Q4 2014 Financial Supplement

EX-99.2 3 axsex99-2.htm FOURTH QUARTER 2014 INVESTOR FINANCIAL SUPPLEMENT Q4 2014 Financial Supplement

AXIS Capital Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT

FOURTH QUARTER 2014





		AXIS Capital Holdings Limited
		92 Pitts Bay Road
		Pembroke HM 08 Bermuda

		Contact Information:
		Linda Ventresca
		Investor Relations
		441 405 2727
		investorrelations@axiscapital.com

		Website Information:
		www.axiscapital.com




	This report is for informational purposes only. It should be read in conjunction with the documents that we file with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.

AXIS Capital Holdings Limited

FINANCIAL SUPPLEMENT TABLE OF CONTENTS



		Page(s)
Basis of Presentation		i - iii
I. Financial Highlights		1
II. Income Statements
a. Consolidated Statements of Income - Quarterly		2
b. Consolidated Statements of Income - Year		3
c. Consolidated Segment Data		4
d. Gross Premium Written by Segment by Line of Business		5
e. Segment Data - Quarterly		6-7
f. Net Investment Income - Quarterly and Year		8
III. Balance Sheets
a. Consolidated Balance Sheets		9
b. Cash and Invested Assets:
• Cash and Invested Assets Portfolio		10
• Cash and Invested Assets Composition - Quarterly		11
• Geographic Distribution of Fixed Maturities and Equities		12
• Corporate Debt Composition		13
• Ten Largest Corporate Debt Holdings		14
• Mortgage-Backed and Asset-Backed Securities Composition		15
c. Reinsurance Recoverable Analysis		16-17
IV. Loss Reserve Analysis
a. Paid to Incurred Analysis		18
b. Paid to Incurred Analysis by Segment		19
c. Paid to Incurred Analysis by Segment - Quarterly		20-21
d. Net Probable Maximum Losses to Certain Peak Industry Catastrophe Exposures		22
V. Share Analysis
a. Earnings Per Common Share Analysis - As Reported, GAAP		23
b. Earnings (Loss) Per Common Share Analysis and Common Share Rollforward - Quarterly		24
c. Diluted Book Value Per Common Share Analysis		25
VI. Non-GAAP Financial Measures
a. Operating Income and Diluted Tangible Book Value Per Common Share		26
b. Adjusted Group Results		27
c. Adjusted Reinsurance Segment Results		28
d. Use of Non-GAAP Financial Measures		29

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

Unless otherwise noted, all data is in thousands, except for per share amounts and ratio information.


•	All financial information contained herein is unaudited, except for the consolidated balance sheet at December 31, 2013 and December 31, 2012 and consolidated statements of income for the years then ended.


•	Amounts may not reconcile exactly due to rounding differences.


•	NM - Not meaningful; NA - Not applicable

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

Statements in this presentation that are not historical facts, including statements regarding our estimates, beliefs, expectations, intentions, strategies or projections, may be “forward-looking statements” within the meaning of the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the United States securities laws. In some cases, these statements can be identified by the use of forward-looking words such as “may,” “should,” “could,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential,” “intend” or similar expressions. Our expectations are not guarantees and are based on currently available competitive, financial and economic data along with our operating plans. Forward-looking statements contained in this presentation may include, but are not limited to, information regarding our estimates of losses related to catastrophes and other large losses, measurements of potential losses in the fair market value of our investment portfolio, our expectations regarding pricing and other market conditions, our growth prospects, and valuations of the potential impact of movements in interest rates, equity securities' prices, credit spreads and foreign currency rates.

Forward-looking statements only reflect our expectations and are not guarantees of performance. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements. We believe that these factors include, but are not limited to, the following:


•	the occurrence and magnitude of natural and man-made disasters,


•	actual claims exceeding our loss reserves,


•	general economic, capital and credit market conditions,


•	the failure of any of the loss limitation methods we employ,


•	the effects of emerging claims, coverage and regulatory issues, including uncertainty related to coverage definitions, limits, terms and conditions,


•	the failure of our cedants to adequately evaluate risks,


•	inability to obtain additional capital on favorable terms, or at all,


•	the loss of one or more key executives,


•	a decline in our ratings with rating agencies,


•	loss of business provided to us by our major brokers,


•	changes in accounting policies or practices,


•	the use of industry catastrophe models and changes to these models,


•	changes in governmental regulations,


•	increased competition,


•	changes in the political environment of certain countries in which we operate or underwrite business,


•	fluctuations in interest rates, credit spreads, equity securities' prices and/or currency values, 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.

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

BUSINESS DESCRIPTIONS

INSURANCE SEGMENT

Our insurance segment offers specialty insurance products to a variety of niche markets on a worldwide basis. The following are the lines of business in our insurance segment:

Property: provides physical loss or damage, business interruption and machinery breakdown coverage for virtually all types of property, including commercial buildings, residential premises, construction projects and onshore energy installations. This line of business consists of both primary and excess risks, some of which are catastrophe-exposed.

Marine: provides coverage for traditional marine classes, including offshore energy, cargo, liability, recreational marine, fine art, specie, hull and war. Offshore energy coverage includes physical damage, business interruption, operators extra expense and liability coverage for all aspects of offshore upstream energy, from exploration and construction through the operation and distribution phases.

Terrorism: provides coverage for physical damage and business interruption of an insured following an act of terrorism.

Aviation: provides hull and liability and specific war coverage primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers.

Credit and Political Risk: provides credit and political risk insurance products for banks and corporations. Coverage is provided for a range of risks including sovereign default, credit default, political violence, currency inconvertibility and non-transfer, expropriation, aircraft non-repossession and contract frustration due to political events. The credit insurance coverage is primarily for lenders seeking to mitigate the risk of non-payment from their borrowers in emerging markets. For the credit insurance contracts, it is necessary for the buyer of the insurance (most often a bank) to hold an insured asset (most often an underlying loan) in order to claim compensation under the insurance contract.

Professional Lines: provides coverage for directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, medical malpractice and other financial insurance related coverages for commercial enterprises, financial institutions and not-for-profit organizations. This business is predominantly written on a claims-made basis.

Liability: primarily targets primary and low/mid-level excess and umbrella commercial liability risks in the U.S. wholesale and retail markets. Target industry sectors include construction, manufacturing, transportation and trucking and other services. We also target middle to high excess liability business in the London and Bermuda wholesale markets and primary and excess business in the Canadian market place.

Accident and Health: includes accidental death, travel insurance and specialty health products for employer and affinity groups, as well as accident and health reinsurance for catastrophic or per life events on a quota share and/or excess of loss basis, with aggregate and/or per person deductibles.

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

BUSINESS DESCRIPTIONS (CONTINUED)

REINSURANCE SEGMENT

Our reinsurance segment provides non-life reinsurance to insurance companies on a worldwide basis. The following are the lines of business in our reinsurance segment:

Catastrophe: provides protection for most catastrophic losses that are covered in the underlying insurance policies written by our cedants. The exposure in the underlying policies is principally property exposure but also covers other exposures including workers compensation, personal accident and life. The principal perils in this portfolio are hurricane and windstorm, earthquake, flood, tornado, hail and fire. In some instances, terrorism may be a covered peril or the only peril. We underwrite catastrophe reinsurance principally on an excess of loss basis.

Property: provides coverage for property damage and related losses resulting from natural and man-made perils contained in underlying personal and commercial policies. While our predominant exposure is to property damage, other risks, including business interruption and other non-property losses, may also be covered when arising from a covered peril. While our most significant exposures typically relate to losses from windstorms, tornadoes and earthquakes, we are also exposed to other perils such as freezes, riots, floods, industrial explosions, fires, hail and a number of other loss events. We assume business on both a proportional and excess of loss basis.

Professional Lines: covers directors’ and officers’ liability, employment practices liability, medical malpractice, professional indemnity, environmental liability and miscellaneous errors and omissions insurance risks. The underlying business is predominantly written on a claims-made basis. Business is written on both a proportional and excess of loss basis.

Credit and Surety: consists of reinsurance of trade credit insurance products and includes both proportional and excess of loss structures. The underlying insurance indemnifies sellers of goods and services in the event of a payment default by the buyer of those goods and services. Also included in this line of business is coverage for losses arising from a broad array of surety bonds issued by insurers to satisfy regulatory demands or contract obligations in a variety of jurisdictions around the world.

Motor: provides coverage to cedants for motor liability and property damage losses arising out of any one occurrence. The occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence.

Liability: provides coverage to insurers of standard casualty business, excess and surplus casualty business and specialty casualty programs. The primary focus of the underlying business is general liability, although workers' compensation and auto liability are also written.

Agriculture: provides coverage for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations. We provide both proportional and aggregate stop loss reinsurance.

Engineering: provides coverage for all types of construction risks and risks associated with erection, testing and commissioning of machinery and plants during the construction stage. This line of business also includes coverage for losses arising from operational failures of machinery, plant and equipment and electronic equipment as well as business interruption.

Other: includes aviation, marine and personal accident reinsurance.

