XL Opens Representative Office in Beijing; Plans Brazil Join Venture

January 31, 2006

Bermuda’s XL Capital Ltd. reported two developments in its global insurance business. It has received the approval of the China Insurance Regulatory Commission to open a Representative Office in Beijing.

XL has also signed a Memorandum of Understandings with Brazil’s Banco Itau Holding Financeira S.A. aimed at creating a new insurance company in Brazil, which will operate in the commercial lines insurance market. It would eventually combine the current Brazilian Property, Casualty and Specialty commercial insurance books of XL and Itau.

Concerning the Beijing office, XL said: It “is permitted to act as a liaison point, conduct research and perform other non-income generating activities,” and “demonstrates XL’s commitment to the China market and the Company’s view of the market’s long-term potential in the areas of insurance and reinsurance.”

President and CEO Brian O’Hara commented: “This is an exciting strategic initiative and we are delighted to be making this step into China. We recognize the need to develop close ties and knowledge exchange opportunities in the country and the opening of the Representative Office will enable us to build the platform to achieve both these goals. Longer term, we see China as very important in strengthening our global presence to support our clients across XL’s three segments of insurance, reinsurance and financial products and services.”

XL’s Chief Representative, Jane Zhuang, said that the Office, in the heart of Beijing’s financial district, would provide the Company with a formal presence in one of the fastest-growing insurance markets in the world. “The Representative Office is an important first step for XL into a key market,” she added. “I look forward to representing this dynamic global company at such a pivotal point in the development of the world’s risk management industry.”

Commenting on the Brazilian move, Clive Tobin, Chief Executive of XL’s Insurance Operations, stated: “I believe that this joint venture continues to reinforce XL’s strategy to be a leading market in all major territories, and we are delighted to be joining forces in Brazil with such a highly respected organization as Banco Itau. We look forward to servicing the local needs of our combined clients, as well as providing them with access to products and services across our global network. This is an important commitment for both our companies, and I believe it positions us well to meet the needs of clients today and after the eventual opening of the Brazilian reinsurance market.”

Mr. Luiz de Campos Salles, CEO of Itau Seguros, indicated “Itau is one of the leaders in Brazil’s financial and insurance community. This joint venture is expected to combine Itau’s Brazilian market expertise and penetration with XL’s outstanding knowledge and access to reinsurance capacity in commercial lines and large insurance risks. We strongly believe that this joint venture will create a winning platform to develop this market in Brazil, with advantages to our clients and brokers.”

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