AXIS CAPITAL HOLDINGS LTDAXS
AXIS CAPITAL HOLDINGS LTD Commitments Disclosure
COMMITMENTS AND CONTINGENCIES
a) Concentrations of Credit Risk
Credit Risk Aggregation
The Company monitors and manages the aggregation of credit risk on a group-wide basis allowing it to consider exposure management strategies for individual companies, countries, regions, sectors and any other relevant inter-dependencies. The Company's credit exposures are aggregated based on the origin of risk. Credit risk aggregation is also managed through minimizing overlaps in underwriting, financing and investing activities. As part of its credit aggregation framework, the Company also assigns aggregate credit limits by country and by single counterparty (or parent of affiliated counterparties). These limits are based on and adjusted for a variety of factors including the prevailing economic environment and the nature of the underlying credit exposures.
The Company's credit aggregation measurement and reporting process is facilitated by its credit risk exposure database, which contains relevant information on counterparty details and credit risk exposures. The database is accessible by management throughout the Company, therefore providing transparency to allow for the implementation of active exposure management strategies. The Company also licenses third-party tools to provide credit risk assessments. The Company monitors all its credit aggregations and, where appropriate, adjusts its internal risk limits and/or takes specific actions to reduce our risk exposures.
The assets that potentially subject the Company to concentrations of credit risk consist principally of cash and investments, reinsurance recoverable on unpaid and paid claims, and insurance and reinsurance premiums balances receivable, as described below:
(i) Cash and Investments
In order to mitigate concentration and operational risks related to cash and cash equivalents, the Company limits the maximum amount of cash that can be deposited with a single counterparty and limits acceptable counterparties based on current rating, outlook and other relevant factors.
The Company's fixed maturities portfolio, which represents approximately $13.4 billion or 39% of its total assets, is exposed to potential losses arising from the diminished creditworthiness of issuers of bonds. The Company's investment portfolio is managed by external investment managers in accordance with its investment guidelines. The Company limits credit risk through diversification and issuer exposure limits graded by ratings and, with respect to custodians, through contractual and other legal remedies. Excluding Government and agency securities, the Company limits its concentration of credit risk to any single corporate issuer to 1% of its investment grade fixed maturities portfolio for securities rated A- or above and 0.5% of its investment grade fixed maturities portfolio for securities rated below A-.
At December 31, 2025, the Company was in compliance with these limits.
(ii) Reinsurance Recoverable on Unpaid and Paid Losses and Loss Expenses
The Company is exposed to the credit risk associated with reinsurance recoverable on unpaid and paid losses and loss expenses to the extent that any of its reinsurers fail to meet their obligations under reinsurance contracts. To help mitigate this risk, the Company's purchase of reinsurance is subject to financial security requirements specified by its Reinsurance Security Committee. This Committee maintains a list of approved reinsurers, performs credit risk assessments for potential new reinsurers, regularly monitors approved reinsurers with consideration for events which may have a material impact on their creditworthiness, recommends counterparty tolerance levels for different types of ceded business and monitors concentrations of credit risk. This assessment considers a wide range of individual attributes, including a review of the counterparty’s financial strength, industry position and other qualitative factors. Generally, the Committee requires that reinsurers who do not meet specified requirements provide collateral.
At December 31, 2025, the three largest balances by reinsurer accounted for 20%, 8% and 4% (2024: 12%, 7% and 5%) of reinsurance recoverable on unpaid and paid losses and loss expenses.
At December 31, 2025, amounts recoverable from reinsurers included 31% that is fully collateralized, 65% that is recoverable from reinsurers rated A- or higher by A.M. Best and 4% that is recoverable from reinsurers rated lower than A- by A.M. Best (2024: 17%, 81% and 2%, respectively).
(iii) Insurance and Reinsurance Premium Balances Receivable
The diversity of the Company's client base limits credit risk associated with its premium balances receivable. In addition, for insurance contracts the Company has contractual rights to cancel coverage for non-payment of premiums and for reinsurance contracts the Company has contractual rights to offset premium balances receivable against corresponding payments for losses and loss expenses.
