Max Capital Posts $163 Million Q3 Net Loss; $81 Million 9-Month Loss

The Bermuda-based Max Capital Group reported a net loss for the three months ended September 30, 2008, of $163.2 million, or $2.79 per fully diluted share, compared to net income of $66.8 million, or $1.05 per fully diluted share, for the three months ended September 30, 2007.

The Group’s net operating loss, which represents net income or loss excluding after-tax net realized gains and losses on fixed maturities, was $146.1 million, or $2.50 per fully diluted share, compared to net operating income of $68.4 million, or $1.08 per fully diluted share, for the three months ended September 30, 2008 and 2007, respectively.

For the nine months ended September 30, 2008, the Company posted a net loss of $81.2 million, or $1.35 per diluted share, compared to net income of $240.9 million, or $3.77 per diluted share, for the nine months ended September 30, 2007.

The net operating loss was $63.7 million, or $1.06 per diluted share, compared to net operating income of $243.9 million, or $3.81 per diluted share, for the nine months ended September 30, 2008 and 2007, respectively.

Chairman and CEO W. Marston (Marty) Becker commented: “Max’s continued solid underwriting performance has been overshadowed by the impact of an unusually difficult investment environment. Max’s overall combined ratio remains ahead of plan for the year despite the soft market conditions and the occurrence of multiple cat events, with the improved underwriting performance primarily due to favorable development of prior period reserves.

“As previously announced, our overall investment portfolio return was negative for the quarter but compared favorably to major indices on a year to date basis. We have updated our investment strategy in keeping with Max’s growing and changing underwriting platforms which should serve us well in an increasingly attractive underwriting environment for 2009.”

Max capital also noted: “Gross premiums written from property and casualty underwriting for the three months ended September 30, 2008, were $206.3 million compared to $160.8 million for the three months ended September 30, 2007, an increase of 28.3 percent. The increase in gross premiums written reflects the growth of the Company’s property and casualty U.S. specialty segment, which commenced underwriting activity in the first half of 2007.”

The full report and details on accessing the earnings conference call may be obtained on the group’s web site at: http://www.maxcapgroup.com.

Source: Max Capital Group