XL Capital Ltd., the Bermuda-based business insurer, is cutting 10 percent of staff and slashing the dividend by almost half after posting a second straight loss on investment declines. Shares rose in late trading, Bloomberg reported.
The fourth-quarter net loss of $1.42 billion widened from a deficit of $1.21 billion in the year-earlier period, the insurer said today in a statement. Job cuts will be "primarily focused" on corporate positions and the efforts may save as much as $120 million annually starting in 2010, XL said in the statement.
"The ground has shifted in the past six months for the insurance industry," Chief Executive Officer Michael McGavick said in the statement. "We will focus on our businesses that deliver the best return on capital"
XL joins insurers including Hartford Financial Services Group Inc. and Genworth Financial Inc. in dismissing employees after investment losses depleted capital. North American insurers have slashed more than 4,000 jobs since the end of September. XL had 4,011 employees as of Dec. 31, 2007, according to a regulatory filing last year.
XL rose 9.3 percent to $3.17 at 7:14 p.m. in New York. The shares have dropped 22 percent this year after plunging 93 percent in 2008.
The company's book value, a measure of assets minus liabilities, was $15.46 per ordinary share at year-end, compared with $21.65 as of September 30, 2008. The decline was driven by a $990 million goodwill impairment and a $858.7 million after-tax reduction in the investment portfolio.
XL will pay a quarterly dividend of 10 cents a share, about 47 percent lower than the 19-cent payout made in December.