White Mountains Insurance Group Inc. on Thursday reported lower quarterly earnings as its reinsurance unit posted a $125 million loss from storms in 2005.

The company reported second-quarter earnings of $115.8 million, or $10.72 per share, compared with $146.8 million, or $13.64 a share, in the same period a year ago.

Earned insurance and reinsurance premiums rose to $953.5 million from $943.4 million a year ago.

Latest quarter results included net realised investment gains of $106.5 million and $30 million in tax benefits related to settlements, the Bermuda-based company said in a statement.

Two analysts on average were expecting the company to post a loss of $3.97 per share, excluding exceptional items, according to Reuters Estimates.

Business Insurance reported that White Mountains Re reported $125 million in after-tax losses from the 2005 storms, net of reinstatement premiums.

The reinsurance unit reported a 116 percent combined ratio for the first half of 2006, compared with 94 percent for the comparable period in 2005.

White Mountains Re chief executive officer Tom Hutton said in a statement that the unit is now benefiting from underwriting changes and improved market conditions.

"In addition, we have reduced our exposure to natural catastrophes, including withdrawing from the marine and offshore energy business in the Gulf of Mexico," Mr. Hutton said.

The insurer, which projected double digit growth in 2006 tangible book value per share, rose $15 to close at $472 a share in trading on the New York Stock Exchange on Friday.