XL Capital 3Q Net Loss Narrows

NU Online News Service, Oct. 30, 3:20 p.m. EDT

XL Capital Ltd. reported a 2009 third-quarter net loss available to ordinary shareholders of $11.4 million. Though the (re)insurer posted a loss for the quarter, it was significantly less than the 2008 third-quarter net loss of $1.6 billion.

Hamilton, Bermuda-based XL Capital Chief Executive Officer Mike McGavick credited solid underwriting and careful expense management with the turnaround, but acknowledged that "clearly there are areas for continued improvement."

Primarily responsible for the sharp drop in net loss for the quarter was a $1.4 billion charge in the 2008 third quarter related to the transaction closed on Aug. 5, 2008 with bond insurer Syncora Holdings Ltd. and certain of its subsidiaries, XL Capital explained.

For the first nine months of 2009, XL Capital recorded net income available to ordinary shareholders of $246.9 million, compared to a loss of $1.2 billion in the first nine months of 2008.

For its property and casualty operations in the third quarter, XL Capital reported gross premiums written of $1.6 billion, down 16.6 percent from 2008 third-quarter gross premiums written of $1.9 billion.

The company said the drop was "primarily due to planned reductions in long-term agreements, strengthening of the U.S. dollar compared to the third quarter of 2008, lower insured values reflecting macroeconomic conditions and planned reductions in several targeted areas."

Net premiums earned fell to $1.3 billion in the quarter from $1.5 billion for the same period in 2008. The combined ratio improved to 93.2 from 106.3.

On the investment side, net investment income in the quarter fell to $327.1 million compared to 2008 third-quarter net investment income of $436.3 million, the company said.