UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
May 2, 2007
Date of Report (Date of earliest event reported)
WHITE MOUNTAINS INSURANCE GROUP, LTD.
(Exact name of
registrant as specified in its charter)
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Bermuda |
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1-8993 |
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94-2708455 |
80 South Main Street, Hanover, New Hampshire 03755
(Address of
principal executive offices)
(603) 640-2200
(Registrant’s
telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 2, 2007, White Mountains Insurance Group, Ltd. issued a press release announcing its results for the three months ended March 31, 2007. The press release furnished herewith is attached as Exhibit 99.1 to this Form 8-K. Certain information included in the press release constitutes non-GAAP financial measures (as defined in Regulation G of the Securities and Exchange Commission). Specifically, non-GAAP financial measures disclosed in the press release are adjusted comprehensive net income and fully diluted tangible book value per share. 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. In the calculation of comprehensive net income under GAAP, fixed maturity investments are marked-to-market while the liabilities to which those assets are matched are not. Symetra attempts to earn a “spread” between what it earns on its investments and what it pays out on its products. In order to try to fix this spread, Symetra invests in a manner that tries to match the duration and cash flows of its investments with the required cash outflows associated with its life insurance and structured settlements products. As a result, Symetra typically earns the same spread on in-force business whether interest rates fall or rise. Further, at any given time, some of Symetra’s structured settlement obligations may extend 40 or 50 years into the future, which is further out than the longest maturing fixed maturity investments regularly available for purchase in the market (typically 30 years). For these long-dated products, Symetra is unable to fully match the obligation with assets until the remaining expected payout schedule comes within the duration of securities available in the market. If at that time, these fixed maturity investments have yields that are lower than the yields expected when the structured settlement product was originally priced, the spread for the product will shrink and Symetra will ultimately harvest lower returns for its shareholders. GAAP comprehensive net income increases when rates decline, which would suggest an increase in the value of Symetra — the opposite of what is happening to the intrinsic value of the business. Therefore, White Mountains’ management and Board of Directors use adjusted comprehensive net income when assessing Symetra’s quarterly financial performance. In addition, this measure is typically the predominant component of growth in fully diluted tangible book value per share, which is used in the calculation of White Mountains’ performance for both the short-term (annual bonus) and long-term incentive plans. A schedule is included in Exhibit 99.1 to this Form 8-K that reconciles the Company’s comprehensive net income and adjusted comprehensive net income.
Book value per share is derived by dividing the Company’s total GAAP shareholders’ equity as of a given date by the number of common shares outstanding as of that date, including the dilutive effects of outstanding options and warrants to acquire common shares, as well as the unamortized accretion of preferred stock. Fully diluted 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 in-the-money convertible securities and to exclude any unamortized goodwill and net unrealized gains from Symetra’s fixed maturity portfolio. In addition, for periods subsequent to December 31, 2006, the number of common shares outstanding used in the calculation of fully diluted tangible book value per share are adjusted to exclude unearned shares of restricted stock representative of the proportion of unamortized compensation cost at the date of the calculation to the value of the restricted stock on the date of issuance. This adjustment was not made to fully diluted tangible book value per share for periods prior to December 31, 2006 as the impact was not significant. A schedule is included in Exhibit 99.1 to this Form 8-K that reconciles the Company’s book value per share and fully diluted tangible book value per share.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
99.1 Press Release of White Mountains Insurance Group, Ltd. dated May 2, 2007 furnished herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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WHITE MOUNTAINS INSURANCE GROUP, LTD. |
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DATED: May 2, 2007 |
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By: |
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/s/ J. BRIAN PALMER |
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J. Brian Palmer |
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Exhibit 99.1
CONTACT: David Foy
(203) 458-5850
WHITE MOUNTAINS REPORTS TANGIBLE BOOK VALUE PER SHARE OF $415
HAMILTON, Bermuda (May 2, 2007) — White Mountains Insurance Group, Ltd. ended the first quarter with a fully diluted tangible book value per share of $415, an increase of 2.6% for the quarter and 20.1% for the past twelve months, including dividends.
Ray Barrette, Chairman and CEO, said “We had an OK quarter. At WMRe, underwriting results were negatively impacted by $45 million of European storm losses and $9 million of more conservative loss ratio picks. OneBeacon and Esurance were on track. Once again, superior investment results drove our book value growth.”
Adjusted comprehensive net income for the first quarter was $103 million, compared to $117 million in last year’s first quarter, while net income was $92 million, compared to $96 million.
