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Net Operating Income Per Share $0.18 in 2002 Compared With $1.25 in2001

HAMILTON, BERMUDA, July 30, 2002 -- XL Capital Ltd ("XL" or the"Company") (NYSE: XL) today reported a net loss for the quarterended June 30, 2002 of $91.7 million, or a loss of $0.68 per share,compared with net income of $128.6 million, or income of $1.01 pershare, in the second quarter of 2001. Net operating income for thesecond quarter of 2002 was $25.0 million, or $0.18 per share,compared with $160.1 million, or $1.25 per share, for the quarterended June 30, 2001.

The Company's 2002 second quarter results reflect previouslyannounced additional pre-tax net incurred losses of $200.0 millionstemming from the attack on the World Trade Center and relatedevents ("WTC"). The Company also realized net losses on investmentsof $110.0 million for the second quarter, which losses were alsopre-announced, including $92.5 million related to WorldCom, Adelphiaand other telecommunication companies.

For the six months ended June 30, 2002, the net loss was $2.3million, or a loss of $0.02 per share, compared with net income of$347.5 million, or $2.72 per share, during the same period in 2001.Net operating income for the first six months of 2002 was $235.4million, or $1.71 per share, compared with $316.8 million, or $2.48per share, for the six months ended June 30, 2001.

Summary unaudited consolidated financial data for the three and sixmonths ended June 30, for each of 2002 and 2001, respectively, isset forth below (in millions except per share amounts):

                  Three months ended June 30   Six months ended June 30                           (Unaudited)                  (Unaudited)                         2002         2001            2002        2001Gross premiums written $ 1,546.9    $ 1,005.8       $ 4,397.1   $ 2,156.7Net premiums written     1,147.4        749.2         3,351.7     1,561.4Net premiums earned      1,078.7        641.0         2,150.8     1,183.1Net (loss) income          (91.7)       128.6            (2.3)      347.5Net operating income (a)    25.0        160.1           235.4       316.8                                Per share results:                              Net (loss) income (b)     $ (0.68)      $ 1.01         $ (0.02)     $ 2.72Net operating income (a)     0.18         1.25            1.71        2.48                                Average shares outstanding :                            Basic (b)                   135.7       125.4           135.4       125.3Fully diluted (b)           138.2       127.8           137.7       127.5Notes:(a) Net operating income is net income excluding net realized gains and losses on investments and net realized and unrealized gains and losses on derivatives, net of tax.(b) Average stock options outstanding have been excluded where anti-dilutive to earnings per share. Consequently, where there is a net loss, basic shares outstanding represents fully diluted shares outstanding.

Commenting on the second quarter results, Brian M. O'Hara, Presidentand Chief Executive Officer of XL, stated, "The Company enjoyedstrong premium growth in the second quarter with net premiumswritten, the pipeline of future earnings, increasing by 53%. Whilethe need to increase loss reserves caused by the World Trade Centertragedy was disappointing, we believe that this addition to reservesshould fully address our losses from this unprecedented event."

"I am pleased to note that our underlying net operating income inthe second quarter, excluding the WTC reserve charge, was slightlyabove expectations. Now we look forward to capitalizing on theimproving property and casualty market through long overdue priceincreases and improvements in terms currently being achieved invirtually all lines of business," Mr. O'Hara concluded.

Results for the quarter and six months ended June 30, 2002 includethe results of Winterthur International, which was acquired witheffect from July 1, 2001. They also include the results of Le MansR, which is accounted for as a consolidated subsidiary with effectfrom January 1, 2002. In the quarter and six months ended June 30,2001, the Company's share of the net income of Le Mans R wasincluded in equity in net income of insurance and other operatingaffiliates. Results of the Company's Lloyd's operations are includedin the insurance segment, and are no longer shown separately.

Total assets as of June 30, 2002 were $31.2 billion, compared with$28.0 billion as of December 31, 2001. Fully diluted book value pershare as at June 30, 2002 was $39.60 compared with $40.35 as atDecember 31, 2001.

