EX-99.2 3 axsex99-2.htm FIRST QUARTER 2015 INVESTOR FINANCIAL SUPPLEMENT

Q1 2015 Financial Supplement

AXIS Capital Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT

FIRST QUARTER 2015

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

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, 2014.

• 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,

• the failure to complete our amalgamation with PartnerRe Ltd., 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.

i

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.

ii

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, primarily 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 March 31,
				2015				2014				Change
HIGHLIGHTS		Gross premiums written		$	1,678,932			$	1,821,399			(7.8	%)
		Gross premiums written - Insurance		35.9		%		33.0		%		2.9		pts
		Gross premiums written - Reinsurance		64.1		%		67.0		%		(2.9	)	pts
		Net premiums written		$	1,463,552			$	1,664,584			(12.1	%)
		Net premiums earned		$	906,222			$	945,949			(4.2	%)
		Net premiums earned - Insurance		49.4		%		47.5		%		1.9		pts
		Net premiums earned - Reinsurance		50.6		%		52.5		%		(1.9	)	pts
		Net income available to common shareholders		$	155,803			$	137,227			13.5	%
		Operating income [a]		136,071				137,069				(0.7	%)
		Reserve for losses and loss expenses		9,443,222				9,667,841				(2.3	%)
		Total shareholders’ equity attributable to AXIS Capital		$	5,977,163			$	5,827,049			2.6	%
PER COMMON SHARE AND COMMON SHARE DATA		Basic earnings per common share			$1.56				$1.26			23.8	%
		Diluted earnings per common share		1.54				1.24				24.2	%
		Operating income per common share - diluted [b]			$1.35				$1.24			8.9	%
		Weighted average common shares outstanding		99,910				109,053				(8.4	%)
		Diluted weighted average common shares outstanding		101,139				110,391				(8.4	%)
		Book value per common share			$53.38				$48.71			9.6	%
		Diluted book value per common share (treasury stock method)		51.97				47.13				10.3	%
		Diluted tangible book value per common share (treasury stock method) [a]		51.11				46.31				10.4	%
		Accumulated dividends declared per common share			$9.27				$8.15			13.7	%
FINANCIAL RATIOS		ROACE [c]		11.8		%		10.6		%		1.2		pts
		Operating ROACE [d]		10.3		%		10.6		%		(0.3	)	pts
		Net loss and loss expense ratio		57.3		%		57.5		%		(0.2	)	pts
		Acquisition cost ratio		18.9		%		18.2		%		0.7		pts
		General and administrative expense ratio		18.1		%		16.2		%		1.9		pts
		Combined ratio		94.3		%		91.9		%		2.4		pts
INVESTMENT DATA		Total assets		$	20,458,819			$	20,997,634			(2.6	%)
		Total cash and invested assets [e]		14,758,306				15,330,283				(3.7	%)
		Net investment income		92,110				82,744				11.3	%
		Net realized investment gains (losses)		$	(42,553	)		$	10,620			nm
		Total return on cash and investments (inclusive of investment related foreign exchange movements) [f]		0.7		%		1.1		%		(0.4	)	pts
		Total return on cash and investments (exclusive of investment related foreign exchange movements) [f]		1.2		%		1.1		%		0.1		pts
		Return on other investments [g]		3.3		%		1.7		%		1.6		pts
		Book yield of fixed maturities		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 25 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 (losses) and the change in unrealized 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.

1

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY

	Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
UNDERWRITING REVENUES
Gross premiums written	$	1,678,932			$	762,040			$	896,814			$	1,231,279			$	1,821,399			$	1,746,483
Premiums ceded	(215,380		)		(207,023		)		(209,591		)		(231,117		)		(156,815		)		(176,043		)
Net premiums written	1,463,552				555,017				687,223				1,000,162				1,664,584				1,570,440
Gross premiums earned	1,114,311				1,164,355				1,160,577				1,194,367				1,133,052				1,064,930
Ceded premiums expensed	(208,089		)		(205,838		)		(194,439		)		(193,967		)		(187,103		)		(190,891		)
Net premiums earned	906,222				958,517				966,138				1,000,400				945,949				874,039
Other insurance related income (loss)	7,676				(11,818		)		7,702				1,683				3,082				595
Total underwriting revenues	913,898				946,699				973,840				1,002,083				949,031				874,634
UNDERWRITING EXPENSES
Net losses and loss expenses	518,937				524,625				552,064				565,829				544,207				438,414
Acquisition costs	171,702				187,349				185,950				191,862				172,036				145,491
Underwriting-related general and administrative expenses [a]	127,345				122,005				122,362				117,811				124,022				119,930
Total underwriting expenses	817,984				833,979				860,376				875,502				840,265				703,835
UNDERWRITING INCOME [b]	95,914				112,720				113,464				126,581				108,766				170,799
OTHER OPERATING REVENUE (EXPENSES)
Net investment income	92,110				78,595				66,562				114,867				82,744				108,908
Net realized investment gains (losses)	(42,553		)		10,779				77,448				33,261				10,620				44,478
Interest expense and financing costs	(12,257		)		(17,783		)		(20,344		)		(19,975		)		(16,594		)		(15,834		)
Total other operating revenues	37,300				71,591				123,666				128,153				76,770				137,552
OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	63,220				46,086				72,292				(9,705		)		(4,233		)		34,882
Corporate expenses [a]	(36,172		)		(43,145		)		(30,554		)		(33,270		)		(28,707		)		(21,545		)
Total other (expenses) revenues	27,048				2,941				41,738				(42,975		)		(32,940		)		13,337
INCOME BEFORE INCOME TAXES	160,262				187,252				278,868				211,759				152,596				321,688
Income tax (expense) benefit	690				(16,382		)		4,098				(9,500		)		(4,125		)		(10,131		)
NET INCOME	160,952				170,870				282,966				202,259				148,471				311,557
Amounts attributable (to) from noncontrolling interests	4,873				2,815				6,160				(1,573		)		(1,222		)		—
NET INCOME ATTRIBUTABLE TO AXIS CAPITAL	165,825				173,685				289,126				200,686				147,249				311,557
Preferred share dividends	(10,022		)		(10,022		)		(10,022		)		(10,022		)		(10,022		)		(8,741		)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	155,803			$	163,663			$	279,104			$	190,664			$	137,227			$	302,816
KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	57.3		%		54.7		%		57.1		%		56.6		%		57.5		%		50.2		%
Acquisition cost ratio	18.9		%		19.5		%		19.2		%		19.2		%		18.2		%		16.6		%
General and administrative expense ratio [a]	18.1		%		17.3		%		15.9		%		15.0		%		16.2		%		16.2		%
Combined ratio	94.3		%		91.5		%		92.2		%		90.8		%		91.9		%		83.0		%
Weighted average basic shares outstanding	99,910				100,468				102,945				105,118				109,053				117,022
Weighted average diluted shares outstanding	101,139				102,038				104,247				106,289				110,391				118,658
Basic earnings per common share		$1.56				$1.63				$2.71				$1.81				$1.26				$2.59
Diluted earnings per common share		$1.54				$1.60				$2.68				$1.79				$1.24				$2.55
ROACE (annualized)	11.8		%		12.6		%		21.2		%		14.5		%		10.6		%		22.7		%
Operating ROACE (annualized)	10.3		%		9.3		%		10.1		%		13.1		%		10.6		%		17.1		%

[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 is also a "non-GAAP financial measure". Reconciliations of consolidated underwriting income to the nearest GAAP financial measure (income before income taxes) are presented above.

