Bermuda-based XL Capital Ltd reported net income available to ordinary shareholders for the quarter ended Sept. 30, 2004, of $22.5 million, or 16 cents per ordinary share, compared with $99.0 million, or 71 cents per ordinary share, for the quarter ended Sept. 30, 2003.
“Results for the 2004 third quarter include the impact of a net $420.1 million after-tax charge related to hurricane activity during the quarter,” said the announcement.
“Net loss excluding net realized gains and losses on investments and net realized and unrealized gains and losses on credit and investment derivative instruments, net of tax, for the quarter was $15.4 million, or a loss of 11cents per ordinary share, compared with net income of $124.1 million, or 90 cents per ordinary share, for the year-ago quarter,” the report noted.
For the nine months ended Sept. 30, 2004, net income available to ordinary shareholders increased 22 percent over the year-ago period to a record $838.2 million, or $6.05 per ordinary share. “Net income excluding net realized gains and losses on investments and net realized and unrealized gains and losses on credit and investment derivative instruments, net of tax for the nine-month period was $622.3 million, or $4.49 per ordinary share, a decrease of 3 percent compared with the year-ago period,” the report continued. Annualized return on ordinary shareholders’ equity on the same basis was 12.5 percent, compared with 13.3 percent for the nine months to Sept. 30, 2003.
“In a quarter that witnessed unprecedented natural catastrophe activity, XL delivered solid underlying results,” commented President and CEO Brian O’Hara. “The combined ratio from our general operations, excluding hurricane-related losses, was 86.7 percent reflecting the strength of our underwriting discipline and the continued generally healthy market conditions. The combination of our global presence, diversified product expertise and ratings strength allows us to continue to see attractive market opportunities, although we have selectively reduced writings in certain lines where price competition has become aggressive.
“Cash flow from operations, net invested assets and net investment income all recorded solid increases over year ago levels. Our affiliate investments also delivered particularly strong results in the quarter, benefiting from the IPO’s of Admiral Group and Primus Guaranty and the sale of our 30 percent stake in Pareto Partners. These events, combined, contributed income of $100.9 million after-tax in the quarter,” he concluded.
Other third quarter highlights cited by the report were as follows:
— Net premiums written from general operations decreased 9 percent to $1.4 billion
— Combined ratio from general operations was 110.6 percent. Excluding hurricane-related losses, the combined ratio was 86.7 percent
— Net investment income increased 33 percent to $253.1 million
— Cash flow from operations was $1.1 billion, or $1.4 billion including
structured and spread transactions
— Total net invested assets were $30.3 billion, up 19 percent from Dec. 31, 2003
— Total assets of $46.8 billion, increased 15 percent from Dec. 31, 2003
— Book value per ordinary share of $49.45, increased 6 percent from $46.74 at Dec. 31, 2003
— Underwriting loss for the quarter was $83.7 million, compared with underwriting profit of $119.6 million in the prior-year quarter.
— Reinsurance Operations (general) underwriting loss for the quarter was $78.3 million compared with a loss of $74.5 million in the 2003 third quarter.
The Company will host a conference call to discuss its third quarter 2004 results on Tuesday, Nov. 2, 2004, at 10 a.m. Eastern Time. A live webcast of this call will be available at http://www.xlcapital.com and will be archived on XL’s Web site from approximately 1 p.m. Eastern Time on Nov. 2, 2004, through midnight Eastern Time on Dec. 2, 2004.
A telephone replay of the conference call will be available beginning at 1:00 p.m. Eastern Time on November 2, 2004, until 8:00 p.m. Eastern Time on November 9, 2004, by dialing (201) 612-7415 (account number: 7716 and conference I.D. number: 118726). An unaudited financial supplement relating to the Company’s 2004 third quarter results is available on its Website at http://www.xlcapital.com.
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