XL Capital announced last night that it expects to take fourth-quarter charges in the range of $1.5-to-$1.7 billion related to credit market exposures--principally coming from an investment in Security Capital Assurance, a financial guaranty insurer and reinsurer.
The charges will mar an otherwise profitable quarter for Bermuda-based XL, which would have reported net income of at least $425 million from its core insurance and reinsurance operation, said Brian O'Hara, acting chairman, during a conference call this morning.
Instead, XL expects to record a net loss for the quarter of $1-to-$1.2 billion, while still showing a positive bottom line for the year, with income in the ranged of $200-to-$400 million.
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