XL Group said it boosted net income and improved its property/casualty combined ratio during the 2016 third quarter, even as pretax natural catastrophe losses soared.
CEO Mike McGavick asserted that results mean the benefits of XL’s $4 billion merger with Catlin in mid-2015 are beginning to be realized.
“This is the second quarter of solid progress and seeing the power of the business we are building emerge in the numbers,” McGavick said during the company’s third-quarter 2016 earnings call on Oct. 26.
Third-quarter net income reached $70.6 million, or $0.25 per share, versus nearly $27.3 million, or 9 cents per share, in the 2015 third quarter. The P/C combined ratio hit 93.1 during the 2016 third quarter, an improvement over 95.3 during the same period in 2015.
However, natural catastrophe pretax losses net of reinsurance and reinstatement premiums in the quarter were $97.4 million compared to just under $31 million in the previous, year-ago quarter.
Meanwhile, the reinsurance segment gross premiums written grew by 23.2 percent compared to the 2015 third quarter. XL said the jump came from “significant new business in the Property Treaty and Credit lines of business in the Asia Pacific region, plus new business in Casualty and Property Treaty lines of business in North America.
Here are additional result highlights:
- Gross premiums written came in at $2.7 billion during the third quarter, up from $2.65 billion in the 2015 third quarter. Net premiums written landed at more than $2.1 billion, up from $2 billion in the 2015 third quarter. Net premiums earned were at over $2.4 billion in the 2016 third quarter, up slightly from $2.4 billion in the 2015 third quarter.
- Underwriting profit landed at $166.85 million during the quarter compared to $114.1 million in the 2015 third quarter.
- Costs related to the XL/Catlin merger came in at $54.5 million during the quarter.
- Net investment income was booked at nearly $210 million, down from $225.1 million in the 2015 third quarter.
XL Catlin also disclosed a revamp of its P/C operations. Details can be found here.
Source: XL Group/XL Catlin