On Apr 8, 2015, shares of XL Group plc XL scaled a 52-week high of $37.92 per share on the back of solid strategic initiatives.
The year-to-date return from the stock came in at 9.6%, which was significantly higher than the S&P 500’s return of 1.1%.
XL Group has always adopted strategic initiatives to ramp up its operational results. On Apr 1, the company announced the creation of XL Innovate, an XL Group-sponsored venture capital initiative. XL Innovate will make investments in companies that have a strategic focus on the development of new capabilities in the insurance sector. This venture will team up with companies from outside the reinsurance industry to work out methods of underwriting risks that are currently uninsured. Moreover, it will also be a new platform to take equity positions in ventures that provide market opportunities for XL Group throughout the world.
XL Group's Excess & Surplus insurance team also expanded its newest product line – primary auto. This new primary auto coverage, which is available on an occurrence-based following form policy, has a limit of up to $1.5 million. Currently, XL Group's primary auto operation can issue MCS-90 endorsements as well as post required filings.
Additionally, on Mar 25, XL Group partnered with Red Angle in order to help clients lessen potential communication gaps and deliver construction safety lessons more adequately to Latino workers.
Further, the company, with its operational efficiencies as well as new and innovative assortments, remains well positioned to capitalize on the same. This is evident from XL Group's positive earnings surprise history. In the trailing four quarters, it surpassed the Zacks Consensus Estimate by an average of 19.8%.
On Feb 2, the company also reported fourth-quarter 2014 operating net income of $1.12 per share, which beat the Zacks Consensus Estimate by 27%. Earnings improved 12% year over year and marked five straight quarters of positive earnings surprise. The outperformance came largely on the back of solid underwriting results in both segments – Insurance and Reinsurance – owing to a quite catastrophic environment.
Currently, XL Group carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks from the property and casualty insurance sector include Cincinnati Financial Corp. CINF, Fidelity National Financial, Inc. FNF and Universal Insurance Holdings Inc. UVE. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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