Brokers and other intermediaries collect premiums from customers on behalf of the Company. The Company has procedures in place to manage and monitor credit risk from intermediaries with a focus on day-to-day monitoring of the largest positions.
These contractual rights contribute to the mitigation of credit risk, together with the monitoring of aged premium balances receivable. In light of these mitigating factors and considering that a significant portion of premium balances receivable are not currently due based on the terms of the underlying contracts, the Company does not utilize specific credit quality indicators to monitor its premium balances receivable.
At December 31, 2025, the Company’s premium balances receivable was $3.2 billion (2024: $2.8 billion).
At December 31, 2025, the Company's allowance for expected credit losses to be recognized over the life of the Company’s premium balances receivable was $16 million (2024: $17 million). The following table provides a reconciliation of the beginning and ending balances of the allowance for expected credit losses related to the Company’s premiums balances receivable:
| Year ended December 31, | 2025 | 2024 | |||||||||||||||
| Beginning balance | $ | 17,339 | $ | 11,997 | |||||||||||||
| Increase (decrease) in allowance for expected credit losses | (1,518) | 5,342 | |||||||||||||||
| Ending balance | $ | 15,821 | $ | 17,339 | |||||||||||||
For the year ended December 31, 2025, bad debt expense was $1 million (2024: $3 million; 2023: $2 million).
b) Brokers
The Company produces business through brokers.
For the year ended December 31, 2025, 2024 and 2023, three brokers accounted for 37%, 38% and 38% of gross premiums written, respectively. Marsh & McLennan Companies Inc. accounted for 13% (2024: 14%, 2023: 14%), Aon plc accounted for 13% (2024: 14%, 2023: 15%), and Arthur J. Gallagher & Co. accounted for 11% (2024: 10%, 2023: 9%).
No other broker and no single insured or reinsured accounted for more than 10% of gross premiums written in any of the last three years.
c) Reinsurance Purchase Commitment
In the normal course of business, the Company purchases reinsurance and retrocessional (collectively referred to as "reinsurance") protection for its insurance and reinsurance business. Minimum reinsurance premiums are contractually due in advance on a quarterly basis. At December 31, 2025, the Company had outstanding reinsurance purchase commitments of $10 million (2024: $nil). Actual payments under the reinsurance contracts will depend on the underlying subject premium and may exceed the minimum reinsurance premiums.
d) Legal Proceedings
From time to time, the Company is subject to routine legal proceedings, including arbitrations, arising in the ordinary course of business. These legal proceedings generally relate to claims asserted by or against the Company in the ordinary course of its insurance or reinsurance operations. Estimated amounts payable related to these proceedings are included in reserve for losses and loss expenses in the Company's consolidated balance sheets. The Company is not party to any material legal proceedings arising outside the ordinary course of business.
e) Investments
At December 31, 2025, the Company has $683 million (2024: $526 million) of unfunded investment commitments related to its other investment portfolio, which are callable by investment managers (refer to Note 5(e) 'Investments'). At December 31, 2025, the Company has $3 million (2024: $9 million) of unfunded investment commitments to purchase commercial mortgage loans and $403 million (2024: $94 million) of unfunded investment commitments to purchase corporate debt.
f) Funds at Lloyd's
The Company operates in the Lloyd’s market through its corporate members, AXIS Corporate Capital UK Limited and AXIS Corporate Capital UK II Limited. Lloyd’s sets capital requirements for corporate members annually through the application of a capital model that is based on regulatory rules pursuant to Solvency UK.
The capital provided to support underwriting or Funds at Lloyd’s ("FAL") may be satisfied by cash, certain investments and letters of credit provided by approved banks.
At December 31, 2025, investments and cash of $1,070 million (2024: $883 million) were restricted to satisfy the Company's FAL requirements (refer to Note 5 'Investments' and Note 22 'Statutory Financial Information').
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2015 | Feb 25, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.