Bermuda-based XL Group plc reported net income attributable to ordinary shareholders of $77.543 million for the third quarter of 2010, or $0.23 per ordinary share, compared to a net loss of $11.4 million, or a loss of $0.03 per ordinary share for the third quarter of 2009.
XL noted that, “included in net income attributable to ordinary shareholders for the quarter were after-tax realized losses on investments of $71.9 million compared to $310.8 million for the quarter ended September 30, 2009, and after-tax foreign exchange losses of $37.9 million compared to after-tax foreign exchange gains of $13.8 million in the prior year quarter.”
Operating income was $175 million, or $0.52 per ordinary share, compared to $292.6 million, or $0.85 per ordinary share, in the third quarter of 2009. “This decrease was primarily due to a reduction in income from investment affiliates for the quarter of $39.2 million and lower net investment income, as well as a decrease in underwriting income from the insurance segment. This was offset in part by higher underwriting income from the reinsurance segment,” XL explained.
The bulletin also noted the following earnings highlights for the third quarter:
— P&C operations combined ratio of 94.9 percent
— Fully diluted book value per ordinary share of $29.56 at September 30, 2010, an increase of 7 percent in the quarter and 20 percent from December 31, 2009
— Completed $375.4 million in share buybacks since June 30, 2010 and announced a new $1 billion authorization
CEO Mike McGavick commented: “We have delivered another quarter of solid operating results in a market that continues to be challenging.” P&C operations delivered a healthy combined ratio of 94.9 percent which includes 6.5 points of favorable prior year development.
“The current accident year combined ratio for the P&C operations of 101.4 percent in the quarter included $66.2 million of natural catastrophe losses, net of reinstatement premiums. The underlying combined ratio which excludes prior year development and natural catastrophes was 96.2 percent, virtually unchanged from the prior year.
“This demonstrates our underwriting discipline in a challenging market. However, despite this solid underwriting discipline, we continue to feel the impact that the prolonged soft market has on earnings.”
A replay of the earnings conference call held on Tuesday, Nov. 2, may be accessed on the Group’s web site, as well as the complete earnings report.
Source: XL Group
Topics Profit Loss Property Casualty
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