Max Re Q1 Net $72.9 Million; Conference Call Today, Details

June 1, 2006

Bermuda- based Max Re Capital Ltd. has released its delayed results for the first quarter of 2006, which show net income of $72.9 million, or $1.15 per diluted share, compared to $37.7 million, or 75 cents per diluted share, for the three months ended March 31, 2005. The Company’s Audit and Risk Management Committee recently completed its internal investigation (See IJ Website May 31, May 2).

Max Re’s Q1 net operating income, which represents net income adjusted for net realized gains and losses on sales of fixed maturities, was $74.5 million, or net $1.17 per diluted share, compared with $37.3 million, or 75 cents per diluted share, for the three months ended March 31, 2005. The results are largely in line with the Company’s estimates.

Robert J. Cooney, Chairman, President and CEO, commented: “Our first quarter results reflect solid underwriting performance coupled with strong investment returns. Gross premiums written declined in the first quarter largely attributable to reduced volume in our life and annuity business. Our property and casualty reinsurance premium volume declined in line with our expectations as we reduced our participation on certain casualty and specialty reinsurance renewals. We continue our efforts to diversify our business through such smaller participations and increased the number of transactions bound in the quarter.”

Other highlights from the report included the following:
— Gross premiums written for the three months ended March 31, 2006 were $255.9 million, of which $255.1 million came from property and casualty underwriting and US$0.8 million from life and annuity underwriting, compared to $455.7 million, of which $312.5 million came from property and casualty underwriting and $143.2 million from life and annuity underwriting, for the three months ended March 31, 2005.
— Reinsurance and insurance products account for 72.5 percent and 27.5 percent, respectively, of property and casualty gross premiums written in the three months ended March 31, 2006, compared to 79.4 percent and 20.6 percent, respectively, of property and casualty gross premiums written for the three months ended March 31, 2005. The decline in property and casualty premiums written is principally due to reduced participation on certain reinsurance contracts renewed in 2006 as compared to 2005.
— Net premiums earned for the three months ended March 31, 2006 were $159.8 million compared to $308.3 million for the same period of 2005. The decrease is principally due to $0.8 million of life and annuity written and earned premium during the first three months of 2006 compared to $143.2 million of life and annuity written and earned premium during the first three months of 2005.
— Net investment income for the three months ended March 31, 2006 increased to $34.0 million, from $23.7 million for the same period in 2005 and is principally attributable to a year over year increase in cash and fixed maturities balances.
— Net gains on alternative investments for the three months ended March 31, 2006 were $54.9 million, or a 4.4 percent rate of return, compared to net gains on alternative investments of $14.4 million, or a 1.2 percent rate of return, for the same period of 2005. Invested assets were $4.3 billion as of March 31, 2006, with an allocation of approximately 70.5 percent to cash and fixed maturities and 29.5 percent to alternative investments.
— Total revenue for the three months ended March 31, 2006 decreased 28.9 percent to $247.5 million, compared to $348.1 million for the same period in 2005. The decline in revenue in the three months to March 31, 2006 is principally attributable to the 48 percent decrease in net premiums earned over the same period in 2005, partially offset by the increase in net investment income and net gains on alternative investments.

As detailed on the IJ Website May 31, Max Re will restate prior year earnings for the period 2001-2005, to reflect the results of the internal investigation. The full report and additional information is available on the Company’s Website at: http://www.maxre.bm.

CEO Robert J. Cooney and CFO Keith S. Hynes will host a conference call at 10:00 a.m. EDT today June 1, 2006 with interested investors and shareholders to discuss the Company’s first quarter financial results and the restatement.
Details of the call are as follows:
Date: June 1, 2006
Time: 10:00 a.m. EDT
Dial in #: U.S.: +1-866-356-4441
Dial in# International: +1-617-597-5396
Access Code: 58592868
Please dial in ten minutes prior to the start of the call.
Replay details:
Available from 12:00 p.m. June 1, 2006 – July 1, 2006
Dial in #: U.S.: +1-888-286-8010
Dial in# International: +1-617-801-6888
Access Code: 59722863

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