2

AXIS Capital Holdings Limited

CONSOLIDATED SEGMENT DATA

		Quarter ended March 31, 2015												Quarter ended March 31, 2014
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
UNDERWRITING REVENUES
Gross premiums written		$	602,724			$	1,076,208			$	1,678,932			$	601,721			$	1,219,678			$	1,821,399
Net premiums written		436,740				1,026,812				1,463,552				456,692				1,207,892				1,664,584
Gross premiums earned		638,348				475,963				1,114,311				629,425				503,627				1,133,052
Ceded premiums expensed		(190,881		)		(17,208		)		(208,089		)		(180,211		)		(6,892		)		(187,103		)
Net premiums earned		447,467				458,755				906,222				449,214				496,735				945,949
Other insurance related income		—				7,676				7,676				—				3,082				3,082
Total underwriting revenues		447,467				466,431				913,898				449,214				499,817				949,031
UNDERWRITING EXPENSES
Net losses and loss expenses		285,773				233,164				518,937				279,423				264,784				544,207
Acquisition costs		64,455				107,247				171,702				65,057				106,979				172,036
Underwriting-related general and administrative expenses		87,689				39,656				127,345				87,946				36,076				124,022
Total underwriting expenses		437,917				380,067				817,984				432,426				407,839				840,265
UNDERWRITING INCOME		$	9,550			$	86,364			$	95,914			$	16,788			$	91,978			$	108,766
KEY RATIOS
Current accident year loss ratio		64.6		%		61.0		%		62.8		%		64.8		%		59.7		%		62.1		%
Prior period reserve development		(0.7		%)		(10.2		%)		(5.5		%)		(2.6		%)		(6.4		%)		(4.6		%)
Net loss and loss expense ratio		63.9		%		50.8		%		57.3		%		62.2		%		53.3		%		57.5		%
Acquisition cost ratio		14.4		%		23.4		%		18.9		%		14.5		%		21.5		%		18.2		%
Underwriting-related general and administrative expense ratio		19.6		%		8.6		%		14.1		%		19.6		%		7.3		%		13.2		%
Corporate expense ratio										4.0		%										3.0		%
Combined ratio		97.9		%		82.8		%		94.3		%		96.3		%		82.1		%		91.9		%

3

AXIS Capital Holdings Limited

GROSS PREMIUM WRITTEN BY SEGMENT BY LINE OF BUSINESS

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
INSURANCE SEGMENT
Property		$	129,624			$	153,563			$	143,236			$	207,788			$	139,929			$	151,376
Marine		91,586				26,236				41,529				84,833				85,722				79,893
Terrorism		7,935				10,194				11,055				9,478				6,978				8,213
Aviation		10,014				26,601				17,735				10,568				2,717				3,376
Credit and Political Risk		8,117				16,100				3,782				7,179				18,307				10,003
Professional Lines		150,422				267,950				196,576				244,011				154,248				159,809
Liability		82,667				92,608				94,833				106,643				74,366				57,811
Accident and Health		122,359				31,061				46,537				83,610				119,454				126,234
TOTAL INSURANCE SEGMENT		602,724				624,313				555,283				754,110				601,721				596,715
REINSURANCE SEGMENT
Catastrophe		131,216				13,101				71,319				117,245				171,260				167,803
Property		182,012				4,099				45,030				61,027				239,620				221,876
Professional Lines		65,024				69,236				51,007				104,801				68,219				90,555
Credit and Surety		191,357				6,104				23,933				20,359				208,468				208,308
Motor		297,690				5,152				9,445				2,676				274,019				224,991
Liability		89,772				34,769				145,488				82,566				102,644				99,587
Agriculture		69,729				(3,577		)		(10,206		)		76,665				103,165				80,017
Engineering		38,059				7,589				2,579				8,772				36,510				40,912
Other		11,349				1,254				2,936				3,058				15,773				15,719
TOTAL REINSURANCE SEGMENT		1,076,208				137,727				341,531				477,169				1,219,678				1,149,768
CONSOLIDATED TOTAL		$	1,678,932			$	762,040			$	896,814			$	1,231,279			$	1,821,399			$	1,746,483

4

AXIS Capital Holdings Limited

INSURANCE SEGMENT DATA - QUARTERLY

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
UNDERWRITING REVENUES
Gross premiums written		$	602,724			$	624,313			$	555,283			$	754,110			$	601,721			$	596,715
Net premiums written		436,740				418,150				363,571				541,097				456,692				432,681
Gross premiums earned		638,348				655,199				643,864				641,335				629,425				589,071
Ceded premiums expensed		(190,881		)		(193,339		)		(182,059		)		(183,665		)		(180,211		)		(187,191		)
Net premiums earned		447,467				461,860				461,805				457,670				449,214				401,880
Other insurance related income (loss)		—				(12		)		—				—				—				595
Total underwriting revenues		447,467				461,848				461,805				457,670				449,214				402,475
UNDERWRITING EXPENSES
Net losses and loss expenses		285,773				272,787				289,207				290,466				279,423				217,336
Acquisition costs		64,455				71,444				71,264				71,039				65,057				57,261
General and administrative expenses		87,689				84,005				85,750				83,512				87,946				86,889
Total underwriting expenses		437,917				428,236				446,221				445,017				432,426				361,486
UNDERWRITING INCOME		$	9,550			$	33,612			$	15,584			$	12,653			$	16,788			$	40,989
KEY RATIOS
Current accident year loss ratio		64.6		%		61.2		%		64.7		%		70.7		%		64.8		%		55.5		%
Prior period reserve development		(0.7		%)		(2.1		%)		(2.1		%)		(7.2		%)		(2.6		%)		(1.4		%)
Net loss and loss expense ratio		63.9		%		59.1		%		62.6		%		63.5		%		62.2		%		54.1		%
Acquisition cost ratio		14.4		%		15.5		%		15.4		%		15.5		%		14.5		%		14.2		%
General and administrative expense ratio		19.6		%		18.1		%		18.6		%		18.2		%		19.6		%		21.6		%
Combined ratio		97.9		%		92.7		%		96.6		%		97.2		%		96.3		%		89.9		%

