White Mountains Grows Book Value per Share by 21% to $406 in 2006
HAMILTON, Bermuda, Feb. 2 /PRNewswire-FirstCall/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) ended 2006 with a fully converted tangible book value per share of $406, an increase of 9% for the quarter and 21% for the year, including dividends.
Ray Barrette, Chairman and CEO, said "I am pleased with our 2006 performance. The OneBeacon IPO contributed 5 points of return to an already good year, where all our businesses, including White Mountains Re, performed well. Once again, we had superior investment results. I am now fully engaged in White Mountains' affairs and am pleased with the good progress we are making on many fronts."
Adjusted comprehensive net income for 2006 was $734 million, compared to $68 million in 2005. Adjusted comprehensive net income for the fourth quarter of 2006 was $357 million, compared to adjusted comprehensive net loss of $11 million for the fourth quarter of 2005. Those results reflect favorable weather conditions and strong investment results when compared to 2005. Additionally, during the fourth quarter of 2006, White Mountains recognized an after-tax gain of $171 million on the sale of 27.6% of its interest in OneBeacon through an initial public offering. White Mountains also realized an after-tax gain of $21 million on the purchase of Mutual Service Casualty Insurance Company.
Net income for 2006 was $673 million, up from $290 million last year. Net income for the quarter was $299 million, compared to $33 million for the fourth quarter of 2005.
OneBeacon
OneBeacon's pre-tax income for the fourth quarter of 2006 was $65 million, compared to $29 million for the fourth quarter of 2005. The GAAP combined ratio was 98% for the fourth quarter of 2006, compared to 94% for the fourth quarter of last year. The increase in pre-tax income was primarily due to higher realized investment gains, driven primarily by a $55 million impairment loss on the Montpelier Re investment in the fourth quarter of 2005. The increase in the combined ratio in the fourth quarter was primarily due to higher incentive compensation costs and expenses associated with actions taken to optimize long-term occupancy costs, including OneBeacon's move to its new U.S. headquarters in Canton, Massachusetts.
OneBeacon's pre-tax income for 2006 was $312 million, compared to $332 million for 2005. The GAAP combined ratio was 96% for 2006, compared to 98% for 2005. 2006 results reflect lower catastrophe losses and lower prior year loss reserve development. In addition to the impairment mentioned above, 2005 results included a $54 million gain from the funding of the retiree medical plan through an independent benefit trust, and a $35 million special dividend from Montpelier Re.
Net written premiums were down 7% for the quarter and 8% for the year from the comparable 2005 periods, primarily as a result of the sale of NFU in 2005 and the sale of the renewal rights of OneBeacon's Agri business during 2006.
Mike Miller, CEO of OneBeacon, said, "Our disciplined underwriting and focus on specialized businesses continued to produce strong results in 2006. We finished the year with a combined ratio of 96%, the fourth consecutive year that we achieved an underwriting profit. Adjusted for the sale of two businesses, net written premiums were essentially flat. We experienced strong growth in our specialty and commercial lines, driven by healthy new business and improved retention rates. That growth was offset by decreases at AutoOne, reflecting the dramatic declines in assigned risk pools. Our traditional personal lines premiums were also lower because of the increasingly competitive auto market. However, subsequent to the launch of our new OneChoice product suite, which has been embraced by our agency partners, new business and retention continued to improve in the third and fourth quarters and we anticipate sustaining that momentum going forward. The IPO was a major milestone marking the complete turn-around of the company achieved in the last 5 years. OneBeacon begins 2007 well positioned for profitable growth."
Beginning in the fourth quarter of 2006, OneBeacon includes OneBeacon Specialty Property (OBSP) within commercial lines and AutoOne within personal lines. Both OBSP and AutoOne were formerly reported in specialty lines. The reporting change was undertaken to better align the reported results of OneBeacon's underwriting units with their product and management structure. Prior periods have been reclassified to conform to the current presentation. Additionally, during 2005, OneBeacon reallocated $34 million of reserves from ongoing lines of business to run-off. This reallocation had the effect of lowering the combined ratios for specialty, commercial and personal lines, but had no net impact on OneBeacon's overall results.
