EX-99.2 3 axsex99-2.htm FIRST QUARTER 2017 INVESTOR FINANCIAL SUPPLEMENT

Exhibit

AXIS Capital Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT

FIRST QUARTER 2017

AXIS Capital Holdings Limited

92 Pitts Bay Road

Pembroke HM 08 Bermuda

Contact Information:

Linda Ventresca

Investor Relations

441 405 2727

investorrelations@axiscapital.com

Website Information:

www.axiscapital.com

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

AXIS Capital Holdings Limited

FINANCIAL SUPPLEMENT TABLE OF CONTENTS

		Page(s)
Basis of Presentation		i - iii
I. Financial Highlights		1
II. Income Statements
a. Consolidated Statements of Income - Quarterly		2
b. Consolidated Segment Data		3
c. Gross Premiums Written by Segment by Line of Business		4
d. Segment Data - Quarterly		5-6
e. Strategic Capital Partners - Reinsurance segment		7
f. Net Investment Income - Quarterly		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. Non-GAAP operating income		26
b. Diluted Tangible Book Value Per Common Share		27
c. Use of Non-GAAP Financial Measures		28

AXIS Capital Holdings Limited

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

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

• All financial information contained herein is unaudited, except for the consolidated balance sheets at December 31, 2016 and December 31, 2015 and consolidated statements of income for the years then ended.

• 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 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 markets. Target industry sectors include construction, manufacturing, transportation and trucking and other services.

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 March 31,
				2017				2016				Change
HIGHLIGHTS		Gross premiums written		$	1,911,871			$	1,959,161			(2.4	%)
		Gross premiums written - Insurance		36.3		%		33.3		%		3.0		pts
		Gross premiums written - Reinsurance		63.7		%		66.7		%		(3.0	)	pts
		Net premiums written		$	1,508,959			$	1,685,806			(10.5	%)
		Net premiums earned		$	938,703			$	902,340			4.0	%
		Net premiums earned - Insurance		48.8		%		48.6		%		0.2		pts
		Net premiums earned - Reinsurance		51.2		%		51.4		%		(0.2	)	pts
		Net income available to common shareholders		$	5,014			$	38,417			(86.9	%)
		Non-GAAP Operating income [a]		50,964				101,274				(49.7	%)
		Reserve for losses and loss expenses		9,541,963				9,716,487				(1.8	%)
		Total shareholders’ equity		$	6,230,365			$	5,950,259			4.7	%
PER COMMON SHARE AND COMMON SHARE DATA		Basic earnings per common share			$0.06				$0.41			(85.4	%)
		Diluted earnings per common share		0.06				0.41				(85.4	%)
		Non-GAAP operating income per common share - diluted [b]			$0.59				$1.07			(44.9	%)
		Weighted average common shares outstanding		86,022				94,035				(8.5	%)
		Diluted weighted average common shares outstanding		86,793				94,853				(8.5	%)
		Book value per common share			$59.93				$57.32			4.6	%
		Diluted book value per common share (treasury stock method)		58.89				56.04				5.1	%
		Diluted tangible book value per common share (treasury stock method) [a]		57.92				55.13				5.1	%
		Accumulated dividends declared per common share			$12.01				$10.55			13.8	%
FINANCIAL RATIOS		ROACE [c]		0.4		%		2.9		%		(2.5	)	pts
		Non-GAAP operating ROACE [d]		4.0		%		7.7		%		(3.7	)	pts
		Net loss and loss expense ratio		64.7		%		55.3		%		9.4		pts
		Acquisition cost ratio		20.2		%		20.0		%		0.2		pts
		General and administrative expense ratio		17.2		%		16.6		%		0.6		pts
		Combined ratio		102.1		%		91.9		%		10.2		pts
INVESTMENT DATA		Total assets		$	21,246,967			$	20,978,190			1.3	%
		Total cash and invested assets [e]		14,567,653				14,521,914				0.3	%
		Net investment income		98,664				49,164				100.7	%
		Net realized investment losses		$	(25,050	)		$	(66,508	)		(62.3	%)
		Total return on cash and investments (inclusive of investment related foreign exchange movements) [f]		1.1		%		1.3		%		(0.2	)	pts
		Total return on cash and investments (exclusive of investment related foreign exchange movements) [f]		1.0		%		1.3		%		(0.3	)	pts
		Return on other investments [g]		2.4		%		(3.2		%)		5.6		pts
		Book yield of fixed maturities		2.7		%		2.5		%		0.2		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 26 for reconciliation of non-GAAP operating income to net income available to common shareholders and page 27 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 diluted 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] 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.

[e] 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).

[f] 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.

