"A'' to XL Insurance Company Ltd. (Bermuda) and XL Europe Insurance (Ireland), subsidiaries of Bermuda-based liability carrier, EXEL Ltd.

The agency reported that the ratings reflected the group's excellent operating performance, outstanding balance sheet liquidity and superior capitalisation.

The ratings further acknowledge, said Best, that the companies have attained leading market positions as writers of excess general and professional liability coverages.

Mr. Brian O'Hara, president and CEO of EXEL Ltd. commented: "I am very pleased with these initial ratings. They reflect the company's excellent performance and financial strength.'' Best acknowledged the Bermuda insurer mainly served the US market, while the Dublin-based subsidiary serves Europe. The Bermuda company cedes about 75 percent of its gross business to its parent.

The ratings agency cautioned: "These positive rating factors are partially offset by the uncertainty associated with the group's relatively short existence -- it began in 1986 -- and its very limited loss emergence history.

Loss experience is expected to be low in frequency but high in severity.'' But they said the EXEL group continued to produce superior underwriting results, generating a combined ratio that has hovered around 90 over the last five years, outperforming most other insurers.

Best also noted that the group's long-term profitability is outstanding, as evidenced by a five year pretax return on revenue of nearly 50 percent, which is many times the comparable returns generated by its peers.