XL Capital Ltd almost tripled its second quarter 2006 income over income reported in the same period last year, reflecting solid underwriting, a lack of catastrophes and improved investment returns.

The Bermuda-based insurer and reinsurer last night posted income of $377.1 million, or $2.10 per share for the period ended June 30, 2006, compared with income of $135.9 million, or 97 cents per ordinary share, for the quarter ended June 30, 2005.

Operating income for the second quarter of 2006 was $375.8 million, or $2.10 per share, compared with $101.3 million, or 72 cents per share, for the prior year period.

XL was expected to make $2.09 a share, according to the average estimate of 19 analysts in a Thomson First Call survey.

Year-ago figures included a $186.3 million reserve strengthening for XL's North American Reinsurance operations and a charge of $63.3 million related to an increase in future policy benefit reserves and a write off of deferred acquisition costs with respect to certain novated blocks of US-based term-life mortality business.

Revenue declined 39 percent to $2.5 billion, from $4.12 billion, in the same quarter last year.

"The momentum generated with our first quarter's record results continued in the second quarter," president and chief executive Officer Brian M. O'Hara said.

He added that XL's risk management initiatives are under way and the initial public offering of Security Capital Assurance, XL's financial guaranty business, is on track.

"We remain committed to generating attractive returns and XL is well positioned to take advantage of the opportunities presented by current market conditions, he said.

XL shares closed at $66.44, down 6 cents on a volume of 995,000 shares on the New York Stock Exchange

XL CAPITAL LIMITED 2Q 06 REPORT CARD

Results for the quarter ended June 30, 2006 compared to the same period a year ago

Net Income: $377.1 million, a 178 percent improvement from $135.9 million in the second quarter last year

Net income broken down per share: $2.10 per share compared with 97 cents per share a year ago

Operating income: $375.8 million, a 271 percent improvement from $101.3 million in the same quarter a year ago

Gross premiums written general operations: $2.3 billion, a 42 percent decline from $4 billion in the year ago quarter

Net premiums written general operations: $1.9 billion, a 46 percent decline from $3.5 billion in the same period a year ago

Net investment income: $473.6 million, a 29 percent improvement from $367.4 million a year ago

l Combined ratio: 90 percent compared to 97.9 percent during the same period a year ago

l Shareholders' equity increased to $8.55 billion at June 30, 2006 compared to $8.47 billion at December 31, 2005