The reinsurance segment also writes derivative based risk management products designed to address weather and commodity price risks. The majority of these contracts cover the risk of variations in quantifiable weather-related phenomenon, such as temperature. In general, the portfolio of such derivatives is of short duration, with contracts being predominately seasonal in nature.

iii

AXIS Capital Holdings Limited

FINANCIAL HIGHLIGHTS



		Quarter ended December 31,									Year ended December 31,
		2014			2013			Change			2014			2013			Change

HIGHLIGHTS	Gross premiums written	$	762,040		$	825,957		(7.7	%)		$	4,711,519		$	4,697,041		0.3	%
	Gross premiums written - Insurance	81.9		%	73.4		%	8.5		pts	53.8		%	54.5		%	(0.7	)	pts
	Gross premiums written - Reinsurance	18.1		%	26.6		%	(8.5	)	pts	46.2		%	45.5		%	0.7		pts
	Net premiums written	$	555,017		$	647,965		(14.3	%)		$	3,906,975		$	3,928,200		(0.5	%)
	Net premiums earned	$	958,517		$	941,911		1.8	%		$	3,870,999		$	3,707,065		4.4	%
	Net premiums earned - Insurance	48.2		%	47.8		%	0.4		pts	47.3		%	46.5		%	0.8		pts
	Net premiums earned - Reinsurance	51.8		%	52.2		%	(0.4	)	pts	52.7		%	53.5		%	(0.8	)	pts
	Net income available to common shareholders	$	163,663		$	171,524		(4.6	%)		$	770,657		$	683,910		12.7	%
	Operating income [a]	120,292			158,856			(24.3	%)		562,875			633,072			(11.1	%)
	Reserve for losses and loss expenses	9,596,797			9,582,140			0.2	%		9,596,797			9,582,140			0.2	%
	Total shareholders’ equity attributable to AXIS Capital	5,821,121			5,817,962			0.1	%		5,821,121			5,817,962			0.1	%


PER COMMON SHARE AND COMMON SHARE DATA	Basic earnings per common share		$1.63			$1.55		5.2	%			$7.38			$6.02		22.6	%
	Diluted earnings per common share		$1.60			$1.52		5.3	%			$7.29			$5.93		22.9	%
	Operating income per common share - diluted [b]		$1.18			$1.41		(16.3	%)			$5.32			$5.49		(3.1	%)
	Weighted average common shares outstanding	100,468			110,757			(9.3	%)		104,368			113,636			(8.2	%)
	Diluted weighted average common shares outstanding	102,038			112,702			(9.5	%)		105,713			115,328			(8.3	%)
	Book value per common share		$52.23			$47.40		10.2	%			$52.23			$47.40		10.2	%
	Diluted book value per common share (treasury stock method)		$50.63			$45.80		10.5	%			$50.63			$45.80		10.5	%
	Diluted tangible book value per common share (treasury stock method) [a]		$49.76			$45.01		10.6	%			$49.76			$45.01		10.6	%
	Accumulated dividends declared per common share		$8.98			$7.88		14.0	%			$8.98			$7.88		14.0	%


FINANCIAL RATIOS	ROACE [c]	12.6		%	13.3		%	(0.7	)	pts	14.8		%	13.1		%	1.7		pts
	Operating ROACE [d]	9.3		%	12.3		%	(3.0	)	pts	10.8		%	12.1		%	(1.3	)	pts
	Net loss and loss expense ratio	54.7		%	58.5		%	(3.8	)	pts	56.5		%	57.6		%	(1.1	)	pts
	Acquisition cost ratio	19.5		%	18.6		%	0.9		pts	19.0		%	17.9		%	1.1		pts
	General and administrative expense ratio	17.3		%	15.4		%	1.9		pts	16.1		%	15.5		%	0.6		pts
	Combined ratio	91.5		%	92.5		%	(1.0	)	pts	91.6		%	91.0		%	0.6		pts


INVESTMENT DATA	Total assets	$	19,955,736		$	19,634,784		1.6	%		$	19,955,736		$	19,634,784		1.6	%
	Total cash and invested assets [e]	14,874,737			14,844,799			0.2	%		14,874,737			14,844,799			0.2	%
	Net investment income	78,595			113,863			(31.0	%)		342,766			409,312			(16.3	%)
	Net realized investment gains	10,779			19,558			(44.9	%)		132,108			75,564			74.8	%
	Total return on cash and investments [f]	0.1		%	0.9		%	(0.8	)	pts	2.0		%	1.6		%	0.4		pts
	Return on other investments [g]	1.2		%	4.1		%	(2.9	)	pts	5.8		%	13.3		%	(7.5	)	pts
	Book yield of fixed maturities	2.5		%	2.5		%	—		pts	2.5		%	2.5		%	—		pts


[a]	Operating income and diluted tangible book value per common share are “non-GAAP financial measures” as defined by Regulation G. See page 26 for reconciliation of operating income to net income available to common shareholders and diluted tangible book value per common share to diluted book value per common share.


[b]	Operating income per common share - diluted, is calculated by dividing operating income for the period by weighted average common shares and share equivalents.


[c]	Return on average common equity (“ROACE”) is calculated by dividing net income available to common shareholders for the period by the average common shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the period. Net income for the quarter-periods is annualized.


[d]	Operating ROACE, also a “non-GAAP financial measure”, is calculated by dividing operating income for the period by the average common shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the period. Operating income for the quarter-periods is annualized.


[e]	Total cash and invested assets represents the total cash, available for sale investments, other investments, short-term investments, accrued interest receivable and net receivable (payable) for investments sold (purchased).


[f]	In calculating total return, we include net investment income, net realized investment gains and the change in unrealized gains (losses) including the related foreign exchange gains (losses) generated by our average cash and investment balances.


[g]	Return on other investments is calculated by dividing other investment income by the average month-end other investment balances for the period.

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY



	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012
UNDERWRITING REVENUES
Gross premiums written	$	762,040		$	896,814		$	1,231,279		$	1,821,399		$	825,957		$	752,414
Premiums ceded	(207,023		)	(209,591		)	(231,117		)	(156,815		)	(177,992		)	(234,318		)
Net premiums written	555,017			687,223			1,000,162			1,664,584			647,965			518,096

Gross premiums earned	1,164,355			1,160,577			1,194,367			1,133,052			1,129,147			1,068,259
Ceded premiums expensed	(205,838		)	(194,439		)	(193,967		)	(187,103		)	(187,236		)	(212,210		)
Net premiums earned	958,517			966,138			1,000,400			945,949			941,911			856,049
Other insurance related income (loss)	(11,818		)	7,702			1,683			3,082			2,668			791
Total underwriting revenues	946,699			973,840			1,002,083			949,031			944,579			856,840

UNDERWRITING EXPENSES
Net losses and loss expenses	524,625			552,064			565,829			544,207			551,360			675,047
Acquisition costs	187,349			185,950			191,862			172,036			175,299			144,063
Underwriting-related general and administrative expenses [a]	122,005			122,362			117,811			124,022			123,761			112,021
Total underwriting expenses	833,979			860,376			875,502			840,265			850,420			931,131

UNDERWRITING INCOME (LOSS) [b]	112,720			113,464			126,581			108,766			94,159			(74,291		)

OTHER OPERATING REVENUE (EXPENSES)
Net investment income	78,595			66,562			114,867			82,744			113,863			86,847
Net realized investment gains	10,779			77,448			33,261			10,620			19,558			31,771
Interest expense and financing costs	(17,783		)	(20,344		)	(19,975		)	(16,594		)	(15,625		)	(15,498		)
Total other operating revenues	71,591			123,666			128,153			76,770			117,796			103,120

OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	46,086			72,292			(9,705		)	(4,233		)	(14,484		)	(21,300		)
Corporate expenses [a]	(43,145		)	(30,554		)	(33,270		)	(28,707		)	(20,422		)	(29,365		)
Total other (expenses) revenues	2,941			41,738			(42,975		)	(32,940		)	(34,906		)	(50,665		)

INCOME (LOSS) BEFORE INCOME TAXES	187,252			278,868			211,759			152,596			177,049			(21,836		)

Income tax (expense) benefit	(16,382		)	4,098			(9,500		)	(4,125		)	4,497			12,026

NET INCOME (LOSS)	170,870			282,966			202,259			148,471			181,546			(9,810		)

Amounts attributable (to) from noncontrolling interests	2,815			6,160			(1,573		)	(1,222		)	—			—

NET INCOME (LOSS) ATTRIBUTABLE TO AXIS CAPITAL	173,685			289,126			200,686			147,249			181,546			(9,810		)

Preferred share dividends	(10,022		)	(10,022		)	(10,022		)	(10,022		)	(10,022		)	(8,741		)

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	163,663		$	279,104		$	190,664		$	137,227		$	171,524		$	(18,551	)

KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	54.7		%	57.1		%	56.6		%	57.5		%	58.5		%	78.9		%
Acquisition cost ratio	19.5		%	19.2		%	19.2		%	18.2		%	18.6		%	16.8		%
General and administrative expense ratio [a]	17.3		%	15.9		%	15.0		%	16.2		%	15.4		%	16.5		%
Combined ratio	91.5		%	92.2		%	90.8		%	91.9		%	92.5		%	112.2		%

Weighted average basic shares outstanding	100,468			102,945			105,118			109,053			110,757			117,918
Weighted average diluted shares outstanding	102,038			104,247			106,289			110,391			112,702			117,918
Basic earnings (loss) per common share		$1.63			$2.71			$1.81			$1.26			$1.55			($0.16	)
Diluted earnings (loss) per common share		$1.60			$2.68			$1.79			$1.24			$1.52			($0.16	)
ROACE (annualized)	12.6		%	21.2		%	14.5		%	10.6		%	13.3		%	(1.4		%)
Operating ROACE (annualized)	9.3		%	10.1		%	13.1		%	10.6		%	12.3		%	(2.1		%)


[a]	Underwriting-related general and administrative expenses is a "non-GAAP financial measure" as defined in SEC Regulation G. Our total general and administrative expenses also include corporate expenses. Both underwriting-related general and administrative expenses and corporate expenses are included in the general and administrative expense ratio.


[b]	Group (or consolidated) underwriting income (loss) is also a "non-GAAP financial measure". Reconciliations of consolidated underwriting income (loss) to the nearest GAAP financial measure (income (loss) before income taxes) are presented above and on the following page.

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - YEAR



	Year ended December 31,
	2014			2013			2012
UNDERWRITING REVENUES
Gross premiums written	$	4,711,519		$	4,697,041		$	4,139,643
Premiums ceded	(804,544		)	(768,841		)	(802,187		)
Net premiums written	3,906,975			3,928,200			3,337,456

Gross premiums earned	4,652,345			4,459,269			4,141,037
Ceded premiums expensed	(781,346		)	(752,204		)	(725,574		)
Net premiums earned	3,870,999			3,707,065			3,415,463
Other insurance related income	650			4,424			2,676
Total underwriting revenues	3,871,649			3,711,489			3,418,139

UNDERWRITING EXPENSES
Net losses and loss expenses	2,186,722			2,134,195			2,096,028
Acquisition costs	737,197			664,191			627,653
Underwriting-related general and administrative expenses [a]	486,201			485,134			431,321
Total underwriting expenses	3,410,120			3,283,520			3,155,002

UNDERWRITING INCOME	461,529			427,969			263,137

OTHER OPERATING REVENUE (EXPENSES)
Net investment income	342,766			409,312			380,957
Net realized investment gains	132,108			75,564			127,469
Interest expense and financing costs	(74,695		)	(61,979		)	(61,863		)
Total other operating revenues	400,179			422,897			446,563

OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	104,439			(26,143		)	(29,512		)
Corporate expenses [a]	(135,675		)	(90,256		)	(129,660		)
Total other expenses	(31,236		)	(116,399		)	(159,172		)

INCOME BEFORE INCOME TAXES	830,472			734,467			550,528

Income tax expense	(25,908		)	(7,002		)	(3,287		)

NET INCOME	804,564			727,465			547,241

Amounts attributable (to) from noncontrolling interests	6,181			—			—

NET INCOME ATTRIBUTABLE TO AXIS CAPITAL	810,745			727,465			547,241

Preferred share dividends	(40,088		)	(40,474		)	(38,228		)
Loss on repurchase of preferred shares	—			(3,081		)	(14,009		)

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	770,657		$	683,910		$	495,004

KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	56.5		%	57.6		%	61.4		%
Acquisition cost ratio	19.0		%	17.9		%	18.4		%
General and administrative expense ratio [a]	16.1		%	15.5		%	16.4		%
Combined ratio	91.6		%	91.0		%	96.2		%

Weighted average basic shares outstanding	104,368			113,636			122,148
Weighted average diluted shares outstanding	105,713			115,328			123,654
Basic earnings per common share		$7.38			$6.02			$4.05
Diluted earnings per common share		$7.29			$5.93			$4.00
ROACE	14.8		%	13.1		%	9.7		%
Operating ROACE	10.8		%	12.1		%	8.2		%


[a]	Both underwriting-related general and administrative expenses and corporate expenses are included in the general and administrative expense ratio.

