XL Q4 Net $471.1 Million; $1.72 Billion Full Year

February 8, 2007

Bermuda’s XL Capital reported net income available to ordinary shareholders for the quarter ended December 31, 2006 of $471.1 million, or $2.62 per ordinary share, compared with a net loss of $821.9 million, or $5.51 per ordinary share, for the quarter ended December 31, 2005.

For the year ended December 31, 2006, net income available to ordinary shareholders was $1.7224 billion, or $9.60 per ordinary share, compared with a net loss of $1.2923 billion, or $9.14 per ordinary share, for the twelve months of 2005.

Other highlights in the Company’s report include the following:
— Net income excluding net realized gains and losses [i.e. operating income] was a record $513.8 million, or $2.86 per ordinary share for the quarter, resulting in a record net income excluding net realized gains and losses for the year of $1.7633 billion, or $9.83 per ordinary share
— Combined ratio from general operations was 87.5 percent for the quarter and 88.5 percent for the full year
— Total net investment income for the quarter increased to $522.5 million
— Net income from investment and operating affiliates was $154.5 million for the quarter
— Book value per ordinary share increased 19.9 percent for the year to $53.12
— Return on ordinary shareholders’ equity, based on net income excluding net realized gains and losses, was 22.1 percent for the quarter (annualized) and 20.1 percent for the year

XL has made a remarkable recovery from the disaster of 2005, which included the three hurricanes as well as an adverse decision in its dispute with Credit Suisse over Winterthur International (See IJ web site Nov. 25, 2005).

Commenting on the results, President and CEO Brian M. O’Hara stated: “I am very pleased to report that we have had excellent performance from each of our businesses and our investment operations. They have all contributed to record net income for both the quarter and the full year. Our operating return on equity was 20.1 percent for the year which was the main driver behind the 19.9 percent increase in book value for 2006. As XL enters its third decade, I believe our strengths in underwriting, risk management, investment and capital management will allow us to build on this momentum for the benefit of our shareholders”.

XL’s “Insurance General Operations” sector recorded underwriting profit for the fourth quarter of $34.6 million compared with a loss of $1.0928 billion in the prior year period. “The quarter ended December 31, 2005 included the pre-tax charge related to the Winterthur Decision of $834.2 million and the pre-tax net impact of the 2005 natural catastrophes of $285.1 million,” XL noted.

The complete fourth quarter and full year report are available on the Company’s web site at: www.xlcapital.com. A telephone replay of the Februayu 7th conference call will be available until midnight Eastern time on February 28, 2007 by dialing (800) 642-1687 or (706) 645-9291, Conference ID # 5665106.

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