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XL Capital Ltd reports first quarter 2002 results; net operating income per share $1.53 in 2002 compared with $1.24 in 2001

HAMILTON, BERMUDA, April 29, 2002 -- XL Capital Ltd ("XL" or the "Company") (NYSE: XL) today reported that net income for the first quarter ended March 31, 2002 was $89.5 million, or $0.65 per share, compared with $218.9 million, or $1.73 per share, in the first quarter of 2001. Net operating income for the first quarter of 2002 was $210.4 million, or $1.53 per share, compared with $156.7 million, or $1.24 per share, for the quarter ended March 31, 2001.

Results for the quarter ended March 31, 2002 include the results of Winterthur International, which was acquired with effect from July 1, 2001. They also include the results of Le Mans R, which is accounted for as a consolidated subsidiary with effect from January 1, 2002. In the quarter ended March 31, 2001, the Company's share of the net income of Le Mans R was included in equity in net income of insurance affiliates. Results of the Company's Lloyd's operations are included in the insurance segment, and are no longer shown separately. Summary unaudited consolidated financial data for the three months ended March 31 for each of 2002 and 2001 is set forth below (in millions except per share amounts):

                                            Three months ended March 31
                                                     (unaudited)
                                             2002                  2001
Gross premiums written                      $2,850.2            $1,150.8
Net premiums written                         2,204.4               812.3
Net premiums earned                          1,072.1               542.2
Total revenue                                1,165.1               772.9
Net income                                      89.5               218.9
Net operating income (a)                       210.4               156.7

Per share results:
Net income                                      $0.65               $1.73
Net operating income (a)                         1.53                1.24

Average shares outstanding (b)                 137.8               126.8

Notes: 
              (a) Net operating income is net income excluding net
                  realized gains and losses on investments and net
                  realized and unrealized gains and losses on
                  derivatives, net of tax.

              (b) Diluted weighted average number of shares.

Total assets as of March 31, 2002 were $30.6 billion, compared with $28.0 billion as of December 31, 2001. Fully diluted book value per share as at March 31, 2002 was $40.94 compared with $40.35 as at December 31, 2001.

Net investment income from general operations was $155.6 million in the first quarter of 2002, compared with $143.1 million in 2001's first quarter. Net realized losses on investments and net realized and unrealized losses on derivatives in the first quarter of 2002 was $119.2 million compared with net realized gains of $60.2 million in 2001's first quarter. The Company's equity in the net income of its investment affiliates for the first quarter of 2002 was $32.2 million in 2002 versus $20.4 million in the first quarter of 2001. The Company's equity in the net income of its insurance affiliates was breakeven in the first quarter of 2002 versus $8.0 million in the first quarter of 2001.

The combined ratio for the Company's general insurance and reinsurance operations was 92.0% in the first quarter of 2002 compared with 93.9% in the first quarter of 2001. The loss ratios were 63.2% and 61.3% in the first quarters of 2002 and 2001, respectively, with corresponding expense ratios of 28.8% and 32.6% for the same quarters, respectively.

Commenting on the first quarter results, Brian M. O'Hara, President and Chief Executive Officer of XL, stated, "Our first quarter results reflect the strong growth and improved market conditions that we continue to see in all segments of the Company. Additionally, we have benefited from a flight to quality and from new premiums from the inclusion of XL Winterthur International and Le Mans R in the first quarter."

A live on-line webcast of a call with analyst and investors will be held at 10:00 a.m. Eastern Time on Tuesday, April 30, 2002 to review the first quarter 2002 results at www.xlgroup.com. 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 is available on its web site: www.xlgroup.com.

This press release contains forward-looking statements that involve inherent risks and uncertainties. Statements that are not historical facts, including statements about XL's beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: (a) rate increases and improvements in terms and conditions may not be as large or sustainable as XL is currently projecting; (b) the size of XL's claims may change due to the preliminary nature of reports and estimates of loss and damage; (c) the timely and full recoverability of reinsurance placed by XL with third parties; (d) the timing of claims payments being faster or the receipt of reinsurance recoverables being slower than anticipated by XL; (e) increased competition based on pricing, capacity, coverage terms or other factors; (f) greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events, than XL's underwriting, reserving or investment practices anticipate based on historical experience or industry data; (g) developments in the world's financial and capital markets which adversely affect the performance of XL's investments and XL's access to such markets; (h) the potential impact of government-sponsored solutions to make available insurance coverage for acts of terrorism; (i) developments in the Enron bankruptcy proceedings or other developments related to Enron; (j) the effects of mergers, acquisitions or divestitures; (k) changes in rating agency policy or practices that could have an adverse effect on the company's ratings; (l) changes in accounting policies or practices that could adversely effect the Company's financial statutory and other statements and reports; (m) legislative, tax or regulatory developments that could adversely effect the company or the ability of customers or brokers to do business with the Company; (n) changes in general economic conditions, including inflation, foreign currency exchange rates and other factors; (o) the effects of business disruption or economic contraction due to terrorism or other hostilities; and (p) the other factors set forth in XL's most recent report on Form 10-K and XL's other documents on file with the Securities and Exchange Commission. XL undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

