-- Book value per ordinary share increased by 26% to $18.89 at June
30, 2009 -- P&C operations Combined Ratio of 93.0% -- Total
Shareholders' Equity of $7.5 billion, up from $6.1 billion -- Net
income available to ordinary shareholders of $79.9 million or $0.23
per ordinary share -- Operating income(1) of $162.6 million or
$0.47 per ordinary share, or $0.86 per ordinary share, excluding
foreign exchange losses HAMILTON, Bermuda, July 28
/PRNewswire-FirstCall/ -- XL Capital Ltd ("XL" or the "Company")
(NYSE:XL) today reported its second quarter 2009 results.
Commenting on the Company's performance, Chief Executive Officer,
Michael S. McGavick, said: "Finally! We are pleased to report a
quarter in which the strength of the XL franchise shines through
clearly, despite challenging market conditions in the sector. "It
is also pleasing to be able to prove that investment portfolio
accounting marks can go up as well as down. For the quarter, we are
reporting a 26% increase in XL's book value per ordinary share to
$18.89 and a 31% increase in tangible book value per ordinary share
to $16.41. "This was another turbulent quarter for foreign exchange
markets with the US Dollar reversing some of its strengthening of
recent quarters and the overall impact on XL, inclusive of the
income statement impact, was a net increase in Shareholders' Equity
of $143.7 million after tax. The income statement impact of foreign
exchange movements was an after tax loss of $132.6 million and this
was the principal contributor to the reduction of net income and
operating income from the prior year quarter. Excluding this item,
operating income increased from the prior year quarter reflecting
the strength of our core business. "Gross Premiums Written for our
P&C operations is down 16% for the quarter year on year, a
significant improvement on the trend last quarter and reflecting
the month on month improvement that we noted during our first
quarter earnings call. This reflects both increased selected new
business generation this quarter as well as continued improvements
in retention and pricing. Going forward, our recently announced
agreement with National Indemnity Company relating to our 'Side A'
professional book should further contribute to our new business
production. "Our P&C operations' combined ratio of 93.0% in the
second quarter is an improvement over the full year 2008 and only
slightly higher than the same quarter last year. This strong result
reflects the consistent strength of our underwriting discipline and
strong reserve position. "During the second quarter we continued
de-risking our investment portfolio. We have essentially completed
the asset sales associated with our fourth quarter restructuring
charge and continue transitioning the portfolio to one that is more
typical of a P&C focused operation. On a year-to-date basis we
have reduced our exposure to more volatile asset classes by $3.5
billion. At June 30, 2009, XL had $17.2 billion of its $32.0
billion fixed income portfolio in cash, government, government
related and agency or agency-guaranteed securities. "XL continues
to attract new talent including significant additions to our
underwriting teams around the world. We have done this while
remaining on track in terms of reducing our underlying operating
expense base. Our two previously announced programs in this regard
are both on target in terms of cost, savings and timing. We
recorded costs of $9.1 million in the quarter in connection with
these programs. "This quarter for XL marks a return to positive
growth in shareholder value while we continue to deliver solid
operating performance. We are on track with everything we set out
to do and the benefits are showing as expected. XL is back to
competing from the front foot." He concluded: "As our results
indicate, XL is stable with strong capital, but we are not yet
satisfied. We now have the ability to make the franchise great once
again by remaining focused on delivering value to shareholders and
clients." 2009 Second Quarter Summary Financial Results Three
Months Ended June 30 (US Dollars in thousands except per share
amounts) (Per Share-Diluted) 2009 2008 Change 2009 2008 Change Net
income $79,949 $237,851 -66% $0.23 $1.33 -83% Operating income
162,648 266,205 -39% 0.47 1.49 -68% The Company produced net income
for the second quarter of $79.9 million or $0.23 per ordinary
share, compared to $237.9 million or $1.33 per ordinary share for
the second quarter of 2008. Operating income was $162.6 million, or
$0.47 per ordinary share, compared to $266.2 million, or $1.49 per
ordinary share in the second quarter of 2008. The decrease in net
and operating income in the quarter was in part driven by a foreign
exchange loss of $145.2 million which results from the weakening of
the US dollar against other major currencies, primarily Sterling.
