Max Capital Group Ltd. Reports Second-Quarter 2008 Results

HAMILTON, BERMUDA--(Business Wire)--
Max Capital Group Ltd. (NASDAQ: MXGL; BSX: MXGL BH) today reported
net income for the three months ended June 30, 2008, of $74.2 million,
or $1.26 per fully diluted share, compared to net income of $94.1
million, or $1.45 per fully diluted share, for the three months ended
June 30, 2007. Net operating income, which represents net income
excluding after-tax net realized gains and losses on sales of fixed
maturities, was $76.1 million, or $1.29 per fully diluted share,
compared to net operating income of $94.4 million, or $1.46 per fully
diluted share, for the three months ended June 30, 2008 and 2007,
respectively.

For the six months ended June 30, 2008, the Company had net income
of $82.0 million, or $1.38 per diluted share, compared to $174.1
million, or $2.70 per diluted share, for the six months ended June 30,
2007. Net operating income was $82.4 million, or $1.39 per diluted
share, compared to $175.5 million, or $2.72 per diluted share, for the
six months ended June 30, 2008 and 2007, respectively.

W. Marston (Marty) Becker, Chairman and Chief Executive Officer of
Max Capital Group Ltd., said: "Second quarter results continue to
reflect the benefits of Max's disciplined underwriting and diversified
investment philosophy. Each of our business segments are on plan
through six months. Moreover, this consistent performance has been
complemented by favorable development of reserves associated with
prior periods. Property and casualty gross premium written growth is
flat across our organization other than the expected organic growth in
our developing U.S. specialty operations; invested asset growth is on
plan although reinvestment rates on fixed maturities are below our
original projections; and alternative investment returns have
outperformed the relevant indices with a positive return of 3.34
percent in the second quarter."

Gross premiums written from property and casualty underwriting for
the three months ended June 30, 2008, were $275.7 million compared to
$240.7 million for the three months ended June 30, 2007, an increase
of 14.5 percent. The increase in gross premiums written reflects the
growth of the Company's property and casualty U.S. specialty segment,
which commenced underwriting activity in the three months ended June
30, 2007. Net premiums earned from property and casualty underwriting
for the three months ended June 30, 2008, were $141.2 million versus
$137.4 million for the same period of 2007. Gross premiums written and
net premiums earned from life and annuity underwriting for the three
months ended June 30, 2008, were $93.6 million and $93.4 million,
respectively, compared to $0.8 million and $0.7 million for the same
period of 2007. This increase is principally attributable to the
closing of a life and annuity reinsurance transaction for $92.8
million of gross premiums written during the three months ended June
30, 2008.

Gross premiums written from property and casualty underwriting for
the six months ended June 30, 2008, were $581.7 million compared to
$453.7 million for the six months ended June 30, 2007, an increase of
28.2 percent. The increase in property and casualty gross premiums
written was due to the expansion of the Company's agriculture
reinsurance product line together with the growth of its property and
casualty U.S. specialty segment. Property and casualty reinsurance,
property and casualty insurance, property and casualty U.S. specialty
insurance, and life and annuity reinsurance accounted for 45.1
percent, 28.9 percent, 12.0 percent and 14.0 percent, respectively, of
gross premiums written for the six months ended June 30, 2008, versus
52.7 percent, 44.8 percent, 2.2 percent and 0.3 percent, respectively,
for the same period in 2007. Net premiums earned from property and
casualty underwriting for the six months ended June 30, 2008, were
$276.5 million versus $276.3 million for the same period of 2007.
Gross premiums written and net premiums earned from life and annuity
underwriting for the six months ended June 30, 2008, were $94.3
million and $94.0 million, respectively, compared to $1.4 million and
$1.1 million for the same period of 2007. This increase is principally
attributable to the closing of the aforementioned life and annuity
reinsurance transaction.

Net investment income for the three months ended June 30, 2008,
decreased to $42.5 million from $46.4 million for the same period in
2007, principally attributable to lower yields on cash and
fixed-maturity investments. Net gains on alternative investments for
the three months ended June 30, 2008 were $39.5 million, for a 3.34
percent rate of return, compared to $68.1 million and a 5.84 percent
rate of return for the same period in 2007. For the six months ended
June 30, 2008 alternative investments have returned 1.16 percent or
$13.8 million compared to 10.86 percent or $122.2 million for the same
period in 2007. Trailing twelve-month and sixty-month returns on
alternative investments were 6.73 percent and 8.62 percent,
respectively, at June 30, 2008. In accordance with the Company's
accounting policy, the unrealized mark-to-market gains and losses from
the alternative investment portfolio are recorded through net income
rather than as an adjustment to book value through other comprehensive
income. Invested assets were $5.2 billion as of June 30, 2008, with an
allocation of 80.0 percent to cash and fixed maturities and 20.0
percent to alternative investments.