AXIS Capital Holdings Limited

CONSOLIDATED SEGMENT DATA



	Quarter ended December 31, 2014									Year ended December 31, 2014
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total
UNDERWRITING REVENUES
Gross premiums written	$	624,313		$	137,727		$	762,040		$	2,535,415		$	2,176,104		$	4,711,519
Net premiums written	418,150			136,867			555,017			1,779,501			2,127,474			3,906,975

Gross premiums earned	655,199			509,156			1,164,355			2,569,818			2,082,526			4,652,345
Ceded premiums expensed	(193,339		)	(12,499		)	(205,838		)	(739,274		)	(42,071		)	(781,346		)
Net premiums earned	461,860			496,657			958,517			1,830,544			2,040,455			3,870,999
Other insurance related income (loss)	(12		)	(11,806		)	(11,818		)	(11		)	661			650
Total underwriting revenues	461,848			484,851			946,699			1,830,533			2,041,116			3,871,649

UNDERWRITING EXPENSES
Net losses and loss expenses	272,787			251,838			524,625			1,131,880			1,054,842			2,186,722
Acquisition costs	71,444			115,905			187,349			278,804			458,393			737,197
Underwriting-related general and administrative expenses	84,005			38,000			122,005			341,214			144,987			486,201
Total underwriting expenses	428,236			405,743			833,979			1,751,898			1,658,222			3,410,120

UNDERWRITING INCOME	$	33,612		$	79,108		$	112,720		$	78,635		$	382,894		$	461,529

KEY RATIOS
Current accident year loss ratio	61.2		%	62.0		%	61.6		%	65.3		%	61.3		%	63.2		%
Prior period reserve development	(2.1		%)	(11.3		%)	(6.9		%)	(3.5		%)	(9.6		%)	(6.7		%)
Net loss and loss expense ratio	59.1		%	50.7		%	54.7		%	61.8		%	51.7		%	56.5		%
Acquisition cost ratio	15.5		%	23.3		%	19.5		%	15.2		%	22.5		%	19.0		%
Underwriting-related general and administrative expense ratio	18.1		%	7.7		%	12.8		%	18.7		%	7.1		%	12.6		%
Corporate expense ratio							4.5		%							3.5		%
Combined ratio	92.7		%	81.7		%	91.5		%	95.7		%	81.3		%	91.6		%

AXIS Capital Holdings Limited

GROSS PREMIUM WRITTEN BY SEGMENT BY LINE OF BUSINESS



																	Year ended December 31,
	Q4 2014			Q3 2014			Q2 2014		Q1 2014		Q4 2013			Q4 2012			2014		2013

INSURANCE SEGMENT
Property	$	153,563		$	143,236		$	207,788	$	139,929	$	144,321		$	148,216		$	644,516	$	671,970
Marine	26,236			41,529			84,833		85,722		23,148			29,898			238,320		229,493
Terrorism	10,194			11,055			9,478		6,978		10,264			8,681			37,705		38,373
Aviation	26,601			17,735			10,568		2,717		23,250			29,142			57,622		43,326
Credit and Political Risk	16,100			3,782			7,179		18,307		23,563			26,126			45,368		60,203
Professional Lines	267,950			196,576			244,011		154,248		269,524			255,891			862,784		900,071
Liability	92,608			94,833			106,643		74,366		84,447			72,834			368,450		347,227
Accident and Health	31,061			46,537			83,610		119,454		28,074			9,328			280,650		268,475
TOTAL INSURANCE SEGMENT	624,313			555,283			754,110		601,721		606,591			580,116			2,535,415		2,559,138

REINSURANCE SEGMENT
Catastrophe	13,101			71,319			117,245		171,260		15,537			24,325			372,925		393,652
Property	4,099			45,030			61,027		239,620		20,689			9,991			349,775		364,315
Professional Lines	69,236			51,007			104,801		68,219		166,377			90,313			293,263		380,355
Credit and Surety	6,104			23,933			20,359		208,468		10,372			7,225			258,865		268,494
Motor	5,152			9,445			2,676		274,019		(3,789		)	8,940			291,293		242,046
Liability	34,769			145,488			82,566		102,644		15,118			13,976			365,466		268,673
Agriculture	(3,577		)	(10,206		)	76,665		103,165		(11,214		)	3,789			166,047		132,780
Engineering	7,589			2,579			8,772		36,510		5,142			14,033			55,450		64,258
Other	1,254			2,936			3,058		15,773		1,134			(294		)	23,020		23,330
TOTAL REINSURANCE SEGMENT	137,727			341,531			477,169		1,219,678		219,366			172,298			2,176,104		2,137,903

CONSOLIDATED TOTAL	$	762,040		$	896,814		$	1,231,279	$	1,821,399	$	825,957		$	752,414		$	4,711,519	$	4,697,041

AXIS Capital Holdings Limited

INSURANCE SEGMENT DATA - QUARTERLY



	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012
UNDERWRITING REVENUES
Gross premiums written	$	624,313		$	555,283		$	754,110		$	601,721		$	606,591		$	580,116
Net premiums written	418,150			363,571			541,097			456,692			427,647			345,802

Gross premiums earned	655,199			643,864			641,335			629,425			631,695			591,310
Ceded premiums expensed	(193,339		)	(182,059		)	(183,665		)	(180,211		)	(181,230		)	(208,425		)
Net premiums earned	461,860			461,805			457,670			449,214			450,465			382,885
Other insurance related income (loss)	(12		)	—			—			—			681			791
Total underwriting revenues	461,848			461,805			457,670			449,214			451,146			383,676

UNDERWRITING EXPENSES
Net losses and loss expenses	272,787			289,207			290,466			279,423			285,634			300,094
Acquisition costs	71,444			71,264			71,039			65,057			65,266			48,024
General and administrative expenses	84,005			85,750			83,512			87,946			89,722			81,591
Total underwriting expenses	428,236			446,221			445,017			432,426			440,622			429,709

UNDERWRITING INCOME (LOSS)	$	33,612		$	15,584		$	12,653		$	16,788		$	10,524		$	(46,033	)

KEY RATIOS
Current accident year loss ratio	61.2		%	64.7		%	70.7		%	64.8		%	64.3		%	88.9		%
Prior period reserve development	(2.1		%)	(2.1		%)	(7.2		%)	(2.6		%)	(0.9		%)	(10.5		%)
Net loss and loss expense ratio	59.1		%	62.6		%	63.5		%	62.2		%	63.4		%	78.4		%
Acquisition cost ratio	15.5		%	15.4		%	15.5		%	14.5		%	14.5		%	12.5		%
General and administrative expense ratio	18.1		%	18.6		%	18.2		%	19.6		%	19.9		%	21.3		%
Combined ratio	92.7		%	96.6		%	97.2		%	96.3		%	97.8		%	112.2		%

AXIS Capital Holdings Limited

REINSURANCE SEGMENT DATA - QUARTERLY



	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012
UNDERWRITING REVENUES
Gross premiums written	$	137,727		$	341,531		$	477,169		$	1,219,678		$	219,366		$	172,298
Net premiums written	136,867			323,652			459,065			1,207,892			220,318			172,294

Gross premiums earned	509,156			516,713			553,032			503,627			497,452			476,949
Ceded premiums expensed	(12,499		)	(12,380		)	(10,302		)	(6,892		)	(6,006		)	(3,785		)
Net premiums earned	496,657			504,333			542,730			496,735			491,446			473,164
Other insurance related income (loss)	(11,806		)	7,702			1,683			3,082			1,987			—
Total underwriting revenues	484,851			512,035			544,413			499,817			493,433			473,164

UNDERWRITING EXPENSES
Net losses and loss expenses	251,838			262,857			275,363			264,784			265,726			374,953
Acquisition costs	115,905			114,686			120,823			106,979			110,033			96,039
General and administrative expenses	38,000			36,612			34,299			36,076			34,039			30,430
Total underwriting expenses	405,743			414,155			430,485			407,839			409,798			501,422

UNDERWRITING INCOME (LOSS)	$	79,108		$	97,880		$	113,928		$	91,978		$	83,635		$	(28,258	)

KEY RATIOS
Current accident year loss ratio	62.0		%	63.0		%	60.4		%	59.7		%	62.0		%	84.4		%
Prior period reserve development	(11.3		%)	(10.9		%)	(9.7		%)	(6.4		%)	(7.9		%)	(5.2		%)
Net loss and loss expense ratio	50.7		%	52.1		%	50.7		%	53.3		%	54.1		%	79.2		%
Acquisition cost ratio	23.3		%	22.7		%	22.3		%	21.5		%	22.4		%	20.3		%
General and administrative expense ratio	7.7		%	7.3		%	6.3		%	7.3		%	6.9		%	6.5		%
Combined ratio	81.7		%	82.1		%	79.3		%	82.1		%	83.4		%	106.0		%

AXIS Capital Holdings Limited

NET INVESTMENT INCOME - QUARTERLY AND YEAR



																			Year ended December 31,
	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012			2014			2013

