XL Group has reported a substantial drop in its net income, which the company attributes to a significant impact from global catastrophes, for its second quarter results of 2016.
The company’s unaudited net income for the period ending June 30, 2016 was $43.8 million, a 95.2 percent decrease from $915 million for the last year's second quarter results. Excluding the contribution from the GreyCastle Life Retro Arrangements, net income for the second quarter was $156.0 million.
Pre-tax losses net of reinsurance and reinstatement premiums caused by natural catastrophes in the quarter were $240.1 million (9.8 points to the loss ratio), compared to $59.9 million (2.9 points to the loss ratio), in the prior year quarter.
XL Group said its gross written premiums (GWP) for its property/casualty (P&C) operations increased 17.6 percent to $3.5 billion for the period ending June 30, compared to $3 billion for the same set of Q2 results in 2015.
The insurance segment GWP increased 13.2 percent from the previous year quarter, which the company attributed to the merger with Catlin.
The reinsurance segment GWP increased by 30.2 percent compared to last year's results. The increase is also attributed to the merger with Catlin, as well as new business across all regions, in particular Bermuda, EMEA and North America.
The profitability of XL Group's underwriting declined slightly, with the P&C combined ratio increasing by 6.1 points to 96 percent for this quarter.
Mike McGavick, chief executive officer of XL Group, commented: “XL Catlin’s second quarter results were significantly impacted by global catastrophes, reducing operating earnings per share by 84 cents. In the face of these events and challenging markets, we demonstrated progress in our underlying performance."
Back in May 2014, XL Group had agreed to sell subsidiary XL Life Reinsurance (XLLR) to the newly formed Bermudian company GreyCastle Holdings for $570 million.
XL Group, Insurance, Reinsurance, Results, Bermuda, GreyCastle, Catastrophe