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Press Release

AXIS Capital Reports Profitable Year, with Net Income of $90.1 Million Following Pre-Tax Hurricane Net Losses of $1,019.1 Million

Company Release - 2/7/2006 5:49 PM ET

PEMBROKE, Bermuda--(BUSINESS WIRE)--Feb. 7, 2006--AXIS Capital Holdings Limited ("AXIS Capital ") (NYSE: AXS) today reported net income available to common shareholders of $90.1 million for the year ended December 31, 2005, or $0.57 per diluted common share, compared with net income of $495.0 million, or $2.98 per diluted common share, for the year ended December 31, 2004. Net income available to common shareholders for the quarter ended December 31, 2005 was $233.5 million, or $1.47 per diluted common share, compared with net income of $181.1 million, or $1.09 per diluted common share, for the quarter ended December 31, 2004.

The decrease in the 2005 net income available to common shareholders was principally caused by pre-tax net losses from Hurricanes Katrina, Rita and Wilma of $1,019.1 million. These net losses include $846.9 million for Hurricanes Katrina and Rita, an increase of 5.3% over previously reported net loss estimates for these two events of $804.5 million, and $172.2 million for Hurricane Wilma. These net losses compared to net losses from Hurricanes Charley, Frances, Ivan and Jeanne of $266.3 million for 2004. Our net loss estimate for Hurricane Katrina remained stable at $723.4 million and our net loss estimate for Hurricane Rita increased to $123.5 million from our previous estimate of $80.9 million. Our initial range of net loss estimates for Hurricane Wilma was determined immediately following the event and our updated estimate reflects our analysis of the latest loss information.

Net income available to common shareholders, excluding net realized gains and losses on investments, net of tax, for 2005 was $105.2 million, or $0.67 per diluted common share, compared with net income of $482.2 million, or $2.91 per diluted common share, for 2004. This same item excluding foreign exchange losses, net of tax, for 2005 was $157.6 million, or $1.00 per diluted common share, compared with net income $468.2 million, or $2.82 per diluted common share for 2004.

Net income available to common shareholders, excluding net realized gains and losses on investments, net of tax, for the fourth quarter of 2005 was $243.6 million, or $1.54 per diluted common share, compared with net income of $177.2 million, or $1.06 per diluted common share, for the same period in 2004. This same item excluding foreign exchange losses, net of tax, for the fourth quarter of 2005 was $245.2 million, or $1.54 per diluted common share, compared with net income of $159.0 million, or $0.95 per diluted common share, for the same period in 2004.

Net income available to common shareholders, 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 income are presented at the end of this release.

Operating highlights for the year ended December 31, 2005 included the following:

    --  Gross premiums written increased by 12.7% to $3,393.9 million
        primarily due to an increase in premiums written in our
        reinsurance segment.

    --  Net premiums written increased to $2,659.0 million from
        $2,423.7 million, an increase of 9.7%.

    --  Net premiums earned increased by 25.9% to $2,553.7 million.
        The increase was largely generated by our reinsurance segment.

    --  Total pre-tax investment income, including net realized gains
        and losses, increased by 44.7% to $239.8 million. The increase
        was primarily due to a combination of higher investment
        balances and higher investment yields offset by an increase in
        realized losses; and

    --  Total shareholders' equity was $3.5 billion and total
        capitalization was $4.0 billion at December 31, 2005. This
        included $200 million of common equity and $500 million of
        preferred equity issued during the third and fourth quarters
        of 2005. This compared to total shareholders equity of $3.2
        billion and total capitalization of $3.7 billion at December
        31, 2004.

