XL Catlin has posted a 39.7% fall in first-quarter net profit to $US21.9 billion ($28.8 billion), as integration cost from the Catlin acquisition and natural catastrophe losses hit earnings.

“XL Catlin navigated the challenging conditions of the first quarter, producing good underlying results while maintaining our focus on bottom-line underwriting and top-line discipline,” CEO Mike McGavick said.

“While we see difficult market conditions continuing in the near term, we firmly believe our focus on the bottom line is the right long-term strategy, and that we remain very well positioned.

“Near the one-year anniversary of XL Catlin, we continue to exceed all our integration targets and are seeing new opportunities aligned with our global reach and market relevance.”

Integration expenses following the Catlin purchase cost the merged (re)insurer $US55 million ($72.2 million) in the March quarter.

XL completed its $US4.1 billion ($5.4 billion) takeover of Catlin in May last year.

Overall gross written premium increased to $US4.4 billion ($5.8 billion) from $US2.5 billion ($3.3 billion) in the corresponding quarter last year, and the combined operating ratio deteriorated to 92.5% from 88.9%.

Pre-tax natural catastrophe losses climbed to $US52.8 million ($69.4 million) from $US14.7 million ($19.3 million).

New investment income fell slightly to $US205.9 million ($270.4 million) from $US208.5 million ($273.8 million).