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  • Operating net loss1 of $79.6 million, or $0.25 loss per share, for the quarter and operating net income of $89.5 million, or $0.28 per share, for the full year, largely driven by significant natural catastrophe losses for the quarter and full year.
  • Net loss of $515.5 million, or $1.62 loss per share, for the quarter and $474.8 million, or $1.52 loss per share, for the full year, largely driven by a non-cash goodwill impairment charge of $429.0 million in the fourth quarter, in addition to significant natural catastrophe losses for the quarter and full year.
  • Natural catastrophe losses net of reinsurance and reinstatement premiums of $194.9 million recorded for the quarter, and $761.1 million for the full year.
  • P&C operations combined ratio of 108.2% for the quarter and 107.5% for the full year.
  • Gross P&C premiums written for the year increased by 10.2% compared to the prior year, primarily driven by select new business, favorable pricing and foreign exchange movements.
  • Fully diluted tangible book value per ordinary share2 of $28.36 at December 31, 2011, an increase of $1.18 from December 31, 2010.
  • Share buybacks during the quarter totaled 4.9 million shares for $99.9 million.


Dublin, Ireland - February 9, 2012 - XL Group plc ("XL" or the "Company") (NYSE: XL) today reported its fourth quarter and full year 2011 results.

Commenting on the Company's performance, Chief Executive Officer Mike McGavick said:

"XL was clearly impacted in 2011, like companies throughout the property and casualty industry, by a year that suffered from one of the largest aggregate worldwide catastrophe losses in history, including, most recently, the devastating Thailand floods. While we believe XL's catastrophe loss profile, relative to our peers, showed the effectiveness of our risk management process, we also again experienced an unacceptable level of non-catastrophe insurance losses in isolated underwriting areas. We have added new leaders and talented teams to these areas, and are sharply focused on delivering improved results. We will not shy away from our 2011 results, including a frustrating fourth quarter and full year 2011, and a significant non-cash charge to eliminate the Insurance segment's goodwill reflecting continuing low valuations in our sector. But, we do want to ensure our results are viewed within the broader perspective of our goals and strategy.

"In 2011, XL made significant progress executing our strategy and - although our actions have not yet taken hold in our financial performance - we are confident in the path we are on. Our Reinsurance segment again contributed strong results amid improving pricing. Key insurance businesses such as our Professional and Specialty businesses continued their multi-year track records of excellence. We pursued deliberate, careful growth opportunities in China and Brazil and significantly strengthened our distribution approach. Our investment portfolio now closely reflects our P&C core, and we further reduced our life portfolio's exposure to turbulence in the European investment markets. We believe XL is well-positioned with operating and capital strength and we look forward to fulfilling our vision for XL and its shareholders."

Highlights - Three and twelve months ended December 31

(U.S. Dollars in thousands except per share amounts)


Three months ended


Twelve months ended


December 31


December 31


(Unaudited)


(Unaudited)


2011


2010


2011


2010

Net income (loss) attributable to ordinary shareholders

$     (515,537)


$       188,122


$       (474,760)


$         585,472

Per ordinary share-fully diluted

$           (1.62)


$             0.57


$             (1.52)


$               1.73









Operating net income (loss) (1)

$       (79,625)


$       242,434


$           89,464


$         809,650

Per ordinary share-fully diluted

$           (0.25)


$             0.74


$               0.28


$               2.40



















  • Operating net loss of $79.6 million compared to operating net income of $242.4 million in the prior year quarter due primarily to larger natural catastrophe losses, lower levels of positive prior year loss development incurred during the current quarter and higher than normal tax expenses.
  • Net loss in the quarter of $515.5 million compared to net income of $188.1 million in the prior year quarter due primarily to the non-cash charge for the partial impairment of goodwill of $429.0 million, combined with the operating net loss and the net impact of gains and losses on investments, derivatives and foreign exchange.
  • Net investment income for the quarter was $270.9 million compared to $290.4 million in the prior year quarter and $290.1 million for the third quarter of 2011. The decline against the prior year was primarily due to lower yields as a result of lower reinvestment rates and cash flows from the investment portfolio.
  • Net loss from investment fund and investment manager operating affiliates of $23.9 million in the quarter compared to income of $45.9 million in the prior year quarter, primarily as a result of private fund and investment manager business losses due to challenging market conditions in the third and fourth quarters of 2011.
  • Net realized investment losses for the quarter of $50.0 million compared to $104.5 million in the prior year quarter.
  • Income tax expenses in the quarter and year were high relative to previous periods due to the distribution of profits and losses across the Company’s global organization, in particular in the fourth quarter.
  • Impairment of goodwill is a non-cash charge related to a combination of persistent low market valuations in the insurance industry and the recurring losses in the Company’s Insurance segment, resulting in an impairment charge of $429.0 million in the fourth quarter, representing all of the carried Insurance segment goodwill. This non-cash charge has no material impact on regulatory capital or tangible book value.
  • Fully diluted book value per ordinary share decreased by $1.16 from the prior quarter driven primarily by the partial goodwill impairment combined with net losses and dividends, partially offset by the benefit of share buybacks and unrealized gains on investments.
  • During the quarter, the Company purchased 4.9 million shares for $99.9 million at an average price of $20.21 per share, which was accretive to fully diluted book value per ordinary share by $0.15. During the year, the Company purchased 31.7 million shares for $665.5 million at an average price of $21.03 per share, which was accretive to fully diluted book value per ordinary share by $0.75. $190.5 million of shares remains available for purchase under the Company’s previously announced $1 billion share buyback program.

P&C operations - Three and twelve months ended December 31

(U.S. Dollars in thousands)



Three months ended


Twelve months ended


December 31


December 31


(Unaudited)


     (Unaudited)


2011


2010


2011


2010









Gross premiums written

$    1,260,560


$    1,306,427


$     6,898,284


$    6,261,331

Net premiums written

1,120,341


1,122,387


5,433,388


4,999,588

Net premiums earned

1,386,759


1,282,482


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