CEO calls 16% fall in P&C premiums an “improvement”

XL Capital saw income and profits fall in it Q2 results with net income at just a third of last year.

Financial Highlights (2008 in brackets)

  • GWP for P&C $1.5m ($1.8m) half year: $3.4m ($4.5m)
  • Net PW for P&C $1.1m ($1.4m) half year: $2.6m ($3.5m)
  • Net premiums earned for P&C $1.3m ($1.5m) half year: $2.6m ($3.1m)
  • Total revenues $1.7m ($2.1m) half years: $3.3m ($4.3m)
  • Net income before tax $83,879 ($357,957) half year: $143,257 ($612,479)
  • Net income $79,949 ($237,851) half year: $258,328 ($449,724)
  • Combined ratio 93% (91.6%)

CEO Michael McGavick said: “Finally we are pleased to report a quarter in which the strength of the XL franchise shines through clearly, despite challenging market conditions in the sector.

“Gross Premiums Written for our P&C operations is down 16% for the quarter year on year, a significant improvement on the trend last quarter and reflecting the month on month improvement that we noted during our first quarter earnings call.

“This reflects both increased selected new business generation this quarter as well as continued improvements in retention and pricing.

Make the franchise great again

“Going forward, our recently announced agreement with National Indemnity Company relating to our ‘Side A’ professional book should further contribute to our new business production.

“Our P&C operations’ combined ratio of 93.0% in the second quarter is an improvement over the full year 2008 and only slightly higher than the same quarter last year. This strong result reflects the consistent strength of our underwriting discipline and strong reserve position.

“As our results indicate, XL is stable with strong capital, but we are not yet satisfied. We now have the ability to make the franchise great once again by remaining focused on delivering value to shareholders and clients.”