Specialty Lines Continues to Grow in U.S. and at Lloyd’s Underwriting Platforms in Bermuda, Dublin, U.S. and at Lloyd’s Produce Favorable Results

• Net income of $43.8 million or $0.76 per diluted share
• Net operating income of $47.8 million or $0.83 per diluted share
• Annualized net operating return on average shareholders’ equity of 14.6%
• Book value per diluted share increased by 7.5% to $23.53 at June 30, 2009
• P&C combined ratio of 90.8%

Max Capital Group Ltd. (NASDAQ: MXGL; BSX: MXGL BH) today reported net income for the three months ended June 30, 2009 of $43.8 million, or $0.76 per diluted share, compared to net income of $74.2 million, or $1.26 per diluted share, for the three months ended June 30, 2008. Net operating income, which represents net income excluding after-tax net realized gains and losses on fixed maturities, net gains and losses on foreign exchange, and merger and acquisition expenses, for the three months ended June 30, 2009 was $47.8 million, or $0.83 per diluted share, compared to net operating income of $80.1 million, or $1.36 per diluted share, for the three months ended June 30, 2008.

W. Marston (Marty) Becker, Chairman and Chief Executive Officer of Max Capital Group Ltd., said: “We are very pleased to report another strong quarter for Max Capital. Our underwriting platforms in Bermuda, Dublin, the U.S. and at Lloyd's have all produced favorable results for the quarter. For the second consecutive quarter we posted strong growth in gross premiums written, primarily driven by the expansion of Max’s newer specialty underwriting platforms in the U.S. and at Lloyd’s. Overall loss and combined ratios remain at attractive levels, benefiting from our disciplined underwriting and successful diversification strategy. We continue to see attractive opportunities and are focused on adding new products and teams to each of our global platforms. Market conditions continue to support 2009 as a more attractive underwriting year than 2008. Hedge funds now represent 8.5% of total invested assets and will be further reduced to 5-7% by year end.”

For the six months ended June 30, 2009, the Company had net income of $88.3 million, or $1.54 per diluted share, compared to net income of $82.0 million, or $1.38 per diluted share for the six months ended June 30, 2008. Net operating income for the six months ended June 30, 2009 was $94.7 million, or $1.65 per diluted share, compared to net operating income of $86.4 million, or $1.45 per diluted share, for the six months ended June 30, 2008.

Gross premiums written from property and casualty underwriting for the three months ended June 30, 2009 were $355.5 million compared to $275.7 million for the three months ended June 30, 2008, an increase of 28.9%, with a corresponding increase of 27.8% in net premiums written between the same periods. The increase in gross premiums written reflects the contribution of the Company’s Max at Lloyd’s segment, the continued build-out of the U.S. specialty platform, and modest organic growth in each of the Company’s other property and casualty segments. Net premiums earned from property and casualty underwriting for the three months ended June 30, 2009 were $187.8 million compared to $141.2 million for the same period of 2008, an increase of 33.0%.

Gross premiums written from property and casualty underwriting for the six months ended June 30, 2009 were $789.2 million compared to $581.7 million for the six months ended June 30, 2008, an increase of 35.7%. The same factors have driven the increase for the six month period as for the three month period – the addition of Max at Lloyd’s and the steadily growing volume in the U.S. specialty segment. Net premiums earned from property and casualty underwriting for the six months ended June 30, 2009 were $377.6 million compared to $276.5 million for the same period of 2008, an increase of 36.6%. Gross premiums written from life and annuity underwriting for the six months ended June 30, 2009 were $41.6 million, compared to $94.3 million for the same period of 2008, with one new life and annuity reinsurance transaction in each period.

Net investment income for the three months ended June 30, 2009 was $41.8 million compared to $42.5 million for the same period in 2008. The decline from a year ago reflects lower yields on the higher cash and cash equivalents balance held by the Company. The Company continues to hold a higher than normal cash balance as it rebalances asset allocation and strategically positions its portfolios for the changing fixed income markets. An increase in the fair value of the Company’s fixed maturities portfolio resulted in a $36.9 million increase to shareholders’ equity for unrealized holding gains, which are recorded through other comprehensive income for the three months ended June 30, 2009. The Company recognized other-than-temporary impairment losses through earnings of $2.0 million for the three months ended June 30, 2009, compared to impairment losses totaling $3.1 million during the same period in 2008. Net gains on other investments for the three months ended June 30, 2009 were $21.4 million, for a 3.11% rate of return, compared to net gains of $39.5 million and a 3.34% rate of return for the same period in 2008. For the six months ended June 30, 2009 other investments, comprising the Company’s hedge fund portfolio, have returned 5.23% or a net gain of $39.4 million compared to 1.16% or net gains of $13.8 million for the same period in 2008. In accordance with the Company’s accounting policy, the unrealized mark-to-market gains and losses from the hedge fund portfolio are recorded through net income rather than as an adjustment to book value through other comprehensive income. Invested assets were $5.1 billion as of June 30, 2009, with an allocation of 91.5% to cash and fixed maturities and 8.5% to other investments. The Company’s liquidity position at June 30, 2009 is strong, with 70.6% or $3.3 billion, of the $4.7 billion cash and fixed maturities portfolio held in cash, government and government agency-backed securities, or AAA-rated securities.

