AXIS Capital Holdings Ltd

NYSE:AXS

Earnings Call Analysis

Robust 2023 Performance with Optimistic 2024 Outlook

In 2023, we reported an excellent performance, with gross premiums written growing by 10% year-over-year to $6.1 billion. Fee income remained stable at $53 million, and we launched a new venture, Monarch Point Re. Our insurance combined ratio was 92.5%, reflecting a disciplined growth across various lines, except for professional lines, which we scaled back. Reinsurance was repositioned to a $2.2 billion portfolio, with a year-end combined ratio of 107.6%. Net investment income for the year stood at $612 million. We strengthened our capital position, enabling a $153 million return to shareholders and a $100 million share repurchase. With an efficient organizational structure and improved underwriting, we anticipate lower expenses in 2024 and remain optimistic about future growth in shareholder value.

Exceptional Performance Despite Challenges

In 2023, the company showcased excellent performance, successfully weathering a year with high industry-wide natural catastrophe losses estimated between $95 billion and $100 billion. Despite these challenges, AXIS minimized their market share of these losses to the lowest level in over a decade, achieving a combined ratio of 92.5%, inclusive of adverse reserve development and cat/weather-related losses. Impressively, the company maintained acquisition and G&A expense ratios consistent with the prior year, reinforcing stability in their cost structure.

Strategic Growth and Fee Income Stability

AXIS achieved a 10% increase in gross premiums, reaching $6.1 billion, emphasizing growth across most lines of business. Fee income from strategic capital partners remained steady at $53 million, similar to 2022's performance, with a forward-looking expectation of low to mid-teens in quarterly fees. This stability, alongside a repositioned portfolio and the launch of a new vehicle, Monarch Point Re, highlights AXIS's commitment to diversified growth and innovation.

Insurance and Reinsurance Segments Dynamics

The insurance segment ended with a strong combined ratio of 92.5% for the year and a quarter at 106.7%, factoring in reserve strengthening. Notably, short-tail lines of the portfolio, which make up 56%, saw significant rate increases, maintaining price adequacy. Conversely, the reinsurance segment faced headwinds resulting in a combined ratio of 107.6% annually and 162.8% for the final quarter due to reserve strengthening. Despite this, AXIS has crafted a $2.2 billion Specialty Reinsurance portfolio and anticipates consistent and profitable performance moving forward.

Investment Success and Positive Outlook

The investment arm of AXIS triumphed with net investment income soaring to $612 million, primarily from commendable fixed income returns and alternative investments, although the latter are not expected to be a standard run rate. Looking ahead to 2024, the outlook gleams positively, with an average yield on fixed income at 4.2% and a buoyant new money yield of 5.4%, signaling strong cash flow prospects and a robust capital position verified by S&P's credit reaffirmation.

Capital Return, Strategic Priorities, and Optimism for the Future

AXIS's strategic efforts resulted in growth in book value and advancement in their key priorities. The company demonstrated their commitment to shareholder value with a return of approximately $153 million through dividends and share buybacks. With positive reassessments, a fortified capital position, and adherence to strategic plans, AXIS radiates optimism for a future built on the progress of the past year.

Engagement and Expectation from Investors

As the earnings call wrapped up, the company opened the floor to analysts, signifying a willingness to engage with stakeholders and address queries on their performance, strategies, and outlook, reflecting a transparent and proactive communication stance with the investment community.

Earnings Call Transcript 2023-Q4

[Operator]

Hello, and welcome to the Fourth Quarter 2023 AXIS Capital Earnings Call and Webcast. [Operator Instructions]

I would now like to hand the call to Cliff Gallant, Investor Relations. Please go ahead.

[Clifford Gallant, executive]

Thank you. Good morning, everyone, and welcome to our conference call to discuss the financial results of AXIS Capital for the fourth quarter and year ended December 31, 2023. I'm Cliff Gallant, Investor Relations at AXIS. Our earnings press release and financial supplement were issued last night. If you'd like copies, please visit the Investor Information section of our website at axiscapital.com. We set aside an hour for today's call, which is also available as an audio webcast on our website.

