XL Group reports year-over-year increase in Q3 premiums, loss ratio

XL Group plc’s (NYSE: XL) released Wednesday its financial results for the quarter ending Sept. 30, reporting a drop in reinsurance premiums and an increase in primary insurance premiums due in part to “strong new” business in North America.

The insurance and reinsurance carrier recorded gross written premiums in property and casualty of $1.61 billion during the three months ending Sept. 30, 2013, compared to $1.576 billion during the same period in 2012.All figures are in U.S. currency.

XL Group attributed the increase in insurance premiums to “strong new business in the North American operation including the Construction and Property businesses, and favorable pricing and renewals across most businesses.”

During the latest quarter, XL Group reported net earnings of $170.76 million on total revenues of $1.878 billion. In Q3 2012, the firm earned $207.7 million on total revenues of $1.818 billion. 

The P&C combined ratio was 95.0% in Q3 2013, compared o 92.2% during Q3 2012. For the first nine months of this year the combined P&C ratio was 92.2%, down from 92.7% in Q3 2012.

XL reported its Q3 gross premiums written in reinsurance dropped 16.2% year over year, “predominantly driven by the non-renewal of a North America crop quota share treaty, reductions in volume and shares on certain North America property exposures, and a decrease in Latin America property treaty business.”

Q3 2013 net premiums earned were $1.6 billion, of which $1.1 billion was from insurance and $446.6 million from reinsurance. Insurance net premiums earned were up 12.0% year over year while reinsurance net premiums earned were down 7.5% year over year.

The loss ratio in P&C was 64.9% in Q3 2013, up four points year-over-year from 60.9%. The loss ratio included favourable prior year development of $79.2 million.

“The P&C loss ratio variance was also impacted by natural catastrophe pre-tax losses of $85.0 million net of reinsurance and reinstatement premiums, compared to $32.0 million in the prior year quarter, with approximately $69.5 million related to our Reinsurance segment,” XL Group stated.

“Consistent with our previously released estimate, $59.0 million of such losses, pre-tax and net of reinsurance and reinstatement premiums, relates to the series of hailstorms in Germany and France in late July 2013. Excluding prior year development and natural catastrophe pre-tax losses net of reinsurance and reinstatement premiums, the third quarter P&C loss ratio was 3.5 percentage points higher than the prior year quarter due to a higher level of individual medium to large losses.”