Bermuda insurance giant XL Capital Ltd. made an overall loss of $840 million for the third quarter in 2001, after the company was hit by costs of the terrorist attacks in the United States on September 11.

And the company said that it was now faced with unprecedented change in both the insurance and reinsurance markets, and the industry as a whole would be impacted by the events in the US for years to come.

But the company would show its strengths in this new climate, according to Brian O'Hara, president and chief executive officer.

He said: "The market dynamics we are facing present an environment in which XL will demonstrate its strength. XL has the resources and market position leadership to move forward and we are well-positioned to achieve our future growth and earnings goals. We will be committing our capacity where the highest and most enduring returns are and remain fully committed to our strategic insurance, reinsurance and financial products businesses."

At the close of trade, XL reported a net loss for the third quarter of $840 million, or a loss of $6.57 per share, compared with net income of $139.5 million, or income of $1.10 per share, in 2000's third quarter.

The economic operating loss was $746.8 million, or a loss of $5.84 per share, in the third quarter of 2001 compared with economic operating income of $151.9 million, or $1.20 per share, during the same period in 2000. XL's third quarter results reflect net incurred losses of $750 million pre-tax, or $680.0 million after tax, due to the attack and other related events on September 11.

The company said the effect of other previously announced loss events, including the Sri Lanka airport attack, Toulouse plant explosion, satellite losses and adverse development in the company's Lloyd's operations, were $103.7 million after taxes.

The company's results also reflect the inclusion of the acquired Winterthur International operations in XL's results in the insurance segment for the first time from July 1, 2001.

Mr. O'Hara said: "Our loss estimate for the World Trade Center and related September 11, 2001 events increased slightly from our previously reported loss estimate of $700 million, reflecting modestly higher than originally anticipated losses.

"We are presently faced with an unprecedented change in both our insurance and reinsurance markets. The perception of risk has changed dramatically and the terms and conditions of insurance and reinsurance will be significantly impacted for years."

Total revenues were $845 million and $694.6 million for the quarters ended September 30, 2001 and 2000, respectively.

Gross premiums written were $1.2 billion for the third quarter of 2001, compared with $736.6 million for the third quarter of 2000. Net premiums earned were $751.5 million in the third quarter of 2001 versus $540.0 million in the third quarter of 2000.

Total assets as at September 30, 2001 were $25.7 billion compared with $16.9 billion as at December 31, 2000. Shareholders' equity as at September 30, 2001 was $4.8 billion compared with $5.6 billion as at December 31, 2000. Fully diluted book value per share as at September 30, 2001 was $38.86 compared with $44.78 as at December 31, 2000.

A live on-line webcast of a call with analysts and investors will be held at 8:30 a.m. Eastern Time today to review the third quarter results at www.xlcapital.com.