On a pre-tax basis, the reduction amounts to $184 million, the company said.

Brian M. O'Hara, president and chief executive officer of XL, said he is "personally leading a review of this book of business, which will include an intensive claims audit and review of the ceding company claims files that will be completed by year end.

"I intend to fully address our exposure to the 1997 through 2000 North American casualty reinsurance book written by the former NAC Re so that it will not adversely affect our financial results in 2004 and beyond."

Mr. O'Hara also stated that the underwriting years in the late 1990's were among the worst in the industry's history for North American casualty business.

"Many primary insurers are continuing to see loss development beyond historical patterns due to the marked expansion of liability in the U.S. tort system," he said, noting that XL's claims stem from the former NAC Re book, primarily from general liability, medical malpractice, professional lines and surety."

The Company will report third-quarter results after the close of market trading on October 29, 2003.

XL Capital Limited will hold an analyst conference call at 9:00 a.m. EDT on Monday, October 20, 2003, to discuss these developments. This call will be simultaneously Webcast and can be accessed through XL's Web site at www.xlcapital.com.

XL Capital Ltd, through its operating subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies, and other enterprises on a worldwide basis.