XL Cuts 10% of Staff, Slashes Dividend After Loss (Update1)

By Hugh Son and Andrew Frye
Bloomberg News
February 10, 2009

Feb. 10 (Bloomberg) -- XL Capital Ltd., the Bermuda-based business insurer, is cutting 10 percent of its staff and slashing the dividend by 47 percent after posting a second straight loss on investment declines.

The fourth-quarter net loss of $1.42 billion widened from a deficit of $1.21 billion in the year-earlier period, the insurer said today in a statement distributed by PR Newswire.

XL joins insurers including Hartford Financial Services Group Inc. and Genworth Financial Inc. in dismissing employees after investment losses depleted capital. North American insurers have slashed more than 4,000 jobs since the end of September. XL had 4,011 employees as of Dec. 31, 2007, according to a regulatory filing last year.

"No one is happier to see 2008 behind us or more excited to have 2009 before us than we are at XL," said Chief Executive Officer Michael McGavick in the statement. "2008 has been the toughest year in XL's history."

XL shares have dropped 22 percent this year after plunging 93 percent in 2008.

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