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Net Operating Income $221.0 million, per share $1.61 Net Income$184.0 million, per share $1.34

HAMILTON, BERMUDA, October30, 2002 -- XL Capital Ltd ("XL" or the "Company") (NYSE: XL) todayreported net income available to ordinary shareholders for the quarterended September 30, 2002 of $184.0 million, or income of $1.34 pershare, compared with a net loss of $840.0 million, or a loss of $6.70per share, in the third quarter of 2001. Net operating income for thethird quarter of 2002 was $221.0 million, or $1.61 per share, comparedwith a net operating loss of $761.8 million, or a loss of $6.07 pershare, for the quarter ended September 30, 2001. The Company's resultsin 2001 were severely impacted by losses related to the events ofSeptember 11, 2001.

Commenting on the third quarter 2002 results, Brian M.O'Hara, President and Chief Executive Officer of XL, stated: "Ourinsurance and reinsurance businesses have enjoyed a robust thirdquarter, with significant rate increases and new business contributingto strong underwriting results in the quarter. I am particularlypleased with our general operations combined ratio of 91.0% in thequarter."

"However, while the managers of our investment affiliatesgenerally outperformed their benchmarks and the overall investmentmarkets in the third quarter, their absolute performance resulted in asmall loss when compared to their strong performance a year ago," Mr.O'Hara added.

Mr. O'Hara further stated: "As we look ahead, I am confidentthat the property and casualty markets will remain hard for some time.XL is well positioned to capitalize on the long overdue priceincreases and improvements in terms and conditions currently beingachieved in virtually all lines of business."

For the nine months ended September 30, 2002, net incomeavailable to ordinary shareholders was $181.8 million, or income of$1.32 per share, compared with a net loss of $492.5 million, or a lossof $3.93 per share, during the same period in 2001. Net operatingincome for the first nine months of 2002 was $456.4 million, or $3.32per share, compared with a net operating loss of $445.0 million, or$3.55 per share, for the nine months ended September 30, 2001.

 Summary unaudited consolidated financial data for the three and nine months ended September 30, for each of 2002 and 2001, respectively, is set forth below (in millions except per share amounts):                            Three months ended       Nine months ended                               September 30            September 30                                (Unaudited)            (Unaudited)                                2002       2001          2002      2001Gross premiums written       $2,655.5   $1,193.3      $7,052.6  $3,350.0Net premiums written          2,123.9      537.0       5,475.6   2,098.4Net premiums earned           2,162.3      751.5       4,313.1   1,934.7                                Net income (loss)               186.4     (840.0)        184.2    (492.5)Preference dividend               2.4         --           2.4        --Net income (loss) available to        ordinary shareholders.                                       184.0     (840.0)        181.8    (492.5)                                Net operating income (loss) (a) 221.0     (761.8)        456.4    (445.0)                                Per share results:                              Net income (loss) availableto ordinary shareholders  (b).  $1.34    $ (6.70)         $1.32   $(3.93) Net operating income (loss) (a) (b)                   1.61      (6.07)          3.32    (3.55)                                 Weighted average ordinary shares   outstanding :                         Basic                           135.8     125.4           135.6    125.4Diluted                         137.3     127.8           137.3    127.4Notes: (a) Net operating income is net income available to ordinary shareholders, excluding net realized gains and losses on investments, net realized and unrealized gains and losses on derivatives, net of tax, and one-time charges related to the integration of Winterthur International in 2001.(b) Average stock options outstanding have been excluded where anti-dilutive to earnings per share. Consequently, where there is a net loss, basic weighted average ordinary shares outstanding represents diluted weighted average ordinary shares outstanding. 

Results for all periods subsequent to July 1, 2001 includethe results of Winterthur International, which was acquired witheffect from July 1, 2001. The results also include the consolidationof Le Mans Ré, which is accounted for as a subsidiary with effect fromJanuary 1, 2002. In the quarter and nine months ended September 30,2001, the Company's share of the net income of Le Mans Ré was includedin equity in net income of insurance and operating affiliates.

