Reinsurance
Product Family

  • • Operating net income1 of $243.1 million, or $0.75 per share, for the quarter
  • • Net income attributable to ordinary shareholders of $225.7 million, or $0.69 per share for the quarter
  • • P&C operations combined ratio of 94.9% for the quarter
  • • Natural catastrophe losses of $68.3 million, net of reinstatement premiums, recorded for the quarter
  • • Fully diluted book value per ordinary share2 of $30.87 at June 30, 2011, an increase of 6.3% in the quarter
  • • Share buybacks resumed during the quarter and totaled 4.3 million shares
  • • Gross P&C premiums written increased by 16.9% compared to the prior year quarter, primarily driven by select new business

HAMILTON, Bermuda, Aug. 2, 2011 /PRNewswire/ -- XL Group plc (“XL” or the “Company”) (NYSE: XL) today reported its second quarter 2011 results.

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

"XL's strong second quarter performance was built on a broad foundation, as all of our key value drivers contributed to an annualized operating ROE of 10.3%. Our risk management discipline has put XL's catastrophe loss experience, measured as a percentage of shareholders' equity, among the best of our peers for both the second quarter and the year to date.  XL continued to pursue profitable underwriting opportunities in both existing and expanded markets, and added teams and leaders in lines we consider attractive. Our semi-annual actuarial review of XL's P&C risk portfolio, which followed our prudent reserving practices, resulted in continued favorable development. Our operating expense run-rate was in line with the last two quarters. XL's capital strength supported our underwriting expansion, strategic initiatives and the recommencing of our share buyback program, resulting in second quarter buybacks of 4.3 million shares."

Highlights - Three and six months ended June 30

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

Three months ended

Six months ended

June 30

June 30

2011

2010

2011

2010

Net income (loss) attributable to ordinary shareholders

$    225,663

$    191,811

$       (1,621)

$     319,807

Per ordinary share-fully diluted

$          0.69

$          0.56

$         (0.01)

$           0.93

Operating net income (loss) (1)

$    243,133

$    242,574

$      80,144

$     392,186

Per ordinary share-fully diluted

$          0.75

$          0.71

$          0.25

$           1.14

  • Operating net income was consistent with the prior year quarter as select new business growth combined with an increase in income from operating affiliates and positive prior year loss development was largely offset by larger natural catastrophe losses and other large individual losses incurred during the current quarter.
  • Net investment income for the quarter was $296.5 million compared to $302.6 million in the prior year quarter and $280.3 million for the first quarter of 2011.  The decline against the prior year was primarily due to lower U.S. interest rates and cash outflows from the P&C invested portfolio.
  • Net income from affiliates contributed $56.5 million in the quarter compared to $40.1 million in the prior year quarter as a result of strong performance primarily from investment manager affiliates.
  • Net realized investment losses for the quarter were $9.5 million compared to $61.4 million in the prior year quarter.  
  • Fully diluted book value per ordinary share increased by 6.3% from the prior quarter driven primarily by earnings combined with the benefit of share buybacks and unrealized gains in investments.
  • During the quarter, the Company purchased 4.3 million shares for $92.3 million at an average price of $21.36, which was accretive to book value per ordinary share by $0.12. Since June 30, 2011, the Company purchased an additional 7.3 million shares for $157.7 million.  $440.4 million of shares remains available for purchase under the Company’s previously announced $1 billion share buyback program.

 P&C operations - Three and six months ended June 30

(U.S. dollars in thousands)

Three months ended

Six months ended

June 30

June 30

2011

2010

2011

2010

Gross premiums written

$ 1,762,443

$ 1,507,080

$ 3,861,563

$  3,429,393

Net premiums written

1,306,059

1,114,604

3,020,341

2,711,129

Net premiums earned

1,306,125

1,216,313

2,577,821

2,479,914

Underwriting profit (loss)

67,049

94,673

(261,015)

88,063

Loss ratio

63.1%

61.4%

78.8%

66.1%

Underwriting expense ratio

31.8%

30.8%

31.3%

30.3%

Combined ratio

94.9%

92.2%

110.1%

96.4%