Low catastrophe losses bolster XL's bottom lineReprints
Thanks in part to low catastrophe losses, XL Group P.L.C. reported $354 million in net income for the fourth quarter of last year, an increase of 16.6%.
For all of 2014, net income rose 10.5% to $1.26 billion, the Dublin-based insurer said Monday.
The numbers exclude the impact of a life retrocession-related derivative, which does not affect the insurer’s book value, said XL CEO Mike McGavick.
Like most of the industry, Mr. McGavick said XL’s 2014 results were helped by an extremely low catastrophe year, “but that does not diminish” the overall progress the company has achieved in putting its strategy in place.
That strategy includes XL’s pending acquisition of Bermuda-based Catlin Group Ltd. for about $4.3 billion, he said.
While Mr. McGavick said during a conference call Monday that he preferred to discuss XL’s results, he did say that “planning for the integration of Catlin continues and is on track.”
XL said it had an 11. 7% increase in net property/casualty premiums written, totaling $1.2 billion for the quarter. For the year, though, its $5.77 billion in net property/casualty premiums written declined 2.3% compared with 2013.
The insurer said its combined ratios improved to 92.5% for the quarter and 88.2% for the year.
Mr. McGavick also said during the conference call that even when interest rates start to rise, he expects the industry to maintain its underwriting discipline.
“I don’t expect it will suddenly change on the dime because suddenly there’s some interest rate-based cash flow,” Mr. McGavick said.