(Operator Instructions) Welcome to the Fourth Quarter 2008 AXIS Capital Holdings Limited Earnings Conference Call. Now I would like to turn the conference over to Ms. Linda Ventresca, Investor Relations Director.

I am happy to welcome you to our conference call to discuss the financial results for AXIS Capital for the year ended December 31, 2008. Our fourth quarter and full year 2008 earnings press release, our financial supplement and a new separate year end investment supplement were issued yesterday evening after the market closed. If you would like copies, please visit the Investor Information section of our website, www.AXISCapital.com. We set aside an hour for today's call, which is also available as an audio webcast through the Investor Information section of our website. An audio replay will also be available through February 20th. The toll free dial in number for the replay is 877-344-7529 and the international number is 412-317-0088. The conference code for both replay dial in numbers is 426761. With me on today's call are John Charman, our CEO and President and David Greenfield, our CFO. Before I turn the call over to John, I will remind everyone that statements made during this call including the question and answer session which are not historical facts, may be forward looking statements within the meaning of the US Federal Securities Laws. Forward looking statements contained in this presentation include, but are not necessarily limited to information regarding our estimate of losses related to catastrophes and other loss events, general economic, capital and credit market conditions, future growth prospects and financial results, evaluation of losses and loss reserves, investment strategies, investment portfolio and market performance, impact of the marketplace with respect to changes and pricing models and our expectations regarding pricing and other market conditions. These statements involve risks, uncertainties and assumptions, which could cause actual results to differ materially from our expectations. For a discussion of these matters, please refer to the Risk Factor section in our most recent Form 10-K 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. In addition, this presentation contains information regarding operating income, which is a non-GAAP financial measure within the meaning of the US Federal Securities Laws. For a reconciliation of this item to the most directly comparable GAAP financial measure, please refer to our press release and Form 8-K issued last night which can be found on our website. With that, I’d like to turn the call over to John.

We are pleased and proud of our fourth quarter operating results. Both our insurance and reinsurance segments contributed to the strong underwriting results in the quarter. These results benefited from continued favorable prior period loss development and strong current accident year results. The 2008 net income was $351 million or $2.26 per diluted share. Return on average common equity for the year was 8.1%. We believe that this result is a good one for a company with our business makes which is oriented toward short and medium tail severity exposed lines. In 2008 we estimate that the insurance and reinsurance markets will digest over $60 billion that insured catastrophe, property and energy losses worldwide for which we estimate AXIS market share less than 1%. This was also a period that presented the most competitive market conditions we have experienced since the formation of AXIS and importantly throughout 2008. We have maintained our overall defensive underwriting posture. We are comfortable that any expected loss activity related to the global credit crisis as manageable and well within acceptable loss parameters for us in stress conditions. We took proactive reserving actions throughout this year including the fourth quarter which we believe are prudent, in light of the deteriorating financial market conditions and economic environment. The results of our investment portfolio in 2008 were not immune to the unprecedented and rapid decline in asset values globally. The overall conservative nature of our investment portfolio and liquidity position has held us in good stead. Through the last several months we have seen strong signals that our view regarding our reinsurance led hard market is coming to fruition. To summarize, the most capital intensive lines in both the insurance and reinsurance markets often cat expose lines are responding first and most significantly. Further, as we anticipated…

Despite the challenging industry market conditions experienced for much of 2008, a rise in the frequency of large losses, the third most costly catastrophe in recorded history and the extreme volatility of the financial markets, we generated underwriting profits and produced an annualized return on average common equity of 13% for the fourth quarter and 8% for the year. This result continues to reflect the diversity and strength of our global underwriting operations but has also been significantly and adversely impacted by the extreme volatility of the global financial markets in the second half of 2008. At the end of it we demonstrated our strength, stability, and profitability in one of the most difficult years in history. Net income for the quarter was $131 million or $0.88 per diluted share compared with $306 million or $1.89 per diluted share for the fourth quarter of 2007. After tax, operating income which excludes the impact of realized gains and losses on investments was $163 million or $1.09 per diluted share, compared with $296 million or $1.83 per diluted share for the fourth quarter of 2007. The decline in net income this quarter is primarily related to $138 million of mark to market losses coming from our investments in credit funds and to a lesser extent, hedge funds. For the full year, net income was $351 million or $2.26 per diluted share compared with $1.1 billion or $6.41 per diluted share for 2007. After tax operating income was $436 million or $2.81 per diluted share compared with $1.1 billion or $6.38 per diluted common share for 2007. The reduction in our net income this year was primarily due to estimated net losses from hurricanes Ike and Gustav of $408 million together with $221 million of mark to market losses from the previously mentioned…

