XL Capital last night reported a fourth-quarter profit of $288 million, or $2.07 per share. Last year the Bermuda-based company recorded a loss of $318.4 million, or $2.29 a share.

Excluding realised investment gains and losses, profit was $194.4 million, or $1.40 per share. Analysts in a Thomson First Call survey were expecting profit of $1.43 a share, on average.

Full year net income was a record $1,126 million, or $8.13 per share, compared with $371.7 million, or $2.69 per share for the prior year.

Excluding net realised gains and losses, profit for the full year 2004 was also a record at $816.7 million, or $5.89 per ordinary share, compared with $293.6 million, or $2.12 per ordinary share for the full year 2003. The 2004 fourth quarter net income includes a previously announced charge related to the tsunami in the Indian Ocean and an increase in expected losses from the third quarter 2004 hurricanes of $138 million, after-tax, or 99 cents per ordinary share.

Net premiums written from general operations increased six percent to $1.3 billion in the fourth quarter of 2004. The combined ratio from general operations was 95.8 percent. Net investment income increased 35 percent to $278.4 million. Cash flow from operations was $1.3 billion.

?XL?s fourth quarter results continued the solid underlying performance we delivered throughout the year, with a combined ratio, excluding the impact of the Indian Ocean tsunami and an increase in expected losses from the third quarter 2004 hurricanes,? President and Chief Executive Officer Brian M. O?Hara said, ?eighty-seven percent and healthy year-over-year increases in net invested assets, cash flow from operations, net investment income and book value per ordinary share.?

For the full-year ended December 31, 2004, net premiums written from general operations increased 11 percent to $7.3 billion. The combined ratio from general operations was 96 percent.

Excluding hurricane and tsunami losses, the combined ratio was 87.6 percent. Net investment income increased 28 percent to $995.0 million. Cash flow from operations was $4.37 billion. Book value per ordinary share was $51.98, up 11 percent from December 31, 2003

Mr. O?Hara said: ?Full year 2004 net income of $1,126 million and net income excluding realised gains and losses of $816.7 million were both records.

?Taking into consideration the fact that we incurred over $550 million, after tax, in catastrophe-related losses during the year, these results are a testament to the underlying earnings strength of XL.?

XL introduced a number of strategic initiatives during 2004 including launching a global whole account commercial property program, a primary Directors and Officers liability product in Europe and the start-up of XL?s US primary casualty operation.

Mr. O?Hara said in the company?s earning statement yesterday: ?These initiatives together with our core competitive advantages of global presence, leading product expertise and financial strength, enable us to further differentiate our performance for our customers and shareholders going forward.?

With respect to the post-closing seasoning process with Winterthur Swiss Insurance Company, as contemplated in the amended sale and purchase agreement relating to XL?s acquisition of Winterthur International, on February 3, 2005, both XL and Winterthur submitted their amounts for the independent valuation determination process.

XL?s submission would result in a net payable to XL of approximately $1.45 billion in aggregate and Winterthur?s submission would result in a net payable to XL of approximately $541 million in aggregate.

XL described the independent valuation determination process yesterday, as a ?baseball-type? process, ?whereby either XL?s submitted number or Winterthur?s submitted number will be the actual final seasoned amount, depending upon which number is closest to the number developed by the independent actuarial valuation?.

Mr. O?Hara said: ?XL?s submission was developed with the support of various leading, third-party actuarial and claims advisors and we are confident in our submission.?

He will discuss the process further in today?s earnings call.