NEW YORK (AFX) - Insurer XL Capital Ltd. said Wednesday second-quarter profit almost tripled due to solid underwriting and strong investment performance.
Net income for the Bermuda-based company was $377.1 million, or $2.10 per share, up from $135.9 million, or 97 cents per share, in the year ago quarter.
Year-ago figures included a reserve strengthening of $186.3 million for North American reinsurance operations and a $63.3 million after-tax charge.
Analysts polled by Thomson Financial expected profit of $2.09 per share.
Revenue declined 39 percent to $2.5 billion, from $4.12 billion, in the same quarter last year.
A foreign exchange loss lowered the quarter's general insurance underwriting profit by $46.3 million, compared to last year, the company said.
Reinsurance underwriting profit increased to $113.7 million, from a loss of $104.5 million in the year-ago quarter.
Gross premiums for reinsurance life and annuity operations net income was $18.1 million, compared to a loss of $55.9 million in the year-ago quarter.
Financial products and services operations increased to $59.9 million, driven by higher income from financial guaranty operations. In addition, net income from financial affiliates was $12.3 million, compared to a net loss of $7.4 million in the year-ago quarter. Net investment income from general operations increased 24.7 percent to $261.4 million.
'Our risk management initiatives are well under way, our underwriting results are solid, and our investment performance is strong,' said Brian M. O'Hara, president and chief executive. 'The IPO of SCA, our financial guaranty business, is on track.'
XL Capital closed down 6 cents at $66.44 on the New York Stock Exchange.
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