Reinsurance
Product Family

•  Operating net income1 of $221.9 million, or $0.71 per share, for the quarter•  Net income of $221.2 million, or $0.71 per share, for the quarter•  Annualized operating return on ordinary shareholders' equity2 of 9.1%, for the quarter•  Natural catastrophe losses net of reinsurance and reinstatement premiums of $60.6 million recorded for the quarter•  Gross P&C premiums written for the quarter were flat overall compared to the prior year quarter. Increases in new business lines, and certain pricing increases were largely offset by movements in foreign exchange rates and targeted non-renewals•  Fully diluted tangible book value per ordinary share3 of $30.65 at June 30, 2012, an increase of $2.34 from December 31, 2011•  Share buybacks during the quarter totaled 6.1 million shares for $125.0 million

XL Group plc ("XL" or the "Company") (NYSE: XL) today reported its second quarter 2012 results.

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

"In absolute and relative terms, this was a solid quarter for XL, demonstrating our continued progress. We again expanded margins in both our Insurance and Reinsurance segments and reported a total P&C combined ratio of 90.8 percent, more than four percentage points better than the second quarter last year. Our semi-annual reserve review resulted in both Insurance and Reinsurance releases. And we grew book value as we continued to buy back shares. We are resolved to continue this progress across all of our businesses." 

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

(Unaudited)

(Unaudited)

2012

2011

2012

2011

Net income (loss) attributable to ordinary shareholders

$       221,156

$       225,663

$       397,784

$         (1,621)

Per ordinary share-fully diluted

$             0.71

$             0.69

$             1.26

$           (0.01)

Operating net income (loss)(1)

$       221,945

$       243,133

$       387,176

$         80,144

Per ordinary share-fully diluted

$             0.71

$             0.75

$             1.23

$             0.25

• Net income and operating net income of $221.2 million and $221.9 million, respectively, compared to net income and operating net income of $225.7 million and $243.1 million, respectively, in the prior year quarter, due primarily to lower investment yields and income from operating affiliates, largely offset by improved underwriting results. • Net investment income for the quarter was $262.6 million compared to $296.5 million in the prior year quarter and $265.2 million for the first quarter of 2012.  The decline against the prior year quarter was primarily due to lower yields as a result of lower reinvestment rates and net cash outflows from the investment portfolio.• Net income from investment fund and investment manager operating affiliates of $17.2 million in the quarter compared to income of $51.6 million in the prior year quarter due primarily to lower fund returns and very strong performance in the prior year quarter by certain management companies.• Net realized investment losses for the quarter of $12.4 million compared to losses of $9.5 million in the prior year quarter.  • Fully diluted book value per ordinary share increased by $1.08 from the prior quarter driven primarily by net income combined with the benefit of share buybacks, and an increase in net unrealized gains on investments. • During the quarter, the Company purchased 6.1 million shares for $125.0 million at an average price of $20.44 per share, which was accretive to fully diluted book value per ordinary share by $0.22. $525.0 million of shares remains available for purchase under the Company's previously announced $750.0 million 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

(Unaudited)

(Unaudited)

2012

2011

2012

2011

Gross premiums written

$    1,763,451

$    1,762,443