White Mountains Reports Adjusted Book Value Per Share of $406
HAMILTON, Bermuda, July 30, 2010 /PRNewswire via COMTEX/ --
White Mountains Insurance Group, Ltd. (NYSE: WTM) reported an adjusted book value per share of $406 at June 30, 2010, a decrease of 1% for the quarter.
Ray Barrette, Chairman and CEO, commented, "We had an OK quarter. Adjusted book value per share declined 1%, mostly due to the impact of a strengthening dollar on WMRe Sirius that reduced our book value per share by $7. We remain enthusiastic about our large non-U.S. dollar investment in WMRe Sirius. Otherwise, we had small gains from investments and underwriting. OneBeacon had a 97% combined ratio and closed the sale of its Personal Lines business on July 1, significantly reducing our investment in a business with falling returns and large catastrophe exposures. White Mountains Re reported a 94% combined ratio, a bit elevated by $20 million of development on the Chile earthquake loss. Esurance had an improved quarter with a 101% adjusted combined ratio and 8% premium growth. At Symetra, we are excited about Tom Marra's appointment as CEO. During the quarter, we repurchased $82 million of our shares at 82% of adjusted book value per share. We continue to pursue many value enhancing opportunities, but with our shares trading at these prices, we believe buying shares back is the best use of our undeployed capital for now."
Adjusted comprehensive loss was $67 million in the second quarter and $118 million in the first six months of 2010, compared to adjusted comprehensive income of $236 million in the second quarter and $226 million in the first six months of last year. Net income for the second quarter was $3 million, compared to $180 million in the second quarter of last year, while net loss was $37 million in the first six months of 2010, compared to net income of $211 million in the first six months of last year.
OneBeacon
OneBeacon's book value per share increased 1%, including dividends, in both the second quarter and the first six months of 2010. The GAAP combined ratio for the second quarter was 97% compared to 93% for the second quarter of last year, while the GAAP combined ratio for the first six months was 105% compared to 93% for the first six months of last year. The increase in the GAAP combined ratio for both periods was primarily due to large loss activity and catastrophe losses. The second quarter and first six months of 2010 included 2 points and 6 points of catastrophe losses compared to less than 1 point of catastrophe losses in both the second quarter and first six months of last year.
Mike Miller, CEO of OneBeacon, said, "Our results for the quarter were OK. We experienced a higher than usual level of large property claims and catastrophe losses. Importantly, we completed the sale of our Personal Lines business on July 1, a significant step in our transformation to a specialty company. The market is competitive but we are excited about the prospects for our specialty businesses."
Net written premiums were $344 million in the second quarter and $715 million in the first six months of 2010, a decrease of 31% and 26% from the comparable periods of 2009, reflecting the sale of the non-specialty Commercial Lines business beginning with January 1, 2010 renewal dates. Specialty Lines premiums increased by 2% for the second quarter and 8% for the first six months.
In July, OneBeacon closed the sale of its Personal Lines business to Tower Group, Inc. In the third quarter of 2010, OneBeacon will record an after-tax gain of approximately $19 million on the sale in addition to a $6 million tax benefit booked in the second quarter related to the difference between the tax basis of the companies sold to Tower and the net asset value of those entities under GAAP.
During the second quarter, OneBeacon repurchased $175 million of its senior notes at an average price of 106% of par and recognized a pre-tax loss of $10 million ($7 million after-tax) as a result. OneBeacon's debt-to-total capital at the end of the second quarter was 23%.
White Mountains Re
White Mountains Re's GAAP combined ratio for the second quarter was 94% compared to 87% for the second quarter of last year, while the GAAP combined ratio for the first six months was 113% compared to 83% for the first six months of last year.
Allan Waters, CEO of White Mountains Re, said, "Our Chile loss development is disappointing. Otherwise, we benefited from light catastrophe activity in the quarter, and our $9 million loss from the Deepwater Horizon event was within our underwriting tolerances. While we were able to grow modestly in selected lines during the first half, overall the reinsurance markets continue to be competitive and opportunities for profitable growth remain limited."
