EX-99.2 3 axsex99-2.htm FOURTH QUARTER 2016 INVESTOR FINANCIAL SUPPLEMENT

Exhibit

AXIS Capital Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT

FOURTH QUARTER 2016

AXIS Capital Holdings Limited

92 Pitts Bay Road

Pembroke HM 08 Bermuda

Contact Information:

Linda Ventresca

Investor Relations

441 405 2727

investorrelations@axiscapital.com

Website Information:

www.axiscapital.com

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

AXIS Capital Holdings Limited

FINANCIAL SUPPLEMENT TABLE OF CONTENTS

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

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

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

• All financial information contained herein is unaudited, except for the consolidated balance sheets at December 31, 2015 and December 31, 2014 and consolidated statements of income for the years then ended.

• Amounts may not reconcile exactly due to rounding differences.

• During 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. 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 cyclical nature of the re(insurance) business leading to periods with excess underwriting capacity and unfavorable premium rates,

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

• losses from war, terrorism and political unrest or other unanticipated losses,

• 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,

• our inability to purchase reinsurance or collect amounts due to us,

• the breach by third parties in our program business of their obligations to us,

• difficulties with technology and/or data security,

• the failure of our policyholders and intermediaries to pay premiums,

• 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 and credit risk due to our reliance on brokers,

• changes in accounting policies or practices,

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

• changes in governmental regulations and potential government intervention in our industry,

• failure to comply with certain laws and regulations relating to sanctions and foreign corrupt practices,

• increased competition,

• changes in the political environment of certain countries in which we operate or underwrite business including the United Kingdom's expected withdrawal from the European Union,

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

• the other factors set forth in our most recent report on Form 10-K, Form 10-Q and other documents on file with the Securities and Exchange Commission.

We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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. 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. The Company provides credit insurance coverage to mortgage guaranty insurers and government sponsored entities. 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 insurers for motor liability and property damage losses arising out of any one occurrence. A loss occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence. We offer traditional proportional and non-proportional reinsurance as well as structured solutions.

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.

Marine and Other: includes marine, aviation 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 December 31,												Year ended December 31,
				2016				2015				Change				2016				2015				Change
HIGHLIGHTS		Gross premiums written		$	730,650			$	799,802			(8.6	%)			$	4,970,208			$	4,603,730			8.0	%
		Gross premiums written - Insurance		83.1		%		76.6		%		6.5		pts		54.7		%		56.1		%		(1.4	)	pts
		Gross premiums written - Reinsurance		16.9		%		23.4		%		(6.5	)	pts		45.3		%		43.9		%		1.4		pts
		Net premiums written		$	464,387			$	595,358			(22.0	%)			$	3,752,974			$	3,674,666			2.1	%
		Net premiums earned		$	921,879			$	921,812			—	%			$	3,705,625			$	3,686,417			0.5	%
		Net premiums earned - Insurance		49.3		%		49.2		%		0.1		pts		48.0		%		48.8		%		(0.8	)	pts
		Net premiums earned - Reinsurance		50.7		%		50.8		%		(0.1	)	pts		52.0		%		51.2		%		0.8		pts
		Net income available to common shareholders		$	130,912			$	134,787			(2.9	%)			$	465,462			$	601,562			(22.6	%)
		Non-GAAP operating income [a]		100,500				119,829				(16.1	%)			409,945				400,515				2.4	%
		Reserve for losses and loss expenses		9,697,827				9,646,285				0.5	%			9,697,827				9,646,285				0.5	%
		Total shareholders’ equity attributable to AXIS Capital		6,272,370				5,866,882				6.9	%			6,272,370				5,866,882				6.9	%
PER COMMON SHARE AND COMMON SHARE DATA		Basic earnings per common share			$1.50				$1.40			7.1	%				$5.13				$6.10			(15.9	%)
		Diluted earnings per common share			$1.48				$1.39			6.5	%				$5.08				$6.04			(15.9	%)
		Non-GAAP operating income per common share - diluted [b]			$1.14				$1.23			(7.3	%)				$4.48				$4.02			11.4	%
		Weighted average common shares outstanding		87,552				96,072				(8.9	%)			90,772				98,609				(7.9	%)
		Diluted weighted average common shares outstanding		88,474				97,148				(8.9	%)			91,547				99,629				(8.1	%)
		Book value per common share [c]			$59.54				$55.32			7.6	%				$59.54				$55.32			7.6	%
		Diluted book value per common share (treasury stock method) [c]			$58.27				$54.08			7.7	%				$58.27				$54.08			7.7	%
		Diluted tangible book value per common share (treasury stock method) [a][c]			$57.31				$53.18			7.8	%				$57.31				$53.18			7.8	%
		Accumulated dividends declared per common share			$11.63				$10.20			14.0	%				$11.63				$10.20			14.0	%
FINANCIAL RATIOS		ROACE [d]		9.9		%		10.3		%		(0.4	)	pts		9.0		%		11.5		%		(2.5	)	pts
		Non-GAAP operating ROACE [e]		7.6		%		9.2		%		(1.6	)	pts		7.9		%		7.7		%		0.2		pts
		Net loss and loss expense ratio		58.6		%		56.8		%		1.8		pts		59.5		%		59.0		%		0.5		pts
		Acquisition cost ratio		20.3		%		19.6		%		0.7		pts		20.2		%		19.5		%		0.7		pts
		General and administrative expense ratio		17.8		%		15.2		%		2.6		pts		16.2		%		16.2		%		—		pts
		Combined ratio		96.7		%		91.6		%		5.1		pts		95.9		%		94.7		%		1.2		pts
INVESTMENT DATA		Total assets		$	20,813,691			$	19,981,891			4.2	%			$	20,813,691			$	19,981,891			4.2	%
		Total cash and invested assets [f]		14,727,558				14,640,788				0.6	%			14,727,558				14,640,788				0.6	%
		Net investment income		95,517				79,000				20.9	%			353,335				305,336				15.7	%
		Net realized investment losses		(20,229		)		(14,872		)		36.0	%			(60,525		)		(138,491		)		(56.3	%)
		Total return on cash and investments (inclusive of investment related foreign exchange movements) [g]		(1.1		%)		(0.1		%)		(1.0	)	pts		2.5		%		0.2		%		2.3		pts
		Total return on cash and investments (exclusive of investment related foreign exchange movements) [g]		(0.8		%)		—		%		(0.8	)	pts		3.0		%		1.0		%		2.0		pts
		Return on other investments [h]		2.0		%		0.3		%		1.7		pts		5.1		%		2.3		%		2.8		pts
		Book yield of fixed maturities		2.6		%		2.5		%		0.1		pts		2.6		%		2.5		%		0.1		pts

[a] Non-GAAP operating income and diluted tangible book value per common share are “non-GAAP financial measures” as defined by Regulation G. See page 27 for reconciliation of non-GAAP operating income to net income available to common shareholders and page 28 for diluted tangible book value per common share to diluted book value per common share.

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

[c] Calculation at December 31, 2015 includes 1,358,380 additional shares delivered to the Company in January 2016 under the Company's Accelerated Share Repurchase ("ASR") agreement. See page 26 'Diluted Book Value per Common Share Analysis' for more details.

[d] 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.

[e] Non-GAAP Operating ROACE, also a “non-GAAP financial measure”, is calculated by dividing non-GAAP 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. Non-GAAP operating income for the quarter-periods is annualized.

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

[g] In calculating total return, we include net investment income, net realized investment gains (losses), interest in income (loss) of equity method investments and the change in unrealized gains (losses) generated by our average cash and investment balances.