White Mountains Re
White Mountains Re's pre-tax income was $106 million for the fourth quarter of 2006, compared to a pre-tax loss of $5 million for the fourth quarter of 2005. For the full year of 2006, pre-tax income was $237 million, compared to a pre-tax loss of $17 million for 2005. The GAAP combined ratio was 85% for the fourth quarter of 2006 and 102% for the year, compared to 127% and 118% for the comparable periods of 2005. Pre-tax income for the full year of 2006 was reduced by the $223 million cost related to additional losses on hurricanes Katrina, Rita and Wilma ($86 million) and to the reimbursement of Olympus losses ($137 million). The fourth quarter and full year of 2005 include $124 million and $351 million in pre-tax losses, net of reinstatements and reinsurance, from hurricanes Katrina, Rita and Wilma. 2005 also includes $57 million of other significant property catastrophe losses, primarily from hurricane Erwin and floods in Europe.
Net written premiums were down 12% for the quarter, primarily due to lower reinstatement premiums on property catastrophe reinsurance and the sale of Sirius America in the third quarter of 2006. In addition, there were planned reductions in property catastrophe exposed business, reductions in casualty lines due mainly to pricing, terms and conditions that did not meet White Mountains Re's guidelines and higher ceding company retentions. For the year, net written premiums were basically flat as compared to last year, as improved pricing, terms and conditions on certain lines offset some of the aforementioned reductions.
Tom Hutton, CEO of White Mountains Re, said, "It was a great end to a difficult year. In the fourth quarter, our core business performed well and our results benefited by the lack of catastrophes. During the year, we strengthened the team and enhanced our approach to risk management. The January 1, 2007 renewals were completed as expected. We generally saw strong pricing on the property business, and slight downward pressure on the casualty side. I am optimistic about our prospects, though I am cautious about deteriorating market conditions."
Subsequent to the end of the year, White Mountains Re incurred pre-tax losses, net of reinsurance and reinstatements, of approximately $30-40 million on European windstorms Kyrill and Hanno.
Esurance
Esurance's pre-tax loss was $8 million in both the fourth quarter and the full year of 2006, compared to pre-tax losses of $9 million and $13 million in the comparable periods of 2005. The GAAP combined ratio was 109% for the fourth quarter and 108% for the full year of 2006, compared to 113% and 109% for the comparable periods of the prior year. Net written premiums of $160 million for the quarter and $596 million for the year were up 67% and 71%, respectively, from the comparable periods of 2005. Esurance continues to grow rapidly and wrote 325,000 new policies during the year, compared to 182,000 in 2005.
Gary Tolman, CEO of Esurance, said, "Esurance's growth makes it one of the fastest growing auto insurance companies in the U.S.-if not the fastest. As we expand the company, we are keenly focused on growing our operations to meet the service and claims needs of our customers. We are pleased with our national advertising, which helped us grow the business at lower acquisition costs, and our expense ratio continues to decline nicely. Loss results have been stable over the past four years, although fourth quarter 2006 was impacted by seasonally-driven claims frequency. Overall, we believe our 2006 performance further validates our business model."
Other Operations
White Mountains' Other Operations segment reported pre-tax income of $150 million for the fourth quarter of 2006, compared to a $1 million pre-tax loss for the fourth quarter of 2005. The increase was primarily attributable to the $171 million gain on the sale of OneBeacon shares during the quarter. In addition, the Montpelier Re investment accounted for $4 million in pre-tax losses during the fourth quarter of 2006 compared to $34 million in pre-tax losses during the fourth quarter of 2005. The gain and reduced loss were partially offset by higher incentive compensation accruals in the fourth quarter of 2006 compared to the fourth quarter of last year.
For the full year 2006, the Other Operations segment reported pre-tax income of $189 million versus $3 million in the comparable period of 2005. The increase was primarily attributable to the aforementioned sale of OneBeacon shares. In addition, the Montpelier Re investment accounted for $13 million in pre-tax income during 2006, compared to $63 million of pre-tax losses during 2005, which included $39 million of net investment income from the special dividend. These gains were partially offset by higher incentive compensation accruals in 2006 compared to last year.
