AXIS Capital Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT

FOURTH QUARTER 2013

	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)
Basis of Presentation	i - iii
I. Financial Highlights	1
II. Income Statements
a. Consolidated Statements of Income - Quarterly	2
b. Consolidated Statements of Income - Year	3
c. Consolidated Segment Data	4
d. Gross Premium Written by Segment by Line of Business	5
e. Segment Data - Quarterly	6-7
f. Net Investment Income - Quarterly and Year	8
III. Balance Sheets
a. Consolidated Balance Sheets	9
b. Cash and Invested Assets:
•    Cash and Invested Assets Portfolio	10
•    Cash and Invested Assets Composition - Quarterly	11
•    Geographic Distribution of Fixed Maturities and Equities	12
•    Corporate Debt Composition	13
•    Ten Largest Corporate Debt Holdings	14
•    Mortgage-Backed and Asset-Backed Securities Composition	15
c. Reinsurance Recoverable Analysis	16-17
IV. Analysis of Reserve for Losses and Loss Expenses
a. Paid to Incurred Analysis	18
b. Paid to Incurred Analysis by Segment	19
c. Paid to Incurred Analysis by Segment - Quarterly	20-21
d. Net Probable Maximum Losses to Certain Peak Industry Catastrophe Exposures	22
V. Share Analysis
a. Earnings (Loss) Per Common Share Analysis - As Reported, GAAP	23
b. Earnings (Loss) Per Common Share Analysis and Common Share Rollforward - Quarterly	24
c. Diluted Book Value Per Common Share Analysis	25
VI. Non-GAAP Financial Measures
a. Non-GAAP Financial Measure Reconciliations	26
b. Use of Non-GAAP Financial Measures	27

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

Unless otherwise noted, all data is in thousands, except for per share amounts and ratio information.

• All financial information contained herein is unaudited, except for the consolidated balance sheet at December 31, 2012 and December 31, 2011 and consolidated statements of income for the years then ended.

• Amounts may not reconcile exactly due to rounding differences.

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

Statements in this presentation that are not historical facts, including statements regarding our estimates, beliefs, expectations, intentions, strategies or projections, may be “forward-looking statements” within the meaning of the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the United States securities laws. In some cases, these statements can be identified by the use of forward-looking words such as “may,” “should,” “could,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential,” “intend” or similar expressions. Our expectations are not guarantees and are based on currently available competitive, financial and economic data along with our operating plans. Forward-looking statements contained in this presentation may include, but are not limited to, information regarding our estimates of losses related to catastrophes and other large losses, measurements of potential losses in the fair market value of our investment portfolio, our expectations regarding pricing and other market conditions, our growth prospects, and valuations of the potential impact of movements in interest rates, equity securities' prices, credit spreads and foreign currency rates.

Forward-looking statements only reflect our expectations and are not guarantees of performance. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements. We believe that these factors include, but are not limited to, the following:

• the occurrence and magnitude of natural and man-made disasters,

• actual claims exceeding our loss reserves,

• general economic, capital and credit market conditions,

• the failure of any of the loss limitation methods we employ,

• the effects of emerging claims, coverage and regulatory issues, including uncertainty related to coverage definitions, limits, terms and conditions,

• the failure of our cedants to adequately evaluate risks,

• inability to obtain additional capital on favorable terms, or at all,

• the loss of one or more key executives,

• a decline in our ratings with rating agencies,

• loss of business provided to us by our major brokers,

• changes in accounting policies or practices,

• the use of industry catastrophe models and changes to these models,

• changes in governmental regulations,

• increased competition,

• changes in the political environment of certain countries in which we operate or underwrite business,

• fluctuations in interest rates, credit spreads, equity securities' prices and/or currency values, and

• the other factors set forth in our most recent report on Form 10-K, Form 10-Q and other documents on file with the Securities and Exchange Commission.

We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

i

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

BUSINESS DESCRIPTIONS

INSURANCE SEGMENT

Our insurance segment offers specialty insurance products to a variety of niche markets on a worldwide basis. The following are the lines of business in our insurance segment:

Property: provides physical loss or damage, business interruption and machinery breakdown coverage for virtually all types of property, including commercial buildings, residential premises, construction projects and onshore energy installations. This line of business consists of both primary and excess risks, some of which are catastrophe-exposed.

Marine: provides coverage for traditional marine classes, including offshore energy, cargo, liability, recreational marine, fine art, specie, hull and war. Offshore energy coverage includes physical damage, business interruption, operators extra expense and liability coverage for all aspects of offshore upstream energy, from exploration and construction through the operation and distribution phases.

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

Aviation: provides hull and liability and specific war coverage primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers.

Credit and political risk: provides credit and political risk insurance products for banks and corporations. Coverage is provided for a range of risks including sovereign default, credit default, political violence, currency inconvertibility and non-transfer, expropriation, aircraft non-repossession and contract frustration due to political events. The credit insurance coverage is primarily for lenders seeking to mitigate the risk of non-payment from their borrowers in emerging markets. For the credit insurance contracts, it is necessary for the buyer of the insurance (most often a bank) to hold an insured asset (most often an underlying loan) in order to claim compensation under the insurance contract. The traditional political risk coverage provides protection against sovereign actions that result in the impairment of cross-border investments for banks and major corporations (known as “CEND” coverages).

Professional lines: provides coverage for directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity and other financial insurance related coverages for commercial enterprises, financial institutions and not-for-profit organizations. This business is predominantly written on a claims-made basis.

Liability: primarily targets primary and low/mid-level excess and umbrella commercial liability risks in the U.S. excess and surplus lines markets. Target industry sectors include construction, manufacturing, transportation and trucking and other services. We also target middle to high excess liability business in the London and Bermuda wholesale markets and primary and excess business in the Canadian market place.

Accident & health: includes accidental death, travel insurance and specialty health products for employer and affinity groups, as well as accident & health reinsurance for catastrophic or per life events on a quota share and/or excess of loss basis, with aggregate and/or per person deductibles.

ii

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

BUSINESS DESCRIPTIONS (CONTINUED)

REINSURANCE SEGMENT

Our reinsurance segment provides non-life reinsurance to insurance companies on a worldwide basis. The following are the lines of business in our reinsurance segment:

Catastrophe: provides protection for most catastrophic losses that are covered in the underlying insurance policies written by our cedants. 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.

Property: provides coverage for property damage and related losses resulting from natural and man-made perils contained in underlying personal and commercial policies. While our predominant exposure is to property damage, other risks, including business interruption and other non-property losses, may also be covered when arising from a covered peril. While our most significant exposures typically relate to losses from windstorms, tornadoes and earthquakes, we are also exposed to other perils such as freezes, riots, floods, industrial explosions, fires, hail and a number of other loss events. We assume business on both a proportional and excess of loss basis.

Professional Lines: covers directors’ and officers’ liability, employment practices liability, medical malpractice, professional indemnity, environmental liability and miscellaneous errors and omissions insurance risks. The underlying business is predominantly written on a claims-made basis. Business is written on both a proportional and excess of loss basis.

Credit and Surety: consists 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 in the event of a payment default by the buyer of those goods and services. Also included in this line of business is coverage for losses arising from a broad array of surety bonds issued by insurers to satisfy regulatory demands or contract obligations in a variety of jurisdictions around the world.

Motor: provides coverage to cedants for motor liability and property damage 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 business, excess and surplus casualty business and specialty casualty programs. The primary focus of the underlying business is general liability, although workers' compensation and auto liability are also written.

Agriculture: provides coverage for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations. We provide both proportional and aggregate stop loss reinsurance.

Engineering: provides coverage for all types of construction risks and risks associated with erection, testing and commissioning of machinery and plants during the construction stage. This line of business also includes coverage for losses arising from operational failures of machinery, plant and equipment and electronic equipment as well as business interruption.

Other: includes aviation, marine and personal accident reinsurance.

