Bermuda-based XL Capital Ltd. said today that its preliminary net loss estimates, insurance and reinsurance, from Hurricanes Gustav and Ike range between $195 million to $270 million.

The announcement also included a rundown on the insurer/reinsurer's holding in Lehman Brothers, Washington Mutual, Fannie Mae and Freddie Mac.

XL Chief Executive Officer Michael S. McGavick said, "We are pleased that even at the high end of our current estimates, losses from these two hurricanes represent less than 3 percent of pro forma total shareholders' equity as of June 30. We believe that today's announcements demonstrate disciplined underwriting as well as our care in managing exposures to individual credits."

XL said its estimates, pretax and net of reinsurance and reinstatement premium, related to Hurricane Gustav range from approximately $30 million to $35 million, attributable in roughly equal proportions to its insurance and reinsurance operations.

The company's preliminary loss estimates, pretax and net of reinsurance and reinstatement premium, related to Hurricane Ike range from approximately $165 million to $235 million, of which $65 million to $85 million is attributable to insurance and $100 million to $150 million to reinsurance.

The company said preliminary loss estimates are based on a review of individual treaties and policies expected to be impacted and client data received to date. XL said it takes into account current industry loss estimates, both from published sources and the company's internal analysis.

Additionally, XL announced that less than one-quarter of a percent of its investment portfolio was exposed to Lehman Brothers Holdings Inc. as of June 30.

As of that date, the cost and market value of XL's current holdings of equity of Lehman Brothers was $2 million and $1 million, respectively. Also as of that date, XL's current holdings of subordinated debt of Lehman Brothers had an amortized cost and market value of approximately $34 million and $29 million, respectively, and XL's holdings of senior debt of Lehman Brothers had an amortized cost and market value of $66 million and $63 million, respectively.

XL said it has made no purchases of Lehman Brothers securities since June 30. XL has no derivative counterparty exposure to Lehman Brothers, it said.

As of Sept. 25, the amortized cost of XL's fixed income holdings of Washington Mutual Inc. was $4 million.

As of Sept. 25, the cost of XL's common and preferred equity of Fannie Mae and Freddie Mac was $9 million.

Mr. McGavick said, "Total industry losses for Gustav and Ike are still being calculated, but we believe that Ike alone could be in excess of $15 billion.

XL Capital Ltd, through its operating subsidiaries, is a leading provider of global insurance and reinsurance coverages to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis. More information about XL Capital Ltd is available at www.xlcapital.com.

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XL Estimates Maximum Gustav, Ike Loss At $270 Million

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