XL Group exceeded analysts’ expectations in posting net income of $221.2 million for the second quarter.The Dublin-based business insurer with substantial operations in Bermuda improved margins in its underwriting businesses as it posted net operating earnings of $221.9 million. This broke down to 71 cents per share, comfortably beating the 56 cents a share expected by analysts tracked by Yahoo Finance.Book value rose by $1.08 per share during the quarter, boosted partly by $125 million of share repurchases.CEO Mike McGavick described the April through June period as “a solid quarter”.“In absolute and relative terms, this was a solid quarter for XL, demonstrating our continued progress,” Mr McGavick said.“We again expanded margins in both our insurance and reinsurance segments and reported a total P&C [property and casualty] combined ratio of 90.8 percent, more than four percentage points better than the second quarter last year.“Our semi-annual reserve review resulted in both insurance and reinsurance releases. And we grew book value as we continued to buy back shares. We are resolved to continue this progress across all of our businesses.”The $221.2 million profit was slightly down from the $225.7 million achieved in the same period last year.Natural catastrophe losses net of reinsurance and reinstatement premiums were $60.6 million.The P&C combined ratio was 90.8 percent, a significant improvement from the 94.9 percent recorded in the same period last year.Gross P&C premiums written for the quarter were flat overall compared to the prior year quarter. Increases in new business lines, and certain pricing increases were largely offset by movements in foreign exchange rates and targeted non-renewals.During the quarter, the company purchased 6.1 million shares for $125 million at an average price of $20.44 per share, which was accretive to fully diluted book value per ordinary share by 22 cents.A further $525 million of shares remains available for purchase under XL’s previously announced $750 million share buy-back programme.Net investment income for the quarter was $262.6 million compared to $296.5 million in the prior year quarter. XL said the decrease was primarily due to lower yields as a result of lower reinvestment rates and net cash outflows from the investment portfolio.Net realised investment losses for the quarter were $12.4 million compared to losses of $9.5 million in the same period of 2011.