Commenting on the 2005 financial year results, John Charman, Chief Executive Officer and President of AXIS Capital , stated: "In a year of unprecedented catastrophe losses, AXIS has clearly demonstrated that its experienced, realistic risk management practice, coupled with its strongly diversified business portfolio, is able to withstand extraordinary losses. Having been consistently involved in business subject to volatility, my 34-year career goal has been to accrete capital meaningfully over the long-term and, at the very least, to be in a position to do so by preserving capital regardless of market circumstances. It's always disappointing to report major loss events; however, I am very proud that AXIS was able to produce net income for 2005 of $90.1 million. We finished the year with $4 billion in total capital. This is capital that was preserved by our focused core underwriting discipline and further strengthened by our capital raisings during the last half of 2005.

Our diversified global franchise and underwriting machine is well-positioned to maximize any benefit wherever and whenever it may appear in this firming market environment. Our underwriters have a proven track record of bringing opportunities to fruition quickly and decisively in an intelligent peer review environment and, in the aftermath of Hurricane Katrina, have been rigorously applying remedial action. AXIS is truly well positioned for 2006 and beyond."

Operating Results

Gross premiums written for 2005 increased 12.7% from 2004 and were derived 55.2% from our insurance segment and 44.8% from our reinsurance segment compared to 63.7% and 36.3%, respectively, for 2004. This change in business mix was due to additional premiums written in our reinsurance business and a decrease in premiums written by our global insurance operations. Our combined ratio increased to 101.8% in 2005 from 84.4% in 2004 primarily due to an increase in the level of net hurricane losses.

During the fourth quarter of 2005, gross premiums written decreased by 2.7% compared to the same period in 2004 and were derived 74.6% from our insurance segment and 25.4% from our reinsurance segment compared to 91.1% and 8.9%, respectively, for the same period in 2004. The change in business mix was primarily due to the decrease in premiums written in global insurance. Our combined ratio decreased to 73.2% in the fourth quarter from 79.3% in the same period in 2004 primarily due to a reduction in the loss ratio.

Insurance Segment

Gross premiums written in our insurance segment decreased by 2.3% to $1,875.0 million for 2005 and 20.4% to $472.2 million for the fourth quarter of 2005 compared to the same periods in 2004. The decreases were driven by a reduction in gross premiums written in global insurance of 21.4%, or $234.2 million for the year, and 48.0%, or $174.8 million for the fourth quarter. The decreases were driven by our underwriting discipline during the deteriorating market conditions that characterized most of 2005. In particular, we significantly reduced the level of aviation and aviation war business written in the fourth quarter of 2005, which is the primary renewal period for this business, as fewer risks met our underwriting criteria. This decline in global insurance gross premiums written, however, was largely offset by an increase in gross premiums written in our U.S. insurance segment. Gross premiums written in our U.S. insurance segment increased 23.0%, or $189.7 million, for the year and 23.6%, or $54.0 million, for the fourth quarter compared to the same periods in 2004. These increases were primarily due to the targeted expansion of our professional lines products and our specialty program business within our property account.

Net premiums written of $1,167.8 million for 2005 declined 14.3% from 2004 primarily as a result of increased ceded premiums in U.S. insurance. For the fourth quarter of 2005, net premiums written were $320.1 million, a 23.9% decrease from the same period in 2004.

Our insurance segment reported a combined ratio of 93.2% for 2005 compared to 81.0% for 2004. The increase was driven by net losses of $405.6 million, or 33.8 percentage points, relating to Hurricanes Katrina, Rita and Wilma compared to net losses of $97.1 million, or 8.5 percentage points, relating to Hurricanes Charley, Frances, Ivan and Jeanne in 2004. The insurance segment experienced favorable prior period reserve development of $268.7 million, or 22.4 percentage points, on short-tail lines of business from accident years 2004 and prior, compared to $106.8 million, or 9.3 percentage points, in 2004.

During the fourth quarter of 2005, the insurance segment generated a combined ratio of 71.9% compared to 68.5% in the same period in 2004. The increase was primarily due to net losses of $70.7 million from Hurricane Wilma, which added 22.4 percentage points to the loss ratio. The insurance segment experienced favorable prior period development of $96.1 million, or 30.4 percentage points, in the quarter on short-tail lines of business from accident years 2004 and prior, compared to $27.4 million, or 9.1 percentage points, in the same period in 2004.

