XL Capital issued a warning that its third quarter results will be lower than predicted. It said this was the result of higher than expected losses in its North American reinsurance business, primarily due to new causality claims for the 1997 to 2000 underwriting years.
XL expects its third quarter net income to be reduced by approximately US$184m pretax or US$160m after tax, approximately $1.16 pre ordinary share, when compared to current expectations.
The company will report its third quarter results on 29 October after the close of trading.
XL chief executive and president Brian O'Hara said the late 1990s had been among the worst years in the industry's history for North American casualty business. "Many primary insurers are continuing to loss development beyond historical patterns." The claims stemmed from the former NAC Re book, said O'Hara.
O'Hara said he intended to lead a review of XL's exposure to the NAC Re book to minimise its impact on the company's results.