OneBeacon’s pre-tax income for the first quarter was $87 million, compared to $48 million, while the GAAP combined ratio was 98%, a one point improvement. OneBeacon’s expense ratio for the quarter included approximately two points related to the relocation of its U.S. headquarters to Canton, Massachusetts. The increase in pre-tax income was primarily attributable to a $28 million increase in realized investment gains.
Mike Miller, CEO of OneBeacon, said, “Our acceptable start this quarter reflected solid underwriting results and superior investment returns. We continued to enhance our specialty offerings through the formation of OneBeacon Government Risk Solutions, the appointment of Trident Marine, a marine-specialty managing general agency, and the introduction of our new employment practices liability product for commercial customers. In April, we announced our strategic alliance with Hagerty Insurance, a specialty classic-car and wooden-boat agency that will leverage our personal lines product suite.”
Miller continued, “Going forward, we will continue our focus on specialized opportunities, disciplined underwriting and expense management.”
White Mountains Re’s pre-tax income for the first quarter was $58 million, compared to $84 million, while the GAAP combined ratio was 99%, compared to 88%. During the first quarter, White Mountains Re experienced $45 million in pre-tax losses, net of reinsurance and reinstatement premiums, from European windstorms Kyrill and Hanno.
Allan Waters, recently elected CEO of White Mountains Re, said, “Our combined ratio of 99% for the quarter was impacted by the European storms. We have also taken a bit more conservative view of our reserves. January and April renewals went well, although pricing was not as strong as it has been and our premium volume reflects that. I’ve had the opportunity in these past few weeks to reacquaint myself with our operations and I am heartened that White Mountains Re’s businesses are in solid shape.”
In March 2007, White Mountains Re issued $400 million of ten year senior notes with an annual effective yield of 6.5%. The net proceeds from the senior notes were distributed to White Mountains and used in part to repay the $320 million of outstanding borrowings on White Mountains’ revolving credit facility.
Esurance’s pre-tax loss for the first quarter was $9 million, compared to $4 million, while the GAAP combined ratio was 111%, compared to 110%. The one-point increase in the combined ratio was due to weather-related claim activity and selective rate reductions. The higher loss ratio was partially offset by a three-point improvement in the expense ratio.
Net written premiums for the first quarter were $208 million, up 47% from the first quarter of last year. During the first quarter, Esurance added 56,000 policies-in-force, ending the quarter with 429,000 policyholders. Esurance continues to expand through national and local television advertising, online marketing, direct mail, and online agency channels.
Gary Tolman, CEO of Esurance, said, “Our creative marketing efforts have significantly increased premium volume at acceptable policy acquisition costs in a competitive marketplace. At the same time, we have continued to enhance our infrastructure to support our growing policyholder base. With the addition of South Carolina in the first quarter, Esurance now writes business in 25 states, representing approximately 80% of the personal auto insurance premiums available in the United States. All in all, we’re off to a pretty good start in 2007.”
White Mountains’ Other Operations segment’s pre-tax loss was $4 million for the first quarter, compared to $12 million. The reduction in pre-tax loss for the segment is primarily due to lower incentive compensation accruals and higher net investment income.
The GAAP total return on invested assets for the first quarter was 1.9% compared to 1.1% in the first quarter of last year. Net investment income was $118 million in the quarter, up from $99 million, primarily as a result of a larger invested asset base.
Mark Dorcus, President of White Mountains Advisors, said “We had a solid first quarter. Our high quality short duration bond portfolio paced the conventional benchmarks and avoided any losses from the turmoil in the sub-prime mortgage market. In addition, our equity portfolio once again beat the S&P 500.”
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.
2
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-Q with the Securities and Exchange Commission on or before May 10, 2007 and urges shareholders to refer to that document for more complete information concerning White Mountains’ financial results.
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 7.
Fully diluted 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 in-the-money convertible securities and to exclude any unamortized goodwill and net unrealized gains from Symetra’s fixed maturity portfolio. In addition, for periods subsequent to December 31, 2006, the number of common shares outstanding used in the calculation of fully diluted tangible book value per share are adjusted to exclude unearned shares of restricted stock representative of the proportion of unamortized compensation cost at the date of the calculation to the value of the restricted stock on the date of issuance. This adjustment was not made to fully diluted tangible book value per share for periods prior to December 31, 2006 as the impact was not significant. The reconciliation of fully diluted tangible book value per share to book value per share is included on page 6.
