Shares of troubled Bermuda insurance giant XL Capital shot up 38 percent in early trading today after the company revealed third-quarter investment losses could top $1 billion.

In a statement issued this morning, the company estimated that its book value, as of September 30, was $21 to $22.50 — that's roughly half of what the company was worth three months earlier.

Yesterday, XL's shares hit an all-time low closing price of $4.01 after losing 54 percent of their value in a single trading session.

During a massive sell-off across the insurance sector, XL was particularly badly affected because of concerns over the quality of the company's investment portfolio and its exposure to asset- and mortgage-backed securities.

XL said it will announce preliminary third-quarter results next Tuesday morning and hold a conference call at 9.30 a.m. on the same day.

Chief executive officer Michael McGavick said: "We are determined to provide investors with the information they need to assess the value of XL's shares. I believe that the preliminary estimates we have provided today will assist in these efforts. The next time that we expect to be able to provide further meaningful financial information is early next week and I look forward to doing so on our call on Tuesday."

The market welcomed XL's announcement and shares shot up by $1.47 or 36.8 percent to $5.48 by 11.50 a.m. Bermuda time.