Losses and benefits were $186.4 million for the three months ended
June 30, 2008, versus $106.5 million for the same period in 2007.
Losses and benefits include $92.8 million attributable to the life and
annuity transaction written in the three months ended June 30, 2008.
Property and casualty losses were $78.1 million with a loss ratio of
55.4 percent for the three months ended June 30, 2008 compared to
$95.9 million with a loss ratio of 69.8 percent for the same period in
2007. Results for the three months ended June 30, 2008, include net
favorable development on prior period reserves of approximately $28.5
million on property and casualty reinsurance and insurance reserves,
which accounted for a 20 point decrease in the loss ratio for the
period. This favorable development was partially offset by losses in
the agriculture product line. There was no significant reserve
development for the three months ended June 30, 2007. Losses
recognized in the three and six months ended June 30, 2008 related to
catastrophic events were not significant.

Acquisition costs for the three months ended June 30, 2008, were
$12.2 million compared to $19.7 million for the three months ended
June 30, 2007. The decrease in the 2008 quarter compared to the same
period in 2007 was principally attributable to a change in the mix of
business written and earned, together with commission adjustments in
2007 which increased the comparative figure.

Interest expense for the three months ended June 30, 2008, was
$4.1 million versus $8.3 million for the same period in 2007. The
decrease was principally attributable to lower interest crediting
rates on certain large funds withheld balances, which are based on the
total return of two fixed income indices, together with the reduction
in interest expense on bank loans due to the decrease in LIBOR
compared to the same period in 2007.

General and administrative expenses for the three months ended
June 30, 2008, were $37.5 million compared to $26.8 million for the
same period in 2007. The increase in general and administrative
expenses was principally the result of expenses related to the growth
of the Company's property and casualty U.S. specialty segment, an
increase in professional fees, and increased expense associated with
the vesting of long-term stock-based compensation.

During the three months ended June 30, 2008, under the
Board-approved share repurchase authorization, the Company repurchased
408,200 of its common shares at an average price of $23.47 per share
for a total amount of $9.6 million. As of June 30, 2008, $76.2 million
remains under the Company's share repurchase authorization.

Shareholders' equity was $1,489.6 million at June 30, 2008. Book
value per share at June 30, 2008, was $26.55 per share, versus $27.54
at December 31, 2007, a decrease of 3.6 percent. Fully diluted book
value per share at June 30, 2008, was $25.65 versus $25.59 at December
31, 2007, an increase of 0.2 percent. Diluted book value per share is
computed using the treasury stock method. Net operating return on
average shareholders' equity for the three and six months ended June
30, 2008, was 20.3 percent and 10.7 percent, respectively.

Max Capital Group Ltd., through its operating subsidiaries,
provides specialty insurance and reinsurance products to corporations,
public entities, property and casualty insurers and life and health
insurers.

This release includes statements about future economic
performance, finances, expectations, plans and prospects of the
Company that constitute forward-looking statements for purposes of the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to various risks
and uncertainties that could cause actual results to differ materially
from those suggested by such statements. For further information
regarding cautionary statements and factors affecting future results,
please refer to the Company's most recent Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q filed subsequent to the Annual Report
and other documents filed by the Company with the SEC. The Company
undertakes no obligation to update or revise publicly any
forward-looking statement whether as a result of new information,
future developments or otherwise.

In presenting the Company's results, management has included and
discussed net operating income per diluted share and net operating
return on average shareholders' equity. Such measures are "non-GAAP
financial measures" as defined in Regulation G. Management believes
that these non-GAAP financial measures, which may be defined
differently by other companies, allow for a more complete
understanding of the Company's business. These measures, however,
should not be viewed as a substitute for those determined in
accordance with GAAP. The reconciliation of such measures to their
respective most directly comparable GAAP financial measures is
presented in the attached financial information in accordance with
Regulation G.

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MAX CAPITAL GROUP LTD.
--------------------------------------------

CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and
share amounts)
June 30, December 31,
2008 2007
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 567,440 $ 397,656
Fixed maturities, available for sale at fair
value 3,620,551 3,663,226
Alternative investments, at fair value 1,049,019 1,061,734
Accrued interest income 47,582 49,100
Premiums receivable 566,584 432,965
Losses and benefits recoverable from
reinsurers 668,948 578,333
Deferred acquisition costs 56,037 44,187
Prepaid reinsurance premiums 181,894 130,071
Trades pending settlement 42,569 112,423
Other assets 91,967 68,834

------------ ------------
Total assets $ 6,892,591 $ 6,538,529
============ ============

LIABILITIES
Property and casualty losses $ 2,485,200 $ 2,333,877
Life and annuity benefits 1,336,307 1,203,509
Deposit liabilities 217,321 220,513
Funds withheld from reinsurers 164,134 169,263
Unearned property and casualty premiums 593,761 439,581
Reinsurance balances payable 136,336 99,221
Accounts payable and accrued expenses 40,185 58,892
Bank loans 330,000 330,000
Senior notes 99,791 99,779

