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White Mountains reports $96m profit

White Mountains Insurance Group, Ltd yesterday reported net income attributable to common shareholders of $96 million for the second quarter and $191 million for the first half of the year.

The results compared favourably to $26 million and $147 million for the same periods last year.

The Bermuda-domiciled company declared an adjusted book value per share of $667 at June 30, 2014, up 1.7 percent for the second quarter of 2014 and up four percent for the first six months of 2014, including dividends.

White Mountains chairman and CEO Ray Barrette said: “It was a bit of a mixed quarter except for Sirius Group reporting another strong result with an 81 percent combined ratio. OneBeacon grew book value 2.3 percent despite reporting a 99 percent combined ratio driven by a few large claims.

“BAM guaranteed $2.2 billion in par value, up more than 70 percent from last year's second quarter, though the pricing has deteriorated quite a bit. Our investment portfolio gained 1.5 percent but we trailed our benchmarks in a strong up quarter for both stocks and bonds.”

OneBeacon Insurance Group (OneBeacon) provides speciality insurance solutions. BAM is Build America Mutual Assurance Company, the group's new mutual bond insurer in the financial guaranty industry.

The group's adjusted comprehensive income was $68 million in the second quarter of 2014 compared to an $8 million adjusted comprehensive loss in the second quarter of last year. Adjusted comprehensive income was $156 million in the first six months of 2014 compared to $108 million in the first six months of last year.

OneBeacon's net written premiums were $296 million in the second quarter and $607 million in the first six months of 2014, increases of 20 percent and 19 percent from last year.

CEO Mike Miller said: “We had a tough quarter driven by a few large claims coming from current and prior years. We are confident that the underlying book continues to perform well. For six months, we reported a 94 percent combined ratio and 6.6 percent growth in book value per share.

“Market conditions are increasingly competitive, but we are well-positioned and focused on profitability. Premiums were up 20 percent, principally due to new crop premiums and growth in our newer Programs and Surety business units.

“Excluding these new businesses, our premium growth through June 30 is up six percent over the first half of last year. We expect to close the runoff sale in the second half of the year.”

For the Sirius Group, second quarter gross written premiums decreased eight percent to $239 million and net written premiums decreased nine percent to $187 million, reflecting primarily decreases in property catastrophe excess business. In the first six months of 2014, gross and net written premiums decreased three percent, to $691 million and $521 million, also reflecting primarily decreases in property catastrophe excess business.

CEO Allan Waters said: “Our 77 percent combined ratio for the first six months was a strong start to 2014, assisted by low catastrophe activity. Sirius Group's adjusted book value per share grew six percent over the first six months. Written premiums are off only three percent from prior year-to-date, reflecting Sirius Group's strong global position while maintaining underwriting discipline in a highly competitive environment.”

HG Global reported pre-tax income of $5 million and $10 million in the second quarter and first six months of 2014 compared to pre-tax income of $8 million and $18 million in the second quarter and first six months of last year. The decrease in both periods was driven by lower interest income on the BAM surplus notes. White Mountains reported $8 million and $17 million of GAAP pre-tax losses relating to BAM in the second quarter and first six months of 2014 compared to GAAP pre-tax losses of $27 million and $45 million in the second quarter and first six months of last year. The improvement in both periods was due to lower interest accruals on the surplus notes and better mark-to-market results from BAM's investment portfolio.

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Published July 30, 2014 at 9:00 am (Updated July 29, 2014 at 9:41 pm)

White Mountains reports $96m profit

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