iii

AXIS Capital Holdings Limited

FINANCIAL HIGHLIGHTS

		Quarter ended December 31,									Year ended December 31,
		2013			2012			Change			2013			2012			Change
HIGHLIGHTS	Gross premiums written	$	825,957		$	752,414		9.8	%		$	4,697,041		$	4,139,643		13.5	%
	Gross premiums written - Insurance	73.4		%	77.1		%	(3.7	)	pts	54.5		%	55.8		%	(1.3	)	pts
	Gross premiums written - Reinsurance	26.6		%	22.9		%	3.7		pts	45.5		%	44.2		%	1.3		pts
	Net premiums written	$	647,965		$	518,096		25.1	%		$	3,928,200		$	3,337,456		17.7	%
	Net premiums earned	$	941,911		$	856,049		10.0	%		$	3,707,065		$	3,415,463		8.5	%
	Net premiums earned - Insurance	47.8		%	44.7		%	3.1		pts	46.5		%	45.6		%	0.9		pts
	Net premiums earned - Reinsurance	52.2		%	55.3		%	(3.1	)	pts	53.5		%	54.4		%	(0.9	)	pts
	Net income (loss) available to common shareholders	$	171,524		$	(18,551	)	nm			$	683,910		$	495,004		38.2	%
	Operating income (loss) [a]	158,856			(27,685		)	nm			633,072			421,523			50.2	%
	Reserve for losses and loss expenses	9,582,140			9,058,731			5.8	%		9,582,140			9,058,731			5.8	%
	Total shareholders’ equity attributable to AXIS Capital	5,817,962			5,779,761			0.7	%		5,817,962			5,779,761			0.7	%
PER COMMON SHARE AND COMMON SHARE DATA	Basic earnings (loss) per common share		$1.55			($0.16	)	nm				$6.02			$4.05		48.6	%
	Diluted earnings (loss) per common share		$1.52			($0.16	)	nm				$5.93			$4.00		48.3	%
	Operating income (loss) per common share - diluted [b]		$1.41			($0.23	)	nm				$5.49			$3.41		61.0	%
	Weighted average common shares outstanding	110,757			117,918			(6.1	%)		113,636			122,148			(7.0	%)
	Diluted weighted average common shares outstanding	112,702			117,918			(4.4	%)		115,328			123,654			(6.7	%)
	Book value per common share		$47.40			$44.75		5.9	%			$47.40			$44.75		5.9	%
	Diluted book value per common share (treasury stock method)		$45.80			$42.97		6.6	%			$45.80			$42.97		6.6	%
	Diluted tangible book value per common share (treasury stock method) [a]		$45.01			$42.18		6.7	%			$45.01			$42.18		6.7	%
	Accumulated dividends declared per common share		$7.88			$6.86		14.9	%			$7.88			$6.86		14.9	%
FINANCIAL RATIOS	ROACE [c]	13.3		%	(1.4		%)	14.7		pts	13.1		%	9.7		%	3.4		pts
	Operating ROACE [d]	12.3		%	(2.1		%)	14.4		pts	12.1		%	8.2		%	3.9		pts
	Net loss and loss expense ratio	58.5		%	78.9		%	(20.4	)	pts	57.6		%	61.4		%	(3.8	)	pts
	Acquisition cost ratio	18.6		%	16.8		%	1.8		pts	17.9		%	18.4		%	(0.5	)	pts
	General and administrative expense ratio	15.4		%	16.5		%	(1.1	)	pts	15.5		%	16.4		%	(0.9	)	pts
	Combined ratio	92.5		%	112.2		%	(19.7	)	pts	91.0		%	96.2		%	(5.2	)	pts
INVESTMENT DATA	Total assets	$	19,634,784		$	18,852,344		4.2	%		$	19,634,784		$	18,852,344		4.2	%
	Total cash and invested assets [e]	14,844,799			14,431,365			2.9	%		14,844,799			14,431,365			2.9	%
	Net investment income	113,863			86,847			31.1	%		409,312			380,957			7.4	%
	Net realized investment gains	19,558			31,771			(38.4	%)		75,564			127,469			(40.7	%)
	Total return on cash and investments [f]	0.9		%	0.7		%	0.2		pts	1.6		%	5.4		%	(3.8	)	pts
	Return on other investments [g]	4.1		%	1.8		%	2.3		pts	13.3		%	11.1		%	2.2		pts
	Book yield of fixed maturities	2.5		%	2.6		%	(0.1	)	pts	2.5		%	2.6		%	(0.1	)	pts

[a] Operating income (loss) and diluted tangible book value per common share are “non-GAAP financial measures” as defined by Regulation G. See page 26 for reconciliation of operating income to net income available to common shareholders and diluted tangible book value per common share to diluted book value per common share.

[b] Operating income (loss) per common share - diluted, is calculated by dividing operating income (loss) for the period by weighted average common shares and share equivalents.

[c] Return on average common equity (“ROACE”) is calculated by dividing net income (loss) 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. Net income (loss) for the quarter-periods is annualized.

[d] Operating ROACE, also a “non-GAAP financial measure”, is calculated by dividing operating income (loss) 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. Operating income (loss) for the quarter-periods is annualized.

[e] Cash and invested assets represents the total cash, available for sale investments, other investments, short-term investments, accrued interest receivable and net receivable (payable) for investments sold (purchased).

[f] 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.

[g] Return on other investments is calculated by dividing other investment income by the average month-end other investment balances for the period.

1

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY

	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011
UNDERWRITING REVENUES
Gross premiums written	$	825,957		$	904,797		$	1,219,805		$	1,746,483		$	752,414		$	666,504
Premiums ceded	(177,992		)	(188,408		)	(226,398		)	(176,043		)	(234,318		)	(171,441		)
Net premiums written	647,965			716,389			993,407			1,570,440			518,096			495,063
Gross premiums earned	1,129,147			1,125,289			1,139,904			1,064,930			1,068,259			1,019,953
Ceded premiums expensed	(187,236		)	(180,047		)	(194,031		)	(190,891		)	(212,210		)	(173,200		)
Net premiums earned	941,911			945,242			945,873			874,039			856,049			846,753
Other insurance related income	2,668			725			435			595			791			351
Total underwriting revenues	944,579			945,967			946,308			874,634			856,840			847,104
UNDERWRITING EXPENSES
Net losses and loss expenses	551,360			501,522			642,899			438,414			675,047			583,454
Acquisition costs	175,299			173,682			169,719			145,491			144,063			157,372
Underwriting-related general and administrative expenses [a]	123,761			117,675			123,769			119,930			112,021			91,202
Total underwriting expenses	850,420			792,879			936,387			703,835			931,131			832,028
UNDERWRITING INCOME (LOSS) [b]	94,159			153,088			9,921			170,799			(74,291		)	15,076
OTHER OPERATING REVENUE (EXPENSES)
Net investment income	113,863			103,429			83,112			108,908			86,847			102,362
Net realized investment gains (losses)	19,558			(4,708		)	16,235			44,478			31,771			(3,738		)
Interest expense and financing costs	(15,625		)	(15,260		)	(15,260		)	(15,834		)	(15,498		)	(15,616		)
Total other operating revenues	117,796			83,461			84,087			137,552			103,120			83,008
OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	(14,484		)	(56,860		)	10,320			34,882			(21,300		)	17,328
Corporate expenses [a]	(20,422		)	(23,024		)	(25,265		)	(21,545		)	(29,365		)	(18,788		)
Total other (expenses) revenues	(34,906		)	(79,884		)	(14,945		)	13,337			(50,665		)	(1,460		)
INCOME (LOSS) BEFORE INCOME TAXES	177,049			156,665			79,063			321,688			(21,836		)	96,624
Income tax (expense) benefit	4,497			(6,030		)	4,662			(10,131		)	12,026			(7,341		)
NET INCOME (LOSS)	181,546			150,635			83,725			311,557			(9,810		)	89,283
Preferred share dividends	(10,022		)	(13,514		)	(8,197		)	(8,741		)	(8,741		)	(9,219		)
Loss on repurchase of preferred shares	—			—			(3,081		)	—			—			—
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	171,524		$	137,121		$	72,447		$	302,816		$	(18,551	)	$	80,064
KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	58.5		%	53.1		%	68.0		%	50.2		%	78.9		%	68.9		%
Acquisition cost ratio	18.6		%	18.4		%	17.9		%	16.6		%	16.8		%	18.6		%
General and administrative expense ratio [a]	15.4		%	14.8		%	15.8		%	16.2		%	16.5		%	13.0		%
Combined ratio	92.5		%	86.3		%	101.7		%	83.0		%	112.2		%	100.5		%
Weighted average basic shares outstanding	110,757			111,676			115,163			117,022			117,918			126,360
Weighted average diluted shares outstanding	112,702			113,355			116,671			118,658			117,918			127,686
Basic earnings (loss) per common share		$1.55			$1.23			$0.63			$2.59			($0.16	)		$0.63
Diluted earnings (loss) per common share		$1.52			$1.21			$0.62			$2.55			($0.16	)		$0.63
ROACE (annualized)	13.3		%	10.9		%	5.6		%	22.7		%	(1.4		%)	6.5		%
Operating ROACE (annualized)	12.3		%	15.6		%	3.9		%	17.1		%	(2.1		%)	5.5		%

[a] Underwriting-related general and administrative expenses is a "non-GAAP financial measure" as defined in SEC Regulation G. Our total general and administrative expenses also include corporate expenses. Both underwriting-related general and administrative expenses and corporate expenses are included in the general and administrative expense ratio.

[b] Group (or consolidated) underwriting income (loss) is also a "non-GAAP financial measure". Reconciliations of consolidated underwriting income (loss) to the nearest GAAP financial measure (income (loss) before income taxes) are presented above and on the following page.

