MIGA Signs Treaty Reinsurance Agreement with XL and ACE: Further Increases in Insurance Coverage to Meet Growing Demand

MIGA Signs Treaty Reinsurance Agreement with XL and ACE: Further Increases in Insurance Coverage to Meet Growing Demand

Washington, D.C., February 22, 1999 — The Multilateral Investment Guarantee Agency (MIGA) today announced the signing of treaty reinsurance agreements with two Bermuda-based private insurance companies, XL Insurance Company Ltd (XL) and ACE Bermuda Insurance Limited (ACE). The agreements will substantially increase the availability of insurance coverage for foreign investments in developing countries.

The agreements build on an earlier agreement signed in 1997 between MIGA and ACE. The agreement with ACE was groundbreaking in the political risk insurance industry, in terms of being the first time a private insurer provided long-term (up to 20 years) reinsurance to a public insurer. Under the new agreement, ACE and XL separately provide treaty reinsurance to MIGA.

The agreements provide major increases in MIGA's per project and country limits. Under the new agreements, ACE and XL will each reinsure $50 million per project and $150 million per country. As a result of the new agreements, MIGA's limits per project and per country will increase to $200 million and $620 million, respectively. Additional amounts of coverage can be mobilized through MIGA's Cooperative Underwriting Program and other forms of coinsurance and facultative reinsurance with private insurers.

Mr. Motomichi Ikawa, Executive Vice President of MIGA, expressed his enthusiasm with the new agreement: "The agreements with ACE and XL extend MIGA's close ties with the private insurance marketplace. The treaty testifies to the benefits of close and continued cooperation between insurers in extending insurance coverage to client investors. I look forward to working with XL, and to continuing MIGA's successful cooperation with ACE ."

Mr. Brian O'Hara, Chairman and Chief Executive Officer of XL Capital Ltd, welcomed the joint agreement with MIGA. "We take great pride in establishing a close relationship with MIGA, which we believe is the most prestigious provider of political risk worldwide. Also we are pleased that this relationship continues the symmetry of developing our political risk capabilities with ACE," he concluded.

Mr. Brian Duperreault, Chairman and President of ACE Limited, commented on the successful relationship with MIGA since ACE signed a treaty reinsurance agreement with the Agency in 1997. "I welcome this extension of our collaboration with MIGA and XL's participation in this initiative," he said.

MIGA, created in 1988, is the private insurance company of the World Bank. It provides political risk insurance to investors, to promote the flow of foreign direct investment in developing countries. MIGA's guarantee program has issued US$4.6 billion in insurance covering approximately US$27 billion in foreign direct investment in 63 developing countries. - continued on page 2

The ACE group of companies provides insurance and reinsurance for a diverse group of international clients. Operating subsidiaries are based in Bermuda, the United States, the United Kingdom (Lloyd's) and the Republic of Ireland. At December 31, 1998, ACE Limited had approximately $8.8 billion in assets and $3.9 billion in shareholders' equity. On January 12, 1999, ACE Limited agreed to acquire the international and domestic property and casualty businesses of CIGNA Corporation (NYSE:CI) for $3.4 billion in cash. The transaction, subject to receipt of necessary regulatory approvals and customary closing conditions, is expected to be completed by the end of ACE's fiscal year 1999 third quarter, in June.

XL Capital Ltd, through its wholly-owned subsidiaries and divisions, including XL Insurance Company Ltd., XL Mid Ocean Reinsurance Company, Ltd., XL Capital Products, and The Brockbank Group plc, provides insurance and reinsurance coverages and financial products worldwide. As of November 30, 1998, XL Capital Ltd had assets of $10.1 billion and shareholders' equity of $4.8 billion.