XL Capital Assurance establishes AAA rated, London-based financial guarantee subsidiary

New York, New York - August 15, 2002

New York, New York, August 26, 2002 XL Capital Group Assurance Inc. (XLCA), rated AAA by Moody's Investors Service, Standard & Poor's Ratings Services, and Fitch Ratings, today announced that it has established a triple-A rated financial guarantee subsidiary in London, XL Capital Group Assurance (U.K.) Limited (XLCA-UK). XLCA-UK is also rated by Moody's, S&P, and Fitch, and authorized as an insurer by the Financial Services Authority in London. XLCA-UK plans to establish a branch office in Madrid later this year. The London office of XLCA-UK will be headed by Michael Rego, Managing Director."XLCA-UK offers a full range of triple-A rated credit enhancement solutions to our clients," said Mr. Rego. "We provide expertise across a full range of asset classes. Our London-based group will focus on PFI (Private Finance Initiative), whole business and European asset-backed transactions. Our Madrid team will specialize in essential infrastructure project financings and debt obligations of sovereign and sub-sovereign borrowers throughout Europe."David Stevens, President of XLCA, said, "Our U.K. platform enables us to provide triple-A rated credit enhancement to issuers and investors in Europe who are seeking a new name of the highest quality, as well as substantial new capacity."XL Capital Group Assurance Inc., rated triple-A by Moody's Investors Service, Standard & Poor's Ratings Services and Fitch Ratings, is a New York-domiciled financial guarantee insurer that specializes in corporate and consumer asset securitization, structured funds, essential infrastructure project finance, future flow securitization and U.S. public finance. At June 30, 2002, XLCA had statutory assets of approximately $205.8 million, liabilities of approximately $73.5 million and surplus as regards policyholders of approximately $132.3 million.XLCA is a subsidiary of XL Capital Ltd (NYSE: XL) which, through its principal 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. At June 30, 2002, XL Capital Ltd had consolidated assets of approximately $31.2 billion and consolidated shareholders' equity of approximately $5.4 billion.This press release may contain 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. XLCA does not undertake any duty to update publicly any forward-looking statements contained herein in light of new information or future developments.