Max Re Capital Reports Third Quarter Net Income of $0.42 Per Diluted Share

Hamilton, Bermuda, November 13, 2006 - Max Re Capital Ltd. (NASDAQ: MXRE) today reported net income for the three months ended September 30, 2006 of $26.5 million, or net income of $0.42 per diluted share, compared to a net loss of $44.2 million, or a net loss of $0.96 per diluted share, for the three months ended September 30, 2005. Net operating income, which represents net income adjusted for net realized gains and losses on sales of fixed maturities, for the three months ended September 30, 2006 was $26.8 million, or net operating income of $0.42 per diluted share, compared with a net operating loss of $45.9 million, or a net operating loss of $0.99 per diluted share, for the three months ended September 30, 2005. For the nine months ended September 30, 2006, the Company had net income of $121.5 million, or net income of $1.91 per diluted share, compared to $22.1 million, or $0.44 per diluted share, for the nine months ended September 30, 2005. For the nine months ended September 30, 2006, the Company had net operating income of $128.8 million, or net operating income of $2.03 per diluted share, compared to $19.3 million, or $0.39 per diluted share, for the nine months ended September 30, 2005.

W. Marston Becker, Chairman and acting Chief Executive Officer, commented, "During the third quarter the Company produced the best property and casualty underwriting results in its history principally due to the favorable maturing of general liability insurance reserves and benign catastrophe activity. Our insurance business continues to be our fastest growing segment. The underwriting results were partially offset by disappointing returns on our alternative investment portfolio.  The opportunity to continue to write attractive property and casualty premium volume, has led us to establish a reduced target range for alternative investments of 15% to 20% of invested assets".

Gross premiums written for the three months ended September 30, 2006 were $177.9 million, of which $177.3 million came from property and casualty underwriting and $0.6 million came from life and annuity underwriting, compared to $288.0 million, of which $196.3 million came from property and casualty underwriting and $91.7 million came from life and annuity underwriting, for the three months ended September 30, 2005. Net premiums earned for the three months ended September 30, 2006 were $147.1 million compared to $295.8 million for the same period of 2005. Gross premiums written for the nine months ended September 30, 2006 were $717.7 million compared to $988.8 million for the first nine months of 2005. Property and casualty reinsurance, property and casualty insurance and life and annuity reinsurance accounted for 55%, 39% and 6%, respectively, of gross premiums written for the first nine months of 2006, compared to 48%, 25% and 27%, respectively, for the same period in 2005. Net premiums earned for the first nine months of 2006 decreased 36.5% to $506.0 million compared to $796.8 million for the same period in 2005. The decline in gross premiums written and net premiums earned for the first nine months of 2006 principally relates to decreased life and annuity business written and earned.

Net investment income for the three months ended September 30, 2006 increased to $38.7 million, from $27.0 million for the same period in 2005 and is attributable to a year over year increase in cash and fixed maturities balances and higher yields on fixed maturities investments. Net investment income for the nine months ended September 30, 2006 increased $33.5 million, to $109.2 million, compared to $75.7 million for the same period in 2005. Net losses on alternative investments for the three months ended September 30, 2006 were $31.0 million, or a (2.33)% rate of return, compared to net gains on alternative investments of $35.6 million, or a 3.0% rate of return, for the same period in 2005. For the nine months ended September 30, 2006, alternative investments have returned 1.57%, compared to 4.50% for the same period in 2005. Invested assets were $4.6 billion as of September 30, 2006, with an allocation of approximately 72% to cash and fixed maturities and 28% to alternative investments.

Losses and benefits were $89.2 million for the three months ended September 30, 2006 compared to $367.7 million for the same period in 2005. The decrease in 2006 is principally attributable to the lower volume of life and annuity underwriting, a reduction in prior years general liability insurance reserves of $20.5 million and the absence of significant natural catastrophe losses compared to $100.0 million in natural catastrophe losses included in the three months ended September 30, 2005. Losses and benefits for the nine months ended September 30, 2006 were $380.1 million compared to $792.4 million for the same period in 2005.  The decrease for the nine months ended September 30, 2006 compared to the same period in 2005 is principally attributable to the decrease in life and annuity underwriting, reduction in prior year general liability insurance reserves and the recording of natural catastrophe losses in the 2005 period.

Acquisition costs for the three months ended September 30, 2006 were $19.0 million compared to $20.5 million for the three months ended September 30, 2005, the decrease resulting from lower net premiums earned in 2006.  Acquisition costs are principally related to our property and casualty reinsurance and insurance segments. 

Interest expense for the three months ended September 30, 2006 was ($1.7) million compared to $2.7 million for the same period in 2005, principally attributable to favorable development of $12.0 million on a reinsurance contract that was recorded as a deposit liability.

General and administrative expenses for the three months ended September 30, 2006 were $21.6 million compared to $14.5 million for the same period in 2005. General and administrative expenses for the three months ended September 30, 2006 increased principally due to increased personnel costs and additional costs related to the internal investigation.

Shareholders' equity was $1,294.5 million at September 30, 2006.  Book value per share at September 30, 2006 was $21.74 per share, compared to $20.16 at December 31, 2005. Annualized operating return on average shareholders' equity for the nine months ended September 30, 2006 was 13.8%.

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.

This release includes statements about future expectations, plans and prospects of the Company which constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements, including the risk that the SEC's view of the conclusions reached by the Audit and Risk Management Committee of our Board of Directors in connection with the internal review of three finite risk retrocessional contracts written in 2001 and 2003, which caused the Company to restate its audited financial statements for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 and unaudited financial statements for the periods ended March 31, 2006 and June 30, 2006, may differ, perhaps materially and result in material changes to information contained in the Company's past SEC filings, including financial statements and financial information. For further information regarding cautionary statements and factors affecting future results, please refer to the Company's Annual Report on Form 10-K/A (Amendment No. 2) for the year ended December 31, 2005 and other documents filed by the Company with the SEC. 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.