Axis Capital Holdings Ltd. reported record net investment income of $137 million, which jumped 21 percent.

The news came in the company's quarterly results statement which reported a net income of $231 million for the second quarter, down eight percent compared to the same period in 2007.

Operating income for the second quarter of 2008 was $229 million, compared with $256 million for the second quarter of 2007. The company also reported an annualised return on average common shareholders equity of 19.2 percent. The company's reinsurance operations were hit by several US catastrophes in the second quarter.

Axis estimated net losses from these events at $19 million, primarily through its Midwest regional treaty reinsurance business. Individual property risk losses and an earthquake in China also impacted results, but the reinsurance combined ratio improved slightly to 77.3 percent.

Axis chief executive officer and president John Charman said: "I am pleased that we have been able to deliver growth in diluted book value per share of an excellent 21 percent more than the last 12 months.

"Despite the extremely competitive market conditions, our underwriting results were good and our reserves from prior accident years continued to develop favourably.

"We also posted record quarterly net investment income. Our business is still generating very strong underwriting profitability even against the backdrop of increased market loss activity during this first half of the year in the property lines."

The company's report stated that net investments rose $23 million as a result of increased alternative investments income and a three percent improvement in the yield of cash and fixed maturity investments, reflecting the impact of higher investment balances.

As part of an ongoing strategic diversification of its investment portfolio, Axis began funding an allocation to global equities during the quarter.

The company experienced $2 million of net realised gains in the quarter, compared to net realised losses of $5 million in the second quarter of 2007.

Share repurchases during the quarter totalled $175 million.