Also impacting the reduction in net and operating income during the
quarter was a decline in net investment income of $112.0 million
compared to the second quarter of 2008. Partially offsetting these
impacts, the Company recorded a profit of $41.5 million from the
investment fund and investment management affiliates compared to a
loss of $18.7 million in the prior year quarter. Net investment
income for the quarter was $328.3 million compared to $440.4
million in the prior year quarter. Net investment income from
P&C operations, excluding investment income from structured
products, decreased 26.7% from the prior year quarter to $218.5
million. This decrease was primarily due to lower investment
yields, driven by both the impact of lower US LIBOR rates on
floating rate structured credit assets, and higher allocations to
lower yielding US Treasuries, Agencies and cash as a result of
continued de-risking activities. Pre-tax net realized investment
losses for the quarter were $80.4 million compared to a gain of
$2.0 million in the second quarter of 2008. The loss for the second
quarter of 2009 included other than temporary impairments, net of
non-credit impairments, totaling $84.9 million, partially offset by
realized gains on securities sales of $4.5 million. The realized
gain in the second quarter of 2008 included other than temporary
impairments of $47.7 million. As a result of new accounting
guidance that became effective this quarter, the Company recorded
$30.7 million of non-credit related Other than Temporary Impairment
("OTTI") in shareholders' equity and recorded a transitional
adjustment on the implementation of this guidance of $229.7 million
that increased both unrealized losses on investments and retained
earnings. The annualized return on ordinary shareholders' equity,
based on operating income, was 11.2% for the quarter as compared to
13.3% in the prior year quarter. For the first half of 2009, the
Company produced net income of $258.3 million or $0.76 per ordinary
share, compared to $449.7 million or $2.52 per ordinary share, for
the prior year period. Operating income was $375.1 million or $1.11
per ordinary share, compared to $543.1 million or $3.04 per
ordinary share in the prior year period. The annualized return on
ordinary shareholders' equity, based on operating income, was 12.9%
for the first half of 2009 compared to 13.0% in the prior year
period. P&C Operations Three Months Ended June 30 (US Dollars
in thousands) 2009 2008 Gross Premiums Written $1,501,190
$1,786,231 Net Premiums Written 1,078,278 1,359,467 Net Premiums
Earned 1,281,749 1,508,787 Underwriting Income 89,439 126,356 Loss
Ratio 60.8% 62.2% Expense Ratio 32.2% 29.4% Combined Ratio 93.0%
91.6% -- P&C Gross and Net Premiums Written declined from the
prior year quarter primarily due to planned reductions in long-term
agreements, strengthening of the US dollar compared to the second
quarter of 2008 and planned reductions in our financial lines
business units. Also impacting the decline is continued competitive
pricing in certain lines. -- P&C Net Premiums Earned included
$881.5 million from the Insurance segment and $400.3 million from
the Reinsurance segment. -- The loss ratio for the quarter was
60.8% compared to 62.2% for the second quarter of 2008. Included in
the current quarter loss ratio was prior period favorable
development of $89.6 million compared to $182.5 million in the
second quarter of 2008. -- The second quarter 2009 loss ratio was
not impacted by any new natural peril catastrophe losses compared
to the second quarter of 2008, which had catastrophe losses, net of
reinstatement premiums, of $98.1 million. -- The expense ratio
during the quarter includes charges of approximately $9.1 million
related to the Company's previously announced cost reduction
efforts, of which $4.1 million and $3.0 million relate to the
Insurance and Reinsurance segments, respectively. -- The P&C
combined ratio for the quarter was 93.0% compared to 91.6% for the
quarter ended June 30, 2008. Excluding the charges for the cost
reduction initiatives, the current quarter combined ratio would
have been 92.4%. Capital Position Book value per ordinary share was
$18.89 as compared to $15.02 at March 31, 2009. Net unrealized
losses on investments, net of tax, were $3.2 billion at June 30,
2009 compared with net unrealized losses, net of tax of $4.0
billion at March 31, 2009. The decrease in net unrealized losses
for the quarter in the Company's P&C operations was
substantially due to the tightening of credit spreads on both
corporate and structured credit assets, offset by the impact of
increases in US Government interest rates. The decrease in net
unrealized losses in the Company's Life operations was a result of
tightening credit spreads in Sterling and Euro corporate credit
spreads, and particularly hybrid corporate financials, offset by
the effect of increases in interest rates. The reported decrease of
$0.8 billion in unrealized losses during the quarter comprises an
increase of $1.0 billion in the value of the investment portfolio
offset in part by the transitional adjustment of $229.7 million
referred to above. Further details of the results for the quarter
and of the Company's fixed income investment portfolio may be found
in the Company's Financial Supplement and Fixed Income Portfolio
Data Supplement, respectively. These documents are both dated July
28, 2009 and are available from the Investor Relations section of
the XL Capital website. The Company will host a conference call to
discuss its Second Quarter results on Wednesday, July 29, 2009 at
10.00 a.m. Eastern time. The conference call can be accessed
through a listen-only dial-in number or through a live webcast. To
listen to the conference call, please dial (877) 422-4657 or (706)
679-0474, Conference ID# 1916647. The webcast will be available at
http://www.xlcapital.com/ and will be archived on XL's website from
approximately 1:00 p.m. Eastern Time on July 29, 2009, through
midnight Eastern Time on August 29, 2009. A telephone replay of the
conference call will also be available beginning at 2:00 p.m.
