HAMILTON, Bermuda—XL Capital reported a $206.6 million profit for 2009, compared with a $2.63 billion loss in 2008, while the insurer’s revenues declined to $6.19 billion in 2009, down 13.4% compared with the prior year.

Hamilton, Bermuda-based XL’s combined ratio improved to 93.6% in 2009 from 94.9% in 2008.

For the fourth quarter, XL reported a loss of $40.3 million, which it attributed to net realized losses on investments. In the same period in 2008, XL reported a $1.43 billion loss, which was attributed to impairment of goodwill related to an earlier acquisition and investment-related losses.

“Our results for the quarter and the full year clearly illustrate XL’s re-emergence as a leading (property/casualty) company,” said XL CEO Mike McGavick in a statement.

The insurer has cut expenses and repositioned its investment portfolio to one that is more typical of a property/casualty insurer and reduced “its inherent volatility,” he added.