XL Capital Notes 1stQ 2003 Results

Bermuda-based XL Capital Ltd reported net income available to ordinary shareholders for the quarter ended March 31, 2003 of $239.9 million, or net income of $1.74 per ordinary share, compared with net income of $89.5 million, or a net income of $0.65 per ordinary share, in the first quarter of 2002. Net operating income for the first quarter of 2003 was $250.1 million, or $1.82 per ordinary share, compared with net operating income of $207.6 million, or $1.51 per ordinary share, for the quarter ended March 31, 2002.

Commenting on the first quarter 2003 results, Brian O’Hara, president and CEO of XL, remarked, “We had a very strong first quarter with excellent underwriting results reflected in our combined ratio of 86.1 percent and net earned premium growth of 42 percent in our general insurance and reinsurance operations. Our net operating income return on ordinary shareholders’ equity exceeded 16 percent and book value per ordinary share increased to $46.09, a record level for XL.

“Our general insurance and reinsurance businesses continue to see very strong pricing, most notably in casualty, professional lines and marine worldwide,” said O’Hara.

The first quarter 2003 net operating results include a write down of the company’s investment in Annuity and Life Re Holdings Ltd of $40.9 million.

Total assets as of March 31, 2003 were $37.5 billion compared with $35.6 billion as of Dec. 31, 2002. Book value per ordinary share as at March 31, 2003 increased to $46.09 compared with $44.48 as at Dec. 31, 2002.

Gross premiums written for general operations in the first quarter of 2003 were $3.0 billion compared with $2.8 billion in the first quarter of 2002. Net premiums written increased to $2.4 billion from $2.1 billion and net earned premiums rose to $1.5 billion from $1.0 billion in the respective quarters of 2003 and 2002.

Net investment income from general operations was $156.6 million in the first quarter of 2003, compared with $155.6 million in 2002’s first quarter.

The company’s equity in the net income of its investment affiliates for the first quarter of 2003 was $26.8 million versus $32.2 million in the first quarter of 2002. The company’s equity in net losses of its insurance and operating affiliates was $41.1 million in the first quarter of 2003 versus net income of $0.03 million in the first quarter of 2002.

The combined ratio for the company’s general insurance and reinsurance operations was 86.1 percent in the first quarter of 2003, versus 92.1 percent in the first quarter of 2002. The loss ratios were 60.9 percent and 63.2 percent in the quarters ended March 31, 2003 and 2002, with corresponding expense ratios of 25.2 percent and 28.9 percent for the same quarters, respectively.