Eastern Time on July 29, 2009, until midnight Eastern Time on
August 20, 2009, by dialing (800) 642-1687 or (706) 645-9291,
Conference ID# 1916647. This press release contains forward-looking
statements. Statements that are not historical facts, including
statements about XL's beliefs, plans or expectations, are
forward-looking statements. These statements are based on current
plans, estimates, and expectations, all of which involve risk and
uncertainty. Actual results may differ materially from those
included in such forward-looking statements and therefore you
should not place undue reliance on them. A non-exclusive list of
the important factors that could cause actual results to differ
materially from those in such forward-looking statements includes
(a) changes in ratings, rating agency policies or practices; (b)
greater frequency or severity of claims and loss activity than XL's
underwriting, reserving or investment practices anticipate based on
historical experience or industry data; (c) trends in rates for
property and casualty insurance and reinsurance; (d) other changes
in general economic conditions, including the effects of inflation
and changes in interest rates, credit spreads, foreign currency
exchange rates and other factors; (e) developments, including
uncertainties related to the depth and duration of the current
recession, and future volatility in the world's credit, financial
and capital markets that adversely affect the performance and
valuation of XL's investments or access to such markets; (f) the
potential for changes to methodologies, estimations and assumptions
that underlie the valuation of the Company's financial instruments
that could result in changes to investment valuations; (g) changes
to the Company's assumptions as to whether it has the ability and
intent to hold available-for-sale securities to recovery; (h) the
potential effects of domestic and foreign regulatory developments,
including those which could impact the financial markets or
increase XL's business costs and required capital levels; (i) the
ability of XL's subsidiaries to pay dividends to the Company; (j)
changes in the size of XL's claims relating to natural catastrophe
losses due to the preliminary nature of some reports and estimates
of loss and damage to date; (k) the potential that the agreement
with National Indemnity Company with respect to "Side A" directors
and officers liability policies may not produce the anticipated
benefits; and (l) the other factors set forth in XL's reports on
Form 10-K, Form 10-Q, and other documents on file with the
Securities and Exchange Commission, as well as management's
response to any of the aforementioned factors. XL undertakes no
obligation to update or revise publicly any forward-looking
statement, whether as a result of new information, future
developments or otherwise.. (1) Defined as net income (loss)
excluding net realized gains and losses on investments, goodwill
impairment charges, net realized and unrealized gains and losses on
credit, structured financial and investment derivatives, net of
tax, for the Company and its share of these items for the Company's
insurance company affiliates for the periods presented and charges
in respect of guarantees relating to subsidiaries of Syncora
Holdings Ltd. ("Syncora"), as well as the gain recognized on the
repurchase of the Company's Series C preference ordinary shares.