Fixed maturities	$	70,187		$	74,996		$	78,523		$	72,957		$	74,732		$	75,968		$	296,663		$	293,609
Other investments	11,753			(3,384		)	32,492			16,760			41,408			15,302			57,621			128,814
Equity securities	2,223			2,022			5,301			2,286			2,478			2,862			11,832			10,897
Cash and cash equivalents	2,409			2,081			6,183			863			3,423			549			11,536			6,337
Short-term investments	125			141			246			214			125			(129		)	725			1,181

Gross investment income	86,697			75,856			122,745			93,080			122,166			94,552			378,377			440,838
Investment expense	(8,102		)	(9,294		)	(7,878		)	(10,336		)	(8,303		)	(7,705		)	(35,611		)	(31,526		)

Net investment income	$	78,595		$	66,562		$	114,867		$	82,744		$	113,863		$	86,847		$	342,766		$	409,312

AXIS Capital Holdings Limited

CONSOLIDATED BALANCE SHEETS



	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
	2014			2014			2014			2014			2013			2012
ASSETS
Investments:
Fixed maturities, available for sale, at fair value	$	12,129,273		$	12,444,684		$	12,598,897		$	12,095,839		$	11,986,327		$	11,928,049
Equity securities, available for sale, at fair value	567,707			629,502			744,760			708,412			701,987			666,548
Other investments, at fair value	965,465			946,836			1,044,492			1,005,762			1,045,810			843,437
Short-term investments, at fair value and amortized cost	107,534			114,428			100,166			296,800			46,212			108,860
Total investments	13,769,979			14,135,450			14,488,315			14,106,813			13,780,336			13,546,894
Cash and cash equivalents	1,209,695			1,407,811			1,189,403			1,294,709			987,876			850,550
Accrued interest receivable	83,070			91,777			91,278			89,536			97,132			97,220
Insurance and reinsurance premium balances receivable	1,808,620			2,112,906			2,422,983			2,292,954			1,688,957			1,474,821
Reinsurance recoverable on paid and unpaid losses	1,926,145			1,947,529			1,954,985			1,912,840			1,929,988			1,863,819
Deferred acquisition costs	466,987			556,723			623,573			634,413			456,122			389,248
Prepaid reinsurance premiums	351,441			351,488			337,608			299,994			330,261			315,676
Receivable for investments sold	169			6,472			366			1,972			1,199			1,254
Goodwill and intangible assets	88,960			88,740			90,025			90,350			89,528			97,493
Other assets	250,670			266,151			247,921			274,053			273,385			215,369
TOTAL ASSETS	$	19,955,736		$	20,965,047		$	21,446,457		$	20,997,634		$	19,634,784		$	18,852,344

LIABILITIES
Reserve for losses and loss expenses	$	9,596,797		$	9,751,903		$	9,805,988		$	9,667,841		$	9,582,140		$	9,058,731
Unearned premiums	2,735,376			3,142,055			3,411,108			3,372,166			2,683,849			2,454,692
Insurance and reinsurance balances payable	249,186			244,815			272,062			207,909			234,412			270,739
Senior notes	990,790			1,490,498			1,490,427			1,490,198			995,855			995,245
Payable for investments purchased	188,176			189,684			237,019			162,747			21,744			64,553
Other liabilities	315,471			265,968			221,348			218,502			248,822			228,623
TOTAL LIABILITIES	14,075,796			15,084,923			15,437,952			15,119,363			13,766,822			13,072,583

SHAREHOLDERS’ EQUITY
Preferred shares	627,843			627,843			627,843			627,843			627,843			502,843
Common shares	2,191			2,190			2,189			2,188			2,174			2,146
Additional paid-in capital	2,285,016			2,273,110			2,261,084			2,247,102			2,240,125			2,179,034
Accumulated other comprehensive income	(45,574		)	22,935			272,664			182,254			117,825			362,622
Retained earnings	5,715,504			5,581,942			5,331,199			5,170,948			5,062,706			4,497,789
Treasury shares, at cost	(2,763,859		)	(2,689,531		)	(2,539,269		)	(2,403,286		)	(2,232,711		)	(1,764,673		)
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO AXIS CAPITAL	5,821,121			5,818,489			5,955,710			5,827,049			5,817,962			5,779,761
Noncontrolling interests	58,819			61,635			52,795			51,222			50,000			—
TOTAL SHAREHOLDERS' EQUITY	5,879,940			5,880,124			6,008,505			5,878,271			5,867,962			5,779,761

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	19,955,736		$	20,965,047		$	21,446,457		$	20,997,634		$	19,634,784		$	18,852,344

Basic common shares outstanding	99,426			100,827			103,906			106,745			109,485			117,920
Diluted common shares outstanding	102,577			104,073			107,228			110,327			113,325			122,793
Book value per common share		$52.23			$51.48			$51.28			$48.71			$47.40			$44.75
Diluted book value per common share	50.63			49.88			49.69			47.13			45.80			42.97
Diluted tangible book value per common share		$49.76			$49.02			$48.85			$46.31			$45.01			$42.18
Debt to total capital [a]	14.5		%	20.4		%	20.0		%	20.4		%	14.6		%	14.7		%
Debt and preferred equity to total capital	23.8		%	29.0		%	28.4		%	28.9		%	23.8		%	22.1		%


[a]	The debt to total capital ratio is calculated by dividing our senior notes by total capital. Total capital represents the sum of total shareholders’ equity attributable to AXIS Capital and our senior notes.

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS PORTFOLIO

At December 31, 2014



	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value			Percentage
Fixed Maturities, available for sale
U.S. government and agency	$	1,645,068	$	3,337	$	(28,328	)	$	1,620,077		11	%
Non-U.S. government	1,080,601		7,383		(54,441		)	1,033,543			7	%
Corporate debt	4,386,432		40,972		(66,280		)	4,361,124			29	%
Agency RMBS	2,241,581		40,762		(4,235		)	2,278,108			15	%
CMBS	1,085,618		13,289		(2,019		)	1,096,888			7	%
Non-Agency RMBS	71,236		2,765		(915		)	73,086			1	%
ABS	1,475,026		2,748		(16,188		)	1,461,586			10	%
Municipals	200,411		5,282		(832		)	204,861			1	%
Total fixed maturities	12,185,973		116,538		(173,238		)	12,129,273			81	%

Equity securities, available for sale
Exchange traded funds	416,063		43,583		(4,756		)	454,890			3	%
Non-U.S. bond mutual funds	115,585		—		(2,768		)	112,817			1	%
Total equity securities	531,648		43,583		(7,524		)	567,707			4	%

Total available for sale investments	$	12,717,621	$	160,121	$	(180,762	)	12,696,980			85	%

Other investments (see below)								965,465			7	%

Short-term investments								107,534			1	%

Total investments								13,769,979			93	%

Cash and cash equivalents [a]								1,209,695			7	%

Accrued interest receivable								83,070			1	%

Net receivable/(payable) for investments sold (purchased)								(188,007		)	(1	%)

Total cash and invested assets								$	14,874,737		100	%

								Fair Value			Percentage
Other Investments:
Long/short equity funds								$	298,907		31	%
Multi-strategy funds								324,020			34	%
Event-driven funds								185,899			19	%
Leveraged bank loan funds								9,713			1	%
Direct lending funds								54,438			6	%
Collateralized loan obligations - equity tranches								92,488			9	%
Total								$	965,465		100	%


[a]	Includes $288 million of restricted cash and cash equivalents.

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS COMPOSITION - QUARTERLY



	Q4 2014		Q3 2014		Q2 2014		Q1 2014		Q4 2013		Q4 2012
	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
CASH AND INVESTED ASSETS PORTFOLIO
Fixed Maturities:
U.S. government and agency	10.9	%	9.8	%	10.3	%	11.0	%	9.4	%	9.9	%
Non-U.S. government	6.9	%	7.4	%	8.0	%	8.0	%	7.9	%	7.7	%
Corporate debt	29.3	%	27.5	%	27.5	%	25.0	%	24.3	%	26.9	%
MBS:
Agency RMBS	15.3	%	13.7	%	13.6	%	15.4	%	16.5	%	18.4	%
CMBS	7.4	%	6.2	%	6.0	%	5.6	%	5.4	%	5.8	%
Non-agency RMBS	0.5	%	0.5	%	0.5	%	0.6	%	0.5	%	0.7	%
ABS	9.8	%	9.3	%	8.4	%	6.3	%	6.4	%	4.5	%
Municipals	1.4	%	6.1	%	6.8	%	6.9	%	10.4	%	8.9	%

Total Fixed Maturities	81.5	%	80.5	%	81.1	%	78.8	%	80.8	%	82.8	%
Equity Securities	4.0	%	4.0	%	4.8	%	4.6	%	4.8	%	4.6	%
Other investments	6.5	%	6.1	%	6.7	%	6.6	%	7.0	%	5.8	%
Short-term investments	0.6	%	0.9	%	0.6	%	2.0	%	0.1	%	0.6	%

Total investments	92.6	%	91.5	%	93.2	%	92.0	%	92.7	%	93.8	%
Cash and cash equivalents	8.1	%	9.1	%	7.7	%	8.4	%	6.7	%	5.9	%
Accrued interest receivable	0.6	%	0.6	%	0.6	%	0.6	%	0.7	%	0.7	%
Net receivable/(payable) for investments sold or purchased	(1.3	%)	(1.2	%)	(1.5	%)	(1.0	%)	(0.1	%)	(0.4	%)
Total Cash and Invested Assets	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

CREDIT QUALITY OF FIXED MATURITIES	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
U.S. government and agency	13.4	%	12.2	%	12.7	%	13.9	%	11.6	%	12.9	%
AAA	38.9	%	35.5	%	34.2	%	34.7	%	34.7	%	39.2	%
AA	8.5	%	12.3	%	12.6	%	12.1	%	15.0	%	9.9	%
A	18.2	%	19.1	%	19.7	%	18.2	%	18.5	%	18.6	%
BBB	12.5	%	12.8	%	12.8	%	12.7	%	12.3	%	12.4	%
Below BBB	8.5	%	8.1	%	8.0	%	8.4	%	7.9	%	7.0	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

MATURITY PROFILE OF FIXED MATURITIES	Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %		Fair Value %
Within one year	3.5	%	4.5	%	4.0	%	4.5	%	5.9	%	5.5	%
From one to five years	40.3	%	42.3	%	43.7	%	43.7	%	42.7	%	41.8	%
From five to ten years	14.0	%	14.4	%	15.2	%	14.4	%	14.9	%	16.4	%
Above ten years	1.7	%	2.0	%	1.9	%	1.9	%	0.8	%	0.8	%
Asset-backed and mortgage-backed securities	40.5	%	36.8	%	35.2	%	35.5	%	35.7	%	35.5	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