2

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - YEAR

	Year ended December 31,
	2013			2012			2011
UNDERWRITING REVENUES
Gross premiums written	$	4,697,041		$	4,139,643		$	4,096,153
Premiums ceded	(768,841		)	(802,187		)	(676,719		)
Net premiums written	3,928,200			3,337,456			3,419,434
Gross premiums earned	4,459,269			4,141,037			3,973,956
Ceded premiums expensed	(752,204		)	(725,574		)	(658,995		)
Net premiums earned	3,707,065			3,415,463			3,314,961
Other insurance related income	4,424			2,676			2,396
Total underwriting revenues	3,711,489			3,418,139			3,317,357
UNDERWRITING EXPENSES
Net losses and loss expenses	2,134,195			2,096,028			2,675,052
Acquisition costs	664,191			627,653			587,469
Underwriting-related general and administrative expenses	485,134			431,321			382,062
Total underwriting expenses	3,283,520			3,155,002			3,644,583
UNDERWRITING INCOME (LOSS)	427,969			263,137			(327,226		)
OTHER OPERATING REVENUE (EXPENSES)
Net investment income	409,312			380,957			362,430
Net realized investment gains	75,564			127,469			121,439
Interest expense and financing costs	(61,979		)	(61,863		)	(62,598		)
Total other operating revenues	422,897			446,563			421,271
OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	(26,143		)	(29,512		)	44,582
Corporate expenses [a]	(90,256		)	(129,660		)	(77,089		)
Total other expenses	(116,399		)	(159,172		)	(32,507		)
INCOME BEFORE INCOME TAXES	734,467			550,528			61,538
Income tax expense	(7,002		)	(3,287		)	(15,233		)
NET INCOME	727,465			547,241			46,305
Preferred share dividends	(40,474		)	(38,228		)	(36,875		)
Loss on repurchase of preferred shares	(3,081		)	(14,009		)	—
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	683,910		$	495,004		$	9,430
KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	57.6		%	61.4		%	80.7		%
Acquisition cost ratio	17.9		%	18.4		%	17.7		%
General and administrative expense ratio [a]	15.5		%	16.4		%	13.9		%
Combined ratio	91.0		%	96.2		%	112.3		%
Weighted average basic shares outstanding	113,636			122,148			122,499
Weighted average diluted shares outstanding	115,328			123,654			128,122
Basic earnings per common share		$6.02			$4.05			$0.08
Diluted earnings per common share		$5.93			$4.00			$0.07
ROACE	13.1		%	9.7		%	0.2		%
Operating ROACE	12.1		%	8.2		%	(3.1		%)

[a] Both underwriting-related general and administrative expenses and corporate expenses are included in the general and administrative expense ratio.

3

AXIS Capital Holdings Limited

CONSOLIDATED SEGMENT DATA

	Quarter ended December 31, 2013									Year ended December 31, 2013
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total
UNDERWRITING REVENUES
Gross premiums written	$	606,591		$	219,366		$	825,957		$	2,559,138		$	2,137,903		$	4,697,041
Net premiums written	427,647			220,318			647,965			1,813,538			2,114,662			3,928,200
Gross premiums earned	631,695			497,452			1,129,147			2,458,354			2,000,915			4,459,269
Ceded premiums expensed	(181,230		)	(6,006		)	(187,236		)	(735,592		)	(16,612		)	(752,204		)
Net premiums earned	450,465			491,446			941,911			1,722,762			1,984,303			3,707,065
Other insurance related income	681			1,987			2,668			2,436			1,988			4,424
Total underwriting revenues	451,146			493,433			944,579			1,725,198			1,986,291			3,711,489
UNDERWRITING EXPENSES
Net losses and loss expenses	285,634			265,726			551,360			1,050,402			1,083,793			2,134,195
Acquisition costs	65,266			110,033			175,299			242,363			421,828			664,191
Underwriting-related general and administrative expenses	89,722			34,039			123,761			347,684			137,450			485,134
Total underwriting expenses	440,622			409,798			850,420			1,640,449			1,643,071			3,283,520
UNDERWRITING INCOME	$	10,524		$	83,635		$	94,159		$	84,749		$	343,220		$	427,969
KEY RATIOS
Current accident year loss ratio	64.3		%	62.0		%	63.1		%	63.9		%	63.1		%	63.5		%
Prior period reserve development	(0.9		%)	(7.9		%)	(4.6		%)	(2.9		%)	(8.5		%)	(5.9		%)
Net loss and loss expense ratio	63.4		%	54.1		%	58.5		%	61.0		%	54.6		%	57.6		%
Acquisition cost ratio	14.5		%	22.4		%	18.6		%	14.1		%	21.3		%	17.9		%
Underwriting-related general and administrative expense ratio	19.9		%	6.9		%	13.2		%	20.1		%	6.9		%	13.1		%
Corporate expense ratio							2.2		%							2.4		%
Combined ratio	97.8		%	83.4		%	92.5		%	95.2		%	82.8		%	91.0		%

4

AXIS Capital Holdings Limited

GROSS PREMIUM WRITTEN BY SEGMENT BY LINE OF BUSINESS

																Year ended December 31,
	Q4 2013			Q3 2013		Q2 2013		Q1 2013		Q4 2012			Q4 2011			2013		2012
INSURANCE SEGMENT
Property	$	144,321		$	147,485	$	228,741	$	151,376	$	148,216		$	143,046		$	671,970	$	651,188
Marine	23,148			38,406		88,047		79,893		29,898			32,759			229,493		252,434
Terrorism	10,264			10,418		9,478		8,213		8,681			8,295			38,373		37,186
Aviation	23,250			4,379		12,321		3,376		29,142			36,338			43,326		65,143
Credit and political risk	23,563			7,099		19,537		10,003		26,126			13,583			60,203		39,405
Professional lines	269,524			208,174		262,611		159,809		255,891			224,507			900,071		836,634
Liability	84,447			100,018		104,952		57,811		72,834			52,176			347,227		266,696
Accident & health	28,074			58,799		55,368		126,234		9,328			10,577			268,475		160,795
TOTAL INSURANCE SEGMENT	606,591			574,778		781,055		596,715		580,116			521,281			2,559,138		2,309,481
REINSURANCE SEGMENT
Catastrophe	15,537			71,851		138,461		167,803		24,325			12,904			393,652		368,314
Property	20,689			58,294		63,457		221,876		9,991			29,508			364,315		315,758
Professional lines	166,377			66,017		57,406		90,555		90,313			80,368			380,355		301,863
Credit and surety	10,372			29,487		20,327		208,308		7,225			4,650			268,494		264,572
Motor	(3,789		)	4,286		16,557		224,991		8,940			(622		)	242,046		235,648
Liability	15,118			75,100		78,868		99,587		13,976			14,567			268,673		242,817
Agriculture	(11,214		)	8,659		55,319		80,017		3,789			71			132,780		19,326
Engineering	5,142			12,462		5,741		40,912		14,033			4,518			64,258		70,597
Other	1,134			3,863		2,614		15,719		(294		)	(741		)	23,330		11,267
TOTAL REINSURANCE SEGMENT	219,366			330,019		438,750		1,149,768		172,298			145,223			2,137,903		1,830,162
CONSOLIDATED TOTAL	$	825,957		$	904,797	$	1,219,805	$	1,746,483	$	752,414		$	666,504		$	4,697,041	$	4,139,643

5

AXIS Capital Holdings Limited

INSURANCE SEGMENT DATA - QUARTERLY

	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011
UNDERWRITING REVENUES
Gross premiums written	$	606,591		$	574,778		$	781,055		$	596,715		$	580,116		$	521,281
Net premiums written	427,647			393,627			559,584			432,681			345,802			349,912
Gross premiums earned	631,695			626,005			611,585			589,071			591,310			538,701
Ceded premiums expensed	(181,230		)	(177,933		)	(189,240		)	(187,191		)	(208,425		)	(167,056		)
Net premiums earned	450,465			448,072			422,345			401,880			382,885			371,645
Other insurance related income	681			725			435			595			791			351
Total underwriting revenues	451,146			448,797			422,780			402,475			383,676			371,996
UNDERWRITING EXPENSES
Net losses and loss expenses	285,634			216,440			330,992			217,336			300,094			227,064
Acquisition costs	65,266			61,087			58,749			57,261			48,024			54,508
General and administrative expenses	89,722			82,548			88,526			86,889			81,591			68,187
Total underwriting expenses	440,622			360,075			478,267			361,486			429,709			349,759
UNDERWRITING INCOME (LOSS)	$	10,524		$	88,722		$	(55,487	)	$	40,989		$	(46,033	)	$	22,237
KEY RATIOS
Current accident year loss ratio	64.3		%	55.9		%	80.0		%	55.5		%	88.9		%	68.9		%
Prior period reserve development	(0.9		%)	(7.6		%)	(1.6		%)	(1.4		%)	(10.5		%)	(7.8		%)
Net loss and loss expense ratio	63.4		%	48.3		%	78.4		%	54.1		%	78.4		%	61.1		%
Acquisition cost ratio	14.5		%	13.6		%	13.9		%	14.2		%	12.5		%	14.7		%
General and administrative expense ratio	19.9		%	18.5		%	20.9		%	21.6		%	21.3		%	18.3		%
Combined ratio	97.8		%	80.4		%	113.2		%	89.9		%	112.2		%	94.1		%