"Operating income" is a non-GAAP measure. See the schedule entitled
"Reconciliation" at the end of this release for a reconciliation of
"operating income" to net income (loss) available to ordinary
shareholders. XL CAPITAL LTD SUMMARY CONSOLIDATED FINANCIAL DATA
(U.S. dollars in thousands) Three Months Ended Six Months Ended
June 30 June 30 (Unaudited) (Unaudited) Income Statement Data: 2009
2008 2009 2008 ---- ---- ---- ---- Revenues: Gross premiums written
: - P&C operations $1,501,190 $1,786,231 $3,379,418 $4,487,125
- Life operations 150,711 161,251 285,823 396,209 Net premiums
written : - P&C operations 1,078,278 1,359,467 2,583,589
3,496,020 - Life operations 140,674 150,933 262,259 375,146 Net
premiums earned : - P&C operations 1,281,749 1,508,787
2,603,436 3,061,567 - Life operations 147,951 172,935 277,785
332,517 Net investment income 328,348 440,352 676,314 939,581 Net
realized (losses) gains on investments (80,430) 2,040 (332,367)
(100,211) Net realized and unrealized (losses) gains on derivative
instruments 969 8,124 (438) 52,806 Net income (loss) from
investment affiliates 37,086 (20,435) 10,193 (8,636) Fee and other
income 9,796 12,796 21,954 21,087 ----- ------ ------ ------ Total
revenues $1,725,469 $2,124,599 $3,256,877 $4,298,711 ----------
---------- ---------- ---------- Expenses: Net losses and loss
expenses incurred $779,628 $938,585 $1,569,911 $1,939,478 Claims
and policy benefits 174,588 209,725 332,547 406,024 Acquisition
costs 223,272 246,237 441,491 512,534 Operating expenses 264,219
298,298 532,606 562,122 Exchange (gains) losses 145,221 7,936
120,597 75,681 Interest expense 54,198 65,441 115,539 189,553
Amortization of intangible assets 464 420 929 840 --- --- --- ---
Total expenses $1,641,590 $1,766,642 $3,113,620 $3,686,232
---------- ---------- ---------- ---------- Net income before
non-controlling interest, income tax and net income from operating
affiliates $83,879 $357,957 $143,257 $612,479 Non-controlling
interest in net income of subsidiary (40) - (40) - Income tax
16,045 51,205 61,998 81,907 Net (income) loss from operating
affiliates (17,667) 68,901 (7,339) 48,348 ------- ------ ------
------ Net income attributable to XL Capital Ltd $85,541 $237,851
$88,638 $482,224 Preference share dividends attributable to XL
Capital Ltd (5,592) - (42,126) (32,500) Gain on repurchase of
Series C preference ordinary shares - - 211,816 - ------- -------
------- ------- Net income available to ordinary shareholders
$79,949 $237,851 $258,328 $449,724 ------- -------- --------
-------- SUMMARY CONSOLIDATED FINANCIAL DATA (U.S. dollars in
thousands, except per share amounts) Balance Sheet Data: As at As
at June 30, 2009 December 31, 2008 (Unaudited) (Note 1) -----------
-------- Total investments available for sale $27,738,956
$27,464,510 Cash and cash equivalents 3,989,372 4,353,826
Investments in affiliates 1,222,317 1,552,789 Unpaid losses and
loss expenses recoverable 3,909,110 3,997,722 Total assets
45,412,217 45,622,278 Unpaid losses and loss expenses 21,452,998
21,650,315 Deposit liabilities 2,436,809 2,710,987 Future policy
benefit reserves 5,862,406 5,452,865 Unearned premiums 4,266,872
4,217,931 Notes payable and debt 2,445,230 3,189,734 Redeemable
series C preference ordinary shares 182,673 500,000 Total
shareholders' equity 7,473,219 6,116,831 Diluted book value per
ordinary share $18.89 $15.46 Basic book value per ordinary share
$18.91 $15.46 Note 1: Certain items have been reclassified to
conform with the current period presentation. XL CAPITAL LTD
RECONCILIATION The following is a reconciliation of the Company's
(i) net income (loss) available to ordinary shareholders to
operating income (loss) (Note 1) and (ii) annualized return on
ordinary shareholders' equity (based on operating income (loss)) to
average ordinary shareholders' equity for the three months ended
June 30, 2009 and 2008. (U.S. dollars in thousands except per share
amounts) Three Months Ended June 30 (Unaudited) 2009 2008 ---- ----
Net income available to ordinary shareholders $79,949 $237,851 Net
realized losses (gains) on investments, net of tax 82,859 (2,590)
Net realized and unrealized losses (gains) on investment
derivatives, net of tax (130) (5,695) Net realized and unrealized