3
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’:
x growth in book value per share or return on equity;
x business strategy;
x financial and operating targets or plans;
x incurred losses and the adequacy of its loss and loss adjustment expense reserves and related reinsurance;
x projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts;
x expansion and growth of our business and operations; and
x 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:
x the risks associated with Item 1A of White Mountains’ 2006 Annual Report on Form 10-K;
x claims arising from catastrophic events, such as hurricanes, earthquakes, floods or terrorist attacks;
x the continued availability of capital and financing;
x general economic, market or business conditions;
x business opportunities (or lack thereof) that may be presented to it and pursued;
x competitive forces, including the conduct of other property and casualty insurers and reinsurers;
x changes in domestic or foreign laws or regulations, or their interpretation, applicable to White Mountains, its competitors or its clients;
x an economic downturn or other economic conditions adversely affecting its financial position;
x recorded loss reserves subsequently proving to have been inadequate;
x 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.
4
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions, except share amounts)
(Unaudited)
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March 31, |
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December 31, |
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March 31, |
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|||
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2007 |
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2006 |
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2006 |
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Assets |
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Fixed maturity investments |
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$ |
7,179.9 |
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$ |
7,475.3 |
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$ |
6,954.8 |
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Common equity securities |
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1,245.2 |
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1,212.6 |
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1,107.0 |
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|||
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Short-term investments |
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1,473.6 |
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1,344.9 |
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949.7 |
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|||
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Other investments |
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532.2 |
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524.8 |
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506.8 |
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|||
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Convertible fixed maturity investments |
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485.8 |
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436.2 |
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310.7 |
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Investments held in trust |
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335.4 |
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338.9 |
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— |
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Total investments |
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11,252.1 |
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11,332.7 |
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9,829.0 |
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Reinsurance recoverable on unpaid losses |
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3,873.7 |
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4,015.7 |
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4,860.0 |
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Reinsurance recoverable on paid losses |
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131.9 |
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159.4 |
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96.1 |
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Funds held by ceding companies |
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438.2 |
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452.8 |
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566.1 |
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Insurance and reinsurance premiums receivable |
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1,007.4 |
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913.6 |
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1,099.2 |
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Securities lending collateral |
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563.8 |
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649.8 |
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496.2 |
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Investments in unconsolidated insurance affiliates |
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356.3 |
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335.5 |
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437.5 |
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Deferred acquisition costs |
|
338.6 |
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320.3 |
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312.2 |
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|||
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Ceded unearned premiums |
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133.6 |
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87.9 |
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214.2 |
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Accounts receivable on unsettled investment sales |
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40.2 |
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8.5 |
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45.7 |
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Other assets |
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1,142.4 |
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1,167.5 |
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1,125.2 |
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|||
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Total assets |
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$ |
19,278.2 |
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$ |
19,443.7 |
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$ |
19,081.4 |
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Liabilities |
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|
|
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|
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|||
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Loss and loss adjustment expense reserves |
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$ |
8,636.0 |
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$ |
8,777.2 |
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$ |
9,987.0 |
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Reserves for structured contracts |
|
142.6 |
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147.1 |
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222.8 |
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|||
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Unearned insurance and reinsurance premiums |
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1,746.6 |
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1,584.9 |
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1,742.4 |
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|||
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Debt |
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1,183.6 |
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1,106.7 |
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779.1 |
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|||
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Securities lending payable |
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563.8 |
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649.8 |
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496.2 |
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|||
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Preferred stock subject to mandatory redemption |
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270.5 |
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262.3 |
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240.4 |
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|||
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Ceded reinsurance payable |
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141.0 |
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138.4 |
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173.7 |
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Funds held under reinsurance treaties |
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126.4 |
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141.6 |
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131.5 |
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Accounts payable on unsettled investment purchases |
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19.7 |
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66.8 |
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165.7 |
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|||
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Other liabilities |
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1,276.3 |
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1,510.4 |
|
1,179.3 |
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|||
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Total liabilities |
|
14,106.5 |
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14,385.2 |
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15,118.1 |
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|||
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Minority interest - OneBeacon Insurance Group, Ltd. |
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515.8 |
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490.7 |
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— |
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Minority interest - consolidated limited partnerships |
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113.0 |
|
112.5 |
|
91.1 |
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|||
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Total minority interest |
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628.8 |
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603.2 |
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91.1 |
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|||
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Common Shareholders’ Equity |
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|
|
|||
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Common shares and paid-in surplus |
|
1,727.4 |
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1,727.5 |
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1,726.0 |
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Retained earnings |
|
2,566.7 |
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2,496.0 |
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1,983.4 |
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|||
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Accumulated other comprehensive income (loss, after tax:) |
|
|
|
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|||
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Net unrealized gains on investments |
|
212.9 |
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198.1 |
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200.2 |
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Equity in net unrealized gains (losses from Symetra’s fixed maturity portfolio) |
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1.8 |
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(4.1 |
) |
(32.6 |
) |
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Net unrealized foreign currency translation gains (losses and other) |
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34.1 |
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37.8 |
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(4.8 |
) |
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Total common shareholders’ equity |
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4,542.9 |
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4,455.3 |
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3,872.2 |
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Total liabilities, minority interest and common shareholders’ equity |
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$ |
19,278.2 |
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$ |
19,443.7 |
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$ |
19,081.4 |
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|||
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Common shares outstanding (000’s) |
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10,834 |
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10,783 |
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10,780 |
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Common and equivalent shares outstanding (000’s) |
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10,806 |
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10,812 |
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10,814 |
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(more)
5
WHITE MOUNTAINS INSURANCE GROUP, LTD.
