XL sees off rumours

XL’s public declaration had a spectacular and immediate impact on its share price which rose 35% on the day and more than doubled over the next two trading days. Preliminary statements followed from a number of other Bermudian companies -but none revealed any losses that were not already known or exceptional given the state of financial markets and the scale of catastrophe losses during the quarter

A collapsing share price inspired by rumours of large investment losses was what prompted XL Capital to make an exceptional statement about its financial position on 10 October. Chief executive Mike McGavick readily acknowledged this during XL’s third quarter conference call last Tuesday.