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Press Release

AXIS Capital Reports 2005 Third Quarter Net Loss of $468.1 Million

Company Release - 11/1/2005 5:05 PM ET

PEMBROKE, Bermuda--(BUSINESS WIRE)--Nov. 1, 2005--AXIS Capital Holdings Limited ("AXIS Capital") (NYSE: AXS) today reported a net loss for the quarter ended September 30, 2005 of $468.1 million, or $(3.32) per diluted common share, compared with net income of $6.3 million, or $0.04 per diluted common share, for the quarter ended September 30, 2004. Net loss for the nine months ended September 30, 2005 was $143.4 million, or $(1.01) per diluted common share, compared with net income of $313.9 million, or $1.89 per diluted common share, for the nine months ended September 30, 2004.

Net losses from Hurricanes Katrina and Rita were $804.5 million for the quarter ended September 30, 2005 compared to net losses from Hurricanes Charley, Frances, Ivan and Jeanne of $227.4 million for the quarter ended September 30, 2004. Our net loss for Hurricane Katrina was $723.6 million. Our initial range of net loss estimates was determined immediately following the event and our updated estimate reflects our analysis of the latest loss information. Our estimated net losses for Hurricane Katrina assume an industry loss of $60 billion.

Net loss excluding net realized gains and losses on investments, net of tax, for the third quarter of 2005 was $462.2 million, or $(3.27) per diluted common share, compared with net income of $2.8 million, or $0.02 per diluted common share, for the quarter ended September 30, 2004. This same item excluding foreign exchange losses, net of tax, for the third quarter of 2005 was $460.8 million, or $(3.26) per diluted common share, compared with a net loss of $0.6 million for the quarter ended September 30, 2004.

Net loss excluding net realized gains and losses on investments, net of tax, for the nine months ended September 30, 2005 was $138.5 million, or $(0.98) per diluted common share, compared with net income of $305.2 million, or $1.83 per diluted common share, for the nine months ended September 30, 2004. This same item excluding foreign exchange losses, net of tax, for the nine months ended September 30, 2005 was $87.6 million, or $(0.62) per diluted common share, compared with net income of $309.2 million, or $1.86 per diluted common share, for the nine months ended September 30, 2004.

Net (loss) income excluding net realized gains and losses on investments, net of tax, and net income excluding net realized gains and losses on investments and foreign exchange losses, net of tax, are non-GAAP financial measures. Reconciliations of these measures to net (loss) income are presented at the end of this release.

    Operating highlights for the third quarter of 2005 include:

    --  Gross premiums written increased by 15.5% to $794.6 million
        primarily due to an increase in premiums written by our
        reinsurance segment;

    --  Net premiums earned increased by 18.2% to $616.8 million
        primarily due to net premiums earned by our reinsurance
        segment;

    --  Total pre-tax investment income, including net realized gains
        and losses, increased by 38.5% to $60.6 million primarily due
        to a combination of higher investment balances and higher
        investment yields; and

    --  Total shareholders' equity was $2.9 billion and total
        capitalization was $3.4 billion at September 30, 2005,
        including $250 million of newly issued preferred equity.

Commenting on the third quarter 2005 results, John Charman, Chief Executive Officer and President of AXIS Capital, stated: "It has been an extraordinarily eventful quarter not only for AXIS but also for the industry as a whole. This last quarter continued to demonstrate the increased frequency of major Atlantic hurricanes, much like last year's hurricane season. Uniquely, it was marked by the unprecedented profile and magnitude of the Katrina loss. The unprecedented losses of this year could well exceed an ultimate figure of $80 billion for the industry. My stated management goal has always been, at a minimum, preservation of capital and I believe that we have achieved this. Our capital position is strong and I expect every one of AXIS's major businesses will benefit strongly from the dramatic, positive changes underway in the marketplace."

He continued: "Our initial communication following Katrina was that we estimated this net loss to AXIS to be within our expectations of operating income for the year. Since that time, the industry has incurred the additional strain from Rita and Wilma that could together exceed $20 billion in industry losses. Following these events, we believe that we may ultimately have a nominal net operating loss for the 2005 calendar year, assuming no other large losses during the remainder of the year."