Total assets as of September 30, 2002 were $34.1 billioncompared with $28.0 billion as of December 31, 2001. Fully dilutedbook value per ordinary share as at September 30, 2002 increased to$42.10 compared with $40.35 as at December 31, 2001.

Gross premiums written for general and life operations inthe third quarter of 2002 were $2.7 billion compared with $1.2 billionin the third quarter of 2001. Net premiums written increased to $2.1billion from $537.0 million and net earned premiums rose to $2.2billion from $751.5 million in the respective quarters of 2002 and2001.

For the nine months ended September 30, 2002, gross premiumswritten were $7.1 billion compared with $3.4 billion in the year agoperiod. Net premiums written for the first nine months of 2002 were$5.5 billion compared with $2.1 billion a year ago. Net earnedpremiums were $4.3 billion for the first nine months of 2002 comparedwith $1.9 billion in the first nine months of 2001.

Net investment income from general operations was $161.1million in the third quarter of 2002, compared with $152.2 million in2001's third quarter. Net investment income from general operationswas $474.6 million in the first nine months of 2002, compared with$446.5 million in 2001's first nine months.

Net investment income from life operations was $26.2 millionin the third quarter of 2002 and $58.6 million for the nine months of2002. In 2001, there was no investment income from life operations.

The Company's equity in the net losses of its investmentaffiliates for the third quarter of 2002 was $2.0 million versusincome of $20.8 million in the third quarter of 2001. The Company'sequity in the net income of its investment affiliates for the firstnine months of 2002 was $38.1 million versus $64.3 million in thefirst nine months of 2001.

The Company's equity in net losses of its insurance andoperating affiliates was $0.4 million in the third quarter of 2002versus net losses of $13.5 million in the third quarter of 2001. TheCompany's equity in the net income of its insurance and otheroperating affiliates was $0.04 million for the first nine months of2002 versus $0.8 million in the first nine months of 2001.

The combined ratio for the Company's general operations was91.0% in the third quarter of 2002 compared with 233.3% in the thirdquarter of 2001. The loss ratios were 61.8% and 195.4% in the thirdquarters of 2002 and 2001, respectively, with corresponding expenseratios of 29.2% and 37.9% for the same quarters, respectively. Thecombined ratio for the Company's general operations was 97.1% in thefirst nine months of 2002 compared with 145.2% in the first ninemonths of 2001. The loss ratios were 67.9% and 111.0% in the firstnine months of 2002 and 2001, respectively, with corresponding expenseratios of 29.2% and 34.2% for the same periods.

A live on-line webcast of XL's call with analysts andinvestors to review the third quarter 2002 results will be held at10:00 a.m. Eastern Time on Thursday, October 31, 2002 atwww.xlgroup.com. An unaudited financial information supplementrelating to the Company's 2002 and 2001 quarterly and year-to-dateresults is available on its website: www.xlgroup.com.

XL Capital Ltd, through its operating subsidiaries, is aleading provider of insurance and reinsurance coverages and financialproducts and services to industrial, commercial and professionalservice firms, insurance companies and other enterprises on aworldwide basis.

This press release contains forward-looking statementsthat involve inherent risks and uncertainties. Statements that are nothistorical facts, 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 on them.A non-exclusive list of the important factors that could cause actualresults to differ materially from those in such forward-lookingstatements includes the following: (a) rate increases and improvementsin terms and conditions may not be as large or sustainable as XL iscurrently projecting; (b) greater frequency or severity of claims andloss activity, including as a result of natural or man-madecatastrophic events, than XL's underwriting, reserving or investmentpractices anticipate based on historical experience or industry data;(c) developments in the world's financial and capital markets whichadversely affect the performance of XL's investments and XL's accessto such markets; (d) changes in general economic conditions, includingforeign currency exchange rates, inflation and other factors; and (e)the other factors set forth in XL's most recent report on Form 10-K,Form 10-Q and XL's other documents on file with the Securities andExchange Commission. XL undertakes no obligation to update publicly orrevise any forward-looking statement, whether as a result of newinformation, future developments or otherwise.