FULLY DILUTED TANGIBLE BOOK VALUE PER COMMON AND EQUIVALENT SHARE
(Unaudited)
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|
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March 31, |
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December 31, |
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March 31, |
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|||
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2007 |
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2006 |
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2006 |
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|||
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Book value per share numerators (in millions): |
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|
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Common shareholders’ equity |
|
$ |
4,542.9 |
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$ |
4,455.3 |
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$ |
3,872.2 |
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Benefits to be received from share obligations under employee benefit plans |
|
4.1 |
|
4.7 |
|
5.1 |
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|||
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Remaining adjustment of subsidiary preferred stock to face value |
|
(35.5 |
)(1) |
(41.8 |
)(1) |
(79.6 |
) |
|||
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Book value per share numerator |
|
4,511.5 |
|
4,418.2 |
|
3,797.7 |
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|||
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Equity in net unrealized (gains) losses from Symetra’s fixed maturity portfolio |
|
(1.8 |
) |
4.1 |
|
32.6 |
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|||
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Goodwill |
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(29.2 |
) |
(32.5 |
) |
(23.8 |
) |
|||
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Fully diluted tangible book value per common and equivalent share numerator |
|
$ |
4,480.5 |
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$ |
4,389.8 |
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$ |
3,806.5 |
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Book value per share denominators (in thousands of shares): |
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|
|
|
|
|
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|||
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Common Shares outstanding |
|
10,833.8 |
|
10,782.8 |
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10,780.1 |
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|||
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Unearned restricted shares |
|
(52.7 |
) |
— |
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— |
|
|||
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Share obligations under employee benefits plans |
|
25.3 |
|
29.5 |
|
33.4 |
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|||
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Fully diluted tangible book value per common and equivalent share denominator |
|
10,806.4 |
|
10,812.3 |
|
10,813.5 |
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|||
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Book value per common and equivalent share |
|
$ |
417.47 |
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$ |
408.62 |
|
$ |
351.19 |
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Fully diluted tangible book value per common and equivalent share |
|
$ |
414.61 |
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$ |
406.00 |
|
$ |
352.01 |
|
(1) Remaining adjustment of subsidiary preferred stock to face value, which is representative of White Mountains’ ownership interest in OneBeacon Insurance Group Ltd. of 71.8% and 72.4% as of March 31, 2007 and December 31, 2006.
