Net operating income up in second quarter for XL Group

XL Group plc’s reports that operating net income rose to approximately US$279.6 million in Q2 of 2014 compared to about US$221.6 million in Q2 of 2013, and the company had a net loss attributable to ordinary shareholders of about US$279.3 million compared to net income of approximately US$272.7 million.

The decrease in net income (loss) attributable to ordinary shareholders was “primarily due to a US$621.3 million after-tax loss on the sale of our life reinsurance subsidiary,” notes XL Group, a global insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises.

“The US$35.0 million increase from the estimated loss as of March 31, 2014 relates to the changes in market value of the ceded assets and exposures between signing and closing,” the company statement adds.

XL Group’s operating profit of US$279.6 million for Q2 of 2014 was up from US$221.6 million in the prior year quarter, primarily as a result of higher underwriting profit.

On the property and casualty front, XL Re reports the following:

• gross premiums written (GPW) was about US$2.1 billion in Q2 of 2014, 8.6% higher than the approximately US$1.9 billion in Q2 of 2013 (the Insurance segment GPW increased 9.9% from the prior year quarter, and the Reinsurance segment GPW increased 4.5% from the prior year quarter);

• net premiums written increased 1.8% to about US$1.4 billion compared to approximately US$1.5 billion;

• net premiums earned was approximately US$1.4 billion compared to US$1.5 billion;

• underwriting profit was US$168 million compared to US$92 million;

• P&C combined ratio was 88.3% compared to 93.8% (the combined ratio excluding prior year development and the impact of natural catastrophe losses for Q2 of 2014 was 91.8% compared to 92.7% for the prior year quarter); and

• P&C loss ratio was 57.6% compared to 63.0%.

With regard to natural catastrophe, the pre-tax losses net of reinsurance and reinstatement premiums in the second quarter of 2014 was US$34.6 million compared to US$134.1 million in Q2 of 2013.

For the six months ended June 30, 2014, XL Group reports that operating net income was about US$501.5 million in 2013 and approximately US$518.2 million for 2014. In addition, net income attributable to ordinary shareholders of US$623.5 million for the first half of 2013 fell to a loss of approximately US$23.5 million for the same period in 2014.

“Through the first half of 2014, XL continued to demonstrate solid financial results and strong positioning,” Mike McGavick, chief executive officer of XL Group, notes in the statement. “With the well-publicized turmoil in the reinsurance market, our Reinsurance segment’s 75.7% combined ratio and modest growth demonstrated our deep market relationships and the resiliency of our franchise,” McGavick continues.

“All in, we like the way the year is developing and believe we will continue to harvest the benefits of our work,” he adds.