quarter net operating earnings to be reduced by $125 million due to losses from two major windstorms in Europe.

XL said the losses hit three separate books of business, XL Mid Ocean Reinsurance Ltd, NAC Re International and Le Mans Re, which is 49 percent owned by XL.

Excluding the impact of the storm losses, XL said its fourth quarter earnings would have been consistent with analysts estimates. The net operating earnings were 97 cents per share, after tax. Analysts on average were forecasting XL to earn $1.19 per share, according to First Call/Thomson Financial.

"These are unusually large losses, by some accounts the worst in France for more than 400 years,'' said Brian O'Hara, president and CEO of XL Capital.

He was referring to the cyclone-force storms that raged across France in December. Mr. O'Hara, however, added the impact on XL is small relative to its capital base and will not adversely affect the company's financial condition.

"In fact, the widespread extent of these losses, which have been estimated will exceed $6 billion of insured damage, should serve notice that catastrophe reinsurance rates are inadequate and increases are warranted,'' said Mr.

O'Hara in a statement.

XL expects to announce fourth quarter and full-year 1999 results after the stock market close of trading on February 9, 2000.

Unusually large losses: XL Capital CEO Brian O'Hara.