"Until now, businesses have had a limited choice in terms of how they managed their weather-related risk - to date, derivatives have been the primary mechanism," said Mr. Bortniker. "We have identified a growing demand for weather protection in insurance form, something that is more appealing to corporations around the world."
"Initially, energy and utility companies were the primary market for weather-related risk management products," said Lynda Clemmons. "But that's changing as companies from far-ranging sectors including agriculture, construction, retail, transportation and entertainment realize the effects weather can have on the bottom line."
Element Re's management team has extensive experience in weather risk mitigation instruments. They previously formed the core of the weather derivatives group at Enron North America where they were instrumental in the initial development of the weather risk market.
"Increasingly, our customers have been looking for sophisticated insurance and financial solutions to their weather risk management challenges. Element Re presents an opportunity to leverage the capital markets experience of the principals with the financial and organizational strength of XL Capital to provide these solutions," stated Robert Lusardi. "We are particularly pleased to be affiliated with the acknowledged experts in the weather industry. XL believes that the integration of insurance and capital markets will become increasingly common. This is yet another step on our part to remain at the forefront of industry changes."
Information on Element Re can be accessed on the web site www.elementre.com.
Element Re Advisors Inc., Element Re Capital Products Inc. and Element Reinsurance Ltd are subsidiaries of XL Capital Ltd, 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. Other principal operating subsidiaries of XL Capital Ltd include XL Insurance Ltd, XL Mid Ocean Reinsurance Ltd, The Brockbank Group plc, XL Financial Assurance Ltd, XL Capital Assurance Inc., NAC Re Corp., ECS Inc. and XL Specialty Insurance. As of June 30, 2000, XL Capital Ltd had consolidated assets of approximately $16.1 billion and shareholders equity of approximately $5.5 billion.
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, including, without limitation, that the weather risk management business may not develop to the extent anticipated or at all. XL Capital undertakes no duty to update publicly any forward-looking statements contained herein in light of new information or future developments.