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

Q2 2015 Financial Supplement

AXIS Capital Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT

SECOND 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 Statements of Income - Year to Date		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 to Date		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. Losses 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 Information - As Reported, GAAP		23
b. Earnings Per Common Share Information 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. Use of Non-GAAP Financial Measures		27

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.

• During the second quarter of 2015, AXIS Capital Holdings Limited (the "Company") early adopted the Accounting Standard Update (“ASU”) 2015-02, “Amendments to the Consolidation Analysis” issued by the Financial Accounting Standards Board. The adoption of this amended accounting guidance resulted in the Company concluding that it is no longer required to consolidate the results of operations and the financial position of AXIS Ventures Reinsurance Limited (“Ventures Re”), a Bermuda domiciled insurer. The Company adopted this revised accounting guidance using the modified retrospective approach and ceased to consolidate Ventures Re effective as of January 1, 2015. The first quarter 2015 results have been adjusted to reflect the adoption of this guidance throughout this document. There was no impact from the adoption of ASU 2015-02 on the Company’s cumulative retained earnings.

• 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 June 30,												Six months ended June 30,
				2015				2014				Change				2015				2014				Change
HIGHLIGHTS		Gross premiums written		$	1,188,413			$	1,231,279			(3.5	%)			$	2,867,345			$	3,052,678			(6.1	%)
		Gross premiums written - Insurance		64.0		%		61.2		%		2.8		pts		47.6		%		44.4		%		3.2		pts
		Gross premiums written - Reinsurance		36.0		%		38.8		%		(2.8	)	pts		52.4		%		55.6		%		(3.2	)	pts
		Net premiums written		$	946,544			$	1,000,162			(5.4	%)			$	2,402,090			$	2,664,746			(9.9	%)
		Net premiums earned		$	941,211			$	1,000,400			(5.9	%)			$	1,845,264			$	1,946,349			(5.2	%)
		Net premiums earned - Insurance		48.1		%		45.7		%		2.4		pts		48.8		%		46.6		%		2.2		pts
		Net premiums earned - Reinsurance		51.9		%		54.3		%		(2.4	)	pts		51.2		%		53.4		%		(2.2	)	pts
		Net income available to common shareholders		$	63,349			$	190,664			(66.8	%)			$	219,153			$	327,890			(33.2	%)
		Operating income [a]		93,581				172,743				(45.8	%)			229,653				309,811				(25.9	%)
		Reserve for losses and loss expenses		9,693,440				9,805,988				(1.1	%)			9,693,440				9,805,988				(1.1	%)
		Total shareholders’ equity attributable to AXIS Capital		$	5,948,558			$	5,955,710			(0.1	%)			$	5,948,558			$	5,955,710			(0.1	%)
PER COMMON SHARE AND COMMON SHARE DATA		Basic earnings per common share			$0.63				$1.81			(65.2	%)				$2.19				$3.06			(28.4	%)
		Diluted earnings per common share		0.63				1.79				(64.8	%)			2.17				3.03				(28.4	%)
		Operating income per common share - diluted [b]			$0.93				$1.63			(42.9	%)				$2.27				$2.86			(20.6	%)
		Weighted average common shares outstanding		100,274				105,118				(4.6	%)			100,093				107,075				(6.5	%)
		Diluted weighted average common shares outstanding		101,160				106,289				(4.8	%)			101,151				108,329				(6.6	%)
		Book value per common share			$53.06				$51.28			3.5	%				$53.06				$51.28			3.5	%
		Diluted book value per common share (treasury stock method)		51.81				49.69				4.3	%			51.81				49.69				4.3	%
		Diluted tangible book value per common share (treasury stock method) [a]		50.83				48.85				4.1	%			50.83				48.85				4.1	%
		Accumulated dividends declared per common share			$9.56				$8.42			13.5	%				$9.56				$8.42			13.5	%
FINANCIAL RATIOS		ROACE [c]		4.7		%		14.5		%		(9.8	)	pts		8.3		%		12.5		%		(4.2	)	pts
		Operating ROACE [d]		7.0		%		13.1		%		(6.1	)	pts		8.7		%		11.8		%		(3.1	)	pts
		Net loss and loss expense ratio		61.6		%		56.6		%		5.0		pts		59.2		%		57.0		%		2.2		pts
		Acquisition cost ratio		19.5		%		19.2		%		0.3		pts		19.2		%		18.7		%		0.5		pts
		General and administrative expense ratio		15.8		%		15.0		%		0.8		pts		16.9		%		15.6		%		1.3		pts
		Combined ratio		96.9		%		90.8		%		6.1		pts		95.3		%		91.3		%		4.0		pts
INVESTMENT DATA		Total assets		$	20,704,875			$	21,446,457			(3.5	%)			$	20,704,875			$	21,446,457			(3.5	%)
		Total cash and invested assets [e]		14,674,872				15,532,343				(5.5	%)			14,674,872				15,532,343				(5.5	%)
		Net investment income		88,544				114,867				(22.9	%)			180,651				197,610				(8.6	%)
		Net realized investment gains (losses)		$	(11,110	)		$	33,261			nm				$	(53,662	)		$	43,882			nm
		Total return on cash and investments (inclusive of investment related foreign exchange movements) [f]		—		%		1.6		%		(1.6	)	pts		0.7		%		2.6		%		(1.9	)	pts
		Total return on cash and investments (exclusive of investment related foreign exchange movements) [f]		(0.3		%)		1.5		%		(1.8	)	pts		1.0		%		2.5		%		(1.5	)	pts
		Return on other investments [g]		1.6		%		3.2		%		(1.6	)	pts		5.0		%		4.8		%		0.2		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, mortgage loans, 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

	Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013
UNDERWRITING REVENUES
Gross premiums written	$	1,188,413			$	1,678,932			$	762,040			$	896,814			$	1,231,279			$	1,219,805
Premiums ceded	(241,869		)		(223,386		)		(207,023		)		(209,591		)		(231,117		)		(226,398		)
Net premiums written	946,544				1,455,546				555,017				687,223				1,000,162				993,407
Gross premiums earned	1,158,755				1,114,311				1,164,355				1,160,577				1,194,367				1,139,904
Ceded premiums expensed	(217,544		)		(210,258		)		(205,838		)		(194,439		)		(193,967		)		(194,031		)
Net premiums earned	941,211				904,053				958,517				966,138				1,000,400				945,873
Other insurance related income (loss)	3,486				7,676				(11,818		)		7,702				1,683				435
Total underwriting revenues	944,697				911,729				946,699				973,840				1,002,083				946,308
UNDERWRITING EXPENSES
Net losses and loss expenses	580,153				512,328				524,625				552,064				565,829				642,899
Acquisition costs	183,263				171,542				187,349				185,950				191,862				169,719
Underwriting-related general and administrative expenses [a]	124,433				127,069				122,005				122,362				117,811				123,769
Total underwriting expenses	887,849				810,939				833,979				860,376				875,502				936,387
UNDERWRITING INCOME [b]	56,848				100,790				112,720				113,464				126,581				9,921
OTHER OPERATING REVENUE (EXPENSES)
Net investment income	88,544				92,107				78,595				66,562				114,867				83,112
Net realized investment gains (losses)	(11,110		)		(42,553		)		10,779				77,448				33,261				16,235
Interest expense and financing costs	(12,939		)		(12,257		)		(17,783		)		(20,344		)		(19,975		)		(15,260		)
Total other operating revenues	64,495				37,297				71,591				123,666				128,153				84,087
OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	(22,108		)		63,220				46,086				72,292				(9,705		)		10,320
Corporate expenses [a]	(24,049		)		(36,172		)		(43,145		)		(30,554		)		(33,270		)		(25,265		)
Total other (expenses) revenues	(46,157		)		27,048				2,941				41,738				(42,975		)		(14,945		)
INCOME BEFORE INCOME TAXES	75,186				165,135				187,252				278,868				211,759				79,063
Income tax (expense) benefit	(1,815		)		690				(16,382		)		4,098				(9,500		)		4,662
NET INCOME	73,371				165,825				170,870				282,966				202,259				83,725
Amounts attributable (to) from noncontrolling interests	—				—				2,815				6,160				(1,573		)		—
NET INCOME ATTRIBUTABLE TO AXIS CAPITAL	73,371				165,825				173,685				289,126				200,686				83,725
Preferred share dividends	(10,022		)		(10,022		)		(10,022		)		(10,022		)		(10,022		)		(8,197		)
Loss on repurchase of preferred shares	—				—				—				—				—				(3,081		)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	63,349			$	155,803			$	163,663			$	279,104			$	190,664			$	72,447
KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	61.6		%		56.7		%		54.7		%		57.1		%		56.6		%		68.0		%
Acquisition cost ratio	19.5		%		19.0		%		19.5		%		19.2		%		19.2		%		17.9		%
General and administrative expense ratio [a]	15.8		%		18.0		%		17.3		%		15.9		%		15.0		%		15.8		%
Combined ratio	96.9		%		93.7		%		91.5		%		92.2		%		90.8		%		101.7		%
Weighted average basic shares outstanding	100,274				99,910				100,468				102,945				105,118				115,163
Weighted average diluted shares outstanding	101,160				101,139				102,038				104,247				106,289				116,671
Basic earnings per common share		$0.63				$1.56				$1.63				$2.71				$1.81				$0.63
Diluted earnings per common share		$0.63				$1.54				$1.60				$2.68				$1.79				$0.62
ROACE (annualized)	4.7		%		11.8		%		12.6		%		21.2		%		14.5		%		5.6		%
Operating ROACE (annualized)	7.0		%		10.3		%		9.3		%		10.1		%		13.1		%		3.9		%

[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 and on the following page.

2

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - YEAR TO DATE

	Six months ended June 30,												Year ended December 31,
	2015				2014				2013				2014				2013
UNDERWRITING REVENUES
Gross premiums written	$	2,867,345			$	3,052,678			$	2,966,287			$	4,711,519			$	4,697,041
Premiums ceded	(465,255		)		(387,932		)		(402,441		)		(804,544		)		(768,841		)
Net premiums written	2,402,090				2,664,746				2,563,846				3,906,975				3,928,200
Gross premiums earned	2,273,066				2,327,419				2,204,833				4,652,345				4,459,269
Ceded premiums expensed	(427,802		)		(381,070		)		(384,922		)		(781,346		)		(752,204		)
Net premiums earned	1,845,264				1,946,349				1,819,911				3,870,999				3,707,065
Other insurance related income	11,162				4,766				1,030				650				4,424
Total underwriting revenues	1,856,426				1,951,115				1,820,941				3,871,649				3,711,489
UNDERWRITING EXPENSES
Net losses and loss expenses	1,092,481				1,110,036				1,081,313				2,186,722				2,134,195
Acquisition costs	354,805				363,899				315,209				737,197				664,191
Underwriting-related general and administrative expenses	251,502				241,834				243,698				486,201				485,134
Total underwriting expenses	1,698,788				1,715,769				1,640,220				3,410,120				3,283,520
UNDERWRITING INCOME	157,638				235,346				180,721				461,529				427,969
OTHER OPERATING REVENUE (EXPENSES)
Net investment income	180,651				197,610				192,019				342,766				409,312
Net realized investment gains (losses)	(53,662		)		43,882				60,713				132,108				75,564
Interest expense and financing costs	(25,196		)		(36,569		)		(31,095		)		(74,695		)		(61,979		)
Total other operating revenues	101,793				204,923				221,637				400,179				422,897
OTHER (EXPENSES) REVENUE
Foreign exchange gains (losses)	41,112				(13,939		)		45,201				104,439				(26,143		)
Corporate expenses [a]	(60,221		)		(61,976		)		(46,810		)		(135,675		)		(90,256		)
Total other expenses	(19,109		)		(75,915		)		(1,609		)		(31,236		)		(116,399		)
INCOME BEFORE INCOME TAXES	240,322				364,354				400,749				830,472				734,467
Income tax expense	(1,125		)		(13,625		)		(5,469		)		(25,908		)		(7,002		)
NET INCOME	239,197				350,729				395,280				804,564				727,465
Amounts attributable (to) from noncontrolling interests	—				(2,795		)		—				6,181				—
NET INCOME ATTRIBUTABLE TO AXIS CAPITAL	239,197				347,934				395,280				810,745				727,465
Preferred share dividends	(20,044		)		(20,044		)		(16,938		)		(40,088		)		(40,474		)
Loss on repurchase of preferred shares	—				—				(3,081		)		—				(3,081		)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	219,153			$	327,890			$	375,261			$	770,657			$	683,910
KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	59.2		%		57.0		%		59.4		%		56.5		%		57.6		%
Acquisition cost ratio	19.2		%		18.7		%		17.3		%		19.0		%		17.9		%
General and administrative expense ratio [a]	16.9		%		15.6		%		16.0		%		16.1		%		15.5		%
Combined ratio	95.3		%		91.3		%		92.7		%		91.6		%		91.0		%
Weighted average basic shares outstanding	100,093				107,075				116,088				104,368				113,636
Weighted average diluted shares outstanding	101,151				108,329				117,660				105,713				115,328
Basic earnings per common share		$2.19				$3.06				$3.23				$7.38				$6.02
Diluted earnings per common share		$2.17				$3.03				$3.19				$7.29				$5.93
ROACE [b]	8.3		%		12.5		%		14.7		%		14.8		%		13.1		%
Operating ROACE [b]	8.7		%		11.8		%		10.9		%		10.8		%		12.1		%

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

[b] Annualized for the six-month periods.

