Third Quarter 2008 Financial Supplement

EX-99.2 3 dex992.htm THIRD QUARTER 2008 FINANCIAL SUPPLEMENT Third Quarter 2008 Financial Supplement

Exhibit 99.2

LOGO

AXIS Capital Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT

THIRD QUARTER 2008

AXIS Capital Holdings Limited

92 Pitts Bay Road

Pembroke HM 08 Bermuda

Contact Information:

Linda Ventresca

Investor Relations

441 405 2727

investorrelations@axiscapital.com

Website Information:

www.axiscapital.com

This report is for informational purposes only. It should be read in conjunction with the documents that we file with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.

AXIS Capital Holdings Limited

FINANCIAL SUPPLEMENT TABLE OF CONTENTS


		Page(s)
i. Basis of Presentation		i - iii

I. Financial Highlights		1

II. Income Statements
a. Consolidated Statements of Income - Quarterly		2
b. Consolidated Statements of Income - YTD		3
c. Consolidated Segment Data		4
d. Gross Premium Written by Segment by Line of Business		5
e. Segment Consecutive Quarters		6-7

III. Balance Sheets
a. Consolidated Balance Sheets		8
b. Summary Investment Portfolio Information		9
c. Investment Portfolio Composition - Quarterly		10
d. Investment Portfolio: Mortgage and Asset Backed Securities		11
e. Investment Portfolio: Subprime and Alternative-A Holdings in Direct Investment Portfolio		12
f. Investment Portfolio: Largest Ten Corporate Holdings		13
g. Investment Portfolio: Financial Issuer Exposure in Fixed Maturity Portfolio		14
h. Net Realized and Net Unrealized Investments Gains (Losses)		15
i. Reinsurance Recoverable Analysis		16-17

IV. Loss Reserve Analysis
a. Paid to Incurred Analysis		18
b. Paid to Incurred Analysis by Segment		19
c. Segment Consecutive Quarters		20-21
d. Third Quarter 2008 Impact of Hurricanes Gustav and Ike		22

V. Share Analysis
a. Earnings Per Common Share Analysis - As Reported		23
b. Earnings Per Common Share Analysis and Common Share Rollforward-Quarterly		24
c. Diluted Book Value Per Common Share Analysis		25

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

•

All financial information contained herein is unaudited, except for the consolidated balance sheet and statement of income at and for the year ended December 31, 2007.

•

Unless otherwise noted, all data is in thousands, except for per share amounts and ratio information. Amounts may not reconcile exactly due to small rounding differences.

•

NM - Not meaningful; NR - Not Reported; NA - Not applicable

Cautionary Note Regarding Forward-Looking Statements:

This financial supplement may contain forward-looking statements which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about our beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those included in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of other important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in our most recent annual report on Form 10-K, quarterly report on Form 10-Q and our other documents on file with the Securities and Exchange Commission. AXIS undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

BUSINESS DESCRIPTIONS

INSURANCE SEGMENT

Our insurance segment provides insurance coverage on a worldwide basis. The following are the lines of business in our insurance segment:

Property: provides physical damage and business interruption coverage primarily for industrial and commercial properties and physical damage, business interruption and liability coverage for onshore energy properties and operations. The book consists of both primary and excess risks, some of which are catastrophe-exposed.

Marine: provides coverage for hull, liability, cargo and specie and recreational marine risks. These risks include property damage or physical loss to ships, pollution damage caused by vessels on a sudden and accidental basis, protection for general cargo and the contents of armored cars, vaults, exhibitions and museums, and specific war related risks. This line of business also provides physical damage, business interruption and liability coverage for offshore energy property and operations.

Terrorism: provides coverage for physical damage and business interruption of an insured following an act of terrorism.

Aviation: includes hull and liability and specific war coverage for passenger and cargo airlines and privately owned aircraft as well as select aviation product liability coverage.

Political risk: provides protection against sovereign default or sovereign actions that result in the impairment of cross-border investments for banks and major corporations. This book also provides sovereign and corporate credit insurance, where lenders seek to mitigate the risk of non-payment from their borrowers.

This line of business covers a range of perils that can affect foreign direct investments and assets, project finance, export or import transactions or cross-border financings to private or sovereign borrowers for working capital, trade-related or capital market borrowings. Typical insured risks include confiscation, expropriation, nationalization; currency inconvertibility and non-transfer; terrorism, sabotage, war, insurrection, rebellion; government act, law order or decree; contract frustration, non-performance or payment default, and wrongful calling of contract guarantees and bonds. Coverages are tailored to the insured’s requirements for a broad range of overseas exposures, including equity investments, physical assets, cross-border loans or contracts for goods and services.

Professional lines: includes coverage for directors’ and officers’ liability, errors and omissions liability, employment practices liability, media, cyber, technology and miscellaneous professional liability coverage.

Liability: primarily targets general liability and umbrella and excess liability in the U.S. excess and surplus lines markets. Target classes include mercantile, manufacturing and building/premises, with particular emphasis on commercial and consumer products, commercial construction and miscellaneous general liability.

Other: primarily includes employee medical coverage for self-insured, small and medium sized employers for losses in excess of a retention.

LOGO

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

BUSINESS DESCRIPTIONS (CONTINUED)

REINSURANCE SEGMENT

Our reinsurance segment provides property and casualty reinsurance to insurance companies on a worldwide basis. The following are the lines of business we write on both a treaty and facultative basis:

Catastrophe: provides protection for most catastrophic losses that are covered in the underlying insurance policies written by our ceding company clients. The exposure in the underlying policies is principally property exposure but also covers other exposures including workers compensation, personal accident and life. The principal perils in this portfolio are hurricane and windstorm, earthquake, flood, tornado, hail and fire. In some instances, terrorism may be a covered peril or the only peril. We underwrite catastrophe reinsurance principally on an excess of loss basis, meaning that our exposure only arises when our customers’ claims exceed a certain retained amount.

Property: includes reinsurance written on both a pro rata and a per risk basis and covers underlying personal lines and commercial property exposures. Property pro rata treaty reinsurance covers a cedent’s aggregate losses from all events in the covered period on a proportional basis. Property per risk treaty reinsurance reinsures a portfolio of particular property risks of ceding companies on an excess of loss basis.

Professional Liability: covers directors’ and officers’ liability, employment practices liability, medical malpractice and miscellaneous errors and omissions insurance risks.

Credit and Bond: consists principally of reinsurance of trade credit insurance products and includes both proportional and excess-of loss structures. The underlying insurance indemnifies sellers of goods and services against a payment default by the buyer of those goods and services. Also included in this book is coverage for ceding insurers against losses arising from a broad array of surety bonds issued by bond insurers principally to satisfy regulatory demands in a variety of jurisdictions around the world, but predominantly in Europe.

Motor: provides coverage to insurers for motor liability losses arising out of any one occurrence. The occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence.

Liability: provides coverage to insurers of standard casualty lines, including auto liability, general liability, personal and commercial umbrella and workers’ compensation.

Engineering: provides coverage for all types of civil construction risks and risks associated with erection, testing and commissioning of machinery and plants during the construction stage. This line of business also includes operational risks for machinery, plant and equipment, electronic equipment and business interruption. We write engineering business on a proportional and non-proportional treaty basis as well as on a facultative basis.

Other: includes aviation, marine, personal accident and crop reinsurance.