[h] 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

	Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014
UNDERWRITING REVENUES
Gross premiums written	$	730,650			$	959,962			$	1,320,434			$	1,959,161			$	799,802			$	762,040
Premiums ceded	(266,263		)		(364,531		)		(313,084		)		(273,355		)		(204,444		)		(207,023		)
Net premiums written	464,387				595,431				1,007,350				1,685,806				595,358				555,017
Gross premiums earned	1,213,623				1,214,826				1,197,722				1,136,222				1,146,532				1,164,355
Ceded premiums expensed	(291,744		)		(280,411		)		(250,732		)		(233,882		)		(224,720		)		(205,838		)
Net premiums earned	921,879				934,415				946,990				902,340				921,812				958,517
Other insurance related income (loss)	2,372				5,944				(892		)		(203		)		(15,272		)		(11,818		)
Total underwriting revenues	924,251				940,359				946,098				902,137				906,540				946,699
UNDERWRITING EXPENSES
Net losses and loss expenses	540,612				532,328				632,294				498,962				523,331				524,625
Acquisition costs	187,305				189,810				189,125				180,635				180,564				187,349
Underwriting-related general and administrative expenses [a]	130,069				114,223				114,819				123,589				114,287				122,005
Total underwriting expenses	857,986				836,361				936,238				803,186				818,182				833,979
UNDERWRITING INCOME [b]	66,265				103,998				9,860				98,951				88,358				112,720
OTHER OPERATING REVENUE (EXPENSES)
Net investment income	95,517				116,923				91,730				49,164				79,000				78,595
Net realized investment gains (losses)	(20,229		)		5,205				21,010				(66,508		)		(14,872		)		10,779
Interest expense and financing costs	(12,774		)		(12,839		)		(12,914		)		(12,833		)		(12,851		)		(17,783		)
Total other operating revenues (expenses)	62,514				109,289				99,826				(30,177		)		51,277				71,591
OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	51,514				13,795				56,602				(616		)		33,112				46,086
Corporate expenses [a]	(33,095		)		(28,683		)		(31,927		)		(26,312		)		(26,084		)		(43,145		)
Total other (expenses) revenues	18,419				(14,888		)		24,675				(26,928		)		7,028				2,941
INCOME BEFORE INCOME TAXES AND INTEREST IN INCOME (LOSS) OF EQUITY METHOD INVESTMENTS	147,198				198,399				134,361				41,846				146,663				187,252
Income tax (expense) benefit	1,373				(9,352		)		(4,901		)		6,540				(1,873		)		(16,382		)
Interest in income (loss) of equity method investments	340				(2,434		)		—				—				—				—
NET INCOME	148,911				186,613				129,460				48,386				144,790				170,870
Amounts attributable from noncontrolling interests	—				—				—				—				—				2,815
NET INCOME ATTRIBUTABLE TO AXIS CAPITAL	148,911				186,613				129,460				48,386				144,790				173,685
Preferred share dividends	(16,690		)		(9,969		)		(9,969		)		(9,969		)		(10,003		)		(10,022		)
Loss on repurchase of preferred shares	(1,309		)		—				—				—				—				—
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	130,912			$	176,644			$	119,491			$	38,417			$	134,787			$	163,663
KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	58.6		%		57.0		%		66.8		%		55.3		%		56.8		%		54.7		%
Acquisition cost ratio	20.3		%		20.3		%		20.0		%		20.0		%		19.6		%		19.5		%
General and administrative expense ratio [a]	17.8		%		15.3		%		15.4		%		16.6		%		15.2		%		17.3		%
Combined ratio	96.7		%		92.6		%		102.2		%		91.9		%		91.6		%		91.5		%
Weighted average basic shares outstanding	87,552				89,621				91,926				94,035				96,072				100,468
Weighted average diluted shares outstanding	88,474				90,351				92,558				94,853				97,148				102,038
Basic earnings per common share		$1.50				$1.97				$1.30				$0.41				$1.40				$1.63
Diluted earnings per common share		$1.48				$1.96				$1.29				$0.41				$1.39				$1.60
ROACE (annualized)	9.9		%		13.2		%		9.0		%		2.9		%		10.3		%		12.6		%
Non-GAAP operating ROACE (annualized)	7.6		%		12.0		%		3.6		%		7.7		%		9.2		%		9.3		%

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

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

2

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - YEAR

		Year ended December 31,
		2016				2015				2014
	UNDERWRITING REVENUES
	Gross premiums written	$	4,970,208			$	4,603,730			$	4,711,519
	Premiums ceded	(1,217,234		)		(929,064		)		(804,544		)
	Net premiums written	3,752,974				3,674,666				3,906,975
	Gross premiums earned	4,762,394				4,567,953				4,652,345
	Ceded premiums expensed	(1,056,769		)		(881,536		)		(781,346		)
	Net premiums earned	3,705,625				3,686,417				3,870,999
	Other insurance related income (loss)	7,222				(2,953		)		650
	Total underwriting revenues	3,712,847				3,683,464				3,871,649
	UNDERWRITING EXPENSES
	Net losses and loss expenses	2,204,197				2,176,199				2,186,722
	Acquisition costs	746,876				718,112				737,197
	Underwriting-related general and administrative expenses [a]	482,701				486,911				486,201
	Total underwriting expenses	3,433,774				3,381,222				3,410,120
	UNDERWRITING INCOME	279,073				302,242				461,529
	OTHER OPERATING REVENUE (EXPENSES)
	Net investment income	353,335				305,336				342,766
	Net realized investment gains (losses)	(60,525		)		(138,491		)		132,108
	Interest expense and financing costs	(51,360		)		(50,963		)		(74,695		)
	Total other operating revenues	241,450				115,882				400,179
	OTHER (EXPENSES) REVENUE
	Foreign exchange gains	121,295				102,312				104,439
	Termination fee received	—				280,000				—
	Corporate expenses [a]	(120,016		)		(109,910		)		(135,675		)
	Reorganization and related expenses	—				(45,867		)		—
	Total other (expenses) revenues	1,279				226,535				(31,236		)
	INCOME BEFORE INCOME TAXES AND INTEREST IN INCOME (LOSS) OF EQUITY METHOD INVESTMENTS	521,802				644,659				830,472
	Income tax expense	(6,340		)		(3,028		)		(25,908		)
	Interest in income (loss) of equity method investments	(2,094		)		—				—
	NET INCOME	513,368				641,631				804,564
	Amounts attributable from noncontrolling interests	—				—				6,181
	NET INCOME ATTRIBUTABLE TO AXIS CAPITAL	513,368				641,631				810,745
	Preferred share dividends	(46,597		)		(40,069		)		(40,088		)
	Loss on repurchase of preferred shares	(1,309		)		—				—
	NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	465,462			$	601,562			$	770,657
	KEY RATIOS/PER SHARE DATA
	Net loss and loss expense ratio	59.5		%		59.0		%		56.5		%
	Acquisition cost ratio	20.2		%		19.5		%		19.0		%
	General and administrative expense ratio [a]	16.2		%		16.2		%		16.1		%
	Combined ratio	95.9		%		94.7		%		91.6		%
	Weighted average basic shares outstanding	90,772				98,609				104,368
	Weighted average diluted shares outstanding	91,547				99,629				105,713
	Basic earnings per common share		$5.13				$6.10				$7.38
	Diluted earnings per common share		$5.08				$6.04				$7.29
	ROACE	9.0		%		11.5		%		14.8		%
	Non-GAAP operating ROACE	7.9		%		7.7		%		10.8		%

