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AXIS Capital Reports 2012 Operating Income of $422 Million, or $3.41 Per Diluted Common Share

  AXIS Capital Reports 2012 Operating Income of $422 Million, or $3.41 Per
  Diluted Common Share

Company reports 2012 return on average common equity of 9.7%, operating return
  on average common equity of 8.2% and 13% growth in diluted book value per
                     share to $42.97 at December 31, 2012

Business Wire

PEMBROKE, Bermuda -- February 4, 2013

AXIS Capital Holdings Limited (“AXIS Capital”) (NYSE: AXS) today reported a
net loss to common shareholders for the fourth quarter of 2012 of $19 million,
or $0.16 per diluted common share, compared with net income of $80 million, or
$0.63 per diluted common share, for the fourth quarter of 2011. Net income
available to common shareholders for the full year 2012 was $495 million, or
$4.00 per diluted common share, compared with $9 million, or $0.07 per diluted
common share, for 2011. The improvement in our annual results was largely due
to a reduction in net-after tax losses from natural catastrophe and weather
events, which totaled $398 million in 2012 and $910 million in 2011.

Our operating loss^1 for the fourth quarter of 2012 was $28 million, or $0.23
per diluted common share, compared with operating income of $67 million, or
$0.53 per diluted common share, for the fourth quarter of 2011. For the full
year 2012, AXIS Capital reported operating income of $422 million, or $3.41
per diluted common share, compared with an operating loss of $154 million, or
$1.26 per diluted common share, for 2011.

                            Full Year Highlights^2

  *Gross premiums written increased 1% to $4.1 billion, with growth of $188
    million, or 9%, in our insurance segment offset by a reduction of $144
    million, or 7% in our reinsurance segment;
  *Net premiums written decreased 2% to $3.3 billion and net premiums earned
    increased 3% to $3.4 billion;
  *Combined ratio of 96.2% (including 12.7 points related to 2012 natural
    catastrophe and weather losses and 1.0 point for senior leadership
    transition costs), compared with 112.3% (including 28.2 points related to
    numerous 2011 catastrophe and weather events);
  *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 $245 million (benefiting
    the combined ratio by 7.1 points), compared to $257 million (benefiting
    the combined ratio by 7.8 points);
  *Net investment income increased 5% to $381 million;
  *Pre-tax total return on cash and investments of 5.4%, compared to 3.4%;
  *Net income available to common shareholders of $495 million and return on
    average common equity of 9.7%, compared to $9 million and 0.2%;
  *Operating income of $422 million, representing an operating return on
    average common equity of 8.2%, compared to an operating loss of $154
    million;
  *Net cash flows from operations of $1.1 billion, compared to $1.2 billion;
    and
  *Diluted book value per common share of $42.97, a 13% increase from
    December31, 2011.

                         Fourth Quarter Highlights^2

  *Gross premiums written increased 13% to $752 million;
  *Net premiums written increased 5% to $518 million and net premiums earned
    increased 1% to $856 million;
  *Significant catastrophe and weather-related losses impacting the fourth
    quarter's results included:

       *Estimated pre-tax net losses (net of reinstatement premiums) of $331
         million in relation to Storm Sandy; and
       *An aggregate $28 million reduction in our estimate of pre-tax net
         losses (net of reinstatement premiums) for events of the first three
         quarters of 2012, including Hurricane Isaac, U.S. weather events in
         the first and second quarters, and the impact of severe drought
         conditions on U.S. crops;

  *Net financial impact of Storm Sandy of $301 million, after consideration
    of reinstatement premiums, ceding commissions and the associated income
    tax benefit;
  *Net favorable prior year reserve development of $64 million (benefiting
    the combined ratio by 7.5 points) compared to $78 million (benefiting the
    combined ratio by 9.2 points);
  *Net investment income declined 15% to $87 million;
  *Net cash flows from operations of $233 million, compared to $199 million;
    and
  *Quarterly common share dividend declared increased 4% to $0.25 per share.

Commenting on the fourth quarter 2012 financial results, Albert Benchimol,
President and CEO of AXIS Capital said "We experienced strong results across
most parts of our Company in the fourth quarter, but our performance was
clearly offset by the impact of Storm Sandy, which led to a small loss for the
period. Given 2012 included one of the largest U.S. storm events in
history,we believe our operating income of $422 million for the year,
representing an operating ROE of 8.2%, was an acceptable result. We returned
nearly all of our earnings to shareholders,increased our dividend for the 9th
year in a row, and ended 2012 with diluted book value per share of $42.97,
which represents a 13% increase over the prior year.