losses (gains) on credit and structured financial derivatives, net
of tax 102 1 Net realized and unrealized losses (gains) on
investments and derivatives of the Company's insurance company
affiliates (132) (1,416) Gain on repurchase of Series C preference
ordinary shares - - Mark-to-market charge for Syncora facultative
agreements - (17,946) Charge in respect of guarantees issued to
subsidiaries of Syncora - 56,000 -------- -------- Operating income
(Notes 1 and 2) $162,648 $266,205 ======== ======== Per ordinary
share results: (Note 2) Net income (loss) attributable to ordinary
shareholders $0.23 $1.33 Operating Income (Note 1) $0.47 $1.49
Weighted average ordinary shares outstanding: Basic 342,153,533
179,054,435 Diluted 342,467,928 179,054,495 Return on Ordinary
Shareholders' Equity: Average ordinary shareholders' equity
$5,805,260 $8,012,272 Operating income (Note 1) $162,648 $266,205
Annualized Operating income (Note 1) $650,592 $1,064,820 Annualized
Return on Ordinary Shareholders' Equity - Operating income (Note 1)
11.2% 13.3% ==== ==== Note 1: Operating income is defined as net
income (loss) available to ordinary shareholders excluding net
realized gains and losses on investments, goodwill impairment
charges, net realized and unrealized gains and losses on credit,
structured financial and investment derivatives, net of tax for the
Company and its share of these items for the Company's insurance
company affiliates for the periods presented and charges in respect
of guarantees relating to subsidiaries of Syncora, as well as the
gain recognized on the repurchase of the Company's Series C
preference ordinary shares. Note 2: Diluted weighted average number
of ordinary shares outstanding are used to calculate per share data
except where they are anti- dilutive to earnings per share or where
there is a net loss. XL CAPITAL LTD RECONCILIATION The following is
a reconciliation of the Company's (i) net income (loss) available
to ordinary shareholders to operating income (loss) (Note 1) and
(ii) annualized return on ordinary shareholders' equity (based on
operating income (loss)) to average ordinary shareholders' equity
for the six months ended June 30, 2009 and 2008. (U.S. dollars in
thousands except per share amounts) Six Months Ended June 30
(Unaudited) 2009 2008 ---- ---- Net income available to ordinary
shareholders $258,328 $449,724 Net realized losses (gains) on
investments, net of tax 325,723 95,787 Net realized and unrealized
losses (gains) on investment derivatives, net of tax 1,350 (39,815)
Net realized and unrealized losses (gains) on credit and structured
financial derivatives, net of tax 1,514 58 Net realized and
unrealized losses (gains) on investments and derivatives of the
Company's insurance company affiliates (9) (736) Gain on repurchase
of Series C preference ordinary shares (211,816) - Mark-to-market
charge for Syncora facultative agreements - (17,946) Charge in
respect of guarantees issued to subsidiaries of Syncora - 56,000
-------- -------- Operating income (Note 1, 2, and 3) $375,090
$543,072 ======== ======== Per ordinary share results: (Note 2) Net
income (loss) attributable to ordinary shareholders $0.76 $2.52
Operating Income (Note 1) $1.11 $3.04 Weighted average ordinary
shares outstanding: Basic 339,155,217 178,701,331 Diluted
339,262,340 178,701,480 Return on Ordinary Shareholders' Equity:
Average ordinary shareholders' equity $5,793,039 $8,358,668
Operating income (Note 1) $375,090 $543,072 Annualized Operating
income (Note 1) $750,180 $1,086,144 Annualized Return on Ordinary
Shareholders' Equity - Operating income (Note 1) 12.9% 13.0% ====
==== Note 1: Operating income is defined as net income (loss)
available to ordinary shareholders excluding net realized gains and
losses on investments, goodwill impairment charges, net realized
and unrealized gains and losses on credit, structured financial and
investment derivatives, net of tax for the Company and its share of
these items for the Company's insurance company affiliates for the
periods presented and charges in respect of guarantees relating to
subsidiaries of Syncora, as well as the gain recognized on the
repurchase of the Company's Series C preference ordinary shares.