3

AXIS Capital Holdings Limited

CONSOLIDATED SEGMENT DATA

		Quarter ended June 30, 2015												Six months ended June 30, 2015
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
UNDERWRITING REVENUES
Gross premiums written		$	761,126			$	427,287			$	1,188,413			$	1,363,850			$	1,503,495			$	2,867,345
Net premiums written		534,263				412,281				946,544				971,004				1,431,086				2,402,090
Gross premiums earned		649,053				509,702				1,158,755				1,287,401				985,665				2,273,066
Ceded premiums expensed		(196,731		)		(20,813		)		(217,544		)		(387,612		)		(40,190		)		(427,802		)
Net premiums earned		452,322				488,889				941,211				899,789				945,475				1,845,264
Other insurance related income		269				3,217				3,486				269				10,893				11,162
Total underwriting revenues		452,591				492,106				944,697				900,058				956,368				1,856,426
UNDERWRITING EXPENSES
Net losses and loss expenses		297,534				282,619				580,153				583,307				509,174				1,092,481
Acquisition costs		66,920				116,343				183,263				131,375				223,430				354,805
Underwriting-related general and administrative expenses		88,420				36,013				124,433				176,109				75,393				251,502
Total underwriting expenses		452,874				434,975				887,849				890,791				807,997				1,698,788
UNDERWRITING INCOME (LOSS)		$	(283	)		$	57,131			$	56,848			$	9,267			$	148,371			$	157,638
KEY RATIOS
Current accident year loss ratio		69.2		%		67.9		%		68.5		%		66.9		%		64.6		%		65.7		%
Prior period reserve development		(3.4		%)		(10.1		%)		(6.9		%)		(2.1		%)		(10.7		%)		(6.5		%)
Net loss and loss expense ratio		65.8		%		57.8		%		61.6		%		64.8		%		53.9		%		59.2		%
Acquisition cost ratio		14.8		%		23.8		%		19.5		%		14.6		%		23.6		%		19.2		%
Underwriting-related general and administrative expense ratio		19.5		%		7.4		%		13.2		%		19.6		%		8.0		%		13.6		%
Corporate expense ratio										2.6		%										3.3		%
Combined ratio		100.1		%		89.0		%		96.9		%		99.0		%		85.5		%		95.3		%

4

AXIS Capital Holdings Limited

GROSS PREMIUM WRITTEN BY SEGMENT BY LINE OF BUSINESS

																										Six months ended June 30,
		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013				2015				2014
INSURANCE SEGMENT
Property		$	196,817			$	129,624			$	153,563			$	143,236			$	207,788			$	228,741			$	326,441			$	347,717
Marine		85,483				91,586				26,236				41,529				84,833				88,047				177,068				170,555
Terrorism		6,610				7,935				10,194				11,055				9,478				9,478				14,545				16,456
Aviation		9,519				10,014				26,601				17,735				10,568				12,321				19,533				13,285
Credit and Political Risk		12,981				8,117				16,100				3,782				7,179				19,537				21,098				25,486
Professional Lines		251,730				150,422				267,950				196,576				244,011				262,611				402,152				398,259
Liability		112,870				82,667				92,608				94,833				106,643				104,952				195,538				181,009
Accident and Health		85,116				122,359				31,061				46,537				83,610				55,368				207,475				203,064
TOTAL INSURANCE SEGMENT		761,126				602,724				624,313				555,283				754,110				781,055				1,363,850				1,355,831
REINSURANCE SEGMENT
Catastrophe		95,653				131,216				13,101				71,319				117,245				138,461				226,869				288,505
Property		58,258				182,012				4,099				45,030				61,027				63,457				240,270				300,646
Professional Lines		94,152				65,024				69,236				51,007				104,801				57,406				159,176				173,021
Credit and Surety		16,210				191,357				6,104				23,933				20,359				20,327				207,568				228,827
Motor		14,196				297,690				5,152				9,445				2,676				16,557				311,886				276,696
Liability		57,730				89,772				34,769				145,488				82,566				78,868				147,502				185,210
Agriculture		72,709				69,729				(3,577		)		(10,206		)		76,665				55,319				142,438				179,830
Engineering		15,707				38,059				7,589				2,579				8,772				5,741				53,767				45,282
Other		2,672				11,349				1,254				2,936				3,058				2,614				14,019				18,830
TOTAL REINSURANCE SEGMENT		427,287				1,076,208				137,727				341,531				477,169				438,750				1,503,495				1,696,847
CONSOLIDATED TOTAL		$	1,188,413			$	1,678,932			$	762,040			$	896,814			$	1,231,279			$	1,219,805			$	2,867,345			$	3,052,678

5

AXIS Capital Holdings Limited

INSURANCE SEGMENT DATA - QUARTERLY

		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013
UNDERWRITING REVENUES
Gross premiums written		$	761,126			$	602,724			$	624,313			$	555,283			$	754,110			$	781,055
Net premiums written		534,263				436,740				418,150				363,571				541,097				559,584
Gross premiums earned		649,053				638,348				655,199				643,864				641,335				611,585
Ceded premiums expensed		(196,731		)		(190,881		)		(193,339		)		(182,059		)		(183,665		)		(189,240		)
Net premiums earned		452,322				447,467				461,860				461,805				457,670				422,345
Other insurance related income (loss)		269				—				(12		)		—				—				435
Total underwriting revenues		452,591				447,467				461,848				461,805				457,670				422,780
UNDERWRITING EXPENSES
Net losses and loss expenses		297,534				285,773				272,787				289,207				290,466				330,992
Acquisition costs		66,920				64,455				71,444				71,264				71,039				58,749
General and administrative expenses		88,420				87,689				84,005				85,750				83,512				88,526
Total underwriting expenses		452,874				437,917				428,236				446,221				445,017				478,267
UNDERWRITING INCOME (LOSS)		$	(283	)		$	9,550			$	33,612			$	15,584			$	12,653			$	(55,487	)
KEY RATIOS
Current accident year loss ratio		69.2		%		64.6		%		61.2		%		64.7		%		70.7		%		80.0		%
Prior period reserve development		(3.4		%)		(0.7		%)		(2.1		%)		(2.1		%)		(7.2		%)		(1.6		%)
Net loss and loss expense ratio		65.8		%		63.9		%		59.1		%		62.6		%		63.5		%		78.4		%
Acquisition cost ratio		14.8		%		14.4		%		15.5		%		15.4		%		15.5		%		13.9		%
General and administrative expense ratio		19.5		%		19.6		%		18.1		%		18.6		%		18.2		%		20.9		%
Combined ratio		100.1		%		97.9		%		92.7		%		96.6		%		97.2		%		113.2		%