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

3

AXIS Capital Holdings Limited

CONSOLIDATED SEGMENT DATA

		Quarter ended December 31, 2016												Year ended December 31, 2016
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
UNDERWRITING REVENUES
Gross premiums written		$	607,446			$	123,204			$	730,650			$	2,720,242			$	2,249,966			$	4,970,208
Net premiums written		374,068				90,319				464,387				1,807,125				1,945,849				3,752,974
Gross premiums earned		680,000				533,623				1,213,623				2,640,592				2,121,802				4,762,394
Ceded premiums expensed		(225,328		)		(66,416		)		(291,744		)		(863,271		)		(193,498		)		(1,056,769		)
Net premiums earned		454,672				467,207				921,879				1,777,321				1,928,304				3,705,625
Other insurance related income		146				2,226				2,372				89				7,133				7,222
Total underwriting revenues		454,818				469,433				924,251				1,777,410				1,935,437				3,712,847
UNDERWRITING EXPENSES
Net losses and loss expenses		288,161				252,451				540,612				1,141,933				1,062,264				2,204,197
Acquisition costs		66,138				121,167				187,305				251,120				495,756				746,876
Underwriting-related general and administrative expenses		94,205				35,864				130,069				346,857				135,844				482,701
Total underwriting expenses		448,504				409,482				857,986				1,739,910				1,693,864				3,433,774
UNDERWRITING INCOME		$	6,314			$	59,951			$	66,265			$	37,500			$	241,573			$	279,073
KEY RATIOS
Current accident year loss ratio		66.2		%		65.9		%		66.0		%		67.4		%		67.4		%		67.4		%
Prior period reserve development		(2.8		%)		(11.9		%)		(7.4		%)		(3.1		%)		(12.3		%)		(7.9		%)
Net loss and loss expense ratio		63.4		%		54.0		%		58.6		%		64.3		%		55.1		%		59.5		%
Acquisition cost ratio		14.5		%		25.9		%		20.3		%		14.1		%		25.7		%		20.2		%
Underwriting-related general and administrative expense ratio		20.7		%		7.7		%		14.2		%		19.5		%		7.0		%		13.0		%
Corporate expense ratio										3.6		%										3.2		%
Combined ratio		98.6		%		87.6		%		96.7		%		97.9		%		87.8		%		95.9		%

4

AXIS Capital Holdings Limited

GROSS PREMIUMS WRITTEN BY SEGMENT BY LINE OF BUSINESS

																										Year ended December 31,
		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014				2016				2015
INSURANCE SEGMENT
Property		$	150,511			$	164,605			$	211,183			$	146,592			$	141,429			$	153,563			$	672,891			$	607,358
Marine		34,311				33,677				84,089				73,532				26,071				26,236				225,609				241,956
Terrorism		10,056				9,394				11,650				7,046				7,972				10,194				38,146				33,709
Aviation		16,062				9,684				8,326				19,101				24,887				26,601				53,173				54,642
Credit and Political Risk		15,631				5,423				19,960				8,917				30,327				16,100				49,930				59,967
Professional Lines		254,942				204,926				240,040				145,451				251,641				267,950				845,358				850,011
Liability		94,233				108,447				118,464				83,886				83,941				92,608				405,030				384,145
Accident and Health		31,700				139,274				90,305				168,824				46,259				31,061				430,105				351,293
TOTAL INSURANCE SEGMENT		607,446				675,430				784,017				653,349				612,527				624,313				2,720,242				2,583,081
REINSURANCE SEGMENT
Catastrophe		8,193				46,338				123,507				146,847				8,135				13,101				324,884				291,697
Property		(1,020		)		61,957				45,424				176,174				(2,649		)		4,099				282,535				305,160
Professional Lines		33,309				19,479				126,840				88,774				71,794				69,236				268,403				276,479
Credit and Surety		3,975				36,174				20,816				258,111				11,662				6,104				319,077				242,620
Motor		7,683				13,344				3,638				321,422				1,839				5,152				346,087				335,084
Liability		57,109				91,387				124,003				149,990				86,457				34,769				422,489				345,319
Agriculture		6,963				1,286				87,372				62,657				(6,506		)		(3,577		)		158,278				132,629
Engineering		12,173				13,588				8,342				34,789				13,886				7,589				68,892				72,050
Marine and Other		(5,181		)		979				(3,525		)		67,048				2,657				1,254				59,321				19,611
TOTAL REINSURANCE SEGMENT		123,204				284,532				536,417				1,305,812				187,275				137,727				2,249,966				2,020,649
CONSOLIDATED TOTAL		$	730,650			$	959,962			$	1,320,434			$	1,959,161			$	799,802			$	762,040			$	4,970,208			$	4,603,730

5

AXIS Capital Holdings Limited

INSURANCE SEGMENT DATA - QUARTERLY

		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014
UNDERWRITING REVENUES
Gross premiums written		$	607,446			$	675,430			$	784,017			$	653,349			$	612,527			$	624,313
Net premiums written		374,068				433,131				526,764				473,163				407,236				418,150
Gross premiums earned		680,000				668,820				656,107				635,665				652,349				655,199
Ceded premiums expensed		(225,328		)		(224,129		)		(216,828		)		(196,987		)		(198,498		)		(193,339		)
Net premiums earned		454,672				444,691				439,279				438,678				453,851				461,860
Other insurance related income (loss)		146				39				(234		)		137				225				(12		)
Total underwriting revenues		454,818				444,730				439,045				438,815				454,076				461,848
UNDERWRITING EXPENSES
Net losses and loss expenses		288,161				273,226				306,141				274,405				288,348				272,787
Acquisition costs		66,138				61,755				61,829				61,398				60,716				71,444
General and administrative expenses		94,205				84,588				82,487				85,576				79,734				84,005
Total underwriting expenses		448,504				419,569				450,457				421,379				428,798				428,236
UNDERWRITING INCOME (LOSS)		$	6,314			$	25,161			$	(11,412	)		$	17,436			$	25,278			$	33,612
KEY RATIOS
Current accident year loss ratio		66.2		%		66.1		%		74.3		%		63.1		%		64.0		%		61.2		%
Prior period reserve development		(2.8		%)		(4.7		%)		(4.6		%)		(0.5		%)		(0.5		%)		(2.1		%)
Net loss and loss expense ratio		63.4		%		61.4		%		69.7		%		62.6		%		63.5		%		59.1		%
Acquisition cost ratio		14.5		%		13.9		%		14.1		%		14.0		%		13.4		%		15.5		%
General and administrative expense ratio		20.7		%		19.1		%		18.7		%		19.5		%		17.6		%		18.1		%
Combined ratio		98.6		%		94.4		%		102.5		%		96.1		%		94.5		%		92.7		%

6

AXIS Capital Holdings Limited

REINSURANCE SEGMENT DATA - QUARTERLY

		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014
UNDERWRITING REVENUES
Gross premiums written		$	123,204			$	284,532			$	536,417			$	1,305,812			$	187,275			$	137,727
Net premiums written		90,319				162,300				480,586				1,212,643				188,122				136,867
Gross premiums earned		533,623				546,006				541,615				500,557				494,183				509,156
Ceded premiums expensed		(66,416		)		(56,282		)		(33,904		)		(36,895		)		(26,222		)		(12,499		)
Net premiums earned		467,207				489,724				507,711				463,662				467,961				496,657
Other insurance related income (loss)		2,226				5,905				(658		)		(340		)		(15,497		)		(11,806		)
Total underwriting revenues		469,433				495,629				507,053				463,322				452,464				484,851
UNDERWRITING EXPENSES
Net losses and loss expenses		252,451				259,102				326,153				224,557				234,983				251,838
Acquisition costs		121,167				128,055				127,296				119,237				119,848				115,905
General and administrative expenses		35,864				29,635				32,332				38,013				34,553				38,000
Total underwriting expenses		409,482				416,792				485,781				381,807				389,384				405,743
UNDERWRITING INCOME		$	59,951			$	78,837			$	21,272			$	81,515			$	63,080			$	79,108
KEY RATIOS
Current accident year loss ratio		65.9		%		64.2		%		75.6		%		63.1		%		66.2		%		62.0		%
Prior period reserve development		(11.9		%)		(11.3		%)		(11.4		%)		(14.7		%)		(16.0		%)		(11.3		%)
Net loss and loss expense ratio		54.0		%		52.9		%		64.2		%		48.4		%		50.2		%		50.7		%
Acquisition cost ratio		25.9		%		26.1		%		25.1		%		25.7		%		25.6		%		23.3		%
General and administrative expense ratio		7.7		%		6.1		%		6.4		%		8.2		%		7.4		%		7.7		%
Combined ratio		87.6		%		85.1		%		95.7		%		82.3		%		83.2		%		81.7		%

7

AXIS Capital Holdings Limited

REINSURANCE SEGMENT - STRATEGIC CAPITAL PARTNERS

		Quarter ended December 31,								Year ended December 31,
TOTAL MANAGED PREMIUMS [a]		2016				2015				2016				2015
Total managed premiums		$	123,204			$	187,275			$	2,249,966			$	2,020,649
Premiums ceded to Harrington Re		17,403				—				119,092				—
Premiums ceded to Other Strategic Capital Partners		15,482				(847		)		185,025				105,342
Net premiums written		$	90,319			$	188,122			$	1,945,849			$	1,915,307
FEE INCOME FROM STRATEGIC CAPITAL PARTNERS [b]
Fee income		$	6,769			$	2,557			$	21,776			$	8,511

[a] Total managed premiums represented gross premiums written by the AXIS Reinsurance segment of $123,204 and $187,275 for the three months ended December 31, 2016 and 2015, respectively, and $2,249,966 and $2,020,649 for the years ended December 31, 2016 and 2015, respectively, including premiums written on behalf of our strategic capital partners.

