AXIS Capital Holdings Limited (AXS) 8-K Axis Capital Reports Second Quarter Operating Income of $113 Million

Exhibit 99.1

Investor Contact	Media Contact
Linda Ventresca	Michael Herley
AXIS Capital Holdings Limited	Kekst and Company
investorrelations@axiscapital.com	michael-herley@kekst.com
(441) 405-2727	(212) 521-4897

AXIS CAPITAL REPORTS SECOND QUARTER OPERATING INCOME OF $113 MILLION

Company reports quarterly diluted operating income per common share of $0.90 and annualized operating return on average common equity of 8.7%

Pembroke, Bermuda, July 31, 2012 - AXIS Capital Holdings Limited (“AXIS Capital”) (NYSE: AXS) today reported net income available to common shareholders for the second quarter of 2012 of $168 million, or $1.35 per diluted common share, compared with $101 million, or $0.79 per diluted common share, for the second quarter of 2011. For the six months ended June 30, 2012, AXIS Capital reported net income available to common shareholders of $290 million, or $2.31 per diluted common share. During the first six months of 2011, we recognized a net loss to common shareholders of $283 million, or $2.38 per diluted common share. Our results for the first six months of 2011 were adversely impacted by $691 million of net-after tax losses from numerous natural catastrophe and weather events.

Operating income¹ for the second quarter of 2012 was $113 million, or $0.90 per diluted common share, compared with $83 million, or $0.65 per diluted common share, for the second quarter of 2011. For the six months ended June 30, 2012, AXIS Capital reported operating income of $249 million, or $1.98 per diluted common share, compared with an operating loss of $316 million, or $2.66 per diluted common share, for the first six months of 2011.

¹  Operating income (loss) available to common shareholders and operating return on average common equity are “non-GAAP financial measures” as defined in Regulation G. The reconciliation of operating income (loss) to net income (loss) available to common shareholders (the most directly comparable GAAP financial measure) and the calculation of operating return on average common equity are provided in this release, as is a discussion of the rationale for the presentation of these items.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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Second Quarter Highlights²

• Gross premiums written decreased 3% to $1.0 billion;

• Net premiums written decreased 6% to $802 million;

• Net premiums earned increased 1% to $851 million;

• Combined ratio of 92.3%, compared to 98.9% for the same period last year;

• Estimated pre-tax net losses (net of reinstatement premiums) for second quarter 2012 U.S. weather events of $55 million;

• Upward revision of $22 million (net of reinstatement premiums) for first quarter 2012 U.S. weather events during the second quarter, but this amount was fully contained within the incurred but not reported (“IBNR”) reserves established at March 31, 2012;

• No material change in our aggregate estimate for losses related to 2011 and 2010 calendar year natural catastrophe events during 2012;

• Net favorable prior year reserve development of $75 million, pre-tax, benefiting the combined ratio by 8.7 points, compared with $52 million in the prior year quarter, benefiting the combined ratio by 6.1 points;

• Net investment income of $74 million, a decrease of 26%;

• Total return on cash and investments of 0.5% (pre-tax), compared to 1.5% for the same period last year;

• Net cash flows from operations of $288 million;

• Operating income of $113 million, representing an annualized operating return on average common equity of 8.7%;

• Share repurchases totaled $90 million in the quarter;

• Tender offer for 7.5% Series B preferred shares closed in April, resulting in repurchase of $247 million;

• The transition in our senior leadership during the quarter resulted in separation payments and accelerated and incremental share-based compensation expenses totaling $34 million; and

• Diluted book value per common share of $40.55 at June 30, 2012, an increase of 3% during the quarter and 10% from June 30, 2011.

² All comparisons are with the same period last year unless otherwise stated.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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Commenting on the second quarter 2012 financial results, Albert Benchimol, Chief Executive Officer and President of AXIS Capital, stated: “We are pleased to report diluted book value per share, at $40.55, reached a new record at the end of the second quarter. Diluted book value per share growth, including dividends paid, was 12.8% over the last twelve months.

