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XL Catlin’s profits grow as expenses fall

XL Catlin CEO Mike McGavick

Global insurer and reinsurer XL Catlin last night posted profits of $152.8 million for the first quarter of the year.

The figure is nearly $140 million up on the same period last year and equal to 57 cents per share, compared to 7 cents in the first quarter of 2016.

Mike McGavick, XL’s chief executive officer, said: “We are pleased to start off 2017 with solid performance, focused growth and the continuation of lower operating expenses.

“As we approach the two-year anniversary of the Catlin acquisition, we see the benefits of our increased market presence, or focus on underwriting discipline, our strong culture of innovation and continuous improvement and a more efficient operating platform.

“Additionally, our realigned operating model seamlessly went live at the beginning of the year and with it we remained steadfast on superior client experience.

“As a result, our performance included an accident year combined ratio, excluding catastrophes, of 89.5 per cent — an improvement of 2.6 points compared to the first quarter of 2016. 2017 is all about delivering on what we have built.”

Net income from company affiliates totalled $51.9 million for the year, compared to $8.1 million in the prior year quarter.

XL Catlin said the increase was driven mostly by its hedge fund affiliates, as well as strong performance by its strategic operating affiliates and “investments within our value investing strategy.”

Net investment income for the quarter was $200.5 million, compared to $205.9 million in the first quarter of last year.

The company posted natural catastrophe pre-tax losses net of reinsurance and reinstatement premiums in the quarter of $96.1 million, compared to $52.8 million in the prior year quarter.

Integration costs related to the combination of XL and Catlin totalled $33.9 million for the first quarter, compared to $55 million in the first quarter of last year.

Gross premiums written in property and casualty in the first three months of the year amounted to $4.62 million, 6 per cent up on the first quarter of 2016.

Property and casualty net premiums earned were $2.5 billion, made up of $1.6 billion from the insurance segment and $0.9 billion from the reinsurance segment.