Investment Activities
The GAAP total return on invested assets for the quarter was 2%, compared to 1% in the fourth quarter of last year. For the full year of 2006 it was 8%, compared to 3% for the full year of 2005. Net investment income was $124 million in the quarter, up from $102 million in the fourth quarter of 2005, and $436 million for the full year, down from $492 million in 2005, which included a $74 million special dividend from Montpelier Re.
Mark Dorcus, President of White Mountains Advisors, said "Investment results were outstanding in 2006 on both an absolute and relative basis. Both equities and fixed income beat their respective benchmarks for the year. Individual security selection was a key driver for the outperformance. In addition, the bond portfolio benefited by being short in duration and from favorable currency movements."
Additional Information
On July 17, 2006, in connection with the initial public offering of OneBeacon Insurance Group, Ltd. ("OBIG"), White Mountains undertook an internal reorganization and formed OBIG for the purpose of holding certain of its property and casualty insurance businesses. As a result of the reorganization, certain of White Mountains' businesses that had been historically reported as part of its Other Operations segment are now owned by OBIG, and accordingly are now included within the OneBeacon segment. In addition, certain other businesses of White Mountains that are no longer owned by OBIG are now presented as part of the Other Operations segment. Prior period segment information has been restated to conform to the current presentation.
As a result of the sale of OneBeacon shares, there is a significant minority interest in OneBeacon. Accordingly, prior periods in the Company's financial statements have been reclassified to show the Company's minority interest in certain limited partnership investments.
White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM. Additional financial information and other items of interest are available at the Company's website located at www.whitemountains.com. The Company expects to file its Form 10-K with the Securities and Exchange Commission on or before March 1, 2007 and urges shareholders to refer to that document for more complete information concerning White Mountains' financial results.
Regulation G
This earnings release includes two non-GAAP financial measures that have been reconciled to their most comparable GAAP financial measures. White Mountains believes these measures to be more relevant than comparable GAAP measures in evaluating White Mountains' financial performance.
Adjusted comprehensive net income is a non-GAAP financial measure that excludes the change in net unrealized gains and losses from Symetra's fixed maturity portfolio from comprehensive net income. The reconciliation of adjusted comprehensive net income to comprehensive net income is included on page 8.
Fully converted tangible book value per share is a non-GAAP measure which is derived by expanding the GAAP book value per share calculation to include the effects of assumed conversion of all convertible securities and to exclude any unamortized goodwill and net unrealized gains from Symetra's fixed maturity portfolio. The reconciliation of fully converted tangible book value per share to book value per share is included on page 7.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This earnings release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this release which address activities, events or developments which we expect or anticipate will or may occur in the future are forward-looking statements. The words "will," "believe," "intend," "expect," "anticipate," "project," "estimate," "predict" and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to White Mountains':
* growth in book value per share or return on equity;
* business strategy;
* financial and operating targets or plans;
* incurred losses and the adequacy of its loss and loss adjustment expense
reserves and related reinsurance;
* projections of revenues, income (or loss), earnings (or loss) per share,
dividends, market share or other financial forecasts;
* expansion and growth of our business and operations; and
future capital expenditures.
These statements are based on certain assumptions and analyses made by White Mountains in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that could cause actual results to differ materially from expectations, including:
* the risks associated with Item 1A of White Mountains' 2005 Annual Report
on Form 10-K and second quarter 2006 Form 10-Q;
* claims arising from catastrophic events, such as hurricanes,
earthquakes, floods or terrorist attacks;
* the continued availability of capital and financing;
* general economic, market or business conditions;
* business opportunities (or lack thereof) that may be presented to it and
pursued;
* competitive forces, including the conduct of other property and casualty
insurers and reinsurers;
* changes in domestic or foreign laws or regulations, or their
interpretation, applicable to White Mountains, its competitors or its
clients;
* an economic downturn or other economic conditions adversely affecting
its financial position;
* recorded loss reserves subsequently proving to have been inadequate;
* other factors, most of which are beyond White Mountains' control.
Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by White Mountains will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, White Mountains or its business or operations. White Mountains assumes no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: David Foy
(203) 458-5850
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions, except share amounts)
(Unaudited)
December September December
31, 30, 31,
2006 2006 2005
Assets
Fixed maturity investments $7,911.5 $7,089.2 $7,582.7
Common equity securities 1,212.6 1,042.0 967.8
Short-term investments 1,344.9 1,222.8 727.8
Other investments 524.8 498.0 588.1
Investments held in trust 338.9 - -
Total investments 11,332.7 9,852.0 9,866.4
Reinsurance recoverable on unpaid
losses 4,015.7 4,250.3 5,025.7
Reinsurance recoverable on paid
losses 159.4 89.3 77.0
Funds held by ceding companies 452.8 467.5 620.4
Insurance and reinsurance premiums
receivable 913.6 1,002.3 1,014.3
Securities lending collateral 649.8 583.8 674.9
Investments in unconsolidated
insurance affiliates 335.5 529.1 479.7
Deferred acquisition costs 320.3 333.5 288.4
Ceded unearned premiums 87.9 113.7 200.7
Accounts receivable on unsettled
investment sales 8.5 354.1 21.7
Other assets 1,167.5 1,136.5 1,148.9
Total assets $19,443.7 $18,712.1 $19,418.1
Liabilities
Loss and loss adjustment expense
reserves $8,777.2 $9,114.2 $10,231.2
Reserves for structured contracts 147.1 153.5 224.6
Unearned insurance and reinsurance
premiums 1,584.9 1,714.9 1,582.0
Debt 1,106.7 794.2 779.1
Securities lending payable 649.8 583.8 674.9
Preferred stock subject to
mandatory redemption 262.3 254.5 234.0
Ceded reinsurance payable 138.4 135.6 204.5
Funds held under reinsurance
treaties 141.6 119.6 171.4
Accounts payable on unsettled
investment purchases 66.8 303.5 43.4
Other liabilities 1,510.4 1,309.6 1,343.4
Total liabilities 14,385.2 14,483.4 15,488.5
Minority interest - OneBeacon
Insurance Group, Ltd. 490.7 - -
Minority interest - consolidated
limited partnerships 112.5 110.0 96.4
Total minority interest 603.2 110.0 96.4
Common Shareholders' Equity
Common shares and paid-in surplus 1,727.5 1,726.7 1,725.3
Retained earnings 2,496.0 2,218.2 1,899.8
Accumulated other comprehensive
income (loss), after tax:
Net unrealized gains on
investments 198.1 169.8 209.7
Equity in net unrealized gains
(losses) from Symetra's fixed
maturity portfolio (4.1) (4.1) 24.2
Net unrealized foreign currency
translation gains (losses) and
other 37.8 8.1 (25.8)
Total common shareholders'
equity 4,455.3 4,118.7 3,833.2
Total liabilities, minority
interest and common shareholders'
equity $19,443.7 $18,712.1 $19,418.1
Common shares outstanding (000's) 10,783 10,780 10,779
Common and equivalent shares
outstanding (000's) 10,812 10,812 10,814
WHITE MOUNTAINS INSURANCE GROUP, LTD.