The market environment for our businesses is showing ongoing improvement, and our underwriting operations are executing as expected in the current transitional market. Growth is strong in markets that have shown improvement in pricing and in lines where investment in product or geographic expansion in recent years is gaining traction. In other areas, which are for the most part stable or showing modest improvement, we have been actively optimizing portfolio composition to expand margin. We are confident that we have strategically and tactically positioned ourselves to deliver continued significant value growth to shareholders.”

Segment Highlights

Insurance Segment

Our insurance segment reported gross premiums written of $675 million in the quarter, comparable with the second quarter of 2011. Accident & health premiums written decreased quarter over quarter, largely due to timing of a large reinsurance treaty that was written in the first and second quarters of 2011 and renewed entirely in the first quarter of 2012. This reduction was largely offset by increases in our professional lines, property and liability lines of business. For the six months ended June 30, 2012, gross premiums written were $1.2 billion, up 8% from same period of 2011. This increase was driven by strategic growth opportunities, including our accident & health line, and an improving rate environment. Net premiums written decreased 6% for the second quarter, due to the aforementioned reduction in accident & health premiums as well as changes in certain of our ceded reinsurance programs. Net premiums earned increased 7% and 13%, respectively, for the second quarter and year to date; this growth reflected written premium growth over the past year, largely related to newer geographies and initiatives (including accident & health) and rate increases.

Our insurance segment reported underwriting income of $25 million for the quarter, compared to $20 million for the second quarter of 2011. The current quarter’s underwriting results reflected a combined ratio of 93.7%, compared with 94.4% in the prior year quarter. The segment’s current accident year loss ratio decreased from 68.1% in the second quarter of 2011 to 67.6% this quarter, with both quarters similarly impacted by U.S. weather events. Net favorable prior year reserve development was $35

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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million, or 9.2 points, this quarter compared with $27 million, or 7.5 points, in the second quarter of 2011. Acquisition costs primarily increased due to business mix changes and the increase in general and administrative expenses reflected the continued build-out of the segment’s global platform over the past year. For the six months ended June 30, 2012, we recognized underwriting income of $35 million, compared with a loss of $28 million for the prior year; the difference was largely attributable to a lower level of natural catastrophe activity.

Reinsurance Segment

Our reinsurance segment reported gross premiums written in the quarter of $339 million, down 7% from the second quarter of 2011. The reduction for the quarter was driven by motor and property business, partially offset by an increase in catastrophe premiums. For the six months ended June 30, 2012, gross premiums written were $1.3 billion, down 10% from the comparable period in 2011 largely as a result of our decision to withhold catastrophe capacity in the first quarter.

Our reinsurance segment reported underwriting income of $95 million for the quarter, compared to $9 million for the second quarter of 2011. The segment’s combined ratio decreased from 98.2% in the second quarter of 2011 to 79.5% for the second quarter of 2012. The current accident year loss ratio decreased from 77.4% in the second quarter of 2011 to 60.5% this quarter, with the difference largely attributable to a significant decrease in the level of natural catastrophe-related losses. Second quarter 2011 results included aggregate net pre-tax losses (net of reinstatement premiums) of $86 million, or 18.2 points, with respect to catastrophe and severe weather events. These aggregate net pre-tax losses included amounts related to the series of U.S. storms and tornadoes in April and May and New Zealand III, as well as a net increase in our estimate for first quarter 2011 events (the Japanese earthquake and tsunami, New Zealand II and the Australian weather events). During the second quarter of 2012, we recognized pre-tax net losses (net of reinstatement premiums) of $20 million, or 4.2 points, for second quarter U.S. weather events. Our estimate for first quarter 2012 U.S. weather events increased by $17 million during the second quarter; however, this increase was fully contained within IBNR reserves established during the first quarter. Net favorable prior period reserve development was $39 million, or 8.4 points, this quarter compared with $25 million, or 5.2 points, in the second quarter of 2011. The increase in acquisition costs was largely driven by business mix changes. For the six months ended June 30, 2012, our reinsurance segment reported underwriting income of $147 million, compared with an underwriting loss of $405 million for the comparable period of 2011. The significant decrease in the level of natural catastrophe activity was the primary driver of this variance.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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Investments