CASH AND INVESTED ASSETS PORTFOLIO CHARACTERISTICS
Book yield of fixed maturities	2.5	%	2.5	%	2.5	%	2.5	%	2.5	%	2.6	%
Yield to maturity of fixed maturities	2.4	%	2.3	%	2.0	%	2.1	%	2.3	%	1.6	%
Average duration of fixed maturities (inclusive of duration hedges)	2.9	yrs	2.9 yrs		2.9 yrs		3.0 yrs		3.2 yrs		3.0	yrs
Average credit quality	AA-		AA-		AA-		AA-		AA-		AA-

AXIS Capital Holdings Limited

GEOGRAPHIC DISTRIBUTION OF FIXED MATURITIES AND EQUITIES

At December 31, 2014



				Corporate Debt
	Governments and Agencies			Financials		Non-Financials		Government Guaranteed		Total		Agency RMBS		Non-Agency RMBS/CMBS		ABS		Total Fixed Maturities		Equities			Total Fixed Maturities and Equities
Composition by country
Eurozone countries:
Germany	$	—		$	9,329	$	85,555	$	40,570	$	135,454	$	—	$	—	$	1,108	$	136,562	$	—		$	136,562
Supranational [a]	107,299			—		—		8,673		8,673		—		—		—		115,972		—			115,972
Netherlands	10,054			14,779		34,745		—		49,524		—		3,450		—		63,028		—			63,028
France	—			7,389		52,403		—		59,792		—		—		64		59,856		—			59,856
Luxembourg	—			—		23,510		—		23,510		—		—		—		23,510		—			23,510
Ireland	—			2,911		7,436		—		10,347		—		—		10,600		20,947		—			20,947
Italy	—			1,986		12,663		—		14,649		—		—		—		14,649		—			14,649
Belgium	—			—		12,577		—		12,577		—		—		—		12,577		—			12,577
Spain	—			—		8,619		—		8,619		—		—		—		8,619		—			8,619
Slovenia	1,782			—		—		—		—		—		—		—		1,782		—			1,782
Austria	—			—		478		—		478		—		—		—		478		—			478
Other [b]	—			—		—		—		—		—		—		—		—		158,485			158,485
Total eurozone	119,135			36,394		237,986		49,243		323,623		—		3,450		11,772		457,980		158,485			616,465
Other concentrations:
United Kingdom	172,410			37,517		155,742		588		193,847		—		17,635		2,000		385,892		—			385,892
Canada	114,430			80,460		60,766		48,254		189,480		—		—		—		303,910		—			303,910
Australia	190,565			59,592		21,482		—		81,074		—		—		1,843		273,482		—			273,482
Brazil	87,890			—		8,048		—		8,048		—		—		—		95,938		—			95,938
Mexico	67,368			—		21,524		978		22,502		—		—		—		89,870		—			89,870
Other	281,745			56,762		145,072		—		201,834		—		3,769		—		487,348		68,209		[c]	555,557
Total other concentrations	914,408			234,331		412,634		49,820		696,785		—		21,404		3,843		1,636,440		68,209			1,704,649

Total Non-U.S. concentrations	1,033,543			270,725		650,620		99,063		1,020,408		—		24,854		15,615		2,094,420		226,694			2,321,114

United States	1,497,922		[d]	1,477,437		1,863,279		—		3,340,716		2,278,108		1,145,120		1,445,971		9,707,837		341,013		[e]	10,048,850
United States agencies	122,155			—		—		—		—		—		—		—		122,155		—			122,155
United States local governments	204,861			—		—		—		—		—		—		—		204,861		—			204,861
Total U.S. concentrations	1,824,938			1,477,437		1,863,279		—		3,340,716		2,278,108		1,145,120		1,445,971		10,034,853		341,013			10,375,866

Totals	$	2,858,481		$	1,748,162	$	2,513,899	$	99,063	$	4,361,124	$	2,278,108	$	1,169,974	$	1,461,586	$	12,129,273	$	567,707		$	12,696,980


[a]	Represents holdings of the European Investment Bank.


[b]	Represents holdings in two non-U.S. bond mutual funds with underlying exposure to primarily sovereign and corporate debt and one exchange-traded fund ("ETF"). The primary countries of risk for these underlying securities are countries within the eurozone.


[c]	Represents exchange-traded funds (“ETF’s”) designed to track indexes with primary underlying exposures to countries other than the United States and those within the eurozone.


[d]	Represents United States Treasuries.


[e]	Represents ETF’s designed to track the S&P 500, an index consisting primarily of exposure to the United States.

AXIS Capital Holdings Limited

CORPORATE DEBT COMPOSITION

At December 31, 2014



	Fair Value		% of Total Corporate Debt		% of Total Cash and Invested Assets
Composition by sector - Investment grade
Financial institutions:
U.S. banking	$	988,300	22.7	%	6.6	%
Corporate/commercial finance	230,752		5.3	%	1.6	%
Foreign banking [a]	214,001		4.9	%	1.4	%
Insurance	116,687		2.7	%	0.8	%
Investment brokerage	10,859		0.2	%	0.1	%
Total financial institutions	1,560,599		35.8	%	10.5	%
Communications	356,038		8.2	%	2.4	%
Consumer cyclicals	327,950		7.5	%	2.2	%
Consumer non-cyclicals	326,746		7.5	%	2.2	%
Energy	207,204		4.8	%	1.4	%
Industrials	188,553		4.3	%	1.3	%
Utilities	117,505		2.7	%	0.8	%
Technology	107,311		2.5	%	0.7	%
Non-U.S. government guaranteed [b]	99,063		2.3	%	0.7	%
Transportation	85,141		2.0	%	0.6	%
Total investment grade	3,376,110		77.6	%	22.8	%

Total non-investment grade	985,014		22.4	%	6.5	%

Total corporate debt	$	4,361,124	100.0	%	29.3	%


[a]	Located in Canada, Australia, Japan, United Kingdom, Germany, Switzerland, Chile and New Zealand.


[b]	Includes $41 million from Germany. No other corporate debt guaranteed by a eurozone country.

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

TEN LARGEST CORPORATE DEBT HOLDINGS

At December 31, 2014



	Amortized Cost		Net Unrealized Gain			Fair Value		% of Total Fixed Maturities
ISSUER [a]
BANK OF AMERICA CORP	$	154,412	$	2,315		$	156,727	1.3	%
GOLDMAN SACHS GROUP INC	129,028		2,503			131,531		1.1	%
MORGAN STANLEY	120,972		2,913			123,885		1.0	%
JP MORGAN CHASE & CO	107,991		1,069			109,060		0.9	%
CITIGROUP INC	96,140		1,107			97,247		0.8	%
WELLS FARGO & COMPANY	83,375		1,070			84,445		0.7	%
FORD MOTOR COMPANY	82,790		(316		)	82,474		0.7	%
AT&T INC	80,928		(170		)	80,758		0.7	%
COMCAST CORPORATION	76,392		901			77,293		0.6	%
DAIMLER AG	63,849		(497		)	63,352		0.5	%


[a]	The holdings represent direct investments in fixed maturities of the parent issuer and its major subsidiaries. These investments exclude asset and mortgage backed securities that were issued, sponsored or serviced by the parent.

AXIS Capital Holdings Limited

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES COMPOSITION

At December 31, 2014



	Agencies			AAA			AA			A			BBB			Non-Investment Grade			Total

Residential MBS	$	2,278,108		$	22,360		$	338		$	6,329		$	12,574		$	31,485		$	2,351,194
Commercial MBS	—			701,316			218,188			123,623			51,990			1,771			1,096,888
ABS	—			1,065,658			315,401			55,634			21,987			2,906			1,461,586

Total mortgage-backed and asset-backed securities	$	2,278,108		$	1,789,334		$	533,927		$	185,586		$	86,551		$	36,162		$	4,909,668

Percentage of total	46.4		%	36.4		%	10.9		%	3.8		%	1.8		%	0.7		%	100.0		%

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS



	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012
Reinsurance recoverable on paid losses and loss expenses:
Insurance	$	29,280		$	31,460		$	24,680		$	26,943		$	29,897		$	39,201
Reinsurance	6,584			1,399			1,281			1,077			(21		)	—
Total	$	35,864		$	32,859		$	25,961		$	28,020		$	29,876		$	39,201

Reinsurance recoverable on unpaid losses and loss expenses: OSLR
Insurance	$	584,378		$	608,304		$	625,142		$	575,811		$	587,727		$	561,652
Reinsurance	985			514			15			36			—			—
Total	$	585,363		$	608,818		$	625,157		$	575,847		$	587,727		$	561,652

Reinsurance recoverable on unpaid losses and loss expenses: IBNR
Insurance	$	1,320,518		$	1,318,833		$	1,319,543		$	1,322,309		$	1,321,597		$	1,214,482
Reinsurance	2,023			5,244			2,725			5,289			9,280			64,580
Total	$	1,322,541		$	1,324,077		$	1,322,268		$	1,327,598		$	1,330,877		$	1,279,062

Provision against reinsurance recoverables:
Insurance	$	(17,623	)	$	(18,225	)	$	(18,401	)	$	(18,625	)	$	(18,492	)	$	(16,096	)
Reinsurance	—			—			—			—			—			—
Total	$	(17,623	)	$	(18,225	)	$	(18,401	)	$	(18,625	)	$	(18,492	)	$	(16,096	)

Net reinsurance recoverables:
Insurance	$	1,916,553		$	1,940,372		$	1,950,964		$	1,906,438		$	1,920,729		$	1,799,239
Reinsurance	9,592			7,157			4,021			6,402			9,259			64,580
Total	$	1,926,145		$	1,947,529		$	1,954,985		$	1,912,840		$	1,929,988		$	1,863,819

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

At December 31, 2014



Categories	Gross Recoverable		Collateral			Gross Recoverable Net of Collateral		% of Total Gross Recoverable Net of Collateral	% of Total Shareholders’ Equity Attributable to AXIS Capital	Provision Against Reinsurance Recoverable			Provision Against Reinsurance Recoverable as % of Gross Recoverable	Net Recoverable
Top 10 reinsurers based on gross recoverables	$	1,486,405	$	(25,392	)	$	1,461,013	78.4%	25.1%	$	(12,596	)	0.8%	$	1,473,809
Other reinsurers balances > $20 million	177,441		(2,236		)	175,205		9.4%	3.0%	(1,550		)	0.9%	175,891
Other reinsurers balances < $20 million	279,922		(52,550		)	227,372		12.2%	3.9%	(3,477		)	1.2%	276,445
Total	$	1,943,768	$	(80,178	)	$	1,863,590	100.0%	32.0%	$	(17,623	)	0.9%	$	1,926,145

At December 31, 2014, 98.5% (December 31, 2013: 98.8%) of our gross recoverables were collectible from reinsurers rated the equivalent of A- or better by internationally recognized rating agencies.



