The XL Group announced significant income gains for both the fourth quarter of 2010 and for the full year. Net income attributable to ordinary shareholders in Q4 was $188.1 million, or $0.57 per ordinary share, compared to a loss of more than $40 million in Q4, 2010.
Xl’s net income for the year was $585.5 million, or $1.73 per ordinary share, compared to $206.6 million in 2009for the full year.
Operating net income, which excludes capital gains/losses, for the fourth quarter was $242.4 million, or $0.74 per ordinary share, slightly above the $217 million recorded in Q4, 2009. For the full year XL’s operating profit was $809.7 million, or $2.40 per ordinary share, a decrease from the $992 million it reported in 2009 for the full year.
Fully diluted book value per ordinary share as of December 31, 2010 was $29.78 an increase of 0.7 percent in the quarter and 21.1 percent from December 31, 2009. Full year return on ordinary shareholders’ equity based on operating net income was 9.0 percent
CEO Mike McGavick commented “XL’s fourth quarter results demonstrated progress in several key elements driving shareholder value. Our P&C operations’ 91.4 percent combined ratio benefited from outstanding performance from our Reinsurance segment, positive prior year development and sustained operating efficiency.
“We received our license to offer insurance in China and added experienced teams in lines we believe offer prospects for strategic growth.
“Our on-going risk management discipline resulted in our catastrophe losses being at the low end of the expected range, with only modest changes to our initial estimates for the New Zealand earthquake. We reduced exposures to non-core holdings, and we continued to return excess capital through share buybacks. We believe XL is in a solid position to meet the challenges of current market conditions and the opportunities that will come as conditions improve.”
The Company also announced that fourth quarter natural catastrophe losses include $23.3 million related to flooding in Australia. Based on preliminary data available, the Company’s first quarter losses related to flooding in Australia are expected to range between an additional $75.0 million and $95.0 million.
XL said its “estimates are based on its review of individual treaties and policies expected to be impacted and client data received to date. The Company’s loss estimates involve the exercise of considerable judgment and are accordingly subject to revision.”
Source: XL Capital