Gross premiums written in the second quarter of 2002 were $1.5billion up from $1.0 billion in the second quarter of 2001. Netpremiums written increased to $1.1 billion from $749.2 million andnet earned premiums rose to $1.1 billion from $641.0 million in therespective periods of 2002 and 2001. For six months, gross premiumswritten were $4.4 billion in the second quarter of 2002 comparedwith $2.2 billion in the year ago period. Net premiums written forthe first six months of 2002 were $3.4 billion compared to $1.6billion a year ago. Net earned premiums were $2.2 billion for thefirst six months of 2002 compared with $1.2 billion in the first sixmonths of 2001.

Net investment income from general operations was $157.9 million inthe second quarter of 2002, compared with $151.2 million in 2001'ssecond quarter. Net investment income from general operations was$313.5 million in the first six months of 2002, compared with $294.3million in 2001's first six months.

The Company's equity in the net income of its investment affiliatesfor the second quarter of 2002 was $7.9 million in 2002 versus $23.2million in the second quarter of 2001. The Company's equity in thenet income of its insurance and other operating affiliates was $0.4million in the second quarter of 2002 versus $6.3 million in thesecond quarter of 2001. The Company's equity in the net income ofits investment affiliates for the first six months of 2002 was $40.1million versus $43.6 million in the first half of 2001. TheCompany's equity in the net income of its insurance and otheroperating affiliates was $0.4 million for the first six months of2002 versus $14.3 million in the first six months of 2001.

The combined ratio for the Company's general insurance andreinsurance operations was 109.9% in the second quarter of 2002compared with 92.3% in the second quarter of 2001. The loss ratioswere 80.2% and 60.9% in the second quarters of 2002 and 2001,respectively, with corresponding expense ratios of 29.7% and 31.4%for the same quarters, respectively. The combined ratio for theCompany's general insurance and reinsurance operations was 101.0% inthe first six months of 2002 compared with 93.1% in the first sixmonths of 2001. The loss ratios were 71.8% and 61.1% in the firstsix months of 2002 and 2001, respectively, with correspondingexpense ratios of 29.2% and 32.0% for the same periods.

A live online webcast of a call with analysts and investors will beheld at 10:00 a.m. Eastern Time on Wednesday, July 31, 2002 toreview the second quarter 2002 results at www.xlgroup.com. XLCapital Ltd, through its operating subsidiaries, is a leadingprovider of insurance and reinsurance coverages and financialproducts and services to industrial, commercial and professionalservice firms, insurance companies and other enterprises on aworldwide basis. An additional unaudited financial supplementrelating to the Company's 2002 and 2001 quarterly and year to dateresults is available on its web site: www.xlgroup.com.

This press release contains forward-looking statements that involveinherent risks and uncertainties. Statements that are not historicalfacts, including statements about XL's beliefs, plans orexpectations, are forward-looking statements. These statements arebased on current plans, estimates and expectations. Actual resultsmay differ materially from those projected in such forward-lookingstatements and therefore you should not place undue reliance onthem. A non-exclusive list of the important factors that could causeactual results to differ materially from those in suchforward-looking statements includes the following: (a) rateincreases and improvements in terms and conditions may not be assignificant or sustainable as XL is currently projecting; (b) actualor projected claims against XL may change due to the preliminarynature of reports and estimates of loss and damage; (c) the timelyand full recoverability of reinsurance placed by XL with thirdparties; (d) the timing of claims payments being faster or thereceipt of reinsurance recoverables being slower than anticipated byXL; (e) increased competition based on pricing, capacity, coverageterms or other factors; (f) greater frequency or severity of claimsand loss activity, including as a result of natural or man-madecatastrophic events, than XL's underwriting, reserving or investmentpractices anticipate based on historical experience or industrydata; (g) developments in the world's financial and capital marketswhich adversely affect the performance of XL's investments and XL'saccess to such markets; (h) the potential impact ofgovernment-sponsored solutions to make available insurance coveragefor acts of terrorism; (i) developments in the Adelphia, Enron orWorldCom (or other companies that file for bankruptcy protection)bankruptcy proceedings or other developments related to suchcompanies; (j) the effects of mergers, acquisitions or divestitures;(k) changes in rating agency policy or practices that could have anadverse effect on the Company's ratings; (l) changes in accountingpolicies or practices that could adversely effect the Company'sfinancial, statutory and other statements and reports; (m)legislative, tax or regulatory developments that could adverselyeffect the Company or the ability of customers or brokers to dobusiness with the Company; (n) changes in general economicconditions, including inflation, foreign currency exchange rates andother factors; (o) the effects of business disruption or economiccontraction due to terrorism or other hostilities; and (p) the otherfactors set forth in XL's most recent report on Form 10-K and XL'sother documents on file with the Securities and Exchange Commission.XL undertakes no obligation to publicly update or revise anyforward-looking statement, whether as a result of new information,future developments or otherwise.