The second quarter of 2010 included $24 million (11 points) of natural catastrophe losses, net of reinsurance and reinstatements, primarily from $20 million (9 points) of additional losses from the Chile earthquake, compared to $8 million (4 points) in the second quarter of 2009, primarily from storms in Eastern Europe. The second quarter of 2010 also included $9 million (4 points) of losses from Deepwater Horizon. Partially offsetting these losses was $8 million (4 points) of favorable loss reserve development recorded during the second quarter of 2010, compared to minimal loss reserve development in the second quarter of 2009. For the first six months of 2010, White Mountains Re recorded natural catastrophe losses of $147 million (34 points), including $130 million of Chile earthquake losses, and $7 million from European storm Xynthia. For the first six months of 2009, White Mountains Re recorded $19 million (4 points) of natural catastrophe losses, primarily from European winter storm Klaus.
Net written premiums were up 8% for the quarter and 10% for the six months. These increases are primarily due to increases in the trade credit and accident and health lines and the effects of foreign currency translation.
Esurance
Esurance's adjusted combined ratio for the second quarter was 101% compared to 99% in the second quarter of last year, while the adjusted combined ratio for the first six months was 103% compared to 101% for the first six months of last year. The loss and LAE ratio was 73% and 74% for the second quarter and first six months of 2010 compared to 71% and 73% in the second quarter and first six months of last year. The increase in the loss ratio for both periods was due to a greater incidence of large injury claims, a decline in the average premium per policy on new business, and an increase in catastrophe claims, partially offset by higher favorable loss reserve development. Favorable loss reserve development was $4 million (2 points) in the second quarter and $9 million (2 points) in the first six months of 2010 compared to $1 million of favorable loss reserve development in both the second quarter and first six months of last year. The adjusted expense ratio was 28% for the second quarter and 29% for the first six months of 2010 compared to 28% for both the second quarter and first six months of last year. The increase in the adjusted expense ratio in the first six months of 2010 compared to the first six months of last year was primarily due to increased advertising expenses.
Gary Tolman, CEO of Esurance, said, "We've had good top-line growth for the first half of the year due to strong new policy sales and higher renewal retentions. Our new advertising campaign, launched in June, should help us continue this growth. Loss results were higher than expected in the second quarter and we have taken rate actions in a few problem states to correct the trend. Answer Financial continues to perform well."
Controlled premiums, which include policies sold by Answer Financial, were $1.2 billion on a trailing twelve month basis. Controlled premiums were $282 million and $602 million in the second quarter and first six months of 2010, compared to $266 million and $565 million in the second quarter and first six months of last year. Gross premiums written by Esurance were $194 million in the second quarter and $426 million in the first six months of 2010, an 8% increase from comparable periods of 2009. Esurance ended the second quarter with 839,000 policies-in-force (including 324,000 policies at Answer Financial and 16,000 property policies), an increase of 80,000 from June 30, 2009.
In 2010, Esurance began reporting its expense and combined ratios on an adjusted basis, deducting referral fee revenues from acquisition expenses in order to better reflect this growing benefit, which is a by-product of our advertising expenditures. See "Regulation G" below.
Other Operations
White Mountains' Other Operations segment's pre-tax loss in the second quarter and first six months of 2010 was $38 million and $52 million, compared to $38 million and $76 million in the second quarter and first six months of last year. WM Life Re reported $9 million and $12 million of pre-tax loss in the second quarter and first six months compared to $27 million and $58 million of pre-tax loss in the second quarter and first six months of 2009. For both periods, the improvements at WM Life Re were primarily offset by increased mark-to-market losses on the Symetra warrants and higher incentive compensation expenses.
Investment Activities
The GAAP total return on invested assets for the second quarter and first six months of 2010 was -0.8% and 0.7%, which included -1.1% and -1.4% of currency losses, compared to 4.5% and 4.3% for the second quarter and first six months of last year, which included 1.0% and 0.4% of currency gains.
