Welcome to the third quarter 2009 AXIS Capital Holdings Limited earnings conference call. I would now like to turn the conference over to Linda Ventresca. Please go ahead.

Thank you, operator. Good morning ladies and gentlemen. I am happy to welcome you to our conference call to discuss the financial results for AXIS Capital for the quarter ended September 30, 2009. Our earnings press release, financial supplement and quarterly 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 be available by dialing 877-344-7529 in the U.S. The international number is 412-317-0088. The conference code for both replay dial in numbers is 434229. 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, derivative contracts, policies 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 which can be found on our website. With that, I would like to turn the call over to John.

Thank you Linda and good morning to you all. I am pleased to report that during this third quarter of 2009 Axis benefited from very good P&C underwriting results as well as a strong recovery in asset valuations throughout our investment portfolio. Importantly, our underwriting operations produced a combined ratio of 73.2%. While the combined ratio benefited from a low number of catastrophes, it continues to demonstrate our strong performance for the year and the consistency of our underwriting performance through what has been so far a very challenging phase of the underwriting cycle. Our results are particularly strong given the impact of the global economic crisis on a number of our important product lines over the last couple of years. Our results this quarter were adversely impacted by an increase in the fair value liability of our only insurance derivative contract. Despite this adjustment, we were still able to deliver an increase in diluted book value per share of 10% in the quarter and 22% for the year-to-date. For the third quarter our consolidated net premiums written were up 80%, largely due to the continued success of our reinsurance segment in Axis [included] underwriting opportunities. At this time, the reinsurance market continues to remain the most disciplined and attractive area of the global P&C marketplace. In our insurance segment we have continued to maintain a very defensive posture overall. While rates improved across our insurance portfolio during the third quarter of 2009, this improvement was somewhat muted relative to the first half of this year. As we have demonstrated in the past, when necessary we will sacrifice top line growth to preserve underwriting profit. As we work diligently through this challenging phase of the underwriting cycle we have continued to invest in broadening our franchise’s capabilities. This includes the expansion of distribution capabilities and new target markets including global accident and health. We expect these efforts to generate significant returns to shareholders over time. With that I will turn the call over to David to discuss our financial results for the quarter in more detail.

Thank you John and good morning everyone. As John mentioned we are pleased with the underlying performance of our business this quarter. As we announced a few weeks ago this quarter’s results were adversely impacted by an increase in the fair value liability for the insurance derivative contract we wrote in 2006 primarily exposed to longevity risk. Despite this adjustment, which I will cover in more detail in a few minutes, our otherwise strong underwriting results and strong investment results enabled us to achieve an annualized operating return on average common equity for the quarter of 13% and 14.7% for the year-to-date. This, combined with the significant improvement in asset valuations across our investment portfolio, contributed to the 10% increase in our diluted book value per share to $31.58 in the quarter. Since the start of the year the diluted book value per share increased 22%. We recorded a net loss for the quarter of $96 million or $0.70 per diluted share compared with a net loss of $249 million or $1.79 per diluted share for the third quarter of 2008. After tax operating income which excludes the impact of realized investment gains and losses was $152 million or $1.00 per diluted share compared with an operating loss of $151 million or $1.15 per diluted share for the third quarter of 2008. The main driver of the difference between the operating income and the net loss is the impairment charge on medium term notes reported this quarter. For the first nine months of 2009 net income was $179 million or $1.19 per diluted share compared with $220 million or $1.40 per diluted share in the first nine months of 2008. After tax operating income improved substantially to $490 million or $3.26 per diluted share from $273 million or $1.74 per…

Thank you David. You can breathe out now. I would like to start my commentary with a discussion of two operational items. First, and as we have discussed regularly over the last several quarters, the past two years have presented understandable stresses to the credit exposed underwriting areas of Axis. We view this period as a welcome test, not unlike those we have faced time and time again in our catastrophe exposed lines of business. Our performance continues to be very good when measured against the scale of the global financial crisis. Our emphasis on underwriting, emerging market, political and credit business was the appropriate one. We continue to believe that our credit exposed businesses offer significant profitability over an economic cycle. Secondly, our experience with our only life settlements transaction was a direct result of a significant and unexpected shift in life expectancies. As a background of investment opportunity was presented to us in 2006 and the fundamentals of success with respect to this investment needed to be determined by our evaluation of longevity exposure for a group of elderly individuals. As part of this evaluation, we delivered our underwriting resources and supplemented this with contracted, traditional life industry third-party actuarial support. Of course, since the time we took on this transaction in 2006 we have been monitoring and evaluating the exposure very closely. Our restructuring of the transaction in September of 2007, as described by David, capped our downside and we are now in a position to put this behind us. We are in the risk business and losses must be accepted at some time or another in the various lines of business that we underwrite. They usually don’t all happen at the same time, though, but when a few of them do converge we believe we are…