6

AXIS Capital Holdings Limited

REINSURANCE SEGMENT DATA - QUARTERLY

	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011
UNDERWRITING REVENUES
Gross premiums written	$	219,366		$	330,019		$	438,750		$	1,149,768		$	172,298		$	145,223
Net premiums written	220,318			322,762			433,823			1,137,759			172,294			145,151
Gross premiums earned	497,452			499,284			528,319			475,859			476,949			481,252
Ceded premiums expensed	(6,006		)	(2,114		)	(4,791		)	(3,700		)	(3,785		)	(6,144		)
Net premiums earned	491,446			497,170			523,528			472,159			473,164			475,108
Other insurance related income	1,987			—			—			—			—			—
Total underwriting revenues	493,433			497,170			523,528			472,159			473,164			475,108
UNDERWRITING EXPENSES
Net losses and loss expenses	265,726			285,082			311,907			221,078			374,953			356,390
Acquisition costs	110,033			112,595			110,970			88,230			96,039			102,864
General and administrative expenses	34,039			35,127			35,243			33,041			30,430			23,015
Total underwriting expenses	409,798			432,804			458,120			342,349			501,422			482,269
UNDERWRITING INCOME (LOSS)	$	83,635		$	64,366		$	65,408		$	129,810		$	(28,258	)	$	(7,161	)
KEY RATIOS
Current accident year loss ratio	62.0		%	66.6		%	66.3		%	57.2		%	84.4		%	85.3		%
Prior period reserve development	(7.9		%)	(9.3		%)	(6.7		%)	(10.4		%)	(5.2		%)	(10.3		%)
Net loss and loss expense ratio	54.1		%	57.3		%	59.6		%	46.8		%	79.2		%	75.0		%
Acquisition cost ratio	22.4		%	22.6		%	21.2		%	18.7		%	20.3		%	21.7		%
General and administrative expense ratio	6.9		%	7.2		%	6.7		%	7.0		%	6.5		%	4.8		%
Combined ratio	83.4		%	87.1		%	87.5		%	72.5		%	106.0		%	101.5		%

7

AXIS Capital Holdings Limited

NET INVESTMENT INCOME - QUARTERLY AND YEAR

																			Year ended December 31,
	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011			2013			2012
Fixed maturities	$	74,732		$	74,691		$	74,503		$	69,683		$	75,968		$	77,933		$	293,609		$	304,400
Other investments	41,408			32,127			11,848			43,431			15,302			25,124			128,814			87,660
Equity securities	2,478			3,871			3,134			1,414			2,862			4,209			10,897			11,904
Cash and cash equivalents	3,423			382			1,265			1,267			549			894			6,337			4,528
Short-term investments	125			127			397			532			(129		)	431			1,181			596
Gross investment income	122,166			111,198			91,147			116,327			94,552			108,591			440,838			409,088
Investment expense	(8,303		)	(7,769		)	(8,035		)	(7,419		)	(7,705		)	(6,229		)	(31,526		)	(28,131		)
Net investment income	$	113,863		$	103,429		$	83,112		$	108,908		$	86,847		$	102,362		$	409,312		$	380,957

8

AXIS Capital Holdings Limited

CONSOLIDATED BALANCE SHEETS

	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
	2013			2013			2013			2013			2012			2011
ASSETS
Investments:
Fixed maturities, available for sale, at fair value	$	11,986,327		$	11,984,740		$	11,644,912		$	11,973,364		$	11,928,049		$	10,940,100
Equity securities, available for sale, at fair value	701,987			650,627			618,795			617,436			666,548			677,560
Other investments, at fair value	1,045,810			994,572			962,315			972,364			843,437			699,320
Short-term investments, at fair value and amortized cost	46,212			84,709			45,904			98,964			108,860			149,909
Total investments	13,780,336			13,714,648			13,271,926			13,662,128			13,546,894			12,466,889
Cash and cash equivalents	987,876			1,109,998			1,116,248			856,215			850,550			1,082,838
Accrued interest receivable	97,132			98,285			95,098			95,877			97,220			98,346
Insurance and reinsurance premium balances receivable	1,688,957			1,920,985			2,166,982			2,015,578			1,474,821			1,413,839
Reinsurance recoverable on paid and unpaid losses	1,929,988			1,899,510			1,981,441			1,895,547			1,863,819			1,770,329
Deferred acquisition costs	456,122			505,002			543,069			561,417			389,248			407,527
Prepaid reinsurance premiums	330,261			340,280			331,528			300,617			315,676			238,623
Receivable for investments sold	1,199			1,317			1,399			12,546			1,254			3,006
Goodwill and intangible assets	89,528			91,656			91,370			97,001			97,493			99,590
Other assets	273,385			251,268			247,252			214,016			215,369			225,072
TOTAL ASSETS	$	19,634,784		$	19,932,949		$	19,846,313		$	19,710,942		$	18,852,344		$	17,806,059
LIABILITIES
Reserve for losses and loss expenses	$	9,582,140		$	9,484,516		$	9,342,817		$	9,097,703		$	9,058,731		$	8,425,045
Unearned premiums	2,683,849			2,990,301			3,209,055			3,135,610			2,454,692			2,454,462
Insurance and reinsurance balances payable	234,412			261,737			292,572			208,018			270,739			206,539
Senior notes	995,855			995,699			995,546			995,394			995,245			994,664
Payable for investments purchased	21,744			174,034			234,001			169,646			64,553			151,941
Other liabilities	248,822			238,833			210,375			215,141			228,623			129,329
TOTAL LIABILITIES	13,766,822			14,145,120			14,284,366			13,821,512			13,072,583			12,361,980
SHAREHOLDERS’ EQUITY
Preferred shares - Series A, B, C and D	627,843			627,843			627,843			502,843			502,843			500,000
Common shares	2,174			2,172			2,172			2,168			2,146			2,125
Additional paid-in capital	2,240,125			2,225,826			2,213,204			2,199,092			2,179,034			2,105,386
Accumulated other comprehensive income	117,825			130,373			24,755			310,108			362,622			128,162
Retained earnings	5,062,706			4,921,716			4,813,687			4,769,764			4,497,789			4,155,392
Treasury shares, at cost	(2,232,711		)	(2,120,101		)	(2,119,714		)	(1,894,545		)	(1,764,673		)	(1,446,986		)
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO AXIS CAPITAL	5,817,962			5,787,829			5,561,947			5,889,430			5,779,761			5,444,079
Noncontrolling interests	50,000			—			—			—			—			—
TOTAL SHAREHOLDERS' EQUITY	5,867,962			5,787,829			5,561,947			5,889,430			5,779,761			5,444,079
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	19,634,784		$	19,932,949		$	19,846,313		$	19,710,942		$	18,852,344		$	17,806,059
Basic common shares outstanding	109,485			111,651			111,588			116,306			117,920			125,588
Diluted common shares outstanding	113,325			115,684			115,631			120,594			122,793			129,818
Book value per common share		$47.40			$46.22			$44.22			$46.31			$44.75			$39.37
Diluted book value per common share	45.80			44.60			42.67			44.67			42.97			38.08
Diluted tangible book value per common share		$45.01			$43.81			$41.88			$43.86			$42.18			$37.32
Debt to total capital [a]	14.6		%	14.7		%	15.2		%	14.5		%	14.7		%	15.4		%
Debt and preferred equity to total capital	23.8		%	23.9		%	24.8		%	21.8		%	22.1		%	23.2		%

[a] The debt to total capital ratio is calculated by dividing our senior notes by total capital. Total capital represents the sum of total shareholders’ equity attributable to AXIS Capital and our senior notes.

9

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS PORTFOLIO

At December 31, 2013

	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value			Percentage
Fixed Maturities, available for sale
U.S. government and agency	$	1,421,245	$	1,405	$	(33,952	)	$	1,388,698		9	%
Non-U.S. government	1,208,384		17,990		(49,992		)	1,176,382			8	%
Corporate debt	3,533,585		84,881		(10,228		)	3,608,238			24	%
Agency RMBS	2,485,139		21,979		(58,291		)	2,448,827			17	%
CMBS	790,095		11,285		(3,966		)	797,414			5	%
Non-Agency RMBS	65,590		2,375		(398		)	67,567			1	%
ABS	955,274		6,871		(8,694		)	953,451			6	%
Municipals	1,527,834		32,432		(14,516		)	1,545,750			10	%
Total fixed maturities	11,987,146		179,218		(180,037		)	11,986,327			80	%
Equity securities, available for sale
Common stocks	345,759		98,742		(6,183		)	438,318			3	%
Exchange traded funds	106,762		32,085		—			138,847			1	%
Non-U.S. bond mutual funds	113,698		11,124		—			124,822			1	%
Total equity securities	566,219		141,951		(6,183		)	701,987			5	%
Total available for sale investments	$	12,553,365	$	321,169	$	(186,220	)	12,688,314			85	%
Other investments (see below)								1,045,810			7	%
Short-term investments								46,212			—	%
Total investments								13,780,336			92	%
Cash and cash equivalents [a]								987,876			7	%
Accrued interest receivable								97,132			1	%
Net receivable/(payable) for investments sold (purchased)								(20,545		)	—	%
Total cash and invested assets								$	14,844,799		100	%
								Fair Value			Percentage
Other Investments:
Long/short equity funds								$	425,444		41	%
Multi-strategy funds								285,155			27	%
Event-driven funds								190,458			18	%
Leveraged bank loan funds								48,753			5	%
Direct lending funds								22,134			2	%
Collateralized loan obligations - equity tranches								73,866			7	%
Total								$	1,045,810		100	%

[a] Includes $65 million of restricted cash and cash equivalents.