Before we begin, I'd like to invite you all to attend our Investor Day, which is being held the morning of May 30 in New York City. Joining me on today's call are Vince Tizzio, our President and CEO; and Pete Vogt, our CFO.

In addition, I would like to remind everyone that the statements made during the call, including the question-and-answer section, which are not historical facts, may be forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from those projected in the forward-looking statements due to a variety of factors, including the risk factors set forth in the company's most recent report on the Form 10-K or our quarterly report on Form 10-Q and other reports the company files with the SEC. This includes the additional risks identified in the cautionary note regarding forward-looking statements in our earnings press release issued last night. We undertake no obligation to publicly update or revise any forward-looking statements. In addition, non-GAAP financial measures may be discussed during this conference call. Reconciliations are included in our earnings press release and financial supplement.

And with that, I'll turn the call over to Vince.

[Vincent Tizzio, executive]

Thank you, Cliff. Good morning, and thank you for joining us. 2023 was a transformative year for our company. In recent calls, we've spoken to our aspiration to elevate AXIS as a specialty underwriting leader and our year-end results signal that we've taken important steps towards this ambition.

Looking at the year as a whole, we advanced our targeted underwriting strategy, further developed a diversified and resilient portfolio and strengthened our operating model to meet our financial objectives. Let's discuss some of the headline numbers for the year, which are inclusive of the reserve strengthening that we announced last week.

In 2023, we generated operating income of $486 million, return on average common equity of 7.9% and operating return on equity of 11%. Excluding the reserving strengthening, our return on average common equity and operating return on equity were 15.4% and 18.5%, respectively.

We achieved record performance in several areas, including our premium production, which was the highest in our company's history at $8.4 billion, and our net investment income was $612 million. Further, we produced 15% year-over-year growth in diluted book value per share and delivered a current accident year combined ratio of 91.8%, a more than 4-point year-over-year improvement. These results, combined with the strength of our balance sheet and our capital position are very encouraging. To deliver on our ambition and meet our financial commitments, we will continue to relentlessly execute against our strategy.

I'd like to briefly highlight 3 core elements. First, we continue to operate in attractive markets and are making decisive choices on where to compete, allocate our capital while tapping new sources of revenue. AXIS is a specialty underwriter that brings tailored solutions to its targeted markets and distribution channels to deliver consistent earnings generation.

We continue to lean into our insurance book which as of the year-end makes up close to 75% of our gross premiums written. In 2023, our insurance business generated record production every quarter and a calendar year combined ratio of 92.5% on a current accident year basis, that's 87.4%.

Insurance premiums were up 17% year-over-year, excluding professional lines. And as we've discussed over the past several quarters, this is a class that we have been reducing, given the pricing environment, particularly in public D&O. We remain well positioned to capitalize on favorable conditions in growing market segments. For instance, AXIS is one of the leading players in the U.S. wholesale marketplace, contributing 5 consecutive years of double-digit growth while yielding a 76 current accident year combined ratio in 2023.

We're a global leader in renewable energy, where we see opportunity for further profitable growth as the world transitions to cleaner energy forms. Indeed, we've committed ourselves to the energy resilience and transaction -- transition space through the creation of the first ever Lloyd's syndicate to exclusively underwrite these risks.

We're acting with agility and capitalizing on smart growth opportunities, including adjacent markets what we have not previously played. By example, in the latter part of 2023, within North America, we launched an inland marine unit. Within weeks, they were actively quoting and writing new business. Also, in the past year, we've made strides in scaling our dedicated wholesale lower middle market unit, generating 48% growth year-over-year.

In London, we were recognized by Lloyd's as a top 10 leader and outperforming syndicate. We're leveraging our global platform to introduce our London specialty products to North America. This includes launching to date U.S. Marine cargo and construction, and we'll continue to make more investments and product launches.