Net investment income for the quarter of $74 million represented a decrease of $42 million, or 36%, relative to the first quarter of this year, primarily due to a $2 million decline in the market value of our alternative investments (“other investments”) this quarter, compared to a $40 million increase in the prior quarter. Compared to the prior year quarter, net investment income for the second quarter was down $26 million, or 26%, due to lower returns from our other investments and from our fixed maturities. Net investment income from fixed maturities was $77 million for the quarter, compared to $80 million in the first quarter of 2012 and $89 million in the second quarter of 2011; the declines were primarily due to lower reinvestment yields, partially offset by a higher average fixed maturity investment balance in the current quarter.

Net realized investment gains were $30 million, compared to net realized investment gains of $14 million in the prior quarter and $37 million in the prior year quarter.

Capitalization / Shareholders’ Equity

Our total capital at June 30, 2012 was $6.7 billion, including $1.0 billion of long-term debt and $503 million of preferred equity.

At June 30, 2012, diluted book value per common share on a treasury stock basis was $40.55, a 3% increase from $39.53 at March 31, 2012 and a 10% increase from $36.78 at June 30, 2011.

During the quarter we repurchased 2.7 million common shares at an average price of $34.03 per share, for a total cost of $90 million. As of July 30, 2012, we had $415 million of remaining authorization for common share repurchases through December 31, 2012.

The close of our 7.5% Series B preferred share tender offer in April 2012 marked the completion of three transactions effected to reduce the cost of our preferred equity capital. During the first quarter of 2012, we issued $400 million of 6.875% Series C shares and redeemed $150 million of 7.25% Series A shares. As a result of the tender offer, we repurchased $247 million of 7.5% Series B shares this quarter. While this series of transactions resulted in a $7 million reduction in book value, recognized during the second quarter, the combined execution produced a 42 basis point reduction in the weighted average annual dividend yield on our preferred equity.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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Conference Call

We will host a conference call on Wednesday, August 1, 2012 at 8:00 AM (Eastern) to discuss the second quarter financial results and related matters. The teleconference can be accessed by dialing (866) 843-0890 (U.S. callers) or (412) 317-9250 (international callers) approximately ten minutes in advance of the call and entering the code 7-0-3-6-8-3-7. A live, listen-only webcast of the call will also be available via the Investor Information section of the Company’s website atwww.axiscapital.com. A replay of the teleconference will be available for three weeks by dialing (877) 344-7529 (U.S. callers) or (412) 317-0088 (international callers) and entering the code 1-0-0-1-5-7-5-0. The webcast will be archived in the Investor Information section of our website.

In addition, a financial supplement relating to our financial results for the quarter ended June 30, 2012 is available in the Investor Information section of our website.

AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholders’ equity at June 30, 2012 of $5.7 billion and locations in Bermuda, the United States, Europe, Singapore, Canada, Australia and Latin America. Its operating subsidiaries have been assigned a rating of “A+” (“Strong”) by Standard & Poor’s and “A” (“Excellent”) by A.M. Best. AXIS Capital and AXIS Specialty Finance LLC have been assigned senior unsecured debt ratings of A- (stable) by Standard & Poor’s and Baa1 (stable) by Moody’s Investors Service. For more information about AXIS Capital, visit our website atwww.axiscapital.com.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2012 (UNAUDITED) AND DECEMBER 31, 2011

