XL Capital Ltd. plans to raise an estimated $2.8 billion in new capital through two equity offerings.
The Bermuda-based property-casualty insurer and reinsurer will sell about $2.15 billion in ordinary shares and raise another $650 million from an offering of equity security units.
In addition to the $1.5 billion in after-tax losses the company incurred in the third quarter from catastrophes, XL must also contend with an unfavorable arbitration award in connection with its 2001 acquisition of Winterthur Swiss Insurance Company.
That award should result in a net charge of $830 million in the fourth quarter, XL Chief Executive Officer Brian O'Hara said Monday. Yesterday, the company said it incurred pre-tax losses of about $210 million from Hurricane Wilma.
A.M. Best put the company's ratings under review with negative implications in September after the extent of its catastrophe losses became clear.
Best said it will review XL's capital program, as well as its quota share agreement with a newly formed Bermuda reinsurer, Cyrus Re, with regard to some of the group's property catastrophe and retrocessional exposures in the coming months.
Meanwhile, in other action, XL announced that its insurance subsidiary, XL Insurance, will add an excess and surplus unit to its operations.
"This is a natural evolution for XL Insurance operations," said CEO Clive Tobin. "Our Bermuda and Dublin origins very much reflect an E&S culture."
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