Good morning, and welcome to the AXIS Capital fourth quarter 2011 earnings conference call. All participants will be in listen-only mode. (Operator instructions) Please note, this event is being recorded. I would now like to turn the conference over to Linda Ventresca. Please go ahead.

Thank you, Amy. And 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 fourth quarter and year ended December 31, 2011. Our earnings press release and our financial 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 one hour for today’s call, which is also available as an audio webcast through the Investor Information section of our website. A replay of the teleconference will be available by dialing 877-344-7529 in the United States. The international number is 412-317-0088. The conference code for both replay dial-in numbers is 10008393. With me on today’s call are John Charman, our CEO and President, and Albert Benchimol, 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 meanings 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, policies and other loss events; general economic, capital and credit market conditions; future growth prospects, financial results, and capital management initiatives; the valuation of losses and loss reserves; investment strategies, investment portfolio and market performance; impact to the marketplace with respect to changes in 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 Factors 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’d like to turn the call over to John.

A very good 2012 morning to you, ladies and gentlemen. In 2011, AXIS celebrated its 10th anniversary, and I’m enormously proud of the success AXIS has had in realizing our founding vision. However, I cannot imagine any greater test for our company celebrating such a milestone than the events that have occurred in the past year. AXIS has experienced an unprecedented set of extremely stressful circumstances on both sides of its balance sheet. On the underwriting side, an extraordinary series of natural disasters, which are estimated across our industry over $100 billion, took center stage in 2011. The timing of these losses occurred against the backdrop of a prolonged soft market, but perhaps the weakest phase in this business cycle when adequate pricing remained extremely difficult to obtain. Further, on the asset side, we experienced the persistence of abnormally low interest rates, which made low risk investment income difficult to achieve. At the same time, we weathered severe volatility in the financial markets, which agonized over the possible breakup of the Eurozone, threatening to send one of the world’s key economic regions into financial chaos. We also encountered a host of other uncertainties, including political paralysis, the ratings downgrade of major economies, and the fear of faltering growth in both the United States and China. As an Englishman would say, it certainly was a slow year for us. For the year, AXIS’s diluted book value per share declined by 3.3% to $38.08, reflecting the high level of catastrophe losses. Net income available to common shareholders was $9.4 million. Return on average common equity for 2011 was a nominal 0.2%. While we are unhappy with the adverse impact of these extraordinary events on our earnings, we are nonetheless satisfied with the ability of our portfolio to absorb the significant losses without impairing our financial strength. Over the long-term, however, we have compiled an exceptional record, and I’m pleased that even during such a difficult year, we continued to invest in our company and delivered franchise value to our shareholders. Diluted book value per share adjusted for cumulative dividends declared has risen at a compound annual rate of 13.7% from 2002 through 2011. Our return on average common equity, which was marginal in 2011 due to the high level of catastrophe losses, has averaged 14.2% over 10 years. We are navigating a transitioning market, which I will describe in more detail later. And we are proceeding with appropriate caution. All of us at AXIS recognize the absolute necessity to return to operating profitability during the coming year. I can assure that we are well positioned to do so and our very best endeavors will be devoted to that single cause. And with that, I would like to turn the call over to Albert for an overview of our financial results.

Thank you, John. And good morning, everyone. The fourth quarter was emblematic of a difficult year. Extraordinary catastrophe activity again marked our results, with a $135 million impact from catastrophe-related claims, net of reinsurance, taxes and reinstatement premiums in the quarter and $910 million in the full year. This compares to $41 million and $295 million respectively for the fourth quarter and full year 2010. The increase in catastrophe losses explains the bulk of the year-over-year reductions in earnings. With higher frequency of large losses, lower pricing and reduced investment income contributing the balance of the variance. Nevertheless, we reported net income available to common shareholders of $80 million for the quarter and $9 million for the year and emerged with our balance sheet strength intact and ready to take advantage of improving market conditions. While the catastrophes affected the reported results, they did not distract us from the ongoing development of our business. We made significant progress in new lines in markets, including accident and health, renewable energy, design professionals and environmental, as well as further expansion of our Canadian and Australian operations. We have a well balanced book of business and an organization that is anxious to get back to delivering the superior results that have been the hallmark of this company. Let’s get to the specifics for the quarter. Consolidated gross written premiums were up 5% to $667 million, while net premiums written were up 1%. The lower net written premium growth rate primarily reflects a shift in business mix towards lines where we see the higher percentage of our gross premiums. Consolidated net premiums earned grew 12% in the quarter, reflective of the business written in recent quarters as well as changes to our reinsurance purchasing programs in 2010. Our consolidated combined ratio for the quarter…