"Looking beyond the financial impact of Storm Sandy, we made significant
progress across many facets of our Company. We grew meaningfully in lines and
markets that experienced some of the strongest price corrections in a steadily
improving insurance market. Additionally, we advanced a number of important
business initiatives including renewable energy and global accident and
health, while at the same time continuing to lay the groundwork for further
profitable growth. We have added more balance to our overall portfolio, and
expect that our pursuit of new opportunities in 2013 - including our new
agriculture and marine reinsurance initiatives and re-entry into select
casualty markets -will lead to a larger and more diversified portfolio of
risks. We are entering 2013 on a positive note, based on our expectations for
continued pricing improvement, our positioning for diversified growth and our
excellent financial strength."

                              Segment Highlights

Insurance Segment

Our insurance segment reported gross premiums written of $580 million in the
quarter, up 11% from the fourth quarter of 2011. Growth was largely associated
with new initiatives in our global professional lines business outside the
U.S. and improvements in the U.S. excess and surplus umbrella market
benefiting our liability line. For the full year, gross premiums written were
$2.3 billion, with the 9% growth attributable to a number of lines of
business, including professional lines, liability and accident & health. The
segment's ceded premium ratio increased by seven percentage points in the
quarter, with two points attributable to an increase in costs to reinstate our
reinsurance protection, largely due to Storm Sandy. The remaining increase, as
well as the increase for the full year, was largely due to changes in certain
of our reinsurance programs on renewal in the second quarter and business mix
changes. Net premiums earned increased 3% and 9%, respectively, for the
quarter and year. Recent growth in gross premiums written, most notably in our
accident & health line of business, drove the increases; however, this growth
was partially offset by the aforementioned reinstatement premiums in the
fourth quarter.

Our insurance segment reported an underwriting loss of $46 million for the
quarter, compared to underwriting income of $22 million for the fourth quarter
of 2011. The current quarter’s underwriting results reflected a combined ratio
of 112.2%, compared with 94.1% in the prior year quarter. The segment’s
current accident year loss ratio increased from 68.9% in the fourth quarter of
2011 to 88.9% this quarter, driven by a higher level of natural catastrophe
losses. The current quarter's result includes aggregate pre-tax net losses
(inclusive of premiums to reinstate reinsurance protection) of $178 million,
or 44.9 points, for Storm Sandy; in addition, we recognized an aggregate $13
million, or 3.4 point, reduction in our estimate for events of the first nine
months (including Hurricane Isaac and U.S. weather events in the first half of
the year). Comparatively, the fourth quarter 2011 result included $28 million,
or 7.6 points, of catastrophe and weather-related losses (inclusive of
premiums to reinstate reinsurance protection), primarily related to the Thai
Floods. Exclusive of these amounts, the fourth quarter current accident year
loss ratio decreased in 2012, driven by a number of factors. Most notable was
a reduction in property and energy losses, the frequency of which was high in
the fourth quarter of 2011.

Net favorable prior year reserve development was $40 million, or 10.5 points,
this quarter compared with $29 million, or 7.8 points, in the fourth quarter
of 2011.

The reduction in the segment's acquisition cost ratio for the quarter was
driven by the aforementioned changes in reinsurance programs at the second
quarter renewal, as well as commissions associated with the reinstatement of
our reinsurance protection. The increase in fourth quarter general and
administrative expenses was the result of higher performance-related
compensation costs.

For the full year, underwriting income was $65 million compared with $35
million in 2011. Growth in net premiums earned, an improved current accident
year attritional loss ratio and an increase in favorable prior year reserve
development more than offset a higher level of natural catastrophe-related
losses.

Reinsurance Segment

Our reinsurance segment reported gross premiums written of $172 million and
$1.8 billion in the quarter and full year 2012, respectively, compared to $145
million and $2.0 billion in the corresponding periods of 2011. The full-year
reduction was largely due to the repositioning of our catastrophe reinsurance
portfolio.