FULLY CONVERTED TANGIBLE BOOK VALUE PER COMMON AND EQUIVALENT SHARE
(Unaudited)
Dec. 31, Sept. 30, Dec. 31, Sept. 30,
2006 2006 2005 2005
Book value per share
numerators (in millions):
Common shareholders' equity $4,455.3 $4,118.7 $3,833.2 $3,882.8
Benefits to be received from
share obligations under
employee benefit plans 4.7 5.0 5.1 6.5
Remaining adjustment of
subsidiary preferred stock
to face value (41.8)[1] (65.5) (86.0) (92.1)
Book value per share numerator 4,418.2 4,058.2 3,752.3 3,797.2
Equity in net unrealized
(gains) losses from Symetra's
fixed maturity portfolio 4.1 4.1 (24.2) (39.4)
Goodwill (32.5) (25.8) (24.4) (25.4)
Fully converted tangible book
value per common and equivalent
share numerator $4,389.8 $4,036.5 $3,703.7 $3,732.4
Book value per share denominators
(in thousands of shares):
Common Shares outstanding 10,782.8 10,780.1 10,779.2 10,773.7
Share obligations under
employee benefits plans 29.5 32.2 34.3 44.3
Fully converted tangible book
value per common and equivalent
share denominator 10,812.3 10,812.3 10,813.5 10,818.0
Book value per common and
equivalent share $408.62 $375.34 $347.00 $351.01
Fully converted tangible book
value per common and equivalent
share $406.00 $373.33 $342.51 $345.02
(1) 72.4% of remaining adjustment of subsidiary preferred stock to face
value, which is representative of White Mountains' ownership interest
in OneBeacon Insurance Group Ltd.
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(millions, except per share amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
Revenues:
Earned insurance and
reinsurance premiums $939.3 $917.8 $3,712.7 $3,798.6
Net investment income 123.9 102.2 435.5 491.5
Net realized investment
gains (losses) 69.9 (6.7) 272.7 112.6
Gain on sale of shares
of OneBeacon Insurance
Group, Ltd. 171.3 - 171.3 -
Other revenue 44.9 44.8 202.0 229.2
Total revenues 1,349.3 1,058.1 4,794.2 4,631.9
Expenses:
Loss and loss adjustment
expenses 566.8 739.1 2,452.7 2,858.2
Insurance and
reinsurance acquisition
expenses 192.2 188.3 754.8 761.2
Other underwriting
expenses 143.9 71.8 505.4 424.7
General and
administrative expenses 98.3 13.1 218.3 148.8
Accretion of fair value
adjustment to loss and
loss adjustment expense
reserves 6.3 8.8 24.5 36.9
Interest expense on debt 13.6 9.7 50.1 44.5
Interest expense -
dividends on preferred
stock subject to
mandatory redemption 7.6 7.6 30.3 30.3
Interest expense -
accretion on preferred
stock subject to
mandatory redemption 7.7 6.0 28.3 22.1
Total expenses 1,036.4 1,044.4 4,064.4 4,326.7
Pretax income 312.9 13.7 729.8 305.2
Income tax benefit
(provision) (32.0) 19.6 (98.9) (36.5)
Income before equity in
earnings of unconsolidated
affiliates,
extraordinary item and
minority interest 280.9 33.3 630.9 268.7
Equity in earnings of
unconsolidated
insurance affiliates 7.5 5.9 36.9 33.6
Excess of fair value
of acquired assets
over cost 21.4 - 21.4 -
Minority interest (10.5) (5.9) (16.0) (12.2)
Net income 299.3 33.3 673.2 290.1
Change in net unrealized
gains on investments 28.3 (54.9) (30.7) (182.2)
Change in foreign
currency translation
and other 29.7 (4.9) 63.6 (71.9)
Comprehensive net income
(loss) 357.3 (26.5) 706.1 36.0
Add back: Change in net
unrealized gains and
losses from Symetra's
fixed maturity
portfolio - 15.2 28.3 32.4
Adjusted comprehensive net
income (loss) $357.3 $(11.3) $734.4 $68.4
Basic earnings per share $27.79 $3.10 $62.51 $26.96
Diluted earnings per share $27.70 $2.82 $62.32 $26.56
Dividends declared and paid
per common share $2.00 $2.00 $8.00 $8.00
WHITE MOUNTAINS INSURANCE GROUP, LTD.
