Mr. Brian M. O'Hara, XL's President and Chief Executive Officer, stated: "Following our regular year-end reserve review, we are increasing the reserves of our North American casualty reinsurance book due to adverse development from underwriting years predating our acquisition of NAC Re Corporation. In addition, a number of other loss events in the fourth quarter, including the bankruptcy of Enron, the loss of American Airlines flight 587 and several large European property losses, negatively impacted our results. As a result, we expect to report fourth quarter 2001 operating results at or near breakeven. Including realized investment losses and interim mark-to-market losses on credit enhancement transactions, the Company expects to report a net loss of approximately $60 million for the quarter."
"These results, while very disappointing, stem from the poor pricing and terms that pervaded our industry over the past several years. Underwriting fundamentals are improving substantially in 2002, and we are poised to take advantage of dramatically increased opportunities," stated Mr. O'Hara.
XL intends to announce fourth quarter results after the market close on Tuesday February 12, 2002 and hold a webcast investor conference call at 8:00 a.m. EST on Wednesday, February 13, 2002.
XL, through its operating subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial and professional service firms, insurance companies, and other enterprises on a worldwide basis. As at September 30, 2001, XL had consolidated assets of approximately $25.7 billion and consolidated shareholders' equity of approximately $4.8 billion. More information about XL is available at www.xlgroup.com.
This press release contains forward-looking statements. Such statements are based on current plans, estimates and expectations. Accordingly, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. In particular, financial estimates are subject to the completion of XL's 2001 audit by its independent auditors. A non-exclusive list of the other important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in XL's most recent annual report on Form 10-K and XL's other documents on file with the Securities and Exchange Commission. XL undertakes no duty to update publicly or revise any forward-looking statements contained herein in light of new information, future developments or otherwise.