LOGO

iii

AXIS Capital Holdings Limited

FINANCIAL HIGHLIGHTS


		Quarter ended September 30,								Nine months ended September 30,
		2008			2007			Change		2008			2007			Change
HIGHLIGHTS	Gross premiums written	$	725,283		$	755,224		(4.0	)%	$	2,863,633		$	3,017,225		(5.1	)%
	Gross premiums written - Insurance		*55.5*	%		63.7	%	(8.1	)%		*48.6*	%		50.7	%	(2.1	)%
	Gross premiums written - Reinsurance		*44.5*	%		36.3	%	8.1	%		*51.4*	%		49.3	%	2.1	%
	Net premiums written	$	551,416		$	583,902		(5.6	)%	$	2,327,407		$	2,478,602		(6.1	)%
	Net premiums earned	$	689,970		$	685,845		0.6	%	$	2,028,895		$	2,065,090		(1.8	)%
	Net premiums earned - Insurance		*42.5*	%		44.0	%	(1.5	)%		*43.9*	%		44.3	%	(0.4	)%
	Net premiums earned - Reinsurance		*57.5*	%		56.0	%	1.5	%		*56.1*	%		55.7	%	0.4	%
	Net (loss) income available to common shareholders	$	(249,346	)	$	269,975		(192.4	)%	$	219,643		$	749,143		(70.7	)%
	Reserve for losses and loss expenses		6,406,204			5,531,379		15.8	%		6,406,204			5,531,379		15.8	%
	Total shareholders’ equity		4,601,190			4,943,592		(6.9	)%		4,601,190			4,943,592		(6.9	)%

PER COMMON SHARE AND COMMON SHARE DATA	Basic earnings per common share	$	(1.79	)	$	1.84		(197.3	)%	$	1.55		$	5.04		(69.2	)%
	Diluted earnings per common share	$	(1.79	)	$	1.65		(208.8	)%	$	1.40		$	4.53		(69.2	)%
	Weighted average common shares outstanding		139,335			146,845		(5.1	)%		141,628			148,753		(4.8	)%
	Diluted weighted average common shares outstanding		139,335			164,064		(15.1	)%		157,315			165,458		(4.9	)%
	Book value per common share	$	29.72		$	30.50		(2.5	)%	$	29.72		$	30.50		(2.5	)%
	Accumulated dividends paid per common share	$	2.72		$	2.19		24.2	%	$	2.72		$	2.19		24.2	%
	Diluted book value per common share (treasury stock method) [a]	$	26.25		$	26.93		(2.5	)%	$	26.25		$	26.93		(2.5	)%

FINANCIAL RATIOS	ROACE [b]		(22.5	)%		25.0	%	(47.5	)%		6.7	%		23.9	%	(17.2	)%

	Net loss and loss expense ratio		102.3	%		47.9	%	54.4	%		70.9	%		52.3	%	18.6	%
	Acquisition cost ratio		13.1	%		14.6	%	(1.5	)%		13.9	%		14.2	%	(0.3	)%
	General and administrative expense ratio		12.6	%		11.6	%	0.9	%		12.2	%		10.2	%	2.0	%

	Combined ratio		128.0	%		74.1	%	53.9	%		97.0	%		76.7	%	20.3	%



INVESTMENT DATA	Total assets	$	15,175,454		$	14,711,904		3.2	%	$	15,175,454		$	14,711,904		3.2	%
	Total cash and investments [c]		10,645,111			10,285,370		3.5	%		10,645,111			10,285,370		3.5	%
	Net investment income		50,583			118,908		(57.5	)%		273,249			357,873		(23.6	)%
	Net realized investment losses		(89,079	)		(1,192	)	nm			(51,842	)		(5,548	)	nm
	Total return on cash and investments [d]		(3.6	)%		1.9	%	(5.5	)%		(2.8	)%		3.6	%	(6.4	)%
	Annualized effective yield of invested assets [e]		4.8	%		5.0	%	(0.2	)%		4.8	%		5.0	%	(0.2	)%

[a]

To conform with our current period presentation, we have recalculated the diluted book value per common share for the third quarter of 2007 using the “treasury stock” method.

[b]

Return on average common equity (“ROACE”) is calculated by dividing net income available to common shareholders for the period by the average common shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the period. Percentages presented are annualized for the respective quarters.

[c]

Cash and investments represents the total cash, available for sale investments, other investments, accrued interest receivable and net receivable (payable) for investments sold (purchased).

[d]

In calculating total return, we include net investment income, net realized investment gains (losses) and the change in unrealized gains (losses) generated by our average cash and investment balances.

[e]

Annualized effective yield of invested assets is calculated by dividing the net income generated from invested assets by the average balance of the assets managed by our external investment managers.

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY


	Q3 2008			Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q3 2006
UNDERWRITING REVENUES
Gross premiums written	$	725,283		$	874,169		$	1,264,181		$	572,865		$	755,224		$	734,910
Premiums ceded		(173,867	)		(189,953	)		(172,406	)		(187,710	)		(171,322	)		(128,997	)

Net premiums written		551,416			684,216			1,091,775			385,155			583,902			605,913

Gross premiums earned		862,338			845,249			835,514			860,421			870,752			858,310
Ceded premiums amortized		(172,368	)		(164,958	)		(176,880	)		(191,101	)		(184,907	)		(165,530	)

Net premiums earned		689,970			680,291			658,634			669,320			685,845			692,780

Other insurance related (loss) income		(13,806	)		(7,269	)		2,002			273			1,005			804

Total underwriting revenues		676,164			673,022			660,636			669,593			686,850			693,584

UNDERWRITING EXPENSES
Net losses and loss expenses		705,531			371,717			361,681			290,546			328,193			365,958
Acquisition costs		90,333			97,780			94,480			90,574			100,039			103,615
General and administrative expenses		66,727			65,218			65,189			81,785			59,090			48,303

Total underwriting expenses		862,591			534,715			521,350			462,905			487,322			517,876

UNDERWRITING (LOSS) INCOME		(186,427	)		138,307			139,286			206,688			199,528			175,708

OTHER OPERATING REVENUE (EXPENSES)
Net investment income		50,583			137,015			85,651			125,000			118,908			98,787
Net realized (losses) gains on investments		(89,079	)		1,552			35,685			10,778			(1,192	)		(1,722	)
Interest expense and financing costs		(7,941	)		(7,890	)		(7,958	)		(7,912	)		(13,929	)		(8,239	)

Total other operating (expenses) revenue		(46,437	)		130,677			113,378			127,866			103,787			88,826

OTHER (EXPENSES) REVENUE
Net foreign exchange gains (losses)		7,627			(6,564	)		20,297			349			7,202			(2,738	)
Corporate expenses [a]		(19,995	)		(17,735	)		(13,561	)		(11,053	)		(20,723	)		(20,167	)

Total other (expenses) revenue		(12,368	)		(24,299	)		6,736			(10,704	)		(13,521	)		(22,905	)

(LOSS) INCOME BEFORE INCOME TAXES		(245,232	)		244,685			259,400			323,850			289,794			241,629
Income tax recovery (expense)		5,104			(4,199	)		(12,459	)		(8,547	)		(10,677	)		(6,181	)

NET (LOSS) INCOME		(240,128	)		240,486			246,941			315,303			279,117			235,448
Preferred share dividends		(9,218	)		(9,219	)		(9,219	)		(9,203	)		(9,142	)		(9,226	)

NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	(249,346	)	$	231,267		$	237,722		$	306,100		$	269,975		$	226,222


KEY RATIOS/PER COMMON SHARE DATA
Net loss and loss expense ratio		102.3	%		54.6	%		54.9	%		43.4	%		47.9	%		52.8	%
Acquisition cost ratio		13.1	%		14.4	%		14.3	%		13.5	%		14.6	%		15.0	%
General and administrative expense ratio [a]		12.6	%		12.2	%		12.0	%		13.9	%		11.6	%		9.9	%

Combined ratio		128.0	%		81.2	%		81.2	%		70.8	%		74.1	%		77.7	%


Weighted average basic shares outstanding		139,335			142,333			143,239			143,877			146,845			149,884
Weighted average diluted shares outstanding		139,335			157,602			160,184			161,732			164,064			164,701

Basic earnings per common share	$	(1.79	)	$	1.62		$	1.66		$	2.13		$	1.84		$	1.51
Diluted earnings per common share	$	(1.79	)	$	1.47		$	1.48		$	1.89		$	1.65		$	1.37
ROACE [b]		(22.5	)%		19.2	%		20.0	%		26.9	%		25.0	%		26.0	%

[a]

Corporate expenses are included in the calculation of the general and administrative expense ratio.