YTD SEGMENT INCOME STATEMENT
(in millions)
(Unaudited)
For the Year Ended December 31, 2006
OneBeacon WM Re Esurance Other Total
Revenues:
Earned insurance and
reinsurance
premiums $1,944.0 $1,241.2 $527.5 $- $3,712.7
Net investment
income 187.6 182.7 18.4 46.8 435.5
Net realized
investment gains 156.4 59.0 6.9 50.4 272.7
Gain on sale of
shares of OneBeacon
Insurance Group,
Ltd. - - - 171.3 171.3
Other revenue 38.8 47.8 7.4 108.0 202.0
Total revenues 2,326.8 1,530.7 560.2 376.5 4,794.2
Expenses:
Loss and loss
adjustment expenses 1,180.3 884.6 383.9 3.9 2,452.7
Insurance and
reinsurance
acquisition
expenses 332.3 287.2 135.3 - 754.8
Other underwriting
expenses 360.1 94.7 48.8 1.8 505.4
General and
administrative
expenses 15.3 24.2 0.2 178.6 218.3
Accretion of fair
value adjustment to
loss and lae
reserves 23.0 1.5 - - 24.5
Interest expense on
debt 45.6 1.5 - 3.0 50.1
Interest expense -
dividends and
accretion on
preferred stock
subject to
mandatory
redemption 58.6 - - - 58.6
Total expenses 2,015.2 1,293.7 568.2 187.3 4,064.4
Pretax income (loss) $311.6 $237.0 $(8.0) $189.2 $729.8
For the Year Ended December 31, 2005
OneBeacon WM Re Esurance Other Total
Revenues:
Earned insurance and
reinsurance
premiums $2,118.4 $1,371.6 $306.8 $1.8 $3,798.6
Net investment
income 242.4 148.9 9.8 90.4 491.5
Net realized
investment gains
(losses) 122.8 76.8 2.1 (89.1) 112.6
Other revenue 50.3 33.5 3.0 142.4 229.2
Total revenues 2,533.9 1,630.8 321.7 145.5 4,631.9
Expenses:
Loss and loss
adjustment expenses 1,401.5 1,237.9 206.2 12.6 2,858.2
Insurance and
reinsurance
acquisition
expenses 390.7 279.6 90.8 0.1 761.2
Other underwriting
expenses 278.9 107.0 37.2 1.6 424.7
General and
administrative
expenses 8.4 12.4 - 128.0 148.8
Accretion of fair
value adjustment to
loss and lae
reserves 26.0 10.9 - - 36.9
Interest expense on
debt 44.1 0.4 - - 44.5
Interest expense -
dividends and
accretion on
preferred stock
subject to
mandatory
redemption 52.4 - - - 52.4
Total expenses 2,202.0 1,648.2 334.2 142.3 4,326.7
Pretax income (loss) $331.9 $(17.4) $(12.5) $3.2 $305.2
WHITE MOUNTAINS INSURANCE GROUP, LTD.
QTD SEGMENT INCOME STATEMENT
(in millions)
(Unaudited)
For the Three Months Ended December 31, 2006
OneBeacon WM Re Esurance Other Total
Revenues:
Earned insurance and
reinsurance premiums $485.9 $297.4 $156.0 $- $939.3
Net investment income 43.4 52.1 4.8 23.6 123.9
Net realized investment
gains (losses) 58.6 11.0 (0.1) 0.4 69.9
Gain on sale of shares of
OneBeacon Insurance
Group, Ltd. - - - 171.3 171.3
Other revenue (9.6) 9.6 1.7 43.2 44.9
Total revenues 578.3 370.1 162.4 238.5 1,349.3
Expenses:
Loss and loss adjustment
expenses 289.0 157.3 118.3 2.2 566.8
Insurance and reinsurance
acquisition expenses 82.5 70.2 39.5 - 192.2
Other underwriting
expenses 106.2 24.4 12.9 0.4 143.9
General and
administrative expenses 3.7 11.5 0.1 83.0 98.3
Accretion of fair value
adjustment to loss and
lae reserves 5.7 0.6 - - 6.3
Interest expense on debt 10.8 0.3 - 2.5 13.6
