Good morning, and welcome to the second quarter 2012 AXIS Capital 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, Investor Relations. Ms. Ventresca, please go ahead.

Thank you Laura 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 second quarter ended June 30, 2012. Our earnings press release and 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 an 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 U.S. The international number is 412-317-0088. The conference code for both replay dial-in numbers is 10015750. With me on today’s call are Albert Benchimol, our President and CEO; and Joseph Henry our CFO. Before I turn the call over to Albert, I will remind everyone that statements made during this call, including the question-and-answer sessions, which are not historical facts, may be forward-looking statements within the meaning of the U.S. 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; evaluation 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 U.S. 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 Albert.

Thank you Linda, and before I forget happy birthday. Good morning to everyone. AXIS has had a very good second quarter. On an operating basis we earned $0.90 per share which on annualized basis represents an 8.7% operating return on equity. Our underwriting performance was excellent with a reported combined ratio of 92.3. Excluding the onetime expenses related to senior leadership transitions in the quarter, our run rate results which I believe are more relevant for the purposes of our discussion are even stronger with an adjusted combined ratio of 88.4, and an adjusted annualized operating return on equity of 11.3%. In addition to the senior leadership transition charges our results were also affected by the investment markets with lower interest rates and negative equity returns. Our investment portfolio delivered a total return of 0.5% for the quarter. Nevertheless our diluted book value per share grew almost 3% in the quarter to a record $40.55. Our diluted book value per share growth including dividends paid was a strong 12.8% over the last 12 months. The market environment for our business is showing ongoing improvement and we are taking advantage of marketing conditions and our position in the market to improve the balance and risk adjusted returns of our global portfolio. Our growth is strong in markets that have shown improvements in pricing, and in the lines were investments and products for geographic expansion in recent years is gaining traction. In other areas, which are for the most part stable or showing modest improvement in risk adjusted returns, we have been actively optimizing portfolio composition to expand margin. In some cases this has come with net premium reductions. But the resulting portfolio provides a more powerful base on which to grow in an improved market. We are confident that we’ve strategically and tactically positioned ourselves to deliver continued significant value growth to shareholders. At this point I will pass the call to Joe Henry our new CFO. Joe came to us from XL where he was a chief financial officer of the $4 billion insurance business. In addition, Joe was previously CFO at two public insurance companies. Joe brings to Axis 37 years of experience in finance and operations and we are very pleased to have him on our team. Joe?

Thank you very much Albert, and good morning everyone. I’m very happy to be here at Axis and look forward to helping this company achieve its strategic goals. In six weeks it has been very easy to see why Axis has been so successful in the past and why we feel good about our future. We produced solid results for this quarter, increasing diluted book value per common share by 3% to another record high of $40.55. Our return on average common equity was 13% for the quarter, with operating ROE at 8.7%. Before I get into detail about our second quarter performance, I would like to note that our results for this quarter were adversely impacted by one-time general and administrative costs associated with senior leadership transitions amounting to approximately $34 million. Absent these charges, our return on average common equity and operating ROE were each 2.6 points higher at 15.6% and 11.6% for the quarter respectively. In terms of cat activity 2012 continues to pale in comparison to the extraordinary frequency and severity of international events that was the hallmark of 2011. Our results for this quarter were impacted by U.S weather events including tornados, flooding, hail, windstorms across a number of regions. While it was a light cat quarter for the industry with respect to international catastrophes, U.S catastrophe losses were average, relative to historical industry experience. We incurred some losses from these events in our insurance segment and we established loss provision in our reinsurance segment based upon our expected share of U.S events of this size. In aggregate, we estimated our losses associated with second quarter U.S weather events at $55 million. More than half of this group estimate is IBNR and almost all of the reinsurance component is IBNR. With that said, let's move…

