XL Capital expects to record a third quarter charge of $420 million after tax as a result of claims from recent hurricane activity.

But the company said on Friday that although the charge will adversely affect its third quarter and full year results, it will not materially affect the company?s overall financial condition.

Based on revised loss reports and estimates, XL Capital said it expects net claims arising from storm activity during the third quarter of 2004 will total approximately $450 million, up from an earlier prediction of $345 million.

This amount includes revised estimates for expected net claims related to Hurricanes Charley, Frances and Ivan of approximately $120 million, $80 million and $160 million, respectively and includes estimated net claims of approximately $90 million related to Hurricane Jeanne. XL said that net claims related to recent storms in the Pacific were not significant.

Of the $450 million in total expected net claims, approximately $260 million is expected to be attributable to the Company?s reinsurance segment with the remaining $190 million attributable to the Company?s insurance segment.

As of June 30, 2004, XL Capital Ltd had consolidated assets of approximately $45.5 billion and consolidated shareholders? equity of approximately $7.1 billion.

XL Capital is the latest in a line of Bermuda-based insurers and reinsurers to report on the costs of the recent hurricanes and typhoons.

A survey of those companies that have reported so far suggests that the season could cost Bermuda insurers and reinsurers around $2.5 billion.

Last Wednesday, Aspen Insurance Holdings Ltd. estimated the recent hurricanes will have a negative impact on its third quarter earnings of approximately $135 million, net of reinsurance and tax. It estimates losses from Typhoon Songda could reduce its third quarter earnings by $13 million, net of reinsurance and tax. Last Tuesday, ACE Ltd. said that its net catastrophe-related charges from the hurricanes and typhoons will be approximately $480 million pre-tax. The company will take a $400 million charge on its third quarter earnings as a result.

Axis Capital Holdings Ltd. also reported last week that it expects last month?s hurricanes to cut its earnings for the third quarter by up to $210 million.

And IPC Holdings Ltd. estimated that its quarterly earnings will be reduced by $100 million as a result of the four hurricanes that hit Florida and the Caribbean and two Pacific typhoons.