1214816--3/9/2006--AXIS_CAPITAL_HOLDINGS

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{regulation, change, law}

{loss, insurance, financial}

{financial, litigation, operation}

{operation, international, foreign}

{capital, credit, financial}

{operation, natural, condition}

{acquisition, growth, future}

{interest, director, officer}

{competitive, industry, competition}

{loan, real, estate}

{debt, indebtedness, cash}

{personnel, key, retain}

{condition, economic, financial}

{control, financial, internal}

{product, liability, claim}

Risks Related to the Company Our business, results of operations and financial condition could be materially adversely affected by losses related to Hurricanes Katrina, Rita and Wilma. Our future performance is difficult to predict because we have a limited operating history. Our results of operations and financial condition could be adversely affected by the occurrence of natural and man-made disasters. If actual claims exceed our loss reserves, our financial results could be adversely affected. The failure of any of the loss limitation methods we employ could have a material adverse effect on our results of operations or financial condition. The effects of emerging claim and coverage issues on our business are uncertain. The risk associated with reinsurance underwriting could adversely affect us. We could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified personnel. Our operating subsidiaries are rated by rating agencies and a decline in these ratings could affect our standing among brokers and customers and cause our premiums and earnings to decrease. Since we depend on a few brokers for a large portion of our revenues, loss of business provided by any one of them could adversely affect us. Our reliance on brokers subjects us to their credit risk. If we choose to purchase reinsurance, we may be unable to do so, and if we successfully purchase reinsurance, we may be unable to collect. Our investment performance may affect our financial results and ability to conduct business. We may be adversely affected by interest rate changes. We may require additional capital in the future, which may not be available or may only be available on unfavorable terms. Our operating results may be adversely affected by currency fluctuations. The regulatory system under which we operate, and potential changes thereto, could have a material adverse effect on our business. Our inability to obtain the necessary credit could affect our ability to offer reinsurance in certain markets. Our ability to pay dividends and to make payments on indebtedness may be constrained by our holding company structure and regulatory constraints. Our founding shareholders and some of our directors may have conflicts of interest with us. Our participation in a securities lending program subjects us to risk of default by the borrowers. AXIS Capital is a Bermuda company and it may be difficult for you to enforce judgments against it or its directors and executive officers. Risks Related to Our Industry We operate in a highly competitive environment. The insurance and reinsurance business is historically cyclical, and we expect to experience periods with excess underwriting capacity and unfavorable premium rates. The impact of the investigations into anti-competitive practices in the insurance industry and related lawsuits cannot be predicted and may have a material adverse effect on our business, results of operations and financial condition. We may become subject to taxes in Bermuda after March 28, 2016, which may have a material adverse effect on our results of operations. Our non-U.S. companies may be subject to U.S. tax that may have a material adverse effect on our results of operations. Our non-U.K. companies may be subject to U.K. tax that may have a material adverse effect on our results of operations. Our non-Irish companies may be subject to Irish tax that may have a material adverse effect on our results of operations. If corporate tax rates in Ireland increase, our results of operations could be materially adversely affected. If investments held by AXIS Specialty Ireland or AXIS Re Ireland are determined not to be integral to the insurance and reinsurance businesses carried on by those companies, additional Irish tax could be imposed and our business and financial results could be materially adversely affected. The impact of Bermuda s letter of commitment to the Organization for Economic Cooperation and Development to eliminate harmful tax practices is uncertain and could adversely affect our tax status in Bermuda.

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1214816--3/9/2006--AXIS_CAPITAL_HOLDINGS_LTD