Thank you, Albert. And I will begin my market commentary with an overview of the important January 1 reinsurance renewals. Globally, the reinsurance market was mixed, with pricing conditions varying significantly by line and geography. The greatest firming occurred in the property catastrophe reinsurance line. In the US, pricing was up 5% to 15% in peak zones, with greater increases for loss impacted accounts. Accounts outside the US with significant loss activity through 2010 and 2011 also experienced significant positive rate movement. Property lines lacking Cat content were generally stable, but pricing was up where loss experience warranted this. Overall, the market was slower to adopt RMS version 11 than we have anticipated. And in Europe, it had no impact. Generally, European Cat reinsurance lines experienced moderate firming. And despite continued ample competition for other P&C lines in Europe, the outcome was broadly stable. In the US, besides the signs of improvement in pricing for underlying portfolios in casualty reinsurance lines, including the specialty professional lines, these improvements did not seem to be outpacing loss trend. We find ourselves facing a highly uncertain economic environment with potential adverse implications for exposure in our portfolio. Yet still on the critical – we are still on the critical cusp of a broader P&C market turn. This situation demands that we preserve our capital for the best opportunities that will occur throughout this year. With this in mind, we took a firm line on business where market conditions did not allow us to accomplish our profitability objectives. And when we did deploy capital, we sought to position that capacity strategically. In some cases, this meant reduced lines or shares, and in other cases, restructuring. Approximately 56% of AXIS Re’s 2011 expiring premium was renewable in January. Of this renewal, we estimate our overall…

Thank you. (Operator instructions) Our first question comes from Josh Shanker at Deutsche Bank. Josh Shanker – Deutsche Bank: Yes. Good morning, everyone.

Good morning, Josh. Josh Shanker – Deutsche Bank: I guess I have one more quarter with you, John, where I can ask the questions. So I’ll get it out this one at the beginning of the cycle turn. I’m looking at the last 10 years. You guys have done very well with 14% ROE, I think, over the long run, if I’m correct on that. But you talked about the momentous here that 2011 was. I look at this year and almost every one of your competitors has been left standing. What does that mean for the next decade? And can AXIS really hope for the same kind of performance in the 10s as it did in the millennial decade?

Yes. And let me tell you, Josh, I think that when I started AXIS back in 2001 and looking at pricing levels in 2002 throughout pretty well every product line, the – in 2005, because of the abundance of global liquidity, because of the substantial leveraging that banks had, flooding the capital markets with capital that needed to be put to work, our industry was I think substantially affected. And when people reflect on this last decade, I hope they will reflect back till the end of 2005, after Katrina, when the industry was making process towards actually increasing rates generally across the board again after a few years of substantial competition. What happened in 2005, I believe, it interrupted a much steadier state that the industry has got itself into. It also bought in a huge number of new players, many of which actually had no real future at all because they had absolutely no chance or very little chance in my view of ever building a global franchise. And I think that because what has happened as a result of the financial crisis, with the deleveraging and capital becoming more scarce, people are becoming much more risk conscious especially in our industry. I actually believe our industry, as we progress through 2012 and 2013, is going to emerge in a much more disciplined, much more risk aware and much more demanding industry for the future than it has been over the last 10 years. And that’s why I actually am extremely positive about the future of AXIS during that period of time. Josh Shanker – Deutsche Bank: So, looking at the risk discipline that everyone took following this terrible, terrible year and the fact we don’t have bankruptcies this year, does that mean that there is enough for everybody in that market or does that – or we have to spend a little bit?