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

1

AXIS Capital Holdings Limited

CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY

	Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
UNDERWRITING REVENUES
Gross premiums written	$	1,911,871			$	730,650			$	959,962			$	1,320,434			$	1,959,161			$	1,678,932
Premiums ceded	(402,912		)		(266,263		)		(364,531		)		(313,084		)		(273,355		)		(223,386		)
Net premiums written	1,508,959				464,387				595,431				1,007,350				1,685,806				1,455,546
Gross premiums earned	1,245,669				1,213,623				1,214,826				1,197,722				1,136,222				1,114,311
Ceded premiums expensed	(306,966		)		(291,744		)		(280,411		)		(250,732		)		(233,882		)		(210,258		)
Net premiums earned	938,703				921,879				934,415				946,990				902,340				904,053
Other insurance related income (loss)	(3,783		)		2,372				5,944				(892		)		(203		)		7,676
Total underwriting revenues	934,920				924,251				940,359				946,098				902,137				911,729
UNDERWRITING EXPENSES
Net losses and loss expenses	606,942				540,612				532,328				632,294				498,962				512,328
Acquisition costs	189,792				187,305				189,810				189,125				180,635				171,542
Underwriting-related general and administrative expenses [a]	121,801				130,069				114,223				114,819				123,589				127,069
Total underwriting expenses	918,535				857,986				836,361				936,238				803,186				810,939
UNDERWRITING INCOME [b]	16,385				66,265				103,998				9,860				98,951				100,790
OTHER OPERATING REVENUE (EXPENSES)
Net investment income	98,664				95,517				116,923				91,730				49,164				92,107
Net realized investment gains (losses)	(25,050		)		(20,229		)		5,205				21,010				(66,508		)		(42,553		)
Interest expense and financing costs	(12,791		)		(12,774		)		(12,839		)		(12,914		)		(12,833		)		(12,257		)
Total other operating revenues (expenses)	60,823				62,514				109,289				99,826				(30,177		)		37,297
OTHER (EXPENSES) REVENUE
Foreign exchange (losses) gains	(21,465		)		51,514				13,795				56,602				(616		)		63,220
Corporate expenses [a]	(39,459		)		(33,095		)		(28,683		)		(31,927		)		(26,312		)		(36,172		)
Total other (expenses) revenues	(60,924		)		18,419				(14,888		)		24,675				(26,928		)		27,048
INCOME BEFORE INCOME TAXES AND INTEREST IN INCOME (LOSS) OF EQUITY METHOD INVESTMENTS	16,284				147,198				198,399				134,361				41,846				165,135
Income tax (expense) benefit	9,337				1,373				(9,352		)		(4,901		)		6,540				690
Interest in loss of equity method investments	(5,766		)		340				(2,434		)		—				—				—
NET INCOME	19,855				148,911				186,613				129,460				48,386				165,825
Preferred share dividends	(14,841		)		(16,690		)		(9,969		)		(9,969		)		(9,969		)		(10,022		)
Loss on repurchase of preferred shares	—				(1,309		)		—				—				—				—
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	5,014			$	130,912			$	176,644			$	119,491			$	38,417			$	155,803
KEY RATIOS/PER SHARE DATA
Net loss and loss expense ratio	64.7		%		58.6		%		57.0		%		66.8		%		55.3		%		56.7		%
Acquisition cost ratio	20.2		%		20.3		%		20.3		%		20.0		%		20.0		%		19.0		%
General and administrative expense ratio [a]	17.2		%		17.8		%		15.3		%		15.4		%		16.6		%		18.0		%
Combined ratio	102.1		%		96.7		%		92.6		%		102.2		%		91.9		%		93.7		%
Weighted average basic shares outstanding	86,022				87,552				89,621				91,926				94,035				99,910
Weighted average diluted shares outstanding	86,793				88,474				90,351				92,558				94,853				101,139
Basic earnings per common share		$0.06				$1.50				$1.97				$1.30				$0.41				$1.56
Diluted earnings per common share		$0.06				$1.48				$1.96				$1.29				$0.41				$1.54
ROACE (annualized)	0.4		%		9.9		%		13.2		%		9.0		%		2.9		%		11.8		%
Non-GAAP operating ROACE (annualized)	4.0		%		7.6		%		12.0		%		3.6		%		7.7		%		10.3		%

[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 is also a "non-GAAP financial measure". Reconciliations of consolidated underwriting income to the nearest GAAP financial measure (income (loss) before income taxes and interest in income (loss) of equity method investments) are presented above and on the following page.

2

AXIS Capital Holdings Limited

CONSOLIDATED SEGMENT DATA

		Quarter ended March 31, 2017												Quarter ended March 31, 2016
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
UNDERWRITING REVENUES
Gross premiums written		$	694,006			$	1,217,865			$	1,911,871			$	653,349			$	1,305,812			$	1,959,161
Net premiums written		505,329				1,003,630				1,508,959				473,163				1,212,643				1,685,806
Gross premiums earned		679,105				566,564				1,245,669				635,665				500,557				1,136,222
Ceded premiums expensed		(220,675		)		(86,291		)		(306,966		)		(196,987		)		(36,895		)		(233,882		)
Net premiums earned		458,430				480,273				938,703				438,678				463,662				902,340
Other insurance related income (loss)		42				(3,825		)		(3,783		)		137				(340		)		(203		)
Total underwriting revenues		458,472				476,448				934,920				438,815				463,322				902,137
UNDERWRITING EXPENSES
Net losses and loss expenses		286,903				320,039				606,942				274,405				224,557				498,962
Acquisition costs		68,157				121,635				189,792				61,398				119,237				180,635
Underwriting-related general and administrative expenses		90,448				31,353				121,801				85,576				38,013				123,589
Total underwriting expenses		445,508				473,027				918,535				421,379				381,807				803,186
UNDERWRITING INCOME		$	12,964			$	3,421			$	16,385			$	17,436			$	81,515			$	98,951
KEY RATIOS
Current accident year loss ratio		64.5		%		70.0		%		67.3		%		63.1		%		63.1		%		63.1		%
Prior period reserve development		(1.9		%)		(3.4		%)		(2.6		%)		(0.5		%)		(14.7		%)		(7.8		%)
Net loss and loss expense ratio		62.6		%		66.6		%		64.7		%		62.6		%		48.4		%		55.3		%
Acquisition cost ratio		14.9		%		25.3		%		20.2		%		14.0		%		25.7		%		20.0		%
Underwriting-related general and administrative expense ratio		19.7		%		6.6		%		13.0		%		19.5		%		8.2		%		13.7		%
Corporate expense ratio										4.2		%										2.9		%
Combined ratio		97.2		%		98.5		%		102.1		%		96.1		%		82.3		%		91.9		%

3

AXIS Capital Holdings Limited

GROSS PREMIUMS WRITTEN BY SEGMENT BY LINE OF BUSINESS

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
INSURANCE SEGMENT
Property		$	144,564			$	150,511			$	164,605			$	211,183			$	146,592			$	129,624
Marine		65,601				34,311				33,677				84,089				73,532				91,586
Terrorism		11,814				10,056				9,394				11,650				7,046				7,935
Aviation		14,583				16,062				9,684				8,326				19,101				10,014
Credit and Political Risk		16,172				15,631				5,423				19,960				8,917				8,117
Professional Lines		155,469				254,942				204,926				240,040				145,451				150,422
Liability		90,603				94,233				108,447				118,464				83,886				82,667
Accident and Health		195,200				31,700				139,274				90,305				168,824				122,359
TOTAL INSURANCE SEGMENT		694,006				607,446				675,430				784,017				653,349				602,724
REINSURANCE SEGMENT
Catastrophe		185,935				8,193				46,338				123,507				146,847				131,216
Property		194,541				(1,020		)		61,957				45,424				176,174				182,012
Professional Lines		77,012				33,309				19,479				126,840				88,774				65,024
Credit and Surety		119,925				3,975				36,174				20,816				258,111				191,357
Motor		291,423				7,683				13,344				3,638				321,422				297,690
Liability		111,821				57,109				91,387				124,003				149,990				89,772
Agriculture		149,191				6,963				1,286				87,372				62,657				69,729
Engineering		40,533				12,173				13,588				8,342				34,789				38,059
Marine and Other		47,484				(5,181		)		979				(3,525		)		67,048				11,349
TOTAL REINSURANCE SEGMENT		1,217,865				123,204				284,532				536,417				1,305,812				1,076,208
CONSOLIDATED TOTAL		$	1,911,871			$	730,650			$	959,962			$	1,320,434			$	1,959,161			$	1,678,932