6

AXIS Capital Holdings Limited

REINSURANCE SEGMENT DATA - QUARTERLY

		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013
UNDERWRITING REVENUES
Gross premiums written		$	427,287			$	1,076,208			$	137,727			$	341,531			$	477,169			$	438,750
Net premiums written		412,281				1,018,806				136,867				323,652				459,065				433,823
Gross premiums earned		509,702				475,963				509,156				516,713				553,032				528,319
Ceded premiums expensed		(20,813		)		(19,377		)		(12,499		)		(12,380		)		(10,302		)		(4,791		)
Net premiums earned		488,889				456,586				496,657				504,333				542,730				523,528
Other insurance related income (loss)		3,217				7,676				(11,806		)		7,702				1,683				—
Total underwriting revenues		492,106				464,262				484,851				512,035				544,413				523,528
UNDERWRITING EXPENSES
Net losses and loss expenses		282,619				226,555				251,838				262,857				275,363				311,907
Acquisition costs		116,343				107,087				115,905				114,686				120,823				110,970
General and administrative expenses		36,013				39,380				38,000				36,612				34,299				35,243
Total underwriting expenses		434,975				373,022				405,743				414,155				430,485				458,120
UNDERWRITING INCOME		$	57,131			$	91,240			$	79,108			$	97,880			$	113,928			$	65,408
KEY RATIOS
Current accident year loss ratio		67.9		%		61.2		%		62.0		%		63.0		%		60.4		%		66.3		%
Prior period reserve development		(10.1		%)		(11.6		%)		(11.3		%)		(10.9		%)		(9.7		%)		(6.7		%)
Net loss and loss expense ratio		57.8		%		49.6		%		50.7		%		52.1		%		50.7		%		59.6		%
Acquisition cost ratio		23.8		%		23.5		%		23.3		%		22.7		%		22.3		%		21.2		%
General and administrative expense ratio		7.4		%		8.6		%		7.7		%		7.3		%		6.3		%		6.7		%
Combined ratio		89.0		%		81.7		%		81.7		%		82.1		%		79.3		%		87.5		%

7

AXIS Capital Holdings Limited

NET INVESTMENT INCOME - QUARTERLY AND YEAR TO DATE

																										Six months ended June 30,
		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013				2015				2014
Fixed maturities		$	77,998			$	66,088			$	70,187			$	74,996			$	78,523			$	74,503			$	144,086			$	151,480
Other investments		14,102				30,935				11,753				(3,384		)		32,492				11,848				45,037				49,252
Equity securities		2,674				1,676				2,223				2,022				5,301				3,134				4,350				7,587
Mortgage loans		281				13				—				—				—				—				294				—
Cash and cash equivalents		1,678				1,099				2,409				2,081				6,183				1,265				2,777				7,046
Short-term investments		125				69				125				141				246				397				194				459
Gross investment income		96,858				99,880				86,697				75,856				122,745				91,147				196,738				215,824
Investment expense		(8,314		)		(7,773		)		(8,102		)		(9,294		)		(7,878		)		(8,035		)		(16,087		)		(18,214		)
Net investment income		$	88,544			$	92,107			$	78,595			$	66,562			$	114,867			$	83,112			$	180,651			$	197,610

8

AXIS Capital Holdings Limited

CONSOLIDATED BALANCE SHEETS

		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
		2015				2015				2014				2014				2014				2013
ASSETS
Investments:
Fixed maturities, available for sale, at fair value		$	12,005,736			$	12,012,894			$	12,129,273			$	12,444,684			$	12,598,897			$	11,644,912
Equity securities, available for sale, at fair value		659,181				601,329				567,707				629,502				744,760				618,795
Mortgage loans, held for investment, at amortized cost		79,606				9,935				—				—				—				—
Other investments, at fair value		853,101				939,006				965,465				946,836				1,044,492				962,315
Short-term investments, at fair value and amortized cost		30,618				38,373				107,534				114,428				100,166				45,904
Total investments		13,628,242				13,601,537				13,769,979				14,135,450				14,488,315				13,271,926
Cash and cash equivalents		1,180,059				1,183,782				1,209,695				1,407,811				1,189,403				1,116,248
Accrued interest receivable		78,409				79,706				83,070				91,777				91,278				95,098
Insurance and reinsurance premium balances receivable		2,394,037				2,255,036				1,808,620				2,112,906				2,422,983				2,166,982
Reinsurance recoverable on paid and unpaid losses		2,063,087				1,952,371				1,926,145				1,947,529				1,954,985				1,981,441
Deferred acquisition costs		594,863				616,785				466,987				556,723				623,573				543,069
Prepaid reinsurance premiums		387,639				357,042				351,441				351,488				337,608				331,528
Receivable for investments sold		1,304				13,432				169				6,472				366				1,399
Goodwill and intangible assets		101,053				88,508				88,960				88,740				90,025				91,370
Other assets		276,182				268,350				250,670				266,151				247,921				247,252
TOTAL ASSETS		$	20,704,875			$	20,416,549			$	19,955,736			$	20,965,047			$	21,446,457			$	19,846,313
LIABILITIES
Reserve for losses and loss expenses		$	9,693,440			$	9,443,222			$	9,596,797			$	9,751,903			$	9,805,988			$	9,342,817
Unearned premiums		3,324,578				3,287,920				2,735,376				3,142,055				3,411,108				3,209,055
Insurance and reinsurance balances payable		296,794				300,029				249,186				244,815				272,062				292,572
Senior notes		991,302				991,045				990,790				1,490,498				1,490,427				995,546
Payable for investments purchased		213,142				196,526				188,176				189,684				237,019				234,001
Other liabilities		237,061				220,644				315,471				265,968				221,348				210,375
TOTAL LIABILITIES		14,756,317				14,439,386				14,075,796				15,084,923				15,437,952				14,284,366
SHAREHOLDERS’ EQUITY
Preferred shares		627,843				627,843				627,843				627,843				627,843				627,843
Common shares		2,201				2,200				2,191				2,190				2,189				2,172
Additional paid-in capital		2,285,772				2,287,065				2,285,016				2,273,110				2,261,084				2,213,204
Accumulated other comprehensive income		(78,067		)		(17,070		)		(45,574		)		22,935				272,664				24,755
Retained earnings		5,875,147				5,842,239				5,715,504				5,581,942				5,331,199				4,813,687
Treasury shares, at cost		(2,764,338		)		(2,765,114		)		(2,763,859		)		(2,689,531		)		(2,539,269		)		(2,119,714		)
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO AXIS CAPITAL		5,948,558				5,977,163				5,821,121				5,818,489				5,955,710				5,561,947
Noncontrolling interests		—				—				58,819				61,635				52,795				—
TOTAL SHAREHOLDERS' EQUITY		5,948,558				5,977,163				5,879,940				5,880,124				6,008,505				5,561,947
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	20,704,875			$	20,416,549			$	19,955,736			$	20,965,047			$	21,446,457			$	19,846,313
Basic common shares outstanding		100,284				100,219				99,426				100,827				103,906				111,588
Diluted common shares outstanding		102,690				102,924				102,577				104,073				107,228				115,631
Book value per common share			$53.06				$53.38				$52.23				$51.48				$51.28				$44.22
Diluted book value per common share		51.81				51.97				50.63				49.88				49.69				42.67
Diluted tangible book value per common share			$50.83				$51.11				$49.76				$49.02				$48.85				$41.88
Debt to total capital [a]		14.3		%		14.2		%		14.5		%		20.4		%		20.0		%		15.2		%
Debt and preferred equity to total capital		23.3		%		23.2		%		23.8		%		29.0		%		28.4		%		24.8		%

[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.

