White Mountains Reports Flat Adjusted Book Value Per Share of $352
HAMILTON,
OneBeacon
OneBeacon's book value per share increased 3% in the quarter, including
dividends. The GAAP combined ratio for the first quarter of 2009 was 94%
compared to 100% for the first quarter of 2008. Both periods included 3 points
of net favorable loss reserve development. The first quarter of 2009 had less
than one point of catastrophe losses, while the first quarter of 2008 included
4 points of catastrophe losses, primarily related to tornados in the
Continued Miller, "Our Specialty Lines continue to drive our premium growth. We continue to act in a balanced way in the more competitive Commercial and Personal Lines businesses. Expect us to emphasize underwriting discipline and capital preservation."
Net written premiums were
White Mountains Re
White Mountains Re's GAAP combined ratio for the first quarter of 2009 was
80% compared to 94% for the first quarter of 2008. Both periods experienced
relatively benign weather and light catastrophe activity. The improved
combined ratio in the first quarter of 2009 was driven by favorable loss
reserve development of
Net written premiums were down 14% for the quarter. A significant portion of the decline was in property catastrophe exposed business where White Mountains Re continues to reduce its net exposures.
Controlled premiums, which include policies sold by Answer Financial, were
Other Operations
White Mountains' Other Operations segment's pre-tax loss in the first
quarter of 2009 was
Investment Activities
The GAAP total return on invested assets for the first quarter of 2009 was
-0.1%, including -0.6% from currency losses, compared to 0.3% in the first
quarter of 2008. The GAAP total return on fixed maturity investments,
including mortgage-backed and asset-backed securities, was 1.0% for the
quarter compared to 1.9% in the first quarter of last year. The GAAP total
return on equity and convertible securities was -5.9% for the quarter compared
to -4.7% in the first quarter of last year. Net investment income was
Manning Rountree, President of
Additional Information
During the first quarter of 2009, White Mountains adopted FAS No. 160, Non-controlling Interests-an amendment to ARB 51 ("FAS 160"). As a result, White Mountains has changed the presentation of its financial statements for prior periods to conform to the required presentation, as follows: non-controlling interests (previously referred to as "minority interests") are now presented on the balance sheets within equity, separate from White Mountains' shareholders' equity, and the portion of net income, extraordinary item and comprehensive income attributable to White Mountains' common shareholders and the non-controlling interests are presented separately on the consolidated statements of operations and comprehensive income. The adoption of FAS 160 did not impact White Mountains common shareholders' adjusted book value per share.
White Mountains is a
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/(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 7.
Adjusted book value per share is a non-GAAP measure which is derived by expanding the calculation of GAAP book value per White Mountains common share to exclude 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 shares of restricted stock, the compensation cost of which, at the date of calculation, has yet to be amortized. The reconciliation of adjusted book value per share to book value per share is included on page 6.
