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2017 ANNUAL REPORT AXIS CAPITAL 2017 ANNUAL REPORT Axis AR 2017 022279 AXS AR17 Cover V1 03/13/18 Page 4 Axis AR 2017 022279 AXS AR17 Cover V1 03/13/18 Page 25

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2017 ANNUAL REPORT AXIS CAPITAL 2017 ANNUAL REPORT Axis AR 2017 022279 AXS AR17 Cover V1 03/13/18 Page 4 Axis AR 2017 022279 AXS AR17 Cover V1 03/13/18 Page 25 Relevance. Commitment. Leadership. AXIS CAPITAL 2017 ANNUAL REPORT AXIS CAPITAL 2017 ANNUAL REPORT Axis AR 2017 022279 AXS_AR17_Cover_v1 03/13/18 page 4 Axis AR 2017 022279 AXS_AR17_Cover_v1 03/13/18 page 25 Financial Shareholder CEO Insurance Reinsurance Chairman’s Directors & Highlights Value Letter Letter Executives SHAREHOLDER INFORMATION Annual Meeting Investor relations Transfer agent and registrar 02 03 04 12 16 20 24 Date: For copies of AXIS Capital’s Annual Report, The Transfer Agent for AXIS Capital May 2, 2018, at 8:30 a.m. AST Forms 10-K and 10-Q or other reports is Computershare. iled with or furnished to the Securities and Location: Exchange Commission: For shareholder inquiries, please AXIS House, 92 Pitts Bay Road contact Computershare: Pembroke HM 08, Bermuda Visit: The Investors section of By regular mail: Independent registered www.axiscapital.com P.O. Box 505000 public accounting firm Louisville, KY 40233-5000 Email: Deloitte Ltd. Investor Relations Department of AXIS By overnight delivery: Corner House Capital at [email protected] 462 South 4th Street, Suite 1600 20 Parliament Street Louisville, KY 40202 P.O. Box HM 1556 For other investor relations inquiries: Hamilton HM FX Call: Bermuda Write to: 1.800.522.6645 (within the U.S.) Director, Investor Relations 1.201.680.6578 (outside the U.S.) AXIS Capital Holdings Limited Hearing Impaired TDD: 1.800.952.9245 AXIS House, 92 Pitts Bay Road Pembroke HM 08, Bermuda Website: www.computershare.com Call: 1.441.405.2727 Email: [email protected] Total Shareholder Return 221.6% 269.8% 260.6% AXS S&P 500500 S&P 500500 P&CP&C COMPOSITECOMPOSITE $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 12/31/11 6/28/13 6/30/14 6/30/15 6/30/16 12/31/03 12/31/04 12/29/06 12/31/07 12/31/08 12/31/09 12/31/10 06/29/1212/31/12 12/31/13 12/31/14 12/31/15 12/30/166/30/1712/31/17 06/30/03 06/30/04 06/30/0512/30/0506/30/06 06/29/07 06/30/08 06/30/09 06/30/10 06/30/11 AXISAXIS S&PS&P 500500 S&PS&P P&CP&C CompositeComposite * Data computed from JuneJune 30, 2003 to DecemberDecember 31,31, 2017.2017. ** Shown S h o w n aboveabove isis aa graphgraph comparingcomparing thethe yearlyyearly percentagepercentage changechange inin thethe cumulativecumulative totaltotal shareholdershareholder returnreturn onon ourour commoncommon sharesshares (assuming(assuming reinvestmentreinvestment ofof dividends) fromfrom JulyJuly 1,1, 2003,2003, thethe datedate that ourour commoncommon sharesshares beganbegan tradingtrading onon thethe NewNew YorkYork StockStock Exchange,Exchange, throughthrough DecemberDecember 31,31, 2017,2017, asas comparedcompared toto thethe cumulative totaltotal returnreturn ofof thethe StandardStandard && Poor’sPoor’s 500500 StockStock IndexIndex andand thethe cumulativecumulative totaltotal returnreturn ofof thethe StandardStandard && Poor’sPoor’s PropertyProperty andand CasualtyCasualty Insurance Index.Index. ThisThis graphgraph assumesassumes anan investmentinvestment ofof $100$100 inin JulyJuly 2003.2003. TheThe company’scompany’s totaltotal returnreturn isis computedcomputed usingusing thethe initialinitial publicpublic offeringoffering priceprice ofof $22.00$22.00 perper share.share. ANNUAL REPORT 25 Axis AR 2017 022279 306291L01_text 03/12/18 page 1 Axis AR 2017 022279 306291L01_text 03/14/18 page 2 Axis AR 2017 022279 306291L01_text 03/14/18 page 3 FINANCIAL HIGHLIGHTS As of and for the year ended December 31 ($ in millions, except per share amounts) Selected Statement of Operations Data: Gross premiums written $,.­ $, ­ . $, .­ $,­ . $, ­. Net premiums written ,. ,­. , ­.­ , ­. , . Net premiums earned ,. ,­ . , . ,­ . ,­ ­. Net investment income . . . . Net realized investment gains (losses) . ( . ) ( . ) . ­. Net income (loss) available attributable to (.) . ­­ .­ . common shareholders (1) (2) (3) (4) (5) Non-GAAP operating income (loss) (2) (3) (4) (5) (6) (.) . . . Per Common Share Data: Earnings (loss) per common share — diluted (.) . . ­. Non-GAAP operating income (loss) per common (­.) . share — diluted (7) Book value per common share (8) (9) . . . ­. Diluted book value per common share (8) (9) ­. ­ . . . Dividends declared per common share .­ . Operating Ratios: (10) Net loss and loss expense ratio .% . % . % . % ­. % Expense ratio ­­.% . % .­ % . % . % Combined ratio ­.% . % .­ % . % . % Selected Balance Sheet Data: Total assets $,. $ , .­ $ , . $ , .