5

AXIS Capital Holdings Limited

REINSURANCE SEGMENT DATA - QUARTERLY

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
UNDERWRITING REVENUES
Gross premiums written		$	1,076,208			$	137,727			$	341,531			$	477,169			$	1,219,678			$	1,149,768
Net premiums written		1,026,812				136,867				323,652				459,065				1,207,892				1,137,759
Gross premiums earned		475,963				509,156				516,713				553,032				503,627				475,859
Ceded premiums expensed		(17,208		)		(12,499		)		(12,380		)		(10,302		)		(6,892		)		(3,700		)
Net premiums earned		458,755				496,657				504,333				542,730				496,735				472,159
Other insurance related income (loss)		7,676				(11,806		)		7,702				1,683				3,082				—
Total underwriting revenues		466,431				484,851				512,035				544,413				499,817				472,159
UNDERWRITING EXPENSES
Net losses and loss expenses		233,164				251,838				262,857				275,363				264,784				221,078
Acquisition costs		107,247				115,905				114,686				120,823				106,979				88,230
General and administrative expenses		39,656				38,000				36,612				34,299				36,076				33,041
Total underwriting expenses		380,067				405,743				414,155				430,485				407,839				342,349
UNDERWRITING INCOME		$	86,364			$	79,108			$	97,880			$	113,928			$	91,978			$	129,810
KEY RATIOS
Current accident year loss ratio		61.0		%		62.0		%		63.0		%		60.4		%		59.7		%		57.2		%
Prior period reserve development		(10.2		%)		(11.3		%)		(10.9		%)		(9.7		%)		(6.4		%)		(10.4		%)
Net loss and loss expense ratio		50.8		%		50.7		%		52.1		%		50.7		%		53.3		%		46.8		%
Acquisition cost ratio		23.4		%		23.3		%		22.7		%		22.3		%		21.5		%		18.7		%
General and administrative expense ratio		8.6		%		7.7		%		7.3		%		6.3		%		7.3		%		7.0		%
Combined ratio		82.8		%		81.7		%		82.1		%		79.3		%		82.1		%		72.5		%

6

AXIS Capital Holdings Limited

NET INVESTMENT INCOME - QUARTERLY

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
Fixed maturities		$	66,101			$	70,187			$	74,996			$	78,523			$	72,957			$	69,683
Other investments		30,935				11,753				(3,384		)		32,492				16,760				43,431
Equity securities		1,676				2,223				2,022				5,301				2,286				1,414
Cash and cash equivalents		1,102				2,409				2,081				6,183				863				1,267
Short-term investments		69				125				141				246				214				532
Gross investment income		99,883				86,697				75,856				122,745				93,080				116,327
Investment expense		(7,773		)		(8,102		)		(9,294		)		(7,878		)		(10,336		)		(7,419		)
Net investment income		$	92,110			$	78,595			$	66,562			$	114,867			$	82,744			$	108,908

7

AXIS Capital Holdings Limited

CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,				September 30,				June 30,				March 31,				March 31,
		2015				2014				2014				2014				2014				2013
ASSETS
Investments:
Fixed maturities, available for sale, at fair value		$	12,012,894			$	12,129,273			$	12,444,684			$	12,598,897			$	12,095,839			$	11,973,364
Equity securities, available for sale, at fair value		601,329				567,707				629,502				744,760				708,412				617,436
Other investments, at fair value		939,006				965,465				946,836				1,044,492				1,005,762				972,364
Short-term investments, at fair value and amortized cost		38,373				107,534				114,428				100,166				296,800				98,964
Total investments		13,591,602				13,769,979				14,135,450				14,488,315				14,106,813				13,662,128
Cash and cash equivalents		1,270,092				1,209,695				1,407,811				1,189,403				1,294,709				856,215
Accrued interest receivable		79,706				83,070				91,777				91,278				89,536				95,877
Insurance and reinsurance premium balances receivable		2,241,875				1,808,620				2,112,906				2,422,983				2,292,954				2,015,578
Reinsurance recoverable on paid and unpaid losses		1,921,311				1,926,145				1,947,529				1,954,985				1,912,840				1,895,547
Deferred acquisition costs		616,966				466,987				556,723				623,573				634,413				561,417
Prepaid reinsurance premiums		357,042				351,441				351,488				337,608				299,994				300,617
Receivable for investments sold		13,432				169				6,472				366				1,972				12,546
Goodwill and intangible assets		88,508				88,960				88,740				90,025				90,350				97,001
Other assets		278,285				250,670				266,151				247,921				274,053				214,016
TOTAL ASSETS		$	20,458,819			$	19,955,736			$	20,965,047			$	21,446,457			$	20,997,634			$	19,710,942
LIABILITIES
Reserve for losses and loss expenses		$	9,443,222			$	9,596,797			$	9,751,903			$	9,805,988			$	9,667,841			$	9,097,703
Unearned premiums		3,293,952				2,735,376				3,142,055				3,411,108				3,372,166				3,135,610
Insurance and reinsurance balances payable		266,789				249,186				244,815				272,062				207,909				208,018
Senior notes		991,045				990,790				1,490,498				1,490,427				1,490,198				995,394
Payable for investments purchased		196,526				188,176				189,684				237,019				162,747				169,646
Other liabilities		221,050				315,471				265,968				221,348				218,502				215,141
TOTAL LIABILITIES		14,412,584				14,075,796				15,084,923				15,437,952				15,119,363				13,821,512
SHAREHOLDERS’ EQUITY
Preferred shares		627,843				627,843				627,843				627,843				627,843				502,843
Common shares		2,200				2,191				2,190				2,189				2,188				2,168
Additional paid-in capital		2,287,065				2,285,016				2,273,110				2,261,084				2,247,102				2,199,092
Accumulated other comprehensive income		(17,070		)		(45,574		)		22,935				272,664				182,254				310,108
Retained earnings		5,842,239				5,715,504				5,581,942				5,331,199				5,170,948				4,769,764
Treasury shares, at cost		(2,765,114		)		(2,763,859		)		(2,689,531		)		(2,539,269		)		(2,403,286		)		(1,894,545		)
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO AXIS CAPITAL		5,977,163				5,821,121				5,818,489				5,955,710				5,827,049				5,889,430
Noncontrolling interests		69,072				58,819				61,635				52,795				51,222				—
TOTAL SHAREHOLDERS' EQUITY		6,046,235				5,879,940				5,880,124				6,008,505				5,878,271				5,889,430
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	20,458,819			$	19,955,736			$	20,965,047			$	21,446,457			$	20,997,634			$	19,710,942
Basic common shares outstanding		100,219				99,426				100,827				103,906				106,745				116,306
Diluted common shares outstanding		102,924				102,577				104,073				107,228				110,327				120,594
Book value per common share			$53.38				$52.23				$51.48				$51.28				$48.71				$46.31
Diluted book value per common share		51.97				50.63				49.88				49.69				47.13				44.67
Diluted tangible book value per common share			$51.11				$49.76				$49.02				$48.85				$46.31				$43.86
Debt to total capital [a]		14.2		%		14.5		%		20.4		%		20.0		%		20.4		%		14.5		%
Debt and preferred equity to total capital		23.2		%		23.8		%		29.0		%		28.4		%		28.9		%		21.8		%