During the second quarter of 2008, White Mountains changed its principal
financial reporting measure from "fully diluted tangible book value per share"
to "adjusted book value per share". Fully diluted tangible book value per
share is a non-GAAP measure that differs from adjusted book value per share by
excluding goodwill and other intangible assets. The change from fully diluted
tangible book value per share to adjusted book value per share has been
presented retroactively for all periods. As a result of the change, goodwill
and other intangible assets are included in the calculation for all periods
presented. For periods ended
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':
-- changes in adjusted 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' 2008 Annual
Report on Form 10-K;
-- 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 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)
March 31, December 31, March 31,
2009 2008 2008
Assets
Fixed maturity
investments $5,630.5 $5,480.5 $6,842.6
Common equity securities 318.8 552.7 1,520.7
Short-term investments 2,148.4 2,244.5 2,372.2
Other long-term
investments 395.1 416.2 642.5
Convertible fixed
maturity investments 265.0 308.8 463.0
Securities lending
investment assets -
OneBeacon 46.9 - -
Investments held in trust - - 309.2
Total investments 8,804.7 9,002.7 12,150.2
Reinsurance recoverable
on unpaid losses 2,984.7 3,050.4 3,375.3
Reinsurance recoverable
on paid losses 66.9 47.3 88.2
Funds held by ceding
companies 145.6 163.3 231.7
Insurance and
reinsurance premiums
receivable 982.6 835.7 976.2
Securities lending
collateral - OneBeacon - 100.7 315.4
Securities lending
collateral - WMRe
America 105.8 119.3 165.7
Investments in
unconsolidated
affiliates 99.7 116.9 362.3
Deferred acquisition
costs 327.7 323.0 325.9
Deferred tax asset 658.1 724.0 253.5
Ceded unearned premiums 165.7 111.3 171.9
Value of acquired
business in force - AFI 46.6 51.4 -
Accounts receivable on
unsettled investment
sales 25.6 78.2 35.3
Goodwill 19.6 19.5 34.0
Other assets 1,207.2 1,152.1 879.2
Total assets $15,640.5 $15,895.8 $19,364.8
Liabilities
Loss and loss adjustment
expense reserves $7,260.1 $7,400.1 $8,038.0
Unearned insurance and
reinsurance premiums 1,732.3 1,597.4 1,753.8
Debt 1,349.2 1,362.0 1,666.0
Securities lending
payable - OneBeacon 48.6 107.7 315.4
Securities lending
payable - WMRe America 112.8 127.1 165.7
Deferred tax liability 289.5 306.0 390.2
Preferred stock subject
to mandatory redemption - - 288.9
Ceded reinsurance payable 162.6 101.3 124.6
Funds held under
reinsurance treaties 76.6 79.1 98.7
Accounts payable on
unsettled investment
purchases 23.5 7.5 106.3
Other liabilities 1,103.0 1,295.1 960.6
Total liabilities 12,158.2 12,383.3 13,908.2
White Mountains shareholders' equity
White Mountains common
shares and paid-in
surplus 1,431.7 1,428.2 1,701.2
Retained earnings 1,776.3 1,751.9 2,837.6
Accumulated other
comprehensive income
(loss), after tax:
Equity in unrealized
(losses) gains from
investments in
unconsolidated
affiliates (1.3) (1.1) .3
Equity in net
unrealized losses from
Symetra's fixed
maturity portfolio (218.3) (197.3) (26.3)
Net unrealized foreign
currency translation
(losses) gains and
other (122.2) (82.9) 166.4
Total White
Mountains
shareholders' equity 2,866.2 2,898.8 4,679.2
Non-controlling interests
Non-controlling
interest - OneBeacon
Ltd. 287.0 283.5 407.4
Non-controlling
interest - WMRe Group
Preference Shares 250.0 250.0 250.0
Non-controlling
interest -
consolidated limited
partnerships and A.W.G.
Dewar 79.1 80.2 120.0
Total non-
controlling
interests 616.1 613.7 777.4
Total equity 3,482.3 3,512.5 5,456.6
Total liabilities and
equity $15,640.5 $15,895.8 $19,364.8
Common shares
outstanding (000's) 8,854 8,809 10,570
WHITE MOUNTAINS INSURANCE GROUP, LTD.
ADJUSTED BOOK VALUE PER COMMON SHARE
(Unaudited)
March 31, December 31, March 31,
2009 2008 2008
Book value per share numerators (in millions):
White Mountains common
shareholders' equity $2,866.2 $2,898.8 $4,679.2
Benefits to be received from
share obligations under employee
stock option plans (1) - 1.1 1.5
Remaining adjustment of
preferred stock subj. to
mandatory redemption to face
value - - (8.3)(2)
- - ----
Book value per share numerator 2,866.2 2,899.9 4,672.4
Equity in net unrealized losses
from Symetra's fixed maturity
portfolio 218.3 197.3 26.3
Adjusted book value per common
share numerator $3,084.5 $3,097.2 $4,698.7
Book value per share denominators
(in thousands of shares):
Common Shares outstanding 8,854.1 8,808.8 10,570.2
Share obligations under employee
stock option plans (1) - 6.0 8.7
Book value per share denominator 8,854.1 8,814.8 10,578.9
Unearned restricted shares (83.4) (42.6) (50.4)
Adjusted book value per common
share denominator 8,770.7 8,772.2 10,528.5
Book value per common share $323.71 $328.97 $441.67
Adjusted book value per common
share $351.68 $353.07 $446.28
(1) Assumes conversion of in-the-money stock options.