9

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS PORTFOLIO

At June 30, 2015

		Cost or Amortized Cost				Unrealized Gains				Unrealized Losses				Fair Value				Percentage
Fixed Maturities, available for sale
U.S. government and agency		$	1,699,826			$	3,731			$	(20,448	)		$	1,683,109			11.5	%
Non-U.S. government		958,293				6,242				(64,000		)		900,535				6.1	%
Corporate debt		4,444,087				32,273				(72,408		)		4,403,952				30.0	%
Agency RMBS		2,114,217				30,038				(9,279		)		2,134,976				14.5	%
CMBS		1,093,612				9,814				(3,856		)		1,099,570				7.5	%
Non-Agency RMBS		99,590				2,667				(983		)		101,274				0.7	%
ABS		1,429,667				3,372				(5,978		)		1,427,061				9.7	%
Municipals		254,074				3,405				(2,220		)		255,259				1.7	%
Total fixed maturities		12,093,366				91,542				(179,172		)		12,005,736				81.7	%
Equity securities, available for sale
Exchange traded funds		495,590				44,153				(3,763		)		535,980				3.7	%
Bond mutual funds		123,279				—				(78		)		123,201				0.8	%
Total equity securities		618,869				44,153				(3,841		)		659,181				4.5	%
Total available for sale investments		$	12,712,235			$	135,695			$	(183,013	)		12,664,917				86.2	%
Mortgage loans, held for investment														79,606				0.5	%
Other investments (see below)														853,101				5.8	%
Short-term investments														30,618				0.4	%
Total investments														13,628,242				92.9	%
Cash and cash equivalents [a]														1,180,059				8.0	%
Accrued interest receivable														78,409				0.5	%
Net receivable/(payable) for investments sold (purchased)														(211,838		)		(1.4	%)
Total cash and invested assets														$	14,674,872			100.0	%
														Fair Value				Percentage
Other Investments:
Long/short equity funds														$	192,622			22.6	%
Multi-strategy funds														345,726				40.5	%
Event-driven funds														147,236				17.3	%
Leveraged bank loan funds														75				—	%
Direct lending funds														73,628				8.6	%
Real estate funds														3,000				0.4	%
Collateralized loan obligations - equity tranches														90,814				10.6	%
Total														$	853,101			100.0	%

[a] Includes $191 million of restricted cash and cash equivalents.

10

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS COMPOSITION - QUARTERLY

		Q2 2015			Q1 2015			Q4 2014			Q3 2014			Q2 2014			Q2 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		11.5	%		10.1	%		10.9	%		9.8	%		10.3	%		9.4	%
Non-U.S. government		6.1	%		5.9	%		6.9	%		7.4	%		8.0	%		8.3	%
Corporate debt		30.0	%		30.7	%		29.3	%		27.5	%		27.5	%		24.4	%
MBS:
Agency RMBS		14.5	%		14.9	%		15.3	%		13.7	%		13.6	%		16.4	%
CMBS		7.5	%		7.7	%		7.4	%		6.2	%		6.0	%		5.4	%
Non-agency RMBS		0.7	%		0.5	%		0.5	%		0.5	%		0.5	%		0.6	%
ABS		9.7	%		10.1	%		9.8	%		9.3	%		8.4	%		6.4	%
Municipals		1.7	%		1.4	%		1.4	%		6.1	%		6.8	%		10.8	%
Total Fixed Maturities		81.7	%		81.3	%		81.5	%		80.5	%		81.1	%		81.7	%
Equity securities		4.5	%		4.1	%		4.0	%		4.0	%		4.8	%		4.3	%
Mortgage loans		0.5	%		0.1	%		—	%		—	%		—	%		—	%
Other investments		5.8	%		6.3	%		6.5	%		6.1	%		6.7	%		6.8	%
Short-term investments		0.4	%		0.3	%		0.6	%		0.9	%		0.6	%		0.3	%
Total Investments		92.9	%		92.1	%		92.6	%		91.5	%		93.2	%		93.1	%
Cash and cash equivalents		8.0	%		8.6	%		8.1	%		9.1	%		7.7	%		7.8	%
Accrued interest receivable		0.5	%		0.5	%		0.6	%		0.6	%		0.6	%		0.7	%
Net receivable/(payable) for investments sold or purchased		(1.4	%)		(1.2	%)		(1.3	%)		(1.2	%)		(1.5	%)		(1.6	%)
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		14.0	%		12.4	%		13.4	%		12.2	%		12.7	%		11.5	%
AAA		35.8	%		36.9	%		38.9	%		35.5	%		34.2	%		35.8	%
AA		10.5	%		10.6	%		8.5	%		12.3	%		12.6	%		14.9	%
A		18.4	%		18.5	%		18.2	%		19.1	%		19.7	%		18.3	%
BBB		12.3	%		12.6	%		12.5	%		12.8	%		12.8	%		11.5	%
Below BBB		9.0	%		9.0	%		8.5	%		8.1	%		8.0	%		8.0	%
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		4.5	%		4.2	%		3.5	%		4.5	%		4.0	%		5.5	%
From one to five years		36.4	%		36.2	%		40.3	%		42.3	%		43.7	%		40.7	%
From five to ten years		16.7	%		16.8	%		14.0	%		14.4	%		15.2	%		17.6	%
Above ten years		2.7	%		2.0	%		1.7	%		2.0	%		1.9	%		0.9	%
Asset-backed and mortgage-backed securities		39.7	%		40.8	%		40.5	%		36.8	%		35.2	%		35.3	%
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		2.5	%		2.2	%		2.4	%		2.3	%		2.0	%		2.4	%
Average duration of fixed maturities (inclusive of duration hedges)		3.2 yrs			3.0 yrs			2.9 yrs			2.9 yrs			2.9 yrs			3.5 yrs
Average credit quality		AA-			AA-			AA-			AA-			AA-			AA-