Operating Results

Our total gross premiums written increased 15.5% from the third quarter of 2004 and were derived 58.0% from our insurance segment and 42.0% from our reinsurance segment compared to 64.2% and 35.8%, respectively, for the third quarter of 2004. Our combined ratio increased to 185.4% in the quarter from 109.6% in the third quarter of 2004 primarily due to an increase in the level of net catastrophe losses.

Our total gross premiums written for the nine months ended September 30, 2005 increased 16.9% from the corresponding period of 2004 and were derived 50.8% from our insurance segment and 49.2% from our reinsurance segment compared to 56.2% and 43.8%, respectively, for the same period of 2004. Our combined ratio increased to 112.4% in the nine months ended September 30, 2005 from 86.4% in the same period of 2004 primarily due to an increase in the level of net catastrophe losses.

Insurance Segment

Our insurance segment reported gross premiums written in the quarter of $460.6 million, up 4.3% from the third quarter of 2004. The growth was driven by our U.S. insurance operation, which generated an increase in gross premiums written of 18.3%. This was primarily derived from the select expansion of our professional lines products and from an increase in our specialty program business within our property account. Our global insurance operation experienced a decline in gross premiums written of 10.6% primarily due to an increasingly competitive pricing environment in many lines of business, which resulted in fewer risks meeting our underwriting criteria. Net premiums written of $187.9 million declined 42.8% from the third quarter of 2004 primarily as a result of increased ceded reinstatement premiums relating to Hurricanes Katrina and Rita.

Our insurance segment reported a combined ratio of 192.7% for the quarter compared to 104.5% for the third quarter of 2004. The insurance segment incurred net losses of $309.5 million, or 124.5 percentage points, relating to Hurricanes Katrina and Rita compared to net losses incurred of $108.7 million, or 37.5 percentage points, relating to Hurricanes Charley, Frances, Ivan and Jeanne in the same period of 2004. The insurance segment experienced favorable prior period reserve development of $66.1 million compared to $21.2 million in the third quarter of 2004.

Reinsurance Segment

Our reinsurance segment reported gross premiums written in the quarter of $334.0 million, up 35.7% from the third quarter of 2004, and net premiums written of $329.8 million, up 41.1% from the third quarter of 2004. The increase in gross premiums written was primarily driven by an increase in reinstatement premiums following losses incurred from Hurricane Katrina and new opportunities in our U.S. casualty reinsurance business.

Our reinsurance segment reported a combined ratio of 179.7% for the quarter compared to 111.8% in the third quarter of 2004, largely driven by an increase in the loss ratio from 89.5% to 162.0%. The reinsurance segment incurred net losses of $495.0 million, or 134.4 percentage points, relating to Hurricanes Katrina and Rita compared to net losses incurred of $118.7 million, or 51.1 percentage points, relating to Hurricanes Charley, Frances, Ivan and Jeanne in the same period of 2004. Favorable prior period reserve development was from short-tail lines of business and was $29.7 million in the quarter compared to $28.4 million in the third quarter of 2004.

Interest Expense

Interest expense for the quarter was $8.4 million compared to $0.5 million for the third quarter of 2004. Interest expense for the nine months ended September 30, 2005 was $24.3 million compared to $0.7 million for the same period of 2004. Interest expense consists of interest due on outstanding debt, the amortization of debt offering expenses and offering discounts and fees relating to our credit facility. Our outstanding debt relates to $500 million of senior unsecured notes issued on November 15, 2004.

Investments

Total pre-tax investment income, which included $67.0 million in net investment income and $6.4 million in realized losses, grew 38.5% to $60.6 million in the quarter, up from $43.7 million in the third quarter of 2004. The increase primarily reflected the positive impact of higher average yields on higher investment balances. These increased yields were generated by higher short-term U.S. interest rates together with our increased allocation to other investments. Total pre-tax investment income for the nine months ended September 30, 2005 of $171.8 million included $177.8 million in net investment income and $6.0 million in realized losses. This was an increase of 50.6% from $114.0 million in the same period of 2004.

Capitalization / Shareholders' Equity

Total capitalization at September 30, 2005 was $3.4 billion, including $499.0 million of long-term debt. In late September 2005, we issued 10,000,000 7.25% Series A preferred shares, with net proceeds received of $242.3 million.

At September 30, 2005, diluted book value per common share was $17.59 and book value per common share was $18.52. Diluted book value per share is a non-GAAP financial measure. A reconciliation of this measure to shareholders' equity is presented at the end of this release.

