XL's 2014 combined ratio best in 15 years

XL's 2014 combined ratio best in 15 years

A property and casualty (p/c) combined ratio of 88.2% for 2014 is the best result XL Group has enjoyed in over 15 years with the Dublin-based re/insurer benefiting from the low level of catastrophes to strike during the year.

That combined ratio is a 4.3 percentage point drop on the number the Dublin-based re/insurer reported for 2013, with both the insurance and reinsurance segments of the business playing a role in the strong result.

"XL delivered a very strong 2014 including continued progress in insurance and an extraordinary year in reinsurance,” said XL Group’s chief executive, Mike McGavick.

“Many of our results were the best we have achieved in over 15 years, including our property and casualty combined ratio of 88.2%. Insurance results included a 2014 combined ratio of 94.4%, the best performance since 2007, and a loss ratio of 63.2%. And our reinsurance segment achieved a stellar 73.3% combined ratio, one of its best performances as well.”

However, McGavick also conceded that these results are not only down to the skills of XL’s staff.

“Of course, these results were helped, in part, by one of the lowest catastrophe years we have seen in years,” he said.

2014_XL_GWP
XL Gross Written Premiums 2014 & 2013


Net profit for the company stood at $188.3m for the year, down substantially from the $1.06bn recorded for 2013. However, the figure for 2014 reflects the life retrocession agreements XL entered into following on from the sale of the company’s life reinsurance book to GreyCastle Holdings.

As XL explained, last year’s “net income is impacted by the gains or losses in the life funds withheld assets, with an equal and opposite accounting adjustment in XL’s comprehensive income so there is no effect on XL’s book value”.

2014_XL_Underwriting_Income

Excluding the impact of these life retrocession agreements, XL’s net profit for 2014 would have stood at $1.2bn.

Gross premiums written during the course of 2014 stood $8.09bn, up from $7.74bn in the previous year. This growth was derived from the company’s insurance book which increased by $452.8m year on year. XL’s reinsurance book actually decreased during 2014, with the $1.89bn of gross premium written in this segment representing a drop of $108.1m year on year.

Net investment income, excluding the aforementioned life funds withheld assets, dropped by almost $168.7m year on year to approximately $789.1m.

2014_XL_Combined_Ratio

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