------------ ------------
Total liabilities 5,403,035 4,954,635
------------ ------------

SHAREHOLDERS' EQUITY
Preferred shares (par value $1.00)
20,000,000 shares authorized;
no shares issued or outstanding - -
Common shares (par value $1.00)
200,000,000 shares authorized;
56,095,884 (2007 - 57,515,075) shares
issued and outstanding 56,096 57,515
Additional paid-in capital 756,954 844,455
Accumulated other comprehensive loss (97,506) (20,341)
Retained earnings 774,012 702,265

------------ ------------
Total shareholders' equity 1,489,556 1,583,894
------------ ------------

Total liabilities and shareholders' equity $ 6,892,591 $ 6,538,529
============ ============

Book Value Per Share $ 26.55 $ 27.54
============ ============

Fully Diluted Book Value Per Share $ 25.65 $ 25.59
============ ============

Diluted Shares Outstanding 58,080,690 61,901,228
*T

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MAX CAPITAL GROUP LTD.
-------------------------------

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Expressed in thousands of United States Dollars, except per share and
share amounts)

Three Months Ended June Six Months Ended June 30
30
2008 2007 2008 2007
------------ ------------ ------------ ------------
REVENUES
Gross premiums
written $ 369,292 $ 241,502 $ 675,926 $ 455,100
Reinsurance
premiums ceded (99,115) (77,633) (203,791) (153,841)
------------ ------------ ------------ ------------
Net premiums
written $ 270,177 $ 163,869 $ 472,135 $ 301,259
============ ============ ============ ============

Earned premiums $ 312,657 $ 199,697 $ 522,298 $ 401,189
Earned premiums
ceded (78,047) (61,686) (151,875) (123,756)
------------ ------------ ------------ ------------
Net premiums
earned 234,610 138,011 370,423 277,433

Net investment
income 42,507 46,369 92,133 89,186
Net gains on
alternative
investments 39,493 68,087 13,766 122,199
Net realized
losses on sale of
fixed maturities (1,793) (282) (361) (1,325)
Other income 201 169 1,423 343

------------ ------------ ------------ ------------
Total revenues 315,018 252,354 477,384 487,836
------------ ------------ ------------ ------------

LOSSES AND
EXPENSES
Losses and
benefits 186,369 106,501 294,926 213,516
Acquisition costs 12,235 19,732 21,848 34,658
Interest expense 4,089 8,328 16,046 16,435
General and
administrative
expenses 37,491 26,762 62,211 51,958

------------ ------------ ------------ ------------
Total losses
and expenses 240,184 161,323 395,031 316,567
------------ ------------ ------------ ------------

INCOME BEFORE
TAXES 74,834 91,031 82,353 171,269

Income tax expense
(benefit) 630 (3,109) 401 (2,864)
------------ ------------ ------------ ------------

NET INCOME 74,204 94,140 81,952 174,133

Change in net
unrealized
depreciation of
fixed maturities,
net of tax (83,761) (53,006) (68,812) (57,746)
Foreign currency
translation
adjustment (3,427) 485 (8,353) 869

------------ ------------ ------------ ------------
COMPREHENSIVE
(LOSS) INCOME $ (12,984) $ 41,619 $ 4,787 $ 117,256
============ ============ ============ ============

Basic earnings per
share $ 1.31 $ 1.55 $ 1.44 $ 2.87
============ ============ ============ ============
Diluted earnings
per share $ 1.26 $ 1.45 $ 1.38 $ 2.70
============ ============ ============ ============
Diluted net
operating
earnings per
share $ 1.29 $ 1.46 $ 1.39 $ 2.72
============ ============ ============ ============

Weighted average
shares
outstanding -
basic 56,745,694 60,710,142 56,792,943 60,579,936
============ ============ ============ ============
Weighted average
shares
outstanding -
diluted 58,884,380 64,801,799 59,443,377 64,488,023
============ ============ ============ ============
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MAX CAPITAL GROUP LTD.
----------------------------------------------

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)

Six Months Ended June
30
2008 2007
----------- -----------
Preferred shares
Balance, beginning of period $ - $ -
----------- -----------
Balance, end of period - -
----------- -----------

Common shares
Balance, beginning of period 57,515 60,277
Issue of shares 2,331 1,362
Repurchase of shares (3,750) (1,511)
----------- -----------
Balance, end of period 56,096 60,128
----------- -----------

Additional paid-in capital
Balance, beginning of period 844,455 933,292
Issue of common shares 2,023 3,271
Stock based compensation expense 10,159 8,982
Repurchase of shares (99,683) (38,122)
----------- -----------
Balance, end of period 756,954 907,423
----------- -----------

Accumulated other comprehensive loss
Balance, beginning of period (20,341) (21,688)
Holding losses on fixed maturities arising in
period, net of tax (69,279) (59,071)
Net realized losses included in net income,
net of tax 467 1,325
Currency translation adjustments (8,353) 869
----------- -----------
Balance, end of period (97,506) (78,565)
----------- -----------