# # #

(tables to follow)

                                XL Capital Ltd
                     SUMMARY CONSOLIDATED FINANCIAL DATA
                   (In thousands, except per share amounts)

                                                         Three Months Ended
                                                              March 31
                                                            (Unaudited)
                                                        2002           2001
    Income Statement Data:

    Revenues:
     Gross premiums written                       $2,850,199     $1,150,845

     Net premiums written                         $2,204,376       $812,254

     Net premiums earned - general operations     $1,032,953       $542,154
     Net premiums earned - life operations            39,193             --
     Net investment income - general operations      155,609        143,096
     Net investment income - life operations          15,518             --
     Equity in net income of investment affiliates    32,185         20,374
     Net realized (losses) gains on investments    (106,020)         62,535
     Net realized and unrealized losses on
      derivative instruments                        (13,200)        (2,364)
     Fee and other income                              8,868          7,069
                                                 $ 1,165,106       $772,864

    Expenses:
     Net losses and loss expenses
      incurred - general operations                 $646,924       $330,204
     Claims and policy benefit
      reserves - life operations                      47,763             --
     Acquisition costs, operating expenses,
      and exchange gains and losses                  322,513        197,760
     Interest expense                                 41,622         21,257
     Amortization of intangible assets                   614         14,468
                                                  $1,059,436       $563,689

    Income before minority interest,
     income tax expense and equity in net
      income of insurance affiliates                $105,670       $209,175

    Net income                                       $89,493       $218,929

    Weighted average number of ordinary shares and   137,843        126,782
     ordinary share equivalents (diluted)

    Per Share Data:
     Net income                                        $0.65          $1.73
     Net losses (gains) on investments and
      derivative instruments, after tax                 0.88         (0.49)
     Net operating income                              $1.53          $1.24

    Note: Certain reclassifications, which have no effect on net income, have
    been made to prior year results to conform to current presentation.


                                XL Capital Ltd
                     SUMMARY CONSOLIDATED FINANCIAL DATA

           (In thousands of U.S. dollars, except per share amounts)

                                 (Unaudited)

                                         As at March 31,  As at December 31,
                                                   2002                2001

    Balance Sheet Data:

    Total investments available for sale    $12,833,601         $12,429,845

    Net payable for investments purchased     1,483,177           1,247,027

    Cash and cash equivalents                 2,066,413           1,863,861

    Investments in affiliates                 1,162,725           1,037,344

    Intangible assets                         1,677,597           1,616,943

    Total assets                             30,665,266          27,963,075

    Unpaid losses and loss expenses          12,275,728          11,825,680

    Deposit liabilities and policy benefit
     reserves                                 2,409,481           2,374,164

    Notes payable and debt                    1,857,670           1,604,877

    Shareholders' equity                      5,450,064           5,437,184

    Fully diluted book value per share           $40.94             $ 40.35


                                XL Capital Ltd

                      SUPPLEMENTARY SEGMENT INFORMATION
                        (In thousands of U.S. dollars)
                                 (Unaudited)

                     FOR THE QUARTER ENDED MARCH 31, 2002

                                   Total                 Financial
                                Insurance &              Products &
                      Insurance Reinsurance Reinsurance  Services    Total

    General operations:
    Net premiums
     earned            $592,656   $421,167  $1,013,823   $19,130  $1,032,953
    Fee income and
     other                6,545        899       7,444     1,422       8,866

    Net losses and
     loss expenses      376,380    264,632     641,012     5,912     646,924
    Acquisition costs    91,965     92,214     184,179       958     185,137
    Operating expenses   88,973     18,686     107,659    14,990     122,649
    Exchange gains      (2,112)    (6,252)     (8,364)        --     (8,364)

