Moody's Investors Service last night said it may downgrade Bermuda-based business insurer XL Capital Ltd. because of estimated $1.6 billion to $1.7 billion in quarterly losses.

Moody's has a Baa1 senior debt rating on XL Capital and an A1 insurance financial strength rating on the company's insurance operating subsidiaries. About $5.2 billion of securities are affected by the ratings.