XL Group’s second-quarter profit rose 17 percent year on year to $225.7 million, the business insurer announced last night.The company’s net income for the April through June period was up from the $191.8 million posted last year, despite catastrophe losses of $68.3 million.The Dublin-based company with substantial operations in Bermuda surpassed analysts’ expectations with operating earnings per share of 75 cents, compared to the anticipated 47 cents.Book value per share climbed 6.3 percent during the quarter to $30.87.“XL’s strong second quarter performance was built on a broad foundation, as all of our key value drivers contributed to an annualised operating return on equity of 10.3 percent,” XL CEO Mike McGavick said last night.“Our risk management discipline has put XL’s catastrophe loss experience, measured as a percentage of shareholders’ equity, among the best of our peers for both the second quarter and the year to date.“XL continued to pursue profitable underwriting opportunities in both existing and expanded markets, and added teams and leaders in lines we consider attractive.“Our semi-annual actuarial review of XL’s property and casualty risk portfolio, which followed our prudent reserving practices, resulted in continued favourable development.“Our operating expense run-rate was in line with the last two quarters. XL’s capital strength supported our underwriting expansion, strategic initiatives and the recommencing of our share buyback programme, resulting in second quarter buybacks of 4.3 million shares.”XL recorded net investment income for the quarter of $296.5 million compared to $302.6 million in the prior year quarter and $280.3 million for the first quarter of 2011. The decline against the prior year was primarily due to lower US interest rates and cash outflows from the property and casualty invested portfolio, the company said.Net income from affiliates contributed $56.5 million in the quarter compared to $40.1 million in the prior year quarter as a result of strong performance primarily from investment manager affiliates.Net realised investment losses for the quarter were $9.5 million compared to $61.4 million in the prior year quarter.During the quarter, the company purchased 4.3 million shares for $92.3 million at an average price of $21.36, which was accretive to book value per ordinary share by $0.12. Since June 30, 2011, the Company purchased an additional 7.3 million shares for $157.7 million. $440.4 million of shares remains available for purchase under the Company’s previously announced $1 billion share buyback programme.Gross premiums written increased year on year to $1.76 billion in the quarter from $1.51 billion, and in the first half of the year to $3.86 billion from $3.43 billion.XL said insurance segment premium growth topped 18 percent and included new business initiatives, primarily in North America, and the impact of foreign exchange. The 12 percent increase in reinsurance premium was attributable to increased new business and pricing in property catastrophe lines, a new international casualty treaty and increased volume on a UK motor treaty.The P&C combined ratio was 94.9 percent compared to 92.2 percent a year earlier.