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FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

|(Mark One)
|----------
|x         

For the quarterly period ended September 30, 2002

---

OR

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from _____________ to _____________

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Commission file number
000-33047

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|MAX RE CAPITAL LTD.                                           
|--------------------------------------------------------------
|                                                              
|(Exact name of registrant as specified in its charter)        
|                                                              
|Bermuda                                                       
|                                                              
|(State or other jurisdiction of incorporation or organization)
|                                                              
|Ascot House                                                   
|28 Queen Street                                               
|Hamilton, HM 11                                               
|Bermuda                                                       
|                                                              
|(Address of principal executive offices) (Zip Code)           
|                                                              
|(441) 296-8800                                                
|                                                              
|(Registrants telephone number, including area code)          

Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.

|Yes | x | No | o
|--- | - | -- | -

The number of the Registrants Common Shares (par value $1.00 per share) outstanding as of September 30,
2002 was 38,395,079.

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MAX RE CAPITAL LTD.

INDEX

|                                |                                                                                                                                        | PAGE
|------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                |                                                                                                                                        |     
|PART I --
FINANCIAL INFORMATION |                                                                                                                                       
|                                |                                                                                                                                        |     
|ITEM 1.                         | Financial Statements                                                                                                                   | 1   
|                                |                                                                                                                                        |     
|                                | Consolidated Balance Sheets as of September 30, 2002 (unaudited) and December 31, 2001                                                 | 1   
|                                |                                                                                                                                        |     
|                                | Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2002 and 2001 (unaudited) | 2   
|                                |                                                                                                                                        |     
|                                | Consolidated Statements of Changes in Shareholders Equity for the Nine Months Ended September 30, 2002 and 2001 (unaudited)           | 3   
|                                |                                                                                                                                        |     
|                                | Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001 (unaudited)                                | 4   
|                                |                                                                                                                                        |     
|                                | Notes to the Interim Consolidated Financial Statements (unaudited)                                                                     | 5   
|                                |                                                                                                                                        |     
|ITEM 2.                         | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                  | 10  
|                                |                                                                                                                                        |     
|ITEM 3.                         | Quantitative and Qualitative Disclosure About Market Risk                                                                              | 16  
|                                |                                                                                                                                        |     
|ITEM 4.                         | Controls and Procedures                                                                                                                | 16  
|                                |                                                                                                                                        |     
|PART II--
OTHER INFORMATION     | 18                                                                                                                                    
|                                |                                                                                                                                        |     
|ITEM 1.                         | Legal Proceedings                                                                                                                      | 18  
|                                |                                                                                                                                        |     
|ITEM 2.                         | Changes in Securities                                                                                                                  | 18  
|                                |                                                                                                                                        |     
|ITEM 3.                         | Defaults Upon Senior Securities                                                                                                        | 18  
|                                |                                                                                                                                        |     
|ITEM 4.                         | Submission of Matters to a Vote of Security Holders                                                                                    | 18  
|                                |                                                                                                                                        |     
|ITEM 5.                         | Other Information                                                                                                                      | 18  
|                                |                                                                                                                                        |     
|ITEM 6.                         | Exhibits and Reports on Form 8-K                                                                                                       | 18  
|                                |                                                                                                                                        |     
|SIGNATURES                      | S-1                                                                                                                                   
|                                |                                                                                                                                        |     
|CERTIFICATIONS                  | C-1                                                                                                                                   



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PART I. 
FINANCIAL INFORMATION

ITEM 1. 
Financial Statements

MAX RE CAPITAL LTD.

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars, except share amounts)

|                                                                                                                       |  | September 30, 2002 |           | December 31, 2001 |  
|---------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | ----------------- | -
|                                                                                                                       |  |                    |           |                   |  
|                                                                                                                       |  | (Unaudited)        |           |                   |  
|ASSETS                                                                                                                 |  |                    |           |                   |  
|Cash and cash equivalents                                                                                              |  | $                  | 79,326    |                   | $
|Fixed maturities, available for sale at fair value                                                                     |  |                    | 1,244,292 |                   |  
|Alternative investments, at fair value                                                                                 |  |                    | 607,333   |                   |  
|Accrued interest income                                                                                                |  |                    | 12,570    |                   |  
|Premiums receivable                                                                                                    |  |                    | 218,150   |                   |  
|Losses recoverable from reinsurers                                                                                     |  |                    | 202,119   |                   |  
|Funds withheld                                                                                                         |  |                    | 54,104    |                   |  
|Deferred acquisition costs                                                                                             |  |                    | 84,324    |                   |  
|Deferred charges                                                                                                       |  |                    | 37,074    |                   |  
|Prepaid reinsurance premiums                                                                                           |  |                    | 36,603    |                   |  
|Other assets                                                                                                           |  |                    | 9,863     |                   |  
|                                                                                                                       |  |                    |           |                   |  
|Total assets                                                                                                           |  | $                  | 2,585,758 |                   | $
|                                                                                                                       |  |                    |           |                   |  
|LIABILITIES                                                                                                            |  |                    |           |                   |  
|Life and annuity benefits and experience refunds                                                                       |  | $                  | 407,467   |                   | $
|Property and casualty losses and experience refunds                                                                    |  |                    | 721,292   |                   |  
|Reinsurance balances payable                                                                                           |  |                    | 162,131   |                   |  
|Deposit liabilities                                                                                                    |  |                    | 121,354   |                   |  
|Unearned property and casualty premiums                                                                                |  |                    | 360,229   |                   |  
|Accounts payable and accrued expenses                                                                                  |  |                    | 7,143     |                   |  
|Bank loan                                                                                                              |  |                    | 100,000   |                   |  
|                                                                                                                       |  |                    |           |                   |  
|Total liabilities                                                                                                      |  |                    | 1,879,616 |                   |  
|                                                                                                                       |  |                    |           |                   |  
|Minority interest                                                                                                      |  |                    | 115,287   |                   |  
|                                                                                                                       |  |                    |           |                   |  
|SHAREHOLDERS EQUITY                                                                                                   |  |                    |           |                   |  
|Preferred shares par value $1; 20,000,000 shares authorized no shares issued or outstanding                            |  |                    |          |                   |  
|Common shares par value $1; 200,000,000 shares authorized 38,395,079 shares issued and outstanding (2001  39,582,379) |  |                    | 38,395    |                   |  
|Additional paid-in capital                                                                                             |  |                    | 531,062   |                   |  
|Loans receivable from officers for common share sales                                                                  |  |                    | (12,575   | )                 |  
|Unearned stock grant compensation                                                                                      |  |                    | (2,967    | )                 |  
|Accumulated other comprehensive income                                                                                 |  |                    | 52,224    |                   |  
|Retained earnings (deficit)                                                                                            |  |                    | (15,284   | )                 |  
|                                                                                                                       |  |                    |           |                   |  
|Total shareholders equity                                                                                             |  |                    | 590,855   |                   |  
|                                                                                                                       |  |                    |           |                   |  
|Total liabilities, minority interest and shareholders equity                                                          |  | $                  | 2,585,758 |                   | $
|                                                                                                                       |  |                    |           |                   |  

See accompanying notes to unaudited interim consolidated financial
statements.

