AXIS CAPITAL HOLDINGS LTD – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our results of operations for the
three months ended March 31, 2023 and 2022 and our financial condition at
March 31, 2023 and December 31, 2022. This should be read in conjunction with
Item 1 'Consolidated Financial Statements' of this report and our Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in our Annual Report on Form 10-K for the year ended December 31, 2022.
Unless otherwise noted, tabular dollars are in thousands, except per share
amounts. Amounts in tables may not reconcile due to rounding differences.

                                                           Page

First Quarter 2023 Financial Highlights                      46
Overview                                                     47
Consolidated Results of Operations                           50
Results by Segment:
i) Insurance Segment                                         52
ii) Reinsurance Segment                                      56

Net Investment Income and Net Investment Gains (Losses) 60
Other Expenses (Revenues), Net

                               62
Financial Measures                                           64
Non-GAAP Financial Measures Reconciliation                   66
Cash and Investments                                         69
Liquidity and Capital Resources                              72
Critical Accounting Estimates                                73
Recent Accounting Pronouncements                             74




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FIRST QUARTER 2023 FINANCIAL HIGHLIGHTS

First Quarter 2023 Consolidated Results of Operations

•Net income attributable to common shareholders of $173 million, or $2.03 per
common share, and $2.01 per diluted common share

•Operating income(1) of $200 million, or $2.33 per diluted common share(1)

•Gross premiums written of $2.4 billion

•Net premiums written of $1.6 billion

•Net premiums earned of $1.2 billion

•Pre-tax catastrophe and weather-related losses, net of reinsurance, of $38
million ($32 million, after-tax), (Insurance: $24 million; Reinsurance: $13
million), or 3.1 points on the current accident year loss ratio, primarily
attributable to New Zealand floods, Cyclone Gabrielle, and other weather-related
events.

•Net favorable prior year reserve development of $4 million

•Underwriting income(2) of $139 million and combined ratio of 90.9%

•Net investment income of $134 million

•Net investment losses of $20 million

•Foreign exchange losses of $9 million

First Quarter 2023 Consolidated Financial Condition

•Total cash and investments of $16.0 billion; fixed maturities, short-term
investments, and cash and cash equivalents comprise 85% of total cash and
investments and have an average credit rating of AA-

•Total assets of $28.6 billion

•Reserve for losses and loss expenses of $15.3 billion and reinsurance
recoverable on unpaid and paid losses and loss expenses of $6.4 billion

•Debt of $1.3 billion and debt to total capital ratio(3) of 20.9%

•Common shares repurchased were 262,000 common shares for a total of $16 million

•Common shareholders' equity of $4.4 billion; book value per diluted common
share of $50.31

(1)Operating income (loss) and operating income (loss) per diluted common share
are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K.
The reconciliations to the most comparable GAAP financial measures, net income
(loss) available (attributable) to common shareholders and earnings (loss) per
diluted common share, respectively, and a discussion of the rationale for the
presentation of these items are provided in 'Management's Discussion and
Analysis of Financial Condition and Results of Operations - Non-GAAP Financial
Measures Reconciliation'.
(2)Consolidated underwriting income (loss) is a non-GAAP financial measure as
defined in Item 10(e) of SEC Regulation S-K. The reconciliation to, the most
comparable GAAP financial measure, net income (loss), is presented in
'Management's Discussion and Analysis of Financial Condition and Results of
Operations - Consolidated Results of Operations', and a discussion of the
rationale for its presentation is provided in 'Management's Discussion and
Analysis of Financial Condition and Results of Operations - Non-GAAP Financial
Measures Reconciliation'.
(3)The debt to total capital ratio is calculated by dividing debt by total
capital. Total capital represents the sum of total shareholders' equity and
debt.

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OVERVIEW



Business Overview

AXIS Capital, through its operating subsidiaries, is a global specialty
underwriter and provider of insurance and reinsurance solutions with operations
in Bermuda, the U.S., Europe, Singapore and Canada. Our underwriting operations
are organized around our global underwriting platforms, AXIS Insurance and AXIS
Re.

We provide our clients and distribution partners with a broad range of risk
transfer products and services, and strong capacity, backed by excellent
financial strength. We manage our portfolio holistically, aiming to construct
the optimum portfolio of risks, consistent with our risk appetite and the
development of our franchise. We nurture an ethical, entrepreneurial,
disciplined and diverse culture that promotes outstanding client service,
intelligent risk taking, operating efficiency, corporate citizenship and the
achievement of superior risk-adjusted returns for our shareholders. We believe
that the achievement of our objectives will position us as a global leader in
specialty risks. The execution of our business strategy for the first three
months of 2023 included the following:

•increasing our relevance in a select number of attractive specialty lines
insurance and treaty reinsurance markets including U.S. excess and surplus
lines, North America professional lines and Lloyd's specialty insurance
business;

•re-balancing our portfolio towards less volatile lines of business that carry
attractive returns while deploying capital within risk limits, diversification
and risk management;

•investing in attractive growth markets and advancing capabilities to address
more transactional specialist business (small to mid-sized customers) with our
key distribution partners;

•continuing the implementation of a more focused distribution strategy while
building mutually beneficial relationships with clients and partners;

•improving the effectiveness and efficiency of our operating platforms and
processes;

•investing in data and technology capabilities, and tools to empower our
underwriters and enhance the service that we provide to our customers;

•utilizing reinsurance markets and third-party capital relationships;

•fostering a positive workplace environment that enables us to attract, retain
and develop top talent; and

•growing our corporate citizenship program to give back to our communities and
help contribute to a more sustainable future.

