Bermuda’s XL Capital Ltd. reported a net loss to ordinary shareholders for the quarter ended December 31, 2007 of $1.06 billion, or $6.01 per ordinary share, compared with net income of $471.1 million, or net income of $2.62 per ordinary share, for the quarter ended December 31, 2006.
The Company had previously announced that it would report the loss, due to a series of writedowns related to the U.S. subprime mortgage crisis. XL said the “net loss to ordinary shareholders for the quarter ended December 31, 2007 includes previously announced charges of $1.5 billion, net of tax, related to credit market conditions. Excluding these charges, net income available to ordinary shareholders was $439.9 million and $1.86 billion for the quarter and year ended December 31, 2007, respectively.”
If the capital losses are excluded, XL posted net income for the fourth quarter of 2007 of $117.1 million, or $0.66 per ordinary share, compared with $510.4 million, or $2.84 per ordinary share, for the prior year quarter.
Fourth Quarter and Full Year Highlights also included the following:
— Combined ratio from P&C operations was 93.3 percent for the quarter and 88.8 percent for the year
— Net investment income for the quarter increased 7.3 percent to $560.5 million from the prior year quarter
— Return on ordinary shareholders’ equity, based on “net income excluding net realized gains and losses” (1), was 4.9 percent for the quarter and 18.7 percent for the full year
— Basic and diluted book value per ordinary share was $51.16 at December 31, 2007
Net income available to ordinary shareholders for the full year 2007 was $360.4 million, or $2.01 per ordinary share, compared with $1.72 billion, or $9.60 per ordinary share, for the twelve months ended December 31, 2006. XL noted that “excluding net realized gains and losses for the same period,” net income was $1.75 billion, or $9.72 per ordinary share, as compared with $1.76 billion, or $9.79 per ordinary share, for the twelve months ended December 31, 2006.
Commenting on the current quarter results, President, CEO and acting Chairman Brian M. O’Hara stated: “I believe that these previously announced fourth quarter charges, while disappointing, have reduced uncertainty and increased investors’ ability to recognize the strength of XL’s diversified and global insurance and reinsurance franchise, which continues to perform very well as evidenced by our full year combined ratio of 88.8 percent. In addition, our investment fund and manager affiliates have had another strong performance in 2007. We remain committed to building shareholder value as we execute our strategy.”
The full report, including an unaudited financial supplement relating to the Company’s fourth quarter 2007 results, and additional information may be obtained on the Company’s web site at: www.xlcapital.com.
XL will host a conference call to discuss its Fourth Quarter and Year End 2007 results today, Wednesday, February 6, 2008 at 10:00 a.m. Eastern time. The conference call can be accessed through a listen-only dial-in number or through a live webcast. To listen to the conference call, please dial (877) 422-4657 or (706) 679-0474, Conference ID# 30099493.
The webcast will be available on XL’s web site and will be archived on this site from approximately 1:00 p.m. Eastern time on February 6, 2008 through midnight Eastern time on March 6, 2008.
A telephone replay of the conference call will be available beginning at approximately 1:00 p.m. Eastern time on February 6, 2008 until midnight Eastern time on February 27, 2008 dialing (800) 642-1687 or (706) 645-9291, Conference ID #30099493.
Source: XL Capital
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