As you know, during 2008 the worlds financial markets, our industry and we at AXIS have all experienced an unprecedented confluence of events. All of these events were adverse with respect to financial results for the year. Our long held views regarding correlation of risk were torn apart and the global financial markets were faced with a stark reality in this brave new world that at the extreme everything is correlated. Even in the face of this unprecedented confluence of events our industry has demonstrated remarkable resilience and I expect we’ll continue to perform well relative to other sectors within the broader financial services industry. While this is true for the industry there are still points of differentiation. AXIS has once again differentiated itself as having a very well managed and well understood portfolio of underwriting risks. Our estimates of net losses from hurricanes Gustav and Ike remain unchanged relative to our estimates at the end of the third quarter. This is the direct result of deliberate risk management decisions and actions taken well in advance of the onset of the hurricane season. Our diversified business model is equipped to absorb losses in stress conditions. The current global credit crisis and deteriorating economic environment represents a stress scenario for some areas of our underwriting portfolio. David has already discussed our investment portfolio as well as liquidity and capital resources. Before I move on to my forward looking comments, I would like to briefly discuss elements of our underwriting portfolio affected by the credit crisis and the deteriorating economic environment. We have continuously and thoroughly reviewed our professional lines credit and bond reinsurance and credit and political risk insurance lines in light of these events and believe that our exposure to the credit crisis in all of these lines has been…

(Operator Instructions) Your first question comes from Josh Shanker – Citi Josh Shanker – Citi: Your comfort in not being concerned about the recessions impact on the hard market for insurance particularly I was wondering in terms of if you look at most companies renewals they were not as aggressive as your own which might suggest you have some stronger appetite in capital comfort then your competitors. If you could focus a little bit on going into detail about what the market fears about the recession and why you don’t think it’s going to be a key issue?

I’m not sure that we’ve demonstrated that we were aggressive in our insurance lines. We have stated throughout that we’ve actually been extremely defensive. You only have to look at the reductions in our property lines for instance and areas within our professional lines. I think we’ve actually been the opposite to being aggressive. I think we’ve capitalized on opportunities situations. Overall we’ve been extremely defensive in that quarter. We’ll wait and see how the market reacts. Josh Shanker – Citi: The expiring premium how much you renewed it for its considerably higher then some of your peers.

If you actually look at our renewal premium we’re actually down on a lot of our renewable premium as a portfolio. Let me just be clear about this, our portfolio has been extremely defensive on the insurance underwriting in the last quarter. I’m happy to talk about the recession’s impact on the insurance portfolio which is bound to have an impact because the industrial companies are suffering greatly from the recession globally and will be cutting back and descaling their activity. At the same time as that is the insurance marketplace which is significantly under priced, an awful lot of the specialty insurance products is going to have to move pricing upwards materially to recover some of the ground they’ve lost over the last three years. Secondly and equally importantly is the fact that there’s a material reduction of capital and capacity available by insurers to write this business which again is going to force pricing increase. Josh Shanker – Citi: Enough to offset the decline in policy count?

Yes. Josh Shanker – Citi: In the political risk you gave an example of your case reserves for the few cases that you have at average reserve of $9.5 million. I was wondering if you could give us some equivalency to what the net limits would be for those cases.

No, I won’t. We don’t talk about individual policies.

Your next question comes from Ian Gutterman – Adage Capital Ian Gutterman – Adage Capital: The banks loans are down to about $100 million; do have what the par is on that, I’m trying to figure out how much the cumulative marks have been over the year.

Those are through credit fund investments that we made so I don’t have the par. Those are valuations in the funds. Ian Gutterman – Adage Capital: I’m trying to get a sense of how much that’s spun towards the negative on investment income for the year. I’m trying to get a sense of if things recover how much that would unwind.

That’s a difficult answer and we’re not necessarily projecting forward substantial recoveries it’s all going to be dependent on how the markets go. I couldn’t give you a definitive answer on that. Ian Gutterman – Adage Capital: On the reinsurance side, the largest reinsurer in the world may very well have a rating downgrade which will put them at the same rating at you guys are given your upgrade. Can you talk about what opportunities that creates to be at the same rating as Swiss Re potentially for you going forward?

Swiss Re are a fine underwriting company, let me make that point regardless of the near term issues. In any situation where you have a market leader, having those sorts of issues there are bound to be opportunities for quality companies like AXIS. As I tried to say through my commentary there is an increasing flight to quality taking place. People are beginning to be extremely concerned, much more concerned about counterparty credit and we expect to continue to benefit through 2009. Ian Gutterman – Adage Capital: Do you have any concerns that they might react the way AIG has by cutting prices to keep business or do you think possibly the presence of Buffett?

My comment about Swiss Re being a fine underwriting reinsurance underwriting business and I expect them to continue to demonstrate that. Ian Gutterman – Adage Capital: Given that pricing really only improved in the cat areas why grow double digits on the reinsurance so 01/01, why not do a strategy?

Just look at the numbers. The fourth quarters not a big reinsurance number. Ian Gutterman – Adage Capital: You said at 01/01 you renewed I think it was up 11%.

