XL Capital today reported a fourth-quarter loss of $1.06 billion after it took a battering from its exposure to the sub-prime mortgage crisis.

The global business insurer took a $1.5 billion charge “related to credit market conditions”, more than $900 million of which was related to its involvement with bond insurer Security Capital Assurance, in which XL owns a 46-percent stake.

However, XL was able to post a $360.4 million full-year profit for 2007.

Fellow Bermuda insurer Ace Ltd. announced today that it had made record full-year profits of more than $2.5 billion, although its fourth-quarter profit was down 14 percent at $572 million.

Read the full story in tomorrow's Royal Gazette Business section.