Alterra Capital 8-K Results of Operations and Financial Condition

Exhibit 99.1

MAX RE CAPITAL LTD. REPORTS SECOND QUARTER NET INCOME OF $0.27 PER DILUTED SHARE:

Hamilton, Bermuda, July 28, 2006 - Max Re Capital Ltd. (NASDAQ: MXRE) today reported net income for the three months ended June 30, 2006 of $17.3 million, or net income of $0.27 per diluted share, compared to net income of $23.3 million, or net income of $0.47 per diluted share, for the three months ended June 30, 2005. Net operating income, which represents net income adjusted for net realized gains and losses on sales of fixed maturities, for the three months ended June 30, 2006 was $22.6 million, or net operating income of $0.36 per diluted share, compared with net operating income of $22.5 million, or net operating income of $0.45 per diluted share, for the three months ended June 30, 2005. For the six months ended June 30, 2006, the Company had net income of $90.2 million, or net income of $1.42 per diluted share, compared to $61.0 million, or $1.22 per diluted share, for the six months ended June 30, 2005. For the six months ended June 30, 2006, the Company had net operating income of $97.1 million, or net operating income of $1.53 per diluted share, compared to $59.8 million, or $1.20 per diluted share, for the six months ended June 30, 2005.

Robert J. Cooney, Chairman, President and Chief Executive Officer, commented, “Our second quarter results reflect continuing solid underwriting performance and a difficult environment for investment returns. Gross premiums written for the quarter increased 16% over the same period in 2005 principally due to additional property business written in 2006. Our favorable net income for the period was partially offset by a decline in the carrying value of fixed maturities leading to a marginal increase in shareholders equity for the six months ended June 30, 2006”.

Gross premiums written for the three months ended June 30, 2006 were $284.0 million, of which $241.2 million came from property and casualty underwriting and $42.8 million came from life and annuity underwriting, compared to $245.1 million, of which $211.0 million came from property and casualty underwriting and $34.1 million came from life and annuity underwriting, for the three months ended June 30, 2005. Net premiums earned for the three months ended June 30, 2006 were $199.2 million compared to $192.1 million for the same period of 2005. Gross premiums written for the six months ended June 30, 2006 were $539.9 million compared to $700.8 million for the first six months of 2005. Property and casualty reinsurance, property and casualty insurance and life and annuity reinsurance accounted for 55%, 37% and 8%, respectively, of gross premiums written for the first six months of 2006, compared to 50%, 25% and 25%, respectively, for the same period in 2005. Net premiums earned for the first six months of 2006 decreased 28.3% to $358.9 million compared to $500.4 million for the same period in 2005. The decline in gross premiums written and net premiums earned in the six months ended June 30, 2006 compared to the same period in 2005 principally relates to decreased life and annuity business written and earned.

Net investment income for the three months ended June 30, 2006 increased to $36.5 million, from $25.0 million for the same period in 2005 and is attributable to a year over year increase in cash and fixed maturities balances and higher yields on fixed maturities investments. Net investment income for the six months ended June 30, 2006 increased $21.8 million, to $70.5 million, compared to $48.7 million for the same period in 2005. Net losses on alternative investments for the three months ended June 30, 2006 were $5.6 million, or a (0.39)% rate of return, compared to net gains on alternative investments of $3.6 million, or a 0.26% rate of return, for the same period of 2005. For the six months ended June 30, 2006, alternative investments have returned 4.00%, compared to 1.46% for the same period in 2005. Invested assets were $4.4 billion as of June 30, 2006, with an allocation of approximately 70% to cash and fixed maturities and 30% to alternative investments.

Losses and benefits were $164.7 million for the three months ended June 30, 2006 compared to $155.7 million for the same period in 2005. The increase in losses and benefits for the three months ended June 30, 2006 is principally attributable to the increase in premiums earned. Losses and benefits for the six months ended June 30, 2006 were $289.7 million compared to $423.1 million for the same period in 2005. The decrease for the six months ended June 30, 2006 compared to the same period in 2005 is principally attributable to the decrease in net premiums earned from life and annuity underwriting.

Acquisition costs for the three months ended June 30, 2006 were $18.8 million compared to $17.9 million for the three months ended June 30, 2005, the increase resulting from additional net premiums earned in 2006. Acquisition costs are principally related to our property and casualty reinsurance and insurance segments.

Interest expense for the three months ended June 30, 2006 was $7.7 million compared to $13.4 million for the same period in 2005, principally attributable to lower interest crediting rates on funds withheld balances with reinsurers in the three months ended June 30, 2006 compared to the three months ended June 30, 2005.

General and administrative expenses for the three months ended June 30, 2006 were $16.4 million compared to $12.3 million for the same period in 2005. General and administrative expenses for the three months ended June 30, 2006 increased principally due to increased personnel costs.

Shareholders’ equity was $1,211.7 million at June 30, 2006. Book value per share at June 30, 2006 was $20.39 per share, compared to $20.38 at December 31, 2005. Annualized operating return on average shareholders’ equity for the six months ended June 30, 2006 was 16.1%.

Max Re Capital Ltd., through its principal operating subsidiaries, Max Re Ltd., Max Insurance Europe Limited and Max Re Europe Limited, offers customized insurance and reinsurance solutions to property and casualty insurers, life and health insurers and large corporations.

The above remarks about future expectations, plans and prospects from the Company are forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements, including the risk that the SEC’s view of the conclusions reached by the Audit and Risk Management Committee of our Board of Directors in connection with the internal review of three finite risk retrocessional contracts written in 2001 and 2003, which caused the Company to conclude that a restatement of the Company’s audited financial statements for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 is warranted, may differ, perhaps materially. For further information regarding cautionary statements and factors affecting future results, please refer to documents filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.

Contact Information:
Keith S. Hynes	N. James Tees
Executive Vice President & CFO	Senior Vice President & Treasurer
441-296-8800	441-296-8800
keithh@maxre.bm	jimt@maxre.bm

MAX RE CAPITAL LTD.

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars, except per share and share amounts)

	June 30, 2006			December 31, 2005
	(Unaudited)			(Restated)
ASSETS
Cash and cash equivalents	$	353,271		$	314,031
Fixed maturities, available for sale at fair value		2,770,203			2,682,864
Alternative investments, at fair value		1,322,571			1,230,889
Accrued interest income		32,294			32,632
Premiums receivable		421,051			398,666
Losses and benefits recoverable from reinsurers		673,522			646,669
Funds withheld		15,724			16,932
Deferred acquisition costs		73,370			69,015
Prepaid reinsurance premiums		119,187			83,493
Other assets		24,213			23,001
Total assets	$	5,805,406		$	5,498,192
LIABILITIES
Property and casualty losses	$	2,183,741		$	2,006,032
Life and annuity benefits		902,851			854,224
Deposit liabilities		199,268			225,328
Funds withheld from reinsurers		406,869			435,942
Unearned property and casualty premiums		530,617			442,976
Reinsurance balances payable		106,184			90,781
Accounts payable and accrued expenses		114,153			94,043
Bank loan		150,000			150,000
Total liabilities		4,593,683			4,299,326
SHAREHOLDERS' EQUITY
Preferred shares (par value $1.00) 20,000,000 shares authorized; no shares issued or outstanding		—			—
Common shares (par value $1.00) 200,000,000 shares authorized; 59,425,278 (2005 - 58,829,354) shares issued and outstanding		59,425			58,829
Additional paid-in capital		940,077			926,386
Loans receivable from common share sales		(300	)		(465	)
Unearned stock grant compensation		(20,723	)		(14,574	)
Accumulated other comprehensive income (loss)		(74,711	)		4,981
Retained earnings		307,955			223,709
Total shareholders' equity		1,211,723			1,198,866
Total liabilities and shareholders' equity	$	5,805,406		$	5,498,192
Book Value Per Share	$	20.39		$	20.38

MAX RE CAPITAL LTD.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)

(Expressed in thousands of United States Dollars, except shares and per share amounts)

