(superior) from A (excellent).

The rating reflects the group's strong market position as one of the top providers of excess liability insurance coverage to Fortune 1000 companies around the world.

"The group specialised in providing large policy limits on general liability, directors and officers, and professional liability insurance, along with specialty reinsurance products to large and complex business risks,'' Best said.

The rating action applies to XL Insurance Company, Ltd., XL Europe Insurance, and XL Reinsurance Ltd.

"The group markets its products through all the major insurance brokers and is based out of the tax-efficient market of Bermuda, with another office in the important international insurance centre of London.'' The rating also reflects a "strong management team, successful business diversification strategies and strong balance sheet.'' At November 30, EXEL has over $2 billion in stockholders' equity supporting $600 million in writings. Loss reserves are over $2 billion.

Best added: "The group maintains strong financial flexibility, with no outstanding debt, significant cash liquidity -- including a large line of credit -- and is publicly traded with good valuation levels on the New York Stock Exchange.

"Management's initiatives have further positioned the group to take advantage of acquisitions and other market opportunities that will lead to stronger long term relationships with clients and make the company less vulnerable to competition.'' Best, which views the rating outlook as stable, said the group "has developed a large business franchise for large, sophisticated buyers of insurance requiring large limits of liability insurance over significant self-insured layers.'' Best also said that EXEL, over the past five years, has averaged an annual premium growth rate of 12 percent, retained about 90 percent of its insureds, and generated outstanding underwriting results, with an average combined ratio of 93 percent due to focused and disciplined underwriting.