AXIS Capital Holdings Limited first quarter net income declined almost nine percent to $151.8 million from $166.8 million while operating income for the first quarter of 2005 was $152.7 million, down three percent from $157.6 million for the same quarter in 2004.

John Charman, chief executive officer and president, said: "We continue to purposefully build a strong global speciality insurance and reinsurance business while at the same time creating healthy shareholder returns. We expect that the numerous fundamental issues facing the market will not deflect us from reaching that goal. Profitability, diversity of products and location, efficiency of operations, expertise ? these are the foundations of AXIS."

The company said in its earnings release yesterday that financial results for the first quarter benefited from increased underwriting profit and investment income.

Gross premiums for the 2005 first quarter increased 14.8 percent over the first quarter of 2004 with 35.8 percent derived from the insurance segment and 64.2 percent from the reinsurance segment compared to 43 percent and 57 percent, respectively, for the first quarter of 2004.

The company said this increase was largely attributable to growth in its reinsurance segment following greater market penetration in Continental Europe during the key first quarter renewal period.

AXIS has previously disclosed that its US holding company has received subpoenas from the office of the Attorney General of the State of New York seeking information regarding incentive commission agreements, fictitious and inflated quotes and related matters and conditioning direct insurance on the placement of reinsurance. Its US insurance companies have also received subpoenas and requests for information from various state insurance regulators regarding these same matters.

The company said yesterday: "These inquiries are part of industry-wide investigations in these jurisdictions and we understand that officials from other jurisdictions in which we do business have also initiated investigations into similar matters.

"Accordingly, we may in the future receive additional subpoenas and requests for information. We are co-operating fully with the Attorney General of the State of New York and the other state regulators in their investigations and intend to cooperate fully with any future investigations."

The company said yesterday that an internal investigation, led by outside counsel, is nearing completion and has uncovered no evidence indicating that AXIS engaged in bid rigging, fictitious or inflated quotes or related matters or conditioning direct insurance on the placement of reinsurance. "Consistent with long-standing and wide-spread industry practice, we have in the past entered into incentive commission arrangements with brokers; however, we have not entered into any of these arrangements with respect to 2005," the company said.

Two shareholders class action lawsuits filed against AXIS and some of its executive officers relating to the practices being investigated by the Attorney General of the State of New York and other state regulators were consolidated into one lawsuit in April. The company reiterated yesterday that it believes that the lawsuit is "completely without merit" and they intend to vigorously defend against it.