Hurricane losses hit XL’s Q3 results hard
Heavy losses mainly from hurricanes Harvey, Irma and Maria hit the results of the XL Group hard in the third quarter – the re/insurer posting a sizable loss. But the company also enjoyed positive growth in the period.
The company made a net loss of $1.04 billion in the third quarter, compared with a profit of $70.6 million in the same period a year earlier. The figures were mainly hit by pre-tax losses stemming from the three hurricanes totalling $1.48 billion, net of reinsurance, reinstatement and premium adjustments. This added 58.8 points to its loss ratio.
The company’s combined ratio for the period reached 146.9 percent, a big increase on the 89.8 percent it posted a year earlier.
But the company also enjoyed strong growth. P&C gross premiums written in the third quarter increased by 10.9 percent to $3 billion, compared to the prior year quarter. Within this, the insurance segment GPW increased by 7.3 percent from the prior year quarter driven primarily by growth in International and North America Property lines, Accident & Health, North America Construction and Fine Art & Specie.
These increases were partially offset by decreases in North America programmes and Excess & Surplus lines.
Its reinsurance segment GPW increased by 24.6 percent from the prior year quarter due to additional new business written in the quarter and reinstatement premiums from the recent catastrophic activity. The increase in new business was primarily from the casualty line of business predominantly within the Bermuda and EMEA regions. In addition, significant new business was written within the Property Treaty line of business from both the North America and Latin America regions.
Mike McGavick, chief executive of XL Group, said: "The natural catastrophes that mark the third quarter bring a unique devastation to those impacted and we continue the important work of helping our clients rebuild in these times of need. The financial impact of these events was, of course, significant to our financial results in the quarter.
“At the same time, excluding these events, our underlying results show continued progress as demonstrated by improvement in the ex-cat P&C combined ratio, insurance combined ratio and insurance loss ratio versus the prior year quarter. As we look at the global re/insurance markets today, with a view that we will see new levels of appropriate sustainable pricing, we believe we are well positioned by virtue of our diverse portfolio, global relevance and disciplined underwriting.”
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