Bermuda-based XL Group has seen profits fall in the third quarter of 2014, but its chief executive remains optimistic and its operating results remain robust.
Its net profit fell to $72.4 million for the quarter, compared with the $135.6 million it made in the prior year quarter. XL said this was “negatively impacted by the life retrocession derivative, which is offset by a movement in accumulated comprehensive income and therefore does not impact overall book value.”
The company’s operating income was $187.1 million for the quarter compared to operating income of $154.6 million in the prior year quarter primarily due to higher underwriting profit in the current quarter, the company said.
The combined ratio of its property and casualty (P&C) book for the quarter was 90.1 percent, 4.9 percentage points lower than in the prior year quarter, when it was 95 percent.
Mike McGavick, chief executive of XL Group, said: "While we note the relatively benign catastrophe activity so far this year, XL has produced solid across the board results with P&C underwriting profit and combined ratio well ahead of the prior year quarter. On a year to date basis as well, the third quarter continued a solid 2014, with both insurance and reinsurance underwriting profit exceeding last year’s results.
“We’re proud of what XL is producing, particularly given the well-documented pressure on pricing and renewals. Even with the tough market conditions, we believe we are well poised to build on this progress, relying on the drive, innovation, and skill of our underwriters and global teams."
XL Group, Bermuda, Third Quarter 2014 Results, Mike McGavick