4

AXIS Capital Holdings Limited

INSURANCE SEGMENT DATA - QUARTERLY

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
UNDERWRITING REVENUES
Gross premiums written		$	694,006			$	607,446			$	675,430			$	784,017			$	653,349			$	602,724
Net premiums written		505,329				374,068				433,131				526,764				473,163				436,740
Gross premiums earned		679,105				680,000				668,820				656,107				635,665				638,348
Ceded premiums expensed		(220,675		)		(225,328		)		(224,129		)		(216,828		)		(196,987		)		(190,881		)
Net premiums earned		458,430				454,672				444,691				439,279				438,678				447,467
Other insurance related income (loss)		42				146				39				(234		)		137				—
Total underwriting revenues		458,472				454,818				444,730				439,045				438,815				447,467
UNDERWRITING EXPENSES
Net losses and loss expenses		286,903				288,161				273,226				306,141				274,405				285,773
Acquisition costs		68,157				66,138				61,755				61,829				61,398				64,455
General and administrative expenses		90,448				94,205				84,588				82,487				85,576				87,689
Total underwriting expenses		445,508				448,504				419,569				450,457				421,379				437,917
UNDERWRITING INCOME (LOSS)		$	12,964			$	6,314			$	25,161			$	(11,412	)		$	17,436			$	9,550
KEY RATIOS
Current accident year loss ratio		64.5		%		66.2		%		66.1		%		74.3		%		63.1		%		64.6		%
Prior period reserve development		(1.9		%)		(2.8		%)		(4.7		%)		(4.6		%)		(0.5		%)		(0.7		%)
Net loss and loss expense ratio		62.6		%		63.4		%		61.4		%		69.7		%		62.6		%		63.9		%
Acquisition cost ratio		14.9		%		14.5		%		13.9		%		14.1		%		14.0		%		14.4		%
General and administrative expense ratio		19.7		%		20.7		%		19.1		%		18.7		%		19.5		%		19.6		%
Combined ratio		97.2		%		98.6		%		94.4		%		102.5		%		96.1		%		97.9		%

5

AXIS Capital Holdings Limited

REINSURANCE SEGMENT DATA - QUARTERLY

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
UNDERWRITING REVENUES
Gross premiums written		$	1,217,865			$	123,204			$	284,532			$	536,417			$	1,305,812			$	1,076,208
Net premiums written		1,003,630				90,319				162,300				480,586				1,212,643				1,018,806
Gross premiums earned		566,564				533,623				546,006				541,615				500,557				475,963
Ceded premiums expensed		(86,291		)		(66,416		)		(56,282		)		(33,904		)		(36,895		)		(19,377		)
Net premiums earned		480,273				467,207				489,724				507,711				463,662				456,586
Other insurance related income (loss)		(3,825		)		2,226				5,905				(658		)		(340		)		7,676
Total underwriting revenues		476,448				469,433				495,629				507,053				463,322				464,262
UNDERWRITING EXPENSES
Net losses and loss expenses		320,039				252,451				259,102				326,153				224,557				226,555
Acquisition costs		121,635				121,167				128,055				127,296				119,237				107,087
General and administrative expenses		31,353				35,864				29,635				32,332				38,013				39,380
Total underwriting expenses		473,027				409,482				416,792				485,781				381,807				373,022
UNDERWRITING INCOME		$	3,421			$	59,951			$	78,837			$	21,272			$	81,515			$	91,240
KEY RATIOS
Current accident year loss ratio		70.0		%		65.9		%		64.2		%		75.6		%		63.1		%		61.2		%
Prior period reserve development		(3.4		%)		(11.9		%)		(11.3		%)		(11.4		%)		(14.7		%)		(11.6		%)
Net loss and loss expense ratio		66.6		%		54.0		%		52.9		%		64.2		%		48.4		%		49.6		%
Acquisition cost ratio		25.3		%		25.9		%		26.1		%		25.1		%		25.7		%		23.5		%
General and administrative expense ratio		6.6		%		7.7		%		6.1		%		6.4		%		8.2		%		8.6		%
Combined ratio		98.5		%		87.6		%		85.1		%		95.7		%		82.3		%		81.7		%

6

AXIS Capital Holdings Limited

REINSURANCE SEGMENT - STRATEGIC CAPITAL PARTNERS

		Quarter ended March 31,
TOTAL MANAGED PREMIUMS [a]		2017				2016
Total Managed Premiums		$	1,217,865			$	1,305,812
Premiums ceded to Harrington Re		60,434				—
Premiums ceded to Other Strategic Capital Partners		153,801				93,169
Net premiums written		$	1,003,630			$	1,212,643
FEE INCOME FROM STRATEGIC CAPITAL PARTNERS [b]
Fee income		$	11,142			$	4,011

[a] Total managed premiums represented gross premiums written by the AXIS Reinsurance segment of $1,217,865 and $1,305,812 for the three months ended March 31, 2017 and 2016, 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.

7

AXIS Capital Holdings Limited

NET INVESTMENT INCOME - QUARTERLY

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
Fixed maturities		$	77,407			$	76,036			$	75,827			$	77,621			$	75,975			$	66,088
Other investments		18,962				16,744				38,248				14,401				(26,878		)		30,935
Equity securities		3,478				3,462				4,633				3,065				5,145				1,676
Mortgage loans		2,477				2,313				2,191				1,807				1,684				13
Cash and cash equivalents		3,095				2,138				3,768				1,868				1,434				1,099
Short-term investments		438				1,353				337				165				206				69
Gross investment income		105,857				102,046				125,004				98,927				57,566				99,880
Investment expenses		(7,193		)		(6,529		)		(8,081		)		(7,197		)		(8,402		)		(7,773		)
Net investment income		$	98,664			$	95,517			$	116,923			$	91,730			$	49,164			$	92,107