6
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(millions, except per share amounts)
(Unaudited)
|
|
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Three Months Ended |
|
||||
|
|
|
2007 |
|
2006 |
|
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Revenues: |
|
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|
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|
||
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Earned insurance and reinsurance premiums |
|
$ |
938.0 |
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$ |
901.0 |
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Net investment income |
|
118.0 |
|
98.5 |
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||
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Net realized investment gains |
|
73.9 |
|
28.5 |
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Other revenue |
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36.2 |
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29.8 |
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Total revenues |
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1,166.1 |
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1,057.8 |
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Expenses: |
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|
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|
||
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Loss and loss adjustment expenses |
|
613.3 |
|
564.0 |
|
||
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Insurance and reinsurance acquisition expenses |
|
192.6 |
|
185.6 |
|
||
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Other underwriting expenses |
|
137.7 |
|
115.9 |
|
||
|
General and administrative expenses |
|
52.9 |
|
44.6 |
|
||
|
Accretion of fair value adjustment to loss and loss adjustment expense reserves |
|
5.1 |
|
5.2 |
|
||
|
Interest expense on debt |
|
16.8 |
|
11.7 |
|
||
|
Interest expense — dividends on preferred stock subject to mandatory redemption |
|
7.6 |
|
7.6 |
|
||
|
Interest expense — accretion on preferred stock subject to mandatory redemption |
|
8.2 |
|
6.4 |
|
||
|
Total expenses |
|
1,034.2 |
|
941.0 |
|
||
|
|
|
|
|
|
|
||
|
Pretax income |
|
131.9 |
|
116.8 |
|
||
|
Income tax provision |
|
(31.2 |
) |
(26.9 |
) |
||
|
|
|
|
|
|
|
||
|
Income before equity in earnings of unconsolidated affiliates and minority interest |
|
100.7 |
|
89.9 |
|
||
|
Equity in earnings of unconsolidated insurance affiliates |
|
10.5 |
|
9.0 |
|
||
|
Minority interest |
|
(19.0 |
) |
(2.9 |
) |
||
|
Net income |
|
92.2 |
|
96.0 |
|
||
|
Change in net unrealized gains on investments |
|
20.7 |
|
(57.1 |
) |
||
|
Change in foreign currency translation and other |
|
(3.8 |
) |
21.0 |
|
||
|
Comprehensive net income |
|
109.1 |
|
59.9 |
|
||
|
Change in net unrealized (gains and losses from Symetra’s fixed maturity portfolio) |
|
(5.9 |
) |
56.8 |
|
||
|
Adjusted comprehensive net income |
|
$ |
103.2 |
|
$ |
116.7 |
|
|
Basic earnings per share |
|
$ |
8.56 |
|
$ |
8.92 |
|
|
Diluted earnings per share |
|
$ |
8.54 |
|
$ |
8.89 |
|
|
Dividends declared and paid per common share |
|
$ |
2.00 |
|
$ |
2.00 |
|
(more)
7
WHITE MOUNTAINS INSURANCE GROUP, LTD.
(in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
OneBeacon |
|
WM Re |
|
Esurance |
|
Other |
|
Total |
|
|||||
|
For the Three Months Ended March 31, 2007 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Earned insurance and reinsurance premiums |
|
$ |
468.9 |
|
$ |
298.3 |
|
$ |
170.8 |
|
$ |
— |
|
$ |
938.0 |
|
|
Net investment income |
|
50.6 |
|
48.1 |
|
6.2 |
|
13.1 |
|
118.0 |
|
|||||
|
Net realized investment gains (losses) |
|
54.9 |
|
19.9 |
|
1.0 |
|
(1.9 |
) |
73.9 |
|
|||||
|
Other revenue |
|
3.1 |
|
(3.6 |
) |
3.0 |
|
33.7 |
|
36.2 |
|
|||||
|
Total revenues |
|
577.5 |
|
362.7 |
|
181.0 |
|
44.9 |
|
1,166.1 |
|
|||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Loss and loss adjustment expenses |
|
288.2 |
|
194.6 |
|