[b]

Percentages presented are annualized for each quarter.

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - YTD


	Nine months ended									Year ended
	September 30, 2008			September 30, 2007			September 30, 2006			December 31, 2007			December 31, 2006
UNDERWRITING REVENUES
Gross premiums written	$	2,863,633		$	3,017,225		$	2,895,030		$	3,590,090		$	3,609,036
Premiums ceded	$	(536,226	)		(538,623	)		(476,057	)		(726,333	)		(619,857	)

Net premiums written		2,327,407			2,478,602			2,418,973			2,863,757			2,989,179

Gross premiums earned		2,543,101			2,599,395			2,488,136			3,459,816			3,353,884
Ceded premiums amortized		(514,206	)		(534,305	)		(482,663	)		(725,406	)		(659,614	)

Net premiums earned		2,028,895			2,065,090			2,005,473			2,734,410			2,694,270

Other insurance related (loss) income		(19,073	)		3,638			1,866			3,911			2,893

Total underwriting revenues		2,009,822			2,068,728			2,007,339			2,738,321			2,697,163

UNDERWRITING EXPENSES
Net losses and loss expenses		1,438,929			1,079,714			1,096,598			1,370,260			1,425,855
Acquisition costs		282,593			293,923			295,151			384,497			386,959
General and administrative expenses		197,134			163,746			138,446			245,531			209,574

Total underwriting expenses		1,918,656			1,537,383			1,530,195			2,000,288			2,022,388

UNDERWRITING INCOME		91,166			531,345			477,144			738,033			674,775

OTHER OPERATING REVENUE (EXPENSES)
Net investment income		273,249			357,873			284,018			482,873			407,100
Net realized (losses) gains on investments		(51,842	)		(5,548	)		(22,428	)		5,230			(25,702	)
Interest expense		(23,789	)		(43,241	)		(24,639	)		(51,153	)		(32,954	)

Total other operating revenue		197,618			309,084			236,951			436,950			348,444

OTHER REVENUE (EXPENSES)
Net foreign exchange gains		21,360			16,477			25,427			16,826			32,505
Corporate expenses		(51,291	)		(47,247	)		(43,092	)		(58,300	)		(58,822	)

Total other (expenses) revenue		(29,931	)		(30,770	)		(17,665	)		(41,474	)		(26,317	)

INCOME BEFORE INCOME TAXES		258,853			809,659			696,430			1,133,509			996,902
Income tax expense		(11,554	)		(32,943	)		(23,540	)		(41,491	)		(33,842	)

NET INCOME		247,299		$	776,716		$	672,890		$	1,092,018		$	963,060

Preferred share dividends		(27,656	)		(27,573	)		(28,083	)		(36,775	)		(37,925	)

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	219,643		$	749,143		$	644,807		$	1,055,243		$	925,765

KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio		70.9	%		52.3	%		54.7	%		50.1	%		52.9	%
Acquisition cost ratio		13.9	%		14.2	%		14.7	%		14.1	%		14.4	%
General and administrative expense ratio [a]		12.2	%		10.2	%		9.1	%		11.1	%		10.0	%

Combined ratio		97.0	%		76.7	%		78.5	%		75.3	%		77.3	%

Weighted average basic shares outstanding		141,628			148,753			149,657			147,524			149,745
Weighted average diluted shares outstanding		157,315			165,458			163,863			164,515			164,394
Basic earnings per share	$	1.55		$	5.04		$	4.31		$	7.15		$	6.18
Diluted earnings per share	$	1.40		$	4.53		$	3.94		$	6.41		$	5.63
ROACE [b]		6.7	%		23.9	%		25.8	%		24.6	%		26.7	%

[a]

Corporate expenses are included in the calculation of the general and administrative expense ratio.

[b]

Percentages presented are annualized for the nine month period.

AXIS Capital Holdings Limited

CONSOLIDATED SEGMENT DATA


	Three months ended September 30, 2008									Nine months ended September 30, 2008
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total
UNDERWRITING REVENUES
Gross premiums written	$	402,672		$	322,611		$	725,283		$	1,392,993		$	1,470,640		$	2,863,633
Net premiums written		235,666			315,750			551,416			872,909			1,454,498			2,327,407

Gross premiums earned		461,871			400,467			862,338			1,393,019			1,150,082			2,543,101
Ceded premiums amortized		(168,299	)		(4,069	)		(172,368	)		(502,461	)		(11,745	)		(514,206	)

Net premiums earned		293,572			396,398			689,970			890,558			1,138,337			2,028,895
Other insurance related (loss) income		(13,751	)		(55	)		(13,806	)		(20,073	)		1,000			(19,073	)

Total underwriting revenues		279,821			396,343			676,164			870,485			1,139,337			2,009,822


UNDERWRITING EXPENSES
Net losses and loss expenses		230,577			474,954			705,531			549,723			889,206			1,438,929
Acquisition costs		21,964			68,369			90,333			84,798			197,795			282,593
General and administrative expenses		49,361			17,366			66,727			145,321			51,813			197,134

Total underwriting expenses		301,902			560,689			862,591			779,842			1,138,814			1,918,656

UNDERWRITING (LOSS) INCOME	$	(22,081	)	$	(164,346	)	$	(186,427	)	$	90,643		$	523		$	91,166


KEY RATIOS
Net loss and loss expense ratio		78.5	%		119.8	%		102.3	%		61.7	%		78.1	%		70.9	%
Acquisition cost ratio		7.5	%		17.2	%		13.1	%		9.6	%		17.4	%		13.9	%
General and administrative expense ratio		16.8	%		4.4	%		9.7	%		16.3	%		4.5	%		9.7	%
Corporate expense ratio								2.9	%								2.5	%

Combined ratio		102.8	%		141.4	%		128.0	%		87.6	%		100.0	%		97.0	%

AXIS Capital Holdings Limited

GROSS PREMIUM WRITTEN BY SEGMENT BY LINE OF BUSINESS - QUARTERLY


	Quarter ended
	Q3 2008		Q2 2008			Q1 2008		Q4 2007			Q3 2007		Q3 2006
INSURANCE SEGMENT
Property	$	137,417	$	175,017		$	127,291	$	150,283		$	147,033	$	145,334
Marine		41,121		64,601			64,887		19,984			49,971		54,904
Terrorism		7,112		14,612			8,349		10,216			11,672		18,454
Aviation		11,735		8,715			17,486		28,788			14,518		15,384
Political risk		24,817		65,636			54,576		75,410			71,442		35,955
Professional lines		137,553		175,199			108,177		146,095			123,824		112,469
Liability		42,833		52,406			49,923		74,294			53,158		57,559
Other		84		(722	)		4,168		4,256			9,111		13,057

TOTAL INSURANCE SEGMENT		402,672		555,464			434,857		509,326			480,729		453,116


REINSURANCE SEGMENT
Catastrophe		115,216		117,306			212,948		8,743			76,044		100,759
Property		64,683		86,416			141,408		(578	)		55,965		53,933
Professional lines		55,378		31,806			87,376		27,909			54,645		49,431
Credit and bond		5,083		9,230			134,574		5,363			6,705		1,889
Motor		7,202		16,831			75,526		902			5,886		5,896
Liability		54,659		28,917			108,759		8,477			59,233		48,640
Engineering		17,381		7,895			53,224		10,428			13,578		17,158
Other		3,009		20,304			15,509		2,295			2,439		4,088

