XL Estimates Attack Losses at $1.8 Billion Gross, $700 Million Net

October 5, 2001

Bermuda’s XL Capital expects gross claims stemming from the September 11 attacks on the U.S. to reach $1.8 billion, but it expects to recover $1.1 billion from reinsurance. The resulting net loss of $700 million accords with XL’s previous high estimate.

XL’s President and CEO Brian M. O’Hara said that “the third quarter of 2001 has been the worst in the history of the property casualty insurance industry.” He nonetheless expressed confidence in the company’s future projects.

The respective ratings XL gave for its reinsurers were: 26 percent rated “AAA,” 39 percent “AA” and 31 percent “A” by Standard & Poor’ s, a total of 96 percent, which would seem to indicate that most, if not all, of its reinsurance coverage will be paid.

In addition to the losses suffered from the tragic events in the U.S., O’Hara indicated that XL had made provisions of $100 million for other loss events, including the results of newly-acquired subsidiary Winterthur International, losses from the airport attack in Sri Lanka, the recent explosion in Toulouse, France, and XL’s Lloyd’s operations.

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