Reinsurance
Product Family

•  Operating net income1 of $188.0 million, or $0.61 per share, for the quarter•  Net income of $171.9 million, or $0.56 per share, for the quarter•  Annualized operating return on ordinary shareholders' equity2 of 7.4% for the quarter and 7.7% for the year to date•  Natural catastrophe losses net of reinsurance and reinstatement premiums of $32.0 million recorded for the quarter•  Fully diluted tangible book value per ordinary share3 of $32.82 at September 30, 2012, an increase of $4.51, or 15.9%, from December 31, 2011•  Share buybacks during the quarter totaled 5.3 million shares for $125.0 million

Dublin, Ireland – November 5, 2012 – XL Group plc ("XL" or the "Company") (NYSE: XL) today reported its third quarter 2012 results.

 

Commenting on the Company’s performance, Chief Executive Officer Mike McGavick said: "XL's strong third quarter results are another step in the right direction. Our P&C combined ratio of 92.2 percent was more than nine points better than the same period last year. This resulted from lower underlying loss ratios, in part due to a lower number of large losses; fewer catastrophes; and, to a lesser extent, positive prior year development. We are resolved to maintain this progress.”

 

Mr. McGavick also added: “Our thoughts are with those still dealing with the effects of Sandy. As we all witnessed, this was simply a massive event by any measure. We will continue to work with our clients, brokers and partners to provide any assistance we can."

 

Highlights - Three and Nine Months Ended September 30

(U.S. dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

Net income (loss) attributable to ordinary shareholders

$

171,902

$

42,398

$

569,686

$

40,777

Per ordinary share - fully diluted

$

0.56

$

0.14

$

1.82

$

0.13

Operating net income (loss) (Note 1)

$

188,038

$

88,811

$

575,214

$

169,089

Per ordinary share - fully diluted

$

0.61

$

0.28

$

1.84

$

0.54

 

  • Net income and operating net income of $171.9 million and $188.0 million, respectively, compared to net income and operating net income of $42.4 million and $88.8 million, respectively, in the prior year quarter, primarily due to improved underwriting results and lower net realized losses on investments and derivatives.
  • Net investment income for the quarter was $239.5 million compared to $290.1 million in the prior year quarter and $262.6 million for the second quarter of 2012. The decline against the prior year quarter was primarily due to lower yields as a result of lower reinvestment rates.
  • Net income from investment fund and investment manager operating affiliates of $8.6 million in the quarter compared to income of $23.2 million in the prior year quarter primarily due to lower investment manager returns.
  • Net realized investment losses for the quarter of $5.5 million compared to losses of $62.4 million in the prior year quarter.
  • Fully diluted book value per ordinary share increased by $2.20 from the prior quarter driven by net income combined with an increase in net unrealized gains on investments and the benefit of share buybacks.
  • During the quarter, the Company purchased 5.3 million shares for $125.0 million at an average price of $23.44 per share, which was accretive to fully diluted book value per ordinary share by $0.18. $400.0 million of shares remains available for purchase under the Companys previously announced $750 million share buyback program.

P&C Operations - Three and Nine Months Ended September 30

(U.S. dollars in thousands)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

Gross premiums written

$

1,576,231

$

1,776,161

$

5,656,666

$

5,637,724

Net premiums written

1,308,264

1,292,706

4,618,770

4,313,047

Net premiums earned

1,468,553