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                                 XL Capital Ltd                       SUMMARY CONSOLIDATED FINANCIAL DATA                     (In thousands, except per share amounts)                                 Three Months Ended        Six Months Ended                                     June 30                    June 30                                   (Unaudited)                (Unaudited)                                 2002       2001            2002     2001    Income Statement Data:    Revenues:     Gross premiums written   1,546,948  $1,005,847    $4,397,147   $2,156,692     Net premiums written     1,147,351     749,152     3,351,727    1,561,406     Net premiums earned - general      operations             $1,068,160    $640,984    $2,101,113   1,183,138     Net premiums earned - life      operations                 10,497          --        49,690          --     Net investment income -      general operations        157,918     151,168       313,527     294,264     Net investment income - life      operations                 16,825          --        32,343          --     Equity in net income of       investment affiliates      7,931      23,196        40,116      43,570     Net realized (losses) gains on       investments             (110,002)    (36,098)     (216,022)     26,437    Net realized and unrealized     (losses) gains on derivative      instruments                (6,713)      5,026       (19,913)      2,662     Fee and other income        23,452      11,493        32,320      18,562                             $1,168,068    $795,769    $2,333,174  $1,568,633    Expenses:    Net losses and loss expenses     incurred - general operations $844,627   $386,951  $1,491,551   $717,155    Claims and policy benefit     reserves - life operations      18,816         --      66,579         --    Acquisition costs, operating     expenses, and exchange gains     and losses                     331,960     232,708    654,473    430,468    Interest expense                 40,139      26,168     81,761     47,425    Amortization of intangible     assets                              11      14,703        625     29,171                                 $1,235,553    $660,530 $2,294,989  1,224,219    (Loss) income before minority     interest, income tax expense     and equity in net income of     insurance and other operating     affiliates                    $(67,485)   $135,239    $38,185   $344,414    Net (loss) income              $(91,748)   $128,606    $(2,255)  $347,535    Weighted average number of     ordinary shares and     ordinary share equivalents          :Basic                    135,662     125,396    135,431    125,312          : Diluted                 138,231     127,765    137,743    127,546    Per Share Data:     Net (loss) income               $(0.68)     $ 1.01    $ (0.02)     $2.72     Net losses (gains) on      investments and derivative      instruments, after tax           0.86        0.24       1.73      (0.24)     Net operating income             $0.18       $1.25      $1.71      $2.48    Note: Certain reclassifications, which have no effect on net income, have          been made to prior year results to conform to current presentation.                                XL Capital Ltd                     SUMMARY CONSOLIDATED FINANCIAL DATA           (In thousands of U.S. dollars, except per share amounts)                                 (Unaudited)                                  As at          As at                                 June 30,      December  31                                  2002            2001    Balance Sheet Data:    Total investments available     for sale                   $13,466,320    $12,429,845    Net payable for investments     purchased                    1,453,400      1,247,027    Cash and cash equivalents     2,278,754      1,863,861    Investments in affiliates     1,234,174      1,037,344    Intangible assets             1,648,475      1,616,943    Total assets                 31,189,265     27,963,075    Unpaid losses and loss     expenses                    12,396,503     11,825,680    Deposit liabilities and     policy benefit reserves      2,828,755      2,374,164    Notes payable and debt        1,863,816      1,604,877    Shareholders' equity          5,375,531      5,437,184    Fully diluted book value per     share                           $39.60         $40.35                                XL Capital Ltd                      SUPPLEMENTARY SEGMENT INFORMATION                        (In thousands of U.S. dollars)                                 (Unaudited)                     FOR THE QUARTER ENDED JUNE 30, 2002                                           Total        Financial    General                              Insurance &    Products &     operations: Insurance  Reinsurance  Reinsurance    Services     Total    Net premiums     earned      $549,776     $495,300    $1,045,07      $23,084  $1,068,160    Fee income     and other     10,886        8,506       19,392        4,060      23,452    Net losses     and loss     expenses     410,397      427,561      837,958        6,669     844,627    Acquisition     costs         67,644      100,295      167,939        5,045      172,98    Operating     expenses     111,241       31,021      142,262       12,312     154,574    Exchange     gains         22,181        1,025       23,206           --      23,206    