Reinsurance Segment

Our reinsurance segment reported gross premiums written in 2005 of $1,518.9 million, an increase of 39.0% from 2004, and net premiums written in 2005 of $1,491.2 million, an increase of 40.6% from 2004. The increase in gross premiums written was primarily driven by our property, catastrophe and liability lines of business.

The fourth quarter is not a significant renewal date for our reinsurance segment. Gross premiums written were $161.1 million for the fourth quarter of 2005 compared to $58.1 million for the same period in 2004. The increase was primarily due to additional premiums written in our property and liability lines of business.

Our reinsurance segment reported a combined ratio of 106.2% for 2005 compared to 84.5% in 2004, which was largely driven by an increase in the loss ratio from 63.4% to 86.4%. The segment incurred net losses of $613.5 million, or 45.4 percentage points, relating to Hurricanes Katrina, Rita and Wilma compared to net losses of $169.2 million, or 19.2 percentage points, relating to Hurricanes Charley, Frances, Ivan and Jeanne in 2004. Favorable prior period reserve development was from short-tail lines of business and was $114.3 million, or 8.5 percentage points, in 2005 compared to $74.9 million, or 8.5 percentage points for 2004.

The combined ratio in the reinsurance segment for the fourth quarter of 2005 was 69.5% compared to 88.1% for the same period in 2004. The decrease was largely due to a decrease in the loss ratio from 66.7% to 51.5%, which was primarily the result of prior period favorable development from short-tail lines of business of $50.4 million, or 13.6 percentage points, in the quarter compared to $13.0 million, or 5.3 percentage points, in the same period in 2004.

Interest Expense

Interest expense for 2005 was $32.4 million compared to $5.3 million for 2004. Interest expense for the fourth quarter of 2005 was $8.2 million compared to $4.6 million for the same period in 2004. Interest expense consists of interest due on outstanding debt, the amortization of debt offering expenses and discounts and fees relating to our credit facility. Our outstanding debt relates to $500 million of senior unsecured notes issued on November 15, 2004.

Preferred Dividends

Preferred dividends were $4.4 million for 2005 and related to dividends declared on our Series A preferred shares, which were issued in September 2005. Dividends on our Series B preferred shares, issued in November 2005, will be payable commencing in 2006, subject to Board approval.

Investments

Total pre-tax investment income for 2005 of $239.8 million included $256.7 million in net investment income and $16.9 million in realized losses. This was an increase of 44.7% from $165.7 million in 2004. For the fourth quarter of 2005, total pre-tax investment income was $68.0 million and included $78.9 million in net investment income and $10.9 million in realized losses. This was an increase of 31.7% from $51.7 million in the same period in 2004. The increases primarily reflected the positive impact of higher average yields on higher investment balances offset by an increase in realized losses. These increased yields were generated by higher short-term U.S. interest rates together with our increased allocation to other investments.

Capitalization / Shareholders' Equity

Total capitalization at December 31, 2005 was $4.0 billion. In November 2005, we issued 2,500,000 7.5% Series B preferred shares with net proceeds received of $247.5 million and completed the sale of 6,800,000 common shares with net proceeds received of $200.1 million. In September 2005, we issued 10,000,000 7.25% Series A preferred shares with net proceeds received of $242.3 million.

