The XL Group announced from its Dublin, Ireland headquarters that net income for the first quarter of 2014 was $255.7 million, or $0.91 per share, for the quarter on a fully diluted basis, compared to $350.79 million in Q1 2013.
Operating net income was $238.6 million, or $0.85 per share, compared to $279.868 million in Q1 2013.
The P&C combined ratio wasf 89.7 percent for the quarter, compared to 87.7 percent in the prior year quarter.
XL said it had “natural catastrophe pre-tax losses, net of reinsurance and reinstatement premiums, in the quarter of $17.2 million,” compared to $4.0 million in the prior year quarter.
“Annualized operating return on ordinary shareholders’ equity excluding and including unrealized gains and losses on investments were 10.4 percent and 9.4 percent, respectively, for the quarter.
“Fully diluted tangible book value per ordinary share3 of $35.30 at March 31, 2014, an increase of $1.44, or 4.3 percent, from December 31, 2013. Share buybacks totaled 5.8 million ordinary shares for $175.0 million during the quarter.
CEO Mike McGavick commented: “In the first quarter of 2014, XL produced one of the best quarters since the end of 2008. These results included a total P&C combined ratio of 89.7 percent, total underwriting profit of $145 million, and a loss ratio of 58.9 percent — all of which demonstrate our continued broad-based improvement.
“This performance also included Insurance segment underwriting profit of $45 million and an Insurance accident year ex-cat combined ratio of 94.6 percent in the quarter. And the 76.3 percent combined ratio for Reinsurance is particularly satisfying given the difficult market conditions. All in, we like the way these results position us for 2014.”
The earnings bulletin explained that the decreases in net and operating income were “primarily due to lower underwriting profit in the current quarter, partially offset by higher net income from investment funds and investment manager operating affiliates as compared to the prior year quarter.
“Net investment income for the quarter was $233.2 million, compared to $246.5 million in the prior year quarter and $240.8 in the fourth quarter of 2013.
“Net income from investment fund and investment manager operating affiliates was $60.3 million in the quarter, compared to income of $50.7 million in the prior year quarter. The increase was primarily driven by strong results from our investment manager operating affiliates.
The bulletin also noted that XL “increased the share buyback program, authorizing the Company to buy back up to $1.0 billion of its ordinary shares. This authorization includes the approximately $200 million of ordinary shares that remained available for purchase under the program prior to the increase.
“During the quarter, the Company purchased 5.8 million ordinary shares for $175.0 million at an average price of $30.19 per share, which was accretive to fully diluted tangible book value per ordinary share by $0.14. At March 31, 2014, $892.6 million of ordinary shares remained available for purchase under share buyback program.
Source: XL Group