XL Capital last night posted record first quarter 2006 income of $458.5 million, up 3.5 percent from $442.9 million in the same quarter 2005 on strong performance in all segments and strong investment returns.

Broken down, income fell to $2.56 per share in the first quarter of 2006 due to an increased number of shares outstanding, compared to $3.18 per ordinary share for the quarter ended March 31, 2005.

President and chief executive officer Brian M. O?Hara said: ?As we enter our 20th year, I am pleased to report record earnings for the quarter with solid results in each of our business segments, as well as very strong investment returns.?

Underwriting profit for general insurance operations was $64.7 million compared with $84 million in the prior year period with gross and net premiums written down seven percent and ten percent respectively.

Underwriting profit for reinsurance general operations was $84.9 million compared with $93.4 million in the first quarter 2005 with gross and net premiums written down 12 percent and 18 percent respectively. Income from reinsurance life and annuity operations jumped from $5 million in the first quarter 2005 to $14. 1 million in the first quarter 2006 on higher investment income from an increase in the asset base while gross premiums written increased ten percent to $99.6 million.

?Our lower P&C net premiums written is principally reflective of our previously announced corporate-wide risk management initiatives to maximise risk-adjusted returns and the concentration in the first quarter of European renewals that were impacted by lower property rates and foreign exchange movements. I believe we will see continuing robust P&C market conditions and returns as renewals proceed through the remainder of the year.?

Shares of XL Capital rose 13 cents to close at $66.06 on the New York Stock Exchange.