Axis Capital Holdings Ltd. may have to pay as much as $430 million for claims from Hurricanes Gustav and Ike, the Bermuda reinsurer said yesterday.

And the company also said it exects to realise a loss of $60 million related to the US government takeover of Fannie Mae and Frdddie Mac, while it has exposures to collapsed investment bank Lehman Brothers and insurer AIG totalling $52 million.

The company's preliminary net loss estimate, net of reinstatement premiums, for Gustav ranges from about $25 million to $45 million, with $15 million to $25 million emanating from its reinsurance segment and $10 million to $20 million coming from its insurance segment.

Its preliminary net loss estimate related to Ike ranges from approximately $285 million to $385 million, with its reinsurance business accounting for $220 million to $270 million and its insurance segment $65 million to $115 million.

John Charman, CEO and president of Axis Capital, said: "Our estimated net losses from Hurricanes Gustav and Ike are within our expectations for hurricane-related activity. We expect market losses for these hurricanes to be well in excess of $15 billion.

"Our rigorous pricing and risk analyses strongly supported our decisions to allocate Texas capacity to coastal areas and to de-emphasise Florida exposure in our portfolio, particularly in smaller events. Our experience in a storm with Ike's profile was not different from what our analyses had projected for similar landfall scenarios.

"This year has seen a significant amount of loss activity emanating from large individual risk losses as well as small and medium-sized catastrophes. As a major participant in the wholesale insurance and reinsurance marketplace, we expect these types of losses and our underwriting portfolio has performed as expected in a year with estimates of market losses already in excess of $40 billion.

"Further, we expect the ongoing global credit crisis combined with increased loss activity this year to positively influence the buying decision for insurance and reinsurance.

"With our strong balance sheet, we will continue to commit strong capacity to our clients in these unprecedented and challenging times."

Axis Capital also has modest exposure in its fixed income portfolios to several specific situations that are concerning the market.

The company's exposure in these portfolios to Lehman Brothers is $34 million at amortised cost.

Similarly, the company's exposure to operating subsidiaries of American International Group (AIG) is $18 million.

The company expects to realise a loss of approximately $60 million associated with Fannie Mae and Freddie Mac preferred equity.