GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

XL Capital Ltd Reports Operating Results (10-Q)

August 08, 2012 | About:

10qk

18 followers
XL Capital Ltd (XL) filed Quarterly Report for the period ended 2012-06-30.

Xl Group Plc has a market cap of $6.61 billion; its shares were traded at around $22.75 with a P/E ratio of 16.3 and P/S ratio of 1. The dividend yield of Xl Group Plc stocks is 2.1%.

Highlight of Business Operations:

The combined ratio for P&C operations is used by the Company and many other insurance and reinsurance companies as another measure of underwriting profitability. The combined ratio is calculated from the net losses incurred and underwriting expenses as a ratio of the net premiums earned for the Companys insurance and reinsurance operations. A combined ratio of less than 100% indicates an underwriting profit and greater than 100% reflects an underwriting loss. The Companys combined ratio for the three and six months ended June 30, 2012 is lower than for the same periods in the previous year, as a result of a decrease in the loss and loss expense ratio partially offset by a marginal increase in the underwriting expense ratio. The loss and loss expense ratio, which is the ratio of losses and loss expenses incurred to net premiums earned, has decreased as a result of overall lower levels of catastrophe losses and other large loss events for the three and six months ended June 30, 2012 as compared to the same periods of 2011. The increased underwriting expense ratio, which is the ratio of the sum of acquisition expenses and operating expenses to the net premiums earned, is reflective of the additional costs incurred from strategic initiatives and compensation costs.

The Company had a P&C underwriting profit of $129.4 million and $192.6 million for the three and six months ended June 30, 2012, respectively, compared to a P&C underwriting profit of $67.0 and an underwriting loss of $261.0 million for the same periods of 2011, respectively. The increase in underwriting profit in the three and six months ended June 30, 2012 was primarily due to lower levels of natural catastrophe losses and lower non-natural catastrophe large loss activity in energy, property and marine business units as explained further below.

Net realized losses on investments of $12.4 million in the three months ended June 30, 2012 included net realized losses of approximately $28.2 million related to the write-down of certain of the Companys AFS investments as well as losses arising on targeted sales of European financial exposures, partially offset by net realized gains of $24.0 million on sales of equity securities.

Net realized losses on investments during the three months ended June 30, 2011 included net realized losses of $27.2 million related to the write-down of certain of the Companys fixed income, equity and other investments with respect to which the Company determined that there was an other-than-temporary decline in the value of those investments as well as net realized gains of $17.7 million from sales of investments.

Net realized gains on investments of $8.4 million in the six months ended June 30, 2012 included net realized losses of approximately $49.2 million related to the write-down of certain of the Companys AFS investments as well as losses arising on targeted sales of European financial exposures. In addition, included in the net realized gains noted above are net realized gains of $57.6 million due primarily to gains from a repositioning of the Agency RMBS portfolio and net realized gains of $33.8 million on sales of equity securities.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 2.3/5 (3 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK