XL Capital Ltd. chief executive officer Michael McGavick said yesterday that the insurer's business retention rates are in line with previous years — after three ratings agencies last week downgraded the company, partly over concerns over potential loss of clients.

In prepared comments made in meetings with brokers and clients, Mr. McGavick said last week's ratings actions "remove a significant uncertainty surrounding our company".

Following a report on Bloomberg last week that claimed the Bermuda-based company was "seeking a buyer", Mr. McGavick stressed that XL was "financially and operationally positioned to deliver for its customers as an independent company" and did not need to raise capital at this time.

The comments were laid out in a regulatory filing to the Securities and Exchange Commission yesterday morning.

"Plain and simple: XL remains a financially strong, successful and independent franchise," Mr. McGavick told brokers and clients. "We thank you for your support and your business. We are pleased that you — and each of the major brokers — have recognised our financial strength and maintained us on their approved list of insurers.

"This is reflected in the fact that in Europe — where the core renewal date for the insurance business is January 1 — our retention rate is tracking well with prior years. And across the insurance segment our retention rates through November are in line with or ahead of rates for previous years.

"For the reinsurance segment, we are hard at work on our January 1 renewals. Submission levels are high, and we are encouraged by strengthening market conditions, particularly in the short-tail lines."

Last week's ratings action leave XL's financial strength rating at A (excellent) with both Standard & Poor's and AM Best, A (strong) with Fitch, and A2 (good) with Moody's and "place us within the range of many of our peers in the current difficult financial markets", Mr. McGavick said.

The CEO said XL had formally submitted its request for a licence to the Chinese regulators, had streamlined its insurance operations into a single platform and was exploring potential opportunities in Brazil in its joint venture with Banco Itau, in light of its recently announced merger with Unibanco and the buyout by Unibanco of its JV partner, AIG.

"Our confidence is based on several factors: our strong capital, our resilient franchise, our reputation for customer service and the steps we have taken and will continue to take to de-risk our portfolio and enhance our enterprise risk management," Mr. McGavick added.