Thank you, Joe. Market conditions in the second quarter continued to show improvements as there is an increasing awareness of downward pressure on industry earnings including the low interest rate environment, declining favorable prior year reserve development, and increasing loss trends in many lines. This pricing action is most evident at the primary level with reinsurers generally benefiting from underlying improved conditions. In our insurance segments, we had our best quarter yet in terms of pricing change through this market turn. With overall rate up 4% which is ahead of the 3% increase achieved in the first quarter of 2012 and the 2% achieved for the rolling 12 month period. With few exceptions, all lines are showing either flats or increase in rates. Of course, the rate changes very widely by segment and market. Across Axis Insurance the large property and onshore energy classes are showing the greatest improvement indicating an average rate change of plus 11% in Q2, up from plus 10% in the first quarter of the year and ahead of the rolling 12 months average of plus 9%. For many lines across the segment, this is the first quarter where we are seeing rate improvement on top of rate increases achieved in the same period last year, and we estimate these property classes are now up over 15% over the last two years. Areas of the causality market, which have been the most challenging from a price adequacy perspective for some time continue to show gradual improvement, although the progress is not yet sufficient to support significant expansion of underwriting activity. More specifically, rate in our U.S. division which is heavily weighted towards the U.S. property market was up 11% overall, ahead of the last quarter’s 9% and the rolling 12 month average of 9%. In our…

At this time, we will begin question-and-answer session. [Operator Instructions] Our first question is from Keith Walsh of Citi.

Hey, good morning gentlemen. Albert, first question, if you can just help us understand how you execute your plan with the founder of the company being removed as Chairman yet still on the board, how is that not a distraction? I’ve got a follow-up. Thanks.

Well, good morning. I’m not sure I see a problem with that issue. For one thing the strategy that we are executing is really a continuation, a very successful strategy that has evolved over time and you will recall that the strategy that we discussed and the management team that we have in place is one that has been where John was intimately involved and had full agreement all along. So, there is nothing here in terms of the senior management team or the strategy that is in conflict with everything that John has been supporting for as long as he was involved with the company, I don’t see an issue there.

It seems like something weren’t right where he wasn’t in agreement with something if there was an issue on his input and why he was removed as Chairman. So, I’m not entirely clear, how there is not an issue then?

Again, the issue is absolutely not with regard to strategy. I believe that our disclosure on the issue was very clear. There was a disagreement between the board and John in terms of how the role of the Chairman should be executed. They tried to resolve those differences. They could not resolve those differences and as a result of that the board determined to ask John to step down as Chairman. That is the only thing that happened and that is what our disclosures reflected.

Okay. Then just second question. If you could just, you mentioned a little bit about your plan how – you mentioned risk adjusted returns, is your view to make AXIS maybe a little bit less of a volatile player in the market, maybe if you could just talk about how do you thing AXIS is going to look under your leadership three years from now? Thanks.

Thank you. I think fundamentally, AXIS has a very, very strong franchise and leadership position in the complex and volatile risks. And we will continue to make our name with a very strong presence in the complex and volatile risks whether they are in the E&S markets, the property, energy or professional lines. That’s where we’re good at and that’s what the clients and brokers seek us help for. The issue here, when you do have those complex and volatile lines is to make sure that you manage the overall portfolio so that the portfolio is balanced and absorbs that volatility. So it’s the same lines of business and very likely continued growth in those same lines of business, but balance in the portfolio such that the portfolio itself through the benefit of diversification provide a little bit less volatility, but the reduction in the volatility that we would seek is not in the change in our lines of business, but rather from the balance of the portfolio.

Thank you.

And the next question is from Dan Farrell of Sterne Agee. Dan Farrell – Sterne Agee: Hi, good morning. Just a question on the Accident & Health business, correct me if I am wrong, with most of what you’ve been doing there so far has technically been in the reinsurance basis, and now that all of your licenses are in place, can you talk about how we should think about the ramp of the insurance portion of that business, what that ultimately looks like? And then also as the insurance piece of that grows, is there any impact to the acquisition ratio?