Conference Call

We will host a conference call on Wednesday November 2, 2005 at 8:00 AM (Eastern) to discuss the third quarter financial results and related matters. This presentation will be available through an audio webcast accessible through the Investor Information section of our website at www.axiscapital.com.

In addition, a financial supplement relating to our financial results for the third quarter and nine months is available in the Investor Information section of our website.

AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholders' equity at September 30, 2005 of $2.9 billion and locations in Bermuda, the United States, Europe and Singapore. Its operating subsidiaries have been assigned a rating of "A" ("Excellent") by A.M. Best and a rating of "A" ("Strong") by Standard & Poor's. AXIS Capital has been assigned a senior unsecured debt rating of Baa1 (stable) by Moody's Investors Service and BBB+ (stable) by Standard & Poor's. For more information about AXIS Capital, visit our website at www.axiscapital.com.

                     AXIS CAPITAL HOLDINGS LIMITED

                 UNAUDITED CONSOLIDATED BALANCE SHEETS
            As at September 30, 2005 and December 31, 2004
               (Expressed in thousands of U.S. dollars,
                  except share and per share amounts)

                                               September   December
                                               30, 2005    31, 2004
Assets
Cash and cash equivalents                    $   862,184 $   632,329
Investments at fair market value               5,562,593   5,128,345
 (Amortized cost 2005: $5,620,922;
  2004: $5,114,997)
Other investments                                514,221     271,344
Accrued interest receivable                       47,800      47,487
Securities lending collateral                  1,045,144     865,311
Insurance and reinsurance premium balances
 receivable                                    1,145,471     914,562
Deferred acquisition costs                       242,478     211,082
Prepaid reinsurance premiums                     300,872     271,187
Reinsurance recoverable                        1,337,020     596,299
Intangible assets                                 37,969      31,734
Other assets                                     344,794      68,605
                                             ----------- -----------
  Total Assets                               $11,440,546 $ 9,038,285
                                             =========== ===========

Liabilities
Reserve for losses and loss expenses         $ 4,514,277 $ 2,404,560
Unearned premiums                              2,003,223   1,644,771
Insurance and reinsurance balances payable       325,924     247,940
Accounts payable and accrued expenses             92,099      89,804
Securities lending payable                     1,041,124     864,354
Net payable for investments purchased             93,268      49,854
Debt                                             499,019     498,938
                                             ----------- -----------
  Total Liabilities                            8,568,934   5,800,221
                                             ----------- -----------
Shareholders' Equity
Share capital
 (Authorized 800,000,000 shares,
  par value $0.0125)
Series A preferred shares
 (issued and outstanding 2005: 10,000,000;
  2004: nil))                                $       125 $         -
Common shares
 (issued and outstanding 2005: 141,553,736;
  2004: 152,539,621)                               1,769       1,910
Additional paid-in capital                     1,931,807   2,017,144
Accumulated other comprehensive (loss) income    (54,806)     12,915
Retained earnings                                992,717   1,206,095
                                             ----------- -----------
  Total Shareholders' Equity                   2,871,612   3,238,064
                                             ----------- -----------
  Total Liabilities & Shareholders'  Equity  $11,440,546 $ 9,038,285
                                             =========== ===========


                     AXIS CAPITAL HOLDINGS LIMITED

            UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
  For the Quarters and Nine Months ended September 30, 2005 and 2004
               (Expressed in thousands of U.S. dollars,
                  except share and per share amounts)

                        Quarters ended           Nine Months ended
                         September 30,              September 30,
                     2005           2004        2005          2004
Revenues                        (see Note 1)             (see Note 1)
  Gross premiums
   written        $  794,571     $  687,700   $2,760,563   $2,361,142
  Premiums ceded    (276,854)      (125,688)    (564,979)    (412,063)
  Change in
   unearned
   premiums           99,097        (40,214)    (328,767)    (469,630)
                  ----------     ----------   ----------   ----------
  Net premiums
   earned            616,814        521,798    1,866,817    1,479,449