	Three Months Ended June 30						Six Months Ended June 30
	2006			2005			2006			2005
				(Restated)						(Restated)
REVENUES
Gross premiums written	$	283,967		$	245,107		$	539,891		$	700,796
Reinsurance premiums ceded		(73,639	)		(52,705	)		(131,401	)		(96,724	)
Net premiums written	$	210,328		$	192,402		$	408,490		$	604,072
Earned premiums	$	249,283		$	235,598		$	455,409		$	585,926
Earned premiums ceded		(50,094	)		(43,517	)		(96,463	)		(85,521	)
Net premiums earned		199,189			192,081			358,946			500,405
Net investment income		36,497			24,965			70,526			48,654
Net gains on alternative investments		(5,636	)		3,597			49,223			17,974
Net realized gains (losses) on sale of fixed maturities		(5,285	)		813			(6,960	)		1,203
Other income		165			1,182			664			2,500
Total revenues		224,930			222,638			472,399			570,736
LOSSES AND EXPENSES
Losses and benefits		164,746			155,717			289,706			423,142
Acquisition costs		18,847			17,921			40,390			39,423
Interest expense		7,662			13,372			14,007			19,604
General and administrative expenses		16,354			12,310			38,112			27,567
Total losses and expenses		207,609			199,320			382,215			509,736
NET INCOME		17,321			23,318			90,184			61,000
Change in net unrealized appreciation of fixed maturities		(31,104	)		49,248			(81,174	)		27,733
Foreign currency translation adjustment		383			(3,716	)		1,482			(4,325	)
COMPREHENSIVE INCOME (LOSS)	$	(13,400	)	$	68,850		$	10,492		$	84,408
Basic earnings per share	$	0.29		$	0.50		$	1.52		$	1.32
Diluted earnings per share	$	0.27		$	0.47		$	1.42		$	1.22
Diluted net operating earnings per share	$	0.36		$	0.45		$	1.53		$	1.20
Weighted average shares outstanding - basic		59,386,469			46,258,301			59,336,432			46,155,728
Weighted average shares outstanding - diluted		63,340,090			49,746,583			63,638,422			49,773,858

MAX RE CAPITAL LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

(Expressed in thousands of United States Dollars)

	Six Months Ended June 30,
	2006			2005
				(Restated)
Preferred shares
Balance, beginning of period	$	—		$	—
Balance, end of period		—			—
Common shares
Balance, beginning of period		58,829			45,826
Issue of shares		596			609
Repurchase of shares		—			(335	)
Balance, end of period		59,425			46,100
Additional paid-in capital
Balance, beginning of period		926,386			648,446
Issue of common shares		13,257			11,478
Stock option expense		434			412
Repurchase of shares		—			(7,025	)
Balance, end of period		940,077			653,311
Loans receivable from common share sales
Balance, beginning of period		(465	)		(10,515	)
Loans repaid		165			10,050
Balance, end of period		(300	)		(465	)
Unearned stock grant compensation
Balance, beginning of period		(14,574	)		(13,294	)
Stock grants awarded		(12,587	)		(10,812	)
Amortization		6,438			4,824
Balance, end of period		(20,723	)		(19,282	)
Accumulated other comprehensive income (loss)
Balance, beginning of period		4,981			22,227
Holding (losses) gains on fixed maturities arising in period		(88,134	)		28,936
Net realized losses (gains) included in net income		6,960			(1,203	)
Currency translation adjustments		1,482			(4,325	)
Balance, end of period		(74,711	)		45,635
Retained earnings
Balance, beginning of period		223,709			226,336
Net income		90,184			61,000
Dividends paid		(5,938	)		(3,711	)
Balance, end of period		307,955			283,625
Total shareholders' equity	$	1,211,723		$	1,008,924

MAX RE CAPITAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Expressed in thousands of United States Dollars)

