XL profit falls to $28.3m – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

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XL profit falls to $28.3m

XL Group’s profit for the fourth quarter dropped to $28.3 million, or 11 cents per share, a 90.5 per cent year-on-year decrease, after it suffered $315.3 million of pre-tax catastrophe losses.

It took a $100.5m non-recurring tax charge as a result of the US Tax Cuts and Jobs Act, which related to the revaluation of net deferred tax assets.

For the full year XL made a loss of $560.4 million, or $2.16 per share, compared to a profit of $441 million in 2016.

Pre-tax catastrophe losses jumped to $2 billion, up from $636.2 million the previous year.

Net premiums from property and casualty, an important metric, were $2.7 billion for the quarter, up from $2.3 billion. Operating net income was $116 million, or 45 cents per share.

Mike McGavick, chief executive officer, said: “XL’s fourth quarter and full year 2017 results were impacted by the severe natural catastrophes in the year.

“At the same time, we feel positive about where we are going due to some important factors including: our solid capital position, our progress made in our 2017 ex-catastrophe underlying results, the strength of our market relevance as demonstrated by our 8 per cent growth in gross written premiums year-over-year, and that we are seeing early signs of a return to realistic and sustainable rate.

“Additionally, with the benefit of learning from our 2017 catastrophe experience and seeing the early way in which the rate environment is reacting following the 2017 events, we have already made a series of adjustments to optimise the balance of risk and return, meaningfully enhancing our catastrophe exposure profile while keeping us a leading player in these businesses.

“We expect to make further adjustments as the market environment unfolds.”

Mr McGavick said XL Catlin continues to be a market leader in customer satisfaction and innovation, earning top recognition from JD Power, the Gracechurch survey and in Advisen’s innovation index.

He said: “All of this taken together, as we look at our industry, we feel well positioned for what comes next.”

XL Group’s property and casualty combined ratio for the quarter was 99 per cent for the quarter, and 108.3 per cent for the year. Excluding previous year development and natural catastrophe losses, the ratios were 89.5 per cent and 90.2 respectively.

The company did not buyback any shares during the fourth quarter. The book value per share at the end of 2017 was $38.04, a decrease of 23 cents for the quarter and $2.29 for the year.

Ahead of the earnings release, XL Group’s shares closed in New York at $36.79, down five cents on the day.

XL Catlin CEO Mike McGavick