    Underwriting
     profit (loss)      $43,995    $52,786     $96,781  $(1,308)     $95,473

    Life operations:
    Net premiums earned     $--    $39,193     $39,193       $--     $39,193
    Fee income and other     --          2           2        --           2

    Claims and policy
     benefit reserves        --     47,763      47,763        --      47,763
    Acquisition costs and
     operating expenses      --      1,678       1,678        --       1,678

    Net investment income    --     15,518      15,518        --      15,518
    Net realized losses
     on investments          --        618         618        --         618

    Net income from life
     operations             $--     $4,654      $4,654       $--      $4,654

    Net investment income                                            155,609
    Net realized losses on
     investments and
      derivative instruments                                         118,602
    Equity in earnings of
     insurance and   investment
      affiliates                                                      32,217
    Corporate, interest,
     taxes and other                                                  79,858
    Net income                                                       $89,493

    Loss and loss expense
     ratio                63.5%      62.8%       63.2%
    Underwriting expense
     ratio                30.5%      26.3%       28.8%
    Combined ratio        94.0%      89.1%       92.0%

    NOTES:
    1. Ratios are calculated for general insurance and reinsurance operations
        based on net premiums earned, excluding fee income and other.
    2. The underwriting expense ratio excludes exchange gains and losses.


                                XL Capital Ltd

                      SUPPLEMENTARY SEGMENT INFORMATION
                        (In thousands of U.S. dollars)
                                 (Unaudited)

                     FOR THE QUARTER ENDED MARCH 31, 2001

                                   Total                 Financial
                                Insurance &              Products &
                      Insurance Reinsurance Reinsurance  Services    Total

    General operations:
    Net premiums
     earned            $269,473   $266,860    $536,333    $5,821    $542,154
    Fee income and
     other                2,625      (563)       2,062     5,007       7,069

    Net losses and
     loss expenses      160,131    168,458     328,589     1,615     330,204
    Acquisition costs    55,951     69,600     125,551       321     125,872
    Operating expenses   32,787     16,706      49,493    11,357      60,850
    Exchange (gains)
     losses             (1,382)        212     (1,170)        --     (1,170)

    Underwriting
     profit (loss)      $24,611    $11,321     $35,932  $(2,465)     $33,467

    Net investment
     income                                                          143,096
    Net realized gains
     on investments and
      derivative
       instruments                                                    60,171
    Equity in earnings of
     insurance and
      investment
       affiliates                                                     28,388
    Corporate, interest,
     taxes and other                                                  46,193
    Net income                                                      $218,929

    Loss and loss
     expense ratio        59.4%      63.1%       61.3%
    Underwriting expense
     ratio                32.9%      32.4%       32.6%
    Combined ratio        92.3%      95.5%       93.9%

    NOTES:
    1. Ratios are calculated for general insurance and reinsurance operations
       based on net premiums earned, excluding fee income and other.
    2. The underwriting expense ratio excludes exchange gains and losses.


                                XL Capital Ltd

            SUPPLEMENTARY PREMIUM INFORMATION BY LINE OF BUSINESS

                        (In thousands of U.S. dollars)
                                 (Unaudited)

                     FOR THE QUARTER ENDED MARCH 31, 2002

                             Gross Premiums    Net Premiums  Net Premiums
                                    Written         Written        Earned

    Casualty insurance             $495,236        $365,476      $236,868
    Casualty reinsurance            450,329         376,442       159,845
    Property catastrophe            197,746         177,402        60,325
    Other property                  579,257         379,764       229,785
    Marine, energy, aviation
     and satellite                  297,870         226,257       103,787
    Lloyd's syndicates              333,725         263,814       120,362
    Accident and health             127,906         104,977        19,658
    Financial products & services    71,796          69,185        19,130
    Life                             38,528          36,968        39,193
    Other insurance                 125,599          98,740        57,059
    Other reinsurance               132,207         105,351        26,134
    Total                        $2,850,199      $2,204,376    $1,072,146


                       FOR THE QUARTER ENDED MARCH 31, 2001

                             Gross Premiums    Net Premiums  Net Premiums
                                    Written         Written        Earned

    Casualty insurance             $189,187        $111,709       $85,008
    Casualty reinsurance            171,390         123,045        71,389
    Property catastrophe            102,158          97,842        36,822
    Other property                  177,546         126,893        94,331
    Marine, energy, aviation
     and satellite                  177,577         115,408        61,822
    Lloyd's syndicates              216,996         134,540        92,159
    Financial products & services    11,989          11,933         5,821
    Other insurance                  66,687          42,654        33,579
    Other reinsurance                37,315          48,230        61,223
    Total                        $1,150,845        $812,254      $542,154

    NOTES:
    1. The Companies Lloyd's Syndicates write a variety of coverages
       encompassing most of the above lines of business.
    2. Other premiums written and earned includes political risk, surety,
       bonding, and warranty lines.


