XL Group Posts 2Q Profit

XL Group plc on Tuesday today its results for the second quarter of 2010.

Published on August 4, 2010

Commenting on the Company's performance, Chief Executive Officer Mike McGavick said: "We are pleased to report another quarter of solid operating results. Our P&C operations delivered a healthy combined ratio of 92.2% which includes 6.8 points of favorable prior period development. The current accident year combined ratio for our P&C operations was 99.0% in the quarter and our top-line remains strong.

"Our operating income was $242.6 million in the second quarter, compared to $291.4 million in the same quarter last year. Included in operating income was a net charge of $23.5 million for the previously announced termination of the EIB guarantees. This termination continues our progress in eliminating distractions from our core P&C focus.

"We grew our book value per ordinary share for the fifth consecutive quarter, this time by 5%, driven by both investment portfolio gains and net income. Our tangible book value per ordinary share increased 6% during the quarter to $25.30. Total shareholders' equity was $10.5 billion at June 30, 2010, an increase of 5% in the quarter and 11% since the end of 2009.

"Our investment portfolio's favorable mark to market of $349 million this quarter was driven by interest rate declines even as corporate credit spreads widened. Our repositioned P&C portfolio weathered the turmoil in the credit markets, as we had limited exposure to the impacted Euro governments.

"Annualized operating return on ordinary shareholders' equity was 10.5%. Both our investment income and P&C operations contributed to these gains."

Mr. McGavick concluded: "We believe these results demonstrate our continued commitment to disciplined underwriting and vigorous risk management despite anemic pricing conditions."