I still believe there are far too many players in the marketplace, but capital is sufficient and I think that the industry has shown remarkable resilience in totality to absorb over $100 billion of catastrophe losses at the very bottom of a very aggressive pricing cycle. The real issue with the industry, there are just far too many of us around and we need to be culled. Josh Shanker – Deutsche Bank: Do you think that’s M&A that does that or do you think there is capital move [ph] from the market? How does that happen?

I think it’s through a combination of a lot of things, not least of which I think shareholders are getting pretty hacked off with the returns of the industry and the outlook. So, as an industry, we have to get our act together. Josh Shanker – Deutsche Bank:

Appreciate it, Josh. Well, I’m not actually dying, so – Josh Shanker – Deutsche Bank: That’s true.

Thank you all the same. It’s been very kind of all the thank you messages that I’ve received and very nice messages, but they almost read like obituary messages, and I’m going to show you my health is still quite good. Josh Shanker – Deutsche Bank: Good, good. I look forward to seeing you then. Take care.

Your next question comes from Vinay Misquith at Evercore. Vinay Misquith – Evercore: Hi, good morning.

Good morning, Vinay. Vinay Misquith – Evercore:

Well, I think the lower exposures really reflect the fact that we are still not happy with the pricing for Cat business generally. You can’t put $100 billion of Cat losses into the market in 2011 and see what I will consider to be a pretty modest improvement in pricing. I think the reinsurance market as a whole failed to really technically approach a lot of these geographic regions and look at the structures of the reinsurance programs that they were allowing to emerge in these regions as well as the pricing. It’s not just a pricing issue. There are some structural deficiencies, which I think during the course of this year will be resolved. So it was deliberate on our part and we believe that it is better to preserve that capital and get much better returns with the inevitable change. Vinay Misquith – Evercore: What level of price increases do you think are necessary for you to get to 25% of equity 1-in-250 PML?

It’s such a broad question, Vinay, region-by-region, product-by-product. But I can assure you that I felt personally that the market is still some way behind the curve. But I expect that the market will harden because the fourth quarters again bode catastrophe activity for everybody. It’s again more deterioration over prior catastrophe losses. We’re at the bottom of a very soft pricing cycle that we’ve been stuck in for the last five of six years. People are going to get real and they will get real because they are really looking at the numbers. And so I absolutely expect both markets to continue to move. The reinsurance market will move much more quickly than the primary market. Vinay Misquith – Evercore: Okay, that’s great. Just a follow-up on the underwriting margins. So, given what’s happened on Jan 1 plus what you expect pricing to be this year versus last year, do you expect the underwriting margins to remain flattish for the company as a whole in '12 versus '11 or do you expect a small amount of improvement given price increases in property Cat?

We are across both Insurance and Reinsurance, Vinay, that we monitor our prices very carefully. It’s a lot easier to do so on the Insurance side, where just as a matter of interest, we have over 23 different pricing points globally and by product that we measure. When we started the first quarter of 2011, our overall portfolio was showing a reduction in prices of down 5%. When we get to the fourth quarter of last year, that suite of products, as I said, over 23 of them, we’re showing a price increase of 1%. And out of those 23-odd product lines, only three lines were weaker at the end of the year than they were at the beginning of the year. And quite frankly, those three lines were immaterial in terms of production. So I think directionally, that gives you a pretty good indication of where the insurance market is going. Vinay Misquith – Evercore: But pricing is still slightly below loss cost trend do you think this year?

I mean, on the longer tail lines, we believe that to be the case. But pricing is increasing there that it just really hasn’t gathered the momentum it needs to. But I think you will see that occur during the course of this year. Vinay Misquith – Evercore: Okay. Thank you.

Thank you, Vinay.

Our next question comes from Matthew Heimermann at JPMorgan. Matthew Heimermann – JPMorgan: Hi. Good morning, everyone.

Good morning, Matt. Matthew Heimermann – JPMorgan: Couple questions. First, just your comment on the A&H business potentially getting to $300 million to $500 million by 2014, can you just remind us or give us a sense of how much of that is going to be brokered business versus direct business?