TOTAL REINSURANCE SEGMENT		322,611		318,705			829,324		63,539			274,495		281,794

CONSOLIDATED TOTAL	$	725,283	$	874,169		$	1,264,181	$	572,865		$	755,224	$	734,910

AXIS Capital Holdings Limited

INSURANCE SEGMENT DATA - QUARTERLY


	Q3 2008			Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q3 2006
UNDERWRITING REVENUES
Gross premiums written	$	402,672		$	555,464		$	434,857		$	509,326		$	480,729		$	453,116
Net premiums written		235,666			365,511			271,732			322,111			315,605			323,618

Gross premiums earned		461,871			458,545			472,603			480,158			483,046			490,150
Ceded premiums amortized		(168,299	)		(161,116	)		(173,046	)		(186,820	)		(181,121	)		(162,449	)

Net premiums earned		293,572			297,429			299,557			293,338			301,925			327,701
Other insurance related (loss) income		(13,751	)		(7,509	)		1,187			123			610			412

Total underwriting revenues		279,821			289,920			300,744			293,461			302,535			328,113

UNDERWRITING EXPENSES
Net losses and loss expenses		230,577			159,696			159,450			101,652			113,092			182,280
Acquisition costs		21,964			31,120			31,714			28,911			34,721			40,796
General and administrative expenses		49,361			48,141			47,819			57,858			43,262			36,141

Total underwriting expenses		301,902			238,957			238,983			188,421			191,075			259,217

UNDERWRITING (LOSS) INCOME	$	(22,081	)	$	50,963		$	61,761		$	105,040		$	111,460		$	68,896

KEY RATIOS
Net loss and loss expense ratio		78.5	%		53.7	%		53.2	%		34.7	%		37.5	%		55.6	%
Acquisition cost ratio		7.5	%		10.4	%		10.6	%		9.9	%		11.5	%		12.4	%
General and administrative expense ratio		16.8	%		16.2	%		16.0	%		19.7	%		14.3	%		11.0	%

Combined ratio		102.8	%		80.3	%		79.8	%		64.3	%		63.3	%		79.0	%

AXIS Capital Holdings Limited

REINSURANCE SEGMENT DATA - QUARTERLY


	Q3 2008			Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q3 2006
UNDERWRITING REVENUES
Gross premiums written	$	322,611		$	318,705		$	829,324		$	63,539		$	274,495		$	453,116
Net premiums written		315,750			318,705			820,043			63,044			268,297			323,618

Gross premiums earned		400,467			386,704			362,911			380,263			387,706			490,150
Ceded premiums amortized		(4,069	)		(3,842	)		(3,834	)		(4,281	)		(3,786	)		(162,449	)

Net premiums earned		396,398			382,862			359,077			375,982			383,920			327,701
Other insurance related (loss) income		(55	)		240			815			150			395			412

Total underwriting revenues		396,343			383,102			359,892			376,132			384,315			328,113

UNDERWRITING EXPENSES
Net losses and loss expenses		474,954			212,021			202,231			188,894			215,101			182,280
Acquisition costs		68,369			66,660			62,766			61,663			65,318			40,796
General and administrative expenses		17,366			17,077			17,370			23,927			15,828			36,141

Total underwriting expenses		560,689			295,758			282,367			274,484			296,247			259,217

UNDERWRITING (LOSS) INCOME	$	(164,346	)	$	87,344		$	77,525		$	101,648		$	88,068		$	68,896

KEY RATIOS
Net loss and loss expense ratio		119.8	%		55.4	%		56.3	%		50.2	%		56.0	%		55.6	%
Acquisition cost ratio		17.2	%		17.4	%		17.5	%		16.4	%		17.0	%		12.4	%
General and administrative expense ratio		4.4	%		4.5	%		4.8	%		6.4	%		4.1	%		11.0	%

Combined ratio		141.4	%		77.3	%		78.6	%		73.0	%		77.1	%		79.0	%

AXIS Capital Holdings Limited

CONSOLIDATED BALANCE SHEETS


	Sep 30, 2008			Jun 30, 2008			Mar 31, 2008			Dec 31, 2007			Sep 30, 2007			Sep 30, 2006
ASSETS
Investments:
Fixed maturities, available for sale, at fair value	$	8,449,620		$	8,703,346		$	8,423,794		$	8,331,666		$	7,814,855		$	6,523,009
Equity securities, available for sale, at fair value		129,220			247,845			99,239			7,746			8,779			—
Other investments, at fair value		636,304			724,239			552,872			638,241			603,650			714,381

Total investments		9,215,144			9,675,430			9,075,905			8,977,653			8,427,284			7,237,390
Cash and cash equivalents		1,419,610			1,094,429			1,578,801			1,332,921			1,830,852			1,640,914
Accrued interest receivable		74,693			89,261			80,990			87,338			76,257			65,235
Insurance and reinsurance premium balances receivable		1,412,445			1,652,295			1,607,609			1,231,494			1,385,486			1,233,125
Reinsurance recoverable balances		1,410,554			1,340,452			1,330,965			1,280,295			1,247,720			1,315,395
Reinsurance recoverable balances on paid losses		62,617			82,677			95,348			76,598			97,047			49,287
Deferred acquisition costs		333,002			355,587			369,000			276,801			331,290			272,110
Prepaid reinsurance premiums		264,960			263,461			238,466			242,940			246,027			274,972
Securities lending collateral		731,661			813,737			1,025,343			865,256			861,280			1,010,846
Net receivable for investments sold		—			—			18,086			86,356			—
Goodwill and intangible assets		60,726			61,035			61,344			61,653			61,967			34,543
Other assets		190,042			178,025			158,337			156,004			146,694			120,385

TOTAL ASSETS	$	15,175,454		$	15,606,389		$	15,640,194		$	14,675,309		$	14,711,904		$	13,254,202


LIABILITIES
Reserve for losses and loss expenses	$	6,406,204		$	5,995,731		$	5,814,208		$	5,587,311		$	5,531,379		$	4,995,074
Unearned premiums		2,466,622			2,603,676			2,574,755			2,146,087			2,433,339			2,167,364
Insurance and reinsurance balances payable		223,963			249,710			225,715			244,988			255,922			287,445
Securities lending payable		730,412			812,833			1,024,752			863,906			858,546			1,006,806
Senior notes		499,342			499,315			499,288			499,261			499,234			499,127
Other liabilities		183,385			144,689			130,054			175,134			140,869			109,656
Net payable for investments purchased		64,336			37,273			—			—			49,023			47,781

TOTAL LIABILITIES		10,574,264			10,343,227			10,268,772			9,516,687			9,768,312			9,113,253


SHAREHOLDERS’ EQUITY
Series A and B preferred shares		500,000			500,000			500,000			500,000			500,000			500,000
Common shares		1,878			1,877			1,875			1,850			1,849			1,875
Additional paid-in capital		1,943,125			1,922,356			1,902,336			1,869,810			1,859,067			1,923,169
Accumulated other comprehensive (loss) income		(495,697	)		(150,721	)		(104	)		22,668			(28,444	)		(54,673	)
Retained earnings		3,097,487			3,377,051			3,176,654			2,968,900			2,690,742			1,770,578
Treasury shares, at cost		(445,603	)		(387,401	)		(209,339	)		(204,606	)		(79,622	)		—

TOTAL SHAREHOLDERS’ EQUITY		4,601,190			5,263,162			5,371,422			5,158,622			4,943,592			4,140,949

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	15,175,454		$	15,606,389		$	15,640,194		$	14,675,309		$	14,711,904		$	13,254,202

Book value per common share	$	29.72		$	34.11		$	33.69		$	32.69		$	30.50		$	24.27

Debt (Senior notes) to total capitalization [a]		9.8	%		8.7	%		8.5	%		8.8	%		9.2	%		10.8	%

Debt plus preferred shares to total capitalization		19.6	%		17.3	%		17.0	%		17.7	%		18.4	%		21.5	%

[a]

The debt to capitalization ratio is calculated by dividing our senior notes by the total capital. Total capital represents the sum of total shareholders’ equity and our senior notes.