Underwriting losses in our reinsurance segment were $28 million and $7 million
in the fourth quarters of 2012 and 2011, respectively and reflected combined
ratios of 106.0% and 101.5%. The current accident year loss ratios of 84.4%
and 85.3% in the fourth quarters of 2012 and 2011, respectively, were both
significantly impacted by natural-catastrophe losses. The current quarter's
ratio includes aggregate pre-tax net losses (net of reinstatement premiums) of
$153 million, or 33.6 points, related to Storm Sandy and an aggregate $15
million, or 3.3 point, reduction in our estimate for events of the first nine
months (primarily Hurricane Isaac and second quarter U.S. weather events).
Comparatively, the ratio for the fourth quarter of 2011 included aggregate
pre-tax net losses (net of reinstatement premiums) of $111 million, or 24.0
points, related to the Thai floods and an aggregate increase in our estimate
for catastrophe and weather-related events of the first nine months. Exclusive
of these amounts, the primary driver of the reduction in the fourth quarter
current accident year loss ratio was reduced exposure and loss experience
related to aggregate property reinsurance of regional insurance companies in
the U.S.

Net favorable prior period reserve development was $24 million, or 5.2 points,
this quarter compared with $49 million, or 10.3 points, in the fourth quarter
of 2011. The increase in fourth quarter general and administrative expenses
was the result of higher performance-related compensation costs.

For the full year, our reinsurance segment reported underwriting income of
$198 million, compared to an underwriting loss of $362 million for 2011. The
significant decrease in the level of natural catastrophe activity was the
primary driver of this variance.

                                 Investments

Net investment income of $87 million for the quarter represented a $16 million
decrease from the fourth quarter of 2011 and a $17 million decrease from the
third quarter of 2012, with the variances primarily driven by the market value
of our alternative investments ("other investments"). These investments
generated $15 million of income in the fourth quarter of 2012, compared to
income of $25 million and $34 million, respectively, in the fourth quarter of
2011 and the third quarter of 2012.

For the full year, net investment income increased by $19 million, or 5%, in
2012. A $56 million increase in income from our other investments more than
offset a $33 million reduction from fixed maturities due to lower reinvestment
yields, notwithstanding higher investment balances.

Net realized investment gains for the quarter were $32 million, compared to
$51 million in the prior quarter and $4 million of net realized investment
losses in the prior year quarter.

                    Capitalization / Shareholders’ Equity

Our total capital at December31, 2012 was $6.8 billion, including $1.0
billion of long-term debt and $0.5 billion of preferred equity, as compared to
$6.4 billion at December 31, 2011.

Diluted book value per common share, calculated on a treasury stock basis,
declined by 1% to $42.97 in the fourth quarter, driven by the impact of Storm
Sandy. On a year-to-date basis, diluted book value per common share increased
by $4.89, or 13%, driven by operating income, valuation improvements for our
available-for-sale investment portfolio and, to a lesser extent, share
repurchases.

On December 17, 2012, our Board of Directors authorized a new $750 million
share common share repurchase plan, which replaced our existing plan set to
expire at the end of 2012. As of February 4, 2013 we had $750 million of
remaining authorization for common share repurchases through December 31,
2014.

                               Conference Call

We will host a conference call on Tuesday, February 5, 2013 at 8:00 AM
(Eastern) to discuss the fourth quarter and year-end financial results and
related matters. The teleconference can be accessed by dialing (888) 317-6003
(U.S. callers) or (412) 317-6061 (international callers) approximately ten
minutes in advance of the call and entering the code 5-5-0-9-8-4-7. A live,
listen-only webcast of the call will also be available via the Investor
Information section of the Company’s website at www.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 1-0-0-2-3-4-3-3. 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 December 31, 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 December 31, 2012 of $5.8
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”) with a positive outlook 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 at
www.axiscapital.com.

^1 Operating income (loss) and operating return on average common equity are
“non-GAAP financial measures” as defined in Regulation G. A reconciliation of
operating income (loss) to net income (loss) available to common shareholders
(the nearest 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.

^2All comparisons are with the same period of the prior year, unless otherwise
stated.

AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

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

                                             2012            2011
                                                                
                                               (in thousands)
Assets
Investments:
Fixed maturities, available for sale, at       $ 11,928,049     $ 10,940,100
fair value
Equity securities, available for sale, at      666,548          677,560
fair value
Other investments, at fair value               843,437          699,320
Short-term investments, at fair value and      108,860         149,909      
amortized cost
Total investments                              13,546,894       12,466,889
Cash and cash equivalents                      759,817          981,849
Restricted cash and cash equivalents           90,733           100,989
Accrued interest receivable                    97,220           98,346
Insurance and reinsurance premium balances     1,474,821        1,413,839
receivable
Reinsurance recoverable on unpaid and paid     1,863,819        1,770,329
losses
Deferred acquisition costs                     389,248          407,527
Prepaid reinsurance premiums                   315,676          238,623
Receivable for investments sold                1,254            3,006
Goodwill and intangible assets                 97,493           99,590
Other assets                                   215,369         225,072      
       Total assets                            $ 18,852,344    $ 17,806,059 
                                                                
Liabilities
Reserve for losses and loss expenses           $ 9,058,731      $ 8,425,045
Unearned premiums                              2,454,692        2,454,462
Insurance and reinsurance balances payable     270,739          206,539
Senior notes                                   995,245          994,664
Payable for investments purchased              64,553           151,941
Other liabilities                              228,623         129,329      
       Total liabilities                       13,072,583      12,361,980   
                                                                
Shareholders' equity
Preferred shares - Series A, B, and C          502,843          500,000
Common shares                                  2,146            2,125
Additional paid-in capital                     2,179,034        2,105,386
Accumulated other comprehensive income         362,622          128,162
Retained earnings^3                            4,497,789        4,155,392
Treasury shares, at cost                       (1,764,673   )   (1,446,986   )
       Total shareholders' equity              5,779,761       5,444,079    
       Total liabilities and shareholders'     $ 18,852,344    $ 17,806,059 
       equity

^3Common share dividends were historically recognized as a reduction of
retained earnings when paid. During the fourth quarter of 2012, we recognized
a $31 million adjustment in order to recognize dividends when declared.

AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE QUARTERS AND YEARS ENDED DECEMBER 31, 2012 AND 2011

                   Three months ended         Years ended
                     2012         2011          2012           2011
                                                                 
                     (in thousands, except per share amounts)
Revenues
    Net premiums     $ 856,049     $ 846,753     $ 3,415,463     $ 3,314,961
    earned
    Net investment   86,847        102,362       380,957         362,430
    income
    Net realized
    investment gains 31,771        (3,738    )   127,469         121,439
    (losses)
    Other insurance  791          351          2,676          2,396       
    related income
         Total       975,458      945,728      3,926,565      3,801,226   
         revenues
                                                                 
Expenses
    Net losses and   675,047       583,454       2,096,028       2,675,052
    loss expenses
    Acquisition      144,063       157,372       627,653         587,469
    costs
    General and
    administrative   141,386       109,990       560,981         459,151
    expenses
    Foreign exchange 21,300        (17,328   )   29,512          (44,582     )
    losses (gains)
    Interest expense
    and financing    15,498       15,616       61,863         62,598      
    costs
         Total       997,294      849,104      3,376,037      3,739,688   
         expenses
                                                                 
Income (loss) before (21,836   )   96,624        550,528         61,538
income taxes
    Income tax
    expense          (12,026   )   7,341        3,287          15,233      
    (benefit)
Net income (loss)    (9,810    )   89,283        547,241         46,305
Preferred shares     8,741         9,219         38,228          36,875
dividends
Loss on repurchase   —            —            14,009         —           
of preferred shares
Net income (loss)
available to common  $ (18,551 )   $ 80,064     $ 495,004      $ 9,430     
shareholders
                                                                 
Per share data
Net income (loss)
per common share:
Basic net income     $ (0.16   )   $ 0.63        $ 4.05          $ 0.08
(loss)
Diluted net income   $ (0.16   )   $ 0.63        $ 4.00          $ 0.07
(loss)
Weighted average
number of common     117,918       126,360       122,148         122,499
shares outstanding -
basic
Weighted average
number of common     117,918       127,686       123,654         128,122
shares outstanding -
diluted
Cash dividends
declared per common  $ 0.25        $ 0.24        $ 0.97          $ 0.93
share

AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED SEGMENTAL DATA (UNAUDITED)

FOR THE QUARTERS ENDED DECEMBER 31, 2012 AND 2011

                      2012                                     2011
                       Insurance    Reinsurance  Total         Insurance    Reinsurance  Total
                                                                                        