10

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS COMPOSITION - QUARTERLY

	Q4 2013		Q3 2013		Q2 2013		Q1 2013		Q4 2012		Q4 2011
	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
CASH AND INVESTED ASSETS PORTFOLIO
Fixed Maturities:
U.S. government and agency	9.4	%	10.1	%	9.4	%	9.6	%	9.9	%	8.5	%
Non-U.S. government	7.9	%	8.2	%	8.3	%	7.7	%	7.7	%	9.0	%
Corporate debt	24.3	%	23.8	%	24.4	%	25.8	%	26.9	%	26.7	%
MBS:
Agency RMBS	16.5	%	17.0	%	16.4	%	17.6	%	18.4	%	19.5	%
CMBS	5.4	%	5.0	%	5.4	%	5.7	%	5.8	%	2.3	%
Non-agency RMBS	0.5	%	0.5	%	0.6	%	0.6	%	0.7	%	1.2	%
ABS	6.4	%	6.2	%	6.4	%	6.4	%	4.5	%	4.7	%
Municipals	10.4	%	10.5	%	10.8	%	9.5	%	8.9	%	9.1	%
Total Fixed Maturities	80.8	%	81.3	%	81.7	%	82.9	%	82.8	%	81.0	%
Equity Securities	4.8	%	4.4	%	4.3	%	4.2	%	4.6	%	5.0	%
Other investments	7.0	%	6.7	%	6.8	%	6.7	%	5.8	%	5.3	%
Short-term investments	0.1	%	0.6	%	0.3	%	0.7	%	0.6	%	1.2	%
Total investments	92.7	%	93.0	%	93.1	%	94.5	%	93.8	%	92.5	%
Cash and cash equivalents	6.7	%	7.5	%	7.8	%	5.9	%	5.9	%	7.9	%
Accrued interest receivable	0.7	%	0.7	%	0.7	%	0.7	%	0.7	%	0.7	%
Net receivable/(payable) for investments sold or purchased	(0.1	%)	(1.2	%)	(1.6	%)	(1.1	%)	(0.4	%)	(1.1	%)
Total Cash and Invested Assets	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
CREDIT QUALITY	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
Cash and cash equivalents [a]	7.6	%	7.2	%	6.9	%	5.5	%	6.1	%	7.8	%
U.S. government and agency	10.7	%	11.4	%	10.7	%	10.9	%	11.1	%	9.6	%
AAA	32.2	%	33.6	%	33.5	%	37.0	%	37.7	%	40.7	%
AA	13.8	%	14.0	%	13.8	%	11.2	%	9.5	%	11.4	%
A	17.1	%	16.2	%	17.0	%	17.1	%	17.3	%	16.3	%
BBB	11.3	%	10.4	%	10.7	%	10.9	%	11.6	%	9.8	%
Below BBB	7.3	%	7.2	%	7.4	%	7.4	%	6.7	%	4.4	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
MATURITY PROFILE	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
Within one year (includes cash & cash equivalents)	6.3	%	6.1	%	5.8	%	6.9	%	6.3	%	13.8	%
From one to five years	42.5	%	42.5	%	40.5	%	38.5	%	41.5	%	38.4	%
From five to ten years	14.9	%	15.3	%	17.6	%	17.6	%	16.2	%	15.2	%
Above ten years	0.8	%	1.0	%	0.9	%	0.7	%	0.8	%	1.8	%
Asset-backed and mortgage-backed securities	35.5	%	35.1	%	35.2	%	36.3	%	35.2	%	30.8	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
CASH AND INVESTED ASSETS PORTFOLIO CHARACTERISTICS
Book yield of fixed maturities	2.5	%	2.6	%	2.6	%	2.6	%	2.6	%	2.9	%
Yield to maturity of fixed maturities	2.3	%	2.2	%	2.4	%	1.7	%	1.6	%	2.2	%
Average duration of fixed maturities (inclusive of duration hedges)	3.2	yrs	3.2 yrs		3.5 yrs		3.1 yrs		3.0	yrs	2.8	yrs
Average credit quality	AA-		AA-		AA-		AA-		AA-		AA-

[a] Cash and cash equivalents are net of receivables/payables for investments sold/purchased.

11

AXIS Capital Holdings Limited

GEOGRAPHIC DISTRIBUTION OF FIXED MATURITIES AND EQUITIES

At December 31, 2013

				Corporate Debt
	Governments and Agencies			Financials		Non-Financials		Government Guaranteed		Total		Agency RMBS		Non-Agency RMBS/CMBS		ABS		Total Fixed Maturities		Equities			Total Fixed Maturities and Equities
Composition by country
Eurozone countries:
Germany	$	22,833		$	2,997	$	47,298	$	40,621	$	90,916	$	—	$	—	$	5,176	$	118,925	$	8,113		$	127,038
Supranational [a]	115,777			—		—		—		—		—		—		—		115,777		—			115,777
Netherlands	20,776			10,953		39,519		—		50,472		—		227		4,838		76,313		6,745			83,058
France	—			6,514		38,852		—		45,366		—		—		3,225		48,591		17,940			66,531
Spain	—			—		17,255		—		17,255		—		—		—		17,255		858			18,113
Luxembourg	—			—		17,494		—		17,494		—		—		—		17,494		—			17,494
Ireland	—			—		4,065		—		4,065		—		—		5,668		9,733		2,452			12,185
Italy	—			—		8,112		—		8,112		—		—		—		8,112		—			8,112
Belgium	—			—		6,454		—		6,454		—		—		—		6,454		1,194			7,648
Austria	1,272			—		2,922		—		2,922		—		—		—		4,194		—			4,194
Other [b]	—			—		—		—		—		—		—		—		—		124,822			124,822
Total eurozone	160,658			20,464		181,971		40,621		243,056		—		227		18,907		422,848		162,124			584,972
Other concentrations:
United Kingdom	182,230			22,250		156,513		3,940		182,703		—		10,993		32,400		408,326		23,395			431,721
Canada	165,013			22,033		46,020		10,059		78,112		—		—		—		243,125		12,489			255,614
Australia	158,056			1,330		33,971		—		35,301		—		—		4,146		197,503		4,141			201,644
Mexico	66,987			—		45,479		2,435		47,914		—		—		—		114,901		3,368			118,269
Brazil	94,796			2,602		6,751		—		9,353		—		—		—		104,149		—			104,149
Other	348,642			23,552		78,551		7,927		110,030		—		6,273		—		464,945		125,044		[c]	589,989
Total other concentrations	1,015,724			71,767		367,285		24,361		463,413		—		17,266		36,546		1,532,949		168,437			1,701,386
Total Non-U.S. concentrations	1,176,382			92,231		549,256		64,982		706,469		—		17,493		55,453		1,955,797		330,561			2,286,358
United States	1,119,632		[d]	1,305,623		1,596,146		—		2,901,769		2,448,827		847,488		897,998		8,215,714		371,426		[e]	8,587,140
United States agencies	269,066			—		—		—		—		—		—		—		269,066		—			269,066
United States local governments	1,545,750			—		—		—		—		—		—		—		1,545,750		—			1,545,750
Total U.S. concentrations	2,934,448			1,305,623		1,596,146		—		2,901,769		2,448,827		847,488		897,998		10,030,530		371,426			10,401,956
Totals	$	4,110,830		$	1,397,854	$	2,145,402	$	64,982	$	3,608,238	$	2,448,827	$	864,981	$	953,451	$	11,986,327	$	701,987		$	12,688,314

[a] Represents holdings of the European Investment Bank.

[b] Represents holdings in two non-U.S. bond mutual funds with underlying exposure to primarily sovereign and corporate debt. The primary countries of risk for these underlying securities are countries within the eurozone.

[c] Contains $6 million of exchange-traded funds (“ETF’s”) designed to track indexes with primary underlying exposures to countries other than the United States and those within the eurozone.

[d] Represents United States Treasuries.

[e] Represents $282 million of common stocks of companies with the United States as their primary country of risk and $89 million of ETF’s designed to track the S&P 500, an index consisting primarily of exposure to the United States.

12

AXIS Capital Holdings Limited

CORPORATE DEBT COMPOSITION

At December 31, 2013

	Fair Value		% of Total Corporate Debt		% of Total Cash and Invested Assets
Composition by sector - Investment grade
Financial institutions:
U.S. banking	$	922,033	25.6	%	6.2	%
Insurance	166,987		4.6	%	1.1	%
Corporate/commercial finance	141,956		3.9	%	1.0	%
Foreign banking [a]	45,320		1.3	%	0.3	%
Investment brokerage	8,218		0.2	%	0.1	%
Total financial institutions	1,284,514		35.6	%	8.7	%
Communications	275,671		7.6	%	1.9	%
Consumer cyclicals	259,122		7.2	%	1.7	%
Consumer non-cyclicals	243,476		6.7	%	1.6	%
Utilities	209,680		5.8	%	1.4	%
Industrials	134,243		3.7	%	0.9	%
Energy	111,047		3.1	%	0.7	%
Transportation	80,681		2.2	%	0.5	%
Non-U.S. government guaranteed [b]	64,982		1.8	%	0.4	%
Technology	44,175		1.2	%	0.3	%
Total investment grade	2,707,591		74.9	%	18.1	%
Total non-investment grade	900,647		25.1	%	6.2	%
Total corporate debt	$	3,608,238	100.0	%	24.3	%

[a] Located in Canada, United Kingdom, Australia, New Zealand and Japan.

