Max Re Reports $ 9 Million Q3 Loss

November 1, 2004

Bermuda-based Max Re Capital Ltd. reported a net loss for the three months ended September 30, 2004 of $9.0 million, or 20 cents per diluted share, compared to net income of $38.8 million, or net income of 89 cents per diluted share, for the three months ended September 30, 2003.

The company also posted a net operating loss “before minority interest, which represents net income before minority interest reduced by net realized gains on sale of fixed maturities,” for the third quarter of $9.9 million, or net operating loss of 20 cents per diluted share, compared with net operating income before minority interest of $29.3 million, or net operating income of 64 cents per diluted share, for the three months ended September 30, 2003.

For the nine months ended September 30, 2004, the Company had net income of $46.6 million, or 96 cents per diluted share, compared to $84.2 million, or $2.08 per diluted share, for the nine months ended September 30, 2003. For the nine months ended September 30, 2004, the Company had net operating income before minority interest of $42.5 million, or 87 cents per diluted share, compared to $79.9 million, or $1.76 per diluted share, for the nine months ended September 30, 2003.

Chairman, President and CEO Robert J. Cooney commented: “Losses from hurricanes Charley, Frances, Ivan and Jeanne, predominately through our investment in DaVinci Re, had a significant negative impact on our third quarter results. In addition, our MDS portfolio continued to be affected by the challenging investment environment and did not contribute to third quarter earnings. Despite hurricane activity during the quarter, Max Re showed continuing improvement in its property and casualty combined ratio compared to the prior year. The combination of these factors resulted in a net loss of $9.0 million for the third quarter.”

The bulletin also noted: “Gross premiums written for the three months ended September 30, 2004 were $280.8 million, with $105.8 million of property and casualty premiums and $175.0 million of life and annuity premiums, compared to $188.6 million of property and casualty premiums and no life and annuity premiums for the three months ended September 30, 2003. Gross premiums written for the nine months ended September 30, 2004, were $904.0 million compared to $784.9 million for the first nine months of 2003, an increase of 15 percent. Alternative risk transfer, traditional reinsurance, traditional insurance and life and annuity reinsurance accounted for 32 percent, 30 percent, 19 percent and 19 percent, respectively, of gross premiums written for the first nine months of 2004.”

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