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XL Capital Reports First Quarter 2001 Results

08 May 2001

Hamilton, Bermuda: 7 May, 2001 -- XL Capital Ltd ("XL" or the "Company") (NYSE: XL BSX: XL.BH) today reported that net income for the first quarter ended March 31, 2001 was $218.9 million, or $1.73 per share, compared with $223.8 million, or $1.77 per share, in the first quarter of 2000. Economic operating income was $171.2 million, or $1.35 per share, in the first quarter of 2001 compared with $164.9 million, or $1.30 per share, a year ago. GAAP operating income for the first quarter of 2001, excluding net realized gains, was $156.7 million, or $1.24 per share, compared with $150.8 million, or $1.19 per share, for the quarter ended March 31, 2000.

Total revenues were $767.1 million and $714.2 million for the quarters ended March 31, 2001 and 2000, respectively. Total assets as of March 31, 2001 were $17.6 billion, compared with $16.9 billion as of December 31, 2000. Shareholders' equity was $5.7 billion as at March 31, 2001 compared to $5.6 billion as at December 31, 2000. Fully diluted book value per share as at March 31, 2001 was $45.36 compared with $44.78 as at December 31, 2000.

For the first quarter, gross premiums written were $1.2 billion in 2001 compared with $918.9 million in 2000. Net earned premiums were $542.2 million in the first quarter of 2001 versus $494.5 million in the first quarter of 2000.

Net investment income, excluding net realized investment gains, was $129.4 million in the first quarter of 2001, compared with $128.5 million in 2000's first quarter. Net realized gains on investments were $60.2 million in the first quarter of 2001 compared with $68.7 million in 2000's first quarter.

The Company's equity in the net income of its affiliates for the first quarter was $28.4 million in 2001, versus $17.5 million in the first quarter of 2000.

The combined ratio for the Company was 95.3% in the first quarter of 2001 compared with 93.3% in the first quarter of 2000. The loss ratios were 60.9% and 61.2% in the first quarters of 2001 and 2000, respectively, with corresponding expense ratios of 34.4% and 32.1% for the same quarters, respectively.

During the first quarter of 2001, the Company repurchased 0.2 million of its shares at an average price of $69.77 per share. XL has approximately $238.7 million remaining in its current share repurchase authorization.

Commenting on the first quarter results, Brian M. O'Hara, President and Chief Executive Officer of XL, stated: "After a prolonged downturn in virtually all of the insurance and reinsurance markets, it is now clear that these markets are seeing sustainable price increases. All of our operating segments experienced real growth in premiums written during the first quarter of 2001.

"Our acquisition of Winterthur International, which we announced in February, is proceeding well and we plan to complete the transaction early in the third quarter. Winterthur International will provide XL with a truly global insurance platform," noted Mr. O'Hara.

A live on-line webcast of a call with analyst and investors to review the earnings and strategic transaction will be available at www.xl-capital.com at 10:00 a.m. Eastern Time.

XL Capital Ltd, through its 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. Additional unaudited supplemental financial information relating to the Company's 2001, 2000 and 1999 results is available on its web site: www.xl-capital.com.