Manning Rountree, President of White Mountains Advisors, said, "Our total investment portfolio was down 0.8% for the second quarter and up 0.7% for the first six months. Dollar strengthening reduced returns by 1.1% for the second quarter and 1.4% for the first six months. In local currencies, our fixed income portfolio was up 1.1% for the second quarter and 2.5% for the first six months. These are good absolute returns, but we lagged longer-duration indices during the European sovereign crisis and the ensuing flight to quality. The fixed income portfolio remains short, safe and sound. Our equity portfolio was down 4.5% for the second quarter and 1.2% for the first six months, an excellent relative but poor absolute return. We have made progress in deploying our cash and short-term investments, and we expect this to continue going forward."
Capital Management
White Mountains estimates that its undeployed capital grew from over $700 million at the end of last year to about $900 million as of July 1 upon completion of the OneBeacon Personal Lines sale. White Mountains has repurchased and retired 347,409 of its common shares for $117 million under its share repurchase program in the first six months of 2010, including $82 million in the second quarter at an average share price of $335, which was approximately 82% of White Mountains' June 30, 2010 adjusted book value per share.
David Foy, EVP and Chief Financial Officer, commented, "At the investor day in May, I mentioned that undeployed capital would grow to $1.2 billion to $1.3 billion this year absent capital management activities. This was accomplished as of July 1 when the OneBeacon Personal Lines transaction closed. We have utilized about $200 million to repurchase debt at OneBeacon and over $100 million to repurchase White Mountains shares, leaving us with roughly $900 million in the consolidated organization. We expect to continue to repurchase shares in the second half of the year."
Additional Information
White Mountainsis 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. White Mountains expects to file its Form 10-Q with the Securities and Exchange Commission on or before August 9, 2010 and urges shareholders to refer to that document for more complete information concerning its financial results.
Regulation G
This earnings release includes four 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 book value per share is a non-GAAP financial measure which is derived by expanding the calculation of GAAP book value per share to exclude equity in net unrealized gains (losses) from Symetra's fixed maturity portfolio. In addition, the number of common shares outstanding used in the calculation of adjusted book value per share are adjusted to exclude unearned restricted common shares, the compensation cost of which, at the date of calculation, has yet to be amortized. The reconciliation of adjusted book value per share to GAAP book value per share is included on page 7.
Adjusted comprehensive income (loss) is a non-GAAP financial measure that excludes the change in equity in net unrealized gains (losses) from Symetra's fixed maturity portfolio from comprehensive income (loss). The reconciliation of adjusted comprehensive income (loss) to comprehensive income (loss) is included on page 8.
Esurance's adjusted expense ratio and adjusted combined ratio are non-GAAP financial measures. To calculate the adjusted expense ratio and adjusted combined ratio, acquisition expenses are reduced by referral fee revenue. Referral fee revenue, which is recorded as a component of other revenues under GAAP, represents fees that Esurance receives for referring customers for whom it does not write policies to other insurance carriers. Management believes that Esurance's adjusted expense ratio and adjusted combined ratio are better measures to evaluate Esurance's underwriting results than its GAAP expense ratio and GAAP combined ratio because the expenses that are incurred to acquire policyholders at Esurance, particularly advertising expenses, also lead to referral fee revenue. The reconciliation of Esurance's adjusted expense ratio and adjusted combined ratio to its GAAP expense ratio and GAAP combined ratio follows:
Three Months Six Months
Ended June Ended
30, June 30,
------------- ----------
2010 2009 2010 2009
---- ---- ---- ----
GAAP expense ratio 30% 29% 31% 29%
Referral fees (2)% (1)% (2)% (1)%
--- --- --- ---
Adjusted expense
ratio 28% 28% 29% 28%
GAAP combined
ratio 103% 100% 105% 102%
Referral fees (2)% (1)% (2)% (1)%
--- --- --- ---
Adjusted combined
ratio 101% 99% 103% 101%
================= === === === ===
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':
- change in adjusted book value per share or return on equity;
- business strategy;
- financial and operating targets or plans;
- incurred loss and loss adjustment expenses 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' 2009 Annual Report on Form 10-K;
- claims arising from catastrophic events, such as hurricanes, earthquakes, floods, fires, terrorist attacks or severe winter weather;
- 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 customers;
- an economic downturn or other economic conditions adversely affecting its financial position;
- recorded loss reserves subsequently proving to have been inadequate;
- actions taken by ratings agencies from time to time, such as financial strength or credit ratings downgrades or placing ratings on negative watch;
- 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 publicly update any such forward-looking statements, whether as a result of new information, future events or otherwise.