(2) Remaining adjustment of subsidiary preferred stock to face value,
which is representative of White Mountains' ownership interest in
OneBeacon Insurance Group, Ltd. of 74.7% as of March 31, 2008 .
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(millions, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2009 2008
Revenues:
Earned insurance and
reinsurance premiums $911.4 $929.1
Net investment income 61.1 116.8
Net realized and unrealized
investment losses (23.3) (118.0)
Other revenue 17.3 10.0
Total revenues 966.5 937.9
Expenses:
Loss and loss adjustment
expenses 543.2 638.7
Insurance and reinsurance
acquisition expenses 182.2 186.7
Other underwriting expenses 115.4 116.8
General and administrative
expenses 55.9 56.7
Accretion of fair value
adjustment to loss and loss
adjustment expense reserves 2.5 4.2
Interest expense on debt 18.9 19.4
Interest expense - dividends
on preferred stock subject to
mandatory redemption - 7.1
Interest expense - accretion
on preferred stock subject to
mandatory redemption - 10.5
Total expenses 918.1 1,040.1
Pre-tax income (loss) 48.4 (102.2)
Income tax (expense) benefit (12.3) 32.5
Income (loss) before equity in
earnings of unconsolidated
affiliates, 36.1 (69.7)
extraordinary item
Equity in earnings of
unconsolidated affiliates .9 .4
Excess of fair value of
acquired assets over cost - 4.2
Net income (loss) before non-
controlling interests 37.0 (65.1)
Net (income) loss
attributable to non-
controlling interests (6.7) 8.3
Net income (loss) attributable
to White Mountains common
shareholders 30.3 (56.8)
Comprehensive income, net of tax:
Change in equity in net
unrealized losses from
investments in unconsolidated
affiliates (18.2) (20.5)
Change in foreign currency
translation and other (39.0) 56.5
Comprehensive net loss before
non-controlling interests (26.9) (20.8)
Comprehensive net (income)
loss attributable to non-
controlling interests (.3) .3
Comprehensive net loss
attributable to White Mountains
common shareholders (27.2) (20.5)
Change in net unrealized
losses from Symetra's fixed
maturity portfolio 18.0 20.7
Adjusted comprehensive net
(loss) income $(9.2) $.2
Basic earnings (loss) per share $3.44 $(5.38)
Diluted earnings (loss) per
share $3.44 $(5.38)
Dividends declared and paid per
common share $1.00 $2.00
WHITE MOUNTAINS INSURANCE GROUP, LTD.