                       (in thousands)
Gross premiums         $ 580,116     $ 172,298     $ 752,414     $ 521,281     $ 145,223     $ 666,504
written
Net premiums written   345,802       172,294       518,096       349,912       145,151       495,063
Net premiums earned    382,885       473,164       856,049       371,645       475,108       846,753
Other insurance        791           —             791           351           —             351
related income
Net losses and loss    (300,094  )   (374,953  )   (675,047  )   (227,064  )   (356,390  )   (583,454  )
expenses
Acquisition costs      (48,024   )   (96,039   )   (144,063  )   (54,508   )   (102,864  )   (157,372  )
Underwriting-related
general and
administrative         (81,591   )   (30,430   )   (112,021  )   (68,187   )   (23,015   )   (91,202   )
expenses^4
Underwriting income    $ (46,033 )   $ (28,258 )   (74,291   )   $ 22,237     $ (7,161  )   $ 15,076
(loss)^4
                                                                                             
Corporate expenses                                 (29,365   )                               (18,788   )
Net investment                                     86,847                                    102,362
income
Net realized
investment gains                                   31,771                                    (3,738    )
(losses)
Foreign exchange                                   (21,300   )                               17,328
(losses) gains
Interest expense and                               (15,498   )                               (15,616   )
financing costs
Income (loss) before                               $ (21,836 )                               $ 96,624  
income taxes
                                                                                             
Net loss and loss      78.4      %   79.2      %   78.9      %   61.1      %   75.0      %   68.9      %
expense ratio
Acquisition cost       12.5      %   20.3      %   16.8      %   14.7      %   21.7      %   18.6      %
ratio
General and
administrative
expense ratio          21.3      %   6.5       %   16.5      %   18.3      %   4.8       %   13.0      %
Combined ratio         112.2     %   106.0     %   112.2     %   94.1      %   101.5     %   100.5     %

^4Underwriting-related general and administrative expenses and consolidated
underwriting income (loss) are "non-GAAP financial measures", as defined in
SEC Regulation G. Reconciliations of these amounts to the nearest GAAP
financial measures (total general and administrative expenses and income
(loss) before income taxes, respectively) are provided in this release, as are
discussions of the rationale for the presentation of these items.

AXIS CAPITAL HOLDINGS LIMITED

CONSOLIDATED SEGMENTAL DATA (UNAUDITED)

FOR THE YEARS DECEMBER 31, 2012 AND 2011

                      2012                                           2011
                       Insurance      Reinsurance    Total           Insurance      Reinsurance    Total
                                                                                                  
                       (in thousands)
Gross premiums         $ 2,309,481     $ 1,830,162     $ 4,139,643     $ 2,121,829     $ 1,974,324     $ 4,096,153
written
Net premiums written   1,522,245       1,815,211       3,337,456       1,466,134       1,953,300       3,419,434
Net premiums earned    1,558,058       1,857,405       3,415,463       1,429,687       1,885,274       3,314,961
Other insurance        2,676           —               2,676           2,396           —               2,396
related income
Net losses and loss    (953,564    )   (1,142,464  )   (2,096,028  )   (919,319    )   (1,755,733  )   (2,675,052  )
expenses
Acquisition costs      (226,859    )   (400,794    )   (627,653    )   (199,583    )   (387,886    )   (587,469    )
Underwriting-related
general and
administrative         (314,834    )   (116,487    )   (431,321    )   (278,147    )   (103,915    )   (382,062    )
expenses
Underwriting income    $ 65,477       $ 197,660      263,137         $ 35,034       $ (362,260  )   $ (327,226  )
(loss)
                                                                                                       
Corporate expenses                                     (129,660    )                                   (77,089     )
Net investment                                         380,957                                         362,430
income
Net realized                                           127,469                                         121,439
investment gains
Foreign exchange                                       (29,512     )                                   44,582
(losses) gains
Interest expense and                                   (61,863     )                                   (62,598     )
financing costs
Income before income                                   $ 550,528                                      $ 61,538    
taxes
                                                                                                       
Net loss and loss      61.2        %   61.5        %   61.4        %   64.3        %   93.1        %   80.7        %
expense ratio
Acquisition cost       14.6        %   21.6        %   18.4        %   14.0        %   20.6        %   17.7        %
ratio
General and
administrative
expense ratio          20.2        %   6.3         %   16.4        %   19.4        %   5.5         %   13.9        %
Combined ratio         96.0        %   89.4        %   96.2        %   97.7        %   119.2       %   112.3       %

AXIS CAPITAL HOLDINGS LIMITED

NON-GAAP FINANCIAL MEASURE RECONCILIATION (UNAUDITED)