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Outlook

We are committed to leadership in specialty insurance and reinsurance, where we
have depth of talent and expertise. We believe our market positioning, specialty
underwriting acumen, best-in-class claims management capabilities and strong
relationships with our distributors and clients, supported by a conservative and
well performing investment portfolio, will provide opportunities for increased
profitability, with differences among our lines of business driven by our
tactical response to market conditions.

The industry is observing rising loss cost trends and, across most lines, we
expect rate improvement to continue as carriers assess the impact of heightened
catastrophe loss activity, financial and social inflation, and geopolitical
uncertainty, among other factors. In this market environment, we continue to
focus on growth in attractive lines of business and market segments that are
adequately priced.

Rates, terms and conditions across the majority of insurance lines continued to
be favorable as pricing generally continues to rise, albeit at varying levels
based on market dynamics relative to the individual lines. Market dislocations
continue to drive more risks into the Wholesale channel, and we anticipate this
to sustain throughout 2023 with the strongest market opportunities occurring in
Specialty and E&S lines. For AXIS, we are continuing to pursue a highly targeted
and disciplined underwriting strategy across every line we write and all our
channels of distribution.

The reinsurance market is experiencing improvements in rates, and terms and
conditions. Reinsurance carriers continue to prioritize reducing net volatility
and increasing profitability. We are focused on underwriting discipline and
driving targeted profitable growth among the specialty and casualty reinsurance
lines that we offer.

We are encouraged by the pricing improvements we are seeing across most markets,
which we expect will carry through 2023, and that rate will continue to keep
pace with loss cost trends. Where prices deliver adequate profitability, we will
look to grow within our risk and volatility guidelines. With a strengthened book
of business, and a growing footprint in the specialty markets that are seeing
the most favorable conditions, we believe AXIS is well positioned to drive
profitable growth within the current environment.

Recent Developments

Following the recent disruption in the banking sector, we established a working
group to review existing underwriting and investment exposures and to assess
potential vulnerabilities. In addition, stress tests were undertaken to assess
broader potential underwriting and credit impacts. Based on our review, we have
determined that potential exposures are within our risk appetite for an event of
this nature. We are continuing to closely monitor banking and associated
sectoral impacts.

We note that underwriting exposures emanated from areas where we affirmatively
accepted these risks which are within our risk management guidelines.

We believe the losses and loss expenses that have been incurred at March 31,
2023, based on current facts and circumstances, are contained within our
expected loss ratios. We will continue to monitor the appropriateness of our
assumptions as new information comes to light and will adjust our estimates, as
appropriate.

Response to Russia-Ukraine War

Following the Russian invasion of Ukraine and the triggering of sanctions
against the countries involved, organizations and named individuals, we
established a task-force to coordinate our response to this situation.

The Russia-Ukraine war, and its related impacts, are an evolving risk to which
we are exposed from an underwriting and reserving perspective.

Our team continues to track the situation closely, to perform stress and
scenario testing on underwriting exposures and to consider a range of economic
impacts and external pressures across individual product lines.

Underwriting

We continue to monitor international sanctions which impact our global
operations that were effective since March 27, 2022. The impact on gross
premiums written for the three months ended March 31, 2023 of the cancellation
of policies with exposures to the Russia-Ukraine war was immaterial. We continue
to evaluate opportunities to write business in the region, not including Russia
or Ukraine risks.

We are also continuing to closely monitor cash due from our customers and
reinsurers, giving due consideration to the Russia-Ukraine war and associated
international sanctions. At March 31, 2023, we considered the potential
financial impact of the Russia-Ukraine war

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when determining allowances for expected credit losses for insurance and
reinsurance premium balances receivable and reinsurance recoverable balances on
unpaid losses and loss expenses. Based on facts and circumstances at that time,
we did not adjust allowances for expected credit losses at March 31, 2023. We
will continue to monitor the appropriateness of allowances for expected credit
losses as new information comes to light. Adjustments to allowances for expected
credit losses in subsequent periods could be material.

Reserving

At March 31, 2023, estimated pre-tax net losses attributable to the
Russia-Ukraine war were $45 million.

The estimate of net reserves for losses and loss expenses related to the
Russia-Ukraine war is subject to significant uncertainty. This uncertainty is
driven by the difficulty in performing on-site evaluations, and by the inherent
difficulty in making assumptions due to the lack of comparable events, the
ongoing nature of the event, and its far-reaching impacts.

While we believe the overall estimate of net reserves for losses and loss
expenses is adequate for losses and loss expenses that have been incurred at
March 31, 2023, based on current facts and circumstances, we will continue to
monitor the appropriateness of our assumptions as new information comes to light
and will adjust the estimate of net reserves for losses and loss expenses, as
appropriate.

Actual losses for this event may ultimately differ materially from current
estimates.

Refer to 'Management's Discussion and Analysis of Financial Condition and
Results of Operations - Results by Segment' for further information

Investments

At March 31, 2023, we had no direct exposures to Russia or Ukraine within our
investments portfolio.

Refer to Item 1A, 'Risk Factors' in our most recent Annual Report on Form 10-K
for further information.

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