"Our continuing increase in operating earnings reflects the positive contribution from our merger with Mid Ocean and Brockbank, as well as the underlying financial strength of XL," stated Brian M. O'Hara, President and Chief Executive Officer of XL. "We are particularly pleased with the year-over-year growth in the premiums written by our insurance operations.
"We were pleased to announce our merger with NAC Re Corporation during the first quarter and look forward to completing this transaction later this year," Mr. O'Hara added. "In addition, we increased our presence in the investment management business through our taking an equity stake in a fund manager, Highfields Capital, in February."
Economic operating income for the first quarter of 1999 excludes realized gains on sale of investments of $64.7 million, or $0.57 per share, and amortization of intangible assets of $11.1 million, or $0.10 per share. In the first quarter of 1998, realized investment gains were $63.0 million, or $0.73 per share, and amortization of intangible assets was $3.3 million, or $0.03 per share.
For the first quarter of 1999, net income, including realized investment gains and the amortization of intangible assets was $191.7 million, or $1.69 per share, compared with $155.4 million, or $1.81 per share in 1998.
Revenues in the first quarter were $434.3 million in 1999, compared with $275.6 million in 1998. Total assets as of February 28, 1999 were $10.5 billion, compared with $10.1 billion as of November 30, 1998. Shareholders' equity was $4.8 billion as of February 28, 1999 and November 30, 1998. Fully diluted book value per share as of February 28, 1999 was $42.88 compared with $42.79 as of November 30, 1998.
For the first quarter, gross premiums written were $499.8 million in 1999, compared with $250.3 million in 1998. Net earned premiums were $263.5 million in the first quarter 1999, compared with $139.9 million in 1998.
For the first quarter, net investment income, excluding realized investment gains, was $97.1 million in 1999, compared with $57.5 million in 1998's first quarter.
The Company's equity in the net earnings of its affiliates for the first quarter was $1.0 million in 1999, compared with $15.2 million in 1998.
The first quarter combined ratio was 85.4 percent in 1999, compared with 81.0 percent in the first quarter of 1998. The loss ratio was 54.5 percent and 58.5 percent for the first quarters of 1999 and 1998, respectively, with the underwriting expense ratio for such periods being 30.9 percent and 22.5 percent.
The weighted average number of ordinary shares and share equivalents outstanding on a fully diluted basis in the first quarter was 113.8 million in 1999 versus 86.0 million in 1998. In fiscal 1999 the Company has repurchased 894,400 of its shares for $55.5 million.
The amounts in this release include the consolidation of the results of Mid Ocean Limited, including its Lloyd's (Brockbank) operations, following the completion of the Company's merger with Mid Ocean on August 7, 1998. Prior to the merger, XL owned 26 percent of Mid Ocean. Financial information for the first quarter of 1998 reflects the
Company's equity in the results of Mid Ocean. The merger with Mid Ocean has been accounted for as a purchase under GAAP.
XL Capital Ltd, through its subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.