As respect to our reinsurance business, we have effectively reshaped AXIS Re as a targeted specialist reinsurer focused on delivering more consistent profitability and reduced volatility.

In 2023, we produced a current accident year combined ratio of 93%, a 6-point improvement year-over-year. Our momentum was sustained at the 1/1 renewals, where 45% of our business for the year is up for renewal. During the 1/1s, we produced low double-digit growth in our targeted specialist premium adequate lines. Second, we are investing in building best-in-class capabilities in underwriting, claims and operations.

In 2023, we made clear progress across a number of fronts. Our loss ratio for accident year 2023 was 58.6%, which is 470 basis points better than accident year 2022. As respect to people, we've attracted strong talent to complement our existing team. By example, this includes additions to our underwriting associates in North America and London. And within our claims organization, we've deepened our bench, both in the number of teammates and expansion of our skill sets, particularly in liability lines. In both claims and operations, we have repositioned the operating models to more closely align with our underwriting and business priorities while improving efficiencies.

In Claims, we're growing our data and analytic capabilities to bring insights to our underwriters to help them make continued informed risk selection. Within operations, we're investing in digital and automation to increase our speed of submission intake, and we're continuing to enhance our technology platform, with a priority of driving transactional efficiency.

In addition, Artificial Intelligence is an area that we're investing in with a focus of harnessing its power to augment our company's overall effectiveness. Third, we are improving how we operate to become a more integrated and efficient company. Our How We Work program is at the core of this effort. We are implementing operating model improvements focused on enhancing organizational efficiency, making investments that empower our colleagues and optimize their effectiveness while improving service quality, accelerating growth and ensuring more consistent profitable returns are delivered.

Our progress will be evident by our sustained underwriting results and an improving expense ratio contemplated with engaged associates that are collectively focused on achieving our financial objectives. Ultimately, it is our expectation that AXIS will deliver a consistent low 90s combined ratio and expense ratio in the low 30s, double-digit ROE and book value per share growth.

Finally, just a few words on impressions for the 2024 operating year. We entered the year with confidence and momentum, and we believe we are well positioned to take advantage of generally favorable markets. As I've noted, we have a number of investments that are underway, investments in our people, our operating capabilities and our suite of specialty products, and we're progressing our How We Work program to enable the advancement of our ambitions. In sum, we're supported by a team that's focused and excited to continue bringing value to our brokers, our customers and stakeholders and were united in the pursuit of our strategic objectives.

I'll now pass the floor to Pete, who will detail our fourth quarter and full year 2023 results.

[Peter Vogt, executive]

Thank you, Vince, and good morning, everyone. As you heard from Vince and saw in our prerelease last week, AXIS had a very strong performance in 2023. Inclusive of the reserve actions, our operating income for the year was $486 million or $5.65 per diluted common share, which together with net unrealized gains drove diluted book value per share to $54.06 at year-end, growth of 15.1% over the prior year.

In underwriting, key highlights from the year include on a consolidated basis, our current accident year loss ratio ex-cat and weather of 55.9% is similar to the prior year. Importantly, our 2023 loss picks were consistent with the learnings from our recent in-depth reserve review and did recognize higher loss trends in liability lines. 2023 pretax cat and weather-related losses, net of reinsurance, totaled $138 million or 2.7 points. We would highlight that for the industry, 2023 was another active natural cat year with annual estimates ranging from $95 billion to over $100 billion. Importantly, at AXIS, our market share of these industry losses was the lowest they've been in over 10 years.

Our performance in 2023 was excellent, and we would expect a typical natural catastrophe load to be in the 4- to 5-point range. 2023 consolidated acquisition cost ratio was 19.7% and consolidated G&A expense ratio of 13.5% were consistent to the prior year. As Vince said, as we execute on how we work, we're confident that we will see lower expenses in 2024.