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions, except share amounts)
(Unaudited)
June December June
30, 31, 30,
2010 2009 2009
---- ---- ----
Assets
Fixed maturity investments $5,568.6 $6,101.2 $5,929.8
Short-term investments 1,663.7 2,098.4 2,023.3
Common equity securities 556.3 458.5 262.2
Convertible fixed maturity
investments 196.7 233.1 300.3
Other long-term investments 404.0 341.3 405.4
Total investments 8,389.3 9,232.5 8,921.0
Cash 348.8 366.0 405.2
Reinsurance recoverable on unpaid
losses 2,778.6 2,790.9 2,825.0
Reinsurance recoverable on paid
losses 36.8 35.0 42.9
Insurance and reinsurance premiums
receivable 861.4 785.5 986.5
Funds held by ceding companies 111.0 123.1 141.4
Investments in unconsolidated
affiliates 410.0 344.8 209.0
Deferred acquisition costs 241.9 303.8 329.4
Deferred tax asset 567.3 564.0 567.5
Ceded unearned insurance and
reinsurance premiums 249.3 111.1 159.2
Value of acquired business in force
-Answer Financial 30.1 35.8 42.7
Accounts receivable on unsettled
investment sales 87.1 27.6 10.3
Assets held for sale -OneBeacon
Personal Lines transaction 655.6 - -
Other assets 735.5 723.1 910.9
----- ----- -----
Total assets $15,502.7 $15,443.2 $15,551.0
========= ========= =========
Liabilities
Loss and loss adjustment expense
reserves $6,643.3 $6,802.1 $6,999.8
Unearned insurance and reinsurance
premiums 1,385.7 1,498.5 1,704.4
Debt 851.7 1,050.7 1,271.4
Deferred tax liability 320.9 355.3 309.4
Ceded reinsurance payable 268.8 92.0 158.6
Funds held under reinsurance
treaties 80.4 97.4 55.9
Accounts payable on unsettled
investment purchases 51.8 9.1 64.4
Liabilities held for sale -
OneBeacon Personal Lines
transaction 502.3 - -
Other liabilities 1,237.4 1,196.6 1,135.7
------- ------- -------
Total liabilities 11,342.3 11,101.7 11,699.6
-------- -------- --------
White Mountains' common
shareholders' equity
White Mountains' common shares and
paid-in surplus 1,406.1 1,445.0 1,436.2
Retained earnings 2,108.7 2,215.9 1,956.6
Accumulated other comprehensive
income (loss), after tax:
Equity in unrealized gains (losses)
from investments in unconsolidated
affiliates .5 - (1.6)
Equity in net unrealized gains
(losses) from Symetra's fixed
maturity portfolio 73.8 (9.0) (120.4)
Net unrealized foreign currency
translation (losses) gains and
other (75.5) 5.5 (66.7)
----- --- -----
Total White Mountains' common
shareholders' equity 3,513.6 3,657.4 3,204.1
------- ------- -------
Noncontrolling interests
Noncontrolling interest -OneBeacon
Ltd. 337.9 351.0 315.5
Noncontrolling interest -WMRe
Group Preference Shares 250.0 250.0 250.0
Noncontrolling interest -
consolidated limited partnerships
and A.W.G. Dewar 58.9 83.1 81.8
---- ---- ----
Total noncontrolling interests 646.8 684.1 647.3
----- ----- -----
Total equity 4,160.4 4,341.5 3,851.4
------- ------- -------
Total liabilities and equity $15,502.7 $15,443.2 $15,551.0
========= ========= =========
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WHITE MOUNTAINS INSURANCE GROUP, LTD.
BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE
(Unaudited)
March December
June 30, 31, 31, June 30,
2010 2010 2009 2009
---- ---- ---- ----
Book value per share
numerators (in millions):
White Mountains' common
shareholders' equity $3,513.6 $3,598.3 $3,657.4 $3,204.1
Benefits to be received
from common share
obligations under
employee stock option
plans (1) - - .4 1.1
--- --- --- ---
Book value per share
numerator 3,513.6 3,598.3 3,657.8 3,205.2
Equity in net unrealized
(gains) losses from
Symetra's fixed maturity
portfolio (73.8) (23.8) 9.0 120.4
Adjusted book value per
share numerator $3,439.8 $3,574.5 $3,666.8 $3,325.6
======== ======== ======== ========
Book value per share
denominators (in
thousands of shares):
Common shares outstanding 8,532.4 8,775.6 8,860.2 8,857.6
Common share obligations
under employee stock
option plans(1) - - 2.4 6.0
--- --- --- ---
Book value per share
denominator 8,532.4 8,775.6 8,862.6 8,863.6
Unearned restricted common
shares (58.6) (69.6) (59.1) (76.9)
Adjusted book value per
share denominator 8,473.8 8,706.0 8,803.5 8,786.7
======= ======= ======= =======
Book value per share $411.79 $410.04 $412.73 $361.61
Adjusted book value per
share $405.94 $410.59 $416.52 $378.48
======= ======= ======= =======
(1) Assumes conversion of in-the-money stock options.
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WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
(millions, except per share amounts)
(Unaudited)
Three Months Ended
June 30,
--------
2010 2009
---- ----
Revenues:
Earned insurance and reinsurance
premiums $859.1 $898.3
Net investment income 57.5 77.2
Net realized and unrealized investment
gains 1.8 214.9
Other revenue 10.0 28.5
---- ----
Total revenues 928.4 1,218.9
----- -------
Expenses:
Loss and loss adjustment expenses 554.6 528.9
Insurance and reinsurance acquisition
expenses 183.0 179.8
Other underwriting expenses 100.5 128.7
General and administrative expenses 63.3 52.5
Amortization of Answer Financial
purchase accounting adjustments and
accretion
of fair value adjustment to loss and
lae reserves 5.2 6.9
Interest expense on debt 14.7 18.3
---- ----
Total expenses 921.3 915.1
----- -----
Pre-tax income (loss) 7.1 303.8
Income tax benefit (expense) .8 (88.6)
--- -----
Income (loss) before equity in
earnings of unconsolidated affiliates 7.9 215.2
Equity in earnings (losses) of
unconsolidated affiliates 5.3 8.6
--- ---
Net income (loss) 13.2 223.8
Net income attributable to
noncontrolling interests (10.7) (43.5)
----- -----
Net income (loss) attributable to
White Mountains' common shareholders 2.5 180.3
--- -----
Comprehensive income (loss), net of
tax:
Change in equity in net unrealized
gains from investments in
unconsolidated affiliates 50.4 97.6
Change in foreign currency translation
and other (69.4) 57.0
----- ----
Comprehensive (loss) income (16.5) 334.9
Comprehensive income attributable to
noncontrolling interests (1.5)
--- ----
Comprehensive (loss) income
attributable to White Mountains'
common shareholders (16.5) 333.4
----- -----
Change in equity in net unrealized
gains from Symetra's fixed maturity
portfolio (50.0) (97.9)
----- -----
Adjusted comprehensive (loss) income $(66.5) $235.5
====== ======
Basic earnings (loss) per common share $.28 $20.35
Diluted earnings (loss) per common
share $.28 $20.35
Dividends declared and paid per common
share $ - $ -
Six Months Ended
June 30,
--------
2010 2009
---- ----
Revenues:
Earned insurance and reinsurance
premiums $1,723.8 $1,809.7
Net investment income 118.1 138.3
Net realized and unrealized investment
gains 88.8 191.6
Other revenue 41.8 45.8
---- ----
Total revenues 1,972.5 2,185.4
------- -------
Expenses:
Loss and loss adjustment expenses 1,257.8 1,072.1
Insurance and reinsurance acquisition
expenses 368.0 362.0
Other underwriting expenses 216.4 244.1
General and administrative expenses 108.1 103.1
Amortization of Answer Financial
purchase accounting adjustments and
accretion
of fair value adjustment to loss and
lae reserves 10.9 14.7
Interest expense on debt 31.0 37.2
---- ----