Excellent question, thank you, Dan. Let’s put the whole initiative in context if we can. We over the last two three years have hired in excess of 75 individuals, we’ve asked for licenses in the number of countries, we’ve opened up offices. But as you know it’s a lot earlier to write risk from a reinsurance perspective and an international reinsurance perspective. And so, since we had the skill set in place, since we had the capital in place, we took advantage to frontload our growth if you would through reinsurance, and let’s be honest, some lumpy reinsurance contracts because that’s what is available in the beginning. But the long-term vision of this company has always been to have a majority of our premium on the insurance side. And if you look at where things are right now, and let me just expand on your question, you could look at our A&H business and break it up into four different branches if you would. The first is international reinsurance, the second is the U.S. reinsurance, the third is U.S insurance and the fourth is international insurance, so really four different quadrants. The volume picked up first on the international reinsurance side then followed up by the U.S. reinsurance side, a little bit of international and a little bit of U.S. and U.S. being the latest to acquire any business since the licensing issues were tough. The difference between reinsurance and insurance, reinsurance you get multimillion dollar contracts, big large contracts, insurance is small contracts one at a time. So it was always our expectation that reinsurance would be in the beginning, the larger part of the premium and over time as we grew the licensing, as we grew the presence, we’d be able to pick up and overtake reinsurance with insurance. So that’s the story about the build out if you would. In terms of the acquisition expense ratio, you are absolutely correct. When you go from a reinsurance strategy to an MGU strategy through your own internal distribution strategy, you’re consistently reducing the acquisition expense ratio. So over time, as our dependants from what I would call the quick wins of reinsurance and MGU relationships becomes less important, you will see a transitioning reduction in the acquisition expense ratio over time. Dan Farrell – Sterne Agee: Just one thing, is it fair to say that the people and infrastructure you have in place at this point is sort of where you need it now to support the growth or is there other additions that have to come through?

We’ve had a just-in-time staffing strategy. Of course, you don’t want to have a very large sales force in the U.S. if you don’t have the licenses in place. The best salespeople won’t be very happy joining you and sitting on their hands without the ability to do that. So we try and time our presence if you would to those markets for when we can make most use of our personnel. I fully expect that we will grow the staffing of the A&H division over the next couple of years as we follow the opportunities. I made an indication earlier that we would be expanding in Singapore, we’ll put a presence in Singapore which will be new, we will clearly be expanding our presence in the U.S. to take advantage now of our ability to write in the substantially all states. But in terms of strategic direction, in terms of where we want to go, we think we have the right footprint right now and it’s a question of organic growth and to the staff up to continue to feed our growth over time. Dan Farrell – Sterne Agee: Okay. Thank you very much.

You’re welcome.

Our next question comes from Vinay Misquith of Evercore Partners. Vinay Misquith – Evercore Partners: Hi, good morning. The first question is for Albert. Albert you mentioned that it should be ahead of risk-adjusted portfolio as you are reshaping the portfolio. Going forward, do you see the expected returns being slightly lower, because it’s more balanced portfolio?

I am not sure that that is an equation that we need to make. I think that if we have a better balanced portfolio it allows us to grow across all parts of the portfolio and if we are more efficient in the use of our capital, then we can grow, generally with a lesser need of incremental capital because of the balance and the ROE actually improves.

Okay, that’s helpful. To that point, this quarter the share repurchases were not really that significant, while the top line was down and I believe the top line is going to be down second half of the year in the reinsurance space. Should we expect a higher pace of repurchases in the second half of the year?

Well. I think we repurchased $90 million of shares in the second quarter, which was close to twice what we purchased in the first quarter. And we have indicated to you that we would continue to reuse most of our net income to repurchase shares. So, the intent here is to continue to repurchase shares in the second half of the year.

Okay. That’s great. The one last thing if I may. Within the primary insurance was growth in professional lines and casualty, if you could help us understand this, because I believe you mentioned that in professional lines pricing was now beginning to flatten?

That’s right. So I think you’re asking about growing in a market where pricing is flatter?

Yes, correct.

Yeah. The answer to the question this quarter is exactly the same answer we would have given over the last four quarters or so which is that you’re absolutely right that in the U.S., in a difficult environment, in fact we are not seeing a lot of growth, where we are seeing growth is mostly in our new AXIS Pro which is the smaller professional area in Europe, in Canada, and in Australia. So we are in fact growing in those areas where we believe the opportunities are appropriate, but if you were to look at our specific U.S. based volumes, most lines of business in the U.S. are in fact not growing, they’re shrinking.