130.3 |
|
0.2 |
|
613.3 |
|
|||||
|
Insurance and reinsurance acquisition expenses |
|
78.3 |
|
69.6 |
|
44.7 |
|
— |
|
192.6 |
|
|||||
|
Other underwriting expenses |
|
90.9 |
|
31.3 |
|
14.7 |
|
0.8 |
|
137.7 |
|
|||||
|
General and administrative expenses |
|
2.4 |
|
6.6 |
|
0.1 |
|
43.8 |
|
52.9 |
|
|||||
|
Accretion of fair value adjustment to loss and lae reserves |
|
4.0 |
|
1.1 |
|
— |
|
— |
|
5.1 |
|
|||||
|
Interest expense on debt |
|
11.4 |
|
1.2 |
|
— |
|
4.2 |
|
16.8 |
|
|||||
|
Interest expense — dividends and accretion on preferred stock |
|
15.8 |
|
— |
|
— |
|
— |
|
15.8 |
|
|||||
|
Total expenses |
|
491.0 |
|
304.4 |
|
189.8 |
|
49.0 |
|
1,034.2 |
|
|||||
|
Pretax income (loss) |
|
$ |
86.5 |
|
$ |
58.3 |
|
$ |
(8.8 |
) |
$ |
(4.1 |
) |
$ |
131.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
OneBeacon |
|
WM Re |
|
Esurance |
|
Other |
|
Total |
|
|||||
|
For the Three Months Ended March 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Earned insurance and reinsurance premiums |
|
$ |
480.2 |
|
$ |
315.6 |
|
$ |
105.2 |
|
$ |
— |
|
$ |
901.0 |
|
|
Net investment income |
|
45.1 |
|
41.1 |
|
3.6 |
|
8.7 |
|
98.5 |
|
|||||
|
Net realized investment gains (losses) |
|
27.1 |
|
2.5 |
|
0.9 |
|
(2.0 |
) |
28.5 |
|
|||||
|
Other revenue |
|
5.5 |
|
4.4 |
|
2.1 |
|
17.8 |
|
29.8 |
|
|||||
|
Total revenues |
|
557.9 |
|
363.6 |
|
111.8 |
|
24.5 |
|
1,057.8 |
|
|||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Loss and loss adjustment expenses |
|
303.7 |
|
186.6 |
|
75.2 |
|
(1.5 |
) |
564.0 |
|
|||||
|
Insurance and reinsurance acquisition expenses |
|
86.3 |
|
70.3 |
|
29.0 |
|
— |
|
185.6 |
|
|||||
|
Other underwriting expenses |
|
83.9 |
|
20.4 |
|
11.1 |
|
0.5 |
|
115.9 |
|
|||||
|
General and administrative expenses |
|
4.4 |
|
2.2 |
|
— |
|
38.0 |
|
44.6 |
|
|||||
|
Accretion of fair value adjustment to loss and lae reserves |
|
5.8 |
|
(0.6 |
) |
— |
|
— |
|
5.2 |
|
|||||
|
Interest expense on debt |
|
11.4 |
|
0.4 |
|
— |
|
(0.1 |
) |
11.7 |
|
|||||
|
Interest expense — dividends and accretion on preferred stock |
|
14.0 |
|
— |
|
— |
|
— |
|
14.0 |
|
|||||
|
Total expenses |
|
509.5 |
|
279.3 |
|
115.3 |
|
36.9 |
|
941.0 |
|
|||||
|
Pretax income (loss) |
|
$ |
48.4 |
|
$ |
84.3 |
|
$ |
(3.5 |
) |
$ |
(12.4 |
) |
$ |
116.8 |
|
(more)
8
WHITE MOUNTAINS INSURANCE GROUP, LTD.
SUMMARY OF GAAP RATIOS AND PREMIUMS
(Unaudited)
|
|
|
OneBeacon |
|
|
|
|
|
||||||||||||
|
|
|
Specialty |
|
Commercial |
|
Personal(1) |
|
Total(2) |
|
WM Re |
|
Esurance |
|
||||||
|
Three Months Ended March 31, 2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
GAAP Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Loss and LAE |
|
58 |
% |
55 |
% |
66 |
% |
62 |
% |
65 |
% |
76 |
% |
||||||
|
Expense |
|
31 |
% |
37 |
% |
37 |
% |
36 |
% |
34 |
% |
35 |
% |
||||||
|
Total Combined |
|
89 |
% |
92 |
% |
103 |
% |
98 |
% |
99 |
% |
111 |
% |
||||||
|
Dollars in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net written premiums |
|
$ |
96.8 |
|
$ |
170.6 |
|
$ |
172.8 |
|
$ |
440.3 |
|
$ |
403.6 |
|
$ |
207.7 |
|
|
Earned premiums |
|
$ |
107.0 |
|
$ |
172.0 |
|
$ |
189.8 |
|
$ |
468.9 |
|
$ |
298.3 |
|
$ |
170.8 |
|
|
|
|
OneBeacon |
|
|
|
|
|
||||||
|
|
|
Specialty |
|
Commercial |
|
Personal(1) |
|
Total(2) |
|
WM Re |
|
Esurance |
|
|
Three Months Ended March 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE |
|
53 |
% |
59 |
% |
68 |
% |
63 |
% |
59 |
% |
72 |
% |
|
Expense |
|
32 |
% |
40 |
% |
32 |
% |
36 |
% |
29 |
% |
38 |
% |
|
Total Combined |
|
85 |
% |
99 |
% |
100 |
% |
99 |
% |
88 |
% |
110 |
% |
|
Dollars in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net written premiums |
|
$ |
102.0 |
|
$ |
166.8 |
|
$ |
202.4 |
|
$ |
474.4 |
|
$ |
428.7 |
|
$ |
140.9 |
|
|
Earned premiums |
|
$ |
102.0 |
|
$ |
165.3 |
|
$ |
209.5 |
|
$ |
480.2 |
|
$ |
315.6 |
|
$ |
105.2 |
|
(1) Includes results of consolidated reciprocals.
(2) Includes results from runoff operations and eliminations between underwriting units.
9