11

AXIS Capital Holdings Limited

GEOGRAPHIC DISTRIBUTION OF FIXED MATURITIES AND EQUITIES

At June 30, 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	$	—			$	8,262			$	64,566			$	20,709			$	93,537			$	—			$	—			$	—			$	93,537			$	—			$	93,537
Netherlands	9,978				18,167				58,135				—				76,302				—				2,650				—				88,930				—				88,930
Supranational [a]	83,663				—				—				—				—				—				—				—				83,663				—				83,663
Luxembourg	—				351				33,905				—				34,256				—				—				—				34,256				—				34,256
France	—				1,849				44,654				—				46,503				—				—				—				46,503				—				46,503
Ireland	—				5,454				12,151				—				17,605				—				—				4,929				22,534				—				22,534
Italy	—				2,842				13,145				—				15,987				—				—				—				15,987				—				15,987
Belgium	—				—				12,087				—				12,087				—				—				—				12,087				—				12,087
Spain	—				—				6,872				—				6,872				—				—				—				6,872				—				6,872
Austria	—				—				3,416				—				3,416				—				—				—				3,416				—				3,416
Slovenia	583				—				—				—				—				—				—				—				583				—				583
Other [b]	—				—				—				—				—				—				—				—				—				157,159				157,159
Total eurozone	94,224				36,925				248,931				20,709				306,565				—				2,650				4,929				408,368				157,159				565,527
Other concentrations:
United Kingdom	177,390				43,667				137,292				591				181,550				—				14,453				1,874				375,267				4,176				379,443
Canada	111,457				77,846				79,522				44,745				202,113				—				—				—				313,570				—				313,570
Australia	203,375				57,237				20,541				—				77,778				—				—				1,200				282,353				—				282,353
Mexico	60,334				—				19,287				—				19,287				—				—				—				79,621				—				79,621
Republic of Korea	48,504				—				9,675				—				9,675				—				—				—				58,179				—				58,179
Other	205,251				58,204				82,325				—				140,529				—				—				—				345,780				55,332			[c]	401,112
Total other concentrations	806,311				236,954				348,642				45,336				630,932				—				14,453				3,074				1,454,770				59,508				1,514,278
Total Non-U.S. concentrations	900,535				273,879				597,573				66,045				937,497				—				17,103				8,003				1,863,138				216,667				2,079,805
United States	1,613,649			[d]	1,408,115				2,058,340				—				3,466,455				2,134,976				1,183,741				1,419,058				9,817,879				442,514			[e]	10,260,393
United States agencies	69,460				—				—				—				—				—				—				—				69,460				—				69,460
United States local governments	255,259				—				—				—				—				—				—				—				255,259				—				255,259
Total U.S. concentrations	1,938,368				1,408,115				2,058,340				—				3,466,455				2,134,976				1,183,741				1,419,058				10,142,598				442,514				10,585,112
Totals	$	2,838,903			$	1,681,994			$	2,655,913			$	66,045			$	4,403,952			$	2,134,976			$	1,200,844			$	1,427,061			$	12,005,736			$	659,181			$	12,664,917

[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, closed end funds with the United States as the primary country of risk and a U.S. bond mutual fund.

12

AXIS Capital Holdings Limited

CORPORATE DEBT COMPOSITION

At June 30, 2015

		Fair Value				% of Total Corporate Debt			% of Total Cash and Invested Assets
Composition by sector - Investment grade
Financial institutions:
U.S. banking		$	1,009,808			22.9	%		6.9	%
Corporate/commercial finance		212,914				4.8	%		1.5	%
Foreign banking [a]		207,063				4.7	%		1.4	%
Insurance		108,209				2.5	%		0.7	%
Investment brokerage		27,071				0.6	%		0.2	%
Total financial institutions		1,565,065				35.5	%		10.7	%
Consumer non-cyclicals		391,005				8.9	%		2.7	%
Consumer cyclical		333,139				7.6	%		2.3	%
Communications		305,876				6.9	%		2.1	%
Industrials		201,080				4.6	%		1.4	%
Energy		169,811				3.9	%		1.2	%
Technology		127,591				2.9	%		0.9	%
Utilities		115,184				2.6	%		0.8	%
Transportation		79,178				1.8	%		0.5	%
Non-U.S. government guaranteed [b]		66,045				1.5	%		0.5	%
Total investment grade		3,353,974				76.2	%		23.1	%
Total non-investment grade		1,049,978				23.8	%		6.9	%
Total corporate debt		$	4,403,952			100.0	%		30.0	%

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

[b] Includes $21 million from Germany. No other corporate debt guaranteed by a eurozone country.

13

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

TEN LARGEST CORPORATE DEBT HOLDINGS

At June 30, 2015

		Amortized Cost				Net Unrealized Gain (Loss)				Fair Value				% of Total Fixed  Maturities
ISSUER [a]
BANK OF AMERICA CORP		$	143,880			$	410			$	144,290			1.2	%
JP MORGAN CHASE & CO		133,359				22				133,381				1.1	%
MORGAN STANLEY		122,827				1,646				124,473				1.0	%
GOLDMAN SACHS GROUP		117,573				1,390				118,963				1.0	%
VERIZON COMMUNICATIONS INC		76,972				(1,331		)		75,641				0.6	%
WELLS FARGO & COMPANY		75,614				(312		)		75,302				0.6	%
FORD MOTOR COMPANY		74,024				(1,037		)		72,987				0.6	%
DAIMLER AG		70,081				(1,214		)		68,867				0.6	%
COMCAST CORPORATION		64,294				68				64,362				0.5	%
CAPITAL ONE FINANCIAL CORPORATION		$	64,124			$	(378	)		$	63,746			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.

14

AXIS Capital Holdings Limited

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES COMPOSITION

At June 30, 2015

		Agencies				AAA				AA				A				BBB				Non-Investment Grade				Total
Residential MBS		$	2,134,976			$	20,199			$	1,761			$	27,251			$	23,129			$	28,934			$	2,236,250
Commercial MBS		—				686,666				220,010				144,024				48,340				530				1,099,570
ABS		—				989,896				344,255				81,100				8,914				2,896				1,427,061
Total mortgage-backed and asset-backed securities		$	2,134,976			$	1,696,761			$	566,026			$	252,375			$	80,383			$	32,360			$	4,762,881
Percentage of total		44.8		%		35.6		%		11.9		%		5.3		%		1.7		%		0.7		%		100.0		%

15

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013
Reinsurance recoverable on paid losses and loss expenses:
Insurance		$	38,639			$	23,788			$	29,280			$	31,460			$	24,680			$	35,648
Reinsurance		2,389				7,944				6,584				1,399				1,281				—
Total		$	41,028			$	31,732			$	35,864			$	32,859			$	25,961			$	35,648
Reinsurance recoverable on unpaid losses and loss expenses: OSLR
Insurance		$	668,053			$	576,718			$	584,378			$	608,304			$	625,142			$	635,089
Reinsurance		9,143				936				985				514				15				—
Total		$	677,196			$	577,654			$	585,363			$	608,818			$	625,157			$	635,089
Reinsurance recoverable on unpaid losses and loss expenses: IBNR
Insurance		$	1,327,163			$	1,326,362			$	1,320,518			$	1,318,833			$	1,319,543			$	1,258,113
Reinsurance		34,889				33,509				2,023				5,244				2,725				69,897
Total		$	1,362,052			$	1,359,871			$	1,322,541			$	1,324,077			$	1,322,268			$	1,328,010
Provision against reinsurance recoverables:
Insurance		$	(17,189	)		$	(16,886	)		$	(17,623	)		$	(18,225	)		$	(18,401	)		$	(17,306	)
Reinsurance		—				—				—				—				—				—
Total		$	(17,189	)		$	(16,886	)		$	(17,623	)		$	(18,225	)		$	(18,401	)		$	(17,306	)
Net reinsurance recoverables:
Insurance		$	2,016,666			$	1,909,982			$	1,916,553			$	1,940,372			$	1,950,964			$	1,911,544
Reinsurance		46,421				42,389				9,592				7,157				4,021				69,897
Total		$	2,063,087			$	1,952,371			$	1,926,145			$	1,947,529			$	1,954,985			$	1,981,441