[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.

8

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS PORTFOLIO

At March 31, 2015

		Cost or Amortized Cost				Unrealized Gains				Unrealized Losses				Fair Value				Percentage
Fixed Maturities, available for sale
U.S. government and agency		$	1,490,502			$	9,183			$	(5,528	)		$	1,494,157			10.1	%
Non-U.S. government		932,741				7,041				(66,685		)		873,097				5.9	%
Corporate debt		4,549,974				58,133				(73,829		)		4,534,278				30.7	%
Agency RMBS		2,150,598				51,061				(1,416		)		2,200,243				14.9	%
CMBS		1,111,327				21,219				(1,223		)		1,131,323				7.7	%
Non-Agency RMBS		77,185				2,560				(1,744		)		78,001				0.5	%
ABS		1,500,493				3,438				(8,102		)		1,495,829				10.1	%
Municipals		199,813				6,649				(496		)		205,966				1.4	%
Total fixed maturities		12,012,633				159,284				(159,023		)		12,012,894				81.3	%
Equity securities, available for sale
Exchange traded funds		453,978				46,224				(2,155		)		498,047				3.4	%
Non-U.S. bond mutual funds		118,339				—				(15,057		)		103,282				0.7	%
Total equity securities		572,317				46,224				(17,212		)		601,329				4.1	%
Total available for sale investments		$	12,584,950			$	205,508			$	(176,235	)		12,614,223				85.4	%
Other investments (see below)														939,006				6.4	%
Short-term investments														38,373				0.3	%
Total investments														13,591,602				92.1	%
Cash and cash equivalents [a]														1,270,092				8.6	%
Accrued interest receivable														79,706				0.5	%
Net receivable/(payable) for investments sold (purchased)														(183,094		)		(1.2	%)
Total cash and invested assets														$	14,758,306			100.0	%
														Fair Value				Percentage
Other Investments:
Long/short equity funds														$	242,096			25.8	%
Multi-strategy funds														336,342				35.8	%
Event-driven funds														189,212				20.2	%
Leveraged bank loan funds														9,616				1.0	%
Direct lending funds														69,682				7.4	%
Collateralized loan obligations - equity tranches														92,058				9.8	%
Total														$	939,006			100.0	%

[a] Includes $273 million of restricted cash and cash equivalents.

9

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS COMPOSITION - QUARTERLY

		Q1 2015			Q4 2014			Q3 2014			Q2 2014			Q1 2014			Q1 2013
		Fair Value %			Fair Value %			Fair Value %			Fair Value %			Fair Value %			Fair Value %
CASH AND INVESTED ASSETS PORTFOLIO
Fixed Maturities:
U.S. government and agency		10.1	%		10.9	%		9.8	%		10.3	%		11.0	%		9.6	%
Non-U.S. government		5.9	%		6.9	%		7.4	%		8.0	%		8.0	%		7.7	%
Corporate debt		30.7	%		29.3	%		27.5	%		27.5	%		25.0	%		25.8	%
MBS:
Agency RMBS		14.9	%		15.3	%		13.7	%		13.6	%		15.4	%		17.6	%
CMBS		7.7	%		7.4	%		6.2	%		6.0	%		5.6	%		5.7	%
Non-agency RMBS		0.5	%		0.5	%		0.5	%		0.5	%		0.6	%		0.6	%
ABS		10.1	%		9.8	%		9.3	%		8.4	%		6.3	%		6.4	%
Municipals		1.4	%		1.4	%		6.1	%		6.8	%		6.9	%		9.5	%
Total Fixed Maturities		81.3	%		81.5	%		80.5	%		81.1	%		78.8	%		82.9	%
Equity securities		4.1	%		4.0	%		4.0	%		4.8	%		4.6	%		4.2	%
Other investments		6.4	%		6.5	%		6.1	%		6.7	%		6.6	%		6.7	%
Short-term investments		0.3	%		0.6	%		0.9	%		0.6	%		2.0	%		0.7	%
Total Investments		92.1	%		92.6	%		91.5	%		93.2	%		92.0	%		94.5	%
Cash and cash equivalents		8.6	%		8.1	%		9.1	%		7.7	%		8.4	%		5.9	%
Accrued interest receivable		0.5	%		0.6	%		0.6	%		0.6	%		0.6	%		0.7	%
Net receivable/(payable) for investments sold or purchased		(1.2	%)		(1.3	%)		(1.2	%)		(1.5	%)		(1.0	%)		(1.1	%)
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		12.4	%		13.4	%		12.2	%		12.7	%		13.9	%		11.6	%
AAA		36.9	%		38.9	%		35.5	%		34.2	%		34.7	%		38.8	%
AA		10.6	%		8.5	%		12.3	%		12.6	%		12.1	%		12.0	%
A		18.5	%		18.2	%		19.1	%		19.7	%		18.2	%		18.3	%
BBB		12.6	%		12.5	%		12.8	%		12.8	%		12.7	%		11.5	%
Below BBB		9.0	%		8.5	%		8.1	%		8.0	%		8.4	%		7.8	%
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		4.2	%		3.5	%		4.5	%		4.0	%		4.5	%		6.1	%
From one to five years		36.2	%		40.3	%		42.3	%		43.7	%		43.7	%		38.8	%
From five to ten years		16.8	%		14.0	%		14.4	%		15.2	%		14.4	%		17.7	%
Above ten years		2.0	%		1.7	%		2.0	%		1.9	%		1.9	%		0.7	%
Asset-backed and mortgage-backed securities		40.8	%		40.5	%		36.8	%		35.2	%		35.5	%		36.7	%
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		2.2	%		2.4	%		2.3	%		2.0	%		2.1	%		1.7	%
Average duration of fixed maturities (inclusive of duration hedges)		3.0 yrs			2.9	yrs		2.9 yrs			2.9 yrs			3.0 yrs			3.1 yrs
Average credit quality		AA-			AA-			AA-			AA-			AA-			AA-

