second-quarter net income up five percent to $179.3 million or $1.59 per share.

Economic operating income for the quarter also looked healthy, up 42 percent to $141 million or $1.26 per share.

While revenues jumped from $297 million in the second quarter last year to $438 million this year, total assets swelled from $10.1 billion to $10.8 billion between November and May.

Shareholders' equity remained steady, rising from $4.8 billion six months ago to $4.9 billion in May.

And book value per share increased from $42.79 in November to $43.80 at the close of this year's second quarter.

Generally accepted accounting principles operating income for the quarter amounted to $129.8 million compared with just $96 million in last year's second quarter.

XL president and CEO Brian O'Hara said the net premiums earned from insurance operations continued to grow in the second quarter as compared to the first quarter.

"Also the higher second quarter result as compared to last year reflects the continued positive contribution from our merger with Mid Ocean and Brockbank, as well as XL's core financial and intellectual strengths, which are now widely recognised as being key characteristics of the company's value proposition.

"Many of the new initiatives we commenced over a year ago including our establishment of a specialty financial products group, our joint venture with FSA and our affiliation with Highfields, have borne fruit in this quarter.

"We are looking forward to the beneficial impact of other, more recent transactions including our merger with NAC Re, completed last Friday and our acquisitions of ECS Inc. and Intercargo Corporation.

"All of these will serve to strengthen and diversify our fast expanding specialty business platforms in the US and Europe.'' XL Capital Ltd.'s acquisition US reinsurer NAC Re Corp capped a $1 billion stock deal.

Terms of the agreement will see NAC Re shareholders get 0.915 XL shares for every share they owned, in a tax free exchange to be accounted for as a pooling of interests.