Well, as we’ve said that we had to really wait just over two years to get our suite of licenses in the US put in place. And so initially we – our portfolio has been reinsurance-based rather than more than insurance-based. And naturally, most of that will be broker-based. In terms of the insurance products, it’s a mixture, because there will be a mixture of broker-based as well as direct involvement with affinity groups and different distribution channels. It’s going to be a mix. Matthew Heimermann – JPMorgan: Okay. Any sense of, on the Insurance side, which would predominate?

Sorry, on the Reinsurance side or the Insurance side? Matthew Heimermann – JPMorgan: No, on the Insurance side.

Not in the early stages. I expect us to use both – a number of different distribution channels to actually produce the sort of balanced portfolio we need globally. And it is a global portfolio, don’t forget. And different markets are going to use either – are going to use different distribution channels. It could be the banks in some geographic areas. It could be brokers in others. Matthew Heimermann – JPMorgan: Okay. That’s helpful. And then just when you look forward, if the market were to get better, how should we think about where you have the most opportunities to expand? And I guess is that areas where you pull back like the E&S casualty business or aviation or is it more about areas maybe you’ve built but haven’t been big and historically that would expand?

I would like to think it’s an across-the-board opportunity, because as you quite rightly point out, we have not only withdrawn from a number of product lines where we have significant expertise and industry standing because of margin erosion. But we’ve also pulled back substantially across a whole range of different businesses over the last two or three years as price – as margin erosion has accelerated. So the way I would characterize the opportunity is the fact that as the market moves forward in terms of risk pricing, it substantially opens up our existing portfolios where we can trade a lot more aggressively as opposed to being defensive. And then it also allows us to come back into whole sways of business that we walked away from over the last five years. Matthew Heimermann – JPMorgan: Okay. Thank you. And then just a quick numbers question for Albert. Just can you quantify to any extent either just in aggregate or by segment the property and energy impact in the quarter?

I think that if you look at the Insurance business, first of all, the accident year loss ratio was up about 18 points. Around 10 of that after the Cats. We would say that the rate impact is somewhere between 2 and 3 points and the balance of that 7 to 8 points is essentially higher property and Cat losses. On the Reinsurance side, for the quarter, there is a few million dollars of additional losses specifically for the US aggregate treaties. We had less energy losses. We don’t really write energy on the Reinsurance side. It’s really a business that we do on the direct side. And so the difference in the Reinsurance book is mostly the US Ag business that contributed to more losses in this quarter. Otherwise, it’s the Cats that we identified. Matthew Heimermann – JPMorgan: Okay.

Thanks, Matt.

Brian Meredith – UBS: Yes, good morning.

Good morning, Brian. Brian Meredith – UBS:

Yes. It went very well because we at the senior management level, because of what was the volatility that we were seeing in Europe, which was heightened during November, we spent a great deal of time with our underwriters debating the class and really trying to dig very deeply into it to see what potential there was for loss and the sort of controls that had been bought into that business by the trade credit and bond insurers to protect their portfolio in the event of the collapse of the euro and the collapse of the Eurozone. So what we did, we turned the portfolio in its entirety upside down. We exited a number of the more peripheral players in that industry, and we’ve spent a great deal of time talking to the three major players that control over 70% of the global industry to make sure that we were properly satisfied that they had in place as many corrective actions as they could in the event of what I’ve just talked about. So, on a go-forward basis, we were comfortable, as comfortable as we possibly could be, about the defensibility of that business going forward. The business coming out of the financial crisis out of 2008, the underwriting years 2009, 2010 have actually been very good, far better than initial expectations. So, whilst there has been a little bit of margin erosion, quite frankly, because there were sliding scales in terms of commission, but that’s based on profitability, which we were happy to see. So there were some minor adjustments going into 2011, but not really material. We were much more concerned with the impact of the financial crisis in Europe on the portfolio than we were about arguing over 1% commission or that sort of thing. Brian Meredith – UBS: Okay. Great. And then, could you also give us kind of your thoughts on what’s going on right now in the professional liability market? Any changes that you’ve seen in the fourth quarter exiting any better?

