Property and casualty insurer XL Group plc (XL) on Thursday reported a profit for the first quarter that almost doubled from last year, reflecting higher investment gains in addition to lower operating expenses. Earnings per share beat analysts' estimates.
Mike McGavick, Chief Executive Officer of XL Group said, "In the first quarter, XL once again delivered solid results - the kind of results we seek to routinely produce. While none of us are ready to declare victory, particularly with the benefit of a quiet catastrophe and large loss quarter, such results make us all the more driven to deliver consistent, quality performance, even as catastrophes and losses normalize."
Net realized investment gains for the quarter were $36.51 million, compared to gains of $20.80 million in the prior-year quarter.
Net investment income declined 7 percent from last year to $246.47 million as a result of lower reinvestment rates.
Net premiums written in the property and casualty operations rose 4 percent to $2.04 billion, while net premiums earned increased 7 percent to $1.46 billion. The property-and-casualty operations combined ratio, or the percentage of premiums paid out on losses and expenses, improved to 87.7 percent from 95.3 percent in the year-ago period.
XL Group's first-quarter net income was $350.79 million or $1.17 per share, up from $176.63 million or $0.56 per share in the year-ago quarter.
Operating net income was $279.87 million or $0.93 per share, compared to $165.23 million or $0.52 per share in the prior-year quarter. On average, analysts polled by Thomson Reuters expected the company to earn $0.65 per share for the quarter. Analysts' estimates typically exclude special items.
The operating results reflect improved underwriting results in the latest quarter, including lower levels of catastrophe and large risk losses, combined with higher affiliate earnings than in the prior-year quarter.
Total revenue for the quarter rose 6 percent to $1.86 billion from $1.75 billion in the same period last year. Analysts had a consensus revenue estimate of $1.51 billion.
Total operating expenses declined 5 percent from the previous-year quarter to $1.46 billion.
XL closed Thursday's regular trading session at $30.80, down $0.09 or 0.29 percent on a volume of 3.26 million shares. However, in after-hours, the stock gained $1.20 or 3.90 percent to $32.00.
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