YTD SEGMENT INCOME STATEMENTS
(in millions)
(Unaudited)
For the Three Months Ended March 31, 2009
OneBeacon WMRe Esurance Other Total
Revenues:
Earned insurance and
reinsurance
premiums $487.8 $227.4 $196.2 $- $911.4
Net investment
income 21.9 29.4 6.1 3.7 61.1
Net realized and
unrealized
investment gains
(losses) (5.9) (20.1) 3.7 (1.0) (23.3)
Other revenue -
foreign currency
translation gain - 5.4 - - 5.4
Other revenue 9.4 11.0 13.9 (22.4) 11.9
Total revenues 513.2 253.1 219.9 (19.7) 966.5
Expenses:
Loss and loss
adjustment
expenses 288.0 109.9 145.3 - 543.2
Insurance and
reinsurance
acquisition
expenses 95.9 47.4 38.9 - 182.2
Other underwriting
expenses 72.7 24.2 18.5 - 115.4
General and
administrative
expenses 5.5 18.7 9.2 17.2 50.6
Amortization of
Answer Financial
purchase accounting
adjustments - - 5.3 - 5.3
Accretion of fair
value adjustment to
loss and lae
reserves 1.4 1.1 - - 2.5
Interest expense on
debt 10.9 6.6 - 1.4 18.9
Total expenses 474.4 207.9 217.2 18.6 918.1
Pre-tax income (loss) $38.8 $45.2 $2.7 $(38.3) $48.4
For the Three Months Ended March 31, 2008
OneBeacon WMRe Esurance Other Total
Revenues:
Earned insurance and
reinsurance
premiums $455.3 $266.8 $207.0 $- $929.1
Net investment
income 50.1 50.5 7.9 8.3 116.8
Net realized and
unrealized
investment losses (55.4) (52.5) (7.1) (3.0) (118.0)
Other revenue -
foreign currency
translation loss - (13.1) - - (13.1)
Other revenue 3.6 .2 3.1 16.2 23.1
Total revenues 453.6 251.9 210.9 21.5 937.9
Expenses:
Loss and loss
adjustment
expenses 300.9 168.2 168.4 1.2 638.7
Insurance and
reinsurance
acquisition
expenses 84.7 55.6 46.4 - 186.7
Other underwriting
expenses 70.1 27.0 19.0 .7 116.8
General and
administrative
expenses 2.9 5.1 .6 48.1 56.7
Accretion of fair
value adjustment to
loss and lae
reserves 3.0 1.2 - - 4.2
Interest expense on
debt 11.5 6.9 - 1.0 19.4
Interest expense -
dividends on
preferred stock 7.1 - - - 7.1
Interest expense -
accretion on
preferred stock 10.5 - - - 10.5
Total expenses 490.7 264.0 234.4 51.0 1,040.1
Pre-tax loss $(37.1) $(12.1) $(23.5) $(29.5) $(102.2)
WHITE MOUNTAINS INSURANCE GROUP, LTD.
SUMMARY OF GAAP RATIOS AND PREMIUMS
(Unaudited)
OneBeacon
Three Months Ended March 31, 2009
Specialty Commercial Personal Total (1)
GAAP Ratios
Loss and LAE 32% 58% 89% 59%
Expense 39% 37% 28% 35%
Total GAAP Combined 71% 95% 117% 94%
Dollars in millions
Net written premiums $178.7 $158.9 $131.7 $469.4
Earned premiums $162.7 $174.8 $150.2 $487.8
OneBeacon Three Months Ended March 31, 2008
Specialty Commercial Personal Total (1)
GAAP Ratios
Loss and LAE 55% 72% 65% 66%
Expense 32% 38% 31% 34%
Total Combined 87% 110% 96% 100%
Dollars in millions
Net written premiums $110.9 $169.7 $144.7 $425.7
Earned premiums $110.4 $181.0 $163.6 $455.3
White Mountains Re Esurance
Three Months Ended Three Months Ended
March 31, March 31,
2009 2008 2009 2008
GAAP Ratios
Loss and LAE 48% 63% 74% 81%
Expense 32% 31% 29% 32%
Total Combined 80% 94% 103% 113%
Dollars in millions
Gross written premiums $400.3 $446.9 $214.2 $231.2
Net written premiums $309.3 $359.6 $213.6 $230.3
Earned premiums $227.4 $266.8 $196.2 $207.0
(1) Includes results from runoff operations.
CONTACT: David Foy
(203) 458-5850
SOURCEWhite Mountains Insurance Group, Ltd. -0-05/01/2009 /CONTACT:David Foy forWhite Mountains Insurance Group, Ltd. , +1-203-458-5850, / /Web Site: http://www.whitemountains.com / (WTM) CO:White Mountains Insurance Group, Ltd. ST:Bermuda IN: INS SU: ERN PR -- NE09300 -- 440005/01/2009 08:00 EDT http://www.prnewswire.com