Interest expense -
dividends and accretion
on preferred stock
subject to mandatory
redemption 15.3 - - - 15.3
Total expenses 513.2 264.3 170.8 88.1 1,036.4
Pretax income (loss) $65.1 $105.8 $(8.4) $150.4 $312.9
For the Three Months Ended December 31, 2005
OneBeacon WM Re Esurance Other Total
Revenues:
Earned insurance and
reinsurance premiums $496.4 $327.6 $93.8 $- $917.8
Net investment income 48.3 39.8 3.3 10.8 102.2
Net realized investment
gains (losses) (23.3) 45.8 (1.2) (28.0) (6.7)
Other revenue 2.1 3.1 0.7 38.9 44.8
Total revenues 523.5 416.3 96.6 21.7 1,058.1
Expenses:
Loss and loss adjustment
expenses 341.0 323.1 64.7 10.3 739.1
Insurance and reinsurance
acquisition expenses 90.7 68.8 28.8 - 188.3
Other underwriting
expenses 34.4 24.9 12.2 0.3 71.8
General and
administrative expenses (2.4) 3.4 - 12.1 13.1
Accretion of fair value
adjustment to loss and
lae reserves 6.5 2.3 - - 8.8
Interest expense on debt 11.0 (1.3) - - 9.7
Interest expense -
dividends and accretion
on preferred stock
subject to mandatory
redemption 13.6 - - - 13.6
Total expenses 494.8 421.2 105.7 22.7 1,044.4
Pretax income (loss) $28.7 $(4.9) $(9.1) $(1.0) $13.7
WHITE MOUNTAINS INSURANCE GROUP, LTD.
SUMMARY OF GAAP RATIOS AND PREMIUMS
(Unaudited)
Year Ended December 31, 2006
OneBeacon WM Re Esurance
Personal Comm-
Specialty (1) ercial Total(2)
GAAP Ratios
Loss and LAE 55% 64% 56% 61% 71% 73%
Expense 34% 32% 39% 35% 31% 35%
Total Combined 89% 96% 95% 96% 102% 108%
Dollars in millions
Net written premiums $437.6 $800.6 $718.3 $1,957.6 $1,290.0 $595.9
Earned premiums $432.3 $822.3 $689.3 $1,944.0 $1,241.2 $527.5
Year Ended December 31, 2005
OneBeacon WM Re Esurance
Personal Comm-
Specialty (1) ercial Total(2)
GAAP Ratios
Loss and LAE 54% 62% 59% 66% 90% 67%
Expense 31% 29% 38% 32% 28% 42%
Total Combined 85% 91% 97% 98% 118% 109%
Dollars in millions
Net written premiums $548.8 $910.2 $654.4 $2,121.1 $1,304.1 $349.1
Earned premiums $521.9 $933.7 $654.7 $2,118.4 $1,371.6 $306.8
Three Months Ended December 31, 2006
OneBeacon WM Re Esurance
Personal Comm-
Specialty (1) ercial Total(2)
GAAP Ratios
Loss and LAE 53% 65% 50% 59% 53% 76%
Expense 39% 35% 43% 39% 32% 33%
Total Combined 92% 100% 93% 98% 85% 109%
Dollars in millions
Net written premiums $87.5 $174.3 $169.5 $431.5 $236.4 $159.9
Earned premiums $111.3 $197.6 $177.7 $485.9 $297.4 $156.0
Three Months Ended December 31, 2005
OneBeacon WM Re Esurance
Personal Comm-
Specialty (1) ercial Total(2)
GAAP Ratios
Loss and LAE 46% 59% 39% 69% 99% 69%
Expense 24% 23% 29% 25% 28% 44%
Total Combined 70% 82% 68% 94% 127% 113%
Dollars in millions
Net written premiums $98.9 $205.8 $155.4 $461.5 $269.9 $95.7
Earned premiums $105.5 $223.5 $166.0 $496.4 $327.6 $93.8
(1) Includes results of consolidated reciprocals.
(2) Includes results from runoff operations and eliminations between
underwriting units.
SOURCE White Mountains Insurance Group, Ltd.
CONTACT: David Foy of White Mountains Insurance Group, Ltd.,
+1-203-458-5850