	Six Months Ended June 30
	2006			2005
				(Restated)
OPERATING ACTIVITIES
Net income	$	90,184		$	61,000
Adjustments to reconcile net income to net cash from operating activities:
Amortization of unearned stock based compensation		6,872			5,236
Amortization of premium on fixed maturities		3,554			4,642
Net realized (gains) losses on sale of fixed maturities		6,960			(1,203	)
Alternative investments		(91,566	)		(50,298	)
Accrued interest income		338			(1,396	)
Premiums receivable		(22,385	)		(50,517	)
Losses and benefits recoverable from reinsurers		(26,853	)		(4,269	)
Funds withheld		1,208			723
Deferred acquisition costs		(4,355	)		(34,397	)
Prepaid reinsurance premiums		(35,694	)		(10,115	)
Other assets		(1,212	)		(1,294	)
Property and casualty losses		177,709			40,897
Life and annuity benefits		48,627			123,070
Funds withheld from reinsurers		(29,073	)		(18,070	)
Unearned property and casualty premiums		87,641			110,429
Reinsurance balances payable		15,403			(2,892	)
Accounts payable and accrued expenses		20,110			(29,758	)
Cash from operating activities		247,468			141,788
INVESTING ACTIVITIES
Purchase of fixed maturities		(611,157	)		(774,613	)
Sales of fixed maturities		342,102			689,499
Redemptions of fixed maturities		89,912			19,420
Cash used in investing activities		(179,143	)		(65,694	)
FINANCING ACTIVITIES
Net proceeds from issuance of common shares		1,266			1,275
Repurchase of common shares		—			(7,360	)
Dividends		(5,938	)		(3,711	)
Additions to deposit liabilities		11,048			15,460
Payment of deposit liabilities		(37,108	)		(56,266	)
Notes and loans repaid		165			10,050
Cash used in financing activities		(30,567	)		(40,552	)
Effect of exchange rate on cash		1,482			(4,325	)
Net increase in cash and cash equivalents		39,240			31,217
Cash and cash equivalents, beginning of period		314,031			239,188
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	353,271		$	270,405

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid totaled $5,767 and $3,469 for the six months ended June 30, 2006 and 2005, respectively.

MAX RE CAPITAL LTD.

SCHEDULE OF SUPPLEMENTAL DATA - SIX MONTHS TO JUNE 30, 2006 (Unaudited)

Year to Date Segment Information:	Property & Casualty									Life & Annuity			Corporate			Consolidated
(in 000's US$)	Reinsurance			Insurance			Total			Reinsurance
Gross premiums written	$	298,773		$	197,547		$	496,320		$	43,571		$	—		$	539,891
Reinsurance premiums ceded		(27,523	)		(103,617	)		(131,140	)		(261	)		—			(131,401	)
Net premiums written	$	271,250		$	93,930		$	365,180		$	43,310		$	—		$	408,490
Earned premiums	$	232,671		$	179,167		$	411,838		$	43,571		$	—		$	455,409
Earned premiums ceded		(15,307	)		(80,895	)		(96,202	)		(261	)		—			(96,463	)
Net premiums earned		217,364			98,272			315,636			43,310			—			358,946
Net investment income		—			—			—			—			70,526			70,526
Net gains on alternative investments		—			—			—			—			49,223			49,223
Net realized losses on sales of fixed maturities		—			—			—			—			(6,960	)		(6,960	)
Other income		—			—			—			—			664			664
Total revenues		217,364			98,272			315,636			43,310			113,453			472,399
Losses and benefits		152,006			74,832			226,838			62,868			—			289,706
Acquisition costs		39,403			443			39,846			544			—			40,390
Interest expense		—			—			—			—			14,007			14,007
General and administrative expenses		10,972			6,873			17,845			1,317			18,950			38,112
Total losses and expenses		202,381			82,148			284,529			64,729			32,957			382,215
Net income (loss)	$	14,983		$	16,124		$	31,107		$	(21,419	)	$	80,496		$	90,184
Loss Ratio (a)		69.9	%		76.1	%		71.9	%
Combined Ratio (b)		93.1	%		83.6	%		90.1	%
SCHEDULE OF SUPPLEMENTAL DATA - THREE MONTHS TO JUNE 30, 2006 (Unaudited)
Quarter Segment Information:	Property & Casualty									Life & Annuity			Corporate			Consolidated
(in 000's US$)	Reinsurance			Insurance			Total			Reinsurance
Gross premiums written	$	113,790		$	127,381		$	241,171		$	42,796		$	—		$	283,967
Reinsurance premiums ceded		(11,464	)		(62,069	)		(73,533	)		(106	)		—			(73,639	)
Net premiums written	$	102,326		$	65,312		$	167,638		$	42,690		$	—		$	210,328
Earned premiums	$	115,637		$	90,850		$	206,487		$	42,796		$	—		$	249,283
Earned premiums ceded		(7,391	)		(42,597	)		(49,988	)		(106	)		—			(50,094	)
Net premiums earned		108,246			48,253			156,499			42,690			—			199,189
Net investment income		—			—			—			—			36,497			36,497
Net losses on alternative investments		—			—			—			—			(5,636	)		(5,636	)
Net realized losses on sales of fixed maturities		—			—			—			—			(5,285	)		(5,285	)
Other income		—			—			—			—			165			165
Total revenues		108,246			48,253			156,499			42,690			25,741			224,930
Losses and benefits		75,199			37,723			112,922			51,824			—			164,746
Acquisition costs		18,572			(10	)		18,562			285			—			18,847
Interest expense		—			—			—			—			7,662			7,662
General and administrative expenses		5,211			3,183			8,394			674			7,286			16,354
Total losses and expenses		98,982			40,896			139,878			52,783			14,948			207,609
Net income (loss)	$	9,264		$	7,357		$	16,621		$	(10,093	)	$	10,793		$	17,321
Loss Ratio (a)		69.5	%		78.2	%		72.2	%
Combined Ratio (b)		91.4	%		84.8	%		89.4	%