8

AXIS Capital Holdings Limited

CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,				September 30,				June 30,				March 31,				March 31,
		2017				2016				2016				2016				2016				2015
ASSETS
Investments:
Fixed maturities, available for sale, at fair value		$	11,191,529			$	11,397,114			$	11,566,860			$	11,563,216			$	11,838,068			$	12,012,894
Equity securities, available for sale, at fair value		653,419				638,744				644,344				626,371				637,325				601,329
Mortgage loans, held for investment, at amortized cost and fair value		339,855				349,969				332,753				327,315				267,589				9,935
Other investments, at fair value		780,395				830,219				847,262				865,406				859,639				939,006
Equity method investments		111,233				116,000				111,295				113,729				11,022				9,888
Short-term investments, at amortized cost and fair value		13,338				127,461				39,877				41,086				29,540				38,373
Total investments		13,089,769				13,459,507				13,542,391				13,537,123				13,643,183				13,611,425
Cash and cash equivalents		1,451,570				1,241,507				1,077,263				993,472				952,311				1,183,782
Accrued interest receivable		69,649				74,971				71,096				71,770				71,475				79,706
Insurance and reinsurance premium balances receivable		2,891,811				2,313,512				2,694,976				2,885,606				2,690,400				2,255,036
Reinsurance recoverable on paid and unpaid losses		2,070,341				2,334,922				2,336,741				2,270,776				2,116,090				1,952,371
Deferred acquisition costs		609,773				438,636				545,618				624,638				646,919				616,785
Prepaid reinsurance premiums		645,663				556,344				582,551				498,299				436,382				357,042
Receivable for investments sold		40,448				14,123				2,285				3,569				1,614				13,432
Goodwill and intangible assets		84,613				85,049				85,501				85,954				86,446				88,508
Other assets		293,330				295,120				283,969				278,233				333,370				258,462
TOTAL ASSETS		$	21,246,967			$	20,813,691			$	21,222,391			$	21,249,440			$	20,978,190			$	20,416,549
LIABILITIES
Reserve for losses and loss expenses		$	9,541,963			$	9,697,827			$	9,874,807			$	9,782,304			$	9,716,487			$	9,443,222
Unearned premiums		3,629,354				2,969,498				3,453,655				3,708,603				3,586,307				3,287,920
Insurance and reinsurance balances payable		514,356				493,183				461,519				416,017				344,181				300,029
Senior notes		993,229				992,950				992,633				992,361				992,091				991,045
Payable for investments purchased		83,783				62,550				141,245				144,040				135,647				196,526
Other liabilities		253,917				325,313				272,874				241,932				253,218				220,644
TOTAL LIABILITIES		15,016,602				14,541,321				15,196,733				15,285,257				15,027,931				14,439,386
SHAREHOLDERS’ EQUITY
Preferred shares		1,126,074				1,126,074				625,000				625,000				625,000				627,843
Common shares		2,206				2,206				2,206				2,206				2,206				2,200
Additional paid-in capital		2,276,671				2,299,857				2,307,866				2,302,557				2,296,533				2,287,065
Accumulated other comprehensive income (loss)		699				(121,841		)		98,505				63,089				17,646				(17,070		)
Retained earnings		6,499,262				6,527,627				6,430,573				6,285,803				6,198,932				5,842,239
Treasury shares, at cost		(3,674,547		)		(3,561,553		)		(3,438,492		)		(3,314,472		)		(3,190,058		)		(2,765,114		)
TOTAL SHAREHOLDERS' EQUITY		6,230,365				6,272,370				6,025,658				5,964,183				5,950,259				5,977,163
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	21,246,967			$	20,813,691			$	21,222,391			$	21,249,440			$	20,978,190			$	20,416,549
Basic common shares outstanding		85,170				86,441				88,439				90,654				92,903				100,219
Diluted common shares outstanding		86,670				88,317				90,363				92,667				95,031				102,924
Book value per common share			$59.93				$59.54				$61.07				$58.90				$57.32				$53.38
Diluted book value per common share		58.89				58.27				59.77				57.62				56.04				51.97
Diluted tangible book value per common share			$57.92				$57.31				$58.82				$56.69				$55.13				$51.11
Debt to total capital [a]		13.7		%		13.7		%		14.1		%		14.3		%		14.3		%		14.2		%
Debt and preferred equity to total capital		29.3		%		29.2		%		23.0		%		23.2		%		23.3		%		23.2		%

[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 March 31, 2017

		Cost or Amortized Cost				Unrealized Gains				Unrealized Losses				Fair Value				Percentage
Fixed Maturities, available for sale
U.S. government and agency		$	1,720,234			$	2,822			$	(18,016	)		$	1,705,040			11.5	%
Non-U.S. government		569,044				6,287				(24,210		)		551,121				3.8	%
Corporate debt		4,441,008				46,535				(49,426		)		4,438,117				30.5	%
Agency RMBS		2,289,345				11,062				(30,695		)		2,269,712				15.6	%
CMBS		679,060				5,456				(3,415		)		681,101				4.7	%
Non-Agency RMBS		51,459				1,698				(1,642		)		51,515				0.4	%
ABS		1,360,675				3,792				(1,816		)		1,362,651				9.4	%
Municipals		131,238				1,708				(674		)		132,272				0.9	%
Total fixed maturities		11,242,063				79,360				(129,894		)		11,191,529				76.8	%
Equity securities, available for sale
Common stocks		379				235				(340		)		274				—	%
Exchange traded funds		457,562				68,761				—				526,323				3.6	%
Bond mutual funds		133,618				—				(6,796		)		126,822				0.9	%
Total equity securities		591,559				68,996				(7,136		)		653,419				4.5	%
Total available for sale investments		$	11,833,622			$	148,356			$	(137,030	)		11,844,948				81.3	%
Mortgage loans, held for investment														339,855				2.3	%
Other investments (see below)														780,395				5.4	%
Equity method investments														111,233				0.8	%
Short-term investments														13,338				0.1	%
Total investments														13,089,769				89.9	%
Cash and cash equivalents [a]														1,451,570				10.0	%
Accrued interest receivable														69,649				0.5	%
Net receivable/(payable) for investments sold (purchased)														(43,335		)		(0.4	%)
Total cash and invested assets														$	14,567,653			100.0	%
														Fair Value				Percentage
Other Investments:
Long/short equity funds														$	56,982			7.3	%
Multi-strategy funds														307,575				39.4	%
Event-driven funds														50,242				6.4	%
Direct lending funds														178,390				22.9	%
Real estate funds														17,971				2.3	%
Private equity funds														72,465				9.3	%
Other privately held investments														42,378				5.4	%
Collateralized loan obligations - equity tranches														54,392				7.0	%
Total														$	780,395			100.0	%

[a] Includes $286 million of restricted cash and cash equivalents.