  Net investment
   income             67,015         40,017      177,774      104,621
  Net realized
   (losses) gains     (6,435)         3,732       (5,997)       9,418
  Other insurance
   related income
   (loss)                236          7,206       (5,283)       7,650
                  ----------     ----------   ----------   ----------
    Total
     revenues        677,630        572,753    2,033,311    1,601,138
                  ----------     ----------   ----------   ----------
Expenses
  Net losses and
   loss expenses   1,035,270        445,575    1,702,413      946,025
  Acquisition
   costs              64,436         79,222      241,208      201,674
  General and
   administrative
   expenses           44,237         47,068      155,335      131,360
  Foreign
   exchange
   losses (gains)      1,727         (3,459)      52,371        4,099
  Interest
   expense             8,360            469       24,257          688
                  ----------     ----------   ----------   ----------
    Total
     expenses      1,154,030        568,875    2,175,584    1,283,846
                  ----------     ----------   ----------   ----------

(Loss) income
 before income
 taxes              (476,400)         3,878     (142,273)     317,292
  Income tax
   recovery
   (expense)           8,325          2,401       (1,158)      (3,369)
                  ----------     ----------   ----------   ----------
Net (Loss)
 Income           $ (468,075)    $    6,279   $ (143,431)  $  313,923
                  ==========     ==========   ==========   ==========
Weighted average
 common shares
 and common
 share
 equivalents -
 basic           140,995,298    152,534,495  142,711,852  152,523,144
                 ============   ===========  ===========  ===========
Weighted average
 common shares
 and common
 share
 equivalents -
 diluted         140,995,298    166,128,928  142,711,852  166,401,498
                 ===========    ===========  ===========  ===========
Net (loss) income
 per common share
 - basic          $    (3.32)    $     0.04   $    (1.01)  $     2.06
                  ==========     ==========   ==========   ==========
Net (loss) income
 per common share
 - diluted        $    (3.32)    $     0.04   $    (1.01)  $     1.89
                  ==========     ==========   ==========   ==========
Insurance Ratios
Loss ratio             167.8%          85.4%        91.2%        63.9%
Expense ratio           17.6%          24.2%        21.2%        22.5%
                  ----------     ----------   ----------   ----------
Combined ratio         185.4%         109.6%       112.4%        86.4%
                  ==========     ==========   ==========   ==========

Note 1: Interest expense has been reclassifed from general
administrative expenses for 2004 to conform to current year
classifications. Interest expense consists of interest due on
outstanding debt, the amortization of debt offering expenses and
offering discounts and fees relating to our credit facility.


                     AXIS CAPITAL HOLDINGS LIMITED

                 UNAUDITED CONSOLIDATED SEGMENTAL DATA
                   Quarter ended September 30, 2005

                                         Global     U.S.      Total
                                        Insurance Insurance Insurance
                                        --------- --------- ---------
Revenues:
Gross premiums written                  $ 191,616 $ 268,967 $ 460,583
Net premiums written                       63,813   124,061   187,874
Net premiums earned                       141,359   107,174   248,533
Other insurance related income                  -       236       236
Expenses:
Net losses and loss expenses             (308,024) (130,500) (438,524)
Acquisition costs                         (13,293)    1,722   (11,571)
General and administrative expenses        (9,039)  (19,716)  (28,755)
                                        --------- --------- ---------
Underwriting loss (a)                    (188,997)  (41,084) (230,081)

Corporate expenses
Net investment income
Realized losses on investments
Foreign exchange losses
Interest expense
Loss before income taxes

Net loss and loss expense ratio             217.9%    121.8%    176.4%
Acquisition cost ratio                        9.4%     (1.6%)     4.7%
General and administrative expense ratio      6.4%     18.4%     11.6%
                                        --------- --------- ---------
Combined ratio                              233.7%    138.6%    192.7%
                                        --------- --------- ---------

                                      Reinsurance Corporate   Total
                                        --------- --------- ---------
Revenues:
Gross premiums written                  $ 333,988 $      -  $ 794,571
Net premiums written                      329,843        -    517,717
Net premiums earned                       368,281        -    616,814
Other insurance related income                  -        -        236
Expenses:
Net losses and loss expenses             (596,746)       - (1,035,270)
Acquisition costs                         (52,865)       -    (64,436)
General and administrative expenses       (12,187)       -    (40,942)
                                        --------- --------- ---------
Underwriting loss (a)                    (293,517)       -   (523,598)