(a) The loss ratio is calculated by dividing losses and benefits by net premiums earned.

(b) The combined ratio is calculated by dividing total losses and expenses by net premiums earned.

MAX RE CAPITAL LTD.

SCHEDULE OF SUPPLEMENTAL DATA - JUNE 30, 2006 (Unaudited)

					Periodic Rate of Return
Selected Investment Return Data:	Fair Value*		Investment %'s		Last 3 Months		Year to Date		Last 12 Months		Last 60 months**
Cash and Fixed Maturities	$	3,123,474	70.3	%	0.15	%	-0.47	%	-0.13	%	4.77	%
Global Macro	$	117,479	2.6	%	-1.41	%	-0.04	%	6.54	%	9.01	%
Long / Short Equity		205,105	4.6	%	-3.47	%	-1.37	%	-1.44	%	3.81	%
Convertible Arbitrage		1,636	0.0	%	0.63	%	-0.29	%	1.70	%	4.21	%
Diversified Arbitrage		207,956	4.7	%	0.85	%	7.78	%	19.14	%	9.49	%
Distressed Securities		211,340	4.8	%	2.03	%	8.43	%	14.98	%	17.67	%
Opportunistic		27,607	0.6	%	5.01	%	15.89	%	30.17	%	14.86	%
Emerging Markets		134,982	3.0	%	-0.18	%	5.69	%	11.48	%	16.51	%
Fixed Income Arbitrage		25,560	0.6	%	0.92	%	11.07	%	11.41	%	6.31	%
Event-Driven Arbitrage		170,910	3.8	%	-1.81	%	3.90	%	8.54	%	10.62	%
Commodity Trading Advisers		68,777	1.5	%	-0.68	%	-0.69	%	2.72	%	4.64	%
Credit Long / Short		114,543	2.6	%	1.12	%	6.05	%	12.41	%	8.98	%
MDS		1,285,895	28.9	%	-0.54	%	3.84	%	8.77	%	8.34	%
Reinsurance Private Equity		36,675	0.8	%	5.29	%	9.82	%	-41.93	%	-6.20	%
Alternative Investments	$	1,322,571	29.7	%	-0.39	%	4.00	%	5.93	%	7.73	%
Total Investments	$	4,446,045	100.0	%	-0.01	%	0.85	%	1.68	%	5.71	%

  * Expressed in thousands of United States Dollars

** Annualized