10

AXIS Capital Holdings Limited

CASH AND INVESTED ASSETS COMPOSITION - QUARTERLY

		Q1 2017			Q4 2016			Q3 2016			Q2 2016			Q1 2016			Q1 2015
		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	%		11.4	%		10.8	%		10.5	%		10.7	%		10.1	%
Non-U.S. government		3.8	%		3.8	%		4.0	%		4.4	%		5.0	%		5.9	%
Corporate debt		30.5	%		31.2	%		31.4	%		30.4	%		30.4	%		30.6	%
MBS:
Agency RMBS		15.6	%		16.7	%		17.3	%		16.5	%		16.7	%		14.9	%
CMBS		4.7	%		4.5	%		6.1	%		7.5	%		7.6	%		7.7	%
Non-agency RMBS		0.4	%		0.4	%		0.5	%		0.6	%		0.7	%		0.5	%
ABS		9.4	%		8.3	%		8.5	%		9.0	%		9.2	%		10.1	%
Municipals		0.9	%		1.1	%		0.9	%		1.1	%		1.1	%		1.4	%
Total Fixed Maturities		76.8	%		77.4	%		79.5	%		80.0	%		81.4	%		81.2	%
Equity securities		4.5	%		4.3	%		4.4	%		4.3	%		4.4	%		4.1	%
Mortgage loans		2.3	%		2.4	%		2.3	%		2.3	%		1.8	%		0.1	%
Other investments		5.4	%		5.6	%		5.8	%		6.0	%		5.9	%		6.3	%
Equity method investments		0.8	%		0.8	%		0.8	%		0.8	%		0.1	%		0.1	%
Short-term investments		0.1	%		0.9	%		0.3	%		0.2	%		0.3	%		0.3	%
Total Investments		89.9	%		91.4	%		93.1	%		93.6	%		93.9	%		92.1	%
Cash and cash equivalents		10.0	%		8.4	%		7.4	%		6.9	%		6.6	%		8.6	%
Accrued interest receivable		0.5	%		0.5	%		0.5	%		0.5	%		0.5	%		0.5	%
Net receivable/(payable) for investments sold or purchased		(0.4	%)		(0.3	%)		(1.0	%)		(1.0	%)		(1.0	%)		(1.2	%)
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		15.2	%		14.5	%		13.5	%		13.1	%		13.3	%		12.4	%
AAA		37.8	%		36.5	%		37.7	%		37.9	%		37.9	%		36.9	%
AA		8.7	%		9.9	%		10.1	%		10.5	%		11.3	%		10.6	%
A		14.7	%		15.3	%		15.3	%		16.0	%		16.8	%		18.5	%
BBB		14.1	%		13.7	%		13.9	%		13.2	%		11.7	%		12.6	%
Below BBB		9.5	%		10.1	%		9.5	%		9.3	%		9.0	%		9.0	%
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		2.9	%		2.7	%		3.0	%		2.8	%		2.4	%		4.2	%
From one to five years		35.8	%		33.8	%		32.9	%		32.6	%		33.7	%		36.2	%
From five to ten years		19.7	%		22.0	%		20.2	%		19.8	%		19.1	%		16.8	%
Above ten years		2.6	%		2.8	%		3.1	%		2.9	%		2.8	%		2.0	%
Asset-backed and mortgage-backed securities		39.0	%		38.7	%		40.8	%		41.9	%		42.0	%		40.8	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
CASH AND INVESTED ASSETS PORTFOLIO CHARACTERISTICS
Book yield of fixed maturities		2.7	%		2.6	%		2.6	%		2.6	%		2.5	%		2.5	%
Yield to maturity of fixed maturities		2.7	%		2.8	%		2.3	%		2.3	%		2.5	%		2.2	%
Average duration of fixed maturities (inclusive of duration hedges)		3.3 yrs			3.5 yrs			3.2 yrs			3.1 yrs			3.1 yrs			3.0 yrs
Average credit quality		AA-			AA-			AA-			AA-			AA-			AA-

11

AXIS Capital Holdings Limited

GEOGRAPHIC DISTRIBUTION OF FIXED MATURITIES AND EQUITIES

At March 31, 2017

					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	$	26,335			$	27,351			$	84,755			$	—			$	112,106			$	—			$	—			$	—			$	138,441			$	—			$	138,441
Germany	40,691				4,729				18,749				6,159				29,637				—				—				—				70,328				—				70,328
Luxembourg	—				—				42,642				—				42,642				—				—				—				42,642				—				42,642
France	—				9,937				21,224				—				31,161				—				—				—				31,161				—				31,161
Ireland	—				10,285				13,106				—				23,391				—				—				4,233				27,624				—				27,624
Spain	—				6,695				1,885				—				8,580				—				—				—				8,580				—				8,580
Supranational [a]	7,310				—				—				—				—				—				—				—				7,310				—				7,310
Belgium	—				543				5,021				—				5,564				—				—				—				5,564				—				5,564
Italy	—				330				1,720				—				2,050				—				—				—				2,050				—				2,050
Austria	—				477				1,291				—				1,768				—				—				—				1,768				—				1,768
Other [b]	—				—				—				—				—				—				—				—				—				69,554				69,554
Total eurozone	74,336				60,347				190,393				6,159				256,899				—				—				4,233				335,468				69,554				405,022
Other concentrations:
United Kingdom	140,736				38,924				115,369				19,845				174,138				—				12,888				—				327,762				13,437				341,199
Canada	95,222				79,576				78,660				65,447				223,683				—				—				5,889				324,794				—				324,794
Australia	70,328				70,599				15,646				—				86,245				—				—				—				156,573				—				156,573
Japan	—				91,147				3,634				—				94,781				—				—				—				94,781				25,534				120,315
Mexico	40,648				—				1,809				—				1,809				—				—				—				42,457				—				42,457
Other	129,851				16,210				73,222				11,544				100,976				—				—				—				230,827				31,391			[c]	262,218
Total other concentrations	476,785				296,456				288,340				96,836				681,632				—				12,888				5,889				1,177,194				70,362				1,247,556
Total Non-U.S. concentrations	551,121				356,803				478,733				102,995				938,531				—				12,888				10,122				1,512,662				139,916				1,652,578
United States	1,634,937			[d]	1,349,108				2,150,478				—				3,499,586				2,269,712				719,728				1,352,529				9,476,492				513,503			[e]	9,989,995
United States agencies	70,103				—				—				—				—				—				—				—				70,103				—				70,103
United States local governments	132,272				—				—				—				—				—				—				—				132,272				—				132,272
Total U.S. concentrations	1,837,312				1,349,108				2,150,478				—				3,499,586				2,269,712				719,728				1,352,529				9,678,867				513,503				10,192,370
Totals	$	2,388,433			$	1,705,911			$	2,629,211			$	102,995			$	4,438,117			$	2,269,712			$	732,616			$	1,362,651			$	11,191,529			$	653,419			$	11,844,948

[a] Represents holdings of the European Investment Bank.