Note 2: Diluted weighted average number of ordinary shares
outstanding are used to calculate per share data except where they
are anti- dilutive to earnings per share or where there is a net
loss. Note 3: Diluted weighted average ordinary shares outstanding
for year to date ended June 30, 2009 include the impact of the
Company's 2008 Equity Security units ("ESU") on an "if converted"
basis for the period January 1, 2009 to February 17, 2009 when they
were converted into class A ordinary shares. Net income and
Operating income per share for year to date ended June 30, 2009
have been adjusted to exclude $4,829 of ESU interest from January
1, 2009 to February 17, 2009. Comment on Regulation G This press
release contains the presentation of (i) operating income (loss),
which is defined as net income (loss) excluding net realized gains
and losses on investments, goodwill impairment charges, net
realized and unrealized gains and losses on credit, structured
financial and investment derivatives, net of tax, for the Company
and its share of these items for the Company's insurance company
affiliates for the periods presented and charges in respect of
guarantees relating to subsidiaries of Syncora, as well as the gain
recognized on the repurchase of the Company's Series C preference
ordinary shares and (ii) annualized return on ordinary
shareholders' equity (based on operating income (loss)) to average
ordinary shareholders' equity. These items are "non-GAAP financial
measures" as defined in Regulation G. The reconciliation of such
measures to the most directly comparable GAAP financial measures in
accordance with Regulation G is included above. XL presents its
operations in the way it believes will be most meaningful and
useful to investors, analysts, rating agencies and others who use
XL's financial information in evaluating XL's performance. This
presentation includes the use of "operating income (loss)" and
annualized return on ordinary shareholders' equity based on
operating income (loss). Investment derivatives include all
derivatives entered into by XL other than weather and energy and
credit derivatives (discussed further below). Although the
investment of premiums to generate income (or loss) and realized
capital gains (or losses) is an integral part of XL's operations
and the Company's insurance company operating affiliates, the
determination to realize capital gains (or losses) is independent
of the underwriting process. In addition, under applicable GAAP
accounting requirements, losses can be created as the result of
other than temporary declines in value and from goodwill impairment
charges without actual realization. In this regard, certain users
of XL's financial information, including certain rating agencies,
evaluate earnings before tax and capital gains to understand the
profitability of the recurring sources of income without the
effects of these two variables. Furthermore, these users believe
that, for many companies, the timing of the realization of capital
gains and the recognition of goodwill impairment charges are
largely opportunistic and are a function of economic and interest
rate conditions. In addition, with respect to credit derivatives,
because XL and its insurance company operating affiliates generally
hold financial guaranty contracts written in credit default
derivative form to maturity, the net effects of the changes in fair
value of these credit derivatives are excluded (similar with other
companies' treatment of such contracts) as the changes in fair
value each quarter are not indicative of underlying business
performance. Unlike these credit derivatives, XL's weather and
energy derivatives are actively traded (i.e., they are not held to
maturity) and are, therefore, not excluded from net income as any
gains or losses from this business are considered by management
when evaluating and managing the underlying business. Charges in
respect of guarantees issued by XL Insurance (Bermuda) Ltd, in
respect of subsidiaries of Syncora, as well as the gain recognized
on the repurchase of the Company's Series C preference ordinary
shares, are excluded as these transactions were capital in nature
and outside the scope of the Company's underlying business. In
summary, XL evaluates the performance of and manages its business
to produce an underwriting profit. In addition to presenting net
income (loss), XL believes that showing operating income (loss)
enables investors and other users of XL's financial information to
analyze XL's performance in a manner similar to how management of
XL analyzes performance. In this regard, XL believes that providing
only a GAAP presentation of net income (loss) makes it much more
difficult for users of XL's financial information to evaluate XL's
underlying business. Also, as stated above, XL believes that the
equity analysts and certain rating agencies that follow XL (and the
insurance industry as a whole) exclude these items from their
analyses for the same reasons and they request that XL provide this
non-GAAP financial information on a regular basis. Return on
average ordinary shareholder's equity ("ROE") excluding net
realized gains and losses on investments, goodwill impairment
charges and net realized and unrealized gains and losses on credit
and investment derivative instruments, net of tax, for the Company
and its share of these items for Syncora and the Company's other
insurance company operating affiliates (the "Exclusions"), is a
widely used measure of any company's profitability. Annualized
return on average ordinary shareholders' equity (minus the
Exclusions) is calculated by dividing annualized net income minus
the Exclusions for any period by the average of the opening and
closing ordinary shareholders' equity. The Company establishes
target ROEs (minus the Exclusions) for its total operations,
segments and lines of business. If the Company's ROE (minus the
Exclusions) return targets are not met with respect to any line of
business over time, the Company seeks to re-evaluate these lines.
In addition, the Company's compensation of its senior officers is
dependant upon, among other things, the achievement of the
Company's performance goals to enhance shareholder value which
include ROE (minus the Exclusions) and its P&C combined ratio.
DATASOURCE: XL Capital Ltd CONTACT: David R. Radulski, Investor
Relations, +1-441-294-7460, or Carol A. Parker Trott, Media
Relations, +1-441-294-7290, both of XL Capital Ltd Web Site:
http://www.xlcapital.com/
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