And on a consolidated basis, fee income from strategic capital partners was $53 million for the year. This is very similar to what we saw in 2022, but with a change in mix as our property and catastrophe vehicles wound down, and we launched a new vehicle, Monarch Point Re. We expect quarterly fees from strategic capital partners to be in the low to mid-teens on a go-forward basis.

Now let's move on and discuss our segment results in more detail. Insurance had a strong underlying year-end fourth quarter. Gross premiums written were $1.6 billion for the quarter and $6.1 billion for the year, an increase of 10% compared to the prior year.

Reviewing the quarter, we grew gross premiums written by 8%. Our growth was across all our lines of business with the exception of professional lines, where we continue to be cautious on public D&O. Excluding Professional, we grew 14% in the quarter and 17% for the year. Overall, we're growing where we want to in our chosen lines and markets. The portfolio mix we have at the end of the year is purposeful and attractive.

In the fourth quarter, our short-tail business lines represented 56% of our portfolio. And these lines are highly price adequate and still achieving rate well in excess of trend. We continue to experience price discipline in these lines, especially in the property lines, which saw a double-digit rate increases of 15% in the quarter and in credit and political risk and A&H, with both achieving mid-single-digit rate increases, which at least equal underlying loss cost trends. In our long-tail lines, we remain cautious on public market D&O, where we have cut our book in half from a year ago and which again saw a double-digit rate decreases of approximately 22% in the quarter.

In liability lines, we achieved rate in excess of trend with rates up 10.5% in the quarter and we continue to emphasize the need for strong rate increases in this line in order to keep pace with loss trends.

Lastly, while Cyber remains well priced, the rate change leveled off in the second half of 2023 after significant increases in the previous few years. And in the fourth quarter, rates were down slightly at minus 1.7 points. In Cyber, we continue to see better opportunities in the large client market and have continued to deemphasize the small commercial market. Overall, the insurance book has strong price adequacy as we enter 2024.

The insurance combined ratio for 2023 was 92.5%, including 5.1 points of net adverse reserve development and 3.2% of cat and weather-related losses. For the quarter, it was 106.7%, including the 19.8 points of reserve strengthening.

The full year current accident year loss ratio ex-cat and weather was 51.8%, which compares to 51% in the prior year. As we've discussed on prior calls, we have a few moving pieces here. We have recognized the higher loss trends in liability lines. And somewhat offsetting this, we have a change in business mix in favor of shorter tail lines like property and marine, which carry a lower attritional loss ratio.

For the quarter, the insurance accident year loss ratio was 52%, in line with where we've been for the rest of 2023 although up from a very strong 49.3% in the fourth quarter of 2022.

The acquisition cost ratio of 18.7% for the year, up slightly from the prior year. The increase is principally driven by lower ceding commissions of 1 point on our quota share treaties that renewed during 2023. Similarly, the ratio was 19.1% in the fourth quarter, up from the prior year's quarter of 18.6%.

The underwriting related G&A expense ratio was 13.6% for the year, down from 14.2% in 2022, driven by increased net earned premiums. This also drove the fourth quarter improvement to 13.3% from 13.7% in the year-ago quarter.

Now let's move on to the Reinsurance segment. I'll remind everyone that the fourth quarter is the smallest quarter for gross premiums written for Reinsurance, representing under 10% of the segment's full year gross premiums written. GWP for the quarter was down substantially from the prior year quarter, but largely due to much lower premium adjustments and timing benefits associated with a few renewals in the fourth quarter of 2022.

In 2023, we repositioned our Reinsurance portfolio. At year-end, we're proud of the work that we've accomplished. On a gross basis, reinsurance is now a $2.2 billion portfolio of attractively priced Specialty Reinsurance business. In 2023, we saw favorable pricing that is above trend in most lines of business.

The Reinsurance combined ratio for the year was 107.6%, which includes 14.6 points of net reserve strengthening. And for the quarter, was 162.8%, which includes 69.8 points of reserve strengthening. The 2023 current accident year loss ratio ex-cat weather was 64.8%, up from 62.6% in the prior year.