At December 31, 2005, diluted book value per common share was $19.19 and book value per common share was $20.23. 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 February 8, 2006 at 8:00 AM (Eastern) to discuss the year end 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 year and fourth quarter 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 December 31, 2005 of $3.5 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 December 31, 2005 and December 31, 2004
  (Expressed in thousands of U.S. dollars, except share and per share
                               amounts)

                                         December 31,     December 31,
                                              2005            2004
Assets                                                       Note 1
Cash and cash equivalents                  $1,280,990        $632,329
Fixed maturity investments at fair market
 value                                      6,012,425       5,293,877
Other investments                             409,504         105,812
Accrued interest receivable                    59,784          47,487
Securities lending collateral                 998,349         865,311
Insurance and reinsurance balances
 receivable                                 1,026,975         914,562
Deferred acquisition costs                    196,388         211,082
Prepaid reinsurance premiums                  281,579         271,187
Reinsurance recoverable                     1,518,110         596,299
Intangible assets                              37,013          31,734
Other assets                                  104,859          68,605
                                         -------------   -------------
      Total Assets                        $11,925,976      $9,038,285
                                         =============   =============
Liabilities
Reserve for losses and loss expenses       $4,743,338      $2,404,560
Unearned premiums                           1,760,467       1,644,771
Insurance and reinsurance balances
 payable                                      314,232         247,940
Accounts payable and accrued expenses         101,179          89,804
Securities lending payable                    995,287         864,354
Net payable for investments purchased              76          49,854
Debt                                          499,046         498,938
                                         -------------   -------------
      Total Liabilities                     8,413,625       5,800,221
                                         -------------   -------------

Shareholders' Equity
Series A preferred shares                        $125              $-
Series B preferred shares                          31               -
Common shares                                   1,861           1,910
Additional paid-in capital                  2,386,200       2,017,144
Accumulated other comprehensive (loss)
 income                                       (77,798)         12,915
Retained earnings                           1,201,932       1,206,095
                                         -------------   -------------
      Total Shareholders' Equity            3,512,351       3,238,064
                                         -------------   -------------
      Total Liabilities & Shareholders'
       Equity                             $11,925,976      $9,038,285
                                         =============   =============

Note 1: In 2004, certain investments have been reclassified from other
investments to fixed maturity investments to conform to current year
classifications.



                     AXIS CAPITAL HOLDINGS LIMITED
            UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
      For the Quarters and Years ended December 31, 2005 and 2004
  (Expressed in thousands of U.S. dollars, except share and per
                            share amounts)

                         Quarters ended              Years ended
                           December 31,              December 31,
                        2005         2004         2005         2004
                                    Note 2                    Note 2
Revenues
 Gross premiums
  written         $    633,322 $    651,169 $  3,393,885 $  3,012,311
 Premiums ceded       (169,917)    (176,575)    (734,896)    (588,638)
 Change in
  unearned
  premiums             223,461       74,354     (105,306)    (395,276)
                   ------------ ------------ ------------ ------------
 Net premiums
  earned               686,866      548,948    2,553,683    2,028,397

 Net investment
  income                78,938       47,451      256,712      152,072
 Net realized
  (losses) gains       (10,915)       4,216      (16,912)      13,634
 Other insurance
  related income
  (loss)                   198        3,603       (5,085)      11,253
                   ------------ ------------ ------------ ------------
   Total revenues $    755,087 $    604,218 $  2,788,398 $  2,205,356
                   ------------ ------------ ------------ ------------

Expenses
 Net losses and
  loss expenses   $    348,716 $    300,219 $  2,051,129 $  1,246,244
 Acquisition costs      96,175       78,894      337,383      280,568
 General and
  administrative
  expenses              57,507       55,945      212,842      187,305
 Foreign exchange
  losses (gains)         1,719      (18,583)      54,090      (14,484)
 Interest expense        8,191        4,597       32,447        5,285
                   ------------ ------------ ------------ ------------
   Total expenses $    512,308 $    421,072 $  2,687,891 $  1,704,918
                   ------------ ------------ ------------ ------------