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)

(Expressed in thousands of United States Dollars, except
shares and per share amounts)

|                                                          |  | Three Months Ended September 30 |            | Nine Months Ended September 30 |  
|--------------------------------------------------------- |  | ------------------------------- | ---------- | ------------------------------ | -
|                                                          |  |                                 |            |                                |  
|                                                          |  | 2002                            |            | 2001                           |  
|                                                          |  |                                 |            |                                |  
|REVENUES                                                  |  |                                 |            |                                |  
|Gross premiums written                                    |  | $                               | 65,664     |                                | $
|Reinsurance premiums ceded                                |  |                                 | (2,636     | )                              |  
|                                                          |  |                                 |            |                                |  
|Net premiums written                                      |  | $                               | 63,028     |                                | $
|                                                          |  |                                 |            |                                |  
|Earned premiums                                           |  | $                               | 109,870    |                                | $
|Earned premiums ceded                                     |  |                                 | (12,996    | )                              |  
|                                                          |  |                                 |            |                                |  
|Net premiums earned                                       |  |                                 | 96,874     |                                |  
|Net investment income                                     |  |                                 | 13,772     |                                |  
|Net gains on alternative investments                      |  |                                 | 1,095      |                                |  
|Net realized gains on fixed maturities                    |  |                                 | 663        |                                |  
|Other income                                              |  |                                 | 1,114      |                                |  
|                                                          |  |                                 |            |                                |  
|Total revenues                                            |  |                                 | 113,518    |                                |  
|                                                          |  |                                 |            |                                |  
|LOSSES AND EXPENSES                                       |  |                                 |            |                                |  
|Losses, benefits and experience refunds                   |  |                                 | 102,647    |                                |  
|Acquisition costs                                         |  |                                 | 22,743     |                                |  
|Interest expense                                          |  |                                 | 315        |                                |  
|General and administrative expenses                       |  |                                 | 4,856      |                                |  
|                                                          |  |                                 |            |                                |  
|Total losses and expenses                                 |  |                                 | 130,561    |                                |  
|                                                          |  |                                 |            |                                |  
|INCOME (LOSS) BEFORE MINORITY INTEREST                    |  |                                 | (17,043    | )                              |  
|Minority interest                                         |  |                                 | 2,705      |                                |  
|                                                          |  |                                 |            |                                |  
|NET INCOME (LOSS)                                         |  |                                 | (14,338    | )                              |  
|Change in net unrealized appreciation of fixed maturities |  |                                 | 37,213     |                                |  
|                                                          |  |                                 |            |                                |  
|COMPREHENSIVE INCOME (LOSS)                               |  | $                               | 22,875     |                                | $
|                                                          |  |                                 |            |                                |  
|Basic earnings (loss) per share                           |  | $                               | (0.37      | )                              | $
|                                                          |  |                                 |            |                                |  
|Diluted earnings (loss) per share                         |  | $                               | (0.37      | )                              | $
|                                                          |  |                                 |            |                                |  
|Weighted average shares outstanding - basic               |  |                                 | 38,795,490 |                                |  
|                                                          |  |                                 |            |                                |  
|Weighted average shares outstanding - diluted             |  |                                 | 45,914,822 |                                |  
|                                                          |  |                                 |            |                                |  

See accompanying notes to unaudited interim consolidated financial
statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)

(Expressed in thousands of United States
Dollars)

|                                         |                                       | Nine Months Ended September 30 |        
|---------------------------------------- | ------------------------------------- | ------------------------------ | -------
|                                         |                                       |                                |        
|                                         |                                       | 2002                           |        
|                                         |                                       |                                |        
|Preferred Shares                         |                                       |                                |        
|                                         | Balance, beginning and end of period  |                                | $      
|                                         |                                       |                                |        
|Common shares                            |                                       |                                |        
|                                         | Balance, beginning of period          |                                |        
|                                         | Issuance of shares                    |                                |        
|                                         | Repurchase of shares                  |                                |        
|                                         |                                       |                                |        
|                                         | Balance, end of period                |                                |        
|                                         |                                       |                                |        
|Additional paid-in capital               |                                       |                                |        
|                                         | Balance, beginning of period          |                                |        
|                                         | Issuance of shares                    |                                |        
|                                         | Repurchase of shares                  |                                |        
|                                         | Distribution to shareholders          |                                |        
|                                         |                                       |                                |        
|                                         | Balance, end of period                |                                |        
|                                         |                                       |                                |        
|Loans receivable from common share sales |                                       |                                |        
|                                         | Balance, beginning of period          |                                |        
|                                         | Notes and loans issued, net of repaid |                                |        
|                                         |                                       |                                |        
|                                         | Balance, end of period                |                                |        
|                                         |                                       |                                |        
|Unearned stock grant compensation        |                                       |                                |        
|                                         | Balance, beginning of period          |                                |        
|                                         | Stock grants awarded                  |                                |        
|                                         | Amortization                          |                                |        
|                                         |                                       |                                |        
|                                         | Balance, end of period                |                                |        
|                                         |                                       |                                |        
|Accumulated other comprehensive income   |                                       |                                |        
|                                         | Balance, beginning of period          |                                |        
|                                         | Holding gains on fixed maturities     |                                |        
|                                         | Gains included in net income          |                                |        
|                                         | Reallocation to minority interest     |                                |        
|                                         |                                       |                                |        
|                                         | Balance, end of period                |                                |        
|                                         |                                       |                                |        
|Retained earnings (deficit)              |                                       |                                |        
|                                         | Balance, beginning of period          |                                |        
|                                         | Net income (loss)                     |                                |        
|                                         | Dividends paid                        |                                |        
|                                         |                                       |                                |        
|                                         | Balance, end of period                |                                |        
|                                         |                                       |                                |        
|Total shareholders equity               |                                       | $                              | 590,855
|                                         |                                       |                                |        