As we indicated, as the catastrophe and property premiums ran off, the book has transitioned to a more consistent and profitable book, with a higher attritional loss ratio offset by a significant drop in the catastrophe loss ratio, which has resulted in a lower and less volatile current accident year net loss ratio. For the quarter, the current accident year loss ratio ex-cat and weather was 64.5% compared to 65.5% a year ago.

On expenses, the full year total expense ratio was 26.6%, down from 27.2% largely reflecting the change in business mix on the acquisition ratio and 0.4 point decrease in the G&A ratio as we have created a more efficient organization. Similarly, for the quarter, the expense ratio was 27.7% compared to 28.4% in the prior year quarter.

Moving on to investments. We had a great year for net investment income. For the year, we had $612 million of net investment income, up substantially from the prior year. I would note that the particularly strong fourth quarter result of $187 million was driven by returns on fixed income of $142 million and a very good quarter for alternatives, which produced $25 million of net investment income. Due to timing of gains from alternatives, I would not consider this quarter to be a normal run rate for that asset class.

As we look to 2024, the overall outlook is positive as our average yield on fixed income securities was 4.2% at year-end, and the new money yield is 5.4%, and we continue to generate strong cash flow.

Our capital position has strengthened during the year, from improved underwriting, solid investment performance and management actions taken. As you've all seen, S&P recently took us to credit committee to remove AXIS Capital Holdings Limited from negative credit watch, and reaffirmed its issuer credit rating. They also reaffirmed the financial strength ratings of our operating entities. Their credit report highlights the fact that we had redundant capital at the extreme stress confidence level under their new model at year-end 2022. And they forecast that we will remain redundant over their forecast period 2023 through 2025.

Further, in the quarter, we returned $38 million to shareholders through common dividends, which brings our total year-to-date capital return to approximately $153 million. As you know, our Board authorized a $100 million share buyback in December. Given the substantial opportunities in our specialty markets, we continue to invest in our people, products and operating infrastructure. We equally see strong value creation ahead for our shareholders. So we are currently in the market repurchasing shares.

I also wanted to address the Government of Bermuda's Income Tax Act and the provision referred to as an Economic Transition Adjustment. We continue to evaluate the implementation of the rules. And given the clarifications provided on January 16, we expect to make an assessment in the coming months.

In summary, this quarter and throughout the year, we continued to advance our strategic priority to deliver growth in book value. We are committed to building on our progress and are optimistic for the future. That summarizes our fourth quarter results.

And with that, I'll turn it back to Cliff.

[Clifford Gallant, executive]

Thank you. Operator, we're ready to take questions.

[Operator]

[Operator Instructions] Today's first question comes from Josh Shanker with Bank of America.

[Joshua Shanker, analyst]

You've probably been busy in the last 24 hours, but you may have seen that a couple of other insurance companies reported reserve charges in the aftermarket yesterday. One of them who tends to be a direct competitor in a lot of things that AXIS does. In their 10-Q, they said that they took a charge increasing the inflation assumption around all years from 2016 through 2023. I'm wondering when you talk about your reserve charge, what kind of inflation assumptions were changed? And how that affected accident years both pre-COVID and post-COVID?

[Peter Vogt, executive]

Josh, this is Pete. We'll go back to that. We actually adjusted all of our inflation assumptions as we look back. And again, I would probably encompass social inflation to mean not only what we see for severity trends, what we see for taking a longer development patterns in our underlying. And as we look at that, we've moved all those trends up to where we believe they're going to be, which would be high single digits.

[Joshua Shanker, analyst]

And so is the '22 pick higher now post reserve charge than it was a year ago?

[Peter Vogt, executive]

Just slightly. As I mentioned last week, we did increase our liability reserves in insurance. It was specific to 2 books of business. It was our primary casualty book and some program business. That program business is now in runoff, Josh, so that's not affecting the 2023 current accident year. On the primary casualty, where that was set for '22 is equal to where it was set for '23. So we believe both picks are very strong.

