Bermda-based Axis Capital Holdings Ltd. experienced a healthy increase in second-quarter profit, up from $223m or $1.37 per diluted share last year to $252m or $1.51 per share this quarter.

Operating income was similarly on the rise, reaching $256m or $1.54 per diluted share this time round from a figure of $232m or $1.42 per diluted share in 2006.

But Axis saw its gross premiums written slide by more than $35 million this quarter compared to the same time last year.

They reported a value of $959m, down from $995m in 2006, due to the impact of upward premium adjustments last year.

Meanwhile Axis revealed its investment portfolio contains $69m in total exposure to subprime mortgages, representing less than one percent of their total cash and investments. All of that exposure has been AAA-rated.

Net premiums earned climbed by two percent to $694m for the quarter, while pre-tax net investment increased 24 percent to $114m. These increases reflect higher average investment balances and yields compared to the same period in 2006.

Their pre-tax net loss estimate from the UK and Australian floods in June was $47m and is included in their results for the quarter.

Total shareholders' equity was also on the way up by six percent to $4.7 billion from December 31, 2006.

But chief executive officer and president John Charman was particularly pleased with a strong annualised return on average common equity.

"We are pleased to report that we have delivered an annualised return on average common equity of 24 percent for the first half of this year against the backdrop of increased non-US catastrophe activity," he said.

"Our diluted book value per share has increased 25 percent over the last 12 months.

"Our franchise diversity and depth are strong, as evidenced by the overall stability and quality of our premium volume for the first half of this year.

"In the quarter we closed the acquisition of Media Pro, which represents a significant milestone in continuing to strategically broaden our specialty franchise in the small and middle market."