Earnings Reports: XL Group, Alterra Capital

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Selected earnings highlights from the XL Group's headquarters in Dublin, Ireland for the second quarter and the first half of 2012 are as follows:
                                                             Q2 2012                Q2   2011          
*Gross premiums written ————    $1.763651 bn        $1.762.443 bn
*Net premiums written  —————   $1.347278 bn        $1.306059 bn
*Net premiums earned   ————-    $1.400972 bn        $1.306125 bn  
Net income after tax  ——————   $221.156 mn         $225.663 mn
Operating net income ——————  $221.945 mn         $243.133 mn
Net investment income  —————  $262.631 mn          $296.505 mn
Net realized investment gain/loss—   ($12.393 mn)        ($9.544 mn)
*Q2 combined ratio – 90.8 percent (94.9 percent in Q2 2011)

                                                  1st Half 2012          1st Half 2011          
*Gross premiums written ————    $4.080435 bn      $3.861453 bn
*Net premiums written  —————   $2.168762 bn      $2.250519 bn
*Net premiums earned   —————  $2.758870 bn      $2.577821 bn  
Net income/loss after tax  ———–     $397.784 mn      ($1.621 mn)
Operating net income  —————-    $387.176 mn      $80.144 mn
Net investment income ————–     $527.873 mn      $576.768 mn
Net realized investment gain/loss —- $8.410 mn           ($75.981 mn)
*1st half combined ratio – 93.0 percent (110.1 percent in 1st half 2011)
*Figures are for P&C operations only

CEO Mike McGavick commented: "In absolute and relative terms, this was a solid quarter for XL, demonstrating our continued progress. We again expanded margins in both our Insurance and Reinsurance segments and reported a total P&C combined ratio of 90.8 percent, more than four percentage points better than the second quarter last year.

"Our semi-annual reserve review resulted in both Insurance and Reinsurance releases. And we grew book value as we continued to buy back shares. We are resolved to continue this progress across all of our businesses."

Source: XL Group

Selected earnings highlights from Bermuda-based Alterra Capital Holdings for the second quarter and the first six months of 2012 are as follows:  
                                                           Q2 2012                Q2   2011          
Gross premiums written ————    $566.857 mn         $563.907 mn
Net premiums written  —————   $376.978 mn        $427.281 mn
Net premiums earned  ————-       $350.778 mn        $348.941 mn  
Net income after tax  —————-     $78.940 mn          $32.635 mn             
Net operating income ————–      $69.0 mn                $39.60 mn
Net investment income ————-     $54.729 mn          ($5.744 mn)
*Net investment gain/loss ———–  $13.481 mn           ($5.774 mn)
**Q2 combined ratio: 86.6 percent (93.7 percent in Q2 2011)

                                                 1st Half 2012          1st Half 2011          
Gross premiums written ————    $1.228187 bn     $1.191755 bn
Net premiums written  —————   $813.846 mn      $917.772 mn
Net premiums earned  ————-       $688.953 mn       $728.828 mn  
Net income (loss) after tax  ———   $157.964 mn      ($14.052 mn)            
Net operating income —————-  $136.70 mn         $14.80 mn
Net investment income   ————   $113.407 mn       $6117.431 mn
*Net investment gain/loss ———– $38.974 mn         ($24.592 mn)
**1st half combined ratio: 89.5 percent (103.5 percent in 1st half 2011)
*Realized and unrealized
** P&C only

President and CEO W. Marston (Marty) Becker commented: "We are pleased to report another solid quarter for Alterra. Despite a challenging market environment, we achieved an annualized net operating return on equity close to 10 percent for the quarter, while continuing to maintain a conservative philosophy on our newer product lines and teams.

"While we would prefer to see rates increasing at a faster pace, we are pleased that overall firming continues. Over the last twelve months, we have supplemented our 7.7 percent operating return on equity with significant share repurchases at a discount to diluted book value, contributing to a 12.5 percent increase in diluted book value per share, including dividends, since June 30, 2011.

"We expect to continue to use share repurchases as an important capital management tool for maximizing shareholder value until rate increases enable us to more effectively deploy any excess capital in our underwriting operations."

Source: Alterra Capital

Charles E. Boyle 08 Aug, 2012

Source: http://www.insurancejournal.com/news/international/2012/08/08/258632.htm
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