Top 10 Reinsurers (net of collateral)	% of Total Gross Recoverable Net of Collateral	% of Total Shareholders’ Equity Attributable to AXIS Capital
Transatlantic Reinsurance Company	14.1%	4.5%
Partner Reinsurance Company of the US	11.3%	3.6%
Swiss Reinsurance America Corporation	10.9%	3.5%
Lloyds of London	10.4%	3.3%
Berkley Insurance Company	8.2%	2.6%
Ace Property & Casualty Insurance	6.0%	1.9%
XL Reinsurance America Inc	4.8%	1.5%
Hannover Rueckversicherungs Aktiengesellscheft	4.7%	1.5%
Everest Reinsurance Company	4.6%	1.5%
Liberty Mutual Insurance Company	3.4%	1.2%
	78.4%	25.1%

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS



	Quarter ended December 31, 2014									Year ended December 31, 2014
	Gross			Recoveries			Net			Gross			Recoveries			Net
Reserve for unpaid losses and loss expenses

Beginning of period	$	9,751,903		$	(1,914,670	)	$	7,837,233		$	9,582,140		$	(1,900,112	)	$	7,682,028
Incurred	636,926			(112,301		)	524,625			2,588,184			(401,462		)	2,186,722
Paid	(689,644		)	125,364			(564,280		)	(2,324,144		)	392,283			(1,931,861		)
Foreign exchange and other	(102,388		)	11,327			(91,061		)	(249,383		)	19,011			(230,372		)

End of period [a]	$	9,596,797		$	(1,890,280	)	$	7,706,517		$	9,596,797		$	(1,890,280	)	$	7,706,517


[a]	At December 31, 2014, the gross reserve for losses and loss expenses included IBNR of $6,311 million, or 66%, of total gross reserves for loss and loss expenses. At December 31, 2013, the comparable amount was $6,082 million, or 63%.

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS BY SEGMENT



	Quarter ended December 31, 2014									Year ended December 31, 2014
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total

Gross losses paid	$	400,408		$	289,236		$	689,644		$	1,273,711		$	1,050,433		$	2,324,144
Reinsurance recoveries	(120,151		)	(5,213		)	(125,364		)	(382,378		)	(9,905		)	(392,283		)

Net losses paid	280,257			284,023			564,280			891,333			1,040,528			1,931,861

Change in:
Reported case reserves	(57,519		)	566			(56,953		)	54,903			(142,498		)	(87,595		)
IBNR	39,704			(35,469		)	4,235			201,047			150,588			351,635
Reinsurance recoveries on unpaid loss and loss expense reserves	10,345			2,718			13,063			(15,403		)	6,224			(9,179		)

Total net incurred losses and loss expenses	$	272,787		$	251,838		$	524,625		$	1,131,880		$	1,054,842		$	2,186,722

Gross reserve for losses and loss expenses	$	5,063,147		$	4,533,650		$	9,596,797		$	5,063,147		$	4,533,650		$	9,596,797

Net favorable prior year reserve development	$	9,676		$	55,883		$	65,559		$	63,735		$	195,209		$	258,944

Key Ratios

Net paid to net incurred percentage	102.7		%	112.8		%	107.6		%	78.7		%	98.6		%	88.3		%

Net paid losses / Net premiums earned	60.7		%	57.2		%	58.9		%	48.7		%	51.0		%	49.9		%
Change in net loss and loss expense reserves / Net premiums earned	(1.6		%)	(6.5		%)	(4.2		%)	13.1		%	0.7		%	6.6		%
Net loss and loss expense ratio	59.1		%	50.7		%	54.7		%	61.8		%	51.7		%	56.5		%

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

INSURANCE - QUARTERLY



	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012

Gross losses paid	$	400,408		$	299,526		$	323,513		$	250,264		$	342,952		$	250,927
Reinsurance recoveries	(120,151		)	(108,012		)	(86,537		)	(67,679		)	(98,263		)	(87,520		)

Net losses paid	280,257			191,514			236,976			182,585			244,689			163,407

Change in:
Reported case reserves	(57,519		)	(153		)	101,943			10,632			(30,643		)	199,775
IBNR	39,704			92,959			(5,143		)	73,532			87,794			(9,596		)
Reinsurance recoveries on unpaid loss and loss expense reserves	10,345			4,887			(43,310		)	12,674			(16,206		)	(53,492		)

Total net incurred losses and loss expenses	$	272,787		$	289,207		$	290,466		$	279,423		$	285,634		$	300,094

Gross reserve for losses and loss expenses	$	5,063,147		$	5,117,053		$	5,068,149		$	4,960,559		$	4,873,184		$	4,492,553

Net favorable prior year reserve development	$	9,676		$	9,488		$	32,963		$	11,608		$	4,000		$	40,353

Key Ratios

Net paid to net incurred percentage	102.7		%	66.2		%	81.6		%	65.3		%	85.7		%	54.5		%

Net paid losses/Net premiums earned	60.7		%	41.5		%	51.8		%	40.6		%	54.3		%	42.7		%
Change in net loss and loss expense reserves / Net premiums earned	(1.6		%)	21.1		%	11.7		%	21.6		%	9.1		%	35.7		%
Net loss and loss expense ratio	59.1		%	62.6		%	63.5		%	62.2		%	63.4		%	78.4		%

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

REINSURANCE - QUARTERLY



	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012

Gross losses paid	$	289,236		$	226,319		$	255,715		$	279,163		$	249,816		$	284,517
Reinsurance recoveries	(5,213		)	(475		)	(183		)	(4,033		)	(6		)	—

Net losses paid	284,023			225,844			255,532			275,130			249,810			284,517

Change in:
Reported case reserves	566			1,038			(55,460		)	(88,642		)	64,636			38,303
IBNR	(35,469		)	39,008			72,706			74,341			(46,422		)	54,928
Reinsurance recoveries on unpaid loss and loss expense reserves	2,718			(3,033		)	2,585			3,955			(2,298		)	(2,795		)

Total net incurred losses and loss expenses	$	251,838		$	262,857		$	275,363		$	264,784		$	265,726		$	374,953

Gross reserve for losses and loss expenses	$	4,533,650		$	4,634,850		$	4,737,839		$	4,707,282		$	4,708,956		$	4,566,178

Net prior year favorable reserve development	$	55,883		$	55,050		$	52,391		$	31,885		$	38,788		$	24,213

Key Ratios

Net paid to net incurred percentage	112.8		%	85.9		%	92.8		%	103.9		%	94.0		%	75.9		%

Net paid losses / Net premiums earned	57.2		%	44.8		%	47.1		%	55.4		%	50.8		%	60.1		%
Change in net loss and loss expense reserves / Net premiums earned	(6.5		%)	7.3		%	3.6		%	(2.1		%)	3.3		%	19.1		%
Net loss and loss expense ratio	50.7		%	52.1		%	50.7		%	53.3		%	54.1		%	79.2		%

AXIS Capital Holdings Limited

NET PROBABLE MAXIMUM LOSSES TO CERTAIN PEAK INDUSTRY CATASTROPHE EXPOSURES - AS OF JANUARY 1, 2015



		Estimated Net Exposures (millions of U.S. dollars)
Territory	Peril	50 Year Return Period		100 Year Return Period		250 Year Return Period
Single zone, single event
Southeast	U.S. Hurricane	$	548	$	773	$	947
Northeast	U.S. Hurricane	55		177		325
Mid-Atlantic	U.S. Hurricane	98		305		758
Gulf of Mexico	U.S. Hurricane	351		508		773
California	Earthquake	379		544		702
Europe	Windstorm	151		224		291
Japan	Earthquake	165		270		447
Japan	Windstorm	52		83		120

The above table shows our Probable Maximum Loss (“PML”) to a single natural peril catastrophe event within certain defined single zones which correspond to peak industry catastrophe exposures at January 1, 2015. The return period refers to the frequency with which losses of a given amount or greater are expected to occur. A zone is a geographic area in which the insurance risks are considered to be correlated to a single catastrophic event. Estimated losses from a modeled event are grouped into a single zone, as shown above, based on where the majority of the total estimated industry loss is expected to occur.

As indicated in the table above, our modeled single occurrence 1-in-100 year return period PML for a Southeast hurricane, net of reinsurance, is approximately $0.8 billion. According to our modeling, there is a one percent chance that on an annual basis, our losses incurred from a Southeast hurricane event could be in excess of $0.8 billion. Conversely, there is a 99% chance that on an annual basis, the loss from a Southeast hurricane will fall below $0.8 billion.

We have developed our PML estimates using multiple commercially available catastrophe vendor models, including AIR and RMS. We weight the use of these vendor models based upon our own judgment and experience, and include in our estimates non-modeled perils and other factors which we believe provide us with a more complete view of catastrophe risk.

A supplementary disclosure entitled “Overview of AXIS Natural Peril Catastrophe Risk Measurement and Management” dated August 3, 2011 is available in the Investor Information section of our website. This disclosure provides an overview of our PML methodology, including our approach to zonal aggregation, as well as information about zonal definitions commonly used by other external parties.

Our PML estimates are based on assumptions that are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies can affect actual losses and could cause actual losses to differ materially from those expressed above. We aim to reduce the potential for model error in a number of ways, foremost by ensuring that management’s judgment supplements the model outputs. We also perform ongoing model validation both within our business units and through our catastrophe model validation unit. These validation procedures include sensitivity testing of models to understand their key variables and, where possible, back testing the model outputs to actual results.

Our estimated net losses from peak zone catastrophes may change from period to period as a result of several factors, which include but are not limited to, updates to vendor catastrophe models, changes in our own modeling, changes in our underwriting portfolios, changes to our reinsurance purchasing strategy and changes in foreign exchange rates.

