XL Catlin’s third-quarter profits have fallen more than 60%, largely due to costs from XL Group’s merger with Bermuda-based insurer Catlin in May.

The (re)insurer’s net profit was $US27.3 million ($38.45 million) in the three months, down from XL Group’s $US72.4 million ($10.2 million) in the corresponding quarter last year.

Integration costs were about $US55.2 million ($77.74 million) while natural catastrophe losses were $US30.8 million ($43.37 million), up from $US29.8 million ($41.95 million). 

The combined operating ratio deteriorated to 95.3% from 90.1%.

Gross written premium increased 66.1% to $US2.7 billion ($3.81 billion) following the merger. 

Losses net of reinsurance and reinstatement premiums related to the Tianjin port explosion in August totalled $US95.7 million ($134.8 million).

Investment income was up in quarter to $US178.56 million ($251.69 million) from $US169.95 million ($239.56 million).

XL Catlin CEO Mike McGavick says the performance is “solid” and bottom-line results were affected by market events and the ongoing cost of integration. 

“Our colleagues’ effort to move quickly through our integration continues to be recognised by positive reaction from clients and brokers and the new opportunities we are seeing.

“We have absolute confidence in the fundamentals of the new company we are building and remain focused on creating value by becoming the most innovative and admired (re)insurance company in our industry, and feel we are well on our way.”