See accompanying notes to unaudited interim consolidated financial
statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Expressed in thousands of United States Dollars)

|                                                                                  |                                                        | Nine Months Ended September 30 |         
|--------------------------------------------------------------------------------- | ------------------------------------------------------ | ------------------------------ | --------
|                                                                                  |                                                        |                                |         
|                                                                                  |                                                        | 2002                           |         
|                                                                                  |                                                        |                                |         
|OPERATING ACTIVITIES                                                              |                                                        |                                |         
|Net income (loss)                                                                 |                                                        | $                              | (16,738 
|Adjustments to reconcile net income (loss) to net cash from operating activities: |                                                        |                                |         
|                                                                                  | Minority share of income (loss)                        |                                |         
|                                                                                  | Amortization of unearned stock grant compensation      |                                |         
|                                                                                  | Amortization of discount on fixed maturities           |                                |         
|                                                                                  | Realized gains on fixed maturities                     |                                |         
|                                                                                  | Net gains on alternative investments                   |                                |         
|                                                                                  | Accrued interest income                                |                                |         
|                                                                                  | Premiums receivable                                    |                                |         
|                                                                                  | Losses recoverable from reinsurers                     |                                |         
|                                                                                  | Funds withheld                                         |                                |         
|                                                                                  | Deferred acquisition costs                             |                                |         
|                                                                                  | Deferred charges                                       |                                |         
|                                                                                  | Prepaid reinsurance premiums                           |                                |         
|                                                                                  | Other assets                                           |                                |         
|                                                                                  | Life and annuity benefits and experience refunds       |                                |         
|                                                                                  | Property and casualty losses and experience refunds    |                                |         
|                                                                                  | Reinsurance balances payable                           |                                |         
|                                                                                  | Unearned property and casualty premiums                |                                |         
|                                                                                  | Accounts payable and accrued expenses                  |                                |         
|                                                                                  |                                                        |                                |         
|Cash from operating activities                                                    |                                                        |                                | 143,959 
|                                                                                  |                                                        |                                |         
|INVESTING ACTIVITIES                                                              |                                                        |                                |         
|                                                                                  | Purchases of fixed maturities                          |                                |         
|                                                                                  | Sales (purchases) of alternative investments, net      |                                |         
|                                                                                  | Sales of fixed maturities                              |                                |         
|                                                                                  | Redemptions of fixed maturities                        |                                |         
|                                                                                  |                                                        |                                |         
|Cash used in investing activities                                                 |                                                        |                                | (285,338
|                                                                                  |                                                        |                                |         
|FINANCING ACTIVITIES                                                              |                                                        |                                |         
|                                                                                  | Net proceeds from issuance of common shares            |                                |         
|                                                                                  | Repurchases of common shares                           |                                |         
|                                                                                  | Proceeds from bank loan                                |                                |         
|                                                                                  | Dividends paid / distribution of capital               |                                |         
|                                                                                  | Distributions to / conversion of minority shareholders |                                |         
|                                                                                  | Deposit liabilities, net                               |                                |         
|                                                                                  | Notes and loans repaid                                 |                                |         
|                                                                                  |                                                        |                                |         
|Cash from financing activities                                                    |                                                        |                                | 122,383 
|                                                                                  |                                                        |                                |         
|Changes in cash and cash equivalents                                              |                                                        |                                | (18,996 
|Cash and cash equivalents, beginning of period                                    |                                                        |                                | 98,322  
|                                                                                  |                                                        |                                |         
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                          |                                                        | $                              | 79,326  
|                                                                                  |                                                        |                                |         
|                                                                                  |                                                        |                                |         



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest
paid totaled $856 in 2002 and $nil in 2001

See accompanying notes to unaudited interim consolidated financial statements.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.  GENERAL

The interim consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (GAAP) for interim financial
information and in accordance with Regulation S-X and include the accounts of Max Re Capital Ltd. (Max Re Capital), Max Re Ltd. (Max Re), Max Re Managers Ltd. (Managers), Max Re Europe Limited (Max Re
Europe) and Max Re Diversified Strategies, Ltd. (MDS, and, together with Max Re Capital, Max Re, Managers and Max Re Europe, the Company).  In the opinion of management, these financial statements reflect all the
normal recurring adjustments necessary for a fair presentation of the Companys financial position and results.  The results of operations and cash flows for any interim period are not necessarily indicative of results for the full
year.  These consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements for the year ended December 31, 2001.

Max Re Capital was incorporated on July 8, 1999 under the laws of Bermuda to provide customized multi-line reinsurance and insurance products.  The Companys principal operating
subsidiary is Max Re, a Bermuda long-term and Class 4 insurer.  The Company conducts its European activities through Max Re Europe, a Dublin, Ireland based reinsurance company.

2.  EARNINGS PER SHARE

Basic earnings per share is based on weighted average common shares outstanding and excludes any dilutive
effect of warrants, options and convertible securities.  Diluted earnings per share assumes the conversion of dilutive convertible securities and the exercise of all dilutive stock warrants and options.

3.  BANK LOAN

In March 2002, the Company completed a $100.0 million sale of shares of MDS to a third party financial institution.
Simultaneous with the sale, the Company entered into a total return swap with the purchaser of these shares whereby the Company receives the return earned on the MDS shares in exchange for a variable rate of interest based on LIBOR plus a
spread.  Additional MDS shares owned by Max Re with a fair value of $61.4 million at September 30, 2002 were pledged as collateral.  Under GAAP, these transactions are viewed on a combined basis and accounted for as a financing
transaction, which results in the recording of a $100.0 million bank loan.

The swap termination date is February 2004, with provisions for earlier termination at the
Companys option or in the event that the Company fails to comply with certain covenants, including maintaining a minimum financial strength rating and a minimum MDS net asset value.  At termination, the purchaser has the option to sell
the MDS shares to the Company at a price equal to the fair value of the MDS shares on the date of repurchase.

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4.  SEGMENT INFORMATION

The Company operates in the reinsurance business
serving two markets: the property and casualty market and the life and annuity market, which includes disability products.  Within the property and casualty segment, the Company offers three products: structured risk transfer, alternative risk
transfer and traditional risk transfer.  The Company differentiates these products in several ways, including by the amount of aggregate loss cap and/or occurrence limits incorporated into the underlying contract with its structured risk
transfer products having the lowest aggregate loss cap and occurrence limits and its traditional risk transfer products having the highest.  Within the life and annuity segment, the Company currently offers products focusing on existing blocks
of business, which take the form of co-insurance transactions whereby the risks are reinsured on the same basis as that of the original policies.  The Company does not allocate assets by segment.

A summary of operations by segment for the nine months ended September 30, 2002 and 2001 is as follows:

|                                           |  | September 30, 2002  |        
|------------------------------------------ |  | ------------------- | -------
|                                           |  |                     |        
|Year to Date Segment Information:          |  | Property & Casualty |        
|(in 000s US$)                             |  | Structured Risk     |        
|                                           |  |                     |        
|Gross premiums written                     |  | $                   | 270,764
|Reinsurance premiums ceded                 |  |                     | (42,328
|                                           |  |                     |        
|Net premiums written                       |  | $                   | 228,436
|                                           |  |                     |        
|Earned premiums                            |  | $                   | 185,792
|Earned premiums ceded                      |  |                     | (29,023
|                                           |  |                     |        
|Net premiums earned                        |  |                     | 156,769
|Net investment income                      |  |                     |       
|Net gains on alternative investments       |  |                     |       
|Net realized gains on fixed maturities     |  |                     |       
|Other income                               |  |                     | 2,495  
|                                           |  |                     |        
|Total revenues                             |  |                     | 159,264
|Losses, benefits and experience refunds    |  |                     | 148,441
|Acquisition costs                          |  |                     | 40,236 
|Interest expense                           |  |                     | 597    
|General and administrative expenses        |  |                     | 2,607  
|                                           |  |                     |        
|Total losses and expenses                  |  |                     | 191,881
|                                           |  |                     |        
|Net income (loss) before minority interest |  | $                   | (32,617
|                                           |  |                     |        

