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