Segment Information

9 Months Ended

Sep. 30, 2011

Segment Reporting Disclosure [Text Block]

4. Segment Information

          The Company is organized into three operating segments: Insurance, Reinsurance and Life operations. The Company’s general investment and financing operations are reflected in Corporate.

          The Company evaluates the performance for both the Insurance and Reinsurance segments based on underwriting profit while the Life operations segment performance is based on contribution. Other items of revenue and expenditure of the Company are not evaluated at the segment level for reporting purposes. In addition, the Company does not allocate investment assets by segment for its Property and Casualty (“P&C”) operations. Investment assets related to the Company’s Life operations and certain structured products included in the Insurance and Reinsurance segments and Corporate are held in separately identified portfolios. As such, net investment income from these assets is included in the contribution from each of these segments.

Three Months Ended September 30, 2011:
(U.S. dollars in thousands, except ratios) (Unaudited)	Insurance			Reinsurance			Total P&C			Life Operations			Corporate			Total
Gross premiums written	$	1,156,901		$	619,260		$	1,776,161		$	100,564		$	—		$	1,876,725
Net premiums written		872,757			419,949			1,292,706			90,769			—			1,383,475
Net premiums earned		930,067			432,465			1,362,532			90,794			—			1,453,326
Net losses and loss expenses		(767,091	)		(220,968	)		(988,059	)		(139,549	)		—			(1,127,608	)
Acquisition costs		(118,521	)		(79,839	)		(198,360	)		(9,193	)		—			(207,553	)
Operating expenses (1)		(158,134	)		(40,179	)		(198,313	)		(2,352	)		—			(200,665	)
Underwriting profit (loss)	$	(113,679	)	$	91,479		$	(22,200	)	$	(60,300	)	$	—		$	(82,500	)
Net investment income								190,886			80,349			—			271,235
Net results from structured products (2)		2,457			3,388			5,845			—			—			5,845
Net fee income and other (3)		(3,484	)		1,120			(2,364	)		41			—			(2,323	)
Net realized gains (losses) on investments								(39,047	)		(23,307	)		—			(62,354	)
Contribution from P&C, Life Operations and Corporate							$	133,120		$	(3,217	)	$	—		$	129,903
Corporate & other:
Net realized & unrealized gains (losses) on derivative instruments													$	(26,916	)	$	(26,916	)
Net income (loss) from investment fund affiliates and operating affiliates (4)														28,429			28,429
Exchange gains (losses)														39,425			39,425
Corporate operating expenses														(32,962	)		(32,962	)
Interest expense (5)														(35,885	)		(35,885	)
Non-controlling interests														(33,993	)		(33,993	)
Income taxes & other														(25,603	)		(25,603	)
Net income attributable to XL Group plc																$	42,398
Ratios – P&C operations: (6)
Loss and loss expense ratio		82.5	%		51.1	%		72.5	%
Underwriting expense ratio		29.7	%		27.7	%		29.1	%
Combined ratio		112.2	%		78.8	%		101.6	%

Notes:
(1)	Operating expenses exclude Corporate operating expenses, shown separately.
(2)	The net results from P&C structured products include net investment income and interest expense of $18.9 million and $13.1 million.
(3)	Net fee income and other includes operating expenses from the Company’s loss prevention consulting services business and expenses related to the cost of an endorsement facility with National Indemnity Company.
(4)	The Company records the income related to the alternative funds and to the private investment fund and operating affiliates on a one month and three month lag, respectively.
(5)	Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments and Corporate.
(6)	Ratios are based on net premiums earned from P&C operations.