[Joshua Shanker, analyst]

And where do you stand in terms of COVID era, I guess, COVID-related reserves. Have those been completely released at this point? Or is there still some reserves up for COVID type claims?

[Peter Vogt, executive]

No, we still have some reserves up for COVID-type claims, especially in our reinsurance segment, where it's just taking longer to actually understand the impact of COVID coming from some of our cedents, especially in the European theater. On the insurance side, that's pretty low. That's mostly all paid out by now. And from our original estimate that we put up, I'd say, reserves are down to 10% from the original estimates. We're at about 90% paid.

[Joshua Shanker, analyst]

And if I can sneak one more in, can we take the $425 million and break into 2 parts, the gross increases in reserves for inflationary and severity assumptions around social inflation, whatnot? And the improvement impact from getting the frequency and the incidents right in the numbers?

[Peter Vogt, executive]

Josh, we look at that in total with all the assumptions, and we did not break down the $425 million into those kind of micro pieces like that. So I wouldn't say, right now, I have those numbers at hand to be able to provide to you. But I would say, overall, we've actually extended the development patterns in our reserves, and we've increased the trend in our reserves.

[Operator]

The next question is from Yaron Kinar with Jefferies.

[Yaron Kinar, analyst]

I just want to start with a question on the insurance loss ratio with the underlying loss ratio. So I understand that a year ago, you had some one-off favorable items. But when I look at the 52% you posted this quarter, it still seems like it crept up a little bit relative to the, I'd say, second quarter and third quarter of this year. I'd just like to better understand if there are any one-offs there, just given the fact that you're still talking about rate being better than loss trend and the mix shift towards the lower attritional loss ratio property lines?

[Peter Vogt, executive]

Yes. Yaron, this is Pete. Yes, the lost, underlying loss ratio, just we get our numbers right, insurance was 52% for the quarter. That makes it 51.8% for the entire year 2023. There was not anything in the quarter that I would call one-off either way. It was a pretty consistent quarter overall, [ meat ] being up by about 0.2 point is really just some noise in the quarter. I would particularly tell you, I still think our loss ratio in insurance will be in that low 50s range for the year and actually even for going forward.

[Vincent Tizzio, executive]

And Pete, over the last 6 or 8 quarters, it's been in this vicinity as well you're on?

[Peter Vogt, executive]

Yes. Yes. When I look over the last 8 quarters, it's really been in that vicinity. The only mix change would be, again, increased liability loss picks in 2023, offset by the mix shift into marine and property.

[Yaron Kinar, analyst]

So maybe just a follow-up on that. I just want to make sure I'm thinking about this correctly because ultimately you're saying we took the loss, the trend up but we're still clearing that trend and then some with the rate we're achieving. We are moving our mix more in the direction of lower attritional loss ratios. So why would the loss ratio that you expect for the coming year or years not improve with that? Is it just a matter of conservatism?

[Peter Vogt, executive]

So I'd say, as I think about it, looking backwards at your own '22 to '23, we've got about -- our portfolio has moved by about 5 points more towards the short tail lines, and that has a lower attritional loss ratio. So what we saw was higher loss picks on the longer tail lines, and then with the mix shift, that actually offset. So that's why the loss ratio is pretty consistent from '22 to '23 on a full year basis.

As we look forward to 2024, what I would tell you is I do expect the loss ratio to be in those low 50s. And right now, I'd say the mix we're sorting, that we actually saw in 2023 is what we're looking for in 2024. Also, but that may change based upon market conditions as we enter 2024.

[Yaron Kinar, analyst]

Okay. And then my second question, I think you mentioned that you are in the market to repurchase shares here. Can you help us think about the prioritization here of capital towards buybacks, dividends or as opposed to organic growth when it seems like the market dynamic or market environment is still pretty positive for growth, why not lean as much as you can into those organic growth opportunities and maybe set aside buybacks for the time being?

