OneBeacon Insurance Group, Ltd. reported first quarter 2007 adjusted book value per share of $17.76 representing a 4.5% increase for the quarter including dividends.
For the 12 months ended March 31, 2007, adjusted comprehensive return on equity was 22.4% and adjusted operating return on equity was 14.2%.
Mike Miller, CEO cited strong results by specialty and commercial operations while acknowledging a significant decline in personal lines volume at AutoOne, “principally driven by the continued shrink of the involuntary pools,” and slightly decreased volume for traditional personal lines, “reflecting the competitive market.”
The first quarter featured activities in the company’s specialty operations, including the formation of OneBeacon Government Risk Solutions; the appointment of Trident Marine, a marine-specialty managing general, and a strategic alliance with Hagerty Insurance, a specialty classic-car and wooden-boat agency.
First quarter adjusted operating income was $38 million or $0.38 per share and net income was $61 million or $0.61 per share.
Thanks largely to investment gains, pretax income for the primary insurance operations in the first quarter of 2007 was $115 million as compared to $79 million for the first quarter of 2006.
Net written premiums were $440 million for the first quarter of 2007 as compared to $474 million for the prior year period. Excluding $21 million of premium related to the Agri business (sold in September 2006) from 2006 results, 2007 premiums decreased by 3% overall, reflecting a 20% premium increase in specialty lines, a 2% increase in commercial lines, and a 15% decrease in total personal lines.
The personal lines results reflect a 3% decrease in traditional personal lines and the anticipated decline in AutoOne
business, which totaled 43%, driven by the continuing shrink of the assigned risk pool in New York.
The GAAP combined ratio was 97.5% for the first quarter versus 98.7% for the same period in 2006, driven by favorable reserve development on prior accident year losses and a decrease in current accident year catastrophe losses. OneBeacon’s expense
ratio was 36.1% in the quarter, including 1.8 points of previously announced office consolidation expense. This compares to a 35.4% expense ratio in the first quarter of 2006, which included 0.4 points of office consolidation expense.
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