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP



	Quarter ended December 31,				Year ended December 31,
	2014		2013		2014		2013

Net income available to common shareholders	$	163,663	$	171,524	$	770,657	$	683,910

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Weighted average shares outstanding - basic	100,468		110,757		104,368		113,636
Dilutive share equivalents:
Stock compensation plans	1,570		1,945		1,345		1,692
Weighted average shares outstanding - diluted	102,038		112,702		105,713		115,328

EARNINGS PER COMMON SHARE
Basic		$1.63		$1.55		$7.38		$6.02
Diluted		$1.60		$1.52		$7.29		$5.93

AXIS Capital Holdings Limited

EARNINGS (LOSS) PER COMMON SHARE INFORMATION AND COMMON SHARE ROLLFOWARD - QUARTERLY



	Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q4 2013			Q4 2012

Net income (loss) available to common shareholders	$	163,663		$	279,104		$	190,664		$	137,227		$	171,524		$	(18,551	)

COMMON SHARES OUTSTANDING
Common shares - at beginning of period	100,827			103,906			106,745			109,485			111,651			117,857
Shares issued, including those sourced from treasury	88			90			219			1,296			162			88
Shares repurchased for treasury	(1,489		)	(3,169		)	(3,058		)	(4,036		)	(2,328		)	(25		)
Common shares - at end of period	99,426			100,827			103,906			106,745			109,485			117,920

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average shares outstanding - basic	100,468			102,945			105,118			109,053			110,757			117,918
Dilutive share equivalents: [a]
Stock compensation plans	1,570			1,302			1,171			1,338			1,945			—
Weighted average shares outstanding - diluted	102,038			104,247			106,289			110,391			112,702			117,918

EARNING (LOSS) PER SHARE
Basic		$1.63			$2.71			$1.81			$1.26			$1.55			($0.16	)
Diluted		$1.60			$2.68			$1.79			$1.24			$1.52			($0.16	)

[a] Due to the net loss incurred in the three months ended December 31, 2012, these securities were not included in the computation of diluted earnings per share because of their anti-dilutive effect.

AXIS Capital Holdings Limited

DILUTED BOOK VALUE PER COMMON SHARE ANALYSIS - TREASURY STOCK METHOD [a]



	At December 31, 2014

	Weighted Average Strike Price		Common Shareholders’ Equity		Outstanding Common Shares net of Treasury Shares	Per share

Closing stock price							$51.09

Book value per common share			$	5,193,278	99,426		$52.23

Dilutive securities: [b]
Restricted stocks					1,295	(0.67		)
Options		$28.02			9	—
Restricted and phantom stock units					1,846	(0.93		)
Diluted book value per common share			$	5,193,278	102,577		$50.63

	At December 31, 2013

	Weighted Average Strike Price		Common Shareholders’ Equity		Outstanding Common Shares net of Treasury Shares	Per share

Closing stock price							$47.57

Book value per common share			$	5,190,119	109,485		$47.40

Dilutive securities: [b]
Restricted stocks					2,515	(1.06		)
Options		$27.98			88	(0.04		)
Restricted and phantom stock units					1,237	(0.50		)
Diluted book value per common share			$	5,190,119	113,325		$45.80


[a]	This method assumes that proceeds received upon exercise of options will be used to repurchase our common shares at the closing market price. Unvested restricted stocks and units and unrestricted phantom stock units are also added to determine the diluted common shares outstanding.

[b] Excludes cash-settled restricted stock unit awards.

AXIS Capital Holdings Limited

OPERATING INCOME AND DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE [a]



OPERATING INCOME
	Quarter ended December 31,						Year ended December 31,
	2014			2013			2014			2013
Net income available to common shareholders	$	163,663		$	171,524		$	770,657		$	683,910
Adjustment for:
Net realized investment gains	(10,779		)	(19,558		)	(132,108		)	(75,564		)
Associated tax impact	11,959			(6,737		)	25,912			(2,039		)
Foreign exchange losses (gains)	(46,086		)	14,484			(104,439		)	26,143
Associated tax impact	1,535			(857		)	2,853			(2,459		)
Loss on repurchase of preferred shares	—			—			—			3,081
Associated tax impact	—			—			—			—
Operating income	$	120,292		$	158,856		$	562,875		$	633,072


Net earnings per share - diluted	$	1.60		$	1.52		$	7.29		$	5.93
Adjustment for:
Net realized investment gains	(0.11		)	(0.17		)	(1.25		)	(0.66		)
Associated tax impact	0.12			(0.06		)	0.25			(0.02		)
Foreign exchange losses (gains)	(0.45		)	0.13			(1.00		)	0.23
Associated tax impact	0.02			(0.01		)	0.03			(0.02		)
Loss on repurchase of preferred shares	—			—			—			0.03
Associated tax impact	—			—			—			—
Operating income per share - diluted	$	1.18		$	1.41		$	5.32		$	5.49

Weighted average common shares and common share equivalents - diluted	102,038			112,702			105,713			115,328

Average common shareholders' equity	5,191,962			5,175,053			5,191,699			5,233,519

Annualized return on average common equity	12.6		%	13.3		%	14.8		%	13.1		%

Annualized operating return on average common equity	9.3		%	12.3		%	10.8		%	12.1		%



DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD [b]
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
	2014			2014			2014			2014			2013			2012
Common shareholders' equity	$	5,193,278		$	5,190,646		$	5,327,867		$	5,199,206		$	5,190,119		$	5,276,918
Less: goodwill and intangible assets	(88,960		)	(88,740		)	(90,025		)	(90,350		)	(89,528		)	(97,493		)
Tangible common shareholders' equity	$	5,104,318		$	5,101,906		$	5,237,842		$	5,108,856		$	5,100,591		$	5,179,425

Outstanding diluted common shares net of treasury shares	102,577			104,073			107,228			110,327			113,325			122,793

Diluted book value per common share	$	50.63		$	49.88		$	49.69		$	47.13		$	45.80		$	42.97

Diluted tangible book value per common share	$	49.76		$	49.02		$	48.85		$	46.31		$	45.01		$	42.18


[a]	Operating income and diluted tangible book value per common share are “non-GAAP financial measures” as defined by Regulation G. Reconciliations of operating income to net income available to common shareholders and diluted tangible book value per common share to diluted book value per common share are presented above.


[b]	This method assumes that proceeds received upon exercise of options will be used to repurchase our common shares at the closing market price. Unvested restricted stocks and units and unrestricted phantom stock units are also added to determine the diluted common shares outstanding. Cash-settled restricted stock unit awards are excluded.

AXIS Capital Holdings Limited

ADJUSTED GROUP RESULTS [a]



	Quarter ended December 31, 2014											Year ended December 31, 2014
	Reported Group Results			Cession To AXIS Ventures Reinsurance Limited [b]			Adjustment For Agriculture Hedges		Adjusted Group Results [a]			Reported Group Results			Cession To AXIS Ventures Reinsurance Limited [b]			Adjustment For Agriculture Hedges			Adjusted Group Results [a]
UNDERWRITING REVENUES
Gross premiums written	$	762,040		$	—		$	—	$	762,040		$	4,711,519		$	—		$	—		$	4,711,519
Net premiums written	555,017			—			—		555,017			3,906,975			(41,265		)	—			3,865,710

Gross premiums earned	1,164,355			—			—		1,164,355			4,652,345			—			—			4,652,345
Ceded premiums expensed	(205,838		)	(10,401		)	—		(216,239		)	(781,346		)	(41,071		)	—			(822,417		)
Net premiums earned	958,517			(10,401		)	—		948,116			3,870,999			(41,071		)	—			3,829,928
Other insurance related income (loss) [c]	(11,818		)	—			915		(10,903		)	650			—			(8,328		)	(7,678		)
Total underwriting revenues	946,699			(10,401		)	915		937,213			3,871,649			(41,071		)	(8,328		)	3,822,250

UNDERWRITING EXPENSES
Net losses and loss expenses	524,625			(11,326		)	915		514,214			2,186,722			(39,845		)	(8,328		)	2,138,549
Acquisition costs	187,349			(1,728		)	—		185,621			737,197			(6,800		)	—			730,397
Underwriting-related general and administrative expenses	122,005			(166		)	—		121,839			486,201			(616		)	—			485,585
Total underwriting expenses	833,979			(13,220		)	915		821,674			3,410,120			(47,261		)	(8,328		)	3,354,531

UNDERWRITING INCOME	$	112,720		$	2,819		$	—	$	115,539		$	461,529		$	6,190		$	—		$	467,719


KEY RATIOS
Net loss and loss expense ratio	54.7		%						54.2		%	56.5		%							55.8		%
Acquisition cost ratio	19.5		%						19.6		%	19.0		%							19.1		%
Underwriting-related general and administrative expense ratio	12.8		%						12.8		%	12.6		%							12.7		%
Corporate expense ratio	4.5		%						4.6		%	3.5		%							3.5		%
Combined ratio	91.5		%						91.2		%	91.6		%							91.1		%


[a]	Adjusted group results is a "non-GAAP financial measures" as defined in SEC Regulation G. Reconciliations of adjusted group results to the nearest GAAP financial measures (reported group results) are presented above.


[b]	Amounts attributable from noncontrolling interests of $2,815 and $6,181 for the quarter and year ended December 31, 2014, respectively, also include net investment income attributable to noncontrolling interests of $4 and $9 for the quarter and year ended December 31, 2014, respectively.


[c]	Other insurance related income primarily includes realized gains (losses) on our crop derivatives and the results of our weather and commodity business. This balance is adjusted to reclass the gains (losses) on our crop derivatives to net losses and loss expenses.

