fourth quarter of last year that it felt the effects of two European storms.

XL Capital Ltd yesterday reported that economic operating income for the quarter ended December 31, 1999 stood at $44.4 million, or $0.34 per share, compared with $131.5 million, or $1.03 per share, in 1998's fourth quarter.

Meanwhile earnings for the fourth quarter of 1999 were reduced by $125 million, or $0.97 per share, after tax, as a result of losses from two major European windstorms in December.

And GAAP operating income, which includes amortisation of intangible assets, for the fourth quarter of 1999, excluding the storm losses, was $157.3 million, or $1.22 per share, compared with $117.4 million, or $0.89 per share, in 1998's fourth quarter ended December 31, 1998.

For the fourth quarter of 1999, net income was $60.6 million, or $0.47 per share, compared with $164.3 million, or $1.25 per share in 1998.

"The reduction in earnings in the fourth quarter reflects the previously announced impact of windstorms in Europe,'' stated Brian M. O'Hara, President and Chief Executive Officer of XL.

"Absent the impact of these losses, the Company's operating results were consistent with expectations.

"Although overall market conditions remain at unsatisfactory levels, we are pleased to note that there are signs of positive change beginning to emerge,'' Mr. O'Hara noted.

"Rates in property, marine and aviation have improved. In liability insurance we were gratified by the high level of business retained on January 1, 2000 in contrast to the erosion experienced over the past few years.

"However, there is still a way to go before these changes will be reflected in our operating results. I am confident that XL has the underwriting integrity and balance sheet strength to continue to provide leadership in this industry.''