XL Group Ltd. reported a higher profit for the fourth quarter of 2016 but a significantly lower profit for the full year as losses and loss expenses increased.

The insurer and reinsurer, which does business as XL Catlin, reported a fourth-quarter profit of $304.7 million, a 33.3% increase over the same period in 2015. 

Gross premiums written increased 19.3% to $3.02 billion in the quarter, which benefited partially from changes in foreign exchange rates. The quarterly combined ratio deteriorated to 94.8% compared with 92.3% in the 2015 fourth quarter. 

For the full year, XL reported a profit of $441 million, less than half the $1.21 billion profit it reported for 2015 as, among other things, net losses and loss expenses incurred increased by $1.3 billion. XL reported $636.3 million in natural catastrophe losses in 2016 compared with $213.2 million in 2015.

Gross premiums written increased 27.7% to $13.63 billion in 2016; however, the 2015 premiums only included seven months of the operations of Catlin Group Ltd., which XL acquired in May 2015.

The 2016 combined ratio deteriorated to 94.2% compared with 92% in 2015.

In a conference call with analysts Wednesday, XL CEO Mike McGavick said: “We stumbled out of the gate with a lousy first quarter, and it was a tough catastrophe year throughout, particularly in the fourth quarter. At the same time, as the year developed, our underlying strength continued to emerge, and we finished the year feeling very good about where we are going.”

The company grew premium in both insurance and reinsurance in a tough market, he said.

Insurance pricing for XL decreased about 3% in the fourth quarter and the full year 2016, said Paul Brand, who leads an innovation team at XL but was until recently chief underwriting officer for insurance. Casualty lines were flat in 2016 as decreases in excess casualty lines offset increases elsewhere in the book. Management and professional liability rates fell 2%, driven by the insurer’s U.S. directors and officers liability book, “which was partially offset by lower single-digit rate increases in our cyber lines,” he said.

Specialty lines rates were down 3% and energy, property and construction lines were down 6%, driven mainly by reductions in energy business.

Asked about what would be the implications for XL of prospective changes to border taxes, including last year’s reintroduction of the Neal Bill, which seeks to increase taxes on foreign-based insurers and reinsurers that reinsure U.S. business back to their affiliates offshore, Mr. McGavick said: “The idea of exporting your risks is a good idea. The idea of making it more expensive and more difficult to do so is not a way to grow your economy but rather a way to retard growth.”