Bermuda-based business insurer XL Capital Ltd. has been the year's best performer on the Standard & Poor's 500 Index in terms of percentage rise.

Up until yesterday's close of trading, XL had risen an astounding 406 percent in this year's trading on the New York Stock Exchange.

The company bounced back from a dismal 2008, during which it recorded a net loss of some $2.6 billion.

Most of the losses emanated from the expensive deal the company struck to extricate itself from reinsurance contracts and guarantees relating to Security Capital Assurance. The bond insurer, now known as Syncora Holdings, which was spun off by XL, had suffered badly from the impact of the sub-prime mortgage crisis.

Credit-exposed elements of XL's investment portfolio also suffered some hefty blows as the credit crisis strengthened its grip. Its problems meant the company ended last year with a share price of $3.70, after both S&P and Fitch lowered its financial strength rating from A+ to A.

Even the takeover rumours swirling around XL did not help to boost its share price, which fell to $2.67 on February 4.

Chief executive officer Michael McGavick, who succeeded Brian O'Hara in May 2008, has spearheaded efforts to trim expenses and "de-risk" the company's investment portfolio.

The global workforce was cut by about 10 percent and XL also slimmed down its book of business, especially in life and reinsurance areas.

This year the company has achieved operating profitability and has additionally benefited from the spectacular rebound in the financial markets, as its book value surged 35 percent through the first nine months of the year.

Yesterday, XL was trading at $18.74. that meant that anyone who invested $10,000 in XL at its 2008 closing price would now own a stake worth $50,648, as well as having received $1,080 in dividends.

Based on yesterday's closing prices, hospital operator Tenet Healthcare Corp. was the second highest climber in the S&P 500, (362 percent) and Ford Motor Co. third (332 percent).