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XL Group 3Q Earnings Drop on Catastrophe Losses


Posted on 02 Nov 2011

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XL Group PLC  third-quarter earnings fell 45%, as the property-and-casualty insurer's core profit also dropped on another quarter of heavy catastrophe losses.

The company, which also provides reinsurance, has continued to report higher premiums, even as losses from disasters pushed it into the red in the first quarter. While catastrophe losses this year have been particularly harsh for the insurance industry, XL's hit from disasters had been relatively light.

In the latest period, its combined ratio--the percentage of premiums paid out on losses and expenses--deteriorated to 101.6% from 94.9% in the P&C business. A ratio over 100% means the company paid out more than it brought in. Catastrophe losses were $110.6 million, in line with the company's October estimate, up from $66.2 million.

Overall, XL Group posted a profit of $42.4 million, or 14 cents a share, compared with $77.5 million, or 23 cents a share, a year earlier. Operating income, which strips out investment gains and losses, fell to 28 cents a share from 52 cents.

Net premiums written increased 9.6% to $1.38 billion. Premiums earned in the property-and-casualty operations rose 7.4% to $1.36 billion.

Analysts surveyed by Thomson Reuters predicted operating earnings of 34 cents a share on earned P&C premiums of $1.35 billion.


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