[b] Fee income from strategic capital partners represents services fees and reimbursement of expenses earned by the AXIS Reinsurance segment from its strategic capital partners. Fee income from strategic capital partners is included in other insurance related income and in general and administrative expenses beginning in the quarter ended September 30, 2016. For prior periods fee income from strategic capital partners is included in acquisition costs.

8

AXIS Capital Holdings Limited

NET INVESTMENT INCOME - QUARTERLY AND YEAR

																										Year ended December 31,
		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014				2016				2015
Fixed maturities		$	76,036			$	75,827			$	77,621			$	75,975			$	74,659			$	70,187			$	305,459			$	294,725
Other investments		16,744				38,248				14,401				(26,878		)		2,531				11,753				42,514				20,148
Equity securities		3,462				4,633				3,065				5,145				3,494				2,223				16,306				11,289
Mortgage loans		2,313				2,191				1,807				1,684				1,085				—				7,996				1,861
Cash and cash equivalents		2,138				3,768				1,868				1,434				4,802				2,409				9,209				8,572
Short-term investments		1,353				337				165				206				163				125				2,060				439
Gross investment income		102,046				125,004				98,927				57,566				86,734				86,697				383,544				337,034
Investment expense		(6,529		)		(8,081		)		(7,197		)		(8,402		)		(7,734		)		(8,102		)		(30,209		)		(31,698		)
Net investment income		$	95,517			$	116,923			$	91,730			$	49,164			$	79,000			$	78,595			$	353,335			$	305,336

9

AXIS Capital Holdings Limited

CONSOLIDATED BALANCE SHEETS

		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,
		2016				2016				2016				2016				2015				2014
ASSETS
Investments:
Fixed maturities, available for sale, at fair value		$	11,397,114			$	11,566,860			$	11,563,216			$	11,838,068			$	11,719,749			$	12,129,273
Equity securities, available for sale, at fair value		638,744				644,344				626,371				637,325				597,998				567,707
Mortgage loans, held for investment, at amortized cost and fair value		349,969				332,753				327,315				267,589				206,277				—
Other investments, at fair value		830,219				847,262				865,406				859,639				816,756				965,465
Equity method investments		$	116,000			111,295				113,729				11,022				10,932				8,932
Short-term investments, at amortized cost and fair value		127,461				39,877				41,086				29,540				34,406				107,534
Total investments		13,459,507				13,542,391				13,537,123				13,643,183				13,386,118				13,778,911
Cash and cash equivalents		1,241,507				1,077,263				993,472				952,311				1,174,751				1,209,695
Accrued interest receivable		74,971				71,096				71,770				71,475				73,729				83,070
Insurance and reinsurance premium balances receivable		2,313,512				2,694,976				2,885,606				2,690,400				1,967,535				1,808,620
Reinsurance recoverable on paid and unpaid losses		2,334,922				2,336,741				2,270,776				2,116,090				2,096,104				1,926,145
Deferred acquisition costs		438,636				545,618				624,638				646,919				471,782				466,987
Prepaid reinsurance premiums		556,344				582,551				498,299				436,382				396,201				351,441
Receivable for investments sold		14,123				2,285				3,569				1,614				26,478				169
Goodwill and intangible assets		85,049				85,501				85,954				86,446				86,858				88,960
Other assets		295,120				283,969				278,233				333,370				302,335				241,738
TOTAL ASSETS		$	20,813,691			$	21,222,391			$	21,249,440			$	20,978,190			$	19,981,891			$	19,955,736
LIABILITIES
Reserve for losses and loss expenses		$	9,697,827			$	9,874,807			$	9,782,304			$	9,716,487			$	9,646,285			$	9,596,797
Unearned premiums		2,969,498				3,453,655				3,708,603				3,586,307				2,760,889				2,735,376
Insurance and reinsurance balances payable		493,183				461,519				416,017				344,181				356,417				249,186
Senior notes		992,950				992,633				992,361				992,091				991,825				990,790
Payable for investments purchased		62,550				141,245				144,040				135,647				9,356				188,176
Other liabilities		325,313				272,874				241,932				253,218				350,237				315,471
TOTAL LIABILITIES		14,541,321				15,196,733				15,285,257				15,027,931				14,115,009				14,075,796
SHAREHOLDERS’ EQUITY
Preferred shares		1,126,074				625,000				625,000				625,000				627,843				627,843
Common shares		2,206				2,206				2,206				2,206				2,202				2,191
Additional paid-in capital		2,299,857				2,307,866				2,302,557				2,296,533				2,241,388				2,285,016
Accumulated other comprehensive income (loss)		(121,841		)		98,505				63,089				17,646				(188,465		)		(45,574		)
Retained earnings		6,527,627				6,430,573				6,285,803				6,198,932				6,194,353				5,715,504
Treasury shares, at cost		(3,561,553		)		(3,438,492		)		(3,314,472		)		(3,190,058		)		(3,010,439		)		(2,763,859		)
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO AXIS CAPITAL		6,272,370				6,025,658				5,964,183				5,950,259				5,866,882				5,821,121
Noncontrolling interests		—				—				—				—				—				58,819
TOTAL SHAREHOLDERS' EQUITY		6,272,370				6,025,658				5,964,183				5,950,259				5,866,882				5,879,940
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	20,813,691			$	21,222,391			$	21,249,440			$	20,978,190			$	19,981,891			$	19,955,736
Basic common shares outstanding		86,441				88,439				90,654				92,903				96,066				99,426
Diluted common shares outstanding		88,317				90,363				92,667				95,031				96,883				102,577
Book value per common share [a]			$59.54				$61.07				$58.90				$57.32				$55.32				$52.23
Diluted book value per common share [a]		58.27				59.77				57.62				56.04				54.08				50.63
Diluted tangible book value per common share [a]			$57.31				$58.82				$56.69				$55.13				$53.18				$49.76
Debt to total capital [b]		13.7		%		14.1		%		14.3		%		14.3		%		14.5		%		14.5		%
Debt and preferred equity to total capital		29.2		%		23.0		%		23.2		%		23.3		%		23.6		%		23.8		%

[a] Calculation at December 31, 2015 includes 1,358,380 of additional shares delivered to the Company under the Company's Accelerated Share Repurchase ("ASR") agreement. The shares were delivered to the Company following the early termination of the ASR agreement on January 15, 2016. See page 26 'Diluted Book Value per Common Share Analysis' for more details.

[b] 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.

