A.M. Best Affirms Ratings of XL Group plc, Its Property/Casualty Subsidiaries and XL Group Ltd.

OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of aaa ofthe property/casualty subsidiaries of the holding company, XL Group plc (XL) (Ireland) (NYSE: XL) led by XL Insurance (Bermuda) Ltd (Hamilton, Bermuda). Concurrently, A.M. Best has affirmed the ICR of abbba of XL and XL Group Ltd. (Cayman Islands) as well as all debt ratings for XL Group Ltd. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)

"A.M. Besta�s Ratings & the Treatment of Debt."

The rating affirmations reflect the organizationa�s excellent risk-based capitalization, strong worldwide market presence and the completed de-risking of the groupa�s investment portfolio. Although XL subsidiariesa� property/casualty operating results are unprofitable through the first six months of 2011 (with a combined ratio of 110% due to the worldwide catastrophes), the group averaged a favorable combined ratio of 92.3% for the previous five years. A.M. Best remains encouraged by the strategies implemented by the XL management team. These strategies are supported by an enhanced risk management program and a continued focus on underwriting as the key component of the groupa�s business approach. Managementa�s focus on its core underwriting strengths has been exhibited by the recent addition of a substantial number of new senior underwriters. Furthermore, as a result of XLa�s completed de-risking of its investment portfolio, the organization has successfully reduced the level of market volatility in its investment results, which for the past several years over shadowed the solid operating performance of its core businesses.

XLa�s debt-to-capital ratio is expected to remain in the 15%-25% range as capital is anticipated to be enhanced by strong earnings. The fixed charge coverage stabilized in 2010 and is expected to remain comparable with the current level over the near term.

Partially offsetting these positive factors is XLa�s exposure to large severity events and the current soft pricing stage of the underwriting cycle. Additionally, investment returns are expected to be muted by low interest rates and financial market variability.

The FSR of A (Excellent) and ICR of aaa have been affirmed for the following subsidiaries of XL Group plc:

XL Re Ltd
Indian Harbor Insurance Company
Greenwich Insurance Company
XL Insurance Company of New York, Inc.
XL Insurance America, Inc.
XL Select Insurance Company
XL Reinsurance America Inc.
XL Specialty Insurance Company
XL Insurance (Bermuda) Ltd
XL Re Latin America Ltd
XL Insurance Company Limited
XL Re Europe Limited
XL Insurance Switzerland, Ltd.

The following debt ratings have been affirmed:

XL Group Ltd.a"
-- abbba on $600 million 5.25% senior unsecured notes, due 2014
-- abbba on $350 million 6.375% senior unsecured bonds, due 2024
-- abbba on $325 million 6.25% senior unsecured notes, due 2027
-- abb+a on $1.0 billion Series E non-cumulative preference shares, redeemable 2017

XL Capital Finance (Europe) plc (guaranteed by XL Company Switzerland GmbH)a"
-- abbba on $600 million 6.5% senior unsecured notes, due 2012

The following indicative ratings on shelf securities have been affirmed:

XL Group Ltd.a"
-- abbba on senior unsecured
-- abbb-a on subordinated
-- abb+a on preferred stock

XL Capital Finance (Europe) plc (guaranteed by XL Group Ltd)a"
-- abbba on senior unsecured

The principal methodology used in determining these ratings is [ Besta�s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta�s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: aUnderstanding BCAR for Property/Casualty Insurersa; aRating Members of Insurance Groupsa; aNatural Catastrophe Stress Testa; aRisk Management and the Rating Process for Insurance Companiesa; aUnderstanding Universal BCARa; and aA.M. Besta�s Ratings & the Treatment of Debt.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].

Contributing Sources

Market Wire

N@N

A.M. Best Affirms Ratings of XL Group plc, Its Property/Casualty Subsidiaries and XL Group Ltd.