Well, as I said in my commentary that what we have done is we’ve seen a slowing down of the reductions that were being granted in the professional lines. And I’d just remind you again, we have over 20 different products in the professional lines field and we have huge geographic diversity. And our growth really for the last 18 months in that product line has really come – the vast majority has come from our international operations, which we established over the last three years. We were just finally getting up to scene [ph], but we are seeing a material slowing down in price aggressiveness in the financial institution side. And I hope that that will continue to move through the other products within that portfolio. We're still – we’re in it because it’s a profitable line for us. We have a great global franchise. We have very, very experienced people that underwrite that business. We have great relationships with our client base. We have a niche area where we are not primary underwriters. We know where we want to be. We know what prices we want to get and a very few people without quality of capital in that area of the market. Brian Meredith – UBS: Great. And then one last one. Just curious, your thoughts – the Thai flood losses have caused some pretty heavy losses at some of the Lloyd’s syndicate. Kind of your thoughts on the Lloyd’s market right now, opportunities there potentially for you in lines of business particularly as the Thai floods continue to develop here?

I’ve spent 30 years trying to get out of it. I’m probably – I know too much about it, but there are some very good businesses in Lloyd’s and I have high regard for a number of them and there are some less good businesses in Lloyd’s. The trouble is that you have a neutralized society and with very broad power. So if you’re going to go into Lloyd’s, go in there with your eyes open. That’s all I would say. As long as I’m Chief Executive of this company, we won’t, not for any other reason apart from the fact that as Chief Executive, I’m empowered to run my company. I don’t delegate the authority to run my company to a third-party liability [ph]. Brian Meredith – UBS: Thanks.

Our last question comes from Jay Cohen at Bank of America. Jay Cohen – Bank of America: Yes, thank you.

Good morning, Jay. Jay Cohen – Bank of America: Good morning, John. With the reduced exposure on the Cat side that you discussed for 01/01, I’m assuming that frees up capital. And given that and given that your stock is still below book value, should we expect the buybacks to accelerate a bit in 2012 versus the fourth quarter run rate?

I’m going to ask my partner to answer that question.

Good morning, Jay. I think our position with regard to capital management really hasn’t changed. As you’ll recall, we said that we would be taking a look at this thing on a quarterly basis, take a look at the capital that we’ve generated in every quarter and then determine where the opportunities are. Obviously, if the market’s change is slower than we are hoping for, it clearly means that we’re going to keep less of that capital and use more of it for repurchases and vice versa. Obviously we do need to keep some opportunistic capital. But if we feel confident that we won’t need it, then we will use it to repurchase stock. Jay Cohen – Bank of America: I guess we’ll have to see what the opportunities look like then.

Exactly right.

Jay, can I just on that point of the opportunities, because I think I said back in the last quarter that people expect instant gratification in our industry. And I’ve been saying for a long time the fact this is a cycle change. And I’ve heard some reports about the market is not as positive going into 2012 as people expect it to be. Let me assure you that everything that I thought would happen, especially on the primary side, is happening, and I would love to see it move much more quickly. But in a cycle change, I know that that doesn’t happen. So we are exactly where we thought we were going to be in this cycle change, and we’re poised to be able to take advantage of it. I am slightly disappointed with my Reinsurance colleagues in terms of our peer group and the way that they approach some of these renewals. But as I’ve said that that is a short-term thing because I’m absolutely convinced, as we pull through 2012, when these guys really look at their numbers and really start looking at their pricing and when they start really looking at the outlook, that they are going to pull their socks up. So I’m pretty happy about where the market is and the approach for 2012. And I just want to make that clear to you. Jay Cohen – Bank of America: That’s great. Thanks, John.

Thanks.

This concludes today’s question-and-answer session. I would like to turn the conference back over to John Charman for any closing remarks.

Well, thank you again, ladies and gentlemen, for joining us here today and listening to us, and we very much look forward to seeing you again – or hearing you again fairly shortly. Thank you.

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