Cat losses burn XL profits

XL Group Ltd. was battered by catastrophe losses in the second quarter, reporting million in net income, which was a 94.7% decrease from the comparable period a year ago on Wednesday.

Results of the Hamilton, Bermuda based firm, which completed its redomicile to Bermuda from Dublin on Monday, reflect those of Catlin Group Ltd., which merged last year with XL Group P.L.C., only since May 1, 2015.

Net premiums written for the quarter increased 29.6%, to $2.72 billion. The insurer posted a 96% combined ratio for the quarter, vs. 89.9% for the comparable period a year ago. Revenues decreased 1.4%, to $2.65 billion.

For the first half, XL reported a 86.7% decline in net income, to $131.9 million, while net premiums written increased 46.9%, to $5.78 billion. The company reported a 94.3% combined ratio, vs. 89.5% for the comparable period. Revenues for the first half increased 23.3%, to $5.06 billion.

CEO Mike McGavick said during Wednesday’s analysts call that major sources of XL’s $240 million in catastrophe losses were the Fort McMurray, Alberta wildfires, earthquakes in Japan and Ecuador and U.S. and European storms.

“These losses were in line with our expectations and in line with, or below, our market share. And it is noteworthy that both segments turned a profit despite these losses.”