Max Re Capital Ltd. Reports Third Quarter Net Income Of $0.89 Per Diluted Share

For the nine months ended September 30, 2003, the Company had net income of $84.2 million, or net income of $2.08 per diluted share, compared to a net loss of $16.7 million, or a net loss of $0.43 per diluted share, for the nine months ended September 30, 2002. For the nine months ended September 30, 2003, the Company had net operating income before minority interest of $79.9 million, or net operating income of $1.76 per diluted share, compared to a net operating loss before minority interest of $23.2 million, or a net operating loss $0.50 per diluted share, for the nine months ended September 30, 2002.

Robert J. Cooney, Chairman, President and Chief Executive Officer, commented, "Our third quarter profitable underwriting result is reflective of the increasingly larger percentage of traditional reinsurance and direct insurance in our property and casualty portfolio. Accelerating earned premium combined with attractive underwriting margins has dramatically shifted our earnings focus towards underwriting income. Total income this quarter was again augmented appreciably by a fourth consecutive quarter of strong alternative investment results."

Gross premiums written for the three months ended September 30, 2003 were $188.6 million, coming entirely from property and casualty underwriting, compared to $65.7 million, also all from property and casualty underwriting, for the three months ended September 30, 2002. Net premiums earned for the three months ended September 30, 2003 were $178.7 million compared to $96.9 million for the same period of 2002. Current year to date premiums written are $784.9 million compared to $531.1 million for the first nine months of 2002. Net premiums earned for the first nine months of 2003 are $465.8 million compared to $247.6 million for the same period in 2002.

Net investment income, excluding realized and unrealized gains and losses, for the three months ended September 30, 2003, increased slightly to $13.9 million, from $13.8 million for the same period in 2002. Net investment income for the nine months ended September 30, 2003 increased to $43.5 million from $39.6 million for the same period in 2002. Net gains on alternative investments for the three months ended September 30, 2003 were $28.1 million, or a 3.35% rate of return, compared to net gains on alternative investments of $1.1 million, or a 0.25% rate of return, for the same period of 2002. For the nine months ended September 30, 2003, alternative investments have returned $95.2 million, or 12.77%, compared to $6.7 million, or 1.11%, for the same period in 2002. Invested assets were $2.5 billion as of September 30, 2003, with an allocation of approximately 66% to cash and fixed maturities and 34% to alternative investments.

Total revenue for the three months ended September 30, 2003 increased 106% to $233.5 million, compared to $113.5 million of total revenue for the same period in 2002. Growth in revenue is principally attributable to an 85% increase in net premiums earned and to improved performance on the alternative investments for the three months ended September 30, 2003 compared to the same period in 2002. The increase in net premiums earned and the improved performance on the alternative investments also account for the increase in total revenues year to date through September 30, 2003 compared to the same period in 2002.

Losses, benefits and experience refunds were $139.7 million for the three months ended September 30, 2003 compared to $95.5 million for the same period in 2002. The increase in losses, benefits and experience refunds is principally attributable to the increase in premiums earned. Loss experience on contracts in force developed as expected during the quarter. Losses, benefits and experience refunds for the nine months ended September 30, 2003 were $368.5 million compared to $229.9 million for the same period in 2002.

General and administrative expenses for the three months ended September 30, 2003 were $10.9 million

compared to $4.9 million for the same period in 2002. General and administrative expenses for the nine months ended September 30, 2003 were $29.9 million compared to $15.5 million for the same period in 2002. The growth in general and administrative expenses resulted principally from expenses associated with establishing the Company's direct insurance operations and expanding the Company's traditional reinsurance staff. General and administrative expenses for the nine months ended September 30, 2003 were 6.4 % of net premiums earned compared to 6.2 % of net premiums earned for the nine months ended September 30, 2002.

Shareholders' equity was $789.0 million at September 30, 2003. Shareholders' equity reflects the exchange on July 30, 2003 of non-voting common shares of Max Re Ltd. and warrants to acquire non-voting common shares of Max Re Ltd., (which were accounted for as minority interest) for common shares of the Company. Book value per share at September 30, 2003 was $17.46 per share, compared to $15.75 at December 31, 2002. Return on shareholders' equity for the trailing 12 month period was 12.2 %.

Max Re Capital Ltd., through its principal operating subsidiaries, Max Re Ltd., Max Insurance Europe Limited and Max Re Europe Limited, offers customized insurance and reinsurance solutions to property and casualty insurers, life and health insurers and large corporations.

The above remarks about future expectations, plans and prospects for the Company are forwardlooking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements. For further information regarding cautionary statements and factors affecting future operating results, please refer to the Company's most recent Annual Report on Form 10-K and other documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.