Axis Capital Provides Information on Recent Market Events

2008-09-25 23:47:03 -

- AXIS Capital Holdings Limited ("AXIS Capital") (NYSE: AXS) today announced that preliminary net loss estimates for Hurricanes Gustav and Ike range from approximately $310 million to $430 million, net of reinstatement premiums.

The Company's preliminary net loss estimate, net of reinstatement premiums, related to Hurricane Gustav ranges from approximately $25 million to $45 million, with $15 million to

$25 million emanating from its reinsurance segment and $10 million to $20 million emanating from its insurance segment. The Company's preliminary net loss estimate, net of reinstatement premiums, related to Hurricane Ike ranges from approximately $285 million to $385 million, with $220 million to $270 million emanating from its reinsurance segment and $65 million to $115 million emanating from its insurance segment. The Company's preliminary net loss estimates are based on catastrophe modeling analysis, the assessment of individual contracts and treaties and data from clients, brokers and loss adjusters. These net loss estimates will be revised as additional information is received.

John Charman, CEO and President of AXIS Capital, commented: "Our estimated net losses from Hurricanes Gustav and Ike are within our expectations for hurricane-related activity. We expect market losses for these hurricanes to be well in excess of $15 billion. Our rigorous pricing and risk analyses strongly supported our decisions to allocate Texas capacity to coastal areas and to de-emphasize Florida exposure in our portfolio, particularly in smaller events. Our experience in a storm with Ike's profile was not different from what our analyses had projected for similar landfall scenarios.

This year has seen a significant amount of loss activity emanating from large individual risk losses as well as small and medium-sized catastrophes. As a major participant in the wholesale insurance and reinsurance marketplace, we expect these types of losses and our underwriting portfolio has performed as expected in a year with estimates of market losses already in excess of $40 billion. Further, we expect the ongoing global credit crisis combined with increased loss activity this year to positively influence the buying decision for insurance and reinsurance. With our strong balance sheet, we will continue to commit strong capacity to our clients in these unprecedented and challenging times."

AXIS Capital also has modest exposure in its fixed income portfolios to several specific situations that are concerning the market. The Company's exposure in these portfolios to Lehman Brothers is $34 million at amortized cost. Similarly, the Company's exposure to operating subsidiaries of American International Group is $18 million. Exposure to the preferred equity and common equity of both Lehman and AIG is de minimus. The Company expects to realize a loss of approximately $60 million associated with Fannie Mae and Freddie Mac preferred equity.

AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholders' equity at June 30, 2008 of $5.3 billion and locations in Bermuda, the United States, Europe, Singapore and Australia. Its operating subsidiaries have been assigned a rating of "A" ("Excellent") XV by A.M. Best and a rating of "A" ("Strong") with a positive outlook by Standard & Poor's. AXIS Capital has been assigned a senior unsecured debt rating of Baa1 (stable) by Moody's Investors Service and BBB+ (stable) by Standard & Poor's. For more information about AXIS Capital, visit our website at www.axiscapital.com.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements contained in this release include our expectations regarding market conditions and information regarding our estimates of losses related to natural disasters. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause actual events or results to be materially different from our expectations include the occurrence of natural and man-made disasters; actual claims exceeding our loss reserves; the failure of any of the loss limitation methods we employ; the effects of emerging claims and coverage issues; the failure of our cedants to adequately evaluate risks; interest rate and/or currency value fluctuations; general economic conditions; 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.

Investor:
AXIS Capital Holdings Limited
Linda Ventresca, 441-297-9513
info@axiscapital.com
or
Media:
Kekst and Company
Joseph Kuo, 212-521-4800