Corporate expenses                                   (3,295)   (3,295)
Net investment income                                67,015    67,015
Realized losses on investments                       (6,435)   (6,435)
Foreign exchange losses                              (1,727)   (1,727)
Interest expense                                     (8,360)   (8,360)
                                                            ---------
Loss before income taxes                                     (476,400)
                                                            =========
Net loss and loss expense ratio             162.0%              167.8%
Acquisition cost ratio                       14.4%               10.4%
General and administrative expense
 ratio                                        3.3%      0.6%      7.2%
                                        --------- --------- ---------
Combined ratio                              179.7%              185.4%
                                        ---------           ---------

(a) The Company utilizes underwriting income (loss) as a measure
of underwriting profitability as it evaluates profitability solely on
underwriting related revenues and costs. Items not considered to be
part of underwriting include corporate expenses, investment income,
realized losses and gains on the sale of investments, foreign exchange
and interest expense. These items are evaluated separately from our
underwriting results. Underwriting income (loss) takes into account
net premiums earned and other insurance related income as revenue and
net losses and loss expenses, acquisition costs and underwriting
related general and administrative expenses as expenses. Underwriting
income (loss) is the difference between the revenue and expense items.


                     AXIS CAPITAL HOLDINGS LIMITED

                 UNAUDITED CONSOLIDATED SEGMENTAL DATA
                   Quarter ended September 30, 2004

                                         Global     U.S.      Total
                                        Insurance Insurance Insurance
                                        --------- --------- ---------
Revenues:
Gross premiums written                  $ 214,282 $ 227,380 $ 441,662
Net premiums written                      203,469   124,812   328,281
Net premiums earned                       199,477    90,266   289,743
Other insurance related income              7,106         -     7,106
Expenses:
Net losses and loss expenses             (152,333)  (85,531) (237,864)
Acquisition costs                         (33,067)   (4,941)  (38,008)
General and administrative expenses        (8,592)  (18,222)  (26,814)
                                        --------- --------- ---------
Underwriting income (loss) (a)             12,591   (18,428)   (5,837)

Corporate expenses
Net investment income
Realized gains on investments
Foreign exchange gains
Interest expense
Income before income taxes

Net loss and loss expense ratio              76.4%     94.7%     82.1%
Acquisition cost ratio                       16.5%      5.5%     13.1%

General and administrative expense ratio      4.3%     20.2%      9.3%
                                        --------- --------- ---------
Combined ratio                               97.2%    120.4%    104.5%
                                        --------- --------- ---------

                                      Reinsurance Corporate   Total
                                        --------- --------- ---------

Revenues:
Gross premiums written                  $ 246,038         - $ 687,700
Net premiums written                      233,731         -   562,012
Net premiums earned                       232,055         -   521,798
Other insurance related income                100         -     7,206
Expenses:
Net losses and loss expenses             (207,711)        -  (445,575)
Acquisition costs                         (41,214)        -   (79,222)
General and administrative expenses       (10,530)        -   (37,344)
                                        --------- --------- ---------
Underwriting income (loss) (a)            (27,300)        -   (33,137)

Corporate expenses                         (9,724)   (9,724)
Net investment income                                40,017    40,017
Realized gains on investments                         3,732     3,732
Foreign exchange gains                                3,459     3,459
Interest expense                                       (469)     (469)
                                                            ---------
Income before income taxes                                  $   3,878
                                                            =========

Net loss and loss expense ratio              89.5%               85.4%
Acquisition cost ratio                       17.8%               15.2%

General and administrative expense ratio      4.5%      1.9%      9.0%
                                        --------- --------- ---------
Combined ratio                              111.8%              109.6%
                                        ---------           ---------

(a) The Company utilizes underwriting income (loss) as a measure
of underwriting profitability as it evaluates profitability solely on
underwriting related revenues and costs. Items not considered to be
part of underwriting include corporate expenses, investment income,
realized losses and gains on the sale of investments, foreign exchange
and interest expense. These items are evaluated separately from our
underwriting results. Underwriting income (loss) takes into account
net premiums earned and other insurance related income as revenue and
net losses and loss expenses, acquisition costs and underwriting
related general and administrative expenses as expenses. Underwriting
income (loss) is the difference between the revenue and expense items.


