Best Comments on XL’s Preliminary Q3 Results

A.M. Best Co. has commented that the financial strength (FSR) and issuer credit ratings (ICR) of XL Capital Group and its members are unchanged following the recently announced preliminary estimates of third quarter 2008 consolidated results of the holding company, XL Capital Ltd (Cayman Islands). Best also indicated that the ICR and all debt ratings of XL Capital Ltd are unchanged. ratings.

The charge of $1.4 billion related to the transaction with Syncora Holdings Ltd (f/k/a Security Capital Assurance Ltd.) and
certain of its subsidiaries” had been contemplated in XL Capital’s ratings,” said Best. “In addition, the level of XL Capital’s risk-adjusted capitalization is adequate to absorb the recent increase of approximately $875 million in net unrealized losses within its
investment portfolio, charges of approximately $275 million for other than temporary impairment in the value of its investment portfolio, as well as underwriting losses largely derived from Hurricanes Gustav and Ike.”

Best added: “While XL Capital continues to de-risk its investment portfolio, it remains exposed to the current credit market situation and the volatility in equity markets and credit spreads on corporate investments.”

As a result Best indicated that it would “closely monitor any additional effects of capital market dislocations on XL Capital’s investment portfolio, as well as any deterioration in its underwriting performance. If any significant unanticipated negative developments arise, A.M. Best will re-evaluate the company’s ratings.”

For a complete listing of XL Capital Group and XL Capital Ltd’s FSRs,
ICRs and debt ratings, got to: www.ambest.com/press/101604xlcapital.pdf.

Source: A.M. Best – www.ambest.com