Thank you.

You’re welcome. Operator: And the next question is from Greg Locraft of Morgan Stanley. Greg Locraft – Morgan Stanley: Hi, good morning.

Good morning, Greg. Greg Locraft – Morgan Stanley: I wanted to just -- you’re very clear in terms of the reshaping on the portfolio side for reinsurance and you’ve got some new talent in there as well. Just curious if you guys have an interest in pursuing alternative markets as a source of potential profitability in the future for that one?

Thanks, Greg the first I had to say is I’m very pleased about our new talent, but I’m also very pleased about our old talent. We’ve got a very, very strong reinsurance shop, it has done a great job for us, don’t forget that’s the reinsurance business that over 10 years has delivered an average combined ratio of 89, it’s a superb team. And Jay is a great addition to that team. I think with regards to alternative capital if you would that’s something that we’ve been looking at for quite some time and we’ve always, we still have talent in house to in fact do things like that, Mike Steel who is our Chief Risk Officer was very heavily involved when he was working at [indiscernible] Benfield in that area. So we have a fair amount of talent there. I think the issue to think about is as we look at a potentially more difficult world. In the future you really need to get smart about a lot of different things. You need to be get smarter but where you get your business – you need to get smarter but where you get your capital – how you manage your leverage and so on and so forth. So, clearly, the interest that the capital markets are showing in the insurance and the reinsurance space is something that we need to look at and see if we can use it to our advantage. There is no question that we’ve all seen the presence of capital markets players whether in bonds or side cars or various vehicles participating in our market. Some of us can choose to look at those as threat. Some of us, as we do, think that this should be seen just as much as an opportunity. And so, it’s something that we will look at, although I cannot guarantee you that we will do anything with it, but we will look at it. Greg Locraft – Morgan Stanley: Okay, good. And then, just shifting gears to a totally separate part. Professional lines, it’s a big business for you guys and notably, Chub and some others have been talking about rising loss trend in those markets, and we’re seeing a pricing response across the markets. But, what is your take on the professional lines loss trend and how do you guys manage that line in terms of what you’re seeing?

Right. I think what’s really important is to understand what’s been driving the losses in professional lines. If you look at the various litigation, settlements and so on and so forth, what you’ve seen is an increasing amount of litigation coming through, but most of these are resolved in the lower layers, mostly defense costs burning through the primary layers, maybe the first excess layer. And so, if you go higher up the towers, and by the way on the professional lines we tend to be more of an excess player, different layers depending on the industry, size of the market. But we are generally not the primary players. And so at the excess layers we really haven't seen the kind of activity that you see in the primary layers, which is why in fact the pricing increases have been more pronounced on the primary side and less so on the excess side. Now, we have a high level of confidence that those pricing increases while lagging will ultimately catch up. But on the excess side we really have not seen the kind of activities that have been eroding the profitability of the primary layers. Greg Locraft – Morgan Stanley: Okay that’s great colors. Thank you very much.

You are welcome.

Our next question is from Joshua Shanker of Deutsche Bank. Joshua Shanker – Deutsche Bank Securities: Yeah thank you. Albert I like your commentary on investment income and what not. Your predecessor said that he felt the next ten years would be more profitable for insurance companies during the previous ten and I'm wondering if you concur with that outlook, maybe talk about the next five years.

Very good question. I share John’s optimism about Axis’ success opportunities over the next 5 and 10 years. That’s no doubt. But I think if you look at the industry and what I will say is the following. As I look at the financial sector, banks, insurance companies, P&C, life and so on and so forth, there is no doubt in my mind that the P&C sector is going to be much, much better positioned for success in the next 5 or 10 years than any of the other major players in the financial segments. You look at the banks and I really would not want to be in the executive management team of any of the major banks out there. They are dealing with regulatory uncertainty, they are dealing with a huge number of problems. The life insurance industry, which has significant exposure to investment risk is also having issues. The regulators are looking at making significant changes over there. The P&C industry model is a model that has really proven itself over and over again over 400 years and certainly through the last financial crisis as a model that works. So I'm actually very confident that on a relative basis at least the P&C segment will be probably better, if not the best segment in the financial services segment. In terms of absolute results, the next five years versus the last 10 years, obviously investment income is a significant component of P&C profitability. You know as well as I do the kind of headwinds that we are facing on that. So I think that will be a change from an absolute basis but our job is to generate the maximum return that we can, given the risk on the interest rates available to us and I have absolute confidence we will be able to do that. Joshua Shanker – Deutsche Bank Securities: Okay. Thanks for the clarity.