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                              XL Capital Ltd                   SUMMARY CONSOLIDATED FINANCIAL DATA                (In thousands, except per share amounts)                          Three Months Ended           Nine Months Ended                             September 30                September 30                              (Unaudited)                  (Unaudited)                          2002          2001          2002          2001    Income Statement Data:    Revenues:    Gross premiums     written           $ 2,655,474   $ 1,193,317  $ 7,052,621   $ 3,350,009    Net premiums     written             2,123,875       536,972    5,475,602     2,098,378    Net premiums     earned - general     operations        $ 1,375,935     $ 705,277  $ 3,477,048   $ 1,888,415    Net premiums     earned - life     operations            786,383        46,247      836,073        46,247    Net investment     income - general     operations            161,052       152,231      474,579       446,495    Net investment     income - life     operations             26,263            --       58,606            --    Net realized (losses)     gains on     investments          (23,086)      (56,081)    (239,108)      (29,644)    Net realized and     unrealized losses     on derivative     instruments           (8,898)       (8,554)     (28,811)       (5,892)    Equity in net (loss)     income of investment     affiliates            (1,976)        20,776       38,140        64,346    Fee and other income    24,104         7,990       56,424        26,552                       $ 2,339,777     $ 867,886  $ 4,672,951   $ 2,436,519    Expenses:    Net losses and     loss expenses     incurred - general     operations          $ 844,182   $ 1,356,572  $ 2,335,733   $ 2,073,727    Claims and policy     benefit reserves -     life operations       803,741        46,473      870,320        46,473    Acquisition costs,     operating expenses,    and exchange gains     and losses            425,547       316,268    1,080,020       746,736    Interest expense        51,815        28,339      133,576        75,764    Amortization of     intangible assets         875        15,045        1,500        44,216                       $ 2,126,160   $ 1,762,697  $ 4,421,149   $ 2,986,916    Income (loss) before     minority interest,     income tax expense and     equity in net income     of insurance     and operating     affiliates          $ 213,617   $ (894,811)    $ 251,802   $ (550,397)    Net income           $ 186,436   $ (840,032)    $ 184,181   $ (492,497)    Preference dividend      2,369            --        2,369            --    Net income (loss)     available to     ordinary     shareholders        $ 184,067   $ (840,032)    $ 181,812   $ (492,497)    Weighted average     number of ordinary     shares and ordinary     share equivalents:     : Basic               135,790       125,431      135,551       125,358     : Diluted             137,349       127,845      137,291       127,418    Per Share Data:     Net income (loss)      available to      ordinary shareholders $ 1.34      $ (6.70)       $ 1.32      $ (3.93)     Net losses on      investments, derivative      instruments and one      time charges,      after tax               0.27          0.63         2.00          0.38     Net operating income      (loss)                $ 1.61      $ (6.07)       $ 3.32      $ (3.55)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 September 30,      As at December 31,                                2002                     2001    Balance Sheet Data:    Total investments available     for sale                 $15,208,627             $12,429,845    Net payable for     investments purchased      1,778,303               1,247,027    Cash and cash equivalents   2,737,445               1,863,861    Investments in insurance     and operating affiliates   1,684,713               1,037,344    Intangible assets           1,646,333               1,616,943    Total assets               34,090,827              27,963,075    Unpaid losses and     loss expenses             12,690,974              11,825,680    Deposit liabilities and     policy benefit reserves    3,946,471               2,374,164    Notes payable and debt      1,870,210               1,604,877    Shareholders' equity        5,948,676               5,437,184    Fully diluted book value     per ordinary share            $42.10                  $40.35