Retained earnings
Balance, beginning of period 702,265 418,180
Net income 81,952 174,133
Dividends paid (10,205) (8,525)
----------- -----------
Balance, end of period 774,012 583,788
----------- -----------

Total shareholders' equity $1,489,556 $1,472,774
=========== ===========
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MAX CAPITAL GROUP LTD.
------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Expressed in thousands of United States Dollars)

Six Months Ended June
30
2008 2007
---------- ----------
OPERATING ACTIVITIES
Net income $ 81,952 $ 174,133
Adjustments to reconcile net income to net cash
from operating activities:
Stock based compensation 10,159 8,982
Amortization of premium on fixed maturities 2,449 2,429
Accretion of deposit liabilities 2,146 3,046
Net gains on alternative investments (13,766) (122,199)
Net realized losses on sale of fixed maturities 361 1,325
Changes in:
Accrued interest income 1,518 857
Premiums receivable (133,619) (76,156)
Losses and benefits recoverable from reinsurers (88,361) (66,765)
Deferred acquisition costs (11,850) (1,887)
Prepaid reinsurance premiums (51,916) (30,038)
Trades pending settlement 69,854 29,702
Other assets (11,122) (5,860)
Property and casualty losses 146,224 107,526
Life and annuity benefits 67,567 (17,126)
Funds withheld from reinsurers (5,129) (2,689)
Unearned property and casualty premiums 153,628 53,524
Reinsurance balances payable 37,115 20,070
Accounts payable and accrued expenses (18,707) (12,368)

---------- ----------
Cash from operating activities 238,503 66,506
---------- ----------

INVESTING ACTIVITIES
Purchases of fixed maturities (524,381) (739,421)
Sales of fixed maturities 238,800 205,535
Redemptions of fixed maturities 331,932 254,144
Sales (purchases) of alternative investments 26,481 91,350
Acquisition of subsidiary, net of cash acquired (29,941) (28,400)

---------- ----------
Cash provided by (used in) investing activities 42,891 (216,792)
---------- ----------

FINANCING ACTIVITIES
Net proceeds from issuance of common shares 4,354 4,633
Repurchase of common shares (103,433) (39,633)
Net proceeds from bank loans - 105,000
Net proceeds from issuance of senior notes - 99,497
Dividends paid (10,205) (8,525)
Additions to deposit liabilities 875 17,970
Payment of deposit liabilities (6,583) (3,133)

---------- ----------
Cash (used in) provided by financing activities (114,992) 175,809
---------- ----------

Effect of exchange rate on cash 3,382 869

Net increase in cash and cash equivalents 169,784 26,392

Cash and cash equivalents, beginning of period 397,656 441,895

---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 567,440 $ 468,287
========== ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid totaled $11,988 and $7,224 for the six months ended June
30, 2008 and 2007, respectively.
Corporate taxes paid totaled $153 and $nil for the six months ended
June 30, 2008 and 2007, respectively.
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MAX CAPITAL GROUP LTD.
----------------------

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA-SIX MONTHS ENDED JUNE 30,
2008 (Unaudited)
(Expressed in thousands of United States Dollars)

Year to Date Segment
Information: Property & Casualty
--------------------------------------------
U.S.
Reinsurance Insurance Specialty Total

Gross premiums written $305,027 $195,380 $ 81,268 $ 581,675
Reinsurance premiums
ceded (57,923) (94,783) (50,799) (203,505)
--------------------------------------------
Net premiums written $247,104 $100,597 $ 30,469 $ 378,170
============================================

Earned premiums $200,531 $184,828 $ 42,688 $ 428,047
Earned premiums ceded (29,763) (93,978) (27,848) (151,589)
--------------------------------------------
Net premiums earned 170,768 90,850 14,840 276,458

Net investment income 19,440 8,380 3,810 31,630
Net gains on alternative
investments 2,998 1,361 - 4,359
Net realized losses on
sales of fixed
maturities - - - -
Other income - 1,112 - 1,112
--------------------------------------------

Total revenues 193,206 101,703 18,650 313,559

Losses and benefits 91,336 69,805 10,610 171,751
Acquisition costs 22,506 (1,202) 285 21,589
Interest expense 2,445 - - 2,445
General and
administrative expenses 15,795 10,852 12,276 38,923
--------------------------------------------
Total losses and expenses 132,082 79,455 23,171 234,708

--------------------------------------------
Income (loss) before
taxes $ 61,124 $ 22,248 $ (4,521) $ 78,851
============================================

Loss Ratio (a) 53.5% 76.8% 71.5% 62.1%
Combined Ratio (b) 75.9% 87.5% 156.1% 84.0%

Year to Date Segment Information: Life &
Annuity Corporate Consolidated
----------------------------------
Reinsurance

Gross premiums written $ 94,251 $ - $ 675,926
Reinsurance premiums ceded (286) - (203,791)
----------------------------------
Net premiums written $ 93,965 $ - $ 472,135
==================================