Underwriting     (loss)     profit       $(6,439)    $(54,046)    $(60,485)      $3,118    $(57,367)    Life operations:    Net premiums     earned          $ --      $10,497      $10,497          $--     $10,497    Fee income     and other         --           --           --           --          --    Claims and     policy     benefit     reserves          --       18,816       18,816           --      18,816    Acquisition     costs and     operating     expenses          --        2,467        2,467           --       2,467    Net investment     income            --       16,825       16,825           --      16,825    Net income     from life     operations       $--       $6,039       $6,039          $--      $6,039    Net investment     income                                                         $157,918    Net realized and     unrealized losses on     investments and     derivative instruments                                         (116,715)    Equity in earnings of     insurance, other     operating and     investment affiliates                                             8,347    Corporate, interest,     taxes and other                                                 (89,970)    Net loss                                                       $ (91,748)    Loss and     loss expense     ratio (1)       74.6%        86.3%        80.2%    Underwriting     expense     ratio(1)(2)     32.5%        26.5%        29.7%    Combined     ratio(1)       107.1%       112.8%       109.9%     NOTES:     (1)  Ratios are calculated for general insurance and reinsurance          operations based on net premiums earned, excluding fee income and          other.     (2)  The underwriting expense ratio excludes exchange gains and losses.                                  XL Capital Ltd                        SUPPLEMENTARY SEGMENT INFORMATION                          (In thousands of U.S. dollars)                                   (Unaudited)                       FOR THE QUARTER ENDED JUNE 30, 2001                                           Total        Financial    General                              Insurance &    Products &     operations: Insurance  Reinsurance  Reinsurance    Services     Total    Net premiums     earned      $339,923     $292,407     $632,330       $8,654    $640,984    Fee income     and other        413          714        1,127       10,366      11,493    Net losses     and loss     expenses     201,598      183,339      384,937        2,014     386,951    Acquisition     costs         65,919       76,126      142,045        1,157     143,202    Operating     expenses      33,565       23,069       56,634        6,863      63,497    Exchange     (losses)     gains         (2,783)      (4,825)      (7,608)          --      (7,608)    Underwriting     profit       $36,471       $5,762      $42,233       $8,986     $51,219    Net investment income                                           $151,168    Net realized and     unrealized losses on     investments and     derivative     instruments                                                     (31,072)    Equity in earnings of     insurance, other     operating and     investment affiliates                                            29,514    Corporate, interest,     taxes and other                                                 (72,223)    Net income   $128,606    Loss and     loss expense     ratio(1)        59.3%        62.7%        60.9%    Underwriting     expense     ratio(1)(2)     29.3%        33.9%        31.4%    Combined     ratio(1)        88.6%        96.6%        92.3%    NOTES:    (1)  Ratios are calculated for general insurance and reinsurance         operations based on net premiums earned, excluding fee income and         other.    (2)  The underwriting expense ratio excludes exchange gains and losses.                                XL Capital Ltd                      SUPPLEMENTARY SEGMENT INFORMATION                        (In thousands of U.S. dollars)                                 (Unaudited)                    FOR THE SIX MONTHS ENDED JUNE 30, 2002                                                  Total     Financial                                                Insurance   Products                          Insurance  Reinsurance    &          &       Total                                               Reinsurance  Services    General operations:    Net premiums earned   $1,142,432  $916,467 $2,058,899  $42,214 $2,101,113    Fee income and other      17,431     9,405     26,836    5,482     32,318    Net losses and loss     expenses                786,777   692,193  1,478,970   12,581  1,491,551    Acquisition costs        159,609   192,509    352,118    6,003    358,121    Operating expenses       200,214    49,707    249,921   27,302    277,223    Exchange gains            24,293     7,277     31,570       --     31,570    Underwriting profit    (loss)                   $37,556   $(1,260)  $36,296    $1,810    $38,106    Life operations:    Net premiums earned          $--   $49,690   $49,690       $--    $49,690    Fee income and other          --         2         2        --          2    Claims and policy     benefit reserves             --    66,579    66,579        --     66,579    Acquisition costs and     operating expenses           --     4,145     4,145        --      4,145    Net investment income         --    32,343    32,343        --     32,343    Net income from life     