XL Group Posts $279.3 Million Q2 Net Loss; $279.6 Operating Income

July 29, 2014

The XL Group announced that its operating net income for the second quarter of 2014 was $279.6 million, or $1.02 per share, which produced “a net loss attributable to ordinary shareholders of $279.3 million including the loss on sale of our life reinsurance subsidiary, or $1.03 per share, for the quarter on a fully diluted basis.

The earnings bulletin explained that the “loss on sale of $621.3 million, net of tax, relating to the consummation of the previously announced life transaction.”

Other earnings highlights included in the report were as follows:
— P&C combined ratio of 88.3 percent for the quarter, compared to 93.8 percent in the prior year quarter
— Natural catastrophe pre-tax losses net of reinsurance and reinstatement premiums in the quarter of $34.6 million, compared to $134.1 million in the prior year quarter
— Annualized operating return on ordinary shareholders’ equity excluding and including unrealized gains and losses on investments were 12.3 percent and 11.0 percent, respectively, for the quarter
— Fully diluted tangible book value per ordinary share3of $35.09 at June 30, 2014, an increase of $1.23, or 3.6 percent, from December 31, 2013
— Share buybacks totaled 5.5 million ordinary shares for $175.0 million during the quarter
— Gross premiums written were $2.1115 billion, compared to $1.944 billion in Q2 2014.
— For the first six months of 2014 gross premiums written were$4.54 billion, compared to $4.35 billion in 2013.
— Net premiums written were $1.433 billion in Q2, and $3.353 billion for the first 6 months.
Net premiums earned were $1.438 billion for the quarter and $2.850 billion for the first half.

CEO Mike McGavick commented: “Through the first half of 2014, XL continued to demonstrate solid financial results and strong positioning. In the second quarter of the year, XL produced a total P&C combined ratio of 88.3 percent, total underwriting profit of $168 million, and a loss ratio of 57.6 percent. This performance also included Insurance segment underwriting profit of $62.6 million and a combined ratio of 93.8 percent in the quarter.

“And with the well-publicized turmoil in the reinsurance market, our Reinsurance segment’s 75.7 percent combined ratio and modest growth demonstrated our deep market relationships and the resiliency of our franchise. This quarter also included the completion of our previously announced life transaction, covering the vast majority of our life reinsurance business. All in, we like the way the year is developing and believe we will continue to harvest the benefits of our work.”

Source: XL Group

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