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XL Capital Sees Big Gain as Q1 Net Income Rose

Posted on 05 May 2010

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XL Capital Ltd. saw the most gain in more than six months after reporting that first-quarter profit surged as the company lost less on its investments. First-quarter net income rose to $143.9 million from $3.1 million in the same period a year earlier, the Bermuda-based insurer said yesterday.

Chief Executive Officer Michael McGavick shifted the insurer's investment portfolio last year to reduce risk after losing money on assets tied to subprime mortgages. Net realized investment losses narrowed to $36.2 million in the first quarter from $251.9 million. XL increased policy sales, after losing clients a year earlier.

“The underlying business is showing improvement,” FBR Capital Markets analyst Bijan Moazami wrote in a note today, raising his 2010 operating earnings-per-share estimate for XL to $2.25 from $2.20. “After several quarters of downward premium pressure, it appears that XL is finally regaining traction in the market.”