XL Group has reported a net profit of $US72.4 million ($82 million) for the third quarter, down sharply from $US135.6 million ($153.6 million) in the corresponding period last year.

The Dublin-based insurer blames the drop on a life retrocession derivative, which is offset by a movement in accumulated comprehensive income.

Gross written premium fell to $US1.6 billion ($1.8 billion) from $US1.61 billion ($1.82 billion), while the combined operating ratio strengthened to 90.1% from 95%.

Net investment income was $US226.4 million ($256.4 million) in the quarter, down from $US237.9 million ($269.4 million).

“While we note the relatively benign catastrophe activity so far this year, XL has produced solid across-the-board results,” CEO Mike McGavick said.

“We’re proud of what XL is producing, particularly given the well-documented pressure on pricing and renewals.”