Lack of catastrophe payouts helps insurer
XL Capital announced its Q3 income was lower than last year but it had cut its net loss from $1.6bn to $11.4m.
P&C highlights (2008 in brackets) - 000’s
- Gross Premiums Written $1,584,209 ($1,899,975)
- Net Premiums Written 1,195,119 ($1,257,914)
- Net Premiums Earned 1,293,879 ($1,525,023)
- (included $905.4m from insurance and $388.5m from Reinsurance)
- Underwriting income/loss 88,279 (-$95,392)
- Operating income $306,409 ($107,765)
- Net loss $11,402 ($1,649,024)
- Combined Ratio 93.2% 106.3%
- Catastrophe losses $30.8m ($208.5m)
P&C gross and net premiums written declined from the prior year quarter primarily due to planned reductions in long-term agreements, strengthening of the US dollar compared to the third quarter of 2008, lower insured values reflecting macroeconomic conditions and planned reductions in several targeted areas. Also impacting the decline was XL’s focus on rate achievement in a competitive environment.
Chief executive officer, Mike McGavick, said: ”Solid underwriting and careful expense management, combined with our prudent reserving practices, provided a healthy combined ratio of 93.2% from P&C operations.
“For the quarter, we have recorded a 26% increase in book value per ordinary share to $23.84 and a 30% increase in tangible book value per ordinary share to $21.36. Total shareholders’ equity increased from $7.5bn to $9.2bn in the quarter.
“These are encouraging numbers but clearly there are areas for continued improvement. For instance, gross premiums written for our P&C operations were 16.6% lower than the prior year