Product Family
Stamford, CT – February 12, 2003 – XL Trading Partners Ltd (“XLTP”) a provider of innovative weather and energy risk management products for XL Capital Group Ltd (“XL”), today announced completion of a structured rainfall protection program for Southern Hydro Partnership, an Australian energy company (“Southern Hydro”).Southern Hydro’s operations are highly dependent upon rainfall levels. Under the terms of the transaction, Southern Hydro will be compensated if the annual amount of rainfall falls below a pre-defined level. As payment for the protection, XLTP will receive a premium plus additional revenue if annual rainfall levels are favorable to Southern Hydro’s operations. At the end of the five-year program, Southern Hydro will be eligible for a partial refund of unused premium and any payments made to XLTP during years with high precipitation.To date, the weather risk management market has largely developed around temperature-based products. This transaction marks an important milestone in the development of the Australian weather risk management market and provides further evidence of the industry’s global expansion as well as the trend toward longer term, more structured solutions based on a wider variety of weather indices.“We are constantly looking at ways to protect business value and stabilise our earnings,” said Darryl Flukes, General Manager, Trading at Southern Hydro. “We place a very high emphasis on managing all the risks and uncertainty that exist throughout our operation. This transaction provides a foundation for managing our production risk and we feel confident that, for the next five years, we have protection against the kind of precipitation levels that might previously have caused us concern.”Companies, not only in energy but in other weather-sensitive sectors such as agriculture, construction, entertainment and retail, can look to XLTP, and this weather transaction as an example of what can be done to manage operational risks.About XL Trading PartnersXL Trading Partners is a subsidiary of XL Capital Ltd (NYSE: XL), which, through its 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 of December 31, 2002, XL had consolidated assets of approximately $35.6 billion and consolidated shareholders' equity of approximately $6.6 billion. More information about XL is available press release contains forward-looking statements which involve inherent risks and uncertainties. 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. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of 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, quarterly report on Form 10-Q and XL’s other documents on file with the Securities and Exchange Commission. XL undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future developments or otherwise.