XL Capital's second-quarter profits jumped $177 million year-on-year to $544.5m, with the impact of flooding in England during June and in Australia presenting relatively low pre-tax net losses of around $30m.

There was also a $81.3m fillip from the sale of a chunk of XL's shareholding in Security Capital Assurance (SCA), which turned a net realised investment loss of $63m into a $18.3m addition on the "plus" side of the company's balance sheet.

Underlining its strengthen position, XL's combined ratio declined from 91.9 to 86.3 year-on-year, and gross premiums written came in at $2.23 billion, about $60m less than a year ago.

President and chief executive officer Brian O'Hara said: "XL's six consecutive quarters of excellent earnings demonstrate the advantages of our unique dual platform.

"Our continuous improvement in risk management, commitment to disciplined growth, along with our sharpened strategic focus, have all contributed to the achievement of record results, and as we have demonstrated in this quarter, provide a solid platform for delivering shareholder value."

The profit for the second quarter equates to $3 per share, compared to $2.10 a year ago.

During the past three months XL sold 16.6 percent of its holdings in SCA, leaving it with 46 percent of the company's shares.

Offsetting net income for the quarter was a decrease in net unrealised gains/losses on investments of $615.5m, due to the rise in interest rates.

Insurance underwriting profit for the quarter was $102.2m compared with $63.8m in 2006. This increase was due mainly to net favourable prior year development of $43.7 million, as compared to net adverse development of $4.8 million in the second quarter of 2006.

Reinsurance underwriting profit was $129.8m compared with $81.8m, year on year. That increase was principally due to net favourable prior year development of $80.4m, compared to net adverse development of $3.0m in 2006. Life operations gross premiums written were $235m compared with $194.7m in the prior year quarter, reflecting continued growth in underlying business and favourable foreign exchange movements.