Three Months Ended September 30, 2010:
(U.S. dollars in thousands, except ratios) (Unaudited)	Insurance			Reinsurance			Total P&C			Life Operations			Corporate			Total
Gross premiums written	$	991,781		$	533,730		$	1,525,511		$	103,957		$	—		$	1,629,468
Net premiums written		776,869			389,203			1,166,072			96,444			—			1,262,516
Net premiums earned		872,148			396,593			1,268,741			96,586			—			1,365,327
Net losses and loss expenses		(640,999	)		(170,981	)		(811,980	)		(144,358	)		—			(956,338	)
Acquisition costs		(109,788	)		(82,271	)		(192,059	)		(6,114	)		—			(198,173	)
Operating expenses (1)		(155,816	)		(44,220	)		(200,036	)		(2,372	)		—			(202,408	)
Underwriting profit (loss)	$	(34,455	)	$	99,121		$	64,666		$	(56,258	)	$	—		$	8,408
Net investment income								201,029			78,387			—			279,416
Net results from structured products (2)		3,015			(9,829	)		(6,814	)		—			1,566			(5,248	)
Net fee income and other (3)		(3,713	)		1,017			(2,696	)		54			—			(2,642	)
Net realized gains (losses) on investments								(69,770	)		(1,512	)		2,527			(68,755	)
Contribution from P&C, Life Operations and Corporate							$	186,415		$	20,671		$	4,093		$	211,179
Corporate & other:
Net realized & unrealized gains (losses) on derivative instruments													$	12,473		$	12,473
Net income (loss) from investment fund affiliates and operating affiliates (4)														17,140			17,140
Exchange gains (losses)														(44,540	)		(44,540	)
Corporate operating expenses														(19,782	)		(19,782	)
Interest expense (5)														(36,146	)		(36,146	)
Non-controlling interests														(32,506	)		(32,506	)
Income taxes & other														(30,275	)		(30,275	)
Net income attributable to XL Group plc																	77,543
Ratios – P&C operations: (6)
Loss and loss expense ratio		73.5	%		43.1	%		64.0	%
Underwriting expense ratio		30.5	%		31.9	%		30.9	%
Combined ratio		104.0	%		75.0	%		94.9	%

Notes:
(1)	Operating expenses exclude Corporate operating expenses, shown separately.
(2)	The net results from P&C structured products and Corporate structured products include net investment income, interest expense and operating expenses of $15.3 million, $22.1 million and nil and $2.0 million, $0.3 million and $0.1 million, respectively.
(3)	Net fee income and other includes operating expenses from the Company’s loss prevention consulting services business and expenses related to the cost of an endorsement facility with National Indemnity Company.
(4)	The Company records the income related to the alternative funds and to the private investment fund and operating affiliates on a one month and three month lag, respectively.
(5)	Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments and Corporate.
(6)	Ratios are based on net premiums earned from P&C operations.

Nine Months Ended September 30, 2011:
(U.S. dollars in thousands, except ratios) (Unaudited)	Insurance			Reinsurance			Total P&C			Life Operations			Corporate			Total
Gross premiums written	$	3,669,280		$	1,968,444		$	5,637,724		$	298,504		$	—		$	5,936,228
Net premiums written		2,684,938			1,628,109			4,313,047			272,635			—			4,585,682
Net premiums earned		2,713,430			1,226,923			3,940,353			272,695			—			4,213,048
Net losses and loss expenses		(2,163,786	)		(856,722	)		(3,020,508	)		(410,196	)		—			(3,430,704	)
Acquisition costs		(340,048	)		(244,813	)		(584,861	)		(26,281	)		—			(611,142	)
Operating expenses (1)		(488,837	)		(129,362	)		(618,199	)		(7,241	)		—			(625,440	)
Underwriting profit (loss)	$	(279,241	)	$	(3,974	)	$	(283,215	)	$	(171,023	)	$	—		$	(454,238	)
Net investment income		—			—			570,504			239,382			—			809,886
Net results from structured products (2)		8,407			9,828			18,235			—			—			18,235
Net fee income and other (3)		(12,614	)		2,505			(10,109	)		178			—			(9,931	)
Net realized gains (losses) on investments								(76,181	)		(62,154	)		—			(138,335	)
Contribution from P&C, Life Operations and Corporate							$	219,234		$	6,383		$	—		$	225,617
Corporate & other:
Net realized & unrealized gains (losses) on derivative instruments													$	(34,299	)	$	(34,299	)
Net income (loss) from investment fund affiliates and operating affiliates (4)														125,716			125,716
Exchange gains (losses)														38,409			38,409
Corporate operating expenses														(107,711	)		(107,711	)
Interest expense (5)														(119,383	)		(119,383	)
Non-controlling interests														(69,431	)		(69,431	)
Income taxes & other														(18,141	)		(18,141	)
Net income attributable to XL Group plc																$	40,777
Ratios – P&C operations: (6)
Loss and loss expense ratio		79.7	%		69.8	%		76.7	%
Underwriting expense ratio		30.6	%		30.5	%		30.5	%
Combined ratio		110.3	%		100.3	%		107.2	%

