Bermuda’s XL Capital Ltd. became the latest major insurer based on the island to report strong income gains in the third quarter of 2006. XL posted net income available to ordinary shareholders for the quarter of $415.8 million, or $2.32 per ordinary share, compared with a net loss of $1.0492 billion, or $7.53 per ordinary share, for the quarter ended September 30, 2005.
Net income excluding net realized gains and losses for the third quarter of 2006 was $468.2 million, or $2.61 per ordinary share, compared with a net loss of $1.115 billion, or $8.01 per ordinary share, for the prior year period.
XL noted that “included in both net income and ‘net income excluding net realized gains and losses’ for the quarter ended September 30, 2005 was a net loss after tax of $1.4744 billion related to Hurricanes Katrina, Rita and other natural catastrophes.”
Commenting on the current quarter results, President and CEO Brian M. O’Hara stated: “I am pleased to report that each of our five business segments, along with investment operations, contributed to another record quarter for XL Capital. Our book value rose by over 12 percent this quarter, and our return on equity of 22 percent was exceptional, demonstrating the success of XL’s risk management, underwriting and investment disciplines. I believe our initial public offering of SCA should put them on a very solid foundation for future growth and profitability. As we enter the fourth quarter of XL’s twentieth year, we remain committed to disciplined execution and maintaining the momentum we have built for the benefit of our shareholders.”
For the first nine months of 2006, net income available to ordinary shareholders was $1.2514 billion, or $6.98 per ordinary share, compared with a net loss of $470.4 million, or a loss of $3.39 per ordinary share, in the first nine months of 2005. “Net income excluding net realized gains and losses” for the same period was $1.2495 billion, or $6.97 per ordinary share, as compared with a net loss of $667.2 million, or a loss of $4.81 per ordinary share, in the first nine months of 2005.
Other earnings highlights cited by the Company included the following:
— Combined ratio from general operations was 86.8 percent
— Total net investment income increased 41.3 percent to $518.3 million
— Book value per ordinary share increased 12.1 percent to $49.90
— Cash flow from operations was $800.2 million
— Annualized return on ordinary shareholders’ equity, based on “net income excluding net realized gains and losses”(1), was 22.0 percent
The full report as well as a replay of the investors and analysts conference call is available on the Company’s Website at: www.xlcapital.com. A replay of the conference call is available until Nov. 15 by dialing (800) 642-1687 or (706) 645-9291, Conference ID # 7503058.
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