 Income before
  income taxes         242,779      183,146      100,507      500,438
 Income tax
  expense               (4,908)      (2,071)      (6,067)      (5,440)
                   ------------ ------------ ------------ ------------
Net Income             237,871      181,075       94,440      494,998
Preferred
 Dividends              (4,379)           -       (4,379)           -
                   ------------ ------------ ------------ ------------
Net income
 available to
 common
 shareholders     $    233,492 $    181,075 $     90,061 $    494,998
                   ============ ============ ============ ============
Weighted average
 common shares and
Common share
 equivalents -
 basic             144,750,783  152,662,584  143,225,774  152,553,677
                   ============ ============ ============ ============
Weighted average
 common shares and
 common share
  equivalents -
  diluted          159,123,364  165,397,980  157,523,952  165,875,823
                   ============ ============ ============ ============
Net income per
 common share -
 basic            $       1.61 $       1.19 $       0.63 $       3.24
                   ============ ============ ============ ============
Net income per
 common share -
 diluted          $       1.47 $       1.09 $       0.57 $       2.98
                   ============ ============ ============ ============
Insurance Ratios
Loss ratio                50.8%        54.7%        80.3%        61.4%
Expense ratio             22.4%        24.6%        21.5%        23.0%
                   ------------ ------------ ------------ ------------
Combined ratio            73.2%        79.3%       101.8%        84.4%
                   ============ ============ ============ ============

Note 2: In 2004, interest expense has been reclassifed from general
administrative expenses 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 December 31, 2005

                                         Global     U.S.      Total
                                         Insurance Insurance Insurance
                                        ------------------------------

Revenues:
Gross premiums written                   $189,647  $282,556  $472,203
Net premiums written                      168,455   151,673   320,128
Net premiums earned                       185,081   131,538   316,619
Other insurance related income                  -       198       198
Expenses:
Net losses and loss expenses              (40,709) (117,264) (157,973)
Acquisition costs                         (25,078)  (16,075)  (41,153)
General and administrative expenses        (8,271)  (20,105)  (28,376)
                                        ------------------------------
Underwriting income (loss) (a)            111,023   (21,708)   89,315

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

Net loss and loss expense ratio              22.0%     89.1%     49.9%
Acquisition cost ratio                       13.5%     12.2%     13.0%
General and administrative expense ratio      4.5%     15.3%      9.0%
                                        ------------------------------
Combined ratio                               40.0%    116.6%     71.9%
                                        ------------------------------


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

Revenues:
Gross premiums written                     $161,119          $633,322
Net premiums written                        143,277           463,405
Net premiums earned                         370,247           686,866
Other insurance related income                    -               198
Expenses:
Net losses and loss expenses               (190,743)         (348,716)
Acquisition costs                           (55,022)          (96,175)
General and administrative expenses         (11,592)          (39,968)
                                        ------------------------------
Underwriting income (loss) (a)              112,890           202,205

Corporate expenses                                   (17,539) (17,539)
Net investment income                                 78,938   78,938
Realized losses on investments                       (10,915) (10,915)
Foreign exchange losses                               (1,719)  (1,719)
Interest expense                                      (8,191)  (8,191)
                                                             ---------
Income before income taxes                                   $242,779
                                                             =========

Net loss and loss expense ratio                51.5%             50.8%
Acquisition cost ratio                         14.9%             14.0%
General and administrative expense ratio        3.1%     2.6%     8.4%
                                        ------------------------------
Combined ratio                                 69.5%             73.2%
                                        ------------         ---------

   (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 December 31, 2004

                                         Global     U.S.      Total
                                         Insurance Insurance Insurance
                                        ------------------------------

Revenues:
Gross premiums written                   $364,450  $228,598  $593,048
Net premiums written                      313,950   106,846   420,796
Net premiums earned                       200,805   101,450   302,255
Other insurance related income              3,377         -     3,377
Expenses:
Net losses and loss expenses              (83,248)  (52,475) (135,723)
Acquisition costs                         (35,423)   (3,302)  (38,725)
General and administrative expenses       (11,005)  (21,555)  (32,560)
                                        ------------------------------
Underwriting income (a)                    74,506    24,118    98,624

