DOW JONES NEWSWIRES XL Group PLC (XL) second-quarter profit rose 16% on lower taxes and more income from affiliates, while core earnings at the property-and-casualty insurer unexpectedly rose thanks to a relatively light hit from natural disasters. The company, which also provides reinsurance, said combined ratio -- the percentage of premiums paid out on losses and expenses -- deteriorated slightly to 94.9% from 92.2% in the P&C business. Catastrophe losses in the division jumped to $68.3 million from $16.8 million. However, Chief Executive Mike McGavick noted that XL's catastrophe losses, measured as a percentage of shareholders' equity, were among the best of the its peers for both the second quarter and the year to date. So far, 2011 has dogged the insurance sector with some of worst catastrophe losses in years because of devastating natural disasters in Japan, New Zealand and Australia, as well as a particularly destructive tornado season this spring in the U.S. Losses from disasters drove XL into the red in the first quarter, but XL has continued to report higher premiums. Tuesday, XL Group posted a profit of $225.7 million, or 69 cents a share, compared with $194 million, or 56 cents a share, a year earlier. Operating income, which strips out investment gains and losses, rose to 75 cents a share from 71 cents. Total revenue rose 9.2%. Premiums earned in the property-and-casualty operations increased 7.4% to $1.31 billion. Analysts surveyed by Thomson Reuters predicted operating earnings of 48 cents a share on earned P&C premiums of $1.3 billion. XL shares were up 1.2% at $20.25 after hours. Through the close, the stock has fallen 8.3% so far this year. -By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com
