AXIS Q3 Net Income $226.2 Million

October 31, 2006

Bermuda-based AXIS Capital Holdings Limited reported net income available to common shareholders of $226.2 million, or $1.37 per diluted common share for the quarter ended September 30, 2006, compared with a net loss of $468.1 million, or $(3.32) per diluted common share, for the quarter ended September 30, 2005.

Net income available to common shareholders for the nine months ended September 30, 2006 was $644.8 million, or $3.94 per diluted share, compared with a net loss of $143.4 million, or $(1.01) per diluted share, for the corresponding period in 2005. “Prior year results were significantly impacted by the losses from Hurricanes Katrina and Rita,” the announcement noted.

Operating income for the third quarter, which excludes capital transactions, was $228.1 million, or $1.38 per diluted share, compared with an operating loss of $462.2 million, or $(3.27) per diluted common share, for the third quarter of 2005. AXIS said: “This same item excluding foreign exchange gains (losses), net of tax, for the third quarter of 2006 was $230.8 million, or $1.40 per diluted common share, compared with $(460.8) million, or $(3.26) per diluted common share, for the quarter ended September 30, 2005.”

Operating income for the nine months ended September 30, 2006 was $665.5 million, or $4.07 per diluted share, compared with an operating loss of $138.5 million, or $(0.98) per diluted common share, for the nine months ended September 30, 2005.

AXIS cited the following “operating highlights” for the first nine months of 2006:
— Net premiums written increased by 10.2 percent to $2.419 billion;
— Net premiums earned increased by 7.4 percent to $2.0055 billion;
— Combined ratio of 78.5 percent included net favorable prior period reserve development of $182.1 million, or 9.1 percentage points;
— Pre-tax net investment income increased by 59.8 percent to $284.0 million;
— Annualized return on average common shareholders’ equity was 25.8 percent;
— and Total shareholders’ equity increased from December 31, 2005 by 17.9 percent to $4.1 billion and diluted book value per common share increased 17.1 percent to $22.48.

Commenting on the third quarter 2006 results, John Charman, AXIS CEO and President, stated: “We are extremely pleased to deliver another very strong quarter, bringing year-to-date diluted book value accretion to 17 percent. We have achieved disciplined growth in net premiums written of 10 percent during the same period with a substantially strengthened underwriting portfolio. As we enter 2007, risk selection, franchise focus and the quality of earnings will continue to be our key drivers. We believe our selectively diverse global underwriting platform is uniquely positioned to continue to extract profitability from a mixed marketplace.”

“Our operating results for the quarter ended and for the nine months ended September 30, 2005 were significantly impacted by Hurricanes Katrina and Rita. Consequently, any comparison between these periods and the corresponding periods in 2006 must consider these factors.”

The full report as well as a replay of the conference call held today, Oct. 31 to discuss the results is available on the Company’s Website at: www.axiscapital.com.

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