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|                                           |  | September 30, 2001  |        
|------------------------------------------ |  | ------------------- | -------
|                                           |  |                     |        
|Year to Date Segment Information:          |  | Property & Casualty |        
|(in 000s US$)                             |  | Structured Risk     |        
|                                           |  |                     |        
|Gross premiums written                     |  | $                   | 357,132
|Reinsurance premiums ceded                 |  |                     | (61,826
|                                           |  |                     |        
|Net premiums written                       |  | $                   | 295,306
|                                           |  |                     |        
|Earned premiums                            |  | $                   | 196,213
|Earned premiums ceded                      |  |                     | (35,470
|                                           |  |                     |        
|Net premiums earned                        |  |                     | 160,743
|Net investment income                      |  |                     |       
|Net gains on alternative investments       |  |                     |       
|Net realized gains on fixed maturities     |  |                     |       
|Other income                               |  |                     | 500    
|                                           |  |                     |        
|Total revenues                             |  |                     | 161,243
|Losses, benefits and experience refunds    |  |                     | 167,359
|Acquisition costs                          |  |                     | 20,522 
|Interest expense                           |  |                     |       
|General and administrative expenses        |  |                     | 4,178  
|                                           |  |                     |        
|Total losses and expenses                  |  |                     | 192,059
|                                           |  |                     |        
|Net income (loss) before minority interest |  | $                   | (30,816
|                                           |  |                     |        

Financial information relating to gross and net premiums written by
geographic region for the nine months ended September 30, 2002 and 2001 were as follows:

|                                  |  | September 30,                                     |        
|--------------------------------- |  | ------------------------------------------------- | -------
|                                  |  |                                                   |        
|                                  |  | 2002                                              |        
|                                  |  |                                                   |        
|                                  |  | (Expressed in thousands of United States Dollars) |        
|North America                     |  | $                                                 | 317,833
|Europe                            |  |                                                   | 213,263
|Reinsurance Ceded - North America |  |                                                   | (26,900
|Reinsurance Ceded - Europe        |  |                                                   | (26,514
|                                  |  |                                                   |        
|                                  |  | $                                                 | 477,682
|                                  |  |                                                   |        

Three customers accounted for 25.2%, 19.9% and 13.2%, respectively,
of the Companys gross premiums written during the nine months ended September 30, 2002.  Four customers accounted for 33.3%, 21.9%, 17.2% and 13.8%, respectively, of the Companys gross premiums written during the nine months ended
September 30, 2001.

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5.  EQUITY CAPITAL

Max Re Capitals Board of Directors declared quarterly
dividends of $0.02 per share on each of February 8, 2002, May 3, 2002 and July 26, 2002 payable to shareholders of record on February 22, 2002, May 17, 2002 and August 12, 2002, respectively.  The quarterly dividend declared on July 26, 2002
has been treated as a distribution to shareholders since the Company had a retained deficit on the payment date.

The Company repurchased 1,449,300 common shares at an
average of $11.58 per common share for a total amount of approximately $16.8 million, including costs incurred to effect the repurchases, during the nine months ended September 30, 2002. As of September 30, 2002, the remaining authorization under
the Companys share repurchase program was  approximately $31.3 million, including the authorization by Max Re Capitals Board of Directors announced on November 1, 2002 to repurchase an additional $25.0 million of shares.

6.  RELATED PARTIES

Grand Central Re

Pursuant to an insurance management agreement, Managers provides insurance management services to Grand Central Re Limited, a Bermuda domiciled reinsurance company in which Max Re has a 7.5%
equity investment (Grand Central Re).  Fees for such services for each of the nine months ended September 30, 2002 and 2001 were approximately $2.0 million and are included in other income in the accompanying consolidated statements
of income and comprehensive income.

Max Re has entered into a quota share retrocession agreement with Grand Central Re that commenced as of January 1, 2001.  The
accompanying consolidated balance sheets and statements of income include, or are net of, the following amounts related to the quota share retrocession agreement with Grand Central Re:

|                                             |  | September 30,                                     |        
|-------------------------------------------- |  | ------------------------------------------------- | -------
|                                             |  |                                                   |        
|                                             |  | 2002                                              |        
|                                             |  |                                                   |        
|                                             |  | (Expressed in thousands of United States Dollars) |        
|Prepaid reinsurance premiums                 |  | $                                                 | 34,768 
|Losses recoverable from reinsurers           |  |                                                   | 121,442
|Reinsurance balances payable                 |  |                                                   | 124,016
|Reinsurance premiums ceded                   |  |                                                   | 50,824 
|Earned premiums ceded                        |  |                                                   | 32,701 
|Losses, benefits and experience refunds, net |  |                                                   | 25,176 

The Company believes that the terms of the insurance management and
quota share retrocession agreements with Grand Central Re are comparable to the terms that the Company would expect to negotiate in arms length transactions with unrelated parties.

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Alternative Investment Managers

In connection with fund
investments held by MDS and managed by Moore Capital Management, Inc., which is affiliated with certain shareholders of the Company (Moore), the Company has paid management and incentive fees of $3.4 million to Moore for the nine months
ended September 30, 2002.   Moore is also the investment manager of MDS, for which it received no fees in this role for the nine months ended September 30, 2002.  The Company is currently negotiating an amendment to the investment
management agreement with Moore to provide for the payment of management and incentive fees beginning in January 2003.  Fees contemplated for investment management services are expected to include a management fee of 0.70% of assets held by MDS
in funds unaffiliated with Moore and an incentive fee of 7.5% of the return achieved by MDS in excess of 10%.

In addition, for the nine months ended September
30, 2002, the Company paid management and incentive fees of $0.6 million to a fund investment held by MDS that is managed by another shareholder, of which a Company director is a founding partner.   All investment fees incurred on the
alternative investments are included in the net gains on alternative investments in the consolidated statements of income and comprehensive income.

7.  COMMITMENTS

Letter of Credit Facilities

At September 30, 2002, letters of credit totaling $339.7 million were issued
under the Companys $375 million letter of credit facility with a syndicate of banks.  Fixed maturities and cash equivalents with a fair value of $292.2 million and MDS shares with a fair value of $156.0 million at September 30, 2002 were
pledged as collateral for these letters of credit.

In January 2002, the Company entered into a $100.0 million letter of credit facility with the New York branch of
Bayerische Hypo- und Vereinsbank AG (HVB), a shareholder of the Company.  HVB is the majority shareholder of Grand Central Re, which is managed by Managers and in which the Company has a 7.5% equity interest.  This letter of
credit facility requires that the Company comply with certain covenants, including minimum consolidated tangible net worth.  The Company believes that the terms of this letter of credit facility are comparable to the terms that the Company
would expect to negotiate with an unrelated party.  At September 30, 2002, letters of credit totaling $58.5 million were issued by HVB under this $100.0 million letter of credit facility.  Fixed maturities and cash equivalents with a fair
value of $31.5 million and MDS shares with a fair value of $66.8 million at September 30, 2002 were pledged as collateral for these letters of credit.

