has reported economic operating income for the quarter ended September 30, 1999 of $164.5 million, or $1.28 per share, ahead by 18 percent of the $139.8 million, or $1.15 per share, in the third quarter of 1998.

GAAP operating income for the third quarter ended September 30, 1999 was $150.7 million, or $1.17 per share, compared with $133.7 million, or $1.10 per share, in 1998's third quarter ended September 30, 1998.

Comparative figures provided by the company have been restated as if its 1999 operating units had been part of the XL group last year, which a number of them were not. "These results include the positive contributions from the organisations we acquired or merged with over the past two years,'' stated Brian O'Hara, president and chief executive officer of XL.

"The alignment of NAC Re Corporation, Intercargo Corporation and ECS, Inc.

with XL's businesses has gone very well and I am pleased with the progress we have made in such a short period of time,'' Mr. O'Hara said.

He continued: "Although there is improvement in selected product segments, overall underwriting conditions remain poor. However, our focus on underwriting profit has enabled us to sustain these strong results. We are seeing the benefits of our selective diversification strategy in providing moderate levels of premium growth and new sources of income at a time when traditional lines are under pressure.'' Operating income, before one time charges, for the nine months ended September 30, 1999 was $479.0 million, or $3.66 per share, 30 percent better than the $368.7 million, or $3.33 per share, for the same period in 1998.

GAAP operating income, before one time charges, was $442.0 million for the nine months ended September 30, 1999, or $3.38 per share, compared with $356.0 million, or $3.22 per share, for the same period in 1998.

One-time charges incurred during the second quarter of 1999, on an after tax basis were $101.7 million, or $0.78 per share for the nine months of 1999.

These charges primarily reflect merger-related expenses incurred with respect to XL's merger with NAC Re, which was completed on June 18, 1999 and increases in NAC Re's loss reserves in order to be consistent with XL's methodology.

In addition, charges were recognised for the integration of other operations acquired during the period, including ECS, Intercargo and MKP Capital Management.

At the end of August, 1999, XL announced that it was changing its fiscal year-end from November 30 to December 31, with effect from the third quarter ended September 30, 1999.