­ $ , . Senior notes and notes payable ,­. Preferred shares . , . ­. ­. ­. Common equity ,.­ , . , . , . , . Total shareholders’ equity attributable to AXIS Capital ,­.­ , ­ . , . , . , . Total capital (11) ,. ­, . ,.­ , . , . Return on average common shareholders equity (“ROACE”) –.% . % . % . % . % Non-GAAP operating ROACE (12) –.% ­. % ­.­ % . % . % 1 During 2017, the Company recognized amortization of value of business acquired of $50 million related to the acquisition of Novae. 2 During 2017, the Company recognized transaction and reorganization expenses of $27 million related to the acquisition and integration of Novae. This expense did not affect the Company’s non-GAAP operating income (loss), a non-GAAP financial measure. 3 During 2017, the Company recognized a tax expense of $42 million due to the revaluation of net deferred tax assets pursuant to the U.S. Tax Reform. This expense did not affect the Com- pany’s non-GAAP operating income (loss), a non-GAAP financial measure. 4 During 2015, the Company accepted a request from PartnerRe Ltd., a Bermuda exempted company (“PartnerRe”) to terminate the Agreement and Plan of Amalgamation (the “Amalga- mation Agreement”) with the Company. PartnerRe paid the Company a termination fee of $280 million. This expense did not affect the Company’s non-GAAP operating income (loss), a non-GAAP financial measure. 5 During 2015, the Company implemented a number of profitability enhancement initiatives, which resulted in recognition of transaction and reorganization expenses of $46 million and additional general and administrative expenses of $5 million. The transaction and reorganization expenses did not affect the Company’s non-GAAP operating income (loss), a non-GAAP financial measure. 6 Non-GAAP operating income (loss) represents after-tax operational results without consideration of after-tax net realized investment gains (losses), foreign exchange gains (losses), revaluation of net deferred tax asset, bargain purchase gain, transaction and reorganization expenses, loss on repurchase of preferred shares, and termination fee received. Non-GAAP operating income (loss) is a non-GAAP financial measure as defined in Regulation G. The reconciliation to the most comparable GAAP financial measure (net income (loss) available to common shareholders) is provided in Item 7 of Part II ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary, Results of Operations’ of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 7 Non-GAAP operating income (loss) per common share - diluted is a non-GAAP financial measure as defined in Regulation G. The reconciliation to the most comparable GAAP financial measure (earnings (loss) per common share - diluted ) is provided in Item 7 of Part II ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary, Results of Operations’ of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 8 Book value per common share and diluted book value per common share are based on total common shareholders’ equity divided by common shares and diluted common share equivalents outstanding, respectively. 9 Calculations and share amounts at December 31, 2015 include 1,358,380 additional shares delivered to the Company in January 2016 under the Company’s Accelerated Share Repurchase (“ASR”) agreement entered into on August 17, 2015. 10 Operating ratios are calculated by dividing the respective operating expenses by net premiums earned. 11 Total capital represents the sum of total shareholders’ equity attributable to AXIS Capital and senior notes. 12 Non-GAAP operating ROACE is calculated by dividing non-GAAP operating income (loss) for the year by the average shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the year. Non-GAAP Operating ROACE is a non-GAAP financial measure as defined in Regulation G. See Item 7 of Part II ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures’ of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, for a detailed discussion of the measures used by AXIS to evaluate its financial performance. 2 AXIS CAPITAL Axis AR 2017 022279 306291L01_text 03/12/18 page 2 Axis AR 2017 022279 306291L01_text 03/12/18 page 3 DELIVERING VALUE TO SHAREHOLDERS $16.1 B $24.8B $6.7B CASH & INVESTMENTS TOTAL ASSETS TOTAL CAPITAL Key facts and figures at December 31, 2017 AXIS’ rating of A+ from both Standard & Poor’s and A.M. ($ in billions) Best reflects our exceptional level of financial strength and our long-term track record of outstanding operating performance, placing AXIS among a select group of companies in our industry. Shareholder Value Creation $80.00$80 $70.00$70 Compound Annual Growth Rate = 11.2% $60.00$60 $50.00$50 $40.00$40 $30.00 $30 $20.00 $20 $10.00 $10 $ $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Accumulated Dividends Declared Total value creation is
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