10

AXIS Capital Holdings Limited

GEOGRAPHIC DISTRIBUTION OF FIXED MATURITIES AND EQUITIES

At March 31, 2015

					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	$	—			$	8,665			$	76,702			$	40,010			$	125,377			$	—			$	—			$	100			$	125,477			$	—			$	125,477
Supranational [a]	64,350				—				—				28,444				28,444				—				—				—				92,794				—				92,794
Netherlands	9,745				18,007				32,959				—				50,966				—				2,856				—				63,567				—				63,567
France	—				1,797				47,911				—				49,708				—				—				—				49,708				—				49,708
Luxembourg	—				—				30,342				—				30,342				—				—				—				30,342				—				30,342
Ireland	—				2,937				12,202				—				15,139				—				—				10,514				25,653				—				25,653
Italy	—				2,834				12,984				—				15,818				—				—				—				15,818				—				15,818
Belgium	—				—				12,102				—				12,102				—				—				—				12,102				—				12,102
Spain	—				—				7,603				—				7,603				—				—				—				7,603				—				7,603
Slovenia	1,590				—				—				—				—				—				—				—				1,590				—				1,590
Austria	—				—				431				—				431				—				—				—				431				—				431
Other [b]	—				—				—				—				—				—				—				—				—				153,858				153,858
Total eurozone	75,685				34,240				233,236				68,454				335,930				—				2,856				10,614				425,085				153,858				578,943
Other concentrations:
United Kingdom	165,703				29,133				153,472				561				183,166				—				15,156				1,836				365,861				—				365,861
Canada	107,086				81,030				88,435				44,231				213,696				—				—				—				320,782				—				320,782
Australia	180,938				60,474				20,641				—				81,115				—				—				1,530				263,583				—				263,583
Mexico	74,768				—				21,859				—				21,859				—				—				—				96,627				—				96,627
Republic of Korea	48,707				—				11,173				—				11,173				—				—				—				59,880				—				59,880
Other	220,210				66,789				101,277				—				168,066				—				—				—				388,276				55,225			[c]	443,501
Total other concentrations	797,412				237,426				396,857				44,792				679,075				—				15,156				3,366				1,495,009				55,225				1,550,234
Total Non-U.S. concentrations	873,097				271,666				630,093				113,246				1,015,005				—				18,012				13,980				1,920,094				209,083				2,129,177
United States	1,400,810			[d]	1,456,407				2,062,866				—				3,519,273				2,200,243				1,191,312				1,481,849				9,793,487				392,246			[e]	10,185,733
United States agencies	93,347				—				—				—				—				—				—				—				93,347				—				93,347
United States local governments	205,966				—				—				—				—				—				—				—				205,966				—				205,966
Total U.S. concentrations	1,700,123				1,456,407				2,062,866				—				3,519,273				2,200,243				1,191,312				1,481,849				10,092,800				392,246				10,485,046
Totals	$	2,573,220			$	1,728,073			$	2,692,959			$	113,246			$	4,534,278			$	2,200,243			$	1,209,324			$	1,495,829			$	12,012,894			$	601,329			$	12,614,223

[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 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.

11

AXIS Capital Holdings Limited

CORPORATE DEBT COMPOSITION

At March 31, 2015

		Fair Value				% of Total Corporate Debt			% of Total Cash and Invested Assets
Composition by sector - Investment grade
Financial institutions:
U.S. banking		$	1,052,165			23.2	%		7.1	%
Corporate/commercial finance		225,715				5.0	%		1.5	%
Foreign banking [a]		220,832				4.9	%		1.5	%
Insurance		111,911				2.5	%		0.8	%
Investment brokerage		27,496				0.6	%		0.2	%
Total financial institutions		1,638,119				36.2	%		11.1	%
Consumer non-cyclicals		394,979				8.7	%		2.7	%
Communications		330,556				7.3	%		2.2	%
Consumer cyclical		316,864				7.0	%		2.1	%
Industrials		192,103				4.2	%		1.3	%
Energy		182,646				4.0	%		1.2	%
Utilities		127,525				2.8	%		0.9	%
Non-U.S. government guaranteed [b]		113,246				2.5	%		0.8	%
Technology		108,000				2.4	%		0.7	%
Transportation		87,617				1.9	%		0.6	%
Total investment grade		3,491,655				77.0	%		23.6	%
Total non-investment grade		1,042,623				23.0	%		7.1	%
Total corporate debt		$	4,534,278			100.0	%		30.7	%

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

[b] Includes $40 million from Germany. No other corporate debt guaranteed by a eurozone country.

12

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

TEN LARGEST CORPORATE DEBT HOLDINGS

At March 31, 2015

		Amortized Cost				Net Unrealized Gain (Loss)				Fair Value				% of Total Fixed  Maturities
ISSUER [a]
BANK OF AMERICA CORP		$	156,191			$	1,820			$	158,011			1.3	%
JP MORGAN CHASE & CO		139,016				1,625				140,641				1.2	%
MORGAN STANLEY		127,446				2,956				130,402				1.1	%
GOLDMAN SACHS GROUP		122,974				2,139				125,113				1.0	%
WELLS FARGO & COMPANY		102,245				1,219				103,464				0.9	%
VERIZON COMMUNICATIONS INC		80,167				—				80,167				0.7	%
FORD MOTOR COMPANY		79,525				(362		)		79,163				0.7	%
COMCAST CORPORATION		74,795				1,091				75,886				0.6	%
DAIMLER AG		70,616				(1,367		)		69,249				0.6	%
CAPITAL ONE FINANCIAL CORPORATION		$	59,459			$	(50	)		$	59,409			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.

