A.M. Best Affirms Ratings of XL Capital.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--June 2, 2003

A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) for the core operating subsidiaries of XL Capital Ltd (NYSE: XL) (Bermuda). Concurrently, A.M. Best has affirmed the existing debt ratings on

These ratings reflect XL Capital's strong and diverse earnings base, solid capitalization and well-recognized position as a leading provider of specialized insurance and reinsurance coverage. These strengths are derived from the group's focused operating strategy, disciplined underwriting approach, strong risk management capabilities and experienced management team. Furthermore, XL Capital maintains a distinct competitive advantage as a Bermuda-domiciled organization given its favorable regulatory environment.

A.M. Best expects XL Capital will continue to judiciously manage its capital base while maintaining financial leverage--debt plus preferred securities to total adjusted capital--in the low 20% range. Fixed charge coverage is expected to be restored to the mid to upper single digits.

Partially offsetting these strengths are the risks associated with catastrophe and specialized books, particularly those imposed by financial products, which could cause earnings variability. The group continues to experience adverse loss development in U.S. casualty lines for accident years 1997 to 2000 stemming from its acquisition of NAC Re, and XL Capital maintains a significant level of goodwill associated with its acquisitions. These concerns are mitigated, however, by its solid level of tangible capitalization, favorable market rates and management's demonstrated ability to optimally manage risk.

For a complete listing of the financial strength and debt ratings of XL Capital Ltd, please visit http://www.ambest.com/press/060203xlcapital.pdf.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.