XL Catlin’s profits fell in the third quarter, largely due to integration costs associated with its merger with Catlin earlier this year.
The firm, which has operations in Bermuda, posted a net income of $70.8 million for the quarter, a big decrease compared with operating net income of $187.1 million in the prior year quarter. The current quarter includes approximately $55.2 million in integration costs as well as $30.8 million in natural catastrophe losses compared to $29.8 million in natural catastrophe losses in the prior year quarter.
Its overall net income was $27.3 million for the quarter compared with $72.4 million in the prior year quarter. Excluding the impact of the life retrocession arrangements its net profit would have been $46.6 million, it said.
The combined ratio of its P/C book also deteriorated to 95.3 percent compared with 90.1 percent a year earlier.
Mike McGavick, chief executive of XL Catlin, said: “In its first full quarter of combined operations, XL Catlin produced solid results including a 95.3% combined ratio, gross written premiums of $2.7 billion and a P&C underwriting profit of $114.1 million. At the same time, our bottom-line results in the quarter were particularly impacted by market events and ongoing expenses related to our integration.
“Our colleagues’ effort to move quickly through our integration continues to be recognized by positive reaction from clients and brokers and the new opportunities we are seeing. We have absolute confidence in the fundamentals of the new company we are building and remain focused on creating value by becoming the most innovative and admired (re)insurance company in our industry and feel we are well on our way."
XL Catlin, Mike McGavick, Bermuda, Europe