10

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS PORTFOLIO

At December 31, 2016

		Cost or Amortized Cost				Unrealized Gains				Unrealized Losses				Fair Value				Percentage
Fixed Maturities, available for sale
U.S. government and agency		$	1,681,425			$	1,648			$	(27,004	)		$	1,656,069			11.4	%
Non-U.S. government		613,282				2,206				(49,654		)		565,834				3.8	%
Corporate debt		4,633,834				42,049				(75,140		)		4,600,743				31.2	%
Agency RMBS		2,487,837				13,275				(35,977		)		2,465,135				16.7	%
CMBS		664,368				5,433				(3,564		)		666,237				4.5	%
Non-Agency RMBS		57,316				1,628				(2,023		)		56,921				0.4	%
ABS		1,221,813				3,244				(2,843		)		1,222,214				8.3	%
Municipals		163,441				1,510				(990		)		163,961				1.1	%
Total fixed maturities		11,523,316				70,993				(197,195		)		11,397,114				77.4	%
Equity securities, available for sale
Common stocks		379				41				(342		)		78				—	%
Exchange traded funds		463,936				53,405				(2,634		)		514,707				3.5	%
Bond mutual funds		133,051				—				(9,092		)		123,959				0.8	%
Total equity securities		597,366				53,446				(12,068		)		638,744				4.3	%
Total available for sale investments		$	12,120,682			$	124,439			$	(209,263	)		12,035,858				81.7	%
Mortgage loans, held for investment														349,969				2.4	%
Other investments (see below)														830,219				5.6	%
Equity method investments														116,000				0.8	%
Short-term investments														127,461				0.9	%
Total investments														13,459,507				91.4	%
Cash and cash equivalents [a]														1,241,507				8.4	%
Accrued interest receivable														74,971				0.5	%
Net receivable/(payable) for investments sold (purchased)														(48,427		)		(0.3	%)
Total cash and invested assets														$	14,727,558			100.0	%
														Fair Value				Percentage
Other Investments:
Long/short equity funds														$	118,619			14.3	%
Multi-strategy funds														285,992				34.4	%
Event-driven funds														93,539				11.3	%
Direct lending funds														134,650				16.2	%
Real estate funds														13,354				1.6	%
Private equity funds														81,223				9.8	%
Other privately held investments														42,142				5.1	%
Collateralized loan obligations - equity tranches														60,700				7.3	%
Total														$	830,219			100.0	%

[a] Includes $202 million of restricted cash and cash equivalents.

11

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS COMPOSITION - QUARTERLY

		Q4 2016			Q3 2016			Q2 2016			Q1 2016			Q4 2015			Q4 2014
		Fair Value %			Fair Value %			Fair Value %			Fair Value %			Fair Value %			Fair Value %
CASH AND INVESTED ASSETS PORTFOLIO
Fixed Maturities:
U.S. government and agency		11.4	%		10.8	%		10.5	%		10.7	%		11.3	%		10.9	%
Non-U.S. government		3.8	%		4.0	%		4.4	%		5.0	%		5.0	%		6.9	%
Corporate debt		31.2	%		31.4	%		30.4	%		30.4	%		29.7	%		29.2	%
MBS:
Agency RMBS		16.7	%		17.3	%		16.5	%		16.7	%		15.4	%		15.3	%
CMBS		4.5	%		6.1	%		7.5	%		7.6	%		7.4	%		7.4	%
Non-agency RMBS		0.4	%		0.5	%		0.6	%		0.7	%		0.7	%		0.5	%
ABS		8.3	%		8.5	%		9.0	%		9.2	%		9.4	%		9.8	%
Municipals		1.1	%		0.9	%		1.1	%		1.1	%		1.1	%		1.4	%
Total Fixed Maturities		77.4	%		79.5	%		80.0	%		81.4	%		80.0	%		81.4	%
Equity securities		4.3	%		4.4	%		4.3	%		4.4	%		4.1	%		4.0	%
Mortgage loans		2.4	%		2.3	%		2.3	%		1.8	%		1.4	%		—	%
Other investments		5.6	%		5.8	%		6.0	%		5.9	%		5.6	%		6.5	%
Equity method investments		0.8	%		0.8	%		0.8	%		0.1	%		0.1	%		0.1	%
Short-term investments		0.9	%		0.3	%		0.2	%		0.3	%		0.2	%		0.6	%
Total investments		91.4	%		93.1	%		93.6	%		93.9	%		91.4	%		92.6	%
Cash and cash equivalents		8.4	%		7.4	%		6.9	%		6.6	%		8.0	%		8.1	%
Accrued interest receivable		0.5	%		0.5	%		0.5	%		0.5	%		0.5	%		0.6	%
Net receivable/(payable) for investments sold or purchased		(0.3	%)		(1.0	%)		(1.0	%)		(1.0	%)		0.1	%		(1.3	%)
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		14.5	%		13.5	%		13.1	%		13.3	%		14.1	%		13.4	%
AAA		36.5	%		37.7	%		37.9	%		37.9	%		36.4	%		38.9	%
AA		9.9	%		10.1	%		10.5	%		11.3	%		10.9	%		8.5	%
A		15.3	%		15.3	%		16.0	%		16.8	%		17.6	%		18.2	%
BBB		13.7	%		13.9	%		13.2	%		11.7	%		12.3	%		12.5	%
Below BBB		10.1	%		9.5	%		9.3	%		9.0	%		8.7	%		8.5	%
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		2.7	%		3.0	%		2.8	%		2.4	%		2.5	%		3.5	%
From one to five years		33.8	%		32.9	%		32.6	%		33.7	%		35.3	%		40.3	%
From five to ten years		22.0	%		20.2	%		19.8	%		19.1	%		18.6	%		14.0	%
Above ten years		2.8	%		3.1	%		2.9	%		2.8	%		2.6	%		1.7	%
Asset-backed and mortgage-backed securities		38.7	%		40.8	%		41.9	%		42.0	%		41.0	%		40.5	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
CASH AND INVESTED ASSETS PORTFOLIO CHARACTERISTICS
Book yield of fixed maturities		2.6	%		2.6	%		2.6	%		2.5	%		2.5	%		2.5	%
Yield to maturity of fixed maturities		2.8	%		2.3	%		2.3	%		2.5	%		2.9	%		2.4	%
Average duration of fixed maturities (inclusive of duration hedges)		3.5	yrs		3.2 yrs			3.1 yrs			3.1 yrs			3.3	yrs		2.9	yrs
Average credit quality		AA-			AA-			AA-			AA-			AA-			AA-

12

AXIS Capital Holdings Limited

GEOGRAPHIC DISTRIBUTION OF FIXED MATURITIES AND EQUITIES

At December 31, 2016

					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:
Netherlands	$	18,003			$	29,517			$	76,920			$	—			$	106,437			$	—			$	—			$	—			$	124,440			$	—			$	124,440
France	—				9,830				34,429				—				44,259				—				—				—				44,259				876				45,135
Germany	2,573				—				25,316				16,360				41,676				—				—				—				44,249				—				44,249
Luxembourg	—				138				32,072				—				32,210				—				—				—				32,210				—				32,210
Ireland	—				10,496				13,352				—				23,848				—				—				4,224				28,072				—				28,072
Spain	—				5,848				4,781				—				10,629				—				—				—				10,629				—				10,629
Belgium	—				531				9,484				—				10,015				—				—				—				10,015				—				10,015
Supranational [a]	7,316				—				—				—				—				—				—				—				7,316				—				7,316
Italy	—				—				5,501				—				5,501				—				—				—				5,501				—				5,501
Austria	—				454				1,315				—				1,769				—				—				—				1,769				—				1,769
Other [b]	—				—				—				—				—				—				—				—				—				58,069				58,069
Total eurozone	27,892				56,814				203,170				16,360				276,344				—				—				4,224				308,460				58,945				367,405
Other concentrations:
United Kingdom	217,517				44,947				131,084				—				176,031				—				12,979				—				406,527				16,051				422,578
Canada	101,549				78,487				81,564				55,393				215,444				—				—				1,392				318,385				—				318,385
Australia	66,777				62,679				19,741				—				82,420				—				—				74				149,271				—				149,271
Japan	—				81,385				3,735				—				85,120				—				—				—				85,120				22,529				107,649
Mexico	37,489				—				2,853				—				2,853				—				—				—				40,342				—				40,342
Other	114,610				17,331				88,920				15,766				122,017				—				—				—				236,627				29,470			[c]	266,097
Total other concentrations	537,942				284,829				327,897				71,159				683,885				—				12,979				1,466				1,236,272				68,050				1,304,322
Total Non-U.S. concentrations	565,834				341,643				531,067				87,519				960,229				—				12,979				5,690				1,544,732				126,995				1,671,727
United States	1,583,106			[d]	1,393,592				2,246,922				—				3,640,514				2,465,135				710,179				1,216,524				9,615,458				511,749			[e]	10,127,207
United States agencies	72,963				—				—				—				—				—				—				—				72,963				—				72,963
United States local governments	163,961				—				—				—				—				—				—				—				163,961				—				163,961
Total U.S. concentrations	1,820,030				1,393,592				2,246,922				—				3,640,514				2,465,135				710,179				1,216,524				9,852,382				511,749				10,364,131
Totals	$	2,385,864			$	1,735,235			$	2,777,989			$	87,519			$	4,600,743			$	2,465,135			$	723,158			$	1,222,214			$	11,397,114			$	638,744			$	12,035,858

[a] Represents holdings of the European Investment Bank.