                     AXIS CAPITAL HOLDINGS LIMITED

                 UNAUDITED CONSOLIDATED SEGMENTAL DATA
                 Nine months ended September 30, 2005

                                        Global     U.S.      Total
                                        Insurance Insurance Insurance
                                        --------- --------- ---------
Revenues:
Gross premiums written                  $ 671,451 $ 731,363 $1,402,814
Net premiums written                      481,248   366,391   847,639
Net premiums earned                       562,934   321,996   884,930
Other insurance related (loss) income      (5,865)      582    (5,283)
Expenses:
Net losses and loss expenses             (451,958) (272,876) (724,834)
Acquisition costs                         (72,830)   (5,017)  (77,847)
General and administrative expenses       (28,523)  (60,804)  (89,327)
                                        --------- --------- ---------
Underwriting income (loss) (a)              3,758   (16,119)  (12,361)

Corporate expenses
Net investment income
Realized losses on investments
Foreign exchange losses
Interest expense
Loss before income taxes

Net loss and loss expense ratio              80.3%     84.7%     81.9%
Acquisition cost ratio                       12.9%      1.6%      8.8%
General and administrative expense
 ratio                                        5.1%     18.9%     10.1%
                                        -----------------------------
Combined ratio                               98.3%    105.2%    100.8%
                                        -----------------------------

                                       Reinsurance Corporate  Total
                                        --------- --------- ---------
Revenues:
Gross premiums written                 $1,357,749        - $2,760,563
Net premiums written                    1,347,945        -  2,195,584
Net premiums earned                       981,887        -  1,866,817
Other insurance related (loss) income           -        -     (5,283)
Expenses:
Net losses and loss expenses             (977,579)       - (1,702,413)
Acquisition costs                        (163,361)       -   (241,208)

General and administrative expenses       (36,818)       -   (126,145)
                                        --------- --------- ---------
Underwriting income (loss) (a)           (195,871)       -   (208,232)

Corporate expenses                                  (29,190)  (29,190)
Net investment income                               177,774   177,774
Realized losses on investments                       (5,997)   (5,997)
Foreign exchange losses                             (52,371)  (52,371)
Interest expense                                    (24,257)  (24,257)
                                                            ---------
Loss before income taxes                                    $(142,273)
                                                            =========

Net loss and loss expense ratio              99.6%               91.2%
Acquisition cost ratio                       16.6%               12.9%
General and administrative expense
 ratio                                        3.7%      1.5%      8.3%
                                        --------- --------- ---------
Combined ratio                              119.9%              112.4%
                                        ---------           ---------

(a) The Company utilizes underwriting income (loss) as a measure
of underwriting profitability as it evaluates profitability solely on
underwriting related revenues and costs. Items not considered to be
part of underwriting include corporate expenses, investment income,
realized losses and gains on the sale of investments, foreign exchange
and interest expense. These items are evaluated separately from our
underwriting results. Underwriting income (loss) takes into account
net premiums earned and other insurance related income as revenue and
net losses and loss expenses, acquisition costs and underwriting
related general and administrative expenses as expenses. Underwriting
income (loss) is the difference between the revenue and expense items.



                     AXIS CAPITAL HOLDINGS LIMITED

                 UNAUDITED CONSOLIDATED SEGMENTAL DATA
                 Nine months ended September 30, 2004

                                        Global     U.S.      Total
                                        Insurance Insurance Insurance
                                        --------- --------- ---------
Revenues:
Gross premiums written                  $ 730,878 $ 595,637 $1,326,515
Net premiums written                      619,248   323,241   942,489
Net premiums earned                       595,761   247,837   843,598
Other insurance related income              6,887         -     6,887
Expenses:
Net losses and loss expenses             (368,476) (182,271) (550,747)
Acquisition costs                         (89,530)   (7,477)  (97,007)
General and administrative expenses       (24,047)  (49,927)  (73,974)
                                        --------- --------- ---------
Underwriting income (a)                   120,595     8,162   128,757

Corporate expenses
Net investment income
Realized gains on investments
Foreign exchange losses
Interest expense
Income before income taxes

Net loss and loss expense ratio              61.8%     73.5%     65.3%
Acquisition cost ratio                       15.0%      3.0%     11.5%
General and administrative expense
 ratio                                        4.0%     20.1%      8.8%
                                        --------- --------- ---------
Combined ratio                               80.8%     96.6%     85.6%
                                        --------- --------- ---------

