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  • • Operating net income1 of $88.8 million, or $0.28 per share, for the quarter
  • • Net income attributable to ordinary shareholders of $42.4 million, or $0.14 per share for the quarter
  • • P&C operations combined ratio of 101.6% for the quarter
  • • Natural catastrophe losses of $110.6 million, net of reinsurance and reinstatement premiums, recorded for the quarter
  • • Fully diluted book value per ordinary share2 of $30.80 at September 30, 2011
  • • Share buybacks during the quarter totaled 15.1 million shares
  • • Gross P&C premiums written increased by 16.4% compared to the prior year quarter, primarily driven by foreign exchange, select new business and favorable pricing

HAMILTON, Bermuda, Nov. 1, 2011 - XL Group plc ("XL" or the "Company") (NYSE: XL) today reported its third quarter 2011 results.

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

"Progress continued at XL in the quarter, and our own efforts were joined by a new factor - an improving rate environment. Our top line growth continued, our enterprise risk management quality continued to show through, and our growing attractiveness as the employer of choice for great complex risk underwriting was demonstrated by a number of important hires.

But by far the most important of these externally is rate. The quarter saw accelerating rate achievement in most lines. In far more parts of the market the long overdue response to unrealistic risk pricing is underway.

Taken together, I believe XL is exceptionally positioned for this phase, given our broadened and deepened team of first tier, experienced underwriters and other insurance and reinsurance professionals."

Highlights - Three and nine months ended September 30

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










Three months ended


Nine months ended


September 30


September 30










2011


2010


2011


2010









Net income (loss) attributable to ordinary shareholders

$          42,398


$          77,543


$          40,777


$        397,350

Per ordinary share-fully diluted

$              0.14


$              0.23


$              0.13


$              1.16









Operating net income (loss) (1)

$          88,811


$        175,030


$        169,089


$        567,216

Per ordinary share-fully diluted

$              0.28


$              0.52


$              0.54


$              1.66



  • • Operating net income decreased from the prior year quarter due primarily to larger natural catastrophe losses and lower levels of positive prior year loss development incurred during the current quarter, offset somewhat by an increase in income from operating affiliates.
  • • Net investment income for the quarter was $290.1 million compared to $296.7 million in the prior year quarter and $296.5 million for the second quarter of 2011. The slight decline against the prior year was primarily due to lower yields as a result of lower interest rates and cash outflows from the investment portfolio.
  • • Net income from affiliates contributed $28.4 million in the quarter compared to $17.1 million in the prior year quarter as a result of strong performance primarily from investment manager affiliates due to profits on the sale of a fund manager affiliate, partially offset by alternative fund losses due to market conditions.
  • • Net realized investment losses for the quarter were $62.4 million compared to $68.8 million in the prior year quarter.  
  • • Fully diluted book value per ordinary share decreased by $0.07 from the prior quarter driven primarily by the settlement of the forward purchase contracts associated with the equity security units, partially offset by the benefit of share buybacks and unrealized gains on investments.
  • • During the quarter, the Company purchased 15.1 million shares for $307.7 million at an average price of $20.33 per share, which was accretive to fully diluted book value per ordinary share by $0.46. $290.4 million of shares remains available for purchase under the Company's previously announced $1 billion share buyback program.

P&C operations - Three and nine months ended September 30

(U.S. Dollars in thousands)










Three months ended


Nine months ended


September 30


September 30










2011


2010


2011


2010









Gross premiums written

$     1,776,161


$     1,525,511


$     5,637,724


$     4,954,904

Net premiums written

1,292,706


1,166,072


4,313,047


3,877,201

Net premiums earned

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