XL Group starts buyback programme
XL Group continued to reap the rewards of its 2015 merger with Catlin Group in its 2016 results, posting strong growth. But the company’s profits declined as a result of cat losses with its CEO describing 2016 as a very challenging year.
The company’s net income fell to $440.9 million in 2016, a fall of 74.5 percent on the $1.2 billion it recorded in 2015.
It said the decrease was due largely to greater catastrophe losses incurred in 2016 as compared to 2015, citing Hurricane Matthew and the recent earthquake activity in New Zealand.
Natural catastrophe pre-tax losses net of reinsurance and reinstatement premiums for the year came to $636.3 million, almost triple the $213.2 million it reported in 2015. The company also saw its full year P&C combined ratio inch up slightly, from 92 percent in 2015 to 94.2 percent in 2016.
However, its gross written premiums came to $13.6 billion, up 28.3 percent on the $10.6 billion it recorded in 2015.
Integration costs related to the combination with Catlin Group totalled approximately $220.4 million for the full year.
Mike McGavick, CEO of XL Group, said: “2016 was undoubtedly a challenging year. Our results were impacted by both a disappointing start as well as a number of significant catastrophe losses throughout the year and in the 4th quarter in particular.
“At the same time, as the year developed, our underlying strengths continued to emerge. For example, our grinding focus on efficiency and underwriting quality produced a lower expense ratio and an improved loss ratio excluding catastrophes. We were even able to grow a bit - bolstered by our new market presence our 4th quarter P&C net premium earned, for example, was up 3.3 percent over the prior year quarter.
“All in, we feel we took important steps in the year and, despite challenging market conditions, are very much looking forward to 2017.”
XL Group, Results 2016, XL Catlin, Mike McGavick, Catastrophe loss, Insurance, Reinsurance, Bermuda, North America, Europe