Total expenses 1,992.2 1,833.2
------- -------
Pre-tax income (loss) (19.7) 352.2
Income tax benefit (expense) 1.0 (100.9)
--- ------
Income (loss) before equity in earnings
of unconsolidated affiliates (18.7) 251.3
Equity in earnings (losses) of
unconsolidated affiliates (6.3) 9.5
---- ---
Net income (loss) (25.0) 260.8
Net income attributable to
noncontrolling interests (12.1) (50.2)
----- -----
Net income (loss) attributable to White
Mountains' common shareholders (37.1) 210.6
----- -----
Comprehensive income (loss), net of
tax:
Change in equity in net unrealized
gains from investments in
unconsolidated affiliates 83.3 79.4
Change in foreign currency translation
and other (81.0) 18.0
----- ----
Comprehensive (loss) income (34.8) 308.0
Comprehensive income attributable to
noncontrolling interests (1.8)
--- ----
Comprehensive (loss) income
attributable to White Mountains'
common shareholders (34.8) 306.2
----- -----
Change in equity in net unrealized
gains from Symetra's fixed maturity
portfolio (82.8) (79.9)
----- -----
Adjusted comprehensive (loss) income $(117.6) $226.3
======= ======
Basic earnings (loss) per common share $(4.24) $23.82
Diluted earnings (loss) per common
share $(4.24) $23.82
Dividends declared and paid per common
share $1.00 $1.00
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WHITE MOUNTAINS INSURANCE GROUP, LTD.
QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)
(in millions)
(Unaudited)
For the Three Months Ended June 30, 2010
OneBeacon WMRe Esurance Other Total
--------- ---- -------- ----- -----
Revenues:
Earned insurance and
reinsurance premiums $428.3 $221.1 $209.7 $- $859.1
Net investment income 25.0 22.3 6.7 3.5 57.5
Net realized and
unrealized investment
(losses) gains (14.4) 26.0 1.4 (11.2) 1.8
Other revenue -
foreign currency
translation loss - (13.7) - - (13.7)
Other revenue -
referral fee revenue - - 3.8 - 3.8
Other revenue -
Tuckerman Fund I - - - 5.3 5.3
Other revenue (2.3) .4 11.2 5.3 14.6
Total revenues 436.6 256.1 232.8 2.9 928.4
----- ----- ----- --- -----
Expenses:
Loss and loss
adjustment expenses 261.9 140.2 152.5 - 554.6
Insurance and
reinsurance
acquisition expenses 95.2 43.3 44.5 - 183.0
Other underwriting
expenses 58.5 23.4 18.6 - 100.5
General and
administrative
expenses -Tuckerman
Fund I - - - 4.7 4.7
General and
administrative
expenses 6.8 6.9 9.2 35.7 58.6
Amortization of Answer
Financial purchase
accounting
adjustments - - 3.1 - 3.1
Accretion of fair
value adjustment to
loss and lae reserves - 2.1 - - 2.1
Interest expense on
debt 7.9 6.5 - .3 14.7
Total expenses 430.3 222.4 227.9 40.7 921.3
----- ----- ----- ---- -----
Pre-tax income (loss) $6.3 $33.7 $4.9 $(37.8) $7.1
==== ===== ==== ====== ====
For the Three Months Ended June 30, 2009
OneBeacon WMRe Esurance Other Total
--------- ---- -------- ----- -----
Revenues:
Earned insurance and
reinsurance premiums $490.2 $210.7 $197.4 $- $898.3
Net investment income 36.1 31.4 6.2 3.5 77.2
Net realized and
unrealized investment
gains 127.4 65.8 18.1 3.6 214.9
Other revenue -foreign
currency translation
gain - 26.0 - - 26.0
Other revenue -
referral fee revenue - - 1.6 - 1.6
Other revenue -
Tuckerman Fund I and
II - 7.8 - 4.3 12.1
Other revenue 1.1 1.4 11.1 (24.8) (11.2)
Total revenues 654.8 343.1 234.4 (13.4) 1,218.9
----- ----- ----- ----- -------
Expenses:
Loss and loss
adjustment expenses 275.7 113.7 139.5 - 528.9
Insurance and
reinsurance
acquisition expenses 97.0 43.2 39.6 - 179.8
Other underwriting
expenses 84.3 26.1 18.3 - 128.7
General and
administrative
expenses -Tuckerman
Fund I and II - 8.4 - 4.3 12.7
General and
administrative
expenses 6.5 6.3 8.4 18.6 39.8
Amortization of Answer
Financial purchase
accounting adjustment - - 4.3 - 4.3
Accretion of fair value
adjustment to loss and
lae reserves 1.3 1.3 - - 2.6
Interest expense on
debt 10.1 6.5 - 1.7 18.3
Total expenses 474.9 205.5 210.1 24.6 915.1
----- ----- ----- ---- -----
Pre-tax income (loss) $179.9 $137.6 $24.3 $(38.0) $303.8
====== ====== ===== ====== ======
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WHITE MOUNTAINS INSURANCE GROUP, LTD.
YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)
(in millions)
(Unaudited)
For the Six Months Ended June 30, 2010
OneBeacon WMRe Esurance Other Total
--------- ---- -------- ----- -----
Revenues:
Earned insurance and
reinsurance premiums $881.5 $433.7 $408.6 $- $1,723.8
Net investment income 53.3 44.9 13.0 6.9 118.1
Net realized and
unrealized
investment gains
(losses) 28.0 66.1 6.0 (11.3) 88.8
Other revenue -
foreign currency
translation loss - (20.2) - - (20.2)
Other revenue -
referral fee revenue - - 7.2 - 7.2
Other revenue -
Tuckerman Fund I - - - 9.4 9.4
Other revenue 4.2 13.3 22.2 5.7 45.4
Total revenues 967.0 537.8 457.0 10.7 1,972.5
----- ----- ----- ---- -------
Expenses:
Loss and loss
adjustment expenses 595.6 358.4 303.8 - 1,257.8
Insurance and
reinsurance
acquisition expenses 196.6 84.8 86.6 - 368.0
Other underwriting
expenses 132.7 44.8 38.9 - 216.4
General and
administrative
expenses -Tuckerman
Fund I - - - 8.7 8.7
General and
administrative
expenses 14.5 14.2 17.5 53.2 99.4
Amortization of
Answer Financial
purchase accounting
adjustments - - 6.7 - 6.7
Accretion of fair
value adjustment to
loss and lae
reserves - 4.2 - - 4.2
Interest expense on
debt 17.0 13.4 - .6 31.0
Total expenses 956.4 519.8 453.5 62.5 1,992.2
----- ----- ----- ---- -------
Pre-tax income
(loss) $10.6 $18.0 $3.5 $(51.8) $(19.7)
===== ===== ==== ====== ======
For the Six Months Ended June 30, 2009
OneBeacon WMRe Esurance Other Total
--------- ---- -------- ----- -----
Revenues:
Earned insurance and
reinsurance premiums $978.0 $438.1 $393.6 $- $1,809.7
Net investment income 58.0 60.8 12.3 7.2 138.3
Net realized and
unrealized investment
gains 121.5 45.7 21.8 2.6 191.6
Other revenue -
foreign currency
translation gain - 31.4 - - 31.4
Other revenue -
referral fee revenue - - 3.6 - 3.6
Other revenue -
Tuckerman Fund I and
II - 20.1 - 10.5 30.6
Other revenue 10.5 .1 23.0 (53.4) (19.8)
Total revenues 1,168.0 596.2 454.3 (33.1) 2,185.4
------- ----- ----- ----- -------
Expenses:
Loss and loss
adjustment expenses 563.7 223.6 284.8 - 1,072.1
Insurance and
reinsurance
acquisition expenses 192.9 90.6 78.5 - 362.0
Other underwriting
expenses 157.0 50.3 36.8 - 244.1
General and
administrative
expenses -Tuckerman
Fund I and II - 19.9 - 10.5 30.4
General and
administrative
expenses 12.0 13.5 17.6 29.6 72.7
Amortization of Answer
Financial purchase
accounting adjustment - - 9.6 - 9.6
Accretion of fair
value adjustment to
loss and lae reserves 2.7 2.4 - - 5.1
Interest expense on
debt 21.0 13.1 - 3.1 37.2
Total expenses 949.3 413.4 427.3 43.2 1,833.2
----- ----- ----- ---- -------
Pre-tax income (loss) $218.7 $182.8 $27.0 $(76.3) $352.2
====== ====== ===== ====== ======
(more)
WHITE MOUNTAINS INSURANCE GROUP, LTD.
