Bermuda’s XL Capital Ltd. reported net income available to ordinary shareholders for the quarter ended March 31, 2006 of $458.5 million, or $2.56 per ordinary share, compared with net income of $442.9 million, or $3.18 per ordinary share, for the quarter ended March 31, 2005. Net income excluding net realized gains and losses (operating income) for the first quarter of 2006 was $405.5 million, or $2.26 per ordinary share, compared with $346.5 million, or $2.49 per ordinary share, for the prior year period.
Other highlights cited in the report include the following:
— Combined ratio was 89.6 percent
— Net investment income increased 50 percent to $463.7 million
— Record net income from investment affiliates was $106.4 million
— Contribution from financial operations was $64.5 million
— Cash flow from operations was $555.0 million
— Annualized return on ordinary shareholders’ equity, based on net income excluding net realized gains and losses, was 20.4 percent
President and CEO Brian M. O’Hara commented: “As we enter our twentieth year, I am pleased to report record earnings for the quarter with solid results in each of our business segments, as well as very strong investment returns. Our lower P&C net premiums written is principally reflective of our previously announced corporate-wide risk management initiatives to maximize risk-adjusted returns and the concentration in the first quarter of European renewals that were impacted by lower property rates and foreign exchange movements. I believe we will see continuing robust P&C market conditions and returns as renewals proceed through the remainder of the year.”
Although the net figures showed increases, XL recorded decreases in a number of its operating sectors. General insurance operations posted an underwriting profit of $64.7 million compared with $82.0 million in the prior year period. In addition XL noted:
— Gross and net premiums written decreased 7.1 percent and 9.9 percent, respectively as a result of a decrease in European property rates, unfavorable foreign exchange movements, lower multi-year premiums and ongoing risk management initiatives.
— Net premiums earned decreased 4.7 percent primarily due to the lower net premium written.
— The combined ratio was 91.5 percent in both quarters.
Concerning its reinsurance operations XL said its underwriting profit for the quarter ended March 31, 2006 was $84.9 million compared with $93.4 million for the prior year period. It also noted:
— Gross and net premiums written were down 12.5 percent and 17.8 percent, respectively primarily due to ongoing risk management initiatives and selective treaty cancellations.
— Net premiums earned were down 7.1 percent reflecting the effects of lower net premiums written over the previous twenty four months.
— The combined ratio was 86.6 percent compared with 86.9 percent in the prior year period.
The Company will host a conference call to discuss its first quarter 2006 results on Wednesday, April 26, 2006 at 10:00 a.m. EDT. The conference call can be accessed through a listen-only dial-in number or through a live webcast. To listen to the conference call, please dial (706) 679-0474, password 042606. The webcast will be available on XL’s Website located at http://www.xlcapital.com/ and will be archived on this site from approximately 1:00 p.m. Eastern time on April 26, 2006 through midnight Eastern time on May 26, 2006. A slide presentation accompanying the Company’s discussion of its first quarter results will also be available on the Company’s Website, beginning approximately 15 minutes before the commencement of the conference call.
A telephone replay of the conference call will be available beginning at approximately 11:00 a.m. Eastern time on April 26, 2006 until 11:00 p.m. Eastern time on May 26, 2006 by dialing (800) 642-1687 or (706) 645-9291, Conference ID #7311747. An unaudited financial supplement relating to the Company’s first quarter 2006 results is available on its Website.
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