Max Re Capital Ltd. closed 2005 with small profit despite catastrophe losses which sent the Bermuda-based company to a fourth quarter 2005 loss of $11.4 million or 20 cents per share.

For the year ended December 31, 2005, the company reported earnings of $6.7 million, or 13 cents per share, a 95 percent decrease from $133.7 million, or $2.75 per share earned in 2004. The full-year operating income fell 94 percent to $7.4 million compared to the same period of 2004 when it was $123.3 million.

Max Re's shares fell 80 cents or three percent to $25.34 in trading on the New York Stock Exchange yesterday. Analysts were expecting the reinsurer to post a fourth-quarter profit of nine cents a share.

Robert J. Cooney, chairman, president and chief executive officer, said: "The company recorded a reduction in net income of $157.4 million from natural catastrophes during 2005, but despite these events we are pleased to report a small net income for the year. We successfully raised $284.1 million in a public common share offering in the fourth quarter of 2005 and are well positioned to participate in the expected attractive market for our products in upcoming months."

Max Re Capital Ltd. also issued its 2006 earnings guidance on Friday. It expects gross premiums written to be between $1 billion and $1.1 billion and the property and casualty combined ratio, which is defined as total losses and expenses as a percentage of net premiums earned, is expected to range between 88-90 percent. Net operating earnings per share, which represents net income decreased by net realised gains on sale of fixed maturities, are expected to be between $3 and $3.50 per share.

Max Re Capital 4Q 05 Report Card:

Results for the last three months of the year compared to the same period a year ago

Net loss: $11.4 million compared with earnings of $87.1 million during the last quarter last year

Net loss broken down per share: 20 cents per share compared with earnings of $1.82 per share a year ago

Operating loss: $7.9 million compared with an operating gain of $80.8 million in the same quarter a year ago

Gross premiums written: $257.2 million compared to $139.6 million in the same period a year ago

Net premiums written: $188.8 million, an increase from $97.1 million in the same period a year ago

Net investment income: $31.2 million compared with $24.2 million a year ago

P/Casualty Combined Ratio: 105.3 percent

Shareholders' equity: $1.22 billion at December 31, 2005 compared to $937 million at the end of 2004.