A lot of money rides on the weather. Just ask insurance operator XL Capital (NYSE:XL), which posted a $1.5 billion loss because of massive hurricane activity in 2005. Yet the following year, it made a profit of $1.7 billion, as the weather stayed friendly. It's enough to get some investors queasy ... but not our 31,000-plus rated investors participating in the Motley Fool CAPS community. CAPS players have awarded XL with a five-star CAPS rating -- the best possible.

Why the bullishness? Let's take a look.

CAPS pitches
CAPS member weiwentg, with a CAPS rating of 87.50, notes that the company "writes mainly long-tail insurance, which is insurance for liabilities that take a long time before they become known to the insured and are reported as claims. This makes for high reserve uncertainty, but allows them to hang on to and invest those reserves for longer periods."

And from CAPS member NetscribeInsuran: "The financial position of the company looks excellent with a solid return on equity, and its interest rate sensitivity completely diversified among U.S, U.K., and other European markets. It is trading at an attractive price with a lower book value [than] its peers."

My take
In fiscal Q1, XL posted a 20% increase in net income and operating earnings of $3.03 per share. The book value is $54.95 per share, which translates into a fairly conservative 1.5 multiple.

Like big insurance peers Markel (NYSE:MKL), W.R. Berkley (NYSE:BER), and AXIS Capital (NYSE:AXS), XL has benefited from mild weather. But if the hurricane season gets active this year, there could be trouble. Read this Foolish article to see how insurers have prepared for the next big storm.

Do you agree with our CAPS community about XL? Let us know.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 1,831 out of more than 31,000 ranked investors in CAPS.