XL entered the excess property insurance field earlier this year in anticipation of a continued shrinking of capacity stemming in the property casualty business.

And it believes that market forces will create the environment it needs to acquire much more property business.

Mr. Brian O'Hara, president and CEO, said: "Property losses from the earthquake are estimated to approach some $6 billion. That is a subtantial increase over the first estimates of $1 billion to $1.8 billion.

"It is expected to hurt Southern California companies and others which have concentrated on earthquake coverage. People are having much larger losses than expected, even though it was a relatively small earthquake.'' Mr. Art Liebelt, senior vice president, property, said: "There have also been flood losses and losses from the freezing weather, and it still is early in the year. The hurricane season is yet to arrive.'' Mr. Liebelt is the senior underwriter in the property department, having just joined XL this year, after retiring as chief underwriter for Cigna Worldwide.

Mr.

O'Hara said it is expected that the capacity will tighten and an upward pressure could be put on premiums.The company sees a future in the excess property insurance field writing high-layer risks for large commercial accounts.

They see a growing demand from their customers who were faced with shrinking capacity. The company said that because it has strong relationships with their clients and brokers in the excess liability and directors and officers liability fields, XL is in a unique position to offer the new coverage and add considerable value to the products and services already provided to insureds.

XL's first two excess property policies were brokered through Johnson and Higgins (Bermuda) Ltd.

"If we expect to offer a $100-million capacity on an individual risk, that should be significant,'' Mr. O'Hara said.

XL is involved in insuring 600 major corporations in the world for mostly general liability and for some directors and officers. Eighty of those firms are in the top 500 globally. They are the firms that the company is expecting to draw on for the excess property market business.

XL has assets in excess of $3.6 billion and shareholders' equity approaching $2 billion.

HOT PROPERTY -- Officials from XL and brokers Johnson & Higgins this week marked the binding of the first contracts utilising XL's new excess property cover programme. From left, Mr. Art Liebelt, sneior vice president, property XL, Mr. Jeff Alpaugh, account executive at J&H ; Mr. John Goldberg, managing director of J&H, Mr. Brian O'Hara, president of XL and Mrs. Josie Richardson, broker at J&H.