Bermuda-based White Mountains Insurance Group Limited have announced a comprehensive profit of $290 million for 2002.

(The figure excludes $660 million of deferred credits brought into income by an accounting change).

The company released their fourth quarter results yesterday and showed a vast improvement over last year's losses of $302 million.

Net income for the fourth quarter was $61 million compared to losses of $169 million last year

Diluted earnings on a per share basis were $2.78 for the quarter and $6.80 for the full year 2002.

Total Revenue (including both earned premiums and investment gains) was $1 billion for the quarter, down from $1.19 billion for the same quarter last year,

Net investment income was down for the quarter - $76.5 million compared to $83 million for the fourth quarter 2001, but up for the year - $352.7 million compared to $284 million for 2001.

Conversely, total expenses for the quarter were down ($941 million vs $1.4 billion) but total expenses for the year were higher than last year's levels ($4 billion vs $3.2 billion).

Total Assets as at 31 December 2002 were down at $16.03 billion compared to $16.6 billion a year ago.

Chief executive officer Ray Barrette said: "We are pleased with our results in all areas of the company. Our book value grew nicely thanks to solid investment performance and major underwriting improvements at both OneBeacon and Folksamerica. We finished the year with a strong balance sheet. Our reserves are in good shape, we are comfortable with the level and structure of our debt, and our investment portfolio is rock solid. We expect strong performances in all our businesses in 2003."

The firm's chairman Jack Byrne, is also chair of Bermuda start-up Montpelier Re and White Mountain hold a large investment in Montpelier.

White Mountains said yesterday that the investment consists of warrants and common equity that comprise a 21 percent economic interest in the reinsurer and commented: "Montpelier had a successful first year of operations in the international reinsurance marketplace."

However they announced reserve strengthening of $57 million for their loss-making subsidiary OneBeacon.

OneBeacon's reserves for accident years 2000 and prior were increased by 97 million, while reserves for accident year 2001 were reduced by $40 million due in large part to favourable development on losses from the September 11 disaster. Reserves for A&E exposures are covered by a $2.5 billion reinsurance cover purchased by OneBeacon from National Indemnity (NICO), a Berkshire Hathaway company.

Another subsidiary, Folksamerica, significantly reduced their losses to $14 million for the year 2002 down from $130 million for 2001 and management predicted that Folksamerica's underwriting discipline would start to pay off in a continuing hard market in 2003.

White Mountain's underwriting manager (WMU) had a successful first year of operations, generating underwriting fees of $44 million. The company said that most of this income was generated through WMU's consulting contract with its main third part customer, fellow Bermuda company, Olympia Re.