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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
July 18, 2002
Date of Report (Date of earliest event reported)
XL CAPITAL LTD
(Exact name of registrant as specified in its charter)
Cayman Islands 1-10809 98-0191089
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
XL House, One Bermudiana Road, Hamilton, Bermuda HM11
(Address of principal executive offices)
(441) 292-8515
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other events.
On July 18, 2002, XL Capital Ltd issued the press release attached as Exhibit
99(a) and incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibit is filed herewith:
Exhibit No. Description
99(a) Press Release ("XL Capital Announces Reserve Increase For
September 11 Claims and Certain Investment Losses") dated July
18, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: July 18, 2002
XL CAPITAL LTD
By: /s/ Jerry de St. Paer
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Name: Jerry de St. Paer
Title: Executive Vice President &
Chief Financial Officer
Exhibit 99(a)
XL Capital Ltd
XL House
One Bermudiana Road
Hamilton HM 11 Bermuda
Phone: (441) 292-8515
Fax: (441) 292-5280
NEWS RELEASE
IMMEDIATE
Contact: Gavin R. Arton Roger R. Scotton
Investor Relations Media Relations
441-294-7104 441-294-7165
XL CAPITAL ANNOUNCES RESERVE INCREASE FOR SEPTEMBER 11
CLAIMS AND CERTAIN INVESTMENT LOSSES
HAMILTON, BERMUDA (July 18, 2002) - XL Capital Ltd (NYSE: XL) ("XL" or the
"Company") announced today that it is increasing reserves for losses relating to
the attacks on the United States on September 11, 2001 by approximately $200
million in the second quarter of 2002. In addition, the Company expects to
report net investment losses of approximately $120 million for the quarter ended
June 30, 2002 largely due to investments in certain telecommunications
companies.
Mr. Brian M. O'Hara, President and Chief Executive Officer of XL, commented:
"Despite our intensive reserve analysis immediately following September 11, the
unprecedented nature of the attacks has resulted in higher losses as information
has developed. We believe that increasing our reserves at this time should fully
address our exposure to September 11."
The increase in the net loss reserves for September 11 claims consists of
approximately $135 million of additional reserves in the Company's reinsurance
segment, primarily due to higher business interruption losses and exposure to
Lloyd's Central Fund, and about $65 million in the accident and health book of
the Company's Lloyd's operations. The increase in reserves in the accident and
health book at Lloyd's reflected that the Company's exposure ultimately included
a higher concentration of victims in the World Trade Center than previously
indicated.
Net investment losses in the quarter include losses in the Company's fixed
income portfolio for WorldCom, Adelphia and other telecommunication companies of
approximately $92 million and the writedown of the Company's investment in
Mutual Risk Management of approximately $20
million. In addition, investment losses include derivative losses and other
investment losses net of realized investment gains.
"I am pleased to note that we had minimal underwriting exposure in both our
insurance and reinsurance operations to the telecommunications and related
industries during the quarter," Mr. O'Hara added.
Mr. O'Hara stated, "Absent the impact of these charges, we believe our second
quarter results should be in line with consensus analyst estimates. I am
confident that the recovery underway in the insurance and reinsurance markets is
sustainable for the foreseeable future and believe that the need for higher
prices is reinforced by the adverse development of recent losses and declines in
the investment markets."
The Company intends to announce its second quarter results after the market
close on July 30, 2002 and will host a webcast investor conference call at 10:00
a.m. Eastern Time on July 31, 2002. This webcast will be accessible via the
Company's website at www.xlcapital.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. As of March 31, 2002, XL Capital Ltd had
consolidated assets of approximately $30.7 billion and consolidated
shareholders' equity of approximately $5.5 billion. More information about XL
Capital Ltd is available at www.xlcapital.com.
This press release contains forward-looking statements which 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. In particular, the financial forecasts, estimates and projections
contained herein are unaudited, based on a preliminary review of financial,
accounting and other data relating to the second quarter of 2002 and are subject
to completion of the review of XL's second quarter 2002 results by its
independent auditors. A non-exclusive list of other important factors that could
cause actual results to differ materially from those in such forward-looking
statements is set forth in XL's most recent annual report on Form 10-K and XL's
other documents on file with the Securities and Exchange Commission. XL
undertakes no obligation to update or revise publicly any forward-looking
statement, whether as a result of new information, future developments or
otherwise.
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