Fitch Comments on XL Capital Ltd Catastrophe Loss Announcement

Business Wire, Jan 21, 2005

CHICAGO -- XL Capital Ltd (XL) recently announced estimated losses totaling approximately $139 million after-tax from the recent tsunami in South Asia and third-quarter hurricanes in the U.S. that will be reported with fourth-quarter 2004 earnings. Fitch Ratings indicates that this announcement will not affect XL's ratings, including XL's 'A' long-term issuer rating and the 'AA' insurer financial strength (IFS) rating of lead (re)insurance companies XL Insurance (Bermuda) Ltd and XL Re Ltd. The Rating Outlook is Stable.

The ratings continue to reflect XL's position within the global insurance and reinsurance markets, historical underwriting and earnings performance, strong operating cash flow, and adequate capital position at the parent and subsidiary level.

XL estimates pre-tax losses of approximately $75 million from the tsunami event, with losses split roughly two-thirds in the insurance segment and one-third in the reinsurance segment.

XL is adding approximately $74 million to its estimate for losses from the four third-quarter hurricanes, increasing the total pre-tax loss estimate for these events to $520 million. The company attributes this change in estimate primarily to the difficulty in assessing expected claims for individual hurricane events when more than one storm strikes in a close time frame and follow similar landfall paths.

XL is a Bermuda-based holding company with subsidiaries providing insurance, reinsurance, and specialty financial products and services on a worldwide basis. The company reported consolidated GAAP assets of $46.8 billion and shareholders equity of approximately $7.4 billion at Sept. 30, 2004. XL reported net income of $838 million and an underwriting combined ratio of 96.1% for the nine months ended Sept. 30, 2004.

XL Capital Ltd.:

-- Long-Term Issuer 'A'/Stable Outlook

-- Senior Debt 'A'/Stable Outlook

-- Preferred Stock 'A-'/Stable Outlook

XL Capital Finance (Europe) plc:

-- Senior Debt 'A'/Stable Outlook

XL Insurance (Bermuda) Ltd.:

-- IFS 'AA'/Stable Outlook

XL Re Ltd.:

-- IFS 'AA'/Stable Outlook

XL Insurance Company Limited:

-- IFS 'AA'/Stable Outlook

XL Insurance Switzerland:

-- IFS 'AA'/Stable Outlook

XL Re Latin America:

-- IFS 'AA'/Stable Outlook

XL Europe Ltd.:

-- IFS 'AA'/Stable Outlook

XL America Pool:

-- XL Reinsurance America Inc. IFS 'AA'/Stable Outlook

-- XL Insurance Company of New York, Inc. IFS 'AA'/Stable Outlook

-- XL Specialty Insurance Company IFS 'AA'/Stable Outlook

-- Indian Harbor Insurance Company IFS 'AA'/Stable Outlook

-- Greenwich Insurance Company IFS 'AA'/Stable Outlook

-- XL Insurance Company Limited IFS 'AA'/Stable Outlook

-- XL Select Insurance Company IFS 'AA'/Stable Outlook