[b] Includes $41 million from Germany. No other corporate debt guaranteed by a eurozone country.

13

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

TEN LARGEST CORPORATE DEBT HOLDINGS

At December 31, 2013

	Amortized Cost		Net Unrealized Gain		Fair Value		% of Total Fixed  Maturities
ISSUER [a]
BANK OF AMERICA CORP	$	160,013	$	5,228	$	165,241	1.4	%
JP MORGAN CHASE & CO	152,409		2,184		154,593		1.3	%
CITIGROUP INC	138,277		4,492		142,769		1.2	%
MORGAN STANLEY	131,016		4,966		135,982		1.1	%
GOLDMAN SACHS GROUP INC	127,001		4,784		131,785		1.1	%
DAIMLER AG	77,088		655		77,743		0.6	%
WELLS FARGO & COMPANY	68,435		1,684		70,119		0.6	%
GENERAL ELECTRIC CO	65,284		786		66,070		0.6	%
FORD MOTOR COMPANY	63,739		1,969		65,708		0.5	%
AMERICAN INTERNATIONAL GROUP INC	51,542		1,594		53,136		0.4	%

[a] The holdings represent direct investments in fixed maturities of the parent issuer and its major subsidiaries. These investments exclude asset and mortgage backed securities that were issued, sponsored or serviced by the parent.

14

AXIS Capital Holdings Limited

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES COMPOSITION

At December 31, 2013

	Agencies			AAA			AA			A			BBB			Non-Investment Grade			Total
Residential MBS	$	2,448,827		$	12,261		$	370		$	5,891		$	8,095		$	40,950		$	2,516,394
Commercial MBS	—			411,811			233,360			73,932			76,493			1,818			797,414
ABS	—			636,911			237,881			38,382			37,052			3,225			953,451
Total mortgage-backed and asset-backed securities	$	2,448,827		$	1,060,983		$	471,611		$	118,205		$	121,640		$	45,993		$	4,267,259
Percentage of total	57.4		%	24.9		%	11.1		%	2.8		%	2.9		%	0.9		%	100.0		%

15

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011
Reinsurance recoverable on paid losses and loss expenses:
Insurance	$	29,897		$	16,713		$	35,648		$	14,286		$	39,201		$	36,525
Reinsurance	(21		)	—			—			—			—			—
Total	$	29,876		$	16,713		$	35,648		$	14,286		$	39,201		$	36,525
Reinsurance recoverable on unpaid losses and loss expenses: OSLR
Insurance	$	587,727		$	608,886		$	635,089		$	590,478		$	561,652		$	541,423
Reinsurance	—			—			—			—			—			—
Total	$	587,727		$	608,886		$	635,089		$	590,478		$	561,652		$	541,423
Reinsurance recoverable on unpaid losses and loss expenses: IBNR
Insurance	$	1,321,597		$	1,285,078		$	1,258,113		$	1,239,615		$	1,214,482		$	1,154,556
Reinsurance	9,280			6,982			69,897			66,781			64,580			56,286
Total	$	1,330,877		$	1,292,060		$	1,328,010		$	1,306,396		$	1,279,062		$	1,210,842
Provision against reinsurance recoverables:
Insurance	$	(18,492	)	$	(18,149	)	$	(17,306	)	$	(15,613	)	$	(16,096	)	$	(17,988	)
Reinsurance	—			—			—			—			—			(473		)
Total	$	(18,492	)	$	(18,149	)	$	(17,306	)	$	(15,613	)	$	(16,096	)	$	(18,461	)
Net reinsurance recoverables:
Insurance	$	1,920,729		$	1,892,528		$	1,911,544		$	1,828,766		$	1,799,239		$	1,714,516
Reinsurance	9,259			6,982			69,897			66,781			64,580			55,813
Total	$	1,929,988		$	1,899,510		$	1,981,441		$	1,895,547		$	1,863,819		$	1,770,329

16

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

At December 31, 2013

Categories	Gross Recoverable		Collateral			Gross Recoverable Net of Collateral		% of  Total Gross Recoverable Net  of Collateral	% of  Total Shareholders’ Equity	Provision Against Reinsurance Recoverable			Provision Against  Reinsurance Recoverable as % of Gross Recoverable	Net Recoverable
Top 10 reinsurers based on gross recoverables	$	1,506,561	$	(24,391	)	$	1,482,170	78.8%	25.5%	$	(13,023	)	0.9%	$	1,493,538
Other reinsurers balances > $20 million	183,490		(5,302		)	178,188		9.5%	3.1%	(1,615		)	0.9%	181,875
Other reinsurers balances < $20 million	258,429		(38,512		)	219,917		11.7%	3.7%	(3,854		)	1.5%	254,575
Total	$	1,948,480	$	(68,205	)	$	1,880,275	100.0%	32.3%	$	(18,492	)	0.9%	$	1,929,988

At December 31, 2013, 98.8% (December 31, 2012: 98.8%) of our gross recoverables were collectible from reinsurers rated the equivalent of A- or better by internationally recognized rating agencies.

Top 10 Reinsurers (net of collateral)	% of  Total Gross Recoverable Net  of Collateral	% of  Total Shareholders’ Equity Attributable to AXIS Capital
Transatlantic Reinsurance Company	14.3%	4.6%
Partner Reinsurance Company of the US	11.0%	3.6%
Swiss Reinsurance America Corporation	11.0%	3.6%
Lloyds of London	10.5%	3.4%
Berkley Insurance Company	8.7%	2.8%
Ace Property & Casualty Insurance	6.4%	2.1%
XL Reinsurance America Inc	5.4%	1.7%
Hannover Ruckversicherungs Aktiengesellschaft	4.1%	1.3%
Everest Reinsurance Company	3.9%	1.3%
Liberty Mutual Insurance Company	3.5%	1.1%
	78.8%	25.5%

17

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

	Quarter ended December 31, 2013									Year ended December 31, 2013
	Gross			Recoveries			Net			Gross			Recoveries			Net
Reserve for unpaid losses and loss expenses
Beginning of period	$	9,484,516		$	(1,882,797	)	$	7,601,719		$	9,058,731		$	(1,825,617	)	$	7,233,114
Incurred	668,133			(116,773		)	551,360			2,549,463			(415,268		)	2,134,195
Paid	(592,768		)	98,269			(494,499		)	(2,028,359		)	336,894			(1,691,465		)
Foreign exchange and other	22,259			1,189			23,448			2,305			3,879			6,184
End of period [a]	$	9,582,140		$	(1,900,112	)	$	7,682,028		$	9,582,140		$	(1,900,112	)	$	7,682,028

[a] At December 31, 2013, the gross reserve for losses and loss expenses included IBNR of $6,082 million, or 63%, of total gross reserves for loss and loss expenses. At December 31, 2012, the comparable amount was $5,786 million, or 64%.

18

AXIS Capital Holdings Limited

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

	Quarter ended December 31, 2013									Year ended December 31, 2013
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total
Gross losses paid	$	342,952		$	249,816		$	592,768		$	1,121,853		$	906,506		$	2,028,359
Reinsurance recoveries	(98,263		)	(6		)	(98,269		)	(336,888		)	(6		)	(336,894		)
Net losses paid	244,689			249,810			494,499			784,965			906,500			1,691,465
Change in:
Reported case reserves	(30,643		)	64,636			33,993			171,610			65,157			236,767
IBNR	87,794			(46,422		)	41,372			227,501			56,835			284,336
Reinsurance recoveries on unpaid loss and loss expense reserves	(16,206		)	(2,298		)	(18,504		)	(133,674		)	55,301			(78,373		)
Total net incurred losses and loss expenses	$	285,634		$	265,726		$	551,360		$	1,050,402		$	1,083,793		$	2,134,195
Gross reserve for losses and loss expenses	$	4,873,184		$	4,708,956		$	9,582,140		$	4,873,184		$	4,708,956		$	9,582,140
Net favorable prior year reserve development	$	4,000		$	38,788		$	42,788		$	50,355		$	169,081		$	219,436
Key Ratios
Net paid to net incurred percentage	85.7		%	94.0		%	89.7		%	74.7		%	83.6		%	79.3		%
Net paid losses / Net premiums earned	54.3		%	50.8		%	52.5		%	45.6		%	45.7		%	45.6		%
Change in net loss and loss expense reserves / Net premiums earned	9.1		%	3.3		%	6.0		%	15.4		%	8.9		%	12.0		%
Net loss and loss expense ratio	63.4		%	54.1		%	58.5		%	61.0		%	54.6		%	57.6		%