                                XL Capital Ltd

                   XL Capital Ltd SUPPLEMENTARY INFORMATION

                (In thousands of U.S. dollar except % changes)
                                 (Unaudited)

    Consolidated              First Quarter   First Quarter      % Change
                                       2002            2001

    Net Income                        $89.5          $218.9       (59.1%)
    Operating Income                  210.4           156.7         34.3%

    Net Income per share               0.65            1.73       (62.4%)
    Operating Income per share         1.53            1.24         23.4%

    Avg. number of shares
     outstanding                      137.8           126.8          8.7%

    General Operations        First Quarter   First Quarter      % Change
                                       2002            2001

    Gross premiums written         $2,811.7        $1,150.8        144.3%
    Net premiums written            2,167.4           812.3        166.8%
    Net premiums earned             1,033.0           542.2         90.5%
    Underwriting profit                95.5            33.5        185.1%
    Combined ratio                    92.0%           93.9%

    Net investment income             155.6           143.1          8.7%

    Life Operations

    Gross premiums written             38.5            $ --           N/A
    Net premiums written               37.0              --           N/A
    Net premiums earned                39.2              --           N/A
    Claims and policy benefit
     reserves                          47.8              --           N/A
    Net income from life operations     4.6              --           N/A

    Net investment income              15.5              --           N/A

    Note:
    The supplementary information contained herein is being furnished for the
    convenience of the reader only, and does not purport to be complete.
    Percentage changes are based upon the rounded numbers shown above.
    Investors should refer to XL Capital Ltd's Form 10-Q for the quarter ended
    March 31, 2002 to be filed with the SEC (and XL Capital Ltd's other
    documents on file with the SEC) for a complete description of XL Capital Group
    Ltd.


                                XL Capital Ltd

                   XL Capital Ltd SUPPLEMENTARY INFORMATION

                (In thousands of U.S. dollar except % changes)
                                 (Unaudited)

                              GENERAL OPERATIONS

    Insurance Segment         First Quarter   First Quarter      % Change
                                       2002            2001

    Gross premiums written         $1,450.4          $571.2        153.9%
    Net premiums written            1,051.9           342.2        207.4%
    Net premiums earned               592.7           269.5        119.9%
    Fee income                          6.5             2.6        150.0%
    Underwriting profit                44.0            24.6         78.9%
    Loss ratio                        63.5%           59.4%
    Expense ratio                     30.5%           32.9%
    Combined ratio                    94.0%           92.3%

    Reinsurance Segment       First Quarter   First Quarter      % Change
                                       2002            2001

    Gross premiums written         $1,289.5          $567.6        127.2%
    Net premiums written            1,046.4           458.1        128.4%
    Net premiums earned               421.2           266.9         57.8%
    Fee income                          1.0           (0.6)           n/m
    Underwriting profit                52.8            11.3        367.3%
    Loss ratio                        62.8%           63.1%
    Expense ratio                     26.3%           32.4%
    Combined ratio                    89.1%           95.5%

    Financial Products and
     Services Segment         First Quarter   First Quarter      % Change
                                       2002            2001

    Gross premiums written            $71.8           $12.0        498.3%
    Net premiums written               69.2            11.9        481.5%
    Net premiums earned                19.1             5.8        229.3%
    Fee income                          1.4             5.0       (72.0%)
    Underwriting loss                 (1.3)           (2.5)         48.0%

Notes:
The supplementary information contained herein is being furnished for the convenience of the reader only, and does not purport to be complete. Percentage changes are based upon the rounded numbers shown above. Investors should refer to XL Capital Ltd's Form 10-Q for the quarter ended March 31, 2002 to be filed with the SEC (and XL Capital Ltd's other documents on file with the SEC) for a complete description of XL Capital Ltd.

n/m = not meaningful

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