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Total operating expenses, excluding the Catlin related integration costs, are generally split across the Company, with approximately 70% allocated to the Insurance segment (including costs associated with GAPS), 15% allocated to the Reinsurance segment and 15% included within Corporate and Other.  Based on XL’s current operating model, the Company expects the percentage of total operating expenses allocated to Corporate and Other to decline by approximately 1 to 2 percentage points in 2017 as existing infrastructure projects are completed and the associated costs are allocated to the Insurance segment or Reinsurance segment.

•	The Company anticipates that approximately 24% of its total operating expenses will be incurred in British Pounds and approximately 7% of its total operating expenses will be incurred in Euros.

•	Variable compensation costs typically represent approximately 15-20% of total annual operating expenses.

•	Estimated total operating expenses for each of 2016 and 2017 includes approximately $20 million per year of expenses related to the Company’s acquisition of Allied International Holdings, Inc. that closed on February 1, 2016.

•	changes in the size of our claims relating to unpredictable natural or man-made catastrophe losses, such as hurricanes, typhoons, floods, nuclear accidents or terrorism, due to the preliminary nature of some reports and estimates of loss and damage to date.

•	the continuation of downward trends in rates for property and casualty insurance and reinsurance;

•	the impact of fluctuations in exchange rates and the impact of such fluctuations on our expenses and revenue;

•	the actual results of our business and the impact such results may have on variable compensation arrangements;

•	changes in the amount or type of business that we write, including the geographic locations where such business is written, whether due to our actions, changes in market conditions or other factors, and the amount of premium attributable to those businesses, which could cause future results to differ materially from historic results;

•	the effects of mergers, acquisitions and divestitures, our ability to modify our internal controls over financial reporting, changes to our risk appetite and our ability to realize the strategic value or financial benefits expected, in each case, as a result such transactions;

•	unanticipated costs related to mergers, acquisitions and divestitures, including costs associated with consolidation of corporate support areas and other employees and the failure or delay in achieving anticipated synergies;

•	the availability, cost or quality of ceded reinsurance, and the timely and full recoverability of such reinsurance, or other amounts due to us, or changes to our projections relating to such recoverables;

•	increased competition on the basis of pricing, capacity, coverage terms or other factors, such as the increased inflow of third-party capital into reinsurance markets, which could harm our ability to maintain or increase our business volumes or profitability;

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the impact of changes in the global financial markets, such as the effects of inflation on our business including on pricing and reserving, changes in interest rates, credit spreads and foreign currency exchange rates and future volatility in the world's credit, financial and capital markets that adversely affect the performance and valuation of our investments, future financing activities and access to such markets, our ability to pay claims or our general financial condition;

•	our ability to successfully implement our business strategy;

•	changes in credit ratings or rating agency policies or practices, which could trigger cancelation provisions in our assumed reinsurance agreements or an event of default under our credit facilities;

•	the potential for changes to methodologies, estimations and assumptions that underlie the valuation of our financial instruments, that could result in changes to investment valuations;

•	unanticipated constraints on our liquidity, including the availability of borrowings and letters of credit under our credit facilities, that inhibit our ability to support our operations, including our ability to underwrite policies and pay claims;

•	changes in regulators or regulation applicable to us, including as a result of the completion of our proposed redomestication from Ireland to Bermuda, such as changes in regulatory capital balances that our operating subsidiaries must maintain, or to our brokers or customers;

•	the effects of business disruption, economic contraction or economic sanctions due to unpredictable global political and social conditions such as war, terrorism or other hostilities, or pandemics;

•	the actual amount of new and renewal business and acceptance of our products and services, including new products and services and the materialization of risks related to such products and services;

•	changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers;

•	bankruptcies or other financial concerns of companies insofar as they affect P&C insurance and reinsurance coverages or claims that we may have as a counterparty;

•	the loss of key personnel;

•	changes in general economic conditions, including the impact of the withdrawal of the U.K. from the E.U., should it occur, new or continued sovereign debt concerns in Euro-Zone countries or emerging markets such as Brazil or China, or governmental actions for the purpose of stabilizing financial markets;

•	changes in applicable tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof;

•	judicial decisions and rulings, new theories of liability or emerging claims coverage issues, legal tactics and settlement terms; and

•	the other factors set forth in Item 1A, "Risk Factors," included in our Annual Report on Form 10-K for the year ended December 31, 2015 and our other documents on file with the SEC.

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By:	/s/ Kirstin Gould

Name:	Kirstin Gould

Title:	General Counsel and Secretary