13

AXIS Capital Holdings Limited

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES COMPOSITION

At March 31, 2015

		Agencies				AAA				AA				A				BBB				Non-Investment Grade				Total
Residential MBS		$	2,200,243			$	21,201			$	320			$	14,046			$	12,060			$	30,374			$	2,278,244
Commercial MBS		—				710,744				227,704				140,626				50,488				1,761				1,131,323
ABS		—				1,063,891				340,609				66,523				22,022				2,784				1,495,829
Total mortgage-backed and asset-backed securities		$	2,200,243			$	1,795,836			$	568,633			$	221,195			$	84,570			$	34,919			$	4,905,396
Percentage of total		44.9		%		36.6		%		11.6		%		4.5		%		1.7		%		0.7		%		100.0		%

14

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
Reinsurance recoverable on paid losses and loss expenses:
Insurance		$	23,788			$	29,280			$	31,460			$	24,680			$	26,943			$	14,286
Reinsurance		7,944				6,584				1,399				1,281				1,077				—
Total		$	31,732			$	35,864			$	32,859			$	25,961			$	28,020			$	14,286
Reinsurance recoverable on unpaid losses and loss expenses: OSLR
Insurance		$	576,718			$	584,378			$	608,304			$	625,142			$	575,811			$	590,478
Reinsurance		936				985				514				15				36				—
Total		$	577,654			$	585,363			$	608,818			$	625,157			$	575,847			$	590,478
Reinsurance recoverable on unpaid losses and loss expenses: IBNR
Insurance		$	1,326,362			$	1,320,518			$	1,318,833			$	1,319,543			$	1,322,309			$	1,239,615
Reinsurance		2,449				2,023				5,244				2,725				5,289				66,781
Total		$	1,328,811			$	1,322,541			$	1,324,077			$	1,322,268			$	1,327,598			$	1,306,396
Provision against reinsurance recoverables:
Insurance		$	(16,886	)		$	(17,623	)		$	(18,225	)		$	(18,401	)		$	(18,625	)		$	(15,613	)
Reinsurance		—				—				—				—				—				—
Total		$	(16,886	)		$	(17,623	)		$	(18,225	)		$	(18,401	)		$	(18,625	)		$	(15,613	)
Net reinsurance recoverables:
Insurance		$	1,909,982			$	1,916,553			$	1,940,372			$	1,950,964			$	1,906,438			$	1,828,766
Reinsurance		11,329				9,592				7,157				4,021				6,402				66,781
Total		$	1,921,311			$	1,926,145			$	1,947,529			$	1,954,985			$	1,912,840			$	1,895,547

15

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

At March 31, 2015

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		$	1,474,122			$	(18,377	)		$	1,455,745			78.4%		24.4%		$	(12,307	)		0.8%		$	1,461,815
Other reinsurers balances > $20 million		200,445				(1,357		)		199,088				10.7%		3.3%		(1,617		)		0.8%		198,828
Other reinsurers balances < $20 million		263,630				(61,071		)		202,559				10.9%		3.4%		(2,962		)		1.1%		260,668
Total		$	1,938,197			$	(80,805	)		$	1,857,392			100.0%		31.1%		$	(16,886	)		0.9%		$	1,921,311

At March 31, 2015, 98.3% (December 31, 2014: 98.5%) 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		14.3%		4.4%
Partner Reinsurance Company of the US		11.1%		3.4%
Swiss Reinsurance America Corporation		11.0%		3.4%
Lloyd's of London		10.2%		3.2%
Berkley Insurance Company		8.3%		2.6%
Ace Property & Casualty Insurance		5.8%		1.8%
XL Reinsurance America Inc		4.9%		1.5%
Everest Reinsurance Company		4.8%		1.5%
Hannover Ruckversicherungs Aktiengesellschaft		4.5%		1.4%
Liberty Mutual Insurance Company		3.5%		1.2%
		78.4%		24.4%

16

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

		Quarter ended March 31, 2015												Quarter ended March 31, 2014
		Gross				Recoveries				Net				Gross				Recoveries				Net
Reserve for unpaid losses and loss expenses
Beginning of period		$	9,596,797			$	(1,890,280	)		$	7,706,517			$	9,582,140			$	(1,900,112	)		$	7,682,028
Incurred		602,582				(83,645		)		518,937				599,290				(55,083		)		544,207
Paid		(579,293		)		70,451				(508,842		)		(529,427		)		71,712				(457,715		)
Foreign exchange and other		(176,864		)		13,895				(162,969		)		15,838				(1,337		)		14,501
End of period [a]		$	9,443,222			$	(1,889,579	)		$	7,553,643			$	9,667,841			$	(1,884,820	)		$	7,783,021

[a] At March 31, 2015, the gross reserve for losses and loss expenses included IBNR of $6,242 million, or 66%, of total gross reserves for loss and loss expenses. At December 31, 2014, the comparable amount was $6,311 million, or 66%.

17

AXIS Capital Holdings Limited

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

		Quarter ended March 31, 2015												Quarter ended March 31, 2014
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
Gross losses paid		$	274,589			$	304,704			$	579,293			$	250,264			$	279,163			$	529,427
Reinsurance recoveries		(69,075		)		(1,376		)		(70,451		)		(67,679		)		(4,033		)		(71,712		)
Net losses paid		205,514				303,328				508,842				182,585				275,130				457,715
Change in:
Reported case reserves		24,888				(22,906		)		1,982				10,632				(88,642		)		(78,010		)
IBNR		68,071				(46,764		)		21,307				73,532				74,341				147,873
Reinsurance recoveries on unpaid loss and loss expense reserves		(12,700		)		(494		)		(13,194		)		12,674				3,955				16,629
Total net incurred losses and loss expenses		$	285,773			$	233,164			$	518,937			$	279,423			$	264,784			$	544,207
Gross reserve for losses and loss expenses		$	5,112,243			$	4,330,979			$	9,443,222			$	4,960,559			$	4,707,282			$	9,667,841
Net favorable prior year reserve development		$	3,361			$	46,690			$	50,051			$	11,608			$	31,885			$	43,493
Key Ratios
Net paid to net incurred percentage		71.9		%		130.1		%		98.1		%		65.3		%		103.9		%		84.1		%
Net paid losses / Net premiums earned		45.9		%		66.1		%		56.1		%		40.6		%		55.4		%		48.4		%
Change in net loss and loss expense reserves / Net premiums earned		18.0		%		(15.3		%)		1.2		%		21.6		%		(2.1		%)		9.1		%
Net loss and loss expense ratio		63.9		%		50.8		%		57.3		%		62.2		%		53.3		%		57.5		%