Our next question is from Brian Meredith of UBS Brian Meredith – UBS: Yeah good morning Albert. A couple of questions for you. The first one is, just curious on the reduction in P&Ls in aggregate to the mid-Atlantic and Northeast in the cat reinsurance market. Was that driven by your view of an increase in risk in those areas or was it because rates decline and is it something that’s kind of relatively new or could we expect this to kind of go through to one-one renewals as well?

Right. I think if you look at some of the places where we reduced in the mid-Atlantic and Northeast, it was mostly in the very, very low priced higher layers and so we were putting up a large amount of capacity for very little return and it just didn’t seem to us that it was the best use of our capital and that was really what it was. Again we are talking about balance in the portfolio and you will see that how we shifted some of our emphasis between the 50-year, 100-year, 250-years segments to really optimize the risk adjusted returns. I will say this, I'm absolutely comfortable at where we are right now is absent a significant reduction in pricing, the floor of our P&Ls. I think that we are actually looking for growth in that area but growth when the conditions make sense. As I mentioned earlier, there were some areas, some zones where we felt we may have been a little overweight or given our new perception of risk adjusted return shift does not meet the kind of returns that we wanted, we have taken some action over the last 12 months. You are very familiar with those. Where we are now as far as I'm concerned is a very solid base on which to grow. Brian Meredith – UBS: Great. I'm just curious, what changes if any has Jay permitted in the reinsurance business since he has got on board?

Well, I think jay has been on board for a grand total of three, four months here. So I think he has been getting his feet under the table, getting to know the people, basically rearranging some of the way we think about the lines of business so we had more of a geographic organization. And what he has done is overlay the product reorganization over the geographic reorganization. So that would be the first thing. The second thing is clearly I would say that his presence and insights have been clearly reflected in the Florida, the most recent June-July renewals. He was there and he has had a lot of input in how we should think about shaping that portfolio, gave us access to some new accounts that we didn’t have easy access to. The third thing is as I mentioned in my prepared remarks, he has launched a new global crop initiative for our reinsurance business. I think that he has been pretty busy for his four months. Brian Meredith – UBS: Great. Just one other quick one. Expected maturities for your fixed income over the next 12 months?

Well we are currently at approximately 2.8 duration and although everybody says that rates are going to stay low for longer, we are just not getting paid to go longer in duration and the risk that you take for any kind of shock that would take a 25, 50 basis point increase in yields, that could be huge in an interest rate environment as low as this one. So I think that you should continue to see it stay at approximately this area. Brian Meredith – UBS: Great, thank you.

You are welcome.

Next we have a question from Edward Fodden [ph] of Nomura. Sam Hoffman – Nomura: Hi. It’s actually Sam Hoffman. I had one question on credit and bond reinsurance. This week you raised a combined ratio guidance for the second half of 2012 to be up actually 14 points versus the first half from 73% to 87%. My question is, are you looking at a loss ratio in credit and bond reinsurance at that level already or should we expect an increase in the second half of this year and 2013? Thank you.

Good morning Sam. We have in fact as you know from the very beginning of the year increased the loss ratios for 2012 and my recollection is that we are some 12, 13 points higher than 2012 than [inaudible] and ’11. So we have already been reflecting that on our numbers. Sam Hoffman – Nomura: Okay, thank you.

This will conclude our question and answer session. I would now like to turn the conference back over to Albert Benchimol for any closing remarks.

Thank you operator and thank you everyone. As I mentioned this was a good quarter for Axis and I'm looking forward to discussing more good quarters with you in the years to come. Of course if you have any additional questions, please feel free to contact Linda. It may be her birthday but she is still working. Have a good one.

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