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

As of September 30, 2008


TYPE OF INVESTMENT	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Percentage
U.S. government and agency	$	1,270,970	$	5,758	$	(8,493	)	$	1,268,235	12	%
Non U.S. government		310,723		4,454		(18,405	)		296,772	3	%
Corporate debt		2,414,922		3,017		(287,724	)		2,130,215	20	%
Agency Mortgage-backed [a], [b]		2,216,340		13,079		(15,803	)		2,213,616	21	%
Non-Agency CMBS [a]		936,640		33		(79,135	)		857,538	8	%
Non-Agency RMBS [a]		522,024		522		(47,376	)		475,170	4	%
Asset-backed [a]		435,321		129		(27,247	)		408,203	4	%
Municipals		804,781		1,298		(6,208	)		799,871	7	%

Total Fixed Maturities		8,911,721		28,290		(490,391	)		8,449,620	79	%
Common stocks		134,184		825		(26,871	)		108,138	1	%
Non-redeemable preferred stocks		31,395		—		(10,313	)		21,082	0	%

Total Equities		165,579		825		(37,184	)		129,220	1	%
Cash, net of unsettled trades		—		—		—			387,255	4	%

Total Invested Assets		9,077,300		29,115		(527,575	)		8,966,095	84	%
Operating Cash Balances		—		—		—			968,019	9	%

Total Cash, Fixed Maturities and Equities	$	9,077,300	$	29,115	$	(527,575	)		9,934,114	93	%

Other Investments									636,304	6	%
Accrued interest receivable									74,693	1	%

Total Cash and Investments								$	10,645,111	100	%


	Fair Value		Percentage
OTHER INVESTMENTS
Hedge funds	$	284,613	45	%
Collateralized loan obligations		111,590	18	%
Credit funds		194,264	30	%
Short duration high yield fund		45,837	7	%

Total	$	636,304	100	%

[a]

For a further breakdown of our mortgage-backed and asset-backed securities, refer to page 11.

[b]

Agency mortgage-backed securities include both agency RMBS and agency CMBS.

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO COMPOSITION - QUARTERLY


TYPE OF INVESTMENT	Q3 2008		Q2 2008		Q1 2008		Q4 2007		Q3 2007		Q3 2006
TYPE OF INVESTMENT	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
U.S. government and agency	11.8	%	11.3	%	11.3	%	10.1	%	11.5	%	14.6	%
Non U.S. government	2.8	%	2.4	%	2.6	%	2.7	%	1.7	%	1.7	%
Corporate debt	19.9	%	21.7	%	21.2	%	20.5	%	17.7	%	14.3	%
Mortgage-backed	33.1	%	34.2	%	33.3	%	33.2	%	31.3	%	31.0	%
Asset-backed	3.8	%	4.1	%	4.2	%	5.1	%	5.5	%	5.3	%
Municipals	7.5	%	6.7	%	5.7	%	7.9	%	7.8	%	6.0	%
Mortgage derivatives	—		—		—		—		0.5	%	0.3	%

Total Fixed Maturities	78.9	%	80.4	%	78.3	%	79.5	%	76.0	%	73.2	%
Equities	1.2	%	2.3	%	—		—		—		—
Cash, net of unsettled trades	3.6	%	3.0	%	5.6	%	5.4	%	4.9	%	3.7	%

Total Invested Assets	83.7	%	85.7	%	83.9	%	84.9	%	80.9	%	76.9	%
Operating Cash Balances	9.6	%	6.8	%	9.3	%	8.1	%	12.4	%	14.2	%

Total Cash and Fixed Maturities	93.4	%	92.5	%	93.2	%	93.0	%	93.3	%	91.1	%
Other Investments	5.9	%	6.7	%	6.0	%	6.2	%	6.0	%	8.0	%
Accrued interest receivable	0.7	%	0.8	%	0.8	%	0.8	%	0.7	%	0.9	%

Total Cash and Investments	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%


CREDIT QUALITY OF FIXED MATURITIES	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
AAA	69.7	%	69.2	%	72.4	%	70.8	%	71.4	%	77.6	%
AA	8.6	%	10.0	%	9.1	%	7.8	%	7.7	%	4.6	%
A	13.2	%	12.2	%	9.7	%	12.5	%	11.3	%	9.7	%
BBB	8.0	%	8.2	%	8.8	%	8.9	%	9.6	%	8.1	%
BB	0.4	%	0.4	%	—		—		—		—

Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%


MATURITY PROFILE OF FIXED MATURITIES	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
Within one year	7.5	%	7.3	%	7.9	%	10.4	%	5.9	%	5.7	%
From one to five years	27.6	%	30.1	%	30.8	%	25.2	%	27.1	%	26.8	%
From five to ten years	10.5	%	9.5	%	8.5	%	10.6	%	10.0	%	13.2	%
Above ten years	7.6	%	5.6	%	5.0	%	5.6	%	7.9	%	4.3	%
Asset-backed and mortgage-backed securities	46.8	%	47.6	%	47.8	%	48.2	%	49.1	%	50.0	%

Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%


PORTFOLIO CHARACTERISTICS OF FIXED MATURITIES	As of or for the quarter ended
PORTFOLIO CHARACTERISTICS OF FIXED MATURITIES	Q3 2008		Q2 2008		Q1 2008		Q4 2007		Q3 2007		Q3 2006
Annualized effective yield of invested assets	4.8	%	4.8	%	4.9	%	4.9	%	5.0	%	4.7	%
Yield to maturity of invested assets	5.7	%	5.1	%	5.1	%	5.1	%	5.6	%	5.1	%
Average duration of invested assets	2.9	yrs	2.9	yrs	2.9	yrs	2.7	yrs	3.2	yrs	3.1	yrs
Average credit quality of invested assets	AA+		AA+		AA+		AA+		AA+		AA+

AXIS Capital Holdings Limited

MORTGAGE AND ASSET BACKED SECURITIES

As of September 30, 2008


	Mortgage-Backed Securities By Rating and Class
	Agency [a]				AAA				AA or lower				Total				Total
	Residential		Commercial		Residential		Commercial		Residential		Commercial		Residential		Commercial		Total
Agency
Agency Pass-Throughs	$	2,020,583	$	—	$	—	$	—	$	—	$	—	$	2,020,583	$	—	$	2,020,583
Agency CMO’s		112,676		9,315		—				—		—		112,676		9,315		121,991
Agency Floating Rate MBS		71,042		—		—		—		—		—		71,042		—		71,042

Non-Agency
Non-Agency CMO’s		—		—		411,624		837,767		8,092		19,758		419,716		857,525		1,277,241
Non-Agency Floating Rate MBS		—		—		54,907		13		547		—		55,454		13		55,467

Total	$	2,204,301	$	9,315	$	466,531	$	837,780	$	8,639	$	19,758	$	2,679,471	$	866,853	$	3,546,324


Description	Asset-Backed Securities By Rating
Description	AAA		AA or lower		Total
Auto	$	126,285	$	11,938	$	138,223
CLO [b]		—		44,976		44,976
CDO		5,678		3,139		8,817
Credit Card		112,577		—		112,577
Equipment		5,872		—		5,872
Home Equity		33,901		6,718		40,619
Other		57,119		—		57,119

Total	$	341,432	$	66,771	$	408,203

[a]

These represent securities backed by U.S Government sponsored agencies.

[b]

Collateralized loan obligation - debt tranche securities.