Notes:
(1)	Operating expenses exclude Corporate operating expenses, shown separately.
(2)	The net results from P&C structured products include net investment income and interest expense of $57.0 million and $38.8 million.
(3)	Net fee income and other includes operating expenses from the Company’s loss prevention consulting services business and expenses related to the cost of an endorsement facility with National Indemnity Company.
(4)	The Company records the income related to the alternative funds and to the private investment fund and operating affiliates on a one month and three month lag, respectively.
(5)	Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments and Corporate.
(6)	Ratios are based on net premiums earned from P&C operations.

Nine Months Ended September 30, 2010:
(U.S. dollars in thousands, except ratios) (Unaudited)	Insurance			Reinsurance			Total P&C			Life Operations			Corporate			Total
Gross premiums written	$	3,209,411		$	1,745,493		$	4,954,904		$	309,696		$	—		$	5,264,600
Net premiums written		2,435,557			1,441,644			3,877,201			287,204			—			4,164,405
Net premiums earned		2,637,825			1,110,830			3,748,655			287,918			—			4,036,573
Net losses and loss expenses		(1,881,502	)		(569,843	)		(2,451,345	)		(391,476	)		—			(2,842,821	)
Acquisition costs		(312,166	)		(230,448	)		(542,614	)		(37,256	)		—			(579,870	)
Operating expenses (1)		(472,057	)		(129,910	)		(601,967	)		(8,145	)		—			(610,112	)
Underwriting profit (loss)	$	(27,900	)	$	180,629		$	152,729		$	(148,959	)	$	—		$	3,770
Net investment income								610,289			234,120			—			844,409
Net results from structured products (2)		11,594			(1,577	)		10,017			—			8,305			18,322
Net fee income and other (3)		(11,836	)		1,911			(9,925	)		208			—			(9,717	)
Net realized gains (losses) on investments								(154,223	)		(11,370	)		(724	)		(166,317	)
Contribution from P&C, Life Operations and Corporate							$	608,887		$	73,999		$	7,581		$	690,467
Corporate & other:
Net realized & unrealized gains (losses) on derivative instruments													$	(27,903	)	$	(27,903	)
Net income (loss) from investment fund affiliates and operating affiliates (4)														77,021			77,021
Exchange gains (losses)														8,819			8,819
Corporate operating expenses														(61,438	)		(61,438	)
Interest expense (5)														(111,597	)		(111,597	)
Non-controlling interests														(32,425	)		(32,425	)
Loss on termination of guarantee														(23,500	)		(23,500	)
Income taxes & other														(104,016	)		(104,016	)
Net income attributable to XL Group plc																$	415,428
Ratios – P&C operations: (6)
Loss and loss expense ratio		71.3	%		51.3	%		65.4	%
Underwriting expense ratio		29.8	%		32.4	%		30.5	%
Combined ratio		101.1	%		83.7	%		95.9	%

Notes:
(1)	Operating expenses exclude Corporate operating expenses, shown separately.
(2)	The net results from P&C structured products and Corporate structured products include net investment income, interest expense and operating expenses of $52.2 million, $43.6 million and $1.3 million (credit) and $11.0 million, $1.7 million and $1.0 million, respectively.
(3)	Net fee income and other includes operating expenses from the Company’s loss prevention consulting services business and expenses related to the cost of an endorsement facility with National Indemnity Company.
(4)	The Company records the income related to the alternative funds and to the private investment fund and operating affiliates on a one month and three month lag, respectively.
(5)	Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments and Corporate.
(6)	Ratios are based on net premiums earned from P&C operations.