	2012			2011
	(in thousands)
Assets
Investments:
Fixed maturities, available for sale, at fair value	$	11,504,448		$	10,940,100
Equity securities, available for sale, at fair value		631,731			677,560
Other investments, at fair value		798,233			699,320
Short-term investments, at fair value and amortized cost		71,277			149,909
Total investments		13,005,689			12,466,889
Cash and cash equivalents		751,011			981,849
Restricted cash and cash equivalents		121,740			100,989
Accrued interest receivable		97,417			98,346
Insurance and reinsurance premium balances receivable		1,888,238			1,413,839
Reinsurance recoverable on unpaid and paid losses		1,792,358			1,770,329
Deferred acquisition costs		502,413			407,527
Prepaid reinsurance premiums		271,262			238,623
Receivable for investments sold		596			3,006
Goodwill and intangible assets		98,203			99,590
Other assets		192,485			225,072
Total assets	$	18,721,412		$	17,806,059
Liabilities
Reserve for losses and loss expenses	$	8,600,651		$	8,425,045
Unearned premiums		2,958,223			2,454,462
Insurance and reinsurance balances payable		211,704			206,539
Senior notes		994,951			994,664
Other liabilities		145,188			129,329
Payable for investments purchased		112,855			151,941
Total liabilities		13,023,572			12,361,980
Shareholders’ equity
Preferred shares - Series A, B, and C		502,843			500,000
Common shares		2,141			2,125
Additional paid-in capital		2,153,467			2,105,386
Accumulated other comprehensive income		240,939			128,162
Retained earnings		4,383,405			4,155,392
Treasury shares, at cost		(1,584,955	)		(1,446,986	)
Total shareholders’ equity		5,697,840			5,444,079
Total liabilities and shareholders’ equity	$	18,721,412		$	17,806,059

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

	Three months ended					Six months ended
	2012			2011		2012			2011
	(in thousands, except per share amounts)
Revenues
Net premiums earned	$	850,603		$	840,014	$	1,696,968		$	1,628,215
Net investment income		74,449			100,018		190,472			210,673
Net realized investment gains		30,405			37,477		44,896			67,621
Other insurance related income		299			126		931			889
Total revenues		955,756			977,635		1,933,267			1,907,398
Expenses
Net losses and loss expenses		467,637			564,959		978,328			1,584,759
Acquisition costs		156,397			147,905		324,793			283,262
General and administrative expenses		161,331			118,105		284,984			234,625
Foreign exchange losses (gains)		(36,162	)		18,517		(15,715	)		33,575
Interest expense and financing costs		15,170			15,445		30,807			31,305
Total expenses		764,373			864,931		1,603,197			2,167,526
Income (loss) before income taxes		191,383			112,704		330,070			(260,128	)
Income tax expense		2,317			2,417		5,165			4,126
Net income (loss)		189,066			110,287		324,905			(264,254	)
Preferred shares dividends		11,527			9,219		20,746			18,438
Loss on repurchase of preferred shares		9,387			—		14,009			—
Net income (loss) available to common shareholders	$	168,152		$	101,068	$	290,150		$	(282,692	)
Per share data
Net income (loss) per common share:
Basic net income (loss)	$	1.36		$	0.81	$	2.32		$	(2.38	)
Diluted net income (loss)	$	1.35		$	0.79	$	2.31		$	(2.38	)
Weighted average number of common shares outstanding - basic		123,823			124,132		124,802			118,771
Weighted average number of common shares outstanding - diluted		124,983			128,369		125,825			118,771
Cash dividends declared per common share	$	0.24		$	0.23	$	0.48		$	0.46

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED SEGMENTAL DATA (UNAUDITED)