SUMMARY OF GAAP RATIOS AND PREMIUMS
(Dollars in millions)
(Unaudited)
OneBeacon Three Months Ended June 30, 2010
--------- --------------------------------
Specialty Personal Run-off Total
--------- -------- ------- -----
GAAP Ratios
Loss and LAE 60% 67% 57% 61%
Expense 37% 30% 41% 36%
--- --- --- ---
Combined 97% 97% 98% 97%
=== === === ===
Net written
premiums $237.8 $113.5 $(7.4) $343.9
Earned premiums $241.2 $118.4 $68.7 $428.3
OneBeacon Six Months Ended June 30, 2010
--------- ------------------------------
Specialty Personal Run-off Total
--------- -------- ------- -----
GAAP Ratios
Loss and LAE 59% 76% 81% 68%
Expense 38% 33% 41% 37%
--- --- --- ---
Combined 97% 109% 122% 105%
=== === === ===
Net written
premiums $498.1 $225.0 $(7.7) $715.4
Earned premiums $477.1 $241.2 $163.2 $881.5
OneBeacon Three Months Ended June 30, 2009
--------- --------------------------------
Specialty Personal Run-off Total
--------- -------- ------- -----
GAAP Ratios
Loss and LAE 46% 67% 64% 56%
Expense 39% 32% 39% 37%
--- --- --- ---
Combined 85% 99% 103% 93%
=== === === ===
Net written
premiums $233.6 $137.9 $126.4 $497.9
Earned premiums $224.3 $146.1 $119.8 $490.2
OneBeacon Six Months Ended June 30, 2009
--------- ------------------------------
Specialty Personal Run-off Total
--------- -------- ------- -----
GAAP Ratios
Loss and LAE 39% 78% 66% 57%
Expense 39% 30% 38% 36%
--- --- --- ---
Combined 78% 108% 104% 93%
=== === === ===
Net written
premiums $463.1 $269.6 $234.6 $967.3
Earned premiums $440.0 $296.3 $241.7 $978.0
White Mountains
Re Three Months Ended Six Months Ended
---------------
June 30, June 30,
-------- --------
2010 2009 2010 2009
---- ---- ---- ----
GAAP Ratios
Loss and LAE 64% 54% 83% 51%
Expense 30% 33% 30% 32%
--- --- --- ---
Combined 94% 87% 113% 83%
=== === === ===
Gross written
premiums $241.2 $224.0 $703.3 $624.3
Net written
premiums $206.9 $191.7 $549.0 $501.0
Earned premiums $221.1 $210.7 $433.7 $438.1
Esurance Three Months Ended Six Months Ended
--------
June 30, June 30,
-------- --------
2010 2009 2010 2009
---- ---- ---- ----
Adjusted Ratios
(1)
Loss and LAE 73% 71% 74% 73%
Expense 28% 28% 29% 28%
--- --- --- ---
Combined 101% 99% 103% 101%
=== === === ===
Gross written
premiums $194.2 $180.6 $426.3 $394.8
Net written
premiums $193.5 $180.1 $424.8 $393.7
Earned premiums $209.7 $197.4 $408.6 $393.6
(1) Adjusted expense and combined ratios include acquisition
expenses net of referral fee revenue (end)
CONTACT: David Foy (203) 458-5850
SOURCE White Mountains Insurance Group, Ltd.