operations                  $--   $11,311   $11,311       $--    $11,311    Net investment income                                            $313,527    Net realized and     unrealized losses on     investments and     derivative instruments                                          (235,935)    Equity in earnings of     insurance, other     operating and     investment affiliates                                             40,564    Corporate, interest,     taxes and other                                                 (169,828)    Net loss                                                          $(2,255)    Loss and loss expense     ratio (1)                 68.9 %    75.5 %    71.8 %    Underwriting expense     ratio (1) (2)             31.5 %    26.4 %    29.2 %    Combined ratio (1)        100.4 %   101.9 %   101.0 %    NOTES:    (1) Ratios are calculated for general insurance and reinsurance operations        based on net premiums earned, excluding fee income and other.    (2) The underwriting expense ratio excludes exchange gains and losses.                                XL Capital Ltd                      SUPPLEMENTARY SEGMENT INFORMATION                        (In thousands of U.S. dollars)                                 (Unaudited)                    FOR THE SIX MONTHS ENDED JUNE 30, 2001                                                  Total     Financial                                                Insurance   Products                          Insurance  Reinsurance    &          &       Total                                               Reinsurance  Services    General operations:    Net premiums earned     $609,396  $559,267 $1,168,663  $14,475 $1,183,138    Fee income and other       3,038       151      3,189   15,373     18,562    Net losses and loss     expenses                361,729   351,797    713,526    3,629    717,155    Acquisition costs        121,870   145,726    267,596    1,478    269,074    Operating expenses        66,352    39,775    106,127   18,220    124,347    Exchange (losses) gains   (1,401)   (5,037)    (6,438)      --     (6,438)    Underwriting profit     (loss)                  $61,082   $17,083    $78,165   $6,521    $84,686    Net investment income                                            $294,264    Net realized and     unrealized gains on     investments and     derivative instruments                                            29,099    Equity in earnings of     insurance, other     operating and     investment affiliates                                             57,902    Corporate, interest,     taxes and other                                                 (118,416)    Net income                                                       $347,535    Loss and loss expense     ratio (1)                 59.4 %    62.9 %    61.1 %    Underwriting expense     ratio (1) (2)             30.9 %    33.2 %    32.0 %    Combined ratio (1)         90.3 %    96.1 %    93.1 %    NOTES:    (1) Ratios are calculated for general insurance and reinsurance operations        based on net premiums earned, excluding fee income and other.    (2) The underwriting expense ratio excludes exchange gains and losses.                                XL Capital Ltd            SUPPLEMENTARY PREMIUM INFORMATION BY LINE OF BUSINESS                        (In thousands of U.S. dollars)                                 (Unaudited)                     FOR THE QUARTER ENDED JUNE 30, 2002                                 Gross Premiums   Net Premiums    Net Premiums                                     Written         Written         Earned    Casualty insurance              $421,091        $274,306        $204,890    Casualty reinsurance             206,110         200,456         198,982    Property catastrophe              64,740          47,018          53,574    Other property                   319,005         218,158         224,614    Marine, energy,     aviation and satellite          178,046         120,475         119,256    Lloyd's syndicates (1)           136,276         116,265          84,000    Accident and health              (38,048)        (40,073)         45,041    Financial products and services   84,539          82,125          23,084    Life                              19,968          11,529          10,497    Other insurance (2)              123,363          97,184          92,947    Other reinsurance (2)             31,858          19,908          21,772    Total                         $1,546,948      $1,147,351      $1,078,657                     FOR THE QUARTER ENDED JUNE 30, 2001                                 Gross Premiums   Net Premiums    Net Premiums                                    Written         Written          Earned    Casualty insurance              $250,039        $170,261        $113,502    Casualty reinsurance             118,932          81,271          92,391    Property catastrophe              50,892          44,726          41,035    Other property                   175,535         128,075         124,787    Marine, energy,     aviation and satellite           77,088          36,959          49,606    Lloyd's syndicates (1)           162,242         145,042         118,387    Financial products and services   29,214          28,994           8,654    Other insurance (2)              102,823          85,100          51,723    Other reinsurance  (2)            39,082          28,724          40,899    Total                         $1,005,847        $749,152        $640,984     NOTES:     1.  