FOR THE THREE MONTHS ENDED JUNE 30, 2012 AND 2011

	2012									2011
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total
	(in thousands)
Gross premiums written	$	675,009		$	339,366		$	1,014,375		$	682,097		$	364,066		$	1,046,163
Net premiums written		465,238			336,337			801,575			495,049			355,090			850,139
Net premiums earned		386,580			464,023			850,603			359,875			480,139			840,014
Other insurance related income		299			—			299			126			—			126
Net losses and loss expenses		(225,900	)		(241,737	)		(467,637	)		(218,219	)		(346,740	)		(564,959	)
Acquisition costs		(58,654	)		(97,743	)		(156,397	)		(51,244	)		(96,661	)		(147,905	)
General and administrative expenses		(77,770	)		(29,359	)		(107,129	)		(70,229	)		(28,073	)		(98,302	)
Underwriting income	$	24,555		$	95,184			119,739		$	20,309		$	8,665		$	28,974
Corporate expenses								(54,202	)								(19,803	)
Net investment income								74,449									100,018
Net realized investment gains								30,405									37,477
Foreign exchange (losses) gains								36,162									(18,517	)
Interest expense and financing costs								(15,170	)								(15,445	)
Income before income taxes							$	191,383								$	112,704
Net loss and loss expense ratio		58.4	%		52.1	%		55.0	%		60.6	%		72.2	%		67.3	%
Acquisition cost ratio		15.2	%		21.1	%		18.4	%		14.3	%		20.1	%		17.6	%
General and administrative expense ratio		20.1	%		6.3	%		18.9	%		19.5	%		5.9	%		14.0	%
Combined ratio		93.7	%		79.5	%		92.3	%		94.4	%		98.2	%		98.9	%

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED SEGMENTAL DATA (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011

	2012									2011
	Insurance			Reinsurance			Total			Insurance			Reinsurance			Total
	(in thousands)
Gross premiums written	$	1,199,689		$	1,339,856		$	2,539,545		$	1,107,088		$	1,487,505		$	2,594,593
Net premiums written		843,853			1,324,909			2,168,762			784,365			1,466,554			2,250,919
Net premiums earned		776,837			920,131			1,696,968			687,523			940,692			1,628,215
Other insurance related income		931			—			931			889			—			889
Net losses and loss expenses		(467,623	)		(510,705	)		(978,328	)		(484,852	)		(1,099,907	)		(1,584,759	)
Acquisition costs		(119,808	)		(204,985	)		(324,793	)		(93,322	)		(189,940	)		(283,262	)
General and administrative expenses		(155,214	)		(57,133	)		(212,347	)		(137,956	)		(55,459	)		(193,415	)
Underwriting income (loss)	$	35,123		$	147,308			182,431		$	(27,718	)	$	(404,614	)	$	(432,332	)
Corporate expenses								(72,637	)								(41,210	)
Net investment income								190,472									210,673
Net realized investment gains								44,896									67,621
Foreign exchange (losses) gains								15,715									(33,575	)
Interest expense and financing costs								(30,807	)								(31,305	)
Income (loss) before income taxes							$	330,070								$	(260,128	)
Net loss and loss expense ratio		60.2	%		55.5	%		57.7	%		70.5	%		116.9	%		97.3	%
Acquisition cost ratio		15.4	%		22.3	%		19.1	%		13.6	%		20.2	%		17.4	%
General and administrative expense ratio		20.0	%		6.2	%		16.8	%		20.1	%		5.9	%		14.4	%
Combined ratio		95.6	%		84.0	%		93.6	%		104.2	%		143.0	%		129.1	%

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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AXIS CAPITAL HOLDINGS LIMITED

NON-GAAP FINANCIAL MEASURE RECONCILIATION (UNAUDITED)

OPERATING INCOME AND OPERATING RETURN ON AVERAGE COMMON EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

	Three months ended						Six months ended
	2012			2011			2012			2011
	(in thousands, except per share amounts)
Net income (loss) available to common shareholders	$	168,152		$	101,068		$	290,150		$	(282,692	)
Net realized investment gains, net of tax(1)		(28,854	)		(36,583	)		(40,064	)		(66,725	)
Foreign exchange (gains) losses, net of tax(2)		(35,853	)		18,572			(15,526	)		33,608
Loss on repurchase of preferred shares, net of tax(3)		9,387			—			14,009			—
Operating income (loss)	$	112,832		$	83,057		$	248,569		$	(315,809	)
Earnings (loss) per common share - diluted	$	1.35		$	0.79		$	2.31		$	(2.38	)
Net realized investment gains, net of tax		(0.23	)		(0.28	)		(0.32	)		(0.56	)
Foreign exchange (gains) losses, net of tax		(0.29	)		0.14			(0.12	)		0.28
Loss on repurchase of preferred shares, net of tax		0.07			—			0.11			—
Operating income (loss) per common share - diluted	$	0.90		$	0.65		$	1.98		$	(2.66	)
Weighted average common shares and common share equivalents - diluted		124,983			128,369			125,825			118,771
Average common shareholders’ equity	$	5,172,088		$	4,761,260		$	5,069,538		$	4,978,955
Annualized return on average common equity		13.0	%		8.5	%		11.4	%		(11.4	)%
Annualized operating return on average common equity		8.7	%		7.0	%		9.8	%		(12.7	)%