[b] Represents holdings in two exchange-traded funds ("ETFs"). The primary countries of risk for these underlying securities are countries within the eurozone.

[c] Represents exchange-traded funds (“ETFs”) 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 ETFs 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.

13

AXIS Capital Holdings Limited

CORPORATE DEBT COMPOSITION

At December 31, 2016

		Fair Value				% of Total Corporate Debt			% of Total Cash and Invested Assets
Composition by sector - Investment grade
Financial institutions:
U.S. banking		$	950,392			20.7	%		6.5	%
Foreign banking [a]		237,783				5.2	%		1.6	%
Corporate/commercial finance		236,523				5.1	%		1.6	%
Insurance		123,256				2.7	%		0.8	%
Investment brokerage		20,012				0.4	%		0.1	%
Total financial institutions		1,567,966				34.1	%		10.6	%
Consumer non-cyclicals		511,872				11.1	%		3.5	%
Consumer cyclicals		321,089				7.0	%		2.2	%
Communications		250,447				5.4	%		1.7	%
Energy		201,225				4.4	%		1.4	%
Technology		198,950				4.3	%		1.4	%
Industrials		127,076				2.8	%		0.9	%
Utilities		121,074				2.6	%		0.8	%
Transportation		112,239				2.4	%		0.8	%
Non-U.S. government guaranteed [b]		87,519				1.9	%		0.6	%
Total investment grade		3,499,457				76.0	%		23.9	%
Total non-investment grade		1,101,286				24.0	%		7.3	%
Total corporate debt		$	4,600,743			100.0	%		31.2	%

[a] Located in Japan, Canada, Australia, United Kingdom, Switzerland, Chile, Jersey, Norway, Netherlands and France.

[b] Includes $16 million from Germany. No other corporate debt guaranteed by a eurozone country.

14

AXIS Capital Holdings Limited

INVESTMENT PORTFOLIO

TEN LARGEST CORPORATE DEBT HOLDINGS

At December 31, 2016

		Amortized Cost				Net Unrealized Gain (Loss)				Fair Value				% of Total Fixed  Maturities
ISSUER [a]
WELLS FARGO & COMPANY		$	134,723			$	(1,427	)		$	133,296			1.2	%
MORGAN STANLEY		122,486				(1,908		)		120,578				1.1	%
JP MORGAN CHASE & CO		119,485				(1,488		)		117,997				1.0	%
GOLDMAN SACHS GROUP INC		116,397				(1,567		)		114,830				1.0	%
BANK OF AMERICA CORP		78,339				(1,264		)		77,075				0.7	%
ANHEUSER-BUSCH INBEV		64,380				(259		)		64,121				0.6	%
FORD MOTOR COMPANY		61,433				(2,195		)		59,238				0.5	%
VERIZON COMMUNICATIONS INC		59,337				(1,214		)		58,123				0.5	%
AMERICAN EXPRESS COMPANY		52,501				125				52,626				0.5	%
AT&T INC		43,567				(461		)		43,106				0.4	%

[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.

15

AXIS Capital Holdings Limited

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES COMPOSITION

At December 31, 2016

		Agencies				AAA				AA				A				BBB				Non-Investment Grade				Total
Residential MBS		$	2,465,135			$	20,902			$	1,882			$	4,233			$	9,755			$	20,149			$	2,522,056
Commercial MBS		—				475,504				118,653				61,036				10,791				253				666,237
ABS		—				843,435				294,798				52,594				22,816				8,571				1,222,214
Total mortgage-backed and asset-backed securities		$	2,465,135			$	1,339,841			$	415,333			$	117,863			$	43,362			$	28,973			$	4,410,507
Percentage of total		55.9		%		30.4		%		9.4		%		2.7		%		1.0		%		0.6		%		100.0		%

16

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014
Reinsurance recoverable on paid losses and loss expenses:
Insurance		$	40,413			$	32,853			$	32,499			$	36,414			$	40,633			$	29,280
Reinsurance		18,400				27,096				16,257				8,275				24,162				6,584
Total		$	58,813			$	59,949			$	48,756			$	44,689			$	64,795			$	35,864
Reinsurance recoverable on unpaid losses and loss expenses: OSLR
Insurance		$	723,265			$	712,987			$	712,844			$	667,601			$	664,592			$	584,378
Reinsurance		36,326				31,789				31,324				27,939				11,654				985
Total		$	759,591			$	744,776			$	744,168			$	695,540			$	676,246			$	585,363
Reinsurance recoverable on unpaid losses and loss expenses: IBNR
Insurance		$	1,489,953			$	1,523,537			$	1,480,265			$	1,384,417			$	1,349,242			$	1,320,518
Reinsurance		46,955				28,700				17,880				12,002				24,063				2,023
Total		$	1,536,908			$	1,552,237			$	1,498,145			$	1,396,419			$	1,373,305			$	1,322,541
Provision against reinsurance recoverables:
Insurance		$	(19,889	)		$	(20,087	)		$	(20,233	)		$	(20,558	)		$	(18,242	)		$	(17,623	)
Reinsurance		(501		)		(134		)		(60		)		—				—				—
Total		$	(20,390	)		$	(20,221	)		$	(20,293	)		$	(20,558	)		$	(18,242	)		$	(17,623	)
Net reinsurance recoverables:
Insurance		$	2,233,742			$	2,249,290			$	2,205,375			$	2,067,874			$	2,036,225			$	1,916,553
Reinsurance		101,180				87,451				65,401				48,216				59,879				9,592
Total		$	2,334,922			$	2,336,741			$	2,270,776			$	2,116,090			$	2,096,104			$	1,926,145

17

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

At December 31, 2016

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		$	1,590,040			$	(34,682	)		$	1,555,358			71.3%		24.8%		$	(14,237	)		0.9%		$	1,575,803
Other reinsurers balances > $20 million		444,492				(60,584		)		383,908				17.6%		6.1%		(3,567		)		0.8%		440,925
Other reinsurers balances < $20 million		320,780				(78,945		)		241,835				11.1%		3.9%		(2,586		)		0.8%		318,194
Total		$	2,355,312			$	(174,211	)		$	2,181,101			100.0%		34.8%		$	(20,390	)		0.9%		$	2,334,922

At December 31, 2016, 96.7% (December 31, 2015: 96.2%) 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
Swiss Reinsurance America Corporation		14.4%		5.0%
Lloyds of London		10.9%		3.8%
Transatlantic Reinsurance Company		9.4%		3.3%
Partner Reinsurance Company of the US		9.2%		3.2%
Swiss Reinsurance Company Ltd.		7.0%		2.4%
Berkley Insurance Company		5.3%		1.8%
Hannover Ruck SE		4.7%		1.6%
Everest Reinsurance Company		4.4%		1.5%
Munich Reinsurance America, Inc		3.3%		1.2%
Ace Property and Casualty Insurance		3.2%		1.2%
		71.8%		25.0%

18

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

		Quarter ended December 31, 2016												Year ended December 31, 2016
		Gross				Recoveries				Net				Gross				Recoveries				Net
Reserve for unpaid losses and loss expenses
Beginning of period		$	9,874,807			$	(2,276,792	)		$	7,598,015			$	9,646,285			$	(2,031,309	)		$	7,614,976
Incurred		690,647				(150,035		)		540,612				2,760,187				(555,990		)		2,204,197
Paid		(754,226		)		130,274				(623,952		)		(2,637,579		)		445,730				(2,191,849		)
Foreign exchange and other		(113,401		)		20,444				(92,957		)		(71,066		)		(134,540		)		(205,606		)
End of period [a]		$	9,697,827			$	(2,276,109	)		$	7,421,718			$	9,697,827			$	(2,276,109	)		$	7,421,718

[a] At December 31, 2016, the gross reserve for losses and loss expenses included IBNR of $6,339 million, or 65%, of total gross reserves for loss and loss expenses. At December 31, 2015, the comparable amount was $6,393 million, or 66%.

