XL Insurance, the global insurance arm of XL Group (XL), inked an underwriting agreement with CIMI Professional (CIMI Pro), the professional liability underwriting division of Chandler Insurance Managers Inc.
Per the agreement, CIMI Professional will provide professional liability and general liability insurance coverages to the long-term care industry through one of the XL Insurance companies approved to write insurance coverages throughout the United States. A maximum of $5 million of coverage will be provided under professional and general liability insurance.
The addition of CIMI Professional to XL Insurance will broaden the latter’s exposure to the long-term care industry.
Though XL Group’s third-quarter operating income surpassed the Zacks Consensus Estimate, it was way behind year-ago results. The year-over-year decline issued from lower income from investment affiliates, lower net investment income, as well as a lower underwriting income from the insurance segment. However, higher underwriting income from the reinsurance segment was a partial offset.
The Zacks Consensus Estimate for fourth-quarter 2010 is 66 cents per share. For full years 2010 and 2011, the Zacks Consensus Estimates are, respectively, $2.36 per share and $2.38 per share.
Based on the company’s conservative underwriting practices and repositioned property and casualty portfolio, we expect XL Group to fare well going forward. The company is also taking initiatives to expand its operations and is aiming to tap the opportunities in the growing economy.
However, the low interest rate environment keeps us on the sidelines meanwhile. We maintain our long-term Neutral recommendation on XL Group. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
Based in Dublin, Ireland, XL Group is a leading global provider of insurance, reinsurance and financial risk solutions to enterprises and insurance companies.
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