18

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

INSURANCE - QUARTERLY

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
Gross losses paid		$	274,589			$	400,408			$	299,526			$	323,513			$	250,264			$	234,250
Reinsurance recoveries		(69,075		)		(120,151		)		(108,012		)		(86,537		)		(67,679		)		(59,950		)
Net losses paid		205,514				280,257				191,514				236,976				182,585				174,300
Change in:
Reported case reserves		24,888				(57,519		)		(153		)		101,943				10,632				49,847
IBNR		68,071				39,704				92,959				(5,143		)		73,532				51,575
Reinsurance recoveries on unpaid loss and loss expense reserves		(12,700		)		10,345				4,887				(43,310		)		12,674				(58,386		)
Total net incurred losses and loss expenses		$	285,773			$	272,787			$	289,207			$	290,466			$	279,423			$	217,336
Gross reserve for losses and loss expenses		$	5,112,243			$	5,063,147			$	5,117,053			$	5,068,149			$	4,960,559			$	4,579,672
Net favorable prior year reserve development		$	3,361			$	9,676			$	9,488			$	32,963			$	11,608			$	5,598
Key Ratios
Net paid to net incurred percentage		71.9		%		102.7		%		66.2		%		81.6		%		65.3		%		80.2		%
Net paid losses/Net premiums earned		45.9		%		60.7		%		41.5		%		51.8		%		40.6		%		43.4		%
Change in net loss and loss expense reserves / Net premiums earned		18.0		%		(1.6		%)		21.1		%		11.7		%		21.6		%		10.7		%
Net loss and loss expense ratio		63.9		%		59.1		%		62.6		%		63.5		%		62.2		%		54.1		%

19

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

REINSURANCE - QUARTERLY

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
Gross losses paid		$	304,704			$	289,236			$	226,319			$	255,715			$	279,163			$	195,510
Reinsurance recoveries		(1,376		)		(5,213		)		(475		)		(183		)		(4,033		)		—
Net losses paid		303,328				284,023				225,844				255,532				275,130				195,510
Change in:
Reported case reserves		(22,906		)		566				1,038				(55,460		)		(88,642		)		(15,273		)
IBNR		(46,764		)		(35,469		)		39,008				72,706				74,341				43,041
Reinsurance recoveries on unpaid loss and loss expense reserves		(494		)		2,718				(3,033		)		2,585				3,955				(2,200		)
Total net incurred losses and loss expenses		$	233,164			$	251,838			$	262,857			$	275,363			$	264,784			$	221,078
Gross reserve for losses and loss expenses		$	4,330,979			$	4,533,650			$	4,634,850			$	4,737,839			$	4,707,282			$	4,518,031
Net favorable prior year reserve development		$	46,690			$	55,883			$	55,050			$	52,391			$	31,885			$	48,901
Key Ratios
Net paid to net incurred percentage		130.1		%		112.8		%		85.9		%		92.8		%		103.9		%		88.4		%
Net paid losses / Net premiums earned		66.1		%		57.2		%		44.8		%		47.1		%		55.4		%		41.4		%
Change in net loss and loss expense reserves / Net premiums earned		(15.3		%)		(6.5		%)		7.3		%		3.6		%		(2.1		%)		5.4		%
Net loss and loss expense ratio		50.8		%		50.7		%		52.1		%		50.7		%		53.3		%		46.8		%

20

AXIS Capital Holdings Limited

NET PROBABLE MAXIMUM LOSSES TO CERTAIN PEAK INDUSTRY CATASTROPHE EXPOSURES - AS OF APRIL 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		$	567			$	708			$	870
Northeast		U.S. Hurricane		56				141				251
Mid-Atlantic		U.S. Hurricane		100				240				671
Gulf of Mexico		U.S. Hurricane		340				470				681
California		Earthquake		375				489				590
Europe		Windstorm		139				210				281
Japan		Earthquake		138				249				398
Japan		Windstorm		45				78				115

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 April 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 $0.7 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 $0.7 billion. Conversely, there is a 99% chance that on an annual basis, the loss from a Southeast hurricane will fall below $0.7 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.

21

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP

		Quarter ended March 31,
		2015				2014
Net income available to common shareholders		$	155,803			$	137,227
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Weighted average shares outstanding - basic		99,910				109,053
Dilutive share equivalents:
Stock compensation plans		1,229				1,338
Weighted average shares outstanding - diluted		101,139				110,391
EARNINGS PER COMMON SHARE
Basic			$1.56				$1.26
Diluted			$1.54				$1.24

22

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION AND COMMON SHARE ROLLFOWARD - QUARTERLY

		Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q1 2014				Q1 2013
Net income available to common shareholders		$	155,803			$	163,663			$	279,104			$	190,664			$	137,227			$	302,816
COMMON SHARES OUTSTANDING
Common shares - at beginning of period		99,426				100,827				103,906				106,745				109,485				117,920
Shares issued, including those sourced from treasury		1,083				88				90				219				1,296				1,755
Shares repurchased for treasury		(290		)		(1,489		)		(3,169		)		(3,058		)		(4,036		)		(3,369		)
Common shares - at end of period		100,219				99,426				100,827				103,906				106,745				116,306
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average shares outstanding - basic		99,910				100,468				102,945				105,118				109,053				117,022
Dilutive share equivalents:
Stock compensation plans		1,229				1,570				1,302				1,171				1,338				1,636
Weighted average shares outstanding - diluted		101,139				102,038				104,247				106,289				110,391				118,658
EARNINGS PER COMMON SHARE
Basic			$1.56				$1.63				$2.71				$1.81				$1.26				$2.59
Diluted			$1.54				$1.60				$2.68				$1.79				$1.24				$2.55

23

AXIS Capital Holdings Limited

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

		At March 31, 2015
		Weighted Average Strike Price				Common Shareholders’ Equity				Outstanding Common Shares net of Treasury Shares			Per share
Closing stock price														$51.58
Book value per common share						$	5,349,320			100,219				$53.38
Dilutive securities: [b]
Restricted stocks										717			(0.38		)
Options		—								—			—
Restricted and phantom stock units										1,988			(1.03		)
Diluted book value per common share						$	5,349,320			102,924				$51.97
		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

[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.