19

AXIS Capital Holdings Limited

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

		Quarter ended December 31, 2016												Year ended December 31, 2016
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
Gross losses paid		$	456,485			$	297,741			$	754,226			$	1,509,061			$	1,128,518			$	2,637,579
Reinsurance recoveries		(121,990		)		(8,284		)		(130,274		)		(414,598		)		(31,132		)		(445,730		)
Net losses paid		334,495				289,457				623,952				1,094,463				1,097,386				2,191,849
Change in:
Reported case reserves		37,738				37,735				75,473				118,490				(6,209		)		112,281
IBNR		(88,366		)		(50,686		)		(139,052		)		(8,034		)		18,361				10,327
Reinsurance recoveries on unpaid loss and loss expense reserves		4,294				(24,055		)		(19,761		)		(62,986		)		(47,274		)		(110,260		)
Total net incurred losses and loss expenses		$	288,161			$	252,451			$	540,612			$	1,141,933			$	1,062,264			$	2,204,197
Gross reserve for losses and loss expenses		$	5,345,655			$	4,352,172			$	9,697,827			$	5,345,655			$	4,352,172			$	9,697,827
Net favorable prior year reserve development		$	12,725			$	55,522			$	68,247			$	55,905			$	236,472			$	292,377
Key Ratios
Net paid to net incurred percentage		116.1		%		114.7		%		115.4		%		95.8		%		103.3		%		99.4		%
Net paid losses / Net premiums earned		73.6		%		62.0		%		67.7		%		61.6		%		56.9		%		59.1		%
Change in net loss and loss expense reserves / Net premiums earned		(10.2		%)		(8.0		%)		(9.1		%)		2.7		%		(1.8		%)		0.4		%
Net loss and loss expense ratio		63.4		%		54.0		%		58.6		%		64.3		%		55.1		%		59.5		%

20

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

INSURANCE - QUARTERLY

		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014
Gross losses paid		$	456,485			$	365,160			$	348,028			$	339,388			$	378,309			$	400,408
Reinsurance recoveries		(121,990		)		(102,625		)		(102,793		)		(87,190		)		(112,628		)		(120,151		)
Net losses paid		334,495				262,535				245,235				252,198				265,681				280,257
Change in:
Reported case reserves		37,738				(5,561		)		80,645				5,668				(19,093		)		(57,519		)
IBNR		(88,366		)		55,505				(22,023		)		46,851				70,623				39,704
Reinsurance recoveries on unpaid loss and loss expense reserves		4,294				(39,253		)		2,284				(30,312		)		(28,863		)		10,345
Total net incurred losses and loss expenses		$	288,161			$	273,226			$	306,141			$	274,405			$	288,348			$	272,787
Gross reserve for losses and loss expenses		$	5,345,655			$	5,430,238			$	5,384,944			$	5,364,671			$	5,291,218			$	5,063,147
Net favorable prior year reserve development		$	12,725			$	20,688			$	20,066			$	2,427			$	2,222			$	9,676
Key Ratios
Net paid to net incurred percentage		116.1		%		96.1		%		80.1		%		91.9		%		92.1		%		102.7		%
Net paid losses / Net premiums earned		73.6		%		59.0		%		55.8		%		57.5		%		58.5		%		60.7		%
Change in net loss and loss expense reserves / Net premiums earned		(10.2		%)		2.4		%		13.9		%		5.1		%		5.0		%		(1.6		%)
Net loss and loss expense ratio		63.4		%		61.4		%		69.7		%		62.6		%		63.5		%		59.1		%

21

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

REINSURANCE - QUARTERLY

		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014
Gross losses paid		$	297,741			$	231,506			$	286,391			$	312,880			$	323,896			$	289,236
Reinsurance recoveries		(8,284		)		(5,463		)		(8,579		)		(8,806		)		(16,584		)		(5,213		)
Net losses paid		289,457				226,043				277,812				304,074				307,312				284,023
Change in:
Reported case reserves		37,735				20,139				11,968				(76,050		)		3,578				566
IBNR		(50,686		)		23,473				46,615				(1,043		)		(80,796		)		(35,469		)
Reinsurance recoveries on unpaid loss and loss expense reserves		(24,055		)		(10,553		)		(10,242		)		(2,424		)		4,889				2,718
Total net incurred losses and loss expenses		$	252,451			$	259,102			$	326,153			$	224,557			$	234,983			$	251,838
Gross reserve for losses and loss expenses		$	4,352,172			$	4,444,569			$	4,397,360			$	4,351,816			$	4,355,067			$	4,533,650
Net favorable prior year reserve development		$	55,522			$	55,331			$	57,653			$	67,967			$	75,022			$	55,883
Key Ratios
Net paid to net incurred percentage		114.7		%		87.2		%		85.2		%		135.4		%		130.8		%		112.8		%
Net paid losses / Net premiums earned		62.0		%		46.2		%		54.7		%		65.6		%		65.7		%		57.2		%
Change in net loss and loss expense reserves / Net premiums earned		(8.0		%)		6.7		%		9.5		%		(17.2		%)		(15.5		%)		(6.5		%)
Net loss and loss expense ratio		54.0		%		52.9		%		64.2		%		48.4		%		50.2		%		50.7		%

22

AXIS Capital Holdings Limited

NET PROBABLE MAXIMUM LOSSES TO CERTAIN PEAK INDUSTRY CATASTROPHE EXPOSURES - AS OF JANUARY 1, 2017

				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		$	461			$	534			$	811
Northeast		U.S. Hurricane		38				105				223
Mid-Atlantic		U.S. Hurricane		100				256				453
Gulf of Mexico		U.S. Hurricane		332				405				468
California		Earthquake		381				446				561
Europe		Windstorm		145				205				273
Japan		Earthquake		121				157				276
Japan		Windstorm		35				60				108

The above table shows our Probable Maximum Loss (“PML”) to a single natural peril catastrophe event within certain defined single zones which correspond to peak industry catastrophe exposures at January 1, 2017. 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 $0.5 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 $0.5 billion. Conversely, there is a 99% chance that on an annual basis, the loss from a Southeast hurricane will fall below $0.5 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.

23

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP

		Quarter ended December 31,								Year ended December 31,
		2016				2015				2016				2015
Net income available to common shareholders		$	130,912			$	134,787			$	465,462			$	601,562
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Weighted average shares outstanding - basic		87,552				96,072				90,772				98,609
Dilutive share equivalents:
Stock compensation plans		922				1,076				775				1,020
Weighted average shares outstanding - diluted		88,474				97,148				91,547				99,629
EARNINGS PER COMMON SHARE
Basic			$1.50				$1.40				$5.13				$6.10
Diluted			$1.48				$1.39				$5.08				$6.04

24

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION AND COMMON SHARE ROLLFOWARD - QUARTERLY

		Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q4 2015				Q4 2014
Net income available to common shareholders		$	130,912			$	176,644			$	119,491			$	38,417			$	134,787			$	163,663
COMMON SHARES OUTSTANDING
Common shares - at beginning of period		88,439				90,654				92,903				96,066				96,049				100,827
Shares issued, including those sourced from treasury		11				37				88				747				25				88
Shares repurchased for treasury		(2,009		)		(2,252		)		(2,337		)		(3,910		)		(8		)		(1,489		)
Common shares - at end of period		86,441				88,439				90,654				92,903				96,066				99,426
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average shares outstanding - basic		87,552				89,621				91,926				94,035				96,072				100,468
Dilutive share equivalents:
Stock compensation plans		922				730				632				818				1,076				1,570
Weighted average shares outstanding - diluted		88,474				90,351				92,558				94,853				97,148				102,038
EARNINGS PER SHARE
Basic			$1.50				$1.97				$1.30				$0.41				$1.40				$1.63
Diluted			$1.48				$1.96				$1.29				$0.41				$1.39				$1.60