[Peter Vogt, executive]

Thanks for the question, Yaron. What I'd say, first and foremost, is that we feel we're in a very strong capital position. So being in that strong capital position, we equally really believe we want to grow our business. And first priority of capital is to continue to grow into these attractive markets where we see them. But we also equally believe that right now, our shares are, call it, at a value price. And with $100 million authorization, we're out buying some shares back because we think that they are attractively priced for us. Overall, we're doing both. And I do think that as we look to 2024, we will continue to grow in insurance, and we have enough capital to do so.

[Vincent Tizzio, executive]

And Yaron, this is Vince. We've pointed to the specific areas of investment that give us confidence in our continued growth within our core business of insurance and have equally recognized where we're trading in the valuation attached to our organization and the belief we have in further developing value creation. And we think it's a good time to do it.

[Operator]

The next question comes from Brian Meredith with UBS.

[Brian Meredith, analyst]

A couple of them for you. First, I'm just curious, do you expect that the reserve charge you took in some of the higher picks that you're talking about on liability and some recent years to have an impact on your ceded reinsurance program in 2024? Could we potentially see acquisition cost ratio actually increasing again in '24?

[Vincent Tizzio, executive]

Brian, this is Vince. Over the recent years, the portfolio has been materially reshaped. And so as we go to market in the current period, while we will be prepared for modest changes in our secured Reinsurance, we don't expect at this point for it to be material. And just to give you more color and content. Again, the rate posture since 2019 and our liability classes has been well over 50-odd percent. The portfolio and its composition of limits, class, retention has been materially as well changed. And I think the recent results in the accident year point to that confidence.

[Brian Meredith, analyst]

Got you. That's helpful. And then I guess my second question, Pete, I think you mentioned that you expect, I guess, total GOE to be down in '24 versus '23. I just want to clarify that. And also on that topic, I noticed corporate overhead was down pretty meaningfully year-over-year. And I know there were some unusual items in the fourth quarter of 2022, but I'm just wondering if that's a good run rate or a little bit low?

[Peter Vogt, executive]

Yes. I would say, Brian, that you hit the nail in the head there. There were some unusual items in the fourth quarter of 2022. When we look at where we are in our corporate, I'd say the fourth quarter is a decent run rate. And I do think as we look forward to 2024 with the actions we've been taking, while this year, we ended up with a G&A ratio overall for the group for the full year of about mid-13s. I would expect it to go into the 12s as we get through 2024.

[Brian Meredith, analyst]

Great. And then just one last one. Pete, I think you mentioned some timing stuff in the Reinsurance business has hurt premium. Any way you can kind of quantify what happened?

[Vincent Tizzio, executive]

It was 2 component parts. There were adjustments and there were renewals that had moved out of the quarter in combination. I think adjustments were about a difference of $39-odd million in the quarter as compared to a negative $9 million in the fourth quarter of '23. There was also a couple of transactions, 1 in motor and 1 in credit that renewed in a different time period. And that in consequence is the shortfall. Having said that, we grew new business though it's a very small degree of what comes to market in the fourth quarter by, I think, about $7-odd million in the quarter.

[Peter Vogt, executive]

Yes. I think as I look at it, Brian, if I adjust for the premium adjustments where we had a lot last year and the timing, and I pull those out, the 2 of them add up to actually over $80 million. The rest of the book on a, I'll call it, a normalized basis, grew at just over 5%.

[Operator]

The next question comes from Elyse Greenspan with Wells Fargo Securities.

[Elyse Greenspan, analyst]

My first question is on the buybacks. So I think you guys have $100 million authorization out there. And I know you said you've just started repurchasing your stock. So is the $100 million like what you would expect to buy back this year? Or is it that you're just going to kind of judge new business opportunities and things like that, and then we'll see where the capital return shakes out?

[Peter Vogt, executive]

So Elyse, this is Pete. I'll take that. Yes, our #1 priority for capital is profitable growth. And we do see real good market opportunities there. Right now, we have the $100 million authorization from the Board, we'll use that opportunistically, as I said in the past, based upon where we see market opportunities.