Lease
Commitments

In 2001, the Company entered into a ten-year lease agreement to lease a building that is currently under construction in Hamilton, Bermuda.  In
connection with the lease of the building, the Company has contractual commitments of approximately $4.4 million for leasehold improvements at September 30, 2002.

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ITEM 2. 
Managements Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion and analysis of the
Companys results of operations for the three and nine month periods ended September 30, 2002 compared to the three and nine month periods ended September 30, 2001 and the financial condition of the Company as of September 30, 2002.  This
discussion and analysis should be read in conjunction with the attached unaudited consolidated financial statements and related notes and the audited consolidated financial statements and related notes contained in the Companys Annual Report
for the year ended December 31, 2001.

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934.  The Company intends that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to these forward-looking statements.  Forward-looking statements are
not statements of historical fact but rather reflect the Companys current expectations, estimates and predictions about future results and events.  These statements may use words such as anticipate, believe,
estimate, expect, intend, predict, project and similar expressions as they relate to the Company or the Companys management.  When the Company makes forward-looking statements,
it is basing them on managements beliefs and assumptions, using information currently available to it.  These forward-looking statements are subject to risks, uncertainties and assumptions.  Factors that could cause such
forward-looking statements not to be realized include, without limitation, acceptance in the market of the Companys reinsurance products; general economic conditions and conditions specific to the reinsurance and investment markets in which
the Company operates; material fluctuations in interest rate levels; pricing competition; the amount of underwriting capacity from time to time in the market; regulatory changes and conditions; rating agency policies and practices; claims
development; and loss of key executives.  The Company cautions that the foregoing list of important factors is not intended to be, and is not, exhaustive.  The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.  If one or more risks or uncertainties materialize, or if the Companys underlying assumptions prove to be incorrect, actual results may vary
materially from what the Company projected.  Any forward-looking statements in this report reflect the Companys current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating
to the Companys operations, results of operations, growth strategy and liquidity.  All subsequent written and oral forward-looking statements attributable to the Company or individuals acting on the Companys behalf are expressly
qualified in their entirety by this paragraph.

Overview

The Company is a Bermuda-based provider of
customized reinsurance for both the property and casualty and the life and annuity, including disability, insurance markets.  As a result of improved market conditions, the Company began selectively underwriting traditional property and
casualty risks, principally workers compensation and professional liability lines, on January 1, 2002.  The Company intends to opportunistically increase its emphasis on traditional property and casualty underwriting.  The Company
often incorporates features such as aggregate loss caps and limits on the number of occurrences covered into its products.

In the current property and casualty
market in which supply and the price environment have been impacted by the September 11, 2001 tragedy, the Company continues to experience increased demand for its property and casualty reinsurance products.  The property and casualty market is
currently presenting more opportunities to the Company than the life and annuity market.  In the current low interest rate environment, there is decreased demand for the Companys life and annuity products, especially in the United
States.  The Company anticipates continuing decreased demand for its life and annuity products until there is a sustained increase in interest rates.

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The Companys capital base and reinsurance products provide flexibility in making decisions regarding investments.  The
Companys investments are currently comprised of high grade fixed maturities, an alternative investment portfolio employing 11 strategies designed to provide diversification and manage investment risk that is invested in approximately 35
underlying trading entities and two strategic insurance private equity investments.  At September 30, 2002, the allocation of invested assets was approximately 69% cash and fixed maturities and 31% alternative investments.

Critical Accounting Policies

The Companys consolidated financial statements are prepared in accordance with GAAP, which
require management to make estimates and assumptions.  The Company believes the critical accounting policies set forth in its Form 10-K, filed on March 27, 2002, describe the more significant judgments and estimates used in the preparation of
its consolidated financial statements.  These accounting policies pertain to revenue recognition, investment valuation and loss and loss adjustment expenses.  If actual events differ significantly from the underlying judgments or estimates
used by management in the application of these accounting policies, there could be a material adverse effect on the Companys results of operations and financial condition.

Results
of Operations  Three months ended September 30, 2002 compared to the three months ended September 30, 2001

Gross premiums written.  Gross
premiums written for the three months ended September 30, 2002 were $65.7 million compared to $42.4 million for the three months ended September 30, 2001 which represents an increase of 55%.  Gross premiums written for property and casualty
were $65.7 million for the three months ended September 30, 2002 compared to $42.1 million for the three months ended September 30, 2001.  Property and casualty underwriting continued to be strong, and demand for alternative risk transfer and
traditional products has increased, principally due to market conditions since the September 11, 2001 tragedy.  There were no gross premiums written for life and annuity for the three months ended September 30, 2002 compared to $0.3 million for
the three months ended September 30, 2001.  The Company believes that the lack of life and annuity underwriting production during the quarter is attributable to the current low interest rate environment and weak global economy.  The demand
for the type of life and annuity reinsurance products that the Company offers is typically weak during periods when interest rates are low.

Reinsurance premiums
ceded.  Reinsurance premiums ceded for the three months ended September 30, 2002 were $2.6 million compared to $6.4 million for the three months ended September 30, 2001.  Reinsurance premiums ceded during each of the three-month
periods ended September 30, 2001 and 2002 principally relate to the Companys quota-share retrocessional agreement with Grand Central Re.  The decrease in the current period principally resulted from the Company retroceding fewer premiums
under this agreement.

Net premiums written.  Net premiums written for the three months ended September 30, 2002 were $63.0 million compared to $36.0
million for the three months ended September 30, 2001.  Net premiums written for property and casualty products for the three months ended September 30, 2002 were $63.0 million compared to $35.8 million for the three months ended September 30,
2001.  There were no net premiums written for life and annuity products for the three months ended September 30, 2002 compared to $0.2 million for the three months ended September 30, 2001.

Net premiums earned.  Net premiums earned for the three months ended September 30, 2002 were $96.9 million compared to $55.5 million for the three months ended September 30,
2001.  Property and casualty net premiums earned were $96.9 million, after the deduction of $13.0 million of earned premiums ceded, for the three months ended September 30, 2002 compared to $55.3 million, after the deduction of $12.2 million of
earned premiums ceded, for the three months ended September 30, 2001.  There were no life and annuity net premiums earned for the three months ended September 30, 2002 compared to $0.2 million net premiums earned after the deduction of $0.1
million of earned premiums ceded, for the three months ended September 30, 2001.  The

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difference between net premiums written and net premiums earned during each of the three months ended September 30, 2002 and 2001 reflects the fact that most of the
Companys property and casualty reinsurance contracts are written on a prospective basis, with the premium earned over the period reinsurance protection is provided, whereas each of the Companys life and annuity contracts assumes the
existing risk of the reinsured, and, accordingly, the related premium is earned at the time the Company enters into the contract.

Net investment income. 
Net investment income was $13.8 million for the three months ended September 30, 2002 compared to $13.2 million for the three months ended September 30, 2001.  The increase was primarily attributable to the increase in the fixed maturities
portfolio resulting from cash received in collection of premiums since September 30, 2001, as well as deployment of $180 million cash received in connection with the Companys initial public offering in August 2001.