[b] Represents holdings in an exchange-traded fund ("ETF"). The primary countries of risk for this underlying security 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 and a U.S. bond mutual fund.

12

AXIS Capital Holdings Limited

CORPORATE DEBT COMPOSITION

At March 31, 2017

		Fair Value				% of Total Corporate Debt			% of Total Cash and Invested Assets
Composition by sector - Investment grade
Financial institutions:
U.S. banking		$	940,977			21.2	%		6.5	%
Foreign banking [a]		264,389				6.0	%		1.8	%
Corporate/commercial finance		231,580				5.2	%		1.6	%
Insurance		119,784				2.7	%		0.8	%
Investment brokerage		17,275				0.4	%		0.1	%
Total financial institutions		1,574,005				35.5	%		10.8	%
Consumer non-cyclicals		474,288				10.7	%		3.3	%
Consumer cyclical		336,105				7.6	%		2.3	%
Communications		249,001				5.6	%		1.7	%
Technology		218,590				4.9	%		1.5	%
Energy		179,665				4.0	%		1.2	%
Transportation		115,668				2.6	%		0.8	%
Industrials		109,146				2.5	%		0.7	%
Non-U.S. government guaranteed [b]		102,994				2.3	%		0.7	%
Utilities		101,242				2.3	%		0.7	%
Total investment grade		3,460,704				78.0	%		23.7	%
Total non-investment grade		977,413				22.0	%		6.8	%
Total corporate debt		$	4,438,117			100.0	%		30.5	%

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

[b] Includes $6 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 March 31, 2017

		Amortized Cost				Net Unrealized Gain (Loss)				Fair Value				% of Total Fixed  Maturities
ISSUER [a]
MORGAN STANLEY		$	123,030			$	(1,022	)		$	122,008			1.1	%
GOLDMAN SACHS GROUP		121,510				(936		)		120,574				1.1	%
JP MORGAN CHASE & CO		117,874				(793		)		117,081				1.0	%
WELLS FARGO & COMPANY		110,732				(950		)		109,782				1.0	%
BANK OF AMERICA CORP		82,812				(847		)		81,965				0.7	%
FORD MOTOR COMPANY		61,434				(1,660		)		59,774				0.5	%
ANHEUSER-BUSCH INBEV		54,767				(179		)		54,588				0.5	%
VERIZON COMMUNICATIONS INC		51,740				(1,075		)		50,665				0.5	%
AT&T INC		44,894				(94		)		44,800				0.4	%
AMERICAN EXPRESS COMPANY		43,739				223				43,962				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.

14

AXIS Capital Holdings Limited

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES COMPOSITION

At March 31, 2017

		Agencies				AAA				AA				A				BBB				Non-Investment Grade				Total
Residential MBS		$	2,269,712			$	20,104			$	940			$	3,462			$	7,854			$	19,155			$	2,321,227
Commercial MBS		127,740				407,242				96,641				43,649				5,660				169				681,101
ABS		—				1,027,205				256,565				47,679				22,933				8,269				1,362,651
Total mortgage-backed and asset-backed securities		$	2,397,452			$	1,454,551			$	354,146			$	94,790			$	36,447			$	27,593			$	4,364,979
Percentage of total		54.9		%		33.3		%		8.1		%		2.2		%		0.8		%		0.7		%		100.0		%

15

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
Reinsurance recoverable on paid losses and loss expenses:
Insurance		$	26,009			$	40,413			$	32,853			$	32,499			$	36,414			$	23,788
Reinsurance		15,301				18,400				27,096				16,257				8,275				7,944
Total		$	41,310			$	58,813			$	59,949			$	48,756			$	44,689			$	31,732
Reinsurance recoverable on unpaid losses and loss expenses: OSLR
Insurance		$	576,914			$	723,265			$	712,987			$	712,844			$	667,601			$	576,718
Reinsurance		39,069				36,326				31,789				31,324				27,939				936
Total		$	615,983			$	759,591			$	744,776			$	744,168			$	695,540			$	577,654
Reinsurance recoverable on unpaid losses and loss expenses: IBNR
Insurance		$	1,366,078			$	1,489,953			$	1,523,537			$	1,480,265			$	1,384,417			$	1,326,362
Reinsurance		67,121				46,955				28,700				17,880				12,002				33,509
Total		$	1,433,199			$	1,536,908			$	1,552,237			$	1,498,145			$	1,396,419			$	1,359,871
Provision against reinsurance recoverables:
Insurance		$	(20,017	)		$	(19,889	)		$	(20,087	)		$	(20,233	)		$	(20,558	)		$	(16,886	)
Reinsurance		(134		)		(501		)		(134		)		(60		)		—				—
Total		$	(20,151	)		$	(20,390	)		$	(20,221	)		$	(20,293	)		$	(20,558	)		$	(16,886	)
Net reinsurance recoverables:
Insurance		$	1,948,984			$	2,233,742			$	2,249,290			$	2,205,375			$	2,067,874			$	1,909,982
Reinsurance		121,357				101,180				87,451				65,401				48,216				42,389
Total		$	2,070,341			$	2,334,922			$	2,336,741			$	2,270,776			$	2,116,090			$	1,952,371