16

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

At June 30, 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		$	1,538,699			$	(18,360	)		$	1,520,339			76.2%		25.6%		$	(12,381	)		0.8%		$	1,526,318
Other reinsurers balances > $20 million		244,931				(11,466		)		233,465				11.7%		3.9%		(1,288		)		0.5%		243,643
Other reinsurers balances < $20 million		296,646				(55,637		)		241,009				12.1%		4.0%		(3,520		)		1.2%		293,126
Total		$	2,080,276			$	(85,463	)		$	1,994,813			100.0%		33.5%		$	(17,189	)		0.8%		$	2,063,087

At June 30, 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		13.0%		4.4%
Lloyd's of London		11.3%		3.8%
Swiss Reinsurance America Corporation		10.9%		3.7%
Partner Reinsurance Company of the US		10.5%		3.5%
Berkley Insurance Company		7.8%		2.6%
Ace Property & Casualty Insurance		5.2%		1.7%
Hannover Ruckversicherungs Aktiengesellschaft		4.9%		1.6%
Everest Reinsurance Company		4.7%		1.6%
XL Reinsurance America Inc		4.5%		1.5%
Liberty Mutual Insurance Company		3.4%		1.2%
		76.2%		25.6%

17

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

		Quarter ended June 30, 2015												Six months ended June 30, 2015
		Gross				Recoveries				Net				Gross				Recoveries				Net
Reserve for unpaid losses and loss expenses
Beginning of period		$	9,443,222			$	(1,920,639	)		$	7,522,583			$	9,596,797			$	(1,890,280	)		$	7,706,517
Incurred		792,246				(212,093		)		580,153				1,394,828				(302,347		)		1,092,481
Paid		(622,263		)		117,869				(504,394		)		(1,201,556		)		199,605				(1,001,951		)
Foreign exchange and other		80,235				(7,196		)		73,039				(96,629		)		(29,037		)		(125,666		)
End of period [a]		$	9,693,440			$	(2,022,059	)		$	7,671,381			$	9,693,440			$	(2,022,059	)		$	7,671,381

[a] At June 30, 2015, the gross reserve for losses and loss expenses included IBNR of $6,369 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%.

18

AXIS Capital Holdings Limited

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

		Quarter ended June 30, 2015												Six months ended June 30, 2015
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
Gross losses paid		$	365,887			$	256,376			$	622,263			$	640,476			$	561,080			$	1,201,556
Reinsurance recoveries		(112,071		)		(5,798		)		(117,869		)		(181,146		)		(18,459		)		(199,605		)
Net losses paid		253,816				250,578				504,394				459,330				542,621				1,001,951
Change in:
Reported case reserves		110,735				(10,675		)		100,060				135,623				(33,581		)		102,042
IBNR		17,744				52,179				69,923				85,815				5,415				91,230
Reinsurance recoveries on unpaid loss and loss expense reserves		(84,761		)		(9,463		)		(94,224		)		(97,461		)		(5,281		)		(102,742		)
Total net incurred losses and loss expenses		$	297,534			$	282,619			$	580,153			$	583,307			$	509,174			$	1,092,481
Gross reserve for losses and loss expenses		$	5,262,956			$	4,430,484			$	9,693,440			$	5,262,956			$	4,430,484			$	9,693,440
Net favorable prior year reserve development		$	15,421			$	49,192			$	64,613			$	18,783			$	101,896			$	120,679
Key Ratios
Net paid to net incurred percentage		85.3		%		88.7		%		86.9		%		78.7		%		106.6		%		91.7		%
Net paid losses / Net premiums earned		56.1		%		51.3		%		53.6		%		51.0		%		57.4		%		54.3		%
Change in net loss and loss expense reserves / Net premiums earned		9.7		%		6.5		%		8.0		%		13.8		%		(3.5		%)		4.9		%
Net loss and loss expense ratio		65.8		%		57.8		%		61.6		%		64.8		%		53.9		%		59.2		%

19

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

INSURANCE - QUARTERLY

		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013
Gross losses paid		$	365,887			$	274,589			$	400,408			$	299,526			$	323,513			$	269,569
Reinsurance recoveries		(112,071		)		(69,075		)		(120,151		)		(108,012		)		(86,537		)		(89,115		)
Net losses paid		253,816				205,514				280,257				191,514				236,976				180,454
Change in:
Reported case reserves		110,735				24,888				(57,519		)		(153		)		101,943				144,059
IBNR		17,744				68,071				39,704				92,959				(5,143		)		73,154
Reinsurance recoveries on unpaid loss and loss expense reserves		(84,761		)		(12,700		)		10,345				4,887				(43,310		)		(66,675		)
Total net incurred losses and loss expenses		$	297,534			$	285,773			$	272,787			$	289,207			$	290,466			$	330,992
Gross reserve for losses and loss expenses		$	5,262,956			$	5,112,243			$	5,063,147			$	5,117,053			$	5,068,149			$	4,771,435
Net favorable prior year reserve development		$	15,421			$	3,361			$	9,676			$	9,488			$	32,963			$	6,693
Key Ratios
Net paid to net incurred percentage		85.3		%		71.9		%		102.7		%		66.2		%		81.6		%		54.5		%
Net paid losses/Net premiums earned		56.1		%		45.9		%		60.7		%		41.5		%		51.8		%		42.7		%
Change in net loss and loss expense reserves / Net premiums earned		9.7		%		18.0		%		(1.6		%)		21.1		%		11.7		%		35.7		%
Net loss and loss expense ratio		65.8		%		63.9		%		59.1		%		62.6		%		63.5		%		78.4		%

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AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

