As XL Group reaches the final days before its $15.3 billion sale to AXA Group goes through, the insurer and reinsurer is still doing fairly well as an independent company.
XL Group/XL Catlin said it generated $319 million in net income, or $1.21 per diluted share, in the 2018 second quarter. That compares to $301.6 million, or $1.14 per diluted share, over the same period a year ago.
The company can also note a 10.6 percent increase in P/C gross premiums written compared to the 2017 second quarter and lower catastrophe losses. Net investment income also rose.
As well, though XL Group’s P/C combined ratio (insurance and reinsurance) rose to 95.8 during the quarter, versus 92.3 a year ago, but that number is still solid. Dig deeper, however, and the results are a bit more mixed. The insurance combined ratio for Q2 2018 was 101.2, a big jump from 96.7 in the 2018 first quarter. The reinsurance combined ratio for the quarter was a much healthier 85.7, a slight uptick from 83.8 in the same, year-ago period.
“In the second quarter we have continued our progress toward a strong and diversified book, particularly as rate conditions improved across most lines,” XL CEO Mike McGavick said in prepared remarks.
McGavick noted the progress in premiums written, and said that maintaining underwriting discipline and a continued shift toward lower volatility business has also helped. At the same time, he pointed out that non-catastrophe losses and prior year development from short tail lines in the company’s Insurance unit partially offset those positive trends.
McGavick assured investors that the company’s progress will continue when it joins AXA, a merger whose closing is expected sometime in the 2018 second half.
“Overall, we are pleased with the results and look forward to continuing to realize the full potential of what we have built when we become a part of AXA Group, McGavick said.
Here are some additional XL Group result details:
- Net investment income for Q2 was $231.8 million, versus $208.7 million in Q2 2017.
- Gross insurance premiums written were nearly $2.9 billion in the quarter, compared to just under $2.6 billion a year ago. Gross reinsurance premiums written were $1 billion, growth from $977.7 million last year.
- Net insurance premiums written came in at $1.9 billion, better than the $1.7 billion a year ago. Net reinsurance premiums written surpassed $889 million in Q2, down from $905 million in the 2017 second quarter.
- Natural catastrophe pre-tax losses net of reinsurance, reinstatement and premiums adjustments for the quarter nearly hit $77 million, compared to $92.1 million in the previous year’s quarter.
Source: XL Group