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Insurer mulls what to do with $2bn

White Mountains saw its adjusted book value rise to $704 per share during the first quarter.

White Mountains Insurance Group increased its adjusted book value to $704 per share during the first quarter, a rise of 0.9 per cent. When adding in the estimated gain from the sale of Sirius Group, a $2.6 billion deal which closed last month, the share book value would have been $794.

The Bermudian-based group’s profit attributable to shareholders fell to $13 million compared with $84 million in the first three months of 2015.

“The year is off to a great start. Both the Sirius Group and Symetra transactions have closed, OneBeacon reported a solid 95 per cent combined ratio, investments were up, BAM/HG Global continues to grow, and most of our insurance services businesses are building value.” said Ray Barrette, chairman of White Mountains.

“Including April, we have repurchased nearly 600,000 shares of White Mountains at good prices. As of today, we have about $2 billion of capital that is undeployed. Looking forward, we expect to gradually return capital to shareholders while exploring new investment opportunities.”

White Mountains’s Bermudian-domiciled financial services group Symetra has been bought by Sumitomo Life Insurance of Japan, while reinsurance firm Sirius was sold to CM International, the Singaporean-based arm of China Minsheng Investment Corporation.

Since the start of the year White Mountains has spent $460 million on share buy-backs.

Adjusted comprehensive income was $50 million for the quarter, compared with a loss of $3 million in the same period last year.

OneBeacon’s book value, including dividends rose 4.4 per cent, however gross written premiums were down 2 per cent at $280 million. One Beacon exited a number of business lines during 2015.

White Mountains’s BAM unit insured $2.2 billion of municipal bonds during the first quarter.

Bob Cochran, BAM chairman, said: “Demand for municipal bond insurance was solid to start the year, as increasing demand from institutional buyers of municipal bonds offset the negative impact from a decline in interest rates.

“BAM insured more new-issue transactions than any other insurer during the first quarter, and guaranteed $2.6 billion of municipal bonds, up 3 per cent from the same period a year ago even as total municipal bond volume fell 7 per cent.”

White Mountains other operations reported a collective pre-tax loss of $26 million, compared with a loss of $24 million a year ago.

Shares of White Mountain closed yesterday at $834, up $4, or 0.48 per cent.

The company has a market capitalisation of $4.5 billion.