Max Re Capital Posts Q4 Net Income of $0.29 per Diluted Share

February 4, 2003

Bermuda-based Max Re Capital Ltd. reported net income for the three months ended December 31, 2002 of $11.0 million, or income of $0.29 per diluted share, compared to net income of $10.1 million, or income of $0.26 per diluted share for the same period in 2001. It also represented a significant improvement over the $0.39 loss per diluted share the company reported for the third quarter.

The company stated that its “Net operating income before minority interest, which represents net income before minority interest reduced by net realized gains on fixed maturities, for the three months ended December 31, 2002 was $10.8 million, or income of $0.24 per diluted share, compared with net operating income before minority interest of $10.9 million, or income of $0.23 per diluted share for the three months ended December 31, 2001.”

Max Re posted a net loss of $5.7 million, or a loss of $0.15 per diluted share, for the year ended December 31, 2002, compared to net income of $2.5 million, or income of $0.06 per diluted share, for the year ended December 31, 2001. “For the year ended December 31, 2002, the Company had a net operating loss before minority interest of $12.4 million, or a loss of $0.27 per diluted share, compared to net operating income before minority interest of $0.1 million, or nil per diluted share, for the year ended December 31, 2001,” said the announcement.

Robert J. Cooney, Chairman, President and CEO, commented, “Our favorable results this quarter are primarily attributable to a 4% return on the alternative investment portfolio and emerging profits from property and casualty risk underwriting. We continue to be pleased by the market acceptance of our traditional property and casualty reinsurance capability, which accounted for over $78 million in gross premiums written during the quarter.”

The company noted that Total revenue for the fourth quarter was $201.6 million, compared to $272.8 million of total revenue for the same period in 2001, and that total revenue was $503.9 million in 2002 compared to $581.0 million for 2001.

“The decrease in total revenue for both the fourth quarter and the year results principally from a drop in the Company’s life and annuity underwriting production during 2002 versus 2001,” the announcement explained. It indicated, however that this had been “partially mitigated by increased net investment income from growth in fixed maturities securities and increased gains on alternative investments.”

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