White Mountains reports $48m loss

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White Mountains Insurance Group has reported a $48 million comprehensive loss attributable to common shareholders during the first quarter.

For the same period in 2017, the Bermudian-domiciled company made a gain of $29 million.

White Mountains reported book value per share of $916, while the adjusted book value was $903 as of March 31; the figures represent a 2 per cent and 1 per cent decrease respectively.

Manning Rountree, chief executive officer, referring to the drop in adjusted book value per share, said: “The main event was a minus 1 per cent total return in our investment portfolio, as both fixed income and equity markets sold off in the quarter.

“As expected, new municipal bond issuance was light in the quarter, and BAM’s volume dipped as a result, although BAM’s pricing and market share remained at healthy levels. MediaAlpha had an outstanding quarter, with strong top-line growth and record adjusted EBITDA [earnings before interest, taxes and amortisation].”

BAM is a mutual insurance company that is owned by its members. It insured municipal bonds with par value of $1.3 billion in the first quarter of 2018, compared to $2.4 billion in the first quarter of 2017.

Mentioning other activity within the group, Mr Rountree said: “In April, we announced our agreement to acquire NSM, a leading speciality insurance programme administrator. We expect to close the acquisition in the second quarter. Our modified Dutch tender offer for up to 500,000 White Mountains common shares will expire on May 7.”

NSM Insurance Group is a full-service MGU [managing general underwriter] and programme administrator for speciality property and casualty insurance, with over $500 million of controlled premiums.

On March 31, White Mountains entered into an agreement to acquire 95 per cent of NSM for cash in an amount equal to $368 million, subject to certain adjustments. NSM expects to borrow approximately $100 million of third party indebtedness in conjunction with the acquisition which will reduce White Mountains’s net investment to approximately $273 million.

Meanwhile, commenting on BAM’s first quarter performance, Seán McCarthy, CEO of BAM, said: “The first quarter saw a marketwide drop in new-issue municipal volume, as the uncertainty over tax reform caused many issuers to pull forward planned 2018 issuance volume into 2017.

“Despite the drop in supply, BAM maintained its market position and continued to generate organic growth in claims paying resources.

“Primary market pricing improved in the quarter. In April, we expanded our claims-paying resources by $100 million through a collateralised reinsurance agreement with Fidus Re Ltd, a special-purpose insurer created to provide collateralised reinsurance protection to BAM. This creative transaction demonstrates the quality of BAM’s insured portfolio and the strength of BAM’s position in the marketplace.”

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Published May 2, 2018 at 10:35 am (Updated May 2, 2018 at 10:35 am)

White Mountains reports $48m loss

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