REINSURANCE - QUARTERLY

		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013
Gross losses paid		$	256,376			$	304,704			$	289,236			$	226,319			$	255,715			$	236,602
Reinsurance recoveries		(5,798		)		(12,661		)		(5,213		)		(475		)		(183		)		—
Net losses paid		250,578				292,043				284,023				225,844				255,532				236,602
Change in:
Reported case reserves		(10,675		)		(22,906		)		566				1,038				(55,460		)		(3,577		)
IBNR		52,179				(46,764		)		(35,469		)		39,008				72,706				81,998
Reinsurance recoveries on unpaid loss and loss expense reserves		(9,463		)		4,182				2,718				(3,033		)		2,585				(3,116		)
Total net incurred losses and loss expenses		$	282,619			$	226,555			$	251,838			$	262,857			$	275,363			$	311,907
Gross reserve for losses and loss expenses		$	4,430,484			$	4,330,979			$	4,533,650			$	4,634,850			$	4,737,839			$	4,571,382
Net favorable prior year reserve development		$	49,192			$	52,705			$	55,883			$	55,050			$	52,391			$	35,422
Key Ratios
Net paid to net incurred percentage		88.7		%		128.9		%		112.8		%		85.9		%		92.8		%		75.9		%
Net paid losses / Net premiums earned		51.3		%		64.0		%		57.2		%		44.8		%		47.1		%		45.2		%
Change in net loss and loss expense reserves / Net premiums earned		6.5		%		(14.3		%)		(6.5		%)		7.3		%		3.6		%		14.4		%
Net loss and loss expense ratio		57.8		%		50.8		%		50.7		%		52.1		%		50.7		%		59.6		%

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AXIS Capital Holdings Limited

NET PROBABLE MAXIMUM LOSSES TO CERTAIN PEAK INDUSTRY CATASTROPHE EXPOSURES - AS OF JULY 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		$	515			$	639			$	796
Northeast		U.S. Hurricane		42				132				217
Mid-Atlantic		U.S. Hurricane		101				233				581
Gulf of Mexico		U.S. Hurricane		339				441				621
California		Earthquake		345				444				531
Europe		Windstorm		146				212				271
Japan		Earthquake		120				221				306
Japan		Windstorm		41				70				101

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 July 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 $0.6 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 $0.6 billion. Conversely, there is a 99% chance that on an annual basis, the loss from a Southeast hurricane will fall below $0.6 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.

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AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP

		Quarter ended June 30,								Six months ended June 30,
		2015				2014				2015				2014
Net income available to common shareholders		$	63,349			$	190,664			$	219,153			$	327,890
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Weighted average shares outstanding - basic		100,274				105,118				100,093				107,075
Dilutive share equivalents:
Stock compensation plans		886				1,171				1,058				1,254
Weighted average shares outstanding - diluted		101,160				106,289				101,151				108,329
EARNINGS PER COMMON SHARE
Basic			$0.63				$1.81				$2.19				$3.06
Diluted			$0.63				$1.79				$2.17				$3.03

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AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION AND COMMON SHARE ROLLFOWARD - QUARTERLY

		Q2 2015				Q1 2015				Q4 2014				Q3 2014				Q2 2014				Q2 2013
Net income available to common shareholders		$	63,349			$	155,803			$	163,663			$	279,104			$	190,664			$	72,447
COMMON SHARES OUTSTANDING
Common shares - at beginning of period		100,219				99,426				100,827				103,906				106,745				116,306
Shares issued, including those sourced from treasury		125				1,083				88				90				219				404
Shares repurchased for treasury		(60		)		(290		)		(1,489		)		(3,169		)		(3,058		)		(5,122		)
Common shares - at end of period		100,284				100,219				99,426				100,827				103,906				111,588
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average shares outstanding - basic		100,274				99,910				100,468				102,945				105,118				115,163
Dilutive share equivalents:
Stock compensation plans		886				1,229				1,570				1,302				1,171				1,508
Weighted average shares outstanding - diluted		101,160				101,139				102,038				104,247				106,289				116,671
EARNINGS PER COMMON SHARE
Basic			$0.63				$1.56				$1.63				$2.71				$1.81				$0.63
Diluted			$0.63				$1.54				$1.60				$2.68				$1.79				$0.62

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AXIS Capital Holdings Limited

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

		At June 30, 2015
		Weighted Average Strike Price				Common Shareholders’ Equity				Outstanding Common Shares net of Treasury Shares			Per share
Closing stock price														$53.37
Book value per common share						$	5,320,715			100,284				$53.06
Dilutive securities: [b]
Restricted stocks										290			(0.16		)
Restricted and phantom stock units										2,116			(1.09		)
Diluted book value per common share						$	5,320,715			102,690				$51.81
		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 June 30,								Six months ended June 30,
		2015				2014				2015				2014
Net income available to common shareholders		$	63,349			$	190,664			$	219,153			$	327,890
Adjustment for:
Net realized (gains) losses		11,110				(33,261		)		53,662				(43,882		)
Associated tax impact		(1,558		)		6,149				(2,116		)		12,470
Foreign exchange losses (gains)		22,108				9,705				(41,112		)		13,939
Associated tax impact		(1,428		)		(514		)		66				(606		)
Operating income		$	93,581			$	172,743			$	229,653			$	309,811
Net earnings per share - diluted		$	0.63			$	1.79			$	2.17			$	3.03
Adjustment for:
Net realized (gains) losses		0.11				(0.31		)		0.53				(0.41		)
Associated tax impact		(0.02		)		0.06				(0.02		)		0.12
Foreign exchange losses (gains)		0.22				0.09				(0.41		)		0.13
Associated tax impact		(0.01		)		—				—				(0.01		)
Operating income per share - diluted		$	0.93			$	1.63			$	2.27			$	2.86
Weighted average common shares and common share equivalents - diluted		101,160				106,289				101,151				108,329
Average common shareholders' equity		$	5,335,018			$	5,263,537			$	5,256,997			$	5,258,993
Annualized return on average common equity		4.7		%		14.5		%		8.3		%		12.5		%
Annualized operating return on average common equity		7.0		%		13.1		%		8.7		%		11.8		%

DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD [b]
	June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
	2015				2015				2014				2014				2014				2013
Common shareholders' equity	$	5,320,715			$	5,349,320			$	5,193,278			$	5,190,646			$	5,327,867			$	4,934,104
Less: goodwill and intangible assets	(101,053		)		(88,508		)		(88,960		)		(88,740		)		(90,025		)		(91,370		)
Tangible common shareholders' equity	$	5,219,662			$	5,260,812			$	5,104,318			$	5,101,906			$	5,237,842			$	4,842,734
Outstanding diluted common shares, net of treasury shares	102,690				102,924				102,577				104,073				107,228				115,631
Diluted book value per common share	$	51.81			$	51.97			$	50.63			$	49.88			$	49.69			$	42.67
Diluted tangible book value per common share	$	50.83			$	51.11			$	49.76			$	49.02			$	48.85			$	41.88

[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

USE OF NON-GAAP FINANCIAL MEASURES

In this document, we present operating income, consolidated underwriting income, underwriting-related general and administrative expenses and diluted tangible book value per common share, 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' and 'Consolidated Statements of Income - Year to Date' 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 to Date' 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.

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") and diluted tangible book value per common share.

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) 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.

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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.

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