Brian O'Hara, President and Chief Executive Officer of XL during a conference call underscored the fact that the company had recorded its second highest level of quarterly net income ever. A number exceeded only by the first quarter.

"Our strategic plan is leading to competitive advantage," he said.

Mr. O'Hara said the results came from a global diversified platform, significantly expanded product capabilities and focus on improving penetration of existing customer relationships.

In a company statement, he said the company's general operations combined ratio of 87.6, an improvement of 4.6 points over the comparable period, showed underwriting discipline "and continued solid market fundamentals, despite increasing competition in certain product lines."

"Our life and annuity operations continue to gain critical mass. During the quarter we completed a single premium annuity reinsurance transaction, representing $898 million in up-front premium, with a major U.K. life insurance company. This was the fourth transaction with up-front premium in excess of $500 million that we have completed since entering the business in 1999."

"We continue to deliver strong returns to shareholders, with net income return on ordinary shareholders' equity for the quarter of 21.7 percent, and 18.4 percent excluding net realized gains and losses on investments and net realized and unrealized gains and losses on credit and investment derivative instruments, net of tax," said Mr. O'Hara.

For the six months ended June 30, net income available to ordinary shareholders increased 39 percent over the year ago period to a record $815.8 million, or $5.88 per ordinary share.

Net income excluding net realized gains and losses on investments and net realized and unrealized gains and losses on credit and investment derivative instruments, net of tax for the same period increased 23 percent to $637.7 million or $4.60 per ordinary share.

Net premiums written from general operations increased 24 percent to $1.7 billion.

Net investment income increased 23 percent to $235.2 million.

Cash flow from operations of $1.4 billion, or $1.9 billion including structured and spread transactions

Total net invested assets of $28.5 billion, were up 12 percent from Dec. 31, 2003.