(Operator instructions) The first question comes from the line of Vinay Misquith – Credit Suisse. Vinay Misquith – Credit Suisse: On the credit insurance and the political risk business, thanks for your update. Could you give us a sense for what trends you are seeing in terms of claims and since you have seen a stabilization in the credit markets should we see a lower impact on the loss ratio? This year I believe it was 11 points on the insurance and 4 points on the consolidated so should we see a lower impact next year?

I think we said that we believe that stabilization has impacted our portfolio [fortunately] which we expected and I have said really over the last year to 18 months that the years that would be affected would be 2007, 2008 and hopefully with 2009 that would be the end of it and we would return to a more stabilized pattern of losses. So I am pretty comfortable with what I said in the last quarter and the quarter before that and the quarter before that about the outlook for this line of business. I don’t think it is quite the plague that some people think it is. I am as comfortable today as where we were in terms of the level of our reserves and the loss activity we have experienced. Vinay Misquith – Credit Suisse: So what is the normalized combined ratio that you would normally write this business to that we could maybe expect in the next few years?

As I have said to you before, many times, I don’t expect a significant amount of loss ratio from this underlying business in normalized years. I won’t go back how far I have been writing this business but if you look at Axis from 2002 through 2007 there was hardly any loss activity at all in those years. As the economic crisis started to develop naturally we saw loss activity increasing in 2007 through 2008 and peaking in 2009. As liquidity has increased globally and as the global crisis has abated we have seen a dramatic impact on the portfolio. So we don’t expect a lot of loss activity during normalized years. Vinay Misquith – Credit Suisse: On capital management, I was curious as to what your views are for next year?

Well I think I would just remind you of the comments I made earlier. We do have an authorization available to us of about $212 million. Where we find the opportunities are there in the markets in terms of growing our business we might deploy our capital in terms of repurchasing shares. Obviously we think that is the most attractive way to manage our capital, as I said. In terms of 2010 I am not going to comment on what our plans are at this point. Vinay Misquith – Credit Suisse: Because the stock is trading at 91% of book it seems that the most attractive opportunities in this market would be repurchasing stock. I think then right now with pricing not improving I was hoping maybe you would be more willing to buy your stock at these levels.

That is certainly going to weigh heavily on our minds.

I wouldn’t take away that we are not willing. I think you have to go back to the comments I made.

The next question comes from the line of Brian Meredith – UBS.

First, on the structured settlement loss going forward if everything remains stable here does that mean we should see about an $8 million hit from that contract per quarter up through 2017?

No that wouldn’t be correct. A couple of things and I already went through quite a lot in the prepared remarks but it is a fair value accounted for contract. It is not a discounted valuation model. It is fair value so you can’t just normalize and amortize the number today to the 400 in the future. Secondly, the amount of loss we have reported to is not the full loss on the contract. It is nearly a full loss but not a full loss. We wouldn’t amortize to a full loss unless we viewed changes in the underlying assumptions. Having put all that aside for the moment and I know a lot of you are trying to figure out what might happen in the future, if you think about your discounting models all else being the same and no change on our view on the loss and the markets moving in a very straight line fashion, you would get a much smaller adjustment on a quarter-to-quarter basis. Again, that is not the way we are going to account for it. We are accounting for it on a fair value basis.

Your alternative investment strategy, obviously things have improved nicely the last couple of quarters. I guess given the volatility we have seen in the alternative investment strategy what are your thoughts on that going forward? You have enough volatility on the liability side. Do you really need the volatility in the asset side?

I think on the alternatives, they are a small portion of our overall portfolio at roughly 5%. We do monitor it very, very closely and carefully. We do believe the investments we are holding are appropriate for our overall company. As I said in my remarks earlier, we will continue to look at opportunities there if we think they make sense relative to our overall company exposure.

You are on the right track in terms of the fact we take risk on the liability side and we want to make sure that whatever risk we are taking on the asset side is acceptable in the light of the totality of our balance sheet. I do not want to go through another year like last year and this year if that gives you an indication.

