credit and financial strength ratings on XL Insurance Ltd. and XL Europe Ltd., its wholly owned subsidiary.

The agency said that for both divisions of the Bermuda-based XL Capital, the outlook is stable.

Standard & Poor's said it considers XL Insurance (XLI) a core insurance subsidiary and the main support for the earnings and capital structure of its parent, XL Capital Ltd.

The agency said: "In addition, XLI continues to generate very strong operating and underwriting results while maintaining extremely strong liquidity and balance-sheet strength.'' But Standard & Poor's noted a down-side: "These positive factors are moderately offset by XL Capital's aggressive capital and investment management strategies, which remain intertwined with XLI's financial results.

Standard & Poor's said the ratings also reflect XL Capital's continuous restructuring efforts to recreate its (re)insurance segments.

Ratings affirmed Over the last three years, XL Capital has changed its and XLI's structure from that of a predominantly mono-line insurer to that of a formal financial service organisation at an aggressive yet methodical pace.

The purchase of Winterthur International Ins. Co. Ltd. and Winterthur International Reinsurance Co. Ltd. has left both on credit watch with developing implications, according to the agency.

Ratings affirmed Over the last three years, XL Capital has changed its and XLI's structure from that of a predominantly mono-line insurer to that of a formal financial service organisation at an aggressive yet methodical pace.

The purchase of Winterthur International Ins. Co. Ltd. and Winterthur International Reinsurance Co. Ltd. has left both on credit watch with developing implications, according to the agency.