Bermuda-based White Mountains Insurance Group, Ltd. announced that has “ended the first quarter with a fully converted tangible book value per share of $352, up 3 percent for the quarter and for the past twelve months, including dividends.
“For the first quarter of 2006, adjusted comprehensive net income was $117 million compared to $75 million for the first quarter of 2005. The current quarter includes a $21 million gain from foreign currency translation, principally due to the strengthening of the Swedish krona against the U.S. dollar, compared to a $25 million loss in the prior year’s first quarter.”
CEO Steve Fass commented: “Our businesses generally performed well in the quarter. White Mountains Re reported an 88 percent combined ratio despite some development from the 2005 storms, reflecting both improved underwriting conditions and generally benign weather patterns during the quarter. OneBeacon delivered an underwriting profit, while Esurance continued to grow rapidly at an acceptable loss ratio. Finally, investments had a nice result, especially given the back-up in interest rates that occurred in the quarter. Our equity portfolio continues to outperform.
“Net income for the first quarter was $96 million, compared to $176 million in the prior year. The decline was primarily due to the receipt in the prior year’s first quarter of a $74 million pretax special dividend from Montpelier Re.”
Concerning OneBeacon, the bulletin noted that its “pretax income for the first quarter of 2006 was $76 million, compared to $160 million for the first quarter of 2005. This decline was also impacted by the Montpelier Re special dividend. The GAAP combined ratio for the first quarter of 2006 was 99 percent, versus 95 percent for the first quarter of 2005. The first quarter of 2005 included the results of National Farmer’s Union (‘NFU’), which lowered the combined ratio by 2 points and was sold in the third quarter of 2005.”
OneBeacon CEO Mike Miller indicated: “OneBeacon produced another quarter with a combined ratio under 100 percent. With our Northeast concentration, we historically have had higher combined ratios in personal and commercial lines in the first quarter compared to the full year. I am pleased with the composition of our book and expect us to deliver a solid underwriting profit again in 2006.”
Another subsidiary, White Mountains Re, posted pretax income for the first quarter of $84 million, compared to $55 million for the first quarter of 2005. The GAAP combined ratio for the first quarter of 2006 was 88 percent, versus 99 percent for the first quarter of 2005. Net written premiums were $429 million, up slightly from $419 million in the prior year’s first quarter.
“White Mountains Re experienced $10 million of pretax net adverse development in the first quarter of 2006, which consisted of $36 million pretax on the 2005 storms ($8 million, $18 million and $10 million on Katrina, Rita and Wilma, respectively), offset by $26 million of favorable development, primarily from property lines that were not impacted by catastrophes. In addition, the first quarter of 2005 contained the impact of European Storm Erwin,” said the announcement.
White Mountains Re CEO Tom Hutton commented: “Although our premiums are only up slightly, we have taken significant price increases and reduced exposure in catastrophe-prone areas. As a result, we have a less risky book of business than we did at this time last year.”
Further information and comments on the Group’s earnings and related matters may be obtained on its Website at: http://www.whitemountains.com.
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