                                       Reinsurance Corporate   Total
                                        --------- --------- ---------
Revenues:
Gross premiums written                 $1,034,627        - $2,361,142
Net premiums written                    1,006,590        -  1,949,079
Net premiums earned                       635,851        -  1,479,449
Other insurance related income                763        -      7,650
Expenses:
Net losses and loss expenses             (395,278)       -   (946,025)
Acquisition costs                        (104,667)       -   (201,674)
General and administrative expenses       (29,058)       -   (103,032)
                                        --------- --------- ---------
Underwriting income (a)                   107,611        -    236,368

Corporate expenses                                  (28,328)  (28,328)
Net investment income                               104,621   104,621
Realized gains on investments                         9,418     9,418
Foreign exchange losses                              (4,099)   (4,099)
Interest expense                                       (688)     (688)
                                                            ---------
Income before income taxes                                  $ 317,292
                                                            =========

Net loss and loss expense ratio              62.1%               63.9%
Acquisition cost ratio                       16.5%               13.6%
General and administrative expense
 ratio                                        4.6%      1.9%      8.9%
                                        --------- --------- ---------
Combined ratio                               83.2%               86.4%
                                        --------- --------- ---------

(a) The Company utilizes underwriting income (loss) as a measure
of underwriting profitability as it evaluates profitability solely on
underwriting related revenues and costs. Items not considered to be
part of underwriting include corporate expenses, investment income,
realized losses and gains on the sale of investments, foreign exchange
and interest expense. These items are evaluated separately from our
underwriting results. Underwriting income (loss) takes into account
net premiums earned and other insurance related income as revenue and
net losses and loss expenses, acquisition costs and underwriting
related general and administrative expenses as expenses. Underwriting
income (loss) is the difference between the revenue and expense items.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements contained in this release include our estimate of losses related to Hurricanes Katrina and Rita, industry loss estimates and our expectations regarding market conditions. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause actual events or results to be materially different from our expectations include (1) our limited operating history, (2) the occurrence of natural and man-made disasters, (3) actual claims exceeding our loss reserves, (4) the failure of any of the loss limitation methods we employ, (5) the effects of emerging claims and coverage issues, (6) the failure of our cedants to adequately evaluate risks, (7) the loss of one or more key executives (8) a decline in our ratings with rating agencies, (9) the loss of business provided to us by our major brokers, (10) changes in governmental regulations, (11) increased competition and (12) general economic conditions. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

In addition to the GAAP financial measures included within this release, we have presented "net (loss) income excluding net realized gains and losses on investments, net of tax", "net (loss) income excluding net realized gains and losses on investments and foreign exchange, net of tax" and "diluted book value per share," which are non-GAAP financial measures. We have included the first and second measures as we believe that security analysts, rating agencies and investors believe that realized gains and losses and foreign exchange, where an actively managed foreign exchange program is not in place, are largely opportunistic and are a function of economic and interest rate conditions. As a result, we believe that they evaluate earnings before realized gains and losses and foreign exchange, adjusted for tax, to make performance comparisons with our industry peers. We have included the third measure because it takes into account the effect of dilutive securities and, therefore, we believe that this is a better measure of calculating shareholder returns than book value per share.


                     AXIS CAPITAL HOLDINGS LIMITED

               NON-GAAP FINANCIAL MEASURE RECONCILIATION
            NET (LOSS) INCOME EXCLUDING REALIZED GAINS AND
                   LOSSES ON INVESTMENTS, NET OF TAX
  For the Quarters and Nine Months ended September 30, 2005 and 2004
  (Expressed in thousands of U.S. dollars, except per share amounts)


                         Quarters ended       Nine Months ended
                         September 30,           September 30,
                        2005       2004         2005        2004

Net (loss) income    $(468,075)  $  6,279     (143,431)   $ 313,923

Adjustment for net
 realized losses
 (gains)
 on investments          6,435     (3,732)       5,997       (9,418)

Adjustment for
 associated tax
 impact of net
 realized (losses)
 gains on investments     (517)       286       (1,039)         645

Net (loss) income
 excluding realized
 (losses) gains on
 investments, net of
 tax                 $(462,157)  $  2,833    $(138,473)   $ 305,150
                     =========   ========    =========    =========

Net (loss) income
 per common share -
 diluted             $   (3.32)  $   0.04    $   (1.01)   $    1.89
                     =========   ========    =========    =========

Adjustment for net
 realized (losses)
 gains on investments     0.05      (0.02)        0.04        (0.06)

Adjustment for
 associated tax
 impact of net
 realized (losses)
 gains on investments        -          -        (0.01)           -

