This summary is based on the fourth quarter fiscal 2007 earnings call conducted by XL Capital. (XL: chart) on February 6, 2008.

Management:

- Acting Chairman, President and CEO: Brian O Hara
- EVP and CFO: Brian Nocco
- EVP and Chief Investment Officer: Sarah E. Street
- EVP and COO: Henry CV Keeling
- Director of IR: David R. Radulski

Key Investors Issues

- Net loss was $1.06 billion, $6.01 per share, down from net income of $471.1 million, or $2.62 per share in 2006.
- Revenues fell 24% to $1.9 billion from $2.5 billion in the prior year.
- Announced the acquisition of GAP, a leading provider of loss prevention services

Full Year Highlights:

- Net income dropped 79% to $360.4 million, or $2.01 per share, compared with $1.72 billion, or $9.60 per ordinary share in the prior year.
- Revenues were down 7% to $9.1 billion.
- Cash and cash equivalents amounted to $3.88 billion.

Fourth Quarter Highlights

Net loss was $1.06 billion, $6.01 per share, down from net income of $471.1 million, or $2.62 per share in the prior year, impacted by credit market related charges stemming from losses and write downs totaling $1.5 billion.

- Book value was $51.16 per share reflecting write down on the carrying value of the firm’s share of SCA to their year-end market value of $3.89 per share or $117 million.
- Net realized losses on investments of $471 million, was driven by charges for other than in temporary impairment of $416 million.
- There are four main categories of OTTI charge, $206 million was on the topical securities, of which $76 million were in the asset-backed CDO and $67 million was on the second-lien securities.
- Secondly, the firm took a $57 million of charges related to lower rated structured credit principally reflecting large price deteriorations in certain lower grade jumbo securities.

Revenues decreased by 24% to $1.9 billion from $2.5 billion in the prior year as on net losses from investments.

- The company took $37 million mark-to-market charge related to a safe capital note, and recognized OTTI of $57 million representing a full write-down of the capital note held in that safe.
- The remaining OTTI amount reflects charges associated with potential portfolio restructuring, meaning the firm is unlikely to hold certain securities until full recovery.
- Declining government rates in the US and the UK possibly impacted on net unrealized position.
- The net unrealized loss position also declined as the firm realized losses with income statement though these movements were more than offset by the impact of wider corporate and structured credit spreads.

Total net investment income was $561 million, with $327 million from the primary P&C operation excluding structured products and $1.3 billion representing growth of 15% largely due to high yield in early 2007.

- Net income from investment from affiliate was $71 million driven by an exceptional 4.4% return in the alternative portfolio.
- Net loss from investment manager affiliates was $10 million, which included a full write down of investment in serious capital.
- Total operating expenses of $287 million were lower than last year and consistent with prior years, a portion of the performance-based compensation was held at the corporate level until the fourth quarter when it was allocated to the businesses.
- This allocation contributed to an increase in the expense ratios of the segments while correspondingly reducing corporate-level operating expenses.

The foreign exchange gain of $39.7 million was due primarily to the continued strengthening of the euro.

- The company repurchased 1.78 million ordinary shares at an average price of $69.81 per share and paid a dividend 38 cents per share.
- The firm’s strategy of building a global insurance and reinsurance platform has been achieved by acquisitions in Europe and North America.
- This platform and its profitability could not have been built organically, but not withstanding charges related to the acquisitions, these investments have contributed both to the strong underlying performance of the franchise and to the firm’s ability to deliver on the strategy of book value growth for the future.
- With respect to SCA, the firm has taken a measured and analytical approach to its exposure to and interest in SCA in order to best protect its economic interest and that of shareholders.

Ratings Downgrade:

- S&P reaffirmed the firm’s A+ or strong rating, Amvest downgraded the firm one notch to A or excellent, Fitch to A plus and Moody''s to A1, all outlooks remain stable.
- These downgrades were principally attributed to earnings volatility, and the firm is working to address rating agencies’ concerns and minimizing any impact on the business.

Activity and Results Within the Investment Portfolio:

- There was continued pressure on fixed income market driven by concerns over losses in residential mortgages as well as investor nervousness and issues in the short term funding market, driving the $471 million net realized losses.
- The firm continues to closely monitor its holdings in all of the topical asset classes which it considers to be sub prime, Alt-A, second lien and asset back CDOs with sub prime exposure.
- In addition to the extensive security level reviews with third party managers, the company has undertaken an independent evaluation of topical assets to help identify further areas of potential economic loss to principal.