16

AXIS Capital Holdings Limited

REINSURANCE RECOVERABLE ANALYSIS

At March 31, 2017

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		$	1,354,455			$	(17,436	)		$	1,337,019			71.3%		21.5%		$	(14,061	)		1.0%		$	1,340,394
Other reinsurers balances > $20 million		420,951				(113,696		)		307,255				16.4%		4.9%		(3,091		)		0.7%		417,860
Other reinsurers balances < $20 million		315,087				(84,516		)		230,571				12.3%		3.7%		(2,999		)		1.0%		312,088
Total		$	2,090,493			$	(215,648	)		$	1,874,845			100.0%		30.1%		$	(20,151	)		1.0%		$	2,070,342

At March 31, 2017, 96.3% (December 31, 2016: 96.7%) 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		18.0%		5.4%
Transatlantic Reinsurance Company		10.5%		3.2%
Partner Reinsurance Company of the US		10.1%		3.0%
Lloyds of London		7.8%		2.3%
Berkley Insurance Company		5.2%		1.6%
Hannover Ruck SE		4.4%		1.3%
Everest Reinsurance Company		4.2%		1.3%
Liberty Mutual Insurance Company		3.8%		1.2%
Munich Reinsurance America, Inc		3.8%		1.1%
Ace Property & Casualty Insurance Company		3.5%		1.1%
		71.3%		21.5%

17

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

		Quarter ended March 31, 2017												Quarter ended March 31, 2016
		Gross				Recoveries				Net				Gross				Recoveries				Net
Reserve for unpaid losses and loss expenses
Beginning of period		$	9,697,827			$	(2,276,109	)		$	7,421,718			$	9,646,285			$	(2,031,309	)		$	7,614,976
Incurred		775,201				(168,259		)		606,942				627,694				(128,732		)		498,962
Paid		(761,649		)		209,124				(552,525		)		(652,268		)		95,996				(556,272		)
Foreign exchange and other		(169,416		)		206,213				36,797				94,776				(7,356		)		87,420
End of period [a]		$	9,541,963			$	(2,029,031	)		$	7,512,932			$	9,716,487			$	(2,071,401	)		$	7,645,086

[a] At March 31, 2017, the gross reserve for losses and loss expenses included IBNR of $6,299 million, or 66%, of total gross reserves for loss and loss expenses. At December 31, 2016, the comparable amount was $6,339 million, or 65%.

18

AXIS Capital Holdings Limited

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

		Quarter ended March 31, 2017												Quarter ended March 31, 2016
		Insurance				Reinsurance				Total				Insurance				Reinsurance				Total
Gross losses paid		$	517,708			$	243,941			$	761,649			$	339,388			$	312,880			$	652,268
Reinsurance recoveries		(203,766		)		(5,358		)		(209,124		)		(87,190		)		(8,806		)		(95,996		)
Net losses paid		313,942				238,583				552,525				252,198				304,074				556,272
Change in:
Reported case reserves		(71,825		)		(1,164		)		(72,989		)		5,668				(76,050		)		(70,382		)
IBNR		(18,949		)		105,490				86,541				46,851				(1,043		)		45,808
Reinsurance recoveries on unpaid loss and loss expense reserves		63,735				(22,870		)		40,865				(30,312		)		(2,424		)		(32,736		)
Total net incurred losses and loss expenses		$	286,903			$	320,039			$	606,942			$	274,405			$	224,557			$	498,962
Gross reserve for losses and loss expenses		$	5,055,410			$	4,486,553			$	9,541,963			$	5,364,671			$	4,351,816			$	9,716,487
Net favorable prior year reserve development		$	8,619			$	16,174			$	24,793			$	2,427			$	67,967			$	70,394
Key Ratios
Net paid to net incurred percentage		109.4		%		74.5		%		91.0		%		91.9		%		135.4		%		111.5		%
Net paid losses / Net premiums earned		68.5		%		49.7		%		58.9		%		57.5		%		65.6		%		61.6		%
Change in net loss and loss expense reserves / Net premiums earned		(5.9		%)		16.9		%		5.8		%		5.1		%		(17.2		%)		(6.3		%)
Net loss and loss expense ratio		62.6		%		66.6		%		64.7		%		62.6		%		48.4		%		55.3		%

19

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

INSURANCE - QUARTERLY

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
Gross losses paid		$	517,708			$	456,485			$	365,160			$	348,028			$	339,388			$	274,589
Reinsurance recoveries		(203,766		)		(121,990		)		(102,625		)		(102,793		)		(87,190		)		(69,075		)
Net losses paid		313,942				334,495				262,535				245,235				252,198				205,514
Change in:
Reported case reserves		(71,825		)		37,738				(5,561		)		80,645				5,668				24,888
IBNR		(18,949		)		(88,366		)		55,505				(22,023		)		46,851				68,071
Reinsurance recoveries on unpaid loss and loss expense reserves		63,735				4,294				(39,253		)		2,284				(30,312		)		(12,700		)
Total net incurred losses and loss expenses		$	286,903			$	288,161			$	273,226			$	306,141			$	274,405			$	285,773
Gross reserve for losses and loss expenses		$	5,055,410			$	5,345,655			$	5,430,238			$	5,384,944			$	5,364,671			$	5,112,243
Net favorable prior year reserve development		$	8,619			$	12,725			$	20,688			$	20,066			$	2,427			$	3,361
Key Ratios
Net paid to net incurred percentage		109.4		%		116.1		%		96.1		%		80.1		%		91.9		%		71.9		%
Net paid losses/Net premiums earned		68.5		%		73.6		%		59.0		%		55.8		%		57.5		%		45.9		%
Change in net loss and loss expense reserves / Net premiums earned		(5.9		%)		(10.2		%)		2.4		%		13.9		%		5.1		%		18.0		%
Net loss and loss expense ratio		62.6		%		63.4		%		61.4		%		69.7		%		62.6		%		63.9		%

