(RTTNews) - Wednesday, XL Capital Ltd. (XL: News ) reported a net loss for its third quarter that narrowed substantially from last year due to the absence of $1.4 billion charge recorded in the year-ago quarter. Operating income for quarter, however, surged from last year, driven by higher underwriting contribution of XL's P&C operations and increased net income from investment affiliates.

The Hamilton, Bermuda-based company reported a net loss available to ordinary shareholders for the third quarter of $11.40 million or $0.03 per share, compared to a loss of $1.65 billion or $6.04 per share in the year-ago quarter.

The company noted that the absence of a $1.4 billion charge related to the transaction closed on August 5, 2008 with Syncora Holdings Ltd. and certain of its subsidiaries was the primary reason for the narrowed net loss to ordinary shareholders in the third quarter of 2009.

Operating income for the quarter was $306.41 million or $0.89 per share, compared to $107.77 million or $0.39 per share in the second quarter of 2008. The company attributed the higher operating income to an increase of $183.7 million from the underwriting contribution of XL's P&C operations and an increase of $97.2 million in the net income from investment affiliates.

On average, fourteen analysts polled by Thomson Reuters expected the company to earn $0.63 per share for the quarter. Analysts estimates typically exclude special items.

The company also noted that the higher operating income was offset by recognition of $310.8 million in after-tax net realized losses related principally to other than temporary impairments. The charge was the main factor which lead a net loss available to ordinary shareholders of $11.40 million or $0.03 per share for the quarter.
Total revenues for the quarter decreased to $1.49 billion from $1.74 billion in the prior-year quarter.

For the sequentially preceding quarter, XL Capital had reported a net income available to ordinary shareholders of $80.00 million or $0.23 per share, compared to $237.85 million or $1.33 per share in the prior year quarter. Total revenues dropped to $1.73 billion from $2.12 billion in the same quarter last year.

Amongst others in the sector, Zurich, Switzerland-based insurer ACE Ltd. (ACE) on October 27, reported a higher third-quarter profit, driven by higher underwriting income. The company posted net income available to holders of common shares of $494 million or $1.46 per share for the third quarter, compared to $54 million or $0.16 per share in the prior year quarter. Income excluding net realized gains rose to $701 million or $2.07 per share from $504 million or $1.50 per share in the year-ago quarter.

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