The Company's Lloyd's syndicates write a variety of coverages,         primarily marine, energy, aviation and satellite.     2.  Other premiums written and earned includes political risk, surety,         bonding, and warranty lines.                                XL Capital Ltd            SUPPLEMENTARY PREMIUM INFORMATION BY LINE OF BUSINESS                        (In thousands of U.S. dollars)                                 (Unaudited)                    FOR THE SIX MONTHS ENDED JUNE 30, 2002                                 Gross Premiums   Net Premiums    Net Premiums                                    Written         Written          Earned    Casualty insurance              $916,327        $639,782        $441,758    Casualty reinsurance             656,439         576,898         358,827    Property catastrophe             262,486         224,420         113,899    Other property                   898,262         597,922         454,399    Marine, energy,     aviation and satellite          475,916         346,732         223,043    Lloyd's syndicates (1)           470,001         380,079         204,362    Accident and health               89,858          64,904          64,699    Financial products and services  156,335         151,310          42,214    Life                              58,496          48,497          49,690    Other insurance (2)              248,962         195,924         150,006    Other reinsurance (2)            164,065         125,259          47,906    Total                         $4,397,147      $3,351,727      $2,150,803                    FOR THE SIX MONTHS ENDED JUNE 30, 2001                                Gross Premiums    Net Premiums    Net Premiums                                    Written         Written          Earned    Casualty insurance              $439,226        $281,970        $198,510    Casualty reinsurance             290,322         204,316         163,780    Property catastrophe             153,050         142,568          77,857    Other property                   353,081         254,968         219,118    Marine, energy,     aviation and satellite          254,665         152,367         111,428    Lloyd's syndicates (1)           379,238         279,582         210,546    Financial products and services   41,203          40,927          14,475    Other insurance (2)              169,510         127,754          85,302    Other reinsurance (2)             76,397          76,954         102,122    Total                         $2,156,692      $1,561,406      $1,183,138     NOTES:     1.  The Company's Lloyd's syndicates write a variety of coverages,         primarily marine, energy, aviation and satellite.     2.  Other premiums written and earned includes political risk, surety,         bonding, and warranty lines.                                XL Capital Ltd                   XL Capital Ltd SUPPLEMENTARY INFORMATION           (In thousands of U.S. dollars except per share amounts)                                 (Unaudited)                FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001    Consolidated                          2002           2001      % Change    Net (loss) income                  $(91,748)       $128,606        NM    Operating income                    $25,018        $160,062       (84.4)%    Net (loss) income per share          $(0.68)          $1.01        NM    Operating income per share            $0.18           $1.25        NM    Weighted average number of ordinary     shares and ordinary share equivalent:        Basic (2)                       135,662         125,396        NM        Diluted (2)                     138,231         127,765        NM    General Operations                    2002           2001       % Change    Gross premiums written           $1,526,980      $1,005,847        51.8 %    Net premiums written              1,135,822         749,152        51.6 %    Net premiums earned               1,068,160         640,984        66.6 %    Underwriting (loss) profit          (57,367)         51,219        NM    Combined ratio                       109.9 %          92.3 %       18.9 %    Life Operations    Gross premiums written              $19,968             $--        NM    Net premiums written                 11,529              --        NM    Net premiums earned                  10,497              --        NM    Claims and policy benefit reserves   18,816              --        NM    Net investment income                16,825              --        NM    Net income from life operations       6,039              --        NM     NM = not meaningful     Notes:     1.  The supplementary information contained herein is being furnished for         the convenience of the reader only and does not purport to be         complete. Percentage changes are based on the rounded numbers shown         above.  Investors should refer to XL Capital Ltd's Form 10-Q for the         quarter ended June 30, 2002 to be filed with the SEC (and XL Capital Group         Ltd's other documents on file with the SEC) for a complete         description of XL Capital Ltd.     2.  Average stock options outstanding have been excluded where anti-         dilutive to earnings per share.  Consequently, where there is a loss,         basic shares outstanding represents fully diluted shares outstanding.                                XL Capital Ltd