XL operating profits dented by integration costs and nat cat losses
XL Group has reported a drop in operating income in 2015 to $705.9 million, compared with $999.2 million in 2014 driven by integration costs and high natural catastrophe losses.
XL nearly doubled its nat cat pre-tax losses, net of reinsurance and reinstatement premiums, in 2015 to $213.2 million compared with $113.3 million in the prior year. The firm also faced integration costs related to the combination with Catlin Group of $156.4 million last year.
However, its net income attributable to ordinary shareholders hiked to $1.2 billion in 2015, compared with $188.3 million in the prior year.
XL’s property and casualty (P&C) combined ratio increased to 92 percent in 2015, compared with 88.2 percent in 2014. However its P&C gross premiums written increased to $10.7 billion in 2015, compared with $7.8 billion in 2014.
Mike McGavick, chief executive officer, XL, said: “Through 2015 XL produced solid results in a tough re/insurance market while closing a transformative acquisition and successfully launching XL Catlin.
“Our colleagues focused on executing a superior integration process that has thus far exceeded our expectations for both business and talent retention as well as synergy savings.
“Looking to 2016, taking into account the continued pressure from both the re/insurance and investment markets, we feel we are well positioned to capitalise on our increased market relevance and to find new areas of innovation and opportunity."