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

Net loss and loss expense ratio              41.5%     51.7%     44.9%
Acquisition cost ratio                       17.6%      3.3%     12.8%

General and administrative expense ratio      5.5%     21.2%     10.8%
                                        ------------------------------
Combined ratio                               64.6%     76.2%     68.5%
                                        ------------------------------


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

Revenues:
Gross premiums written                      $58,121        - $651,169
Net premiums written                         53,798        -  474,594
Net premiums earned                         246,693        -  548,948
Other insurance related income                  226        -    3,603
Expenses:
Net losses and loss expenses               (164,496)       - (300,219)
Acquisition costs                           (40,169)       -  (78,894)
General and administrative expenses         (12,604)       -  (45,164)
                                        ------------------------------
Underwriting income (a)                      29,650        -  128,274

Corporate expenses                                   (10,781) (10,781)
Net investment income                                 47,451   47,451
Realized gains on investments                          4,216    4,216
Foreign exchange gains                                18,583   18,583
Interest expense                                      (4,597)  (4,597)
                                                             ---------
Income before income taxes                                   $183,146
                                                             =========

Net loss and loss expense ratio                66.7%             54.7%
Acquisition cost ratio                         16.3%             14.4%

General and administrative expense ratio        5.1%     2.0%    10.2%
                                        ------------------------------
Combined ratio                                 88.1%             79.3%
                                        ------------         ---------

   (a) The Company utilizes underwriting income 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 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
is the difference between the revenue and expense items.



                     AXIS CAPITAL HOLDINGS LIMITED
                 UNAUDITED CONSOLIDATED SEGMENTAL DATA
                     Year ended December 31, 2005

                                       Global      U.S.      Total
                                       Insurance Insurance  Insurance
                                      --------------------------------

Revenues:
Gross premiums written                 $861,098 $1,013,919 $1,875,017
Net premiums written                    649,703    518,064  1,167,767
Net premiums earned                     748,015    453,534  1,201,549
Other insurance related (loss) income    (5,865)       780     (5,085)
Expenses:
Net losses and loss expenses           (492,667)  (390,140)  (882,807)
Acquisition costs                       (97,908)   (21,092)  (119,000)
General and administrative expenses     (36,794)   (80,909)  (117,703)
                                      --------------------------------
Underwriting income (loss) (a)          114,781    (37,827)    76,954

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

Net loss and loss expense ratio            65.9%      86.0%      73.5%
Acquisition cost ratio                     13.1%       4.7%       9.9%
General and administrative expense
 ratio                                      4.9%      17.8%       9.8%
                                      --------------------------------
Combined ratio                             83.9%     108.5%      93.2%
                                      --------------------------------


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

Revenues:
Gross premiums written                 $1,518,868          $3,393,885
Net premiums written                    1,491,222           2,658,989
Net premiums earned                     1,352,134           2,553,683
Other insurance related (loss) income           -              (5,085)
Expenses:
Net losses and loss expenses           (1,168,322)         (2,051,129)
Acquisition costs                        (218,383)           (337,383)
General and administrative expenses       (48,410)           (166,113)
                                      --------------------------------
Underwriting income (loss) (a)            (82,981)             (6,027)

Corporate expenses                                 (46,729)   (46,729)
Net investment income                              256,712    256,712
Realized losses on investments                     (16,912)   (16,912)
Foreign exchange losses                            (54,090)   (54,090)
Interest expense                                   (32,447)   (32,447)
                                                           -----------
Income before income taxes                                   $100,507
                                                           ===========

Net loss and loss expense ratio              86.4%               80.3%
Acquisition cost ratio                       16.2%               13.2%
General and administrative expense
 ratio                                        3.6%     1.8%       8.3%
                                      --------------------------------
Combined ratio                              106.2%              101.8%
                                      ------------         -----------

   (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
                     Year ended December 31, 2004

                                        Global     U.S.      Total
                                       Insurance  Insurance Insurance
                                      --------------------------------

