Max Re Capital Ltd. Reports Net Income For 2005

Hamilton, Bermuda, February 10, 2006 - Max Re Capital Ltd. NASDAQ: MXRE) today reported a net loss for the three months ended December 31, 2005 of $11.4 million, or a net loss of $0.20 per diluted share, compared to net income of $87.1 million, or net income of $1.82 per diluted share, for the three months ended December 31, 2004. Net operating loss, which represents net loss increased by net realized loss on sale of fixed maturities, for the three months ended December 31, 2005 was $7.9 million, or a net operating loss of $0.13 per diluted share, compared with a net operating gain of $80.8 million, or a net operating earnings of $1.67 per diluted share, for the three months ended December 31, 2004.

For the year ended December 31, 2005, the Company had net income of $6.7 million, or net income of $0.13 per diluted share, compared to $133.7 million, or $2.75 per diluted share, for the year ended December 31, 2004. For the year ended December 31, 2005, the Company had net operating income of $7.4 million, or net operating income of $0.14 per diluted share, compared to $123.3 million, or $2.54 per diluted share, for the year ended December 31, 2004.

Robert J. Cooney, Chairman, President and Chief Executive Officer, commented, "The Company recorded a reduction in net income of $157.4 million from natural catastrophes during 2005, but despite these events we are pleased to report a small net income for the year. We successfully raised $284.1 million in a public common share offering in the fourth quarter of 2005 and are well positioned to participate in the expected attractive market for our products in upcoming months."

Gross premiums written for the three months ended December 31, 2005 were $257.2 million, of which $251.3 million came from property and casualty underwriting and $5.9 million from life and annuity underwriting, compared to $139.6 million, $104.6 million coming from property and casualty underwriting and $35.0 million of life and annuity underwriting, for the three months ended December 31, 2004. Net premiums earned for the three months ended December 31, 2005 were $256.7 million compared to $216.0 million for the same period of 2004, the increase is principally due to $123.9 million of additional property and casualty premiums written and earned on a prior period contract resulting from loss development recorded, partially offset by reduced life and annuity premiums written and earned in the three months ended December 31, 2005. Gross premiums written for the year ended December 31, 2005 were $1,246.0 million compared to $1,043.6 million for 2004. Property and casualty reinsurance, property and casualty insurance and life and annuity reinsurance accounted for 49.4%, 28.5% and 22.1%, respectively, of gross premiums written for the year ended December 31, 2005. Net premiums earned for the year ended December 31, 2005 increased 13.2% to $1,039.4 million compared to $917.8 million for the same period in 2004.

Net investment income for the three months ended December 31, 2005 increased to $31.2 million, from $24.2 million for the same period in 2004 and is principally attributable to increased cash and fixed maturities balances held. Net investment income for the year ended December 31, 2005 increased $24.0 million, to $106.8 million from $82.8 million for the same period in 2004.

Net losses on alternative investments for the three months ended December 31, 2005 were $13.7 million, including $20.6 million in reinsurance private equity losses related to hurricane activity, or a negative 1.11% rate of return, compared to net gains on alternative investments of $56.8 million, including $2.8 million in reinsurance private equity gains, or a 5.36% rate of return, for the same period of 2004. For the year ended December 31, 2005, alternative investments have returned $39.9 million or 3.34%, compared to $81.6 million or 8.23% for the same period in 2004. Invested assets were $4.2 billion as of December 31, 2005, with an allocation of approximately 71% to cash and fixed maturities and 29% to alternative investments.

Losses and benefits were $247.0 million for the three months ended December 31, 2005 compared to $163.4 million for the same period in 2004. The increase in losses and benefits for the three months ended December 31, 2005 is principally attributable to the losses associated with premiums earned, additional loss development of $129.7 million related to a prior period contract and the recording of $23.4 million in natural catastrophe losses. Losses and benefits for the year ended December 31, 2005 were $1,018.9 million compared to $764.3 million for the same period in 2004. The increase for the year ended December 31, 2005 is also principally attributable to the increase in premiums earned, the recording of losses from natural catastrophes and loss development on prior periods.

Acquisition costs for the three months ended December 31, 2005 decreased by 45.3% to $16.3 million compared to $29.8 million for the three months ended December 31, 2004. Acquisition costs for the year ended December 31, 2005 decreased by 34.8% to $76.2 million from $116.9 million for the year ended December 31, 2004. The reduction is attributable to the change in premium mix, with life and annuity products and property and casualty insurance products typically having lower acquisition costs compared to property and casualty reinsurance products.

Interest expense for the three months ended December 31, 2005 decreased to $5.7 million from $9.7 million for the same period in 2004. Interest expense for the year ended December 31, 2005 decreased to $32.0 million from $33.6 million for the same period in 2004. The decrease principally relates to a lower average crediting rate on funds withheld balances.

General and administrative expenses for the three months ended December 31, 2005 were $14.1 million compared to $14.4 million for the same period in 2004. General and administrative expenses for the year ended December 31, 2005 were $56.2 million or 5.4% of net premiums earned compared to $49.0 million or 5.3% of net premiums earned for the year ended December 31, 2004.

Shareholders' equity was $1,217.2 million at December 31, 2005, compared to $937.0 million at December 31, 2004. Book value per share at December 31, 2005 was $20.69 per share, compared to $20.45 at December 31, 2004. Annualized return on average shareholders' equity for the year ended December 31, 2005 was 0.6%.

Max Re Capital Ltd., through its principal operating subsidiaries, Max Re Ltd., Max Insurance Europe Limited and Max Re Europe Limited, offers customized risk financing 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 Quarterly Report on Form 10-Q for the period ended September 30, 2005 and other documents previously 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.

Contact Information:

Keith S. Hynes

Executive Vice President & CFO

441-296-8800

keithh@maxre.bm

N. James Tees

Senior Vice President & Treasurer

441-296-8800

jimt@maxre.bm