What you’re doing is putting together all of the reinsurance marketplace. There were specific opportunities for us with high quality sedans with high quality business for us to increase our market position because of the flight to quality that I just mentioned as well the reallocation that did take place of shares within the marketplace and AXIS materially benefited from it. It wasn’t a matter of us being competitive at all. It was us actually getting a much better market share at the highest quality business available in the market. Ian Gutterman – Adage Capital: Even though pricing didn’t necessarily go up you’re getting essentially better quality of underwriting for the same price it should produce a better loss ratio over time.

Yes, we have a much better quality portfolio going into 2009 then we had coming out of 2008. Ian Gutterman – Adage Capital: I was thinking if this was a broader based turn then the post Katrina turn and therefore it would have a lot more opportunity as the year progressed. I want to make sure you’re comfortable that you have plenty of capital to take advantage of that as the year progresses.

Absolutely.

Your next question comes from Vinay Misquith – Credit Suisse Vinay Misquith – Credit Suisse: You’ve done a great job of explaining in detail the credit insurance book. We keep hearing headlines in the market, what should we be worried about as we hear some news in the market about your primary insurance credit insurance book?

I gave you comfort. I’m responsible overall for the all these underwriting businesses. I’m comfortable about it. I am deeply involved on a very regular basis along with my senior colleagues in monitoring that portfolio as well as the underwriting of that portfolio which has been the case since we started AXIS. We have seven years of AXIS experience which has been extremely favorable. We have 25 years of previous experience which was extremely favorable. I’m not sure what else I can say to you apart from the fact that I’m comfortable, the company is comfortable and we’re in good shape. Vinay Misquith – Credit Suisse: I noticed you’ve written a lot more professional liability primary insurance and reinsurance this quarter and I believe you also mentioned that you increased your market share on your credit and bond business. Would that be just purely because competitors are dialing back, if you could add some more color to that as to how you see more opportunities whereas the market is dialing back.

The reinsurance side I addressed in my previous comment about the fact there’s a flight to quality and we’re able to access better reinsurance business as sedans look more closely at the underlying security of their reinsurers. Naturally as we’ve said over the last couple of quarters the financial institution business has moved ahead strongly in terms of being re-priced. We’ve benefited from that. We are, as a general comment, throughout our professional lines business we’re benefiting from the diversity that we’ve been putting into that portfolio now for the last three or four years. It’s coming from all sorts of difference areas. Its not just financial institutions, which we remain reasonably conservative about. Vinay Misquith – Credit Suisse: On the stock repurchases I noticed you did buy back some stock this quarter. What are your plans for the future especially if you believe that the market is going to get harder in the second half of this year or early into 2010.

On that point a couple things, you might recall from the last quarter I made the commentary that we were suspending our repurchase program, this was back in October for 2009 and as of today I would say that’s still the position we’re in. Those repurchases that occurred last quarter actually occurred very early in the fourth quarter and they were carried out under an automatic program a 10-B-5 program or whatever it was. Once that was completed we essentially suspended repurchases indefinitely at this point.

Your last question comes from Josh Smith – TIAA-CREF Josh Smith – TIAA-CREF: If we could get a little more disclosure in the future, you’ve done a great job giving us color on the political credit risk but maybe at a future investor day if we could get those types of risks by geography in a little more detail there that’s a request for future disclosure. On your PMLs you give your detailed PMLs and Ike turned out to be 55% of the one in 50 events versus the industry loss looking at you being less than 30%. Was Ike an outlier, was that related to the Texas windstorm or did Ike fall within your expectations?

Ike was within our expectations, immediately after the hurricane had hit. I’m pleased about the fact that it modeled as we expected. The loss was as we expected and it didn’t move. Josh Smith – TIAA-CREF: As far as your reinsurance recoverables three out of the top four recently downgraded. Did that have any impact on your comfort on recovering those or are you still as comfortable as you were before those downgrades?

We’re sensitive about any reinsurance recoverable. We will continuously monitor the performance of those underlying reinsurers. Obviously we’re looking very closely at it. Josh Smith – TIAA-CREF: Back to investments, you mentioned that over 96% of your AAA are super senior but then, I think this was on CNBS but the subordination was 26% or so. Typically I think of subordination on super seniors being closer to 30%. Can you give me a range of what a junior AAA versus a senior AAA?

Are you talking about within our portfolio? I wouldn’t have that with me here. We can get back to you on that question.

At this time I would like to turn the conference back over to John Charman for any closing remarks.

I want to make one final comment about Josh Shanker’s question at the beginning which I’d like to elaborate on as I thought more carefully about over the last five or 10 minutes. On our insurance portfolio the way I would categorize it is the fact that you’ve heard me say over the last two to three years that we’ve been extremely defensive because of the aggressive market competition throughout pretty well all of our product lines, throughout the specialty area. I would regard us as being materially underweight through a lot of those product lines, deliberately so, because we have withdrawn from large numbers of accounts because of pricing or conditions. Even though the world is slipping into global recession the fact is that because of the scale of our underweighting throughout an awful lot of those portfolios we have a very major opportunity as pricing moves back into our favor and risk reward moves strongly back in our favor to benefit substantially from that. Thank you again for taking the time to listen to us. We look forward to reporting to you our first quarter results.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.