iii) is able to exercise significant influence over the management of the registered insurer or reinsurer or its parent by virtue of its shareholding or its entitlement to exercise, or control the exercise of, the voting power at any shareholders’ meeting of the registered insurer or reinsurer or its parent company
8. 47Anti-takeover provisions in our bye-laws could impede an attempt to replace our directors or to effect a change in control, which could diminish the value of our common shares

Risks Related to Taxation

1. 48Changes in tax laws resulting from the recommendations of the Organization for Economic Corporation and Development ("OECD") could materially adversely affect us22% rewritten
2. 49BEPS Project DevelopmentsNew
3. 50We will be liable for tax under the Corporate Income Tax Act 2023 of Bermuda, which may have an adverse effect on our results of operations
4. 51Changes in U.S. tax law could adversely affect us
5. 52Changes in U.K. tax law could adversely affect us
6. 53We intend to operate our non-Irish resident companies in such a manner so that none of our non-Irish resident companies are resident in Ireland for tax purposes and are not treated as carrying on a trade through a branch or agency in Ireland
7. 54Changes in Irish tax law could adversely affect us
8. 55If investments held by AXIS Specialty Europe SE or AXIS Re SE are determined not to be integral to the insurance and reinsurance business carried on by those companies, additional Irish tax could be imposed and our business and financial results could be adversely affected
9. 56Our operations may be adversely affected by a transfer pricing adjustment in computing taxable profits36% rewritten
10. 57Changes in tax law as a result of the European Commission’s BEFIT proposal could adversely affect usNew
11. 58Future changes in current accounting practices may adversely impact our reported financial results