Net gains on alternative investments.  Net gains on the alternative investment portfolio were $1.1 million for the three months ended September 30, 2002 compared to ($4.7)
million for the three months ended September 30, 2001.  Alternative investment strategies principally contributing to the gains in the current period were the commodity trading, fixed income arbitrage and insurance underwriting strategies,
which were partially offset by losses in the distressed securities, event-driven arbitrage and convertible arbitrage strategies.

Losses, benefits and experience
refunds.  Losses, benefits and experience refunds were $102.6 million for the three months ended September 30, 2002 compared to $59.6 million for the three months ended September 30, 2001.  Property and casualty losses and experience
refunds were $89.8 million for the three months ended September 30, 2002 compared to $53.2 million for the three months ended September 30, 2001.  The increase in property and casualty losses resulted primarily from additional contracts in
force and an increase in loss reserves of approximately $2.0 million on a property and casualty contract written in a prior year.  Life and annuity benefits and experience refunds were $12.8 million for the three months ended September 30, 2002
compared to $6.4 million for the three months ended September 30, 2001.  The increase in life and annuity benefits resulted from additional contracts in force and an increase in loss reserves of approximately $3.0 million on a life and annuity
contract written in a prior year.

Acquisition costs.  Acquisition costs were $22.7 million for the three months ended September 30, 2002 compared to $8.8
million for the three months ended September 30, 2001.  The increase in acquisition costs was a result of the Companys increase in property and casualty insurance volume and the structuring of the Companys contracts to provide
greater ceding commissions to its clients.  Acquisition costs during each of the three months ended September 30, 2002 and 2001 are principally amortization of deferred policy acquisition costs incurred in connection with writing property and
casualty business.  Acquisition costs are customarily associated with the type of premium written by the Company.  Generally, acquisition costs fluctuate with business volume and changes in product mix.  The largest component of
deferred policy acquisition costs are ceding commissions paid to the buyer of the Companys reinsurance products.

General and administrative
expenses.  General and administrative expenses were $4.9 million for the three months ended September 30, 2002 compared to $5.0 million for the three months ended September 30, 2001.  These represent the Companys operating
expenses, and are principally personnel costs.

Net loss.  Net loss for the three months ended September 30, 2002 was $14.3 million compared to a net loss
of $8.7 million for the three months ended September 30, 2001.  The increase in the loss principally resulted from the strengthening of insurance reserves and lower investment returns than necessary to support the Companys increased
insurance liabilities.

Nine months ended September 30, 2002 compared to the nine months ended September 30, 2001

Gross premiums written.Gross premiums written for the nine months ended September 30, 2002 were $531.1 million compared to $471.1 million for the nine months ended September 30,
2001.  Gross premiums written for

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property and casualty increased to $516.4 million for the nine months ended September 30, 2002 from $357.1 million for the nine months ended September 30, 2001. Gross
premiums written for property and casualty increased due to market demand for, and improved pricing of, products offered by the Company.  Gross premiums written for life and annuity declined to $14.7 million for the nine months ended September
30, 2002 from $114.0 million for the nine months ended September 30, 2001.  The current low interest rate environment has resulted in a decrease in demand for the life and annuity products offered by the Company.

Reinsurance premiumsceded.   Reinsurance premiums ceded for the nine months ended September 30, 2002 were $53.4 million compared to $79.3 million for the nine months ended
September 30, 2001.  Premiums ceded were related principally to the variable quota share retrocessional agreement with Grand Central Re. The decline in premiums ceded is a result of the change in the mix of business written in 2002, whereby
certain reinsurance business is not retroceded to Grand Central Re.

Net premiums earned.  Net premiums earned for the nine months ended September 30, 2002
were $247.6 million compared to $257.3 million for the nine months ended September 30, 2001.  Property and casualty net premiums earned were $235.1 million, after the deduction of $32.0 million of earned premiums ceded, for the nine months
ended September 30, 2002 compared to $160.8 million, after the deduction of $35.5 million of earned premiums ceded, for the nine months ended September 30, 2001.  Life and annuity net premiums earned were $12.5 million, after the deduction $2.2
million of earned premiums ceded, for the nine months ended September 30, 2002 compared to $96.5 million, after the deduction of $17.4 million of earned premiums ceded for the same period in 2001.

Net investment income.  Net investment income was $39.6 million for the nine months ended September 30, 2002 compared to $32.0 million for the nine months ended September 30,
2001.  The increase was primarily attributable to the growth in the fixed income portfolio from $757.7 million at September 30, 2001 to over $1.2 billion at September 30, 2002 resulting from cash provided in connection with the Companys
initial public offering in August 2001 and by the Companys operating and financing activities since September 30, 2001.

Net gains on alternative
investments.  Net gains on the alternative investment portfolio were $6.7 million for the nine months ended September 30, 2002 compared to $15.4 million for the nine months ended September 30, 2001.  Significant contributors to the
gains during the nine month period ended September 30, 2002 were the insurance underwriting, fixed income arbitrage and commodity trading strategies, which were partially offset by losses from the distressed securities and long short equity
strategies.

Losses, benefits and experience refunds.Losses, benefits and experience refunds were $244.0 million for the nine months ended September 30, 2002
compared to $279.2 million for the nine months ended September 30, 2001.  Property and casualty losses and experience refunds were $206.4 million for the nine months ended September 30, 2002 compared to $167.4 million for the nine months ended
September 30, 2001.   The increase in property and casualty losses and experience refunds was related to the increase in property and casualty premiums written and earned during the nine months ended September 30, 2002 compared to the same
period in 2001.  Life and annuity benefits and experience refunds were $37.6 million for the nine months ended September 30, 2002 compared to $111.8 million for the nine months ended September 30, 2001.  The decrease was attributable to
the Companys lower premium production from its life and annuity business for the nine months ended September 30, 2002 compared to the nine months ended September 30, 2001.

Acquisition costs.Acquisition costs were $61.8 million for the nine months ended September 30, 2002 compared to $21.3 million for the nine months ended September 30, 2001.
Acquisition costs during each of the nine months ended September 30, 2002 and 2001 consisted principally of amortization of deferred policy acquisition costs.  The increase in acquisition costs was a result of the Companys increase in
property and casualty insurance volume and the structuring of the Companys contracts to provide greater ceding commissions to its clients.

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General and administrative expenses.General and administrative expenses were $15.5 million for the nine months ended
September 30, 2002 compared to $14.6 million for the nine months ended September 30, 2001.  General and administrative expenses in the nine months ended September 30, 2002 were 4.9% of net premiums earned and deposits received ($69.1 million)
compared to 4.2% for the nine months ended September 30, 2001.  The Companys current general and administrative expense ratio reflects its attempt to maintain a low cost operating structure.

Net income (loss).  Net loss for the nine months ended September 30, 2002 was $16.7 million compared to $7.6 million for the nine months ended September 30, 2001. The increase in net
loss resulted principally from the strengthening of insurance reserves and lower investment returns than necessary to support the Companys increased insurance liabilities.

