ten years ago, according to Brian O'Hara, chief executive officer of the Bermuda insurance giant.

Speaking after the announcement that the company had just bought part of a Credit Suisse bank and also posted excellent year-end results, Mr. O'Hara was bullish about his company's future.

He said: "I can tell you I am absolutely ebullient. This is the best outlook we've had for the company since going public ten years ago.'' Last week XL Capital bought Winterthur International for $600 million, a company with 1,100 employees and gross written premiums and net earned premiums of approximately $1.4 billion and $600 million respectively.

The newly acquired company is one of the leading insurers in total risk management for large national and multinational corporations and the all-cash transaction is valued at $50 million over the book value or approximately $600 million.

The new unit will operate under XL Winterthur International for the moment, and is seen as a real feather in the cap of XL.

Mr. O'Hara, who is usually reserved about his company's outlook, said: "Our balance sheet is in great shape, our reserves are strong, and we are extremely well positioned to grow and prosper in the recovery taking place in virtually all of our lines of business, insurance and reinsurance, but especially now, in our risk management, large risk business and now with our acquisition of Winterthur International.'' XL's earnings were in line with analysts expectations -- the company made three times the profit it made the year before in its fourth quarter earnings.

Mr. O'Hara went on to say that XL's risk management strategy was to build out XL Europe organically and more recently in the United States on a primary basis.

He added: "But I admit, it has been tough going, especially in Europe. With Winterthur International, we achieve both right now. It provides us with the primary capability and perfectly compliments our risk management (excess) business. There is virtually no overlap and strategically, it's absolutely unique and perfect.'' He went on to say that the company's financial products and services were building out well, with changes at senior level enhancing XL's position.

Mr. O'Hara went to Winterthur to sign the agreement to buy the company where he met 27 country managers and 300 local staff.

He said: "I can tell you there is great excitement. We totally share a common vision of the risk management business on a global basis.'' XL in strong position following acquisition XL reported net income figure under (gap) at $506 million for 2000, including all the one-time charges, capital gains, goodwill amortisation charges and so on.

Excluding these items results in economic operating income of $1.26 per share in the fourth quarter, (4.98) per share for the year and operating income of $1.13 per share in the quarter and 4.52 in the year.

Rob Lusardi, Chief Financial Officer, also painted a rosy picture of what will happen at XL in the years to come.

He said: "A summary for the insurance business is to continue to focus on achieving price increases, expanding the global capabilities, especially with Winterthur International, improving the profitability of Lloyd's operations.

" We've merged the back office of (Denim) and Brockbank and we are focusing on fundamentals. And also, we hope to continue to lower expenses.'' Mr. Lusardi went on to say that the company has premiums increase in reinsurance versus '99, largely reflecting the growth of the business.

The reinsurance section has been rebranding XL Re and gross premiums written for the quarter show a reduction of approximately $100 million and is about an $80 million increase for the year.

The main reason given for the quarterly reduction and the small annual increase was in connection with realignment. XL transferred the BIS, now called XL Aerospace business, in the fourth quarter, to the insurance segment.

But it was made retroactive to 1/1/2000 and that had the net effect of transferring about $85 million of premium out of the reinsurance segment.

XL said that there is a true underlying growth of about $160 million per year, with growth coming primarily from increases in Latin American (Re) of about $85 million, the London branch of about $25 million and Bermuda of about $30 million.

On the matter of pricing, Mr. Lusardi said: "Talking about talking trends in general, international property (cat) has finally started to see some needed price increases.

"US property (cat) had already improved somewhat in 2000 and generally, we've experienced a good outcome on 2001 renewals. Other property, the quota share and (permits excess) is seen, improvements and pricing terms and conditions.'' Fast-growing Bermuda-based insurer XL last week established a main foothold in Europe through the $600 million acquisition of Winterthur International.

The company specialises in providing insurance to the world's biggest multinational corporations.

Winterthur International, which has annual gross premiums of $2.3 billion, is part of Credit Suisse, the Swiss bank, which paid $9.5 billion for Winterthur Insurance in mid-1997.

Credit Suisse has been slimming down the Winterthur operation and integrating it into a pan-European financial services business.

Credit Suisse bought Winterthur to gain access to its life insurance operations. Winterthur International was set up in 1983 to conduct global commercial insurance for large national clients.

Winterthur International operates in 27 countries and has net loss reserves of $1 billion.

Willi Suter, Winterthur International's chief executive, will head XL's new global risk management operation, which will be called XL Winterthur International.