(1) Tax cost of $1,551 and $894 for the three months ended June 30, 2012 and 2011, respectively, and $4,832 and $896 for the six months ended June 30, 2012 and 2011, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors including the ability to utilize capital losses.

(2) Tax cost of $309 and $54 for the three months ended June 30, 2012 and 2011, respectively, and $189 and $33 for the six months ended June 30, 2012 and 2011, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors including the tax status of specific foreign exchange transactions.

(3) Tax impact is nil.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements contained in this release include our expectations regarding market conditions and information regarding our estimates of losses related to natural disasters. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause actual events or results to be materially different from our expectations include (1) the occurrence and magnitude of natural and man-made disasters, (2) actual claims exceeding our loss reserves, (3) general economic, capital, and credit market conditions, (4) the failure of any of the loss limitation methods we employ, (5) the effects of emerging claims, coverage and regulatory issues, (6) the failure of our cedants to adequately evaluate risks, (7) inability to obtain additional capital on favorable terms, or at all, (8) the loss of one or more key executives, (9) a decline in our ratings with rating agencies, (10) the loss of business provided to us by our major brokers, (11) changes in accounting policies or practices, (12) the use of industry catastrophe models and changes to these models, (13) changes in governmental regulations, (14) increased competition, (15) changes in the political environment of certain countries in which we operate or underwrite business, (16) fluctuations in interest rates, credit spreads, equity prices and/or currency values, and (17) 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.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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Non-GAAP Financial Measures

In this release, we have presented operating income (loss), which is a “non-GAAP financial measure” as defined in Regulation G. Operating income (loss) represents after-tax operational results without consideration of after-tax net realized investment gains (losses), foreign exchange losses (gains) and losses on the repurchase of preferred shares. A reconciliation of operating income to the most directly comparable GAAP financial measure, net income (loss) available to common shareholders, is included above.

In addition, this press release presents the following measures which are derived from the non-GAAP operating income measure:

1. Diluted operating earnings (loss) per common share - represents operating income (loss) divided by diluted weighted average common shares and share equivalents; and

2. Annualized operating return on average common equity - represents operating income (loss) for the period, projected for a full year, as a percentage of average common equity for the period.

We present our results of operations in the way we believe will be most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. This includes the presentation of “operating income (loss)”, in total and on a per share basis, and “annualized operating return on average common equity” which is based on the “operating income (loss)” measure.

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 gains (losses). 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 Statement of Operations foreign exchange losses (gains) in isolation are not a fair representation of the performance of our business.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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

In this regard, certain users of our financial statements evaluate earnings excluding after-tax net realized investment gains (losses), foreign exchange losses (gains) and losses on repurchase of preferred shares to understand the profitability of recurring sources of income.

We believe that showing net income available to common shareholders exclusive of net realized gains (losses), foreign exchange losses (gains) and losses on repurchase of preferred shares reflects the underlying fundamentals of our business.

In addition, we believe that this presentation enables investors and other users of our financial information to analyze performance in a manner similar to how our management analyzes the underlying business performance. We also believe this measure follows industry practice and, therefore, facilitates comparison of our performance with our peer group. We believe that equity analysts and certain rating agencies that follow us, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons.

AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke, Bermuda HM08

Tel. 441.496.2600 Fax 441.405.2600

www.axiscapital.com

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