AXIS Posts Strong Q4, Full Year Income Gains, as Net Tops $1 Billion

Bermuda-based AXIS Capital Holdings Limited has reported net income available to common shareholders for the fourth quarter of 2007 of $306 million, or $1.89 per diluted share, compared with net income of $281 million, or $1.69 per diluted share, for the corresponding period in 2006. Net income available to common shareholders for the full year of 2007 was $1.055 billion, or $6.41 per diluted common share, compared with net income of $926 million, or $5.63 per diluted common share, for the prior year.

Operating income for the fourth quarter of 2007 was $296 million, or $1.83 per diluted share, compared with $284 million, or $1.71 per diluted common share, for the fourth quarter of 2006. This same item excluding foreign exchange gains, net of tax, for the fourth quarter of 2007 was also $296 million, or $1.83 per diluted common share, compared with $278 million, or $1.67 per diluted common share, for the same period in 2006.

Operating income for the full year of 2007 was $1.050 billion, or $6.38 per diluted share, compared with $950 million, or $5.78 per diluted common share for 2006. This same item excluding foreign exchange gains, net of tax, for 2007 was $1,035 million, or $6.29 per diluted common share, compared with $919 million, or $5.59 per diluted common share, for 2006.

Additional earnings highlights included the following:
— Net premiums earned decreased 3 percent to $669 million in the quarter and increased 1 percent to $2.734 billion for the year.
— Combined ratio improved by 2.9 ratio points to 70.8 percent for the quarter and by 2.0 ratio points to 75.3 percent for the year.
— Pre-tax net investment income increased 2 percent to $125 million in the quarter and 19 percent for the year to a record $483 million.
— Return on average common shareholders’ equity was 26.9 percent for the quarter (annualized) and 24.6 percent for the year.
— Diluted book value per common share increased 23 percent from December 31, 2006 to $28.79.
— Shareholders’ equity increased 17 percent from December 31, 2006 to $5.2 billion.
— Capital management initiatives during the year included $305 million of share repurchases. Also, in December 2007, our Board approved a 12 percent increase in the quarterly common dividend to $0.185 per common share.

CEO and President John Charman commented: “I am proud that our established, high-quality global franchise in both the insurance and reinsurance markets has delivered over $1 billion in annual earnings in just the sixth year since our inception. This achievement is unparalleled in our sector. During this milestone year, AXIS increased diluted book value per share by 23 percent and we returned more than $400 million to shareholders through share repurchases and dividends.”

He also stressed that “during this extraordinarily turbulent time throughout the financial services sector, the strength and solidity of the AXIS balance sheet speaks for itself. The consistency, stability and diversity of our management team, our operations and our earnings stand us in extremely good stead for the challenging times ahead.”

The full report and a detailed breakdown of the performance of each AXIS’ market sectors is available on the Company’s web site at: www.axiscapital.com.

Charman and CFO David Greenfield, CFO, will host an investment community teleconference, including a question and answer period, on Tuesday, February 5, 2008, at 8:00 AM (Eastern) to discuss the fourth quarter and year end results and related matters.

The teleconference can be accessed by dialing (866) 356-3093 (U.S. callers) or (617) 597-5381 (international callers) and entering the pass code 15928142 approximately ten minutes in advance of the call. A live, listen-only webcast of the call will also be available via the Investor Information section of the Company’s web site.

A replay of the teleconference will be available through Friday, February 15, 2008, by dialing (888) 286-8010 (U.S. callers) or (617) 801-6888 (international callers) and entering the pass code 83338412. The webcast will be archived in the Investor Information section of the Company’s web site.

Source: AXIS Capital