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.”