AXIS Capital Holdings Limited

ADJUSTED REINSURANCE SEGMENT RESULTS [a]



	Quarter ended December 31, 2014											Year ended December 31, 2014
	Reported Reinsurance Segment Results			Cession To AXIS Ventures Reinsurance Limited [b]			Adjustment For Agriculture Hedges		Adjusted Reinsurance Segment Results [a]			Reported Reinsurance Segment Results			Cession To AXIS Ventures Reinsurance Limited[b]			Adjustment For Agriculture Hedges			Adjusted Reinsurance Segment Results [a]
UNDERWRITING REVENUES
Gross premiums written	$	137,727		$	—		$	—	$	137,727		$	2,176,104		$	—		$	—		$	2,176,104
Net premiums written	136,867			—			—		136,867			2,127,474			(41,265		)	—			2,086,209

Gross premiums earned	509,156			—			—		509,156			2,082,526			—			—			2,082,526
Ceded premiums expensed	(12,499		)	(10,401		)	—		(22,900		)	(42,071		)	(41,071		)	—			(83,142		)
Net premiums earned	496,657			(10,401		)	—		486,256			2,040,455			(41,071		)	—			1,999,384
Other insurance related income (loss) [c]	(11,806		)	—			915		(10,891		)	661			—			(8,328		)	(7,667		)
Total underwriting revenues	484,851			(10,401		)	915		475,365			2,041,116			(41,071		)	(8,328		)	1,991,717

UNDERWRITING EXPENSES
Net losses and loss expenses	251,838			(11,326		)	915		241,427			1,054,842			(39,845		)	(8,328		)	1,006,669
Acquisition costs	115,905			(1,728		)	—		114,177			458,393			(6,800		)	—			451,593
Underwriting-related general and administrative expenses	38,000			(166		)	—		37,834			144,987			(616		)	—			144,371
Total underwriting expenses	405,743			(13,220		)	915		393,438			1,658,222			(47,261		)	(8,328		)	1,602,633

UNDERWRITING INCOME	$	79,108		$	2,819		$	—	$	81,927		$	382,894		$	6,190		$	—		$	389,084


KEY RATIOS
Net loss and loss expense ratio	50.7		%						49.7		%	51.7		%							50.3		%
Acquisition cost ratio	23.3		%						23.5		%	22.5		%							22.6		%
Underwriting-related general and administrative expense ratio	7.7		%						7.7		%	7.1		%							7.3		%
Combined ratio	81.7		%						80.9		%	81.3		%							80.2		%


[a]	Adjusted reinsurance segment results is a "non-GAAP financial measures" as defined in SEC Regulation G. Reconciliations of adjusted reinsurance segment results to the nearest GAAP financial measures (reported reinsurance segment results) are presented above.


[b]	Amounts attributable from noncontrolling interests of $2,815 and $6,181 for the quarter and year ended December 31, 2014, respectively, also include net investment income attributable to noncontrolling interests of $4 and $9 for the quarter and year ended December 31, 2014, respectively.


[c]	Other insurance related income primarily includes realized gains (losses) on our crop derivatives and the results of our weather and commodity business. This balance is adjusted to reclass the gains (losses) on our crop derivatives to net losses and loss expenses.

AXIS Capital Holdings Limited

USE OF NON-GAAP FINANCIAL MEASURES

In this document, we present operating income, consolidated underwriting income (loss), underwriting-related general and administrative expenses, diluted tangible book value per common share, adjusted group results and adjusted reinsurance segment results, which are “non-GAAP financial measures” as defined in Regulation G.

Operating income represents after-tax operational results without consideration of after-tax net realized investment gains (losses), foreign exchange (losses) gains and losses on the repurchase of preferred shares. We also present diluted operating earnings per share and operating return on average common equity ("operating ROACE"), which are derived from the non-GAAP operating income measure. Reconciliations of operating income, diluted operating earnings per share and operating ROACE to the nearest GAAP financial measures (based on net income available to common shareholders) are included on the 'Operating Income and Diluted Tangible Book Value per Common Share' section of this document.

Consolidated underwriting income (loss) is a pre-tax measure of underwriting profitability that takes into account net premiums earned and other insurance related income (loss) as revenues and net losses and loss expenses, acquisition costs and underwriting-related general and administrative costs as expenses. Underwriting-related general and administrative expenses include those general and administrative expenses that are incremental and/or directly attributable to our individual underwriting operations. While these measures are presented in the Segment Information footnote to our Consolidated Financial Statements, they are considered non-GAAP financial measures when presented elsewhere on a consolidated basis. A reconciliation of consolidated underwriting income (loss) to income before income taxes (the nearest GAAP financial measure) is included in the 'Consolidated Statements of Income - Quarterly' and 'Consolidated Statements of Income - Year' sections of this document. Our total general and administrative expenses (the nearest GAAP financial measure to underwriting-related general and administrative expenses) also includes corporate expenses; the two components are separately presented in the 'Consolidated Statements of Income - Quarterly' and 'Consolidated Statements of Income - Year' sections of this document.

Tangible book value is defined as common shareholders' equity excluding goodwill and intangible assets. Diluted tangible book value per common share uses this measure as the numerator, with the denominator being outstanding diluted common shares calculated under the treasury stock method. A reconciliation of diluted tangible book value per common share to diluted book value per common share (the nearest GAAP financial measure) is included in the 'Operating Income and Diluted Tangible Book Value per Common Share' section of this document.

Adjusted group results and adjusted reinsurance segment results represent the group and the reinsurance segment results after adjusting for ceded transactions with AXIS Ventures Reinsurance Limited (Ventures Re) and realized gains (losses) on crop derivatives. A reconciliation of adjusted group results to reported group results (the nearest GAAP financial measure) is included in the 'Adjusted Group Results' section of this document. A reconciliation of adjusted reinsurance segment results to reported reinsurance segment results (the nearest GAAP financial measure) is included in the 'Adjusted Reinsurance Segment Results' section of this document.

We present our results of operations in the way we believe will be most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. This includes the presentation of “operating income” (in total and on a per share basis), “annualized operating ROACE” (which is based on the “operating income” measure), "consolidated underwriting income (loss)" (which incorporates "underwriting-related general and administrative expenses"), diluted tangible book value per common share and adjusted reinsurance results.

Operating Income

Although the investment of premiums to generate income and realized investment gains (or losses) is an integral part of our operations, the determination to realize investment gains (or losses) is independent of the underwriting process and is heavily influenced by the availability of market opportunities. Furthermore, many users believe that the timing of the realization of investment gains (or losses) is somewhat opportunistic for many companies.

Foreign exchange (losses) gains in our Consolidated Statements of Operations are primarily driven by the impact of foreign exchange rate movements on net insurance-related liabilities. However, this movement is only one element of the overall impact of foreign exchange rate fluctuations on our financial position. In addition, we recognize unrealized foreign exchange (losses) gains on our available-for-sale investments in other comprehensive income and foreign exchange (losses) gains realized upon the sale of these investments in net realized investment (losses) gains. These unrealized and realized foreign exchange movements generally offset a large portion of the foreign exchange (losses) gains reported separately in earnings, thereby minimizing the impact of foreign exchange rate movements on total shareholders’ equity. As such, the Consolidated Statements of Operations foreign exchange (losses) gains in isolation are not a fair representation of the performance of our business.

Losses on repurchase of preferred shares arise from capital transactions and, therefore, are not reflective of underlying business performance.

In this regard, certain users of our financial statements evaluate earnings excluding after-tax net realized investment gains (losses), foreign exchange (losses) gains and losses on repurchase of preferred shares to understand the profitability of recurring sources of income. We believe that showing net income available to common shareholders exclusive of net realized gains (losses), foreign exchange (losses) gains and losses on repurchase of preferred shares reflects the underlying fundamentals of our business. In addition, we believe that this presentation enables investors and other users of our financial information to analyze performance in a manner similar to how our management analyzes the underlying business performance. We also believe this measure follows industry practice and, therefore, facilitates comparison of our performance with our peer group. We believe that equity analysts and certain rating agencies that follow us, and the insurance industry as a whole, generally exclude these items from their analysis for the same reasons.

Consolidated Underwriting Income (Loss)/Underwriting-Related General and Administrative Expenses

Corporate expenses include holding company costs necessary to support our worldwide (re)insurance operations and costs associated with operating as a publicly-traded company. As these costs are not incremental and/or directly attributable to our individual underwriting operations, we exclude them from underwriting-related general and administrative expenses and, therefore, consolidated underwriting income (loss). Interest expense and financing costs primarily relate to interest payable on our senior notes and are excluded from consolidated underwriting income for the same reason.

We evaluate our underwriting results separately from the performance of our investment portfolio. As such, we believe it appropriate to exclude net investment income and net realized investment gains (losses) from our underwriting profitability measure.

As noted above, foreign exchange (losses) gains in our Consolidated Statements of Operations primarily relate to our net insurance-related liabilities. However, we manage our investment portfolio in such a way that unrealized and realized foreign exchange rate gains (losses) on our investment portfolio generally offset a large portion of the foreign exchange (losses) gains arising from our underwriting portfolio. As a result, we believe that foreign exchange (losses) gains are not a meaningful contributor to our underwriting performance and, therefore, exclude them from consolidated underwriting income (loss). We believe that presentation of underwriting-related general and administrative expenses and consolidated underwriting income (loss) provides investors with an enhanced understanding of our results of operations, by highlighting the underlying pre-tax profitability of our underwriting activities.

Diluted Tangible Book Value per Common Share

Diluted tangible book value per common share removes certain effects of purchase accounting. We believe that this measure, in combination with diluted book value per common share, is useful in assessing value generated for our common shareholders.

Adjusted Group Results/Adjusted Reinsurance Segment Results

Adjusted group results and adjusted reinsurance segment results include the impact of ceded reinsurance transactions with Ventures Re that are presented on a net basis in the amounts attributable to (from) noncontrolling interests within our Consolidated Financial Statements and the reclassification of the realized gains (losses) on crop derivatives from other insurance related income (loss) to net losses and loss expenses.

Ventures Re is a variable interest entity and AXIS Capital was determined to be its primary beneficiary. Following this determination Ventures Re is consolidated in our Consolidated Financial Statements. To date Ventures Re has only assumed business written by AXIS Capital. As the underwriting performance of the business assumed by Ventures Re has been fully collateralized through capital provided by third party investors, we believe that presenting the underwriting results of our group and of the reinsurance segment net of the cessions to Ventures Re provides additional relevant information in assessing the performance of our group and of the reinsurance segment.

Additionally, we purchase crop derivatives to protect our agriculture reinsurance products from a significant decline in commodity prices that would impact our group and reinsurance segment underwriting results. These derivatives were purchased to provide economic benefit similar to reinsurance protection. We view movements in these derivatives as part of the results of our underwriting operations that should be seen as an offset against the net losses and loss expenses incurred on this line of business.

We believe that showing our underwriting metrics net of cessions to Ventures Re and the impact of crop derivatives aids in the understanding of the underlying fundamentals of our reinsurance business. In addition, we believe that this presentation enables investors and other users of our financial information to analyze performance in a manner similar to how our management analyzes the underlying business performance. We also believe this measure follows the practices of our industry peers and, therefore, facilitates comparison of our performance with our peer group.