Revenues:
Gross premiums written                $1,095,328  $824,235 $1,919,563
Net premiums written                     933,198   430,087  1,363,285
Net premiums earned                      796,566   349,287  1,145,853
Other insurance related income            10,264         -     10,264
Expenses:
Net losses and loss expenses            (451,724) (234,746)  (686,470)
Acquisition costs                       (124,953)  (10,779)  (135,732)
General and administrative expenses      (35,052)  (71,482)  (106,534)
                                      --------------------------------
Underwriting income (a)                  195,101    32,280    227,381

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

Net loss and loss expense ratio             56.7%     67.2%      59.9%
Acquisition cost ratio                      15.7%      3.1%      11.8%
General and administrative expense
 ratio                                       4.4%     20.5%       9.3%
                                      --------------------------------
Combined ratio                              76.8%     90.8%      81.0%
                                      --------------------------------


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

Revenues:
Gross premiums written                 $1,092,748        - $3,012,311
Net premiums written                    1,060,388        -  2,423,673
Net premiums earned                       882,544        -  2,028,397
Other insurance related income                989        -     11,253
Expenses:
Net losses and loss expenses             (559,774)       - (1,246,244)
Acquisition costs                        (144,836)       -   (280,568)
General and administrative expenses       (41,662)       -   (148,196)
                                      --------------------------------
Underwriting income (a)                   137,261        -    364,642

Corporate expenses                                 (39,109)   (39,109)
Net investment income                              152,072    152,072
Realized gains on investments                       13,634     13,634
Foreign exchange gains                              14,484     14,484
Interest expense                                    (5,285)    (5,285)
                                                           -----------
Income before income taxes                                   $500,438
                                                           ===========

Net loss and loss expense ratio              63.5%               61.4%
Acquisition cost ratio                       16.4%               13.8%
General and administrative expense
 ratio                                        4.7%     1.9%       9.2%
                                      --------------------------------
Combined ratio                               84.5%               84.4%
                                      ------------         -----------

   (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, Rita and Wilma 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 our losses related to Hurricanes Katrina, Rita and Wilma exceeding our estimates. Additional important factors that could cause actual events or results to be materially different from our expectation 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 income available to common shareholders, excluding net realized gains and losses on investments, net of tax", "net income available to common shareholders, excluding net realized gains and losses on investments and foreign exchange, net of tax" and "diluted book value per common 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 INCOME AVAILABLE TO COMMON SHAREHOLDERS EXCLUDING
         REALIZED GAINS AND LOSSES ON INVESTMENTS, NET OF TAX
      For the Quarters and Years ended December 31, 2005 and 2004
  (Expressed in thousands of U.S. dollars, except per share amounts)

                         Quarters ended              Years ended
                           December 31,              December 31,
                        2005         2004         2005         2004
Net income available
 to common
 shareholders         $233,492     $181,075      $90,061     $494,998

Adjustment for net
 realized losses
 (gains) on
 investments            10,915       (4,216)      16,912      (13,634)
Adjustment for
 associated tax
 impact of net
 realized (losses)
 gains on
 investments              (775)         326       (1,813)         971

Net income
 available to
 common shareholders
 excluding realized
 (losses) gains on
 investments, net  ------------ ------------ ------------ ------------
 of tax                $243,632     $177,185     $105,160     $482,235
                   ============ ============ ============ ============

Net income per
 common share -
 diluted                 $1.47        $1.09        $0.57        $2.98
                   ============ ============ ============ ============

Adjustment for net
 realized (losses)
 gains on
 investments              0.07        (0.03)        0.11        (0.08)
Adjustment for
 associated tax
 impact of net
 realized (losses)
 gains on investments        -            -        (0.01)        0.01