Net (loss) income
 excluding realized
 (losses) gains on
 investments, net of
 tax per diluted
 common share        $   (3.27)  $   0.02    $   (0.98)   $    1.83
                     =========   ========    =========    =========
Weighted average
 common shares and
 common share
 equivalents -
 diluted           140,995,298 166,128,928  142,711,852  166,401,498
                   =========== ===========  ===========  ===========


                     AXIS CAPITAL HOLDINGS LIMITED

               NON-GAAP FINANCIAL MEASURE RECONCILIATION
 NET (LOSS) INCOME EXCLUDING REALIZED GAINS AND LOSSES ON INVESTMENTS
                AND FOREIGN EXCHANGE LOSSES, NET OF TAX
  For the Quarters and Nine Months ended September 30, 2005 and 2004
  (Expressed in thousands of U.S. dollars, except per share amounts)

                        Quarters ended          Nine Months ended
                         September 30,            September 30,
                        2005        2004        2005         2004

Net (loss) income    $(468,075)  $  6,279    $(143,431)   $ 313,923

Adjustment for net
 realized losses
 (gains) on
 investments             6,435     (3,732)       5,997       (9,418)
Adjustment for
 foreign exchange
 losses (gains)          1,727     (3,459)      52,371        4,099
Adjustment for
 associated tax
 impact                   (837)       278       (2,563)         586

Net (loss) income
 excluding realized
 (losses) gains on
 investments and
 foreign exchange
 losses, net of
  tax                $(460,750)  $   (634)   $ (87,626)   $ 309,190
                     =========   ========    =========    =========

Net (loss) income
 per common share -
 diluted             $   (3.32)  $   0.04    $   (1.01)   $    1.89
                     =========   ========    =========    =========

Adjustment for net
 realized losses
 (gains) on
 investments              0.05      (0.02)        0.04        (0.06)
Adjustment for
 foreign exchange
 losses                   0.01      (0.02)        0.37         0.03
Adjustment for
 associated tax
 impact                      -          -        (0.02)           -

Net income excluding
 realized (losses)
 gains on investments
 and foreign
 exchange losses,
 net of tax per
 common diluted
 share               $   (3.26)  $      -    $   (0.62)   $    1.86
                     =========   ========    =========    =========
Weighted average
 common shares and
 common share
 equivalents -
 diluted           140,995,298 166,128,928  142,711,852  166,401,498
                   =========== ===========  ===========  ===========


                     AXIS CAPITAL HOLDINGS LIMITED

               NON-GAAP FINANCIAL MEASURE RECONCILIATION
                  DILUTED BOOK VALUE PER COMMON SHARE
            As at September 30, 2005 and December 31, 2004
               (Expressed in thousands of U.S. dollars,
                  except share and per share amounts)

                                             September  December 31,
                                             30, 2005       2004

Total shareholders' equity                 $  2,871,612 $  3,238,064
less preferred equity                          (250,000)           -
                                           ------------ ------------
Common shareholders' equity                $  2,621,612 $  3,238,064

Common shares outstanding                   141,553,736  152,764,917
                                           ------------ ------------
Book value per common share                $      18.52 $      21.20
                                           ============ ============
Diluted book value on an "as if converted
 basis"

Common shareholders' equity                $  2,621,612 $  3,238,064
add in:
  proceeds on exercise of options               121,569       94,724
  proceeds on exercise of warrants              244,812      244,812
                                           ------------ ------------
Adjusted shareholders' equity                 2,987,993    3,577,600
                                           ------------ ------------
As if converted diluted shares outstanding
Common shares outstanding                   141,553,736  152,764,917
add in:
  vesting of restricted stock                 2,288,218    2,182,700
  exercise of options                         6,405,681    5,694,181
  exercise of warrants                       19,643,171   19,619,152
                                           ------------ ------------
Diluted common shares outstanding           169,890,806  180,260,950
                                           ------------ ------------
Diluted book value per common share        $      17.59 $      19.85
                                           ============ ============


    CONTACT: Investor:
             AXIS Capital Holdings Limited

             Andrew Cook / Linda Ventresca
             info@axiscapital.com
             441-297-9513
                        or
             Media:
             Kekst and Company
             Laura Accettella, 212-521-4859

    SOURCE: AXIS Capital Holdings Limited