[Elyse Greenspan, analyst]

And then I think you guys, some of your peers, right, have elected to set up a DTA around Bermuda tax changes. I don't think you guys have done that yet. Do you have a sense of how impactful that could be? Because my understanding right is that would be helpful to your capital position if you did choose to similarly set something up like that.

[Peter Vogt, executive]

So we're going to look at it this quarter, especially after the clarifications we got on January 16, Elyse. If we do elect to do something, my expectation is it would be beneficial. We have to let the tax guys go through all their work, but we'll have more to talk about that at the end of the first quarter on the first quarter call.

[Elyse Greenspan, analyst]

And then on Insurance, I know it came up earlier, you guys are from an underlying loss ratio, right, running just around 52%, slightly below. And it sounds like you guys are comfortable at that level. So based on your view of pricing and loss trend and then I guess there could be an impact of mix, right, as property perhaps has a greater concentration. Where would you -- within your overall view of 2024, what do you think the underlying loss ratio in insurance shakes out? Does it stay within range of that 52%?

[Peter Vogt, executive]

Elyse, I'd agree, it does stay within that range of 52%. Like I said, I think it will be in the low 50s. And as we said, we think there's plenty of market opportunity available to us in 2024, but we'll see it as we go through the year and see how the markets evolve.

[Operator]

The next question is from Meyer Shields with KBW.

[Meyer Shields, analyst]

I have a number of questions all over the place. But one that I'm being urged to ask is whether there's any risk that establishing a DTA in 2024 will be taxable in a way that it wasn't in 2023?

[Peter Vogt, executive]

That's a great question, Meyer. I think right now, what we know, if we set up the DTA, and we followed the guidance by the [ EPA ], it should not be. But I do think that as tax evolves through the course of the year as Bermuda continues to give out clarifications through the rest of the year. And as the OECD kind of sees what Bermuda is doing, we're going to get more clarity as the year progresses.

[Meyer Shields, analyst]

Okay. No, that's perfectly fair. I certainly have no clue. When we talk about the reserve strengthening for the fourth quarter, so you talked about a lot in the context of lines of business, but I'm wondering because we're hearing a lot from competitors and there was a strengthening specific construction. I was hoping you could talk through how you evaluated the reserves that for AXIS are construction related?

[Peter Vogt, executive]

Specific to the line of business construction, what I would say, we've only been -- go ahead.

[Meyer Shields, analyst]

No, no, that's what I meant. I guess the industry rather than the line of business, but yes.

[Peter Vogt, executive]

Yes. I would say we've only started leaning into construction as a growth out of our specialty lending operation in the last few years. So we don't have dramatically large reserves when I think about that in our property book, as I go back to '19 and prior. So I'd say, overall, we're very comfortable with our construction reserves, but it's not the same, I'll call it, depth of timing as you actually have in some other people.

[Vincent Tizzio, executive]

And the construction segment, Meyer, fell under the same scrutiny that we outlined in our call a week ago in terms of the process we undertook.

[Meyer Shields, analyst]

Okay. Perfect. And then one last question, if I can. So you talked about shifting towards, I guess, larger cyber accounts. Is that because the pricing trends are different? Or is it that the expected profitability is better with similar pricing?

[Vincent Tizzio, executive]

We think that the margin potential is strong. We think that there's a strong opportunity for us internationally in the large cyber segment. And in the fourth quarter, you saw, or you will see through our supplement a leaning toward the larger segments and consistent with what we've been reporting in prior quarters, shifting away from the smaller-sized enterprises, where we see it very competitive.

[Operator]

This concludes our question-and-answer session. I would now like to turn the call back to management for closing remarks.

[Vincent Tizzio, executive]

Thank you, and thank you for joining today's call. We look forward to reporting on our continued progress in future calls as well as during our upcoming Investor Day in May. I'll take a moment now to extend great appreciation and gratitude to all of my colleagues across the globe who performed exceedingly well this past year. Thank you.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.