XL Capital Post Record $452.2 million Q1 Net

May 4, 2004

Bermuda’s XL Capital Ltd. reported record net income available to ordinary shareholders for the quarter ended March 31, 2004, of $452.2 million, or $3.25 per ordinary share, compared with $239.9 million, or $1.74 per ordinary share, for the quarter ended March 31, 2003.

“Net income excluding net realized gains and losses on investments and net realized and unrealized gains and losses on credit and investment derivative instruments, net of tax, for the first quarter of 2004 was a record $328.8 million, or $2.36 per ordinary share, compared with $250.2 million, or $1.82 per ordinary share, for the quarter ended March 31, 2003,” said the bulletin.

The company’s announcement also cited the following “Operating Highlights” in comparison to the same period last year:
— Net premiums written from general operations increased 19 percent to $2.8 billion
— Combined ratio from general operations was a satisfactory 88.8 percent
— Net investment income up 19 percent to $228 million
— Earnings from equity in investment affiliates up 163 percent to $70 million
— Cash flow from operations $527 million, or $752 million, including structured and spread transactions
— Total net invested assets exceeded $27 billion, up 30 percent
— Total assets increased 18% to a record $44 billion
— Book value up $2.84 from December 31, 2003 to $49.58
— Return on ordinary shareholders’ equity at 19.8 percent (details given)

Commenting on the first quarter 2004 results, President and CEO Brian M. O’Hara, stated: “I am pleased to announce record first quarter results with all segments of our business being profitable and contributing to this impressive performance.

“Our general operations continue to experience overall premium growth and remain very profitable as evidenced by our 88.8 percent combined ratio in the first quarter of 2004, despite increasing competition. We also enjoyed the benefits of our diversification strategy with very good results from our investments in affiliates as well as solid contributions from our Financial Products and Services segment and our Life and Annuity Reinsurance activities.”

The bulletin also said XL’s “total assets as of March 31, 2004 were a record $44.2 billion compared with $40.8 billion as of December 31, 2003. Book value per ordinary share as at March 31, 2004 increased by 6.1 percent to $49.58 from $46.74 as at December 31, 2003.”

A live on-line web cast of XL’s call with analysts and investors to review the first quarter 2004 results will be held at 10:00 a.m. Eastern Time on May 4, 2004 at www.xlcapital.com. A telephone replay of the conference call will be available beginning at 1:00 p.m. Eastern Time on May 4, until 8:00 p.m. Eastern Time on May 11, 2004 by dialing (201) 612-7415 (account number: 7716 and conference I.D. number: 100381). An unaudited financial information supplement relating to the Company’s 2004 first quarter results is available on its website: www.xlcapital.com.

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