25

AXIS Capital Holdings Limited

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

		At December 31, 2016
		Common Shareholders’ Equity				Outstanding Common Shares net of Treasury Shares			Per share
Closing stock price										$65.27
Book value per common share		$	5,146,296			86,441				$59.54
Dilutive securities: [b]
Restricted units						1,876			(1.27		)
Diluted book value per common share		$	5,146,296			88,317				$58.27
		At December 31, 2015
		Common Shareholders’ Equity				Outstanding Common Shares net of Treasury Shares			Per share
Closing stock price										$56.22
Book value per common share excluding the impact of additional shares settled under the accelerated share repurchase program ("ASR")		$	5,239,039			96,066				$54.54
Additional shares settled under the ASR program [c]						(1,358	)		0.78
Book value per common share						94,708				$55.32
Dilutive securities: [b]
Restricted stocks						307			(0.18		)
Restricted and phantom stock units						1,868			(1.06		)
Diluted book value per common share		$	5,239,039			96,883				$54.08

[a] Under this method unvested restricted stocks and units and unrestricted phantom stock units are added to determine the diluted common shares outstanding.

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

[c] On August 17, 2015, the Company entered into an accelerated share repurchase agreement with Goldman, Sachs & Co. (“Goldman Sachs”) to repurchase an aggregate of $300 million of the Company’s ordinary shares. On August 20, 2015, under the terms of this agreement the Company initially acquired 4,149,378 ordinary shares. The ASR agreement was early terminated by Goldman Sachs on January 15, 2016 with 1,358,380 of additional common shares delivered to the Company.

26

AXIS Capital Holdings Limited

NON-GAAP OPERATING INCOME

NON-GAAP OPERATING INCOME
		Quarter ended December 31,								Year ended December 31,
		2016				2015				2016				2015
Net income available to common shareholders		$	130,912			$	134,787			$	465,462			$	601,562
Adjustment for:
Net realized investment losses		20,229				14,872				60,525				138,491
Associated tax impact		(541		)		1,005				1,830				(3,171		)
Foreign exchange gains		(51,514		)		(33,112		)		(121,295		)		(102,312		)
Associated tax impact		105				2,277				2,114				3,021
Termination fee received		—				—				—				(280,000		)
Associated tax impact		—				—				—				—
Reorganization and related expenses		—				—				—				45,867
Associated tax impact		—				—				—				(2,943		)
Loss on repurchase of preferred shares		1,309				—				1,309				—
Associated tax impact		—				—				—				—
Non-GAAP operating income		$	100,500			$	119,829			$	409,945			$	400,515
Net earnings per share - diluted		$	1.48			$	1.39			$	5.08			$	6.04
Adjustment for:
Net realized investment losses		0.23				0.15				0.66				1.39
Associated tax impact		(0.01		)		0.01				0.02				(0.03		)
Foreign exchange gains		(0.57		)		(0.34		)		(1.31		)		(1.03		)
Associated tax impact		—				0.02				0.02				0.03
Termination fee received		—				—				—				(2.81		)
Associated tax impact		—				—				—				—
Reorganization and related expenses		—				—				—				0.46
Associated tax impact		—				—				—				(0.03		)
Loss on repurchase of preferred shares		0.01				—				0.01				—
Associated tax impact		—				—				—				—
Non-GAAP operating income per share - diluted		$	1.14			$	1.23			$	4.48			$	4.02
Weighted average common shares and common share equivalents - diluted		88,474				97,148				91,547				99,629
Average common shareholders' equity		5,273,477				5,218,781				5,192,668				5,216,159
Annualized return on average common equity		9.9		%		10.3		%		9.0		%		11.5		%
Annualized non-GAAP operating return on average common equity		7.6		%		9.2		%		7.9		%		7.7		%

27

AXIS Capital Holdings Limited

DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE

DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD [a]
	December 31,				September 30,				June 30,				March 31,				December 31,				December 31,
	2016				2016				2016				2016				2015				2014
Common shareholders' equity	$	5,146,296			$	5,400,658			$	5,339,183			$	5,325,259			$	5,239,039			$	5,193,278
Less: goodwill and intangible assets	(85,049		)		(85,501		)		(85,954		)		(86,446		)		(86,858		)		(88,960		)
Tangible common shareholders' equity	$	5,061,247			$	5,315,157			$	5,253,229			$	5,238,813			$	5,152,181			$	5,104,318
Outstanding diluted common shares net of treasury shares	88,317				90,363				92,667				95,031				98,241				102,577
Diluted book value per common share [b]	$	58.27			$	59.77			$	57.62			$	56.04			$	54.08			$	50.63
Diluted tangible book value per common share [b]	$	57.31			$	58.82			$	56.69			$	55.13			$	53.18			$	49.76

[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. Cash-settled restricted stock unit awards are excluded.

[b] Calculation at December 31, 2015 includes 1,358,380 of additional shares delivered to the Company under the Company's Accelerated Share Repurchase ("ASR") agreement. The shares were delivered to the Company following the early termination of the ASR agreement on January 15, 2016. See page 26 'Diluted Book Value per Common Share Analysis' for more details.

28

AXIS Capital Holdings Limited

USE OF NON-GAAP FINANCIAL MEASURES

In this document, we present non-GAAP 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.

Non-GAAP operating income represents after-tax operational results without consideration of after-tax net realized investment gains (losses), foreign exchange (losses) gains, termination fee received, reorganization and related expenses and losses on the repurchase of preferred shares. We also present diluted non-GAAP operating earnings per share and non-GAAP operating return on average common equity ("non-GAAP operating ROACE"), which are derived from the non-GAAP operating income measure. Reconciliations of non-GAAP operating income, diluted non-GAAP operating earnings per share and non-GAAP operating ROACE to the nearest GAAP financial measures (based on net income available to common shareholders) are included on the 'Non-GAAP Operating Income" 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 and interest in income (loss) of equity method investments (the nearest GAAP financial measure) is included in the 'Consolidated Statements of Income - Quarterly' and 'Consolidated Statements of Income - Year ' sections of this document. Our total general and administrative expenses (the nearest GAAP financial measure to underwriting-related general and administrative expenses) also includes corporate expenses; the two components are separately presented in the 'Consolidated Statements of Income - Quarterly' and 'Consolidated Statements of Income - Year' sections of this document.

Tangible book value is defined as common shareholders' equity excluding goodwill and intangible assets. Diluted tangible book value per common share uses this measure as the numerator, with the denominator being outstanding diluted common shares calculated under the treasury stock method. A reconciliation of diluted tangible book value per common share to diluted book value per common share (the nearest GAAP financial measure) is included in the '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 “non-GAAP operating income” (in total and on a per share basis), “non-GAAP annualized operating ROACE” (which is based on the “non-GAAP operating income” measure), "consolidated underwriting income" (which incorporates "underwriting-related general and administrative expenses") and diluted tangible book value per common share.

Non-GAAP 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.

The termination fee received represents the break-up fee paid by PartnerRe Ltd. following the cancellation of the amalgamation agreement with AXIS Capital and is not indicative of future revenues of the Company.

Reorganization and related expenses are primarily driven by business decisions, the nature and timing of which are unrelated to the underwriting process and which are not representative of underlying business performance.

29

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

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

Consolidated Underwriting Income/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.

The termination fee received represents the break-up fee received on the cancellation of the amalgamation agreement between PartnerRe Ltd. and AXIS Capital and should be excluded from consolidated underwriting income since it is not related to underwriting operations.

Reorganization and related expenses are driven by business decisions, the nature and timing of which are unrelated to the underwriting process and for this reason they are excluded 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.

30