This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

XL Group's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Now in the P&C industry, we all know better than to expect an immediate turnaround in underwriting results. But as our actions take hold, improvements will accelerate, we believe. Everyday, these businesses are decreasingly affected by prior decisions and increasingly improving as a result of our corrections. As we've shared with you, some of these 7 businesses are already on their way to reaching appropriate margins. And at the same time, as we have emphasized, we are watching all of our businesses with intense focus, always on the lookout for anything that warrants special attention or greater opportunity to expand our profit.

Turning to another source of confidence. Pricing improved in each month of the first quarter. To use the metric that many of our peers report, North American Property & Casualty rate growth was 5% in the first quarter and rate achievement was accelerating throughout the quarter. I'll ask Greg and Jamie to elaborate, but we feel very comfortable that our positive rate change will continue. We are a long way from regaining the ground lost over the past 10 years, but as the momentum moves in the right direction, we believe XL is well positioned to benefit from this rate movement.

Another source of our confidence is our focus on smart profitable growth. Our P&C gross premiums written increased over 10% from the first quarter of last year. Insurance segment gross premiums written were up 9.3% as a result of new business initiatives in North American Projerty & Casualty lines, higher retention levels in our profitable professional lines, and improved pricing. Gross premiums written by our Reinsurance segment grew by 11.8%, primarily in International Casualty. We like what we are seeing, remixing our businesses towards premiums written in the lines we think provide the greatest opportunity for profit.

Another source of confidence is our ERM. Our enterprise risk management record continues to show results. While the entire industry did benefit from a relatively quiet cat quarter, where losses were reported, XL again fared in line with our expectations and performed well relative to peers as a percentage of shareholders' equity. Now in the first quarter, this was illustrated by Costa Concordia, an awful human tragedy obviously, and one of the true marine catastrophes that we have experienced. In fact, for the sector, this resulted in a loss approaching $1 billion. Now we're a leader in insurance and reinsurance marine coverages for both haul damage and liability. And for us to have a net loss from this event, currently estimated about $45 million, is a sound underwriting achievement given the catastrophe to the market. In the first quarter, we continue to invest favorable reserve development. And we believe you should find more evidence of our reserving prudence when we relieve our -- when we release our Global Loss Triangles later this week. Recall that the first quarter is an actual versus expected quarter. And as usual, we will again perform a complete review of our reserves in the second and fourth quarter, and look forward to discuss reserving in greater detail with you next quarter. Susan Cross, our Global Chief Actuary, will join us then.

Read the rest of this transcript for free on seekingalpha.com

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,041.54 -190.48 -1.04%
S&P 500 2,104.20 -21.86 -1.03%
NASDAQ 5,032.7510 -56.6110 -1.11%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs