XL HIT WITH LARGE NOT-CAT LOSSES AND MISSES ESTIMATE

Bermudian re/insurer XL Group, soon to be part of France’s Axa, saw its second-quarter underwriting income fall 41% to $114.2m after seeing non-catastrophe large-loss activity and unfavourable prior-year development in short-tail insurance lines. Operating earnings per share fell to 84¢ from 96¢ and missed analysts’ estimate of 90¢. The combined ratio added 3.5 points to 95.8%, driven by the insurance segment, which posted a $74m swing to a $20.7m underwriting loss. Gross written premiums rose 10.6% to $3.93bn. Rises in investment income and realised gains offset the decline in underwriting income, raising net income by 5.8% to $319.0m. For the first half, XL’s net income rose 3.8% to $471.6m, as improved investment returns offset a decline in underwriting income. The six-month combined ratio added 2.2 points to 95.5%.