AXIS Capital Holdings Limited

SUBPRIME AND ALTERNATIVE-A HOLDINGS IN DIRECT INVESTMENT PORTFOLIO

As of September 30, 2008


	SUBPRIME AND ALTERNATIVE-A HOLDINGS BY SECTOR
	Holdings at Fair Value		% of Total Shareholders’ Equity		Net Unrealized Gain / (Loss)			Realized losses and impairments in 2008
Subprime Agency MBS	$	1,379	0.03	%	$	(4	)	$	—
Subprime Non-Agency MBS		1,259	0.03	%		(60	)		—
Subprime ABS		33,803	0.73	%		(5,684	)		(7,647	)

Total Subprime	$	36,441	0.79	%	$	(5,748	)	$	(7,647	)

Alternative-A Agency MBS	$	478	0.01	%	$	(20	)	$	—
Alternative-A Non-Agency MBS		117,340	2.55	%		(19,943	)		—
Alternative-A ABS		6,952	0.15	%		(1,101	)		—

Total Alternative-A	$	124,770	2.71	%	$	(21,064	)	$	—

TOTAL Subprime and Alternative-A	$	161,211	3.50	%	$	(26,812	)	$	(7,647	)


	SUBPRIME AND ALTERNATIVE-A HOLDINGS AT FAIR VALUE BY RATING & VINTAGE
	Agency			AAA			AA or lower			Total			Percentage of total
Sub-prime 2003 and prior	$	1,379		$	2,166		$	140		$	3,685		10.1	%
Sub-prime 2004		—			5,223			—			5,223		14.3	%
Sub-prime 2005		—			5,985			506			6,491		17.8	%
Sub-prime 2006		—			13,687			5,084			18,771		51.5	%
Sub-prime 2007		—			2,271			—			2,271		6.2	%

Total Subprime	$	1,379		$	29,332		$	5,730		$	36,441		100.0	%

Rating as Percentage of Total		3.8	%		80.5	%		15.7	%		100.0	%
Alternative-A 2003 and prior	$	—		$	20,109		$	3,038		$	23,147		18.6	%
Alternative-A 2004		478			31,835			123			32,436		26.0	%
Alternative-A 2005		—			54,047			—			54,047		43.3	%
Alternative-A 2006		—			8,509			—			8,509		6.8	%
Alternative-A 2007		—			5,800			831			6,631		5.3	%

Total Alternative A	$	478		$	120,300		$	3,992		$	124,770		100.0	%

Rating as Percentage of Total		0.4	%		96.4	%		3.2	%		100.0	%
Subprime and Alternative-A 2003 and prior	$	1,379		$	22,275		$	3,178		$	26,832		16.6	%
Subprime and Alternative-A 2004		478			37,058			123			37,659		23.4	%
Subprime and Alternative-A 2005		—			60,032			506			60,538		37.6	%
Subprime and Alternative-A 2006		—			22,196			5,084			27,280		16.9	%
Subprime and Alternative-A 2007		—			8,071			831			8,902		5.5	%

TOTAL Subprime and Alternative-A	$	1,857		$	149,632		$	9,722		$	161,211		100.0	%

Rating as Percentage of Total		1.2	%		92.8	%		6.0	%		100.0	%

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

TEN LARGEST CORPORATE HOLDINGS

As of September 30, 2008


ISSUER	Amortized Cost		Unrealized Gain / (Loss)			Fair Value		% of Total Fixed Maturities
GENERAL ELECTRIC CO	$	95,020	$	(7,062	)	$	87,958	1.0	%
JPMORGAN CHASE & CO		88,402		(4,260	)		84,142	1.0	%
BANK OF AMERICA CORP		71,930		(5,857	)		66,073	0.8	%
CITIGROUP INC		59,172		(8,630	)		50,542	0.6	%
WELLS FARGO & COMPANY		46,476		(1,590	)		44,886	0.5	%
NATIONAL AUSTRALIA BANK LIMITED		35,370		31			35,401	0.4	%
MORGAN STANLEY		46,418		(12,073	)		34,345	0.4	%
HSBC HOLDINGS PLC		35,254		(1,534	)		33,720	0.4	%
AT&T INC		34,294		(932	)		33,362	0.4	%
COMCAST CORPORATION		33,797		(1,097	)		32,700	0.4	%

Notes:

1. Corporate issuers exclude government-backed, government-sponsored enterprises and cash and cash equivalents.

2. Credit exposures represent only direct exposure to fixed maturities and short-term investments of the parent issuer and its major subsidiaries. These exposures exclude asset and mortgage backed securities that were issued, sponsored or serviced by the parent.

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

FINANCIAL ISSUER EXPOSURE IN FIXED MATURITY PORTFOLIO

As of September 30, 2008


ISSUER	Amortized Cost		Unrealized Gain / (Loss)			Fair Value		% of Total Fixed Maturities
JPMORGAN CHASE & CO	$	88,402	$	(4,260	)	$	84,142	1.0	%
BANK OF AMERICA CORP		71,930		(5,857	)		66,073	0.8	%
CITIGROUP INC		59,172		(8,630	)		50,542	0.6	%
WELLS FARGO & COMPANY		46,476		(1,590	)		44,886	0.5	%
NATIONAL AUSTRALIA BANK LIMITED		35,370		31			35,401	0.4	%
MORGAN STANLEY		46,418		(12,073	)		34,345	0.4	%
HSBC HOLDINGS PLC		35,254		(1,534	)		33,720	0.4	%
WACHOVIA CORPORATION		30,595		(4,988	)		25,607	0.3	%
NATIONWIDE BUILDING SOCIETY		26,173		(172	)		26,001	0.3	%
Less than $25m individually		530,213		(54,305	)		475,908	5.6	%

Total	$	970,003	$	(93,378	)	$	876,625	10.4	%

Notes:

1. Corporate issuers exclude government-backed, government-sponsored enterprises and cash and cash equivalents.

AXIS Capital Holdings Limited

NET REALIZED AND UNREALIZED INVESTMENTS GAINS (LOSSES)

Three months ended September 30, 2008

Nine months ended September 30, 2008

Net Realized
Gains
(Losses)

Net Unrealized
Gains
(Losses)

Net
Impact

Net Realized
Gains
(Losses)

Net Unrealized
Gains
(Losses)

Net
Impact

Fixed maturities

21,782

(331,593

)

(309,811

)

75,318

(493,476

)

(418,158

)

Equity securities

(63,073

)

(14,886

)

(77,959

)

(62,881

)

(32,429

)

(95,310

)

Other than temporary impairments

(49,663

)

—

(49,663

)

(65,804

)

—

(65,804

)

Sub-total

(90,954

)

(346,479

)

(437,433

)

(53,367

)

(525,905

)

(579,272

)

Change in the fair value of investment derivatives

1,875

—

1,875

1,525

—

1,525

Total (losses) gains

(89,079

)

(346,479

)

(435,558

)

(51,842

)

(525,905

)

(577,747

)

Income tax (recovery) expense

(556

)

(940

)

(1,496

)

1,623

(5,853

)

(4,230

)

Net (losses) gains

(88,523

)

(345,539

)

(434,062

)

(53,465

)

(520,052

)

(573,517

)


	Three months ended September 30, 2007								Nine months ended September 30, 2007
	Net Realized Gains (Losses)			Net Unrealized Gains (Losses)		Net Impact			Net Realized Gains (Losses)			Net Unrealized Gains (Losses)		Net Impact
Fixed maturities	$	(419	)	$	79,044	$	78,625		$	(3,367	)	$	15,891	$	12,524
Equity securities		—			—		—			—			—		—
Other than temporary impairments		(263	)		—		(263	)		(2,100	)		—		(2,100	)

Sub-total		(682	)		79,044		78,362			(5,467	)		15,891		10,424
Change in the fair value of investment derivatives		(510	)		—		(510	)		(81	)		—		(81	)

Total (losses) gains		(1,192	)		79,044		77,852			(5,548	)		15,891		10,343
Income tax (recovery) expense		(335	)		1,358		1,023			(893	)		1,384		491

