AXIS Capital Holdings Limited reported a 23 percent increase in second quarter net income to $172.8 million compared with $140.9 million for the corresponding quarter of 2004.

Net income for the six months ended June 30, 2005 was $324.6 million compared with $307.6 million for the corresponding period in 2004.

Financial results for the second quarter and first six months of 2005 benefited from increased underwriting profit and investment income according to the company. John Charman, chief executive officer and president of AXIS Capital, said that the return on equity generated during the quarter demonstrated the company?s ongoing ability to produce real and attractive returns to shareholders through a diverse global platform.

?We have worked diligently this quarter and found plentiful opportunity as was evidenced by AXIS Insurance?s targeted entry into attractively rated specialty classes and AXIS Re?s success in accessing new property reinsurance opportunities.

?However, our strong underwriting discipline has manifested itself in reduced writings in lines of business where senseless competition has driven pricing to unacceptable levels.?

Total gross premiums for the second quarter of 2005 increased 21.9 percent from the second quarter of 2004 on greater market penetration in existing lines of business.

The company?s combined ratio decreased to 74.5 percent in the quarter due to favourable prior period reserve development and the use of the company?s own loss experience in establishing initial expected net loss and loss expense ratios for many short tail lines of business.

Mr. Charman said yesterday the company has now concluded an ?exhaustive? internal investigation which it launched in the fourth quarter of 2004 in response to subpoenas for information that its US holding company and insurance companies received from US regulators regarding incentive commission agreements, fictitious and inflated quotes and related matters and conditioning direct insurance on the placement of reinsurance.

?It (the internal review) has uncovered no evidence whatsoever indicating that we engaged in bid rigging, fictitious or inflated quotes or related matters or conditioning direct insurance on the placement of reinsurance. No evidence of any of these types of wrongdoing was found,? Mr. Charman said.

During the quarter, plaintiffs in a shareholders class action lawsuit added managing underwriters and one of the selling shareholders in the company?s secondary offering completed in March 2004 to an earlier complaint filed against the company and some of its executive officers relating to the practices being investigated.

Axis continues to believe that the lawsuit is completely without merit and intend to vigorously defend against it. Mr. Charman said the industry needs to address a number of fundamental issues over the next couple of years in light of the powerful combination of Sarbanes-Oxley and the insurance industry investigations led by Mr. Spitzer. He said the resolution of these issues is a matter of when, not if.

?These issues have not deterred us from implementing our strategy of becoming one of the leading and most consistently profitable specialist global insurance and reinsurance businesses.?

Mr. Charman added: ?We believe that AXIS will ultimately benefit from these industry changes leading to greater transparency and honesty, and, in the meantime, we grow stronger and become more focused and more determined every day.?