The next question comes from the line of Ian Gutterman – Adage Capital. Ian Gutterman – Adage Capital: I wanted to follow up on Brian’s question on the settlement. If I am just doing some quick math here, if you are recognizing the liability at 228 and that is being discounted from something in the high 300’s I am getting about a 7% discount rate. First, is that right and second, why is it so high given that interest rates are so low today?

Well a couple of things. I am trying to go to pains to say this is not a discounted cash flow model. It is a valuation model. Your numbers are not off by much but I don’t think you would discount a long-term liability like that, an 8-year liability based on today’s spot rates. Even though interest rates are low today that doesn’t mean that will be the rate for the next eight years. Ian Gutterman – Adage Capital: I guess I’m wondering if rates stay low for awhile is there a chance you are going to have to take that discount rate down over time and that could…what I am calling the discount rate, and that could lead to in a given quarter maybe it gets marked up by more than we expected if interest rates stay low.

Sure. Persistent low rate environment has all kinds of problems for this industry, not only on this contract. But the one thing you are probably also keeping out of the equation is that we do have inflows on this contract as well with future premiums that are expected to be received which you are probably not modeling. Ian Gutterman – Adage Capital: So from now until maturity then is that sort of $150-175 million difference between where it is marked currently and the limit that funds show up on the income statement over time? It just matters how much shows up each quarter depending on where the underlying assumptions are? Is that fair? The whole amount will show up over time, it is just a matter of what the timing is?

That’s correct assuming that the assumption, the conservative assumptions we have now moved to hold up and the actual performance, as I said in my remarks, the actual performance actually meets what we model today which is likely not to be the case then your theory is correct. Ian Gutterman – Adage Capital: On the medium term notes, I am showing on the investment supplement that you have an amortized cost not of $361 million which I assume is what it was written down to. Can you tell me what par is?

It is about $625 million I think was the original par. Ian Gutterman – Adage Capital: How much concern should I have that the $361 million might need to get written down further in the future?

As we were just talking we can’t predict where rates and everything are going to go in the future but that is based on today’s market. So we have seen quite a lot of activity in the last several months and spreads coming in and interest rates staying very, very low. So, I can’t tell you we won’t have any further deterioration in the price there but I have to believe it is highly unlikely we would see much given… Ian Gutterman – Adage Capital: The rates haven’t moved in Europe to the extent they have been modeled in. Ian Gutterman – Adage Capital: I am looking at page 15 of the financial supplement where you show your top financial holdings and you break it out by government guarantee and non-government guarantee. I look at things like B of A or Citi where most of it is non-government guarantee and then you also show somewhere else that those are essentially at par right now. I guess I am wondering for institutions that aren’t necessarily in greater shape and you don’t have a government guarantee and they are trading at par, why wouldn’t you keep holding those at this point? Or at least reduce them so they aren’t such a large part of the portfolio.

Those investments are mainly at the very high level, very senior debt level so we think that they provide good potential for a good profitable portfolio. I think that we are holding. That is our current view anyway. Ian Gutterman – Adage Capital: You don’t worry about concentrations? I know in the individual positions it isn’t large but if you add up where you are in the too big to fail banks that is a meaningful position.

We do look at that in terms of our overall risk management and I would say no we are not that concerned about that concentration at this point.

The next question comes from the line of Steven Labbe – Langen McAlenney. Steven Labbe – Langen McAlenney: Recognizing that the absolute numbers aren’t large, can you elaborate on the lines of business you are writing in the liability insurance and liability reinsurance segment where you had premium increases this quarter?

I am pleased that you explained it in the way that you did because we have historically been very consistent in our approach to the casualty business in both the insurance market and the reinsurance market. Just to put some color around our current casualty writings which if you take out professional lines the peak casualty writers we had were in 2005 which was just over $285 million. Just to give you a flavor for year-to-date we are just under $160 million so we are averaging around about $50 million per quarter in our casualty business. This quarter’s increase was really due to some MGAs coming online. There was nothing special about it. We remain extremely conservative about the casualty lines. It is heavily reinsured. We approach it with caution and we will continue to approach it with caution. On our reinsurance segment again excluding professional lines we are access underwriters, don’t forget, and again we have been very cautious in our approach. We look very carefully at cedants. We audit their underwriting. We audit their claims. The reinsurance portfolio was affected this quarter by a one-off opportunistic reinsurance contract as David mentioned which was for $25 million. There was nothing to read into at all this quarter the increase in the liability premiums.

This does conclude today’s question and answer session. At this time I would like to turn the conference back over to management for any closing remarks.

I would just like to thank you all for taking the time to listen in to us today. I look forward to addressing you for the fourth quarter results. Thank you all.

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