Net (losses) gains		(857	)		77,686		76,829			(4,655	)		14,507		9,852

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS


	Q3 2008			Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q3 2006
Reinsurance recoverable on paid losses and loss expenses:
Insurance	$	57,622		$	70,438		$	83,109		$	64,106		$	82,795		$	27,065
Reinsurance		4,995			12,239			12,239			12,492			14,252			22,222

Total	$	62,617		$	82,677		$	95,348		$	76,598		$	97,047		$	49,287

Reinsurance recoverable on unpaid losses and loss expenses: OSLR
Insurance	$	492,024		$	479,724		$	492,319		$	436,042		$	414,777		$	677,279
Reinsurance		—			—			—			—			—			—

Total	$	492,024		$	479,724		$	492,319		$	436,042		$	414,777		$	677,279

Reinsurance recoverable on unpaid losses and loss expenses: IBNR
Insurance	$	922,329		$	865,323		$	844,747		$	852,054		$	842,797		$	635,202
Reinsurance		30,405			29,609			27,747			26,047			24,144			18,137

Total	$	952,734		$	894,932		$	872,494		$	878,101		$	866,941		$	653,339

Provision against reinsurance recoverables:
Insurance	$	(27,394	)	$	(27,394	)	$	(19,794	)	$	(19,794	)	$	(19,944	)	$	(794	)
Reinsurance		(6,810	)		(6,810	)		(14,054	)		(14,054	)		(14,054	)		(14,429	)

Total	$	(34,204	)	$	(34,204	)	$	(33,848	)	$	(33,848	)	$	(33,998	)	$	(15,223	)

Net reinsurance recoverables:
Insurance	$	1,444,581		$	1,388,091		$	1,400,381		$	1,332,408		$	1,320,425		$	1,338,752
Reinsurance		28,590			35,038			25,932			24,485			24,342			25,930

Total	$	1,473,171		$	1,423,129		$	1,426,313		$	1,356,893		$	1,344,767		$	1,364,682

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS


Consolidated Reinsurance Recoverable	Gross Recoverable		September 30, 2008
Categories	Gross Recoverable		Collateral			Gross Recoverable Net of Collateral		% of Total Gross Recoverable Net of Collateral		% of Total Shareholders’ Equity		Provision against Reinsurance Recoverables			Provision against Reinsurance Recoverable as % of Gross Recoverable		Net Recoverable
Top 10 reinsurers based on gross recoverables	$	979,826	$	(32,843	)	$	946,983	67.0	%	20.6	%	$	(15,480	)	1.6	%	$	964,346
Other reinsurers balances > $20 million		240,431		(17,088	)		223,343	15.8	%	4.9	%		(3,827	)	1.6	%	$	236,604
Other reinsurers balances < $20 million		287,118		(44,130	)		242,988	17.2	%	5.3	%		(14,897	)	5.2	%	$	272,221

Total	$	1,507,375	$	(94,061	)	$	1,413,314	100.0	%	30.8	%	$	(34,204	)	2.3	%	$	1,473,171

At September 30, 2008, 94.1% (December 31, 2007: 94.5%) of our gross recoverables were collectible from reinsurers rated the equivalent of A- or better by internationally recognised rating agencies.


Top 10 Reinsurers (net of collateral)	% of Total Gross Recoverable Net of Collateral		% of Total Shareholders’ Equity
Swiss Reinsurance America Corporation	16.5	%	5.1	%
Partner Reinsurance Co of US	11.3	%	3.5	%
Transatlantic Reinsurance Co.	10.4	%	3.2	%
Lloyd’s of London	8.3	%	2.5	%
XL Reinsurance America Inc	7.9	%	2.4	%
Berkley Insurance Company	4.5	%	1.4	%
Ace Property & Casualty Ins	3.0	%	0.9	%
Federal Insurance Company	2.6	%	0.8	%
General Reinsurance Corporation	2.4	%	0.7	%
Munich Reinsurance America, Inc	2.3	%	0.7	%

	69.3	%	21.3	%

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS


Reserve for losses and loss expenses	Three months ended September 30, 2008									Nine months ended September 30, 2008
Reserve for losses and loss expenses	Gross			Recoveries			Net			Gross			Recoveries			Net
Beginning of period	$	5,995,731		$	(1,423,129	)	$	4,572,602		$	5,587,311		$	(1,356,893	)	$	4,230,418

Incurred		817,361			(111,830	)		705,531			1,777,643			(338,714	)		1,438,929

Paid		(312,619	)		61,574			(251,045	)		(881,484	)		222,222			(659,262	)

Foreign exchange (gains) losses		(94,269	)		214			(94,055	)		(77,266	)		214			(77,052	)

End of period [a]	$	6,406,204		$	(1,473,171	)	$	4,933,033		$	6,406,204		$	(1,473,171	)	$	4,933,033

[a]

As at September 30, 2008, the gross reserve for losses and loss expenses included IBNR of $4,388 million, or 68%, of total gross reserves for loss and loss expenses. As at December 31, 2007, the comparable amount was $3,890 million, or 70%.

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS BY SEGMENT


	Three months ended September 30, 2008									Nine months ended September 30, 2008
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total
Gross losses paid	$	148,243		$	164,376		$	312,619		$	510,839		$	370,645		$	881,484
Reinsurance recoveries received		(54,077	)		(7,497	)		(61,574	)		(214,725	)		(7,497	)		(222,222	)

Net losses paid		94,166			156,879			251,045			296,114			363,148			659,262

Change in:
Reported case reserves		34,509			161,303			195,812			171,583			188,525			360,108
IBNR		158,606			150,324			308,930			194,412			341,639			536,051
Reinsurance recoveries on paid and unpaid loss and loss expense reserves		(56,704	)		6,448			(50,256	)		(112,386	)		(4,106	)		(116,492	)

TOTAL NET INCURRED LOSSES AND LOSS EXPENSES	$	230,577		$	474,954		$	705,531		$	549,723		$	889,206		$	1,438,929

Gross reserve for losses and loss expenses	$	3,690,039		$	2,716,165		$	6,406,204		$	3,690,039		$	2,716,165		$	6,406,204

Prior years net favorable reserve development	$	41,608		$	34,663		$	76,271		$	142,294		$	108,832		$	251,126

Key Ratios
Net paid to net incurred percentage		40.8	%		33.0	%		35.6	%		53.9	%		40.8	%		45.8	%

Net paid losses / Net premiums earned		32.1	%		39.6	%		36.4	%		33.2	%		31.9	%		32.5	%
Change in net loss and loss expense reserves / Net premiums earned		46.5	%		80.2	%		65.9	%		28.5	%		46.2	%		38.4	%

Net loss and loss expense ratio		78.5	%		119.8	%		102.3	%		61.7	%		78.1	%		70.9	%

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

INSURANCE - QUARTERLY


	Quarter ended
	Q3 2008			Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q3 2006
Gross losses paid	$	148,243		$	161,108		$	201,488		$	239,712		$	126,883		$	163,642
Reinsurance recoveries received		(54,077	)		(79,170	)		(81,478	)		(98,388	)		(48,874	)		(117,506	)

Net losses paid		94,166			81,938			120,010			141,324			78,009			46,136

Change in:
Reported case reserves		34,509			44,365			92,709			(9,888	)		1,976			(30,212	)
IBNR		158,606			21,103			14,703			(17,802	)		39,379			153,183
Reinsurance recoveries on paid and unpaid loss and loss expense reserves		(56,704	)		12,290			(67,972	)		(11,982	)		(6,272	)		13,173

TOTAL NET INCURRED LOSSES AND LOSS EXPENSES	$	230,577		$	159,696		$	159,450		$	101,652		$	113,092		$	182,280

Gross reserve for losses and loss expenses	$	3,690,039		$	3,508,456		$	3,442,804		$	3,333,743		$	3,363,368		$	3,152,082

Prior years net favorable reserve development	$	41,608		$	46,106		$	54,580		$	70,870		$	58,607		$	27,940