Earned premiums $ 94,251 $ - $ 522,298
Earned premiums ceded (286) - (151,875)
----------------------------------
Net premiums earned 93,965 - 370,423

Net investment income 20,585 39,918 92,133
Net gains on alternative investments 6,535 2,872 13,766
Net realized losses on sales of
fixed maturities - (361) (361)
Other income - 311 1,423
----------------------------------

Total revenues 121,085 42,740 477,384

Losses and benefits 123,175 - 294,926
Acquisition costs 259 - 21,848
Interest expense 2,244 11,357 16,046
General and administrative expenses 1,491 21,797 62,211
----------------------------------
Total losses and expenses 127,169 33,154 395,031

----------------------------------
Income (loss) before taxes $ (6,084) $ 9,586 $ 82,353
==================================

Loss Ratio (a)
Combined Ratio (b)
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SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA-THREE MONTHS ENDED JUNE 30,
2008 (Unaudited)
(Expressed in thousands of United States Dollars)

Quarter Segment
Information: Property & Casualty
-------------------------------------------
U.S.
Reinsurance Insurance Specialty Total
-------------------------------------------

Gross premiums written $101,602 $122,176 $ 51,916 $275,694
Reinsurance premiums ceded (18,671) (49,392) (30,897) (98,960)
-------------------------------------------
Net premiums written $ 82,931 $ 72,784 $ 21,019 $176,734
===========================================

Earned premiums $ 99,917 $ 93,037 $ 26,105 $219,059
Earned premiums ceded (16,166) (44,765) (16,961) (77,892)
-------------------------------------------
Net premiums earned 83,751 48,272 9,144 141,167

Net investment income 9,555 4,325 1,875 15,755
Net gains on alternative
investments 9,483 3,361 - 12,844
Net realized losses on
sales of fixed maturities - - - -
Other income - 46 - 46
-------------------------------------------

Total revenues 102,789 56,004 11,019 169,812

Losses and benefits 32,699 38,694 6,756 78,149
Acquisition costs 12,542 (356) (58) 12,128
Interest expense (598) - - (598)
General and administrative
expenses 9,189 5,572 7,083 21,844
-------------------------------------------
Total losses and expenses 53,832 43,910 13,781 111,523

-------------------------------------------
Income (loss) before taxes $ 48,957 $ 12,094 $ (2,762) $ 58,289
===========================================

Loss Ratio (a) 39.0% 80.2% 73.9% 55.4%
Combined Ratio (b) 65.0% 91.0% 150.7% 79.4%

Quarter Segment
Information: Life & Annuity Corporate Consolidated
------------------------------------------
Reinsurance
--------------

Gross premiums written $ 93,598 $ - $ 369,292
Reinsurance premiums ceded (155) - (99,115)
------------------------------------------
Net premiums written $ 93,443 $ - $ 270,177
==========================================

Earned premiums $ 93,598 $ - $ 312,657
Earned premiums ceded (155) - (78,047)
------------------------------------------
Net premiums earned 93,443 - 234,610

Net investment income 10,780 15,972 42,507
Net gains on alternative
investments 16,904 9,745 39,493
Net realized losses on
sales of fixed maturities - (1,793) (1,793)
Other income - 155 201
------------------------------------------

Total revenues 121,127 24,079 315,018

Losses and benefits 108,220 - 186,369
Acquisition costs 107 - 12,235
Interest expense (247) 4,934 4,089
General and administrative
expenses 880 14,767 37,491
------------------------------------------
Total losses and expenses 108,960 19,701 240,184

------------------------------------------
Income (loss) before taxes $ 12,167 $ 4,378 $ 74,834
==========================================

Loss Ratio (a)
Combined Ratio (b)
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(a) The loss ratio is calculated by dividing losses and benefits by
net premiums earned.
(b) The combined ratio is calculated by dividing the sum of losses and
benefits, acquisition costs and general and administrative
expenses by net premiums earned.
*T

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MAX CAPITAL GROUP LTD.
----------------------

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA-SIX MONTHS ENDED JUNE 30,
2007 (Unaudited)
(Expressed in thousands of United States Dollars)

Year to Date Segment
Information: Property & Casualty
--------------------------------------------
U.S.
Reinsurance Insurance Specialty Total
--------------------------------------------

Gross premiums written $239,926 $ 203,938 $ 9,872 $ 453,736
Reinsurance premiums
ceded (35,166) (111,528) (6,874) (153,568)
--------------------------------------------
Net premiums written $204,760 $ 92,410 $ 2,998 $ 300,168
============================================

Earned premiums $196,905 $ 201,981 $ 939 $ 399,825
Earned premiums ceded (21,859) (100,958) (666) (123,483)
--------------------------------------------
Net premiums earned 175,046 101,023 273 276,342

Net investment income 21,841 7,918 1,645 31,404
Net gains on alternative
investments 37,412 9,575 - 46,987
Net realized losses on
sales of fixed
maturities - - - -
Other income - - - -
--------------------------------------------

