Bermuda-based Max Capital Group Ltd. expect 2007 to be the best year in its eight-year history, according to chairman and CEO Marston Becker.

In a letter to shareholders giving an update on the company's performance and progress last year and outlook for 2008, which was released last week, Mr. Becker said the re/insurer's business model had served it well over the past five years, allied to a diversified investment strategy, culminating in gross premiums written totalling $1.1 billion.

This included $302 million of closed of closed book life reinsurance premium, with property/casualty (P&C) combined ratio expected to be in the mid-80s, excluding the costs incurred by the Max Specialty start-up.

Meanwhile, preliminary results indicate that Max Capital's net operating income (comprising net income excluding after-tax realised investment gains or losses) per fully diluted share will be between $4.80 and $4.95, while net operating return on average shareholders' equity is expected to be in excess of 20 percent, and the annual return from Max Diversified Strategies Ltd., which invests Max Capital's alternative asset portfolio, is expected to be in excess of 16 percent.

"These are excellent results in any environment - but particularly in a tough environment," said Mr. Becker. "Max's expected results include only a modest amount of prior-year reserve releases. That, plus the expected, continuing growth of our predominantly casualty-focused book of business, bodes well for the company in 2008 and future years.

In 2007, Max Capital repurchased just under 4.3 million shares, representing 7.1 percent of its outstanding shares as of January 1, 2007, at an average cost of $26.66 per share, and, provided the market continues to undervalue, the company intends to continue to be prudent repurchasers of its own stock.

Among some of the other highlights contributing to a successful year, were the launch of Max Specialty, which focuses on US-based excess and surplus lines, and US-based MGA, Max Managers USA, specialists in writing "Bermuda type" casualty business for smaller clients preferring to deal domestically.

In terms of the future, Mr. Becker said Max Capital views 2008 as a "year of continued opportunity".

Estimated gross written premium by segment included: Bermuda/Dublin P&C insurance $390 million, Bermuda/Dublin P&C reinsurance $350 million, Max Specialty $155 million, life reinsurance $150 million and total gross premiums written $1 billion.

The letter will be followed on or about February 13 by the issuance of Max Capital's fourth quarter and full year end financial results.