formed a new unit, Element Re, to provide weather risk management insurance, reinsurance and financial products.

Led by Chief Executive Officer Jeffrey Bortniker and President and Chief Operating Officer Lynda Clemmons, Element Re will offer customers a range of non-catastrophic weather risk mitigation products designed to protect against the negative impact that normal weather fluctuations can have on the financial performance of companies operating in a variety of industries.

Rounding out Element Re's team of professionals are Executive Vice Presidents Michael Corbally (in the UK) and Martin Malinow, and Coi Dang, Vice President.

Element Re will be an integral part of XL Financial Products and Services headed up by Robert Lusardi, the unit's Chief Executive Officer.

"Until now, businesses have had a limited choice in terms of how they managed their weather-related risk -- to date, derivatives have been the primary mechanism,'' said Mr. Bortniker.

"We have identified a growing demand for weather protection in insurance form, something that is more appealing to corporations around the world.'' "Initially, energy and utility companies were the primary market for weather-related risk management products,'' said Lynda Clemmons. "But that's changing as companies from far-ranging sectors including agriculture, construction, retail, transportation and entertainment realise the effects weather can have on the bottom line.'' Element Re's management team has extensive experience in weather risk mitigation instruments. They previously formed the core of the weather derivatives group at Enron North America where they were instrumental in the initial development of the weather risk market.

"Increasingly, our customers have been looking for sophisticated insurance and financial solutions to their weather risk management challenges. Element Re presents an opportunity to leverage the capital markets experience of the principals with the financial and organisational strength of XL Capital to provide these solutions,'' stated Robert Lusardi.