NEW YORK (Bloomberg) — White Mountains Insurance Group Ltd., the Bermuda-based insurer, agreed to buy an affiliated business for $150 million after ending its reinsurance contract with the company because of lower demand for catastrophe coverage.

White Mountains acquired Helicon Re Holdings Ltd. for about $3 million less than its book value, or assets minus liabilities, the Hamilton-based company said yesterday in a statement. Helicon Re, a so-called "sidecar" pool of capital, was started by investors to insure White Mountains after the record 2005 hurricane season boosted demand for coverage.

Quiet US hurricane seasons in 2006 and 2007 caused a decline in property coverage rates as insurers competed for business. Warren Buffett's Berkshire Hathaway Inc., which capitalised on higher rates after Hurricane Katrina struck the Gulf Coast in 2005, reduced sales in his reinsurance unit last year because of falling prices.

"With the deteriorating market conditions in the property cat business, we no longer needed" the extra insurance coverage from Helicon Re, said chief executive officer Allan Waters in the statement.

White Mountains was unchanged at $508 at 10.13 a.m. in New York Stock Exchange composite trading. The company fell 12 percent in the past year.

Helicon Re provided coverage to White Mountains in 2006 and 2007. The business will no longer sell coverage. White Mountains insures businesses, homes and cars. A unit of Berkshire was the second-largest shareholder of White Mountains as of September, according to Bloomberg data.

Humberto, a category-one storm on the five-tier Saffir- Simpson scale, became the only hurricane to reach US shores last year when it struck Texas and Louisiana in September. No storms made US landfall during the 2006 season.