XL Capital expects 3Q loss up to $6.17 per share

On a per-share basis, XL Capital expects a loss between $6.08 and $6.17. The Bermuda-based insurer earned $328 million, or $1.82 per share, during the same quarter last year.

Excluding special items, XL Capital estimated net income of $107.8 million, or 40 cents per share, for the third quarter.

Analysts polled by Thomson Financial, on average, forecast earnings of 38 cents per share for the quarter. Analysts typically exclude special items from their estimates.

XL Capital said it took a $1.4 billion charge during the third quarter related to a transaction with former subsidiary Syncora Holdings. The deal required XL Capital to make a payment to Syncora and issue it stock in exchange for ending certain reinsurance agreements. The deal essentially eliminates XL Capital's exposure to the troubled bond insurer.

The insurer also took $222.8 million in charges tied to Hurricanes Gustav and Ike. Additionally, XL Capital recorded charges of $41.7 million tied to an expense reduction plan and $22.5 million for the redemption of senior notes.

Net premiums written totaled $1.4 billion during the third quarter, compared with $1.39 billion during the same quarter last year. Property and casualty premiums were essentially flat, while life insurance premiums rose slightly.

Net premiums written were helped by targeted new business initiatives and favorable exchange rates, the company said in a statement.

XL Capital said it is conducting a strategic review of its life insurance operations, which it expects to conclude during the fourth quarter. The life insurance operations generated $145.7 million in net premiums during the quarter.

XL Capital's combined ratio ballooned to 107.1 percent from 85.3 percent during the year-ago quarter.