XL Group posts big 2017 loss but enjoys steady growth

XL Group made a net loss of $560.4 million in 2017 – a big reversal on the $440 million net profit it posted the year before. But its CEO said the company has learned from the 2017 catastrophe experience and is adjusting its portfolio accordingly.

The company blamed the loss on high levels of natural catastrophe losses as well as a non-recurring tax charge of $100.5 million related to the revaluation of the net deferred tax asset as a result of the reduced US corporate income tax rate enacted under the US Tax Cuts and Jobs Act. This was recorded against net income attributable to common shareholders in the fourth quarter.

Natural catastrophe pre-tax losses net of reinsurance, reinstatement and premium adjustments and redeemable non-controlling interest reached $2 billion (19.7 points to the loss ratio) for the full year, compared with $636.3 million (6.6 points to the loss ratio) for the prior year

Its combined ratio in 2017 reached 108.3 percent, compared with 94.2 percent a year earlier.

The company enjoyed solid growth last year. Its gross written premiums overall increased to $14.7 billion in 2017 compared with $13.6 billion a year earlier; its reinsurance segment posted GWP of $4.7 billion, compared with $4 billion in 2016.

Mike McGavick, CEO of XL, 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 percent 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 learnings 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 optimize 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.”

Join us at Intelligent Automation in Insurance - London 2018.  Book by Feb 28th and you could save £300.

More of today's news

Validus reports 2017 loss but bullish renewals ahead of AIG takeover

AIG a safe ‘shelter’ for Validus Re as risk landscape changes

Miller swoops for execs from Howden and Ironshore in Asia

Western European re/insurers enjoy upgrades despite tough landscape

Sompo merges US units into global insurance platform SIH

Don't miss our insurtech email newsletter - sign up today