AXIS Capital?s second quarter income rose 30 percent on the same period the previous year helped by increased investment income, low large loss activity and stable underwriting results.

The Bermuda-based company posted income of $223.4 million in the second quarter 2006 compared with $172.8 million for the quarter ended June 30, 2005. Results per share were $1.37 compared with $1.13 in the second quarter 2005.

Operating income for the second quarter of 2006 was $232.2 million, or $1.42 per share, compared with $170.9 million, or $1.12 per share, for the quarter ended June 30, 2005.

Excluding foreign exchange fluctuations, operating income was $1.31 per share, compared with $1.29 per share, for the 2005 quarter. Axis was expected to earn $1.21 a share, according to the average estimate of analysts on a Thomson First Call survey.

In the second quarter 2006, gross premiums written increased by 10 percent to $2,2 billion, net premiums written increased by 8 percent to $1.8 billion and net premiums earned increased by 5 percent to $1.3 billion.

The combined ratio of 78.9 percent included net favourable prior period reserve development of $125.5 million, or 9.6 percentage points, the company said.

Pre-tax net investment income increased 58 percent to $91.7 million, from the second quarter of 2005, helped by higher investment yields, higher investment balances and an increase in investment income from our other investments.

At the end of last year, Axis positioned itself tactically to substantially reduce catastrophe exposures while achieving solid growth in better-rated business, said John Charman, chief executive officer and president of AXIS Capital.

?In the non-property areas of our insurance and reinsurance businesses, our specialist focus has allowed us ample access to risks at stable, attractive rating levels.

?We have achieved all of this without compromising our appropriate risk tolerance levels in both our insurance and reinsurance segments,? he said.

Shareholders? equity increased from December 31, 2005 by 9 percent to $3.8 billion and diluted book value per common share increased 8 percent to $20.68.

Axis shares closed at $29.45, down 5 cents on a volume of 305,400 shares on the New York Stock Exchange