          The following tables summarize the Company’s net premiums earned by line of business:

Three Months Ended September 30, 2011: (U.S. dollars in thousands) (Unaudited)	Insurance		Reinsurance		Life Operations		Total
P&C Operations:
Casualty – professional lines	$	319,102	$	51,944	$	—	$	371,046
Casualty – other lines		179,723		64,275		—		243,998
Property catastrophe		—		97,158		—		97,158
Other property		119,953		161,585		—		281,538
Marine, energy, aviation and satellite		138,884		32,162		—		171,046
Other specialty lines (1)		171,514		—		—		171,514
Other (2)		587		25,341		—		25,928
Structured indemnity		304		—		—		304
Total P&C Operations	$	930,067	$	432,465	$	—	$	1,362,532
Life Operations:
Other Life	$	—	$	—	$	57,452	$	57,452
Annuity		—		—		33,342		33,342
Total Life Operations	$	—	$	—	$	90,794	$	90,794
Total	$	930,067	$	432,465	$	90,794	$	1,453,326

Three Months ended September 30, 2010: (U.S. dollars in thousands) (Unaudited)	Insurance (3)		Reinsurance (3)		Life Operations		Total
P&C Operations:
Casualty – professional lines	$	326,144	$	58,250	$	—	$	384,394
Casualty – other lines		147,152		55,534		—		202,686
Property catastrophe		—		77,234		—		77,234
Other property		102,928		153,275		—		256,203
Marine, energy, aviation and satellite		133,694		24,166		—		157,860
Other specialty lines (1)		151,742		—		—		151,742
Other (2)		2,723		27,180		—		29,903
Structured indemnity		7,765		954		—		8,719
Total P&C Operations	$	872,148	$	396,593	$	—	$	1,268,741
Life Operations:
Other Life	$	—	$	—	$	64,208	$	64,208
Annuity		—		—		32,378		32,378
Total Life Operations	$	—	$	—	$	96,586	$	96,586
Total	$	872,148	$	396,593	$	96,586	$	1,365,327

(1)	Other specialty lines within the Insurance segment includes: environmental, programs, equine, warranty, specie, middle markets and excess and surplus lines.
(2)	Other includes credit and surety, whole account contracts and other lines.
(3)	Certain reclassifications have been made to conform to current period presentation.

          The following tables summarize the Company’s net premiums earned by line of business:

Nine Months Ended September 30, 2011: (U.S. dollars in thousands) (Unaudited)	Insurance		Reinsurance			Life Operations		Total
P&C Operations:
Casualty – professional lines	$	957,399	$	157,577		$	—	$	1,114,976
Casualty – other lines		518,048		184,238			—		702,286
Property catastrophe		—		286,085			—		286,085
Other property		343,646		433,082			—		776,728
Marine, energy, aviation and satellite		393,959		101,025			—		494,984
Other specialty lines (1)		494,966		—			—		494,966
Other (2)		3,003		68,793			—		71,796
Structured indemnity		2,409		(3,877	)		—		(1,468	)
Total P&C Operations	$	2,713,430	$	1,226,923		$	—	$	3,940,353
Life Operations:
Other Life	$	—	$	—		$	172,463	$	172,463
Annuity		—		—			100,232		100,232
Total Life Operations	$	—	$	—		$	272,695	$	272,695
Total	$	2,713,430	$	1,226,923		$	272,695	$	4,213,048

Nine months ended September 30, 2010: (U.S. dollars in thousands) (Unaudited)	Insurance (3)		Reinsurance (3)		Life Operations		Total
P&C Operations:
Casualty – professional lines	$	991,271	$	165,635	$	—	$	1,156,906
Casualty – other lines		445,871		170,987		—		616,858
Property catastrophe		—		242,745		—		242,745
Other property		308,483		381,963		—		690,446
Marine, energy, aviation and satellite		408,184		66,807		—		474,991
Other specialty lines (1)		464,386		—		—		464,386
Other (2)		6,076		82,024		—		88,100
Structured indemnity		13,554		669		—		14,223
Total P&C Operations	$	2,637,825	$	1,110,830	$	—	$	3,748,655
Life Operations:
Other Life	$	—	$	—	$	193,540	$	193,540
Annuity		—		—		94,378		94,378
Total Life Operations	$	—	$	—	$	287,918	$	287,918
Total	$	2,637,825	$	1,110,830	$	287,918	$	4,036,573

(1)	Other specialty lines within the Insurance segment includes: environmental, programs, equine, warranty, specie, middle markets and excess and surplus lines.
(2)	Other includes credit and surety, whole account contracts and other lines.
(3)	Certain reclassifications have been made to conform to current period presentation.