Liquidity and
Capital Resources

As a holding company, Max Re Capitals principal assets are its investments in the voting common shares of its principal subsidiary, Max
Re, and the common shares of its other subsidiaries.  The Companys principal source of funds is from interest income on cash balances and cash dividends from Max Re and its other subsidiaries.  The payment of dividends is limited
under Bermuda insurance laws.  In particular, Max Re may not declare or pay any dividends if it is in breach of its minimum solvency or liquidity levels under Bermuda law or if the declaration or payment of the dividends would cause it to fail
to meet the minimum solvency or liquidity levels under Bermuda laws.  At September 30, 2002, Max Re, which is required to have $232.9 million in statutory capital and surplus in order to pay dividends, had $568.0 million in statutory capital
and surplus.

Cash flow.  The Companys principal sources of cash are premiums and deposits received, underwriting management fees, reinsurance
recoveries under the Companys retrocessional contracts, investment income and proceeds from redemptions, sales and maturities of portfolio investments.  The cash is utilized to pay losses and benefits, pay experience refunds, pay policy
acquisition costs, purchase retrocessional protection, satisfy operating and capital expenditures and purchase investments.  For the nine months ended September 30, 2002, the Company generated $144.0 million from operating activities compared
to $213.9 million from its operating activities for the nine months ended September 30, 2001.  Cash flows from operating activities decreased in the nine-month period ended September 30, 2002 compared to the same period in 2001. The decrease
was principally due to a change in the mix of gross premiums written and the payment of life and annuity benefits in excess of premiums received.  Cash flows from financing activities for the nine months ended September 30, 2002 were
principally provided by the Companys $100.0 million sale of shares in MDS and simultaneous execution of a total return swap with the same counterparty, which is reflected as a bank loan.  Cash flows from financing activities for the nine
months ended September 30, 2001 were principally provided by proceeds from the Companys issuance of common shares amounting to $191.0 million.  The cash generated by the Company from operating and financing activities was principally used
to purchase fixed maturities, net of sales and redemptions, of $313.0 million during the nine months ended September 30, 2002 compared to the purchase of fixed maturities, net of sales and redemptions, of $260 million and alternative investments of
$186.0 million during the same period in 2001.

Capital resources.  The Companys capital structure currently consists of equity and minority
interest.  At September 30, 2002, total capitalization after deducting $12.6 million of loans to management and including $36.9 million in retained deficit and accumulated other comprehensive income, amounted to $706.1 million as compared with
$699.7 million at December 31, 2001.  Shareholders equity increased during the nine months ended September 30, 2002 due to a $38.7 million increase in unrealized gains from fixed maturities resulting from interest rate movements, offset
by a net loss of $16.7 million, dividends paid and capital distributions of $2.4 million and share repurchases of $16.8 million.  The Company continuously reviews its capital adequacy and believes this level of capital is sufficient to support
the Companys current reinsurance operations.

In the ordinary course of business, the Company is required to provide letters of credit or other regulatorily
approved security to certain of its ceding reinsurance companies to meet contractual and regulatory requirements.

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The Company has two letter of credit facilities as of September 30, 2002.  The Companys primary letter of credit facility is a $375 million letter of credit
facility with a syndicate of commercial banks.  At September 30, 2002 and December 31, 2001 letters of credit totaling $339.7 million and $282.9 million, respectively, were issued and outstanding under this facility.  In January 2002, the
Company entered into a $100.0 million letter of credit facility with the New York branch of HVB.  The Company was provided a commitment for this facility at the time it entered into a joint venture with HVB that resulted in the formation of
Grand Central Re.  The Company believes that the terms of this letter of credit facility are comparable to the terms that the Company would expect to negotiate at arms length with an unrelated party.  At September 30, 2002, letters
of credit totaling $58.5 million were issued by HVB under this facility.  All letters of credit issued under these facilities are collateralized by a portion of the Companys invested assets.  The Company was in compliance with all
the covenants of its letter of credit facilities at September 30, 2002.

In March 2002, the Company completed a $100.0 million sale of shares of MDS to a third party
financial institution. Simultaneous with the sale, the Company entered into a total return swap with the purchaser of these shares whereby the Company receives the return earned on the MDS shares in exchange for a variable rate of interest based on
LIBOR plus a spread.  Additional MDS shares owned by Max Re with a fair value of $61.4 million at September 30, 2002 were pledged as collateral.  Under GAAP, these transactions are viewed on a combined basis and accounted for as a
financing transaction, which results in the recording of a $100.0 million bank loan. These transactions enabled the Company to transform a portion of its MDS assets into fixed maturity securities that can be held in a trust for the benefit of
certain ceding reinsurance companies that require trust assets to meet regulatory requirements.  The swap termination date is February 2004, with provisions for earlier termination at the Companys option or in the event that the Company
fails to comply with certain covenants, including maintaining a minimum financial strength rating and a minimum MDS net asset value.  At termination, the purchaser has the option to sell the MDS shares to the Company at a price equal to the
fair value of the MDS shares on the date of repurchase.  At September 30, 2002, the Company was in compliance with all provisions of the total return swap agreement that could, if breached, result in its early termination.

On each of February 8, 2002, May 3, 2002 and July 26, 2002, Max Re Capitals Board of Directors declared quarterly shareholder dividends of $0.02 per share payable to shareholders of
record on February 22, 2002, May 17, 2002 and August 12, 2002, respectively.  The dividend declared on July 26, 2002 was deemed a distribution to shareholders since the Company had a retained deficit on the payment date.  Continuation of
cash dividends in the future will be at the discretion of the Board of Directors and will be dependent upon the Companys results of operations and cash flows, and its financial position and capital requirements, general business conditions,
legal, tax, regulatory and any contractual restrictions on the payment of dividends and other factors the Board of Directors deems relevant.  On November 1, 2002, the Board of Directors declared a dividend of $0.02 per share to be paid on
December 5, 2002 to shareholders of record on November 15, 2002.

In connection with the lease of an office building currently under construction in Hamilton, Bermuda,
the Company has contractual commitments of approximately $4.4 million for leasehold improvements, with $nil paid, as of September 30, 2002.

The Companys insurer
financial strength ratings were unchanged during the nine months ended September 30, 2002. The Companys ratings are A- (Excellent) by A.M. Best Company, Inc. and A (Strong) by Fitch, Inc.  These ratings reflect
each rating agencys opinion of the Companys financial strength, operating performance and ability to meet obligations.  They are not evaluations directed toward the protection of investors.

New Accounting Pronouncements

The Company currently accounts for Employee Stock Options under the rules of Accounting Principles Board
Opinion (APB) No. 25, Accounting for Stock Issued to Employees and discloses the pro-forma expense of

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employee options in the notes to the Companys financial statements under the provisions of Financial Accounting Standard (FAS) No. 123, Accounting for
Stock-Based Compensation (FAS 123).  The Company will adopt the expense recognition provisions of FAS 123 for all stock options granted on or after January 1, 2003.  Under these provisions, compensation expense will be
recognized over the related service period based on the fair value of the stock options on the date of grant.  The amount of stock based compensation to be recognized under the provisions of FAS 123 is not currently determinable because the
number and value of stock options to be granted to employees in the future is not known.