19

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

INSURANCE - QUARTERLY

	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011
Gross losses paid	$	342,952		$	275,082		$	269,569		$	234,250		$	250,927		$	294,834
Reinsurance recoveries	(98,263		)	(89,562		)	(89,115		)	(59,950		)	(87,520		)	(106,667		)
Net losses paid	244,689			185,520			180,454			174,300			163,407			188,167
Change in:
Reported case reserves	(30,643		)	8,348			144,059			49,847			199,775			61,632
IBNR	87,794			14,979			73,154			51,575			(9,596		)	(29,060		)
Reinsurance recoveries on unpaid loss and loss expense reserves	(16,206		)	7,593			(66,675		)	(58,386		)	(53,492		)	6,325
Total net incurred losses and loss expenses	$	285,634		$	216,440		$	330,992		$	217,336		$	300,094		$	227,064
Gross reserve for losses and loss expenses	$	4,873,184		$	4,819,976		$	4,771,435		$	4,579,672		$	4,492,553		$	4,081,741
Net favorable prior year reserve development	$	4,000		$	34,065		$	6,693		$	5,598		$	40,353		$	28,938
Key Ratios
Net paid to net incurred percentage	85.7		%	85.7		%	54.5		%	80.2		%	54.5		%	82.9		%
Net paid losses/Net premiums earned	54.3		%	41.4		%	42.7		%	43.4		%	42.7		%	50.6		%
Change in net loss and loss expense reserves / Net premiums earned	9.1		%	6.9		%	35.7		%	10.7		%	35.7		%	10.5		%
Net loss and loss expense ratio	63.4		%	48.3		%	78.4		%	54.1		%	78.4		%	61.1		%

20

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

REINSURANCE - QUARTERLY

	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011
Gross losses paid	$	249,816		$	224,578		$	236,602		$	195,510		$	284,517		$	288,284
Reinsurance recoveries	(6		)	—			—			—			—			—
Net losses paid	249,810			224,578			236,602			195,510			284,517			288,284
Change in:
Reported case reserves	64,636			19,370			(3,577		)	(15,273		)	38,303			83,915
IBNR	(46,422		)	(21,781		)	81,998			43,041			54,928			(13,526		)
Reinsurance recoveries on unpaid loss and loss expense reserves	(2,298		)	62,915			(3,116		)	(2,200		)	(2,795		)	(2,283		)
Total net incurred losses and loss expenses	$	265,726		$	285,082		$	311,907		$	221,078		$	374,953		$	356,390
Gross reserve for losses and loss expenses	$	4,708,956		$	4,664,540		$	4,571,382		$	4,518,031		$	4,566,178		$	4,343,304
Net prior year favorable reserve development	$	38,788		$	45,970		$	35,422		$	48,901		$	24,213		$	48,837
Key Ratios
Net paid to net incurred percentage	94.0		%	78.8		%	75.9		%	88.4		%	75.9		%	80.9		%
Net paid losses / Net premiums earned	50.8		%	45.2		%	45.2		%	41.4		%	60.1		%	60.7		%
Change in net loss and loss expense reserves / Net premiums earned	3.3		%	12.1		%	14.4		%	5.4		%	19.1		%	14.3		%
Net loss and loss expense ratio	54.1		%	57.3		%	59.6		%	46.8		%	79.2		%	75.0		%

21

AXIS Capital Holdings Limited

NET PROBABLE MAXIMUM LOSSES TO CERTAIN PEAK INDUSTRY CATASTROPHE EXPOSURES - AS OF JANUARY 1, 2014

		Estimated Net Exposures (millions of U.S. dollars)
Territory	Peril	50 Year Return Period		100 Year Return Period		250 Year Return Period
Single zone, single event
Southeast	U.S. Hurricane	$	502	$	705	$	887
Northeast	U.S. Hurricane	60		206		403
Mid-Atlantic	U.S. Hurricane	107		361		772
Gulf of Mexico	U.S. Hurricane	338		507		786
California	Earthquake	352		479		558
Europe	Windstorm	264		371		479
Japan	Earthquake	216		284		482
Japan	Windstorm	68		126		172

The above table shows our Probable Maximum Loss (“PML”) to a single natural peril catastrophe event within certain defined single zones which correspond to peak industry catastrophe exposures at January 1, 2014. The return period refers to the frequency with which losses of a given amount or greater are expected to occur. A zone is a geographic area in which the insurance risks are considered to be correlated to a single catastrophic event. Estimated losses from a modeled event are grouped into a single zone, as shown above, based on where the majority of the total estimated industry loss is expected to occur.

As indicated in the table above, our modeled single occurrence 1-in-100 year return period PML for a Southeast hurricane, net of reinsurance, is approximately $0.7 billion. According to our modeling, there is a one percent chance that on an annual basis, our losses incurred from a Southeast hurricane event could be in excess of $0.7 billion. Conversely, there is a 99% chance that on an annual basis, the loss from a Southeast hurricane will fall below $0.7 billion.

We have developed our PML estimates using multiple commercially available catastrophe vendor models, including AIR and RMS. We weight the use of these vendor models based upon our own judgment and experience, and include in our estimates non-modeled perils and other factors which we believe provide us with a more complete view of catastrophe risk.

A supplementary disclosure entitled “Overview of AXIS Natural Peril Catastrophe Risk Measurement and Management” dated August 3, 2011 is available in the Investor Information section of our website. This disclosure provides an overview of our PML methodology, including our approach to zonal aggregation, as well as information about zonal definitions commonly used by other external parties.

Our PML estimates are based on assumptions that are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies can affect actual losses and could cause actual losses to differ materially from those expressed above. We aim to reduce the potential for model error in a number of ways, foremost by ensuring that management’s judgment supplements the model outputs. We also perform ongoing model validation both within our business units and through our catastrophe model validation unit. These validation procedures include sensitivity testing of models to understand their key variables and, where possible, back testing the model outputs to actual results.

Our estimated net losses from peak zone catastrophes may change from period to period as a result of several factors, which include but are not limited to, updates to vendor catastrophe models, changes in our own modeling, changes in our underwriting portfolios, changes to our reinsurance purchasing strategy and changes in foreign exchange rates.

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AXIS Capital Holdings Limited

EARNINGS (LOSS) PER COMMON SHARE INFORMATION - AS REPORTED, GAAP

	Quarter ended December 31,					Year ended December 31,
	2013		2012			2013		2012
Net income (loss) available to common shareholders	$	171,524	$	(18,551	)	$	683,910	$	495,004
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Weighted average shares outstanding - basic	110,757		117,918			113,636		122,148
Dilutive share equivalents: [a]
Stock compensation plans	1,945		—			1,692		1,506
Weighted average shares outstanding - diluted	112,702		117,918			115,328		123,654
EARNINGS (LOSS) PER COMMON SHARE
Basic		$1.55		($0.16	)		$6.02		$4.05
Diluted		$1.52		($0.16	)		$5.93		$4.00

[a] Due to the net loss incurred in the three months ended December 31, 2012, these securities were not included in the computation of diluted earnings per share because of their anti-dilutive effect.

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AXIS Capital Holdings Limited

EARNINGS (LOSS) PER COMMON SHARE INFORMATION AND COMMON SHARE ROLLFOWARD - QUARTERLY

	Q4 2013			Q3 2013			Q2 2013			Q1 2013			Q4 2012			Q4 2011
Net income (loss) available to common shareholders	$	171,524		$	137,121		$	72,447		$	302,816		$	(18,551	)	$	80,064
COMMON SHARES OUTSTANDING
Common shares - at beginning of period	111,651			111,588			116,306			117,920			117,857			126,141
Shares issued, including those sourced from treasury [a]	162			74			404			1,755			88			1,060
Shares repurchased for treasury	(2,328		)	(11		)	(5,122		)	(3,369		)	(25		)	(1,613		)
Common shares - at end of period	109,485			111,651			111,588			116,306			117,920			125,588
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average shares outstanding - basic	110,757			111,676			115,163			117,022			117,918			126,360
Dilutive share equivalents: [b]
Warrants	—			—			—			—			—			221
Stock compensation plans	1,945			1,679			1,508			1,636			—			1,105
Weighted average shares outstanding - diluted	112,702			113,355			116,671			118,658			117,918			127,686
EARNING (LOSS) PER SHARE
Basic		$1.55			$1.23			$0.63			$2.59			($0.16	)		$0.63
Diluted		$1.52			$1.21			$0.62			$2.55			($0.16	)		$0.63

[a] The cashless exercise of warrants resulted in the issuance of 1,041 shares during the fourth quarter of 2011.

[b] Due to the net loss incurred in the three months ended December 31, 2012, these securities were not included in the computation of diluted earnings per share because of their anti-dilutive effect.

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AXIS Capital Holdings Limited

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

	At December 31, 2013
	Weighted Average Strike Price		Common Shareholders’ Equity		Outstanding Common Shares net of Treasury Shares	Per share
Closing stock price							$47.57
Book value per common share			$	5,190,119	109,485		$47.40
Dilutive securities: [c]
Restricted stocks					2,515	(1.06		)
Options		$27.98			88	(0.04		)
Restricted and phantom stock units					1,237	(0.50		)
Diluted book value per common share			$	5,190,119	113,325		$45.80
	At December 31, 2012
	Weighted Average Strike Price		Common Shareholders’ Equity [b]		Outstanding Common Shares net of Treasury Shares	Per share
Closing stock price							$34.64
Book value per common share			$	5,276,918	117,920		$44.75
Dilutive securities:
Restricted stocks					4,281	(1.57		)
Options		$28.74			157	(0.05		)
Restricted and phantom stock units					435	(0.16		)
Diluted book value per common share			$	5,276,918	122,793		$42.97

[a] This method assumes that proceeds received upon exercise of options will be used to repurchase our common shares at the closing market price. Unvested restricted stocks and units and unrestricted phantom stock units are also added to determine the diluted common shares outstanding.