Property and casualty net losses and loss expenses were $122.2 million with a loss ratio of 65.1% and a combined ratio of 90.8% for the three months ended June 30, 2009, compared to $78.1 million with a loss ratio of 55.4% and a combined ratio of 79.4% for the same period in 2008. Net losses recognized in the three months ended June 30, 2009 and 2008 related to property catastrophe losses were not significant to operating results for either period. Results for the three months ended June 30, 2009 include net favorable development on prior period reserves of $20.0 million, which reduced the loss ratio by 10.6 percentage points. Favorable development reflects lower than expected claims emergence on prior year contracts. Net favorable development on prior period reserves in the three months ended June 30, 2008 was $28.5 million, which reduced the loss ratio by 20.2 percentage points.

Claims and policy benefits for life and annuity reinsurance for the three months ended June 30, 2009 were $55.4 million, compared to $108.2 million for the three months ended June 30, 2008, with both periods containing one new life and annuity reinsurance transaction. No material reserve changes were recognized in either period.

Acquisition costs for the three months ended June 30, 2009 were $25.1 million compared to $12.2 million for the three months ended June 30, 2008. The increase over the comparable period is principally attributable to the addition of Max at Lloyd’s and the growth of Max Specialty.

Interest expense for the three months ended June 30, 2009 was $4.7 million, compared to $4.1 million for the same period in 2008. The increase is principally due to higher interest crediting rates on funds held for retrocessionaires, partially offset by a reduction in interest expense on bank loans due to the decrease in outstanding loan balances compared to the same period in 2008. During the three months ended June 30, 2009 the Company fully repaid $150.0 million in bank loans, and reduced a third loan by $45.0 million. Together with the $75.0 million that was repaid in the first quarter of 2009, the Company has reduced its total debt by $270.0 million for the 2009 year to date.

General and administrative expenses for the three months ended June 30, 2009 were $36.1 million compared to $33.5 million for the same period in 2008. The increase is principally due to the addition of Max at Lloyd’s, partly offset by expense reductions in the other segments. Presented separately from general and administrative expenses are the costs associated with the Company’s merger and acquisition activities, which were $4.8 million and $4.0 million for the three months ended June 30, 2009 and 2008, respectively. The expenses incurred in 2009 related to the proposed amalgamation with IPC Holdings, Ltd., which was terminated in June, 2009. On July 9, 2009, the Company received a $50.0 million termination fee in accordance with the terms of the amalgamation agreement. This fee will be reflected in the Company’s results for the three months ended September 30, 2009, net of an estimated $8.0 million of expenses related to the termination fee.

Shareholders’ equity was $1,363.5 million at June 30, 2009. Book value per share at June 30, 2009 was $24.09, compared to $22.28 at March 31, 2009, an increase of 8.1%. Diluted book value per share at June 30, 2009 was $23.53 compared to $21.88 at March 31, 2009, an increase of 7.5%. Annualized net operating return on average shareholders’ equity for the three months ended June 30, 2009 was 14.6%.

A copy of the Company’s financial supplement for the second quarter will be available on the Company’s website at www.maxcapgroup.com shortly after the release of earnings.

The Company will host a conference call on Tuesday, August 4, 2009 at 10:00am (ET) to discuss this release with interested investors and shareholders. The conference call can be accessed via telephone by dialing 1-888-680-0878 (toll-free U.S.) or 1-617-213-4855 (international) and using access code 86444392. Live broadcast of the conference call will also be available through the Company’s website at www.maxcapgroup.com.

Operating from offices in Bermuda, Ireland, the USA and at Lloyd's, Max Capital Group Ltd. is a global enterprise dedicated to providing diversified specialty insurance and reinsurance products to corporations, public entities, property and casualty insurers, and life and health insurers.

In presenting the Company’s results, management has included and discussed net operating income per diluted share, net operating return on average shareholders’ equity, book value per share and diluted book value per share. 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.

This release includes statements about future economic performance, finances, expectations, plans and prospects of Max Capital Group Ltd. 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 certain 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.