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AXIS Capital Holdings Limited

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

OPERATING INCOME		Quarter ended March 31,
		2015				2014
Net income available to common shareholders		$	155,803			$	137,227
Adjustment for:
Net realized (gains) losses		42,553				(10,620		)
Associated tax impact		(559		)		6,321
Foreign exchange losses (gains)		(63,220		)		4,233
Associated tax impact		1,494				(92		)
Operating income		$	136,071			$	137,069
Net earnings per share - diluted		$	1.54			$	1.24
Adjustment for:
Net realized (gains) losses		0.42				(0.10		)
Associated tax impact		—				0.06
Foreign exchange losses (gains)		(0.62		)		0.04
Associated tax impact		0.01				—
Operating income per share - diluted		$	1.35			$	1.24
Weighted average common shares and common share equivalents - diluted		101,139				110,391
Average common shareholders' equity		$	5,271,299			$	5,194,663
Annualized return on average common equity		11.8		%		10.6		%
Annualized operating return on average common equity		10.3		%		10.6		%

DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD [b]
	March 31,				December 31,				September 30,				June 30,				March 31,				March 31,
	2015				2014				2014				2014				2014				2013
Common shareholders' equity	$	5,349,320			$	5,193,278			$	5,190,646			$	5,327,867			$	5,199,206			$	5,386,587
Less: goodwill and intangible assets	(88,508		)		(88,960		)		(88,740		)		(90,025		)		(90,350		)		(97,001		)
Tangible common shareholders' equity	$	5,260,812			$	5,104,318			$	5,101,906			$	5,237,842			$	5,108,856			$	5,289,586
Outstanding diluted common shares, net of treasury shares	102,924				102,577				104,073				107,228				110,327				120,594
Diluted book value per common share	$	51.97			$	50.63			$	49.88			$	49.69			$	47.13			$	44.67
Diluted tangible book value per common share	$	51.11			$	49.76			$	49.02			$	48.85			$	46.31			$	43.86

[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.

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AXIS Capital Holdings Limited

ADJUSTED GROUP RESULTS [a]

		Quarter ended March 31, 2015																Quarter ended March 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		$	1,678,932			$	—			$	—			$	1,678,932			$	1,821,399			$	—			$	—			$	1,821,399
Net premiums written		1,463,552				(8,006		)		—				1,455,546				1,664,584				(8,404		)		—				1,656,180
Gross premiums earned		1,114,311				—				—				1,114,311				1,133,052				—				—				1,133,052
Ceded premiums expensed		(208,089		)		(2,169		)		—				(210,258		)		(187,103		)		(2,072		)		—				(189,175		)
Net premiums earned		906,222				(2,169		)		—				904,053				945,949				(2,072		)		—				943,877
Other insurance related income		7,676				—				—				7,676				3,082				—				—				3,082
Total underwriting revenues		913,898				(2,169		)		—				911,729				949,031				(2,072		)		—				946,959
UNDERWRITING EXPENSES
Net losses and loss expenses		518,937				(6,609		)		—				512,328				544,207				(112		)		—				544,095
Acquisition costs		171,702				(160		)		—				171,542				172,036				(522		)		—				171,514
Underwriting-related general and administrative expenses		127,345				(276		)		—				127,069				124,022				(218		)		—				123,804
Total underwriting expenses		817,984				(7,045		)		—				810,939				840,265				(852		)		—				839,413
UNDERWRITING INCOME		$	95,914			$	4,876			$	—			$	100,790			$	108,766			$	(1,220	)		$	—			$	107,546
KEY RATIOS
Net loss and loss expense ratio		57.3		%										56.7		%		57.5		%										57.6		%
Acquisition cost ratio		18.9		%										19.0		%		18.2		%										18.2		%
Underwriting-related general and administrative expense ratio		14.1		%										14.0		%		13.2		%										13.2		%
Corporate expense ratio		4.0		%										4.0		%		3.0		%										3.0		%
Combined ratio		94.3		%										93.7		%		91.9		%										92.0		%

[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 (to) noncontrolling interests of $4,873 and $(1,222) for the three months ended March 31, 2015 and 2014, respectively, also include net investment income attributable to noncontrolling interests of $3 and $2 for the three months ended March 31, 2015 and 2014, respectively.

26

AXIS Capital Holdings Limited

ADJUSTED REINSURANCE SEGMENT RESULTS [a]

		Quarter ended March 31, 2015																Quarter ended March 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		$	1,076,208			$	—			$	—			$	1,076,208			$	1,219,678			$	—			$	—			$	1,219,678
Net premiums written		1,026,812				(8,006		)		—				1,018,806				1,207,892				(8,404		)		—				1,199,488
Gross premiums earned		475,963				—				—				475,963				503,627				—				—				503,627
Ceded premiums expensed		(17,208		)		(2,169		)		—				(19,377		)		(6,892		)		(2,072		)		—				(8,964		)
Net premiums earned		458,755				(2,169		)		—				456,586				496,735				(2,072		)		—				494,663
Other insurance related income		7,676				—				—				7,676				3,082				—				—				3,082
Total underwriting revenues		466,431				(2,169		)		—				464,262				499,817				(2,072		)		—				497,745
UNDERWRITING EXPENSES
Net losses and loss expenses		233,164				(6,609		)		—				226,555				264,784				(112		)		—				264,672
Acquisition costs		107,247				(160		)		—				107,087				106,979				(522		)		—				106,457
Underwriting-related general and administrative expenses		39,656				(276		)		—				39,380				36,076				(218		)		—				35,858
Total underwriting expenses		380,067				(7,045		)		—				373,022				407,839				(852		)		—				406,987
UNDERWRITING INCOME		$	86,364			$	4,876			$	—			$	91,240			$	91,978			$	(1,220	)		$	—			$	90,758
KEY RATIOS
Net loss and loss expense ratio		50.8		%										49.6		%		53.3		%										53.5		%
Acquisition cost ratio		23.4		%										23.5		%		21.5		%										21.5		%
General and administrative expense ratio		8.6		%										8.6		%		7.3		%										7.3		%
Combined ratio		82.8		%										81.7		%		82.1		%										82.3		%

[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 (to) noncontrolling interests of $4,873 and $(1,222) for the three months ended March 31, 2015 and 2014, respectively, also include net investment income attributable to noncontrolling interests of $3 and $2 for the three months ended March 31, 2015 and 2014, respectively.

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AXIS Capital Holdings Limited

USE OF NON-GAAP FINANCIAL MEASURES

In this document, we present operating income, consolidated underwriting income, 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) and foreign exchange (losses) gains. 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 is a pre-tax measure of underwriting profitability that takes into account net premiums earned and other insurance related income 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 to income before income taxes (the nearest GAAP financial measure) is included in the 'Consolidated Statements of Income - Quarterly' section 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' section 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" (which incorporates "underwriting-related general and administrative expenses"), diluted tangible book value per common share and adjusted group and reinsurance segment 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.

In this regard, certain users of our financial statements evaluate earnings excluding after-tax net realized investment gains (losses) and foreign exchange (losses) gains 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) and foreign exchange (losses)

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gains 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/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. 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. We believe that presentation of underwriting-related general and administrative expenses and consolidated underwriting income 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 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.

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