Key Ratios
Net paid to net incurred percentage		40.8	%		51.3	%		75.3	%		139.0	%		69.0	%		25.3	%

Net paid losses / Net premiums earned		32.1	%		27.5	%		40.0	%		47.2	%		25.8	%		14.1	%
Change in net loss and loss expense reserves / Net premiums earned		46.5	%		26.1	%		13.2	%		-13.2	%		11.6	%		41.5	%

Net loss and loss expense ratio		78.5	%		53.7	%		53.2	%		33.9	%		37.5	%		55.6	%

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

REINSURANCE - QUARTERLY


	Quarter ended
	Q3 2008			Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q3 2006
Gross losses paid	$	164,376		$	101,782		$	104,487		$	103,817		$	105,316		$	147,766
Reinsurance recoveries received		(7,497	)		—			—			—			(738	)		(15,000	)

Net losses paid		156,879			101,782			104,487			103,817			104,578			132,766

Change in:
Reported case reserves		161,303			15,193			12,029			162			49,528			(23,293	)
IBNR		150,324			104,152			87,163			85,058			61,779			59,517
Reinsurance recoveries on paid and unpaid loss and loss expense reserves		6,448			(9,106	)		(1,448	)		(143	)		(784	)		14,688

TOTAL NET INCURRED LOSSES AND LOSS EXPENSES	$	474,954		$	212,021		$	202,231		$	188,894		$	215,101		$	183,678

Gross reserve for losses and loss expenses	$	2,716,165		$	2,487,275		$	2,371,404		$	2,253,568		$	2,168,011		$	1,842,992

Prior years net favorable reserve development	$	34,663		$	40,638		$	33,531		$	21,131		$	23,585		$	28,626

Key Ratios
Net paid to net incurred percentage		33.0	%		48.0	%		51.7	%		55.0	%		48.6	%		72.3	%

Net paid losses / Net premiums earned		39.6	%		26.6	%		29.1	%		27.6	%		27.2	%		36.4	%
Change in net loss and loss expense reserves / Net premiums earned		80.2	%		28.8	%		27.2	%		22.6	%		28.8	%		13.9	%

Net loss and loss expense ratio		119.8	%		55.4	%		56.3	%		50.2	%		56.0	%		50.3	%

AXIS Capital Holdings Limited

THIRD QUARTER 2008 IMPACT OF HURRICANES GUSTAV AND IKE


	Insurance			Reinsurance			Total
*Gross loss and loss expenses*
Hurricane Gustav	$	40,000		$	22,000		$	62,000
Hurricane Ike		140,500			270,000			410,500

Total gross loss and loss expenses		180,500			292,000			472,500

*Net loss and loss expenses*
Hurricane Gustav		30,000			22,000			52,000
Hurricane Ike		85,000			270,000			355,000

Total net loss and loss expenses		115,000			292,000			407,000

Gross premiums written ^[a]		—			28,993			28,993

Gross premiums earned ^[b]		—			(20,803	)		(20,803	)
Ceded premiums amortized		—			—			—

Net premium earned		—			(20,803	)		(20,803	)

Total impact before income tax		115,000			271,197			386,197
Income tax benefit		(14,381	)		(1,225	)		(15,606	)

Total impact after income tax	$	100,619		$	269,972		$	370,591

Key Ratios
Net loss and loss expense ratio - as reported		78.5	%		119.8	%		102.3	%
Hurricane Gustav and Ike impact		(39.2	)%		(73.7	)%		(59.0	)%

Adjusted net loss and loss expense ratio ^[c]		39.3	%		46.1	%		43.3	%

[a]

The impact of Hurricanes Gustav and Ike on gross premiums written in the quarter relates to reinstatement premiums recorded in our reinsurance segment following the event. These premiums will be earned over the remaining risk period.

[b]

The impact of Hurricanes Gustav and Ike on gross premiums earned in the quarter primarily relates to the impact of full earnout of the original written premium, as well as earnout of the reinstatements premiums for the quarter, for contracts impacted by these losses.

[c]

Represents the ratios for the quarter excluding the impact of hurricane losses.

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP


	Three months ended September 30,					Nine months ended September 30,
	2008			2007		2008		2007
Net (loss) income available to common shareholders	$	(249,347	)	$	269,975	$	219,643	$	749,143

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average basic shares outstanding		139,335			146,845		141,628		148,753

Dilutive share equivalents:
Warrants^[a]		—			13,124		12,600		12,937
Options^[a]		—			1,710		1,496		1,414
Restricted stock^[a]		—			2,385		1,591		2,354

Weighted average diluted shares outstanding		139,335			164,064		157,315		165,458

EARNINGS PER COMMON SHARE
Basic	$	(1.79	)	$	1.84	$	1.55	$	5.04
Diluted	$	(1.79	)	$	1.65	$	1.40	$	4.53

[a]

Due to the net loss incurred in the three months ended September 30, 2008, these securities were not included in the computation of diluted earnings per share, because of their anti-dilutive effect.

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP


	Quarter ended
	Q3 2008			Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q3 2006
Net (loss) income available to common shareholders	$	(249,347	)	$	231,267		$	237,722		$	306,100		$	269,975		$	226,222

COMMON SHARES OUTSTANDING

Common Shares -at beginning of period		139,653			144,590			142,520			145,710			147,924			149,810
Shares issued		113			154			2,189			62			86			185
Shares repurchased for treasury		(1,775	)		(5,091	)		(119	)		(3,240	)		(2,225	)		—
Shares repurchased and cancelled		—			—			—			(12	)		(75	)		—

Common Shares- at end of period		137,991			139,653			144,590			142,520			145,710			149,995

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average basic shares outstanding		139,335			142,333			143,239			143,877			146,845			149,884

Dilutive share equivalents:
Warrants^[a]		—			12,579			13,160			13,406			13,124			11,782
Options^[a]		—			1,496			1,527			1,970			1,710			2,010
Restricted stock^[a]		—			1,194			2,258			2,479			2,385			1,025

Weighted average diluted shares outstanding		139,335			157,602			160,184			161,732			164,064			164,701

EARNINGS PER COMMON SHARE
Basic	$	(1.79	)	$	1.62		$	1.66		$	2.13		$	1.84		$	1.51

Diluted	$	(1.79	)	$	1.47		$	1.48		$	1.89		$	1.65		$	1.37

[a]

Due to the net loss incurred in the three months ended September 30, 2008, these securities were not included in the computation of diluted earnings per share, because of their anti-dilutive effect.

AXIS Capital Holdings Limited

DILUTED BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD ^[a]


	At September 30, 2008
	Weighted Average Strike Price		Common Shareholders’ Equity		Outstanding Common Shares net of Treasury Shares	Per share
Closing stock price						$	31.71

Book value per common share			$	4,101,190	137,991	$	29.72

Dilutive securities:
Warrants	$	12.41		—	11,989		(2.38	)
Restricted stocks				—	5,177		(0.90	)
Options	$	21.20		—	1,017		(0.18	)
Phantom stock units				—	65		(0.01	)

Diluted book value per common share			$	4,101,190	156,239	$	26.25


	At December 31, 2007
	Weighted Average Strike Price		Common Shareholders’ Equity		Outstanding Common Shares net of Treasury Shares	Per share
Closing stock price						$	38.97

Book value per common share			$	4,658,622	142,520	$	32.69

Dilutive securities:
Warrants	$	12.42		—	13,388		(2.81	)
Restricted stocks				—	3,312		(0.60	)
Options	$	18.46		—	2,531		(0.48	)
Phantom stock units				—	53		(0.01	)

Diluted book value per common share			$	4,658,622	161,804	$	28.79

[a]

This method assumes that proceeds received upon exercise of options and warrants will be used to repurchase our common shares at the closing market price. Unvested restricted stock is also added to determine the diluted common shares outstanding.