XL Group PLC swung to a first-quarter profit as the property-and-casualty insurer recorded significantly lower natural catastrophe losses.
The insurance sector faced some of the worst quarters in years in 2011 for catastrophe losses because of disasters in Thailand, Japan, New Zealand and the U.S. Though XL Group reported increases in losses from disasters in prior quarters, the company has also seen higher premiums earned in its property-and-casualty operations.
XL's combined ratio--the percentage of premiums paid out on losses and expenses--fell to 95.3% from 125.8% in the P&C business. A ratio more than 100% means the company paid out more than it brought in. Catastrophe losses, net of reinsurance and reinstatement premiums, were $20 million in the latest period, down from $387.4 million a year ago.
XL posted a profit of $176.6 million, or 56 cents a share, compared with a year-earlier loss of $227.3 million, or 73 cents a share. Its operating earnings, which strip out investment gains and losses as well as other items such as foreign-exchange effects, were 52 cents a share, from a year-earlier loss of 52 cents a share.
Net premiums written rose 15% to $1.96 billion. Premiums earned in the property-and-casualty operations were up 6.8% at $1.36 billion.
Analysts surveyed by Thomson Reuters predicted operating earnings of 40 cents a share on P&C premiums earned of $1.54 billion.
Shares were down by 9 cents at $21.24 in recent after hours trading. The stock is up 7.9% since the start of the year.