20

AXIS Capital Holdings Limited

RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS

REINSURANCE - QUARTERLY

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
Gross losses paid		$	243,941			$	297,741			$	231,506			$	286,391			$	312,880			$	304,704
Reinsurance recoveries		(5,358		)		(8,284		)		(5,463		)		(8,579		)		(8,806		)		(12,661		)
Net losses paid		238,583				289,457				226,043				277,812				304,074				292,043
Change in:
Reported case reserves		(1,164		)		37,735				20,139				11,968				(76,050		)		(22,906		)
IBNR		105,490				(50,686		)		23,473				46,615				(1,043		)		(46,764		)
Reinsurance recoveries on unpaid loss and loss expense reserves		(22,870		)		(24,055		)		(10,553		)		(10,242		)		(2,424		)		4,182
Total net incurred losses and loss expenses		$	320,039			$	252,451			$	259,102			$	326,153			$	224,557			$	226,555
Gross reserve for losses and loss expenses		$	4,486,553			$	4,352,172			$	4,444,569			$	4,397,360			$	4,351,816			$	4,330,979
Net favorable prior year reserve development		$	16,174			$	55,522			$	55,331			$	57,653			$	67,967			$	52,705
Key Ratios
Net paid to net incurred percentage		74.5		%		114.7		%		87.2		%		85.2		%		135.4		%		128.9		%
Net paid losses / Net premiums earned		49.7		%		62.0		%		46.2		%		54.7		%		65.6		%		64.0		%
Change in net loss and loss expense reserves / Net premiums earned		16.9		%		(8.0		%)		6.7		%		9.5		%		(17.2		%)		(14.3		%)
Net loss and loss expense ratio		66.6		%		54.0		%		52.9		%		64.2		%		48.4		%		50.8		%

21

AXIS Capital Holdings Limited

NET PROBABLE MAXIMUM LOSSES TO CERTAIN PEAK INDUSTRY CATASTROPHE EXPOSURES - AS OF APRIL 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		$	462			$	541			$	818
Northeast		U.S. Hurricane		40				108				257
Mid-Atlantic		U.S. Hurricane		109				259				468
Gulf of Mexico		U.S. Hurricane		336				409				481
California		Earthquake		378				446				547
Europe		Windstorm		155				217				277
Japan		Earthquake		133				165				265
Japan		Windstorm		47				82				123

The above table shows our Probable Maximum Loss (“PML”) to a single natural peril catastrophe event within certain defined single zones which correspond to peak industry catastrophe exposures at April 1, 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.

22

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP

		Quarter ended March 31,
		2017				2016
Net income available to common shareholders		$	5,014			$	38,417
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Weighted average shares outstanding - basic		86,022				94,035
Dilutive share equivalents:
Stock compensation plans		771				818
Weighted average shares outstanding - diluted		86,793				94,853
EARNINGS PER COMMON SHARE
Basic			$0.06				$0.41
Diluted			$0.06				$0.41

23

AXIS Capital Holdings Limited

EARNINGS PER COMMON SHARE INFORMATION AND COMMON SHARES ROLLFOWARD - QUARTERLY

		Q1 2017				Q4 2016				Q3 2016				Q2 2016				Q1 2016				Q1 2015
Net income available to common shareholders		$	5,014			$	130,912			$	176,644			$	119,491			$	38,417			$	155,803
COMMON SHARES OUTSTANDING
Common shares - at beginning of period		86,441				88,439				90,654				92,903				96,066				99,426
Shares issued, including those sourced from treasury		958				11				37				88				747				1,083
Shares repurchased for treasury		(2,229		)		(2,009		)		(2,252		)		(2,337		)		(3,910		)		(290		)
Common shares - at end of period		85,170				86,441				88,439				90,654				92,903				100,219
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average shares outstanding - basic		86,022				87,552				89,621				91,926				94,035				99,910
Dilutive share equivalents:
Stock compensation plans		771				922				730				632				818				1,229
Weighted average shares outstanding - diluted		86,793				88,474				90,351				92,558				94,853				101,139
EARNINGS PER COMMON SHARE
Basic			$0.06				$1.50				$1.97				$1.30				$0.41				$1.56
Diluted			$0.06				$1.48				$1.96				$1.29				$0.41				$1.54

24

AXIS Capital Holdings Limited

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

		At March 31, 2017
			Common Shareholders’ Equity				Outstanding Common Shares net of Treasury Shares			Per share
Closing stock price											$67.03
Book value per common share			$	5,104,291			85,170				$59.93
Dilutive securities: [b]
Restricted units							1,500			(1.04		)
Diluted book value per common share			$	5,104,291			86,670				$58.89
		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

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

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

25

AXIS Capital Holdings Limited

NON-GAAP OPERATING INCOME [a]

NON-GAAP OPERATING INCOME		Quarter ended March 31,
		2017				2016
Net income available to common shareholders		$	5,014			$	38,417
Adjustment for:
Net realized investment losses		25,050				66,508
Associated tax impact		(823		)		(4,698		)
Foreign exchange losses		21,465				616
Associated tax impact		258				431
Non-GAAP operating income		$	50,964			$	101,274
Net earnings per share - diluted		$	0.06			$	0.41
Adjustment for:
Net realized investment losses		0.29				0.70
Associated tax impact		(0.01		)		(0.05		)
Foreign exchange losses		0.25				0.01
Associated tax impact		—				—
Non-GAAP operating income per share - diluted		$	0.59			$	1.07
Weighted average common shares and common share equivalents - diluted		86,793				94,853
Average common shareholders' equity		$	5,125,294			$	5,282,149
Annualized return on average common equity		0.4		%		2.9		%
Annualized non-GAAP operating return on average common equity		4.0		%		7.7		%

[a] Non-GAAP operating income is a “non-GAAP financial measure” as defined by Regulation G. Reconciliation of non-GAAP operating income to net income available to common shareholders is presented above.

26

AXIS Capital Holdings Limited

DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE

DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD [a]
	March 31,				December 31,				September 30,				June 30,				March 31,				March 31,
	2017				2016				2016				2016				2016				2015
Common shareholders' equity	$	5,104,291			$	5,146,296			$	5,400,658			$	5,339,183			$	5,325,259			$	5,349,320
Less: goodwill and intangible assets	(84,613		)		(85,049		)		(85,501		)		(85,954		)		(86,446		)		(88,508		)
Tangible common shareholders' equity	$	5,019,678			$	5,061,247			$	5,315,157			$	5,253,229			$	5,238,813			$	5,260,812
Outstanding diluted common shares, net of treasury shares	86,670				88,317				90,363				92,667				95,031				102,924
Diluted book value per common share	$	58.89			$	58.27			$	59.77			$	57.62			$	56.04			$	51.97
Diluted tangible book value per common share	$	57.92			$	57.31			$	58.82			$	56.69			$	55.13			$	51.11

[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.

27

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) and foreign exchange (losses) gains. 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' section of this document. Our total general and administrative expenses (the nearest GAAP financial measure to underwriting-related general and administrative expenses) also includes corporate expenses; the two components are separately presented in the 'Consolidated Statements of Income - Quarterly' section of this document.

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

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.

28

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.

29