Total revenues 234,299 118,516 1,918 354,733

Losses and benefits 115,314 76,982 152 192,448
Acquisition costs 34,913 (633) (20) 34,260
Interest expense 4,244 - - 4,244
General and
administrative expenses 13,941 8,915 8,179 31,035
--------------------------------------------
Total losses and expenses 168,412 85,264 8,311 261,987

--------------------------------------------
Income (loss) before
taxes $ 65,887 $ 33,252 $(6,393) $ 92,746
============================================

Loss Ratio (a) 65.9% 76.2% 55.7% 69.6%
Combined Ratio (b) 93.8% 84.4% n/a 93.3%

Year to Date Segment Information: Life &
Annuity Corporate Consolidated
-----------------------------------
Reinsurance
------------

Gross premiums written $ 1,364 $ - $ 455,100
Reinsurance premiums ceded (273) - (153,841)
-----------------------------------
Net premiums written $ 1,091 $ - $ 301,259
===================================

Earned premiums $ 1,364 $ - $ 401,189
Earned premiums ceded (273) - (123,756)
-----------------------------------
Net premiums earned 1,091 - 277,433

Net investment income 14,641 43,141 89,186
Net gains on alternative
investments 38,784 36,428 122,199
Net realized losses on sales of
fixed maturities - (1,325) (1,325)
Other income - 343 343
-----------------------------------

Total revenues 54,516 78,587 487,836

Losses and benefits 21,068 - 213,516
Acquisition costs 398 - 34,658
Interest expense 2,168 10,023 16,435
General and administrative expenses 1,429 19,494 51,958
-----------------------------------
Total losses and expenses 25,063 29,517 316,567

-----------------------------------
Income (loss) before taxes $29,453 $49,070 $ 171,269
===================================

Loss Ratio (a)
Combined Ratio (b)
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SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA-THREE MONTHS ENDED JUNE 30,
2007 (Unaudited)
(Expressed in thousands of United States Dollars)

Quarter Segment
Information: Property & Casualty
------------------------------------------
U.S.
Reinsurance Insurance Specialty Total
------------------------------------------

Gross premiums written $104,912 $125,904 $ 9,872 $240,688
Reinsurance premiums ceded (11,617) (58,979) (6,874) (77,470)
------------------------------------------
Net premiums written $ 93,295 $ 66,925 $ 2,998 $163,218
==========================================

Earned premiums $ 98,009 $ 99,935 $ 939 $198,883
Earned premiums ceded (11,383) (49,474) (666) (61,523)
------------------------------------------
Net premiums earned 86,626 50,461 273 137,360

Net investment income 11,106 3,974 1,618 16,698
Net gains on alternative
investments 20,990 5,200 - 26,190
Net realized losses on
sales of fixed maturities - - - -
Other income - - - -
------------------------------------------

Total revenues 118,722 59,635 1,891 180,248

Losses and benefits 55,550 40,148 152 95,850
Acquisition costs 19,657 (42) (20) 19,595
Interest expense 1,213 - - 1,213
General and administrative
expenses 6,671 4,531 4,672 15,874
------------------------------------------
Total losses and expenses 83,091 44,637 4,804 132,532

------------------------------------------
Income (loss) before taxes $ 35,631 $ 14,998 $(2,913) $ 47,716
==========================================

Loss Ratio (a) 64.1% 79.6% 55.7% 69.8%
Combined Ratio (b) 94.5% 88.5% n/a 95.6%

Quarter Segment Information: Life &
Annuity Corporate Consolidated
-----------------------------------
Reinsurance
------------

Gross premiums written $ 814 $ - $241,502
Reinsurance premiums ceded (163) - (77,633)
-----------------------------------
Net premiums written $ 651 $ - $163,869
===================================

Earned premiums $ 814 $ - $199,697
Earned premiums ceded (163) - (61,686)
-----------------------------------
Net premiums earned 651 - 138,011

Net investment income 7,285 22,386 46,369
Net gains on alternative
investments 21,288 20,609 68,087
Net realized losses on sales of
fixed maturities - (282) (282)
Other income - 169 169
-----------------------------------

Total revenues 29,224 42,882 252,354

Losses and benefits 10,651 - 106,501
Acquisition costs 137 - 19,732
Interest expense 504 6,611 8,328
General and administrative expenses 718 10,170 26,762
-----------------------------------
Total losses and expenses 12,010 16,781 161,323

-----------------------------------
Income (loss) before taxes $17,214 $26,101 $ 91,031
===================================

Loss Ratio (a)
Combined Ratio (b)
*T

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*T
(a) The loss ratio is calculated by dividing losses and benefits by
net premiums earned.
(b) The combined ratio is calculated by dividing the sum of losses and
benefits, acquisition costs and general and administrative
expenses by net premiums earned.
*T

-0-
*T
MAX CAPITAL GROUP LTD.
---------------------------

SCHEDULE OF SUPPLEMENTAL PREMIUM DATA-SIX MONTHS ENDED JUNE 30, 2008
(Unaudited)
(Expressed in thousands of United States Dollars)

Gross Premiums Written by Six Months Ended Six Months Ended
Type of Risk: June 30, 2008 June 30, 2007
-------------------- --------------------
Gross Percentage Gross Percentage
Premiums of Total Premiums of Total
Written Premiums Written Premiums
Written Written

Property & Casualty
Reinsurance:
Agriculture $ 85,054 12.6% $ 872 0.2%
Aviation 23,520 3.5% 19,798 4.4%
Excess Liability 7,352 1.1% 6,173 1.4%
Medical Malpractice 56,869 8.4% 37,531 8.2%
Other 4,018 0.6% (248) -0.1%
Professional Liability 23,763 3.5% 31,173 6.8%
Property 79,230 11.7% 79,142 17.4%
Marine & Energy 5,274 0.8% 24,927 5.5%
Whole Account 7,887 1.2% 8,541 1.9%
Workers' Compensation 12,060 1.8% 32,017 7.0%
--------- ---------- --------- ----------
305,027 45.2% 239,926 52.7%
Property & Casualty
Insurance:
Aviation 12,813 1.9% 13,429 3.0%
Excess Liability 75,774 11.2% 76,670 16.8%
Professional Liability 73,716 10.9% 80,603 17.7%
Property 33,077 4.9% 33,236 7.3%
--------- ---------- --------- ----------
195,380 28.9% 203,938 44.8%
Property & Casualty U.S.
Specialty:
Property 46,454 6.9% 9,872 2.2%
General Casualty 20,422 3.0% - 0.0%
Marine 14,392 2.1% - 0.0%
--------- ---------- --------- ----------
81,268 12.0% 9,872 2.2%

--------- ---------- --------- ----------
Aggregate Property &
Casualty $581,675 86.1% $453,736 99.7%
--------- ---------- --------- ----------

Life & Annuity:
Annuity $ 92,821 13.7% $ - 0.0%
Health - 0.0% - 0.0%
Life 1,430 0.2% 1,364 0.3%
--------- ---------- --------- ----------

Aggregate Life & Annuity 94,251 13.9% 1,364 0.3%

--------- ---------- --------- ----------
Aggregate P&C and Life &
Annuity $675,926 100.0% $455,100 100.0%
========= ========== ========= ==========
*T

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*T
MAX CAPITAL GROUP LTD.
--------------------------------------------

NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (Unaudited)

Net Operating Income per Diluted Share
(Expressed in thousands of United States Dollars, except per share and
share amounts)

Three Months Ended June Six Months Ended June 30
30
2008 2007 2008 2007
------------ ------------ ------------ ------------

Net income $ 74,204 $ 94,140 $ 81,952 $ 174,133
Net realized
losses on sale of
fixed maturities,
net of tax 1,895 282 467 1,325
------------------------- -------------------------
Net operating
income $ 76,099 $ 94,422 $ 82,419 $ 175,458
========================= =========================

Net income per
diluted share $ 1.26 $ 1.45 $ 1.38 $ 2.70
Net realized
losses on sale of
fixed maturities,
net of tax 0.03 0.01 0.01 0.02
------------------------- -------------------------
Net operating
income per
diluted share $ 1.29 $ 1.46 $ 1.39 $ 2.72
========================= =========================

Weighted average
shares
outstanding -
basic 56,745,694 60,710,142 56,792,943 60,579,936
Weighted average
shares
outstanding -
diluted 58,884,380 64,801,799 59,443,377 64,488,023

Annualized Return and Annualized Net Operating Return on Average
Shareholders' Equity
(Expressed in thousands of United States Dollars)

Three Months Ended June Six Months Ended June 30
30
2008 2007 2008 2007
------------ ------------ ------------ ------------

Net income $ 74,204 $ 94,140 $ 81,952 $ 174,133
Annualized net
income 296,816 376,560 163,904 348,266

Net operating
income $ 76,099 $ 94,422 $ 82,419 $ 175,458
Annualized net
operating income 304,396 377,688 164,838 350,916

Beginning
shareholders'
equity $ 1,511,557 $ 1,448,113 $ 1,583,894 $ 1,390,061
Ending
shareholders'
equity 1,489,556 1,472,774 1,489,556 1,472,774
------------ ------------ ------------ ------------
Average
shareholders'
equity $ 1,500,557 $ 1,460,444 $ 1,536,725 $ 1,431,418
------------ ------------ ------------ ------------

Annualized return
on average
shareholders'
equity 19.8% 25.8% 10.7% 24.3%
Annualized net
operating return
on average
shareholders'
equity 20.3% 25.9% 10.7% 24.5%
*T

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*T
MAX CAPITAL GROUP LTD.
------------------------------------------------------------

SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA-SIX MONTHS ENDED JUNE 30,
2008 (Unaudited)

Selected Investment Return Data:
Fair Investment
Value* Distribution
---------- ------------

Cash and Fixed Maturities $4,187,991 80.0%
========== ============

Commodity Trading Advisers $ - 0.0%
Distressed Securities 148,953 2.8%
Diversified Arbitrage 98,964 1.9%
Emerging Markets 66,002 1.3%
Event-Driven Arbitrage 180,377 3.4%
Fixed Income Arbitrage 28,957 0.6%
Global Macro 90,033 1.7%
Long / Short Credit 44,362 0.8%
Long / Short Equity 350,926 6.7%
Opportunistic 35,794 0.7%
----------

MDS **** 1,044,368 19.9%

Reinsurance Private Equity 4,651 0.1%
---------- ------------

Alternative Investments $1,049,019 20.0%
========== ============

Total Investments $5,237,010 100.0%
========== ============

Selected Investment Return Data: Periodic Rate of Return
Last Year Last Last
3 to 12 60
Months Date months months**
------- ------ ------- ---------

Cash and Fixed Maturities -0.91% 0.49% 4.59% 3.38%

Commodity Trading Advisers 0.00% 0.00% 0.00% 4.57%
Distressed Securities 2.56% 1.98% 7.70% 17.51%
Diversified Arbitrage -0.20% -8.52% -0.83% 5.06%
Emerging Markets 2.76% 3.05% 8.01% 15.95%
Event-Driven Arbitrage 9.44% 11.09% 24.59% 18.23%
Fixed Income Arbitrage 0.85% 15.18% 34.19% 10.32%
Global Macro 5.46% 5.36% 10.41% 8.26%
Long / Short Credit -0.06% 1.63% -2.04% 9.58%
Long / Short Equity 6.71% -0.78% 11.58% 9.97%
Opportunistic -3.78% -5.94% -1.61% 19.26%

MDS **** 3.33% 1.10% 6.50% 9.30%

Reinsurance Private Equity 6.67% 18.06% 102.38% 10.52%

Alternative Investments 3.34% 1.16% 6.73% 8.62%

Total Investments 0.08% 0.69% 5.14% 5.43%

Alternative Investment Return Data ***:

HFRI Fund of Funds Index ^ 1.81% -2.54% -0.35% 7.65%

*T

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*T
MDS Performance History **** - 60 months ended June 30, 2008

Largest monthly gain Largest monthly
4.15% loss (2.58%)
Largest quarterly gain Largest
5.83% quarterly loss (2.72%)
Average monthly gain Average monthly
1.38% loss (0.97%)
Average quarterly gain Average
3.42% quarterly loss (1.14%)
Months with a gain Months with a
44 loss 16
Quarters with a gain Quarters with a
15 loss 5
% of months with a Quarterly
gain standard
73% deviation 2.56%
% of quarters with a Annual standard
gain 75% deviation 4.64%
Largest
drawdown ***** (5.04%)
Monthly performance
2003 2004 2005 2006 2007 2008
January 1.75% 0.16% 2.75% 1.28% (1.37%)
February 1.28% 1.69% 0.39% 1.50% 1.83%
March 1.18% (0.61%) 1.22% 1.90% (2.58%)
April 0.03% (0.65%) 1.89% 2.30% (0.13%)
May (0.87%) (0.68%) (1.74%) 2.59% 2.51%
June 0.70% 1.20% (0.66%) 0.85% 0.93%
July (0.24%) 0.03% 1.33% (0.71%) 0.99%
August 0.96% (0.02%) 0.98% 0.02% (1.62%)
September 2.63% 0.04% 1.84% (2.04%) 1.85%
October 0.98% 1.04% (1.45%) 1.37% 4.15%
November 0.56% 2.54% 0.61% 1.81% 0.10%
December 1.85% 1.74% 1.37% 1.96% (0.13%)

Quarterly performance

Q1 4.27% 1.22% 4.41% 4.75% (2.15%)
Q2 (0.15%) (0.14%) (0.54%) 5.83% 3.33%
Q3 3.37% 0.06% 4.21% (2.72%) 1.18%
Q4 3.43% 5.41% 0.51% 5.22% 4.11%

Period return 6.91% 9.81% 5.88% 6.30% 16.78% 1.10%

Past performance should not be considered to be a reliable indicator
of future performance.
* Expressed in thousands of United States Dollars
** Annualized
*** The percentages shown under the alternative investment return data
relate only to the performance of our alternative investments held by
MDS.
**** Net of all fees
***** Largest drawdown represents the largest decline in value between
two NAV peak values.
^ As reported by HFRI as at July 23, 2008
*T

Max Capital Group, Ltd.
N. James Tees, 441-293-8800
Executive Vice President
jim.tees@maxcapservices.com
or
Kekst and Company
Roanne Kulakoff, 212-521-4837
roanne-kulakoff@kekst.com

Copyright Business Wire 2008