OPERATING INCOME (LOSS), OPERATING RETURN ON AVERAGE COMMON EQUITY

AND UNDERWRITING-RELATED GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE QUARTERS AND YEARS ENDED DECEMBER 31, 2012 AND 2011
                                                             
                 Three months ended               Years ended
                 2012             2011            2012            2011
                                                                  
                 (in thousands, except per share amounts)
                                                                  
Net income
(loss)
available to     $ (18,551   )    $ 80,064        $ 495,004       $ 9,430
common
shareholders
Net realized
investment
(gains)          (29,550     )    3,599           (115,854    )   (119,736    )
losses, net of
tax^(1)
Foreign
exchange
losses           20,416           (16,494     )   28,364          (43,606     )
(gains), net
of tax^(2)
Loss on
repurchase of
preferred        —               —              14,009         —           
shares, net of
tax^(3)
Operating        $ (27,685   )    $ 67,169       $ 421,523      $ (153,912  )
income (loss)
                                                                  
                                                                  
Earnings
(loss) per       $ (0.16     )    $ 0.63          $ 4.00          $ 0.07
common share -
diluted
Net realized
investment
(gains)          (0.25       )    0.03            (0.94       )   (0.93       )
losses, net of
tax
Foreign
exchange
losses           0.18             (0.13       )   0.24            (0.34       )
(gains), net
of tax
Loss on
repurchase of
preferred        —                —               0.11            —
shares, net of
tax
Adjustment for
anti-dilutive    —               —              —              (0.06       )
securities^(4)
Operating
income (loss)
per common       $ (0.23     )    $ 0.53         $ 3.41         $ (1.26     )
share -
diluted
                                                                  
Weighted
average common
shares and
common share
equivalents -
diluted, for     117,918         127,686        123,654        128,122     
net income
(loss)
                                                                  
Weighted
average common
shares and
common share
equivalents -
diluted, for     $ 117,918       $ 127,686      $ 123,654      $ 122,499   
operating
income (loss)
                                                                  
Average common
shareholders'    $ 5,315,172      $ 4,900,592     $ 5,110,499     $ 5,034,525
equity
                                                                  
Annualized
return on        (1.4        %)   6.5         %   9.7         %   0.2         %
average common
equity
                                                                  
Annualized
operating
return on        (2.1        %)   5.5         %   8.2         %   (3.1        %)
average common
equity

(1) Tax cost (benefit) of $2,221 and ($140) for the quarters ended
December31, 2012 and 2011, respectively, and $11,615 and $1,703 for 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 benefit (cost) of $884 and ($834) for the quarters ended December31,
2012 and 2011, respectively, and $1,148 and ($976) for 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.

(4) For operating loss per share purposes, we have excluded the impact of
otherwise anti-dilutive securities.

In addition to underwriting-related general and administrative expenses, our
total general and administrative expenses of $141,386 and $109,990 for the
quarters ended December 31, 2012 and 2011, respectively, and $560,981 and
$459,151 for 2012 and 2011, respectively, include corporate expenses.

             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, including uncertainty related to coverage
definitions, limits, terms and conditions, (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.

                         Non-GAAP Financial Measures

In this release, we present operating income (loss), consolidated underwriting
income (loss) and underwriting-related general and administrative expenses,
which are “non-GAAP financial measures” 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. We
also present diluted operating earnings (loss) per share and operating return
on average common equity ("operating ROACE"), which are derived from the
non-GAAP operating income (loss) measure. Reconciliations of operating income
(loss), diluted operating earnings (loss) per share and operating ROACE to the
nearest GAAP financial measures (based on net income (loss) available to
common shareholders) are included above.

Consolidated underwriting income (loss) 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
(loss) to income before income taxes (the nearest GAAP financial measure) is
included in the 'Consolidated Segmental Data' section of this release. 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 Segmental Data' section of this release.

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),
“annualized operating return on average common equity” (which is based on the
“operating income (loss)” measure) and "consolidated underwriting income
(loss)", which incorporates "underwriting-related general and administrative
expenses".

Operating Income (Loss)

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.

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.

Consolidated Underwriting Income (Loss)/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 (loss). Interest expense and financing costs
primarily relate to interest payable on our senior notes and are excluded from
consolidated underwriting income (loss) 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 Statement
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
(loss).

We believe that presentation of underwriting-related general and
administrative expenses and consolidated underwriting income (loss) provides
investors with an enhanced understanding of our results of operations, by
highlighting the underlying pre-tax profitability of our underwriting
activities.

Contact:

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