[b] Common share dividends were historically recognized as a reduction of retained earnings, a component of common shareholders' equity, when paid. During the fourth quarter of 2012, we recognized a $31 million adjustment in order to recognize dividends when declared.

[c] Excludes cash-settled restricted stock unit awards.

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AXIS Capital Holdings Limited

NON-GAAP FINANCIAL MEASURE RECONCILIATION

OPERATING INCOME
	Quarter ended December 31,						Year ended December 31,
	2013			2012			2013			2012
Net income (loss) available to common shareholders	$	171,524		$	(18,551	)	$	683,910		$	495,004
Adjustment for:
Net realized investment gains	(19,558		)	(31,771		)	(75,564		)	(127,469		)
Associated tax impact	(6,737		)	2,221			(2,039		)	11,615
Foreign exchange losses	14,484			21,300			26,143			29,512
Associated tax impact	(857		)	(884		)	(2,459		)	(1,148		)
Loss on repurchase of preferred shares	—			—			3,081			14,009
Associated tax impact	—			—			—			—
Operating income (loss)	$	158,856		$	(27,685	)	$	633,072		$	421,523
Net earnings (loss) per share - diluted	$	1.52		$	(0.16	)	$	5.93		$	4.00
Adjustment for:
Net realized investment gains	(0.17		)	(0.27		)	(0.66		)	(1.03		)
Associated tax impact	(0.06		)	0.02			(0.02		)	0.09
Foreign exchange losses	0.13			0.19			0.23			0.25
Associated tax impact	(0.01		)	(0.01		)	(0.02		)	(0.01		)
Loss on repurchase of preferred shares	—			—			0.03			0.11
Associated tax impact	—			—			—			—
Operating income (loss) per share - diluted	$	1.41		$	(0.23	)	$	5.49		$	3.41
Weighted average common shares and common share equivalents - diluted	112,702			117,918			115,328			123,654
Average common shareholders' equity	5,175,053			5,315,172			5,233,519			5,110,449
Annualized return on average common equity	13.3		%	(1.4		)%	13.1		%	9.7		%
Annualized operating return on average common equity	12.3		%	(2.1		)%	12.1		%	8.2		%

DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD [a]
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
	2013			2013			2013			2013			2012			2011
Common shareholders' equity	$	5,190,119		$	5,159,986		$	4,934,104		$	5,386,587		$	5,276,918		$	4,944,079
Less: goodwill and intangible assets	(89,528		)	(91,656		)	(91,370		)	(97,001		)	(97,493		)	(99,590		)
Tangible common shareholders' equity	$	5,100,591		$	5,068,330		$	4,842,734		$	5,289,586		$	5,179,425		$	4,844,489
Outstanding diluted common shares net of treasury shares	113,325			115,684			115,631			120,594			122,793			129,818
Diluted book value per common share	$	45.80		$	44.60		$	42.67		$	44.67		$	42.97		$	38.08
Diluted tangible book value per common share	$	45.01		$	43.81		$	41.88		$	43.86		$	42.18		$	37.32

[a] This method assumes that proceeds received upon exercise of options will be used to repurchase our common shares at the closing market price. Unvested restricted stocks and units and unrestricted phantom stock units are also added to determine the diluted common shares outstanding. Cash-settled restricted stock unit awards are excluded.

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AXIS Capital Holdings Limited

USE OF NON-GAAP FINANCIAL MEASURES

In this document, we present operating income, consolidated underwriting income, underwriting-related general and administrative expenses and diluted tangible book value per common share, which are “non-GAAP financial measures” as defined in Regulation G.

Operating income represents after-tax operational results without consideration of after-tax net realized investment gains (losses), foreign exchange losses (gains) and losses on the repurchase of preferred shares. We also present diluted operating earnings per share and operating return on average common equity ("operating ROACE"), which are derived from the non-GAAP operating income measure. Reconciliations of operating income, diluted operating earnings per share and operating ROACE to the nearest GAAP financial measures (based on net income available to common shareholders) are included on the previous page.

Consolidated underwriting income (loss) is a pre-tax measure of underwriting profitability that takes into account net premiums earned and other insurance related income as revenues and net losses and loss expenses, acquisition costs and underwriting-related general and administrative costs as expenses. Underwriting-related general and administrative expenses include those general and administrative expenses that are incremental and/or directly attributable to our individual underwriting operations. While these measures are presented in the Segment Information footnote to our Consolidated Financial Statements, they are considered non-GAAP financial measures when presented elsewhere on a consolidated basis. A reconciliation of consolidated underwriting income (loss) to income before income taxes (the nearest GAAP financial measure) is included in the 'Consolidated Statements of Income - Quarterly' section of this document. Our total general and administrative expenses (the nearest GAAP financial measure to underwriting-related general and administrative expenses) also includes corporate expenses; the two components are separately presented in the 'Consolidated Statements of Income - Quarterly' section of this document.

Tangible book value is defined as common shareholders' equity excluding goodwill and intangible assets. Diluted tangible book value per common share uses this measure as the numerator, with the denominator being outstanding diluted common shares calculated under the treasury stock method. A reconciliation of diluted tangible book value per common share to diluted book value per common share (the nearest GAAP financial measure) is included on the previous page.

We present our results of operations in the way we believe will be most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. This includes the presentation of “operating income” (in total and on a per share basis), “annualized operating ROACE” (which is based on the “operating income” measure), "consolidated underwriting income (loss)" (which incorporates "underwriting-related general and administrative expenses") and diluted tangible book value per common share.

Operating Income

Although the investment of premiums to generate income and realized investment gains (or losses) is an integral part of our operations, the determination to realize investment gains (or losses) is independent of the underwriting process and is heavily influenced by the availability of market opportunities. Furthermore, many users believe that the timing of the realization of investment gains (or losses) is somewhat opportunistic for many companies.

Foreign exchange losses (gains) in our Consolidated Statements of Operations are primarily driven by the impact of foreign exchange rate movements on net insurance-related liabilities. However, this movement is only one element of the overall impact of foreign exchange rate fluctuations on our financial position. In addition, we recognize unrealized foreign exchange losses (gains) on our available-for-sale investments in other comprehensive income and foreign exchange losses (gains) realized upon the sale of these investments in net realized investment gains (losses). These unrealized and realized foreign exchange movements generally offset a large portion of the foreign exchange losses (gains) reported separately in earnings, thereby minimizing the impact of foreign exchange rate movements on total shareholders’ equity. As such, the Statement of Operations foreign exchange losses (gains) in isolation are not a fair representation of the performance of our business.

Losses on repurchase of preferred shares arise from capital transactions and, therefore, are not reflective of underlying business performance.

In this regard, certain users of our financial statements evaluate earnings excluding after-tax net realized investment gains (losses), foreign exchange losses (gains) and losses on repurchase of preferred shares to understand the profitability of recurring sources of income. We believe that showing net income available to common shareholders exclusive of net realized gains (losses), foreign exchange losses (gains) and losses on repurchase of preferred shares reflects the underlying fundamentals of our business. In addition, we believe that this presentation enables investors and other users of our financial information to analyze performance in a manner similar to how our management analyzes the underlying business performance. We also believe this measure follows industry practice and, therefore, facilitates comparison of our performance with our peer group. We believe that equity analysts and certain rating agencies that follow us, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons.

Consolidated Underwriting Income (Loss)/Underwriting-Related General and Administrative Expenses

Corporate expenses include holding company costs necessary to support our worldwide (re)insurance operations and costs associated with operating as a publicly-traded company. As these costs are not incremental and/or directly attributable to our individual underwriting operations, we exclude them from underwriting-related general and administrative expenses and, therefore, consolidated underwriting income (loss). Interest expense and financing costs primarily relate to interest payable on our senior notes and are excluded from consolidated underwriting income (loss) for the same reason.

We evaluate our underwriting results separately from the performance of our investment portfolio. As such, we believe it appropriate to exclude net investment income and net realized investment gains (losses) from our underwriting profitability measure.

As noted above, foreign exchange losses (gains) in our Consolidated Statement of Operations primarily relate to our net insurance-related liabilities. However, we manage our investment portfolio in such a way that unrealized and realized foreign exchange rate gains (losses) on our investment portfolio generally offset a large portion of the foreign exchange losses (gains) arising from our underwriting portfolio. As a result, we believe that foreign exchange losses (gains) are not a meaningful contributor to our underwriting performance and, therefore, exclude them from consolidated underwriting income (loss). We believe that presentation of underwriting-related general and administrative expenses and consolidated underwriting income (loss) provides investors with an enhanced understanding of our results of operations, by highlighting the underlying pre-tax profitability of our underwriting activities.

Diluted Tangible Book Value per Common Share

Diluted tangible book value per common share removes certain effects of purchase accounting. We believe that this measure, in combination with diluted book value per common share, is useful in assessing value generated for our common shareholders.

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