ITEM 3. 
Quantitative and Qualitative Disclosures About Market Risk

The Company engages in an investment strategy that combines a fixed maturities
portfolio, an alternative investment portfolio that employs 11 strategies to manage investment risk, and private equity investments in two reinsurance companies. The Company attempts to maintain adequate liquidity in its fixed maturities portfolio
to fund operations and protect against unexpected events, and the Company has diversified its portfolio to limit volatility. The Company seeks to manage its credit risk through industry and issuer diversification, and interest rate risk by
monitoring the duration and structure of the Companys investment portfolio relative to the duration and structure of its liability portfolio. The Company is exposed to potential loss from various market risks, primarily changes in interest
rates and equity prices.  Accordingly, earnings could be adversely affected by these changes. The Company manages its market risk based on Board of Directors approved investment policies.  With respect to its fixed maturities portfolio,
the Companys risk management strategy and investment policy is to invest in debt instruments of investment grade issuers and to limit the amount of credit exposure with respect to particular ratings categories and any one issuer. The
Companys investments include characteristics such as duration, yield, currency and liquidity tailored to the cash outflow characteristics of the Companys property and casualty and life and annuity liabilities.

As of September 30, 2002, all securities held in the Companys fixed maturities portfolio were investment grade securities.  Pursuant to the Companys investment policies,
derivative positions are allowed only for the purposes of collateralization structuring, risk management and security replication.  At September 30, 2002, the impact on the fixed maturities portfolio from an immediate 100 basis point increase
in market interest rates would have resulted in an estimated decrease in market value of 3.66% or approximately $45.5 million and the impact on the fixed maturities portfolio from an immediate 100 basis point decrease in market interest rates would
have resulted in an estimated increase in market value of 4.13% or approximately $51.4 million.

With respect to the Companys alternative investment portfolio,
the Company does not directly control the allocation of its assets to strategies or underlying funds, nor does the Company control the manner in which they are invested by the Companys underlying fund managers.  However, the Company
consistently and systematically monitors the strategies and funds in which it is invested and Moore, the Companys alternative investment portfolio advisor, must ensure compliance with the Companys alternative investment guidelines. 
The Company believes its overall risk is limited as a result of the selected strategies diversification and low correlation to the bond market, the stock market and each other.  At September 30, 2002, the impact on the alternative
investment portfolio from an immediate 100 basis point increase in market interest rates would have resulted in an estimated decrease in market value of 0.95% or approximately $5.8 million and the impact on the alternative investment portfolio from
an immediate 100 basis point decrease in market interest rates would have resulted in an estimated increase in market value of 0.95% or approximately $5.8 million.

ITEM 4. 
Controls and Procedures

Disclosure Controls and Internal Controls.  The Companys disclosure controls and procedures (as
defined in Rule 13a-14(c) under the Securities Exchange Act of 1934, the Exchange Act) (Disclosure Controls) are procedures that are designed with the objective of ensuring that information required to be disclosed in
the

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Companys reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the time periods specified in
the Securities and Exchange Commissions rules and forms.  Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to the Companys management, including the Chief
Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.  Internal controls and procedures for financial reporting (Internal Controls) are procedures that are
designed with the objective of providing reasonable assurance that (1) the Companys transactions are properly authorized; (2) assets are safeguarded against unauthorized or improper use; and (3) transactions are properly recorded and reported,
all to permit the preparation of the Companys financial statements in conformity with GAAP.

Limitations on the effectiveness of controls.  The
Companys management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that the Companys Disclosure Controls or Internal Controls will prevent all error and all fraud.  A control system, no
matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Quarterly evaluation of the Companys Disclosure Controls.  Within the 90-day period prior to the filing of this report, an evaluation was carried out under the supervision and
with the participation of the Companys management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys Disclosure Controls. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded, subject to the limitations noted above, that the design and operation of these Disclosure Controls were effective to ensure that material information relating to the Company is made
known to management, including the Chief Executive Officer and Chief Financial Officer, particularly during the period when the Companys periodic reports are being prepared, and that the Companys Internal Controls are effective to
provide reasonable assurance that the Companys financial statements are fairly presented in conformity with GAAP. No significant changes were made in the Companys Internal Controls that could significantly affect these controls
subsequent to the date of their evaluation.

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##### Table of Contents

PART II 
OTHER INFORMATION

ITEM 1. 
Legal Proceedings

There are no pending legal proceedings.  The Company anticipates that it will be subject to litigation and
arbitration in the ordinary course of business.

ITEM 2. 
Changes in Securities

Not applicable.

ITEM 3. 
Defaults Upon Senior Securities

Not applicable.

ITEM 4. 
Submission of Matters to a Vote of Security Holders

Not applicable.

ITEM 5. 
Other Information

Not applicable.

ITEM 6. 
Exhibits and Reports on Form 8-K

(a)  Exhibits

| | 99.1 | Factors Affecting Future Financial Performance (incorporated by reference to Exhibit 99.1 of the Companys Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 27, 2002)
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                           
| | 99.2 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                   
| |      |                                                                                                                                                                                                           
| | 99.3 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                   

(b)  Reports on Form 8-K

| |  | There were no reports on Form 8-K filed during the three months ended September 30, 2002.
| |  | -----------------------------------------------------------------------------------------

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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                         | MAX RE CAPITAL LTD. | 
|------------------------ | ------------------- | 
|                         |                     | 
|                         |                     | 
|                         |                     | 
|                         | Name:               | 
|                         | Title:              | 
|                         |                     | 
|Date:  November 13, 2002 |                     | 
|                         |                     | 
|                         |                     | 
|                         |                     | 
|                         | Name:               | 
|                         | Title:              | 
|                         |                     | 
|Date:  November 13, 2002 |                     | 

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##### Table of Contents

CERTIFICATIONS

I, Robert J. Cooney, the Chief Executive Officer of Max Re Capital Ltd., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Max Re Capital Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date);
and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or
persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that
involves management or other employees who have a significant role in the registrants internal controls; and

6. The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date:       November 13, 2002

| |       | /s/ ROBERT J. COONEY |                 
| | ----- | -------------------- | ----------------
| |       |                     
| | Name: |                      | Robert J. Cooney
| |       |                      |                 

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##### Table of Contents

I, Keith S. Hynes, the Chief Financial Officer of Max Re Capital Ltd., certify that:

1. I have reviewed this quarterly
report on Form 10-Q of Max Re Capital Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge,
the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness
of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and

c) presented in this
quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrants other certifying
officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and

6. The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:       November 13, 2002

| |       | /s/ KEITH S. HYNES |               
| | ----- | ------------------ | --------------
| |       |                   
| | Name: |                    | Keith S. Hynes
| |       |                    |               

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