Net income excluding
 realized (losses)
 gains on
 investments, net
 of tax per diluted------------ ------------ ------------ ------------
 common share            $1.54        $1.06        $0.67        $2.91
                   ============ ============ ============ ============
Weighted average
 common shares and
 common share
 equivalents -
 diluted           159,123,364  165,397,980  157,523,952  165,875,823
                   ============ ============ ============ ============



                     AXIS CAPITAL HOLDINGS LIMITED
               NON-GAAP FINANCIAL MEASURE RECONCILIATION
 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS EXCLUDING REALIZED GAINS
   AND LOSSES ON INVESTMENTS AND FOREIGN EXCHANGE LOSSES, NET OF TAX
      For the Quarters and Years ended December 31, 2005 and 2004
  (Expressed in thousands of U.S. dollars, except per share amounts)

                         Quarters ended              Years ended
                           December 31,              December 31,
                        2005         2004         2005         2004

Net income
 available to
 common
 shareholders         $233,492     $181,075      $90,061     $494,998

Adjustment for net
 realized losses
 (gains) on
 investments            10,915       (4,216)      16,912      (13,634)
Adjustment for
 foreign exchange
 losses (gains)          1,719      (18,583)      54,090      (14,484)
Adjustment for
 associated tax
 impact                   (891)         739       (3,454)       1,325

Net income
 available to
 common shareholders
 excluding realized
 (losses) gains on
 investments and
 foreign exchange
 gains, (losses)   ------------ ------------ ------------ ------------
 net of tax          $245,235     $159,015     $157,609     $468,205
                   ============ ============ ============ ============
Net income per
 common share -
 diluted                 $1.47        $1.09        $0.57        $2.98
                   ============ ============ ============ ============

Adjustment for net
 realized losses
 (gains) on
 investments              0.07        (0.03)        0.11        (0.08)
Adjustment for
 foreign exchange
 losses                   0.01        (0.11)        0.34        (0.09)
Adjustment for
 associated tax
 impact                  (0.01)           -        (0.02)        0.01

Net income
 excluding realized
 (losses) gains on
 investments and
 foreign exchange
 gains, (losses)
 net of tax per
 common diluted    ------------ ------------ ------------ ------------
 share                   $1.54        $0.95        $1.00        $2.82
                   ============ ============ ============ ============

Weighted average
 common shares and
 common share
 equivalents -
 diluted           159,123,364  165,397,980  157,523,952  165,875,823
                   ============ ============ ============ ============



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

                                             December 31, December 31,
                                                 2005         2004


Total shareholders' equity                    $3,512,351   $3,238,064
less preferred equity                           (500,000)           -
                                             ------------ ------------
Common shareholders' equity                   $3,012,351   $3,238,064

Common shares outstanding                    148,868,759  152,764,917

                                             ------------ ------------
Book value per common share                       $20.23       $21.20
                                             ============ ============

Diluted book value on an "as if converted
 basis"

Common shareholders' equity                   $3,012,351   $3,238,064
add in:
  proceeds on exercise of options                117,808       94,724
  proceeds on exercise of warrants               244,812      244,812

                                             ------------ ------------
Adjusted shareholders' equity                  3,374,971    3,577,600
                                             ------------ ------------

As if converted diluted shares outstanding
Common shares outstanding                    148,868,759  152,764,917
add in:
  vesting of restricted stock                  1,172,550    2,182,700
  exercise of options                          6,174,464    5,694,181
  exercise of warrants                        19,650,509   19,619,152

                                             ------------ ------------
Diluted common shares outstanding            175,866,282  180,260,950
                                             ------------ ------------

                                             ------------ ------------
Diluted book value per common share               $19.19       $19.85
                                             ============ ============

    CONTACT: Investor:
             AXIS Capital Holdings Limited

             Andrew Cook / Linda Ventresca, 441-297-9513
             info@axiscapital.com
             or
             Media:
             Kekst and Company
             Joseph Kuo / Caroline Gentile, 212-521-4800

    SOURCE: AXIS Capital Holdings Limited