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Weak quarter does not dent White Mountains

Strong year: White Mountains reported a $33 million loss for the fourth-quarter of 2016, but a $413 million profit for the full year

White Mountains Insurance Group reported a $33 million loss in the fourth quarter, compared with a profit of $268 million in the same period in 2015.

However, the Bermudian-based financial services holding company made a profit of $413 million for the year, up from $298 million in 2015.

The book value per share was $790, down 1 per cent for the quarter, but up 14 per cent for the year.

“It was an okay last quarter in a successful year for White Mountains. For the year, we grew ABVPS by 14 per cent with the Sirius, Symetra, and Tranzact sales,” said Ray Barrette, chief executive officer of White Mountains.

The company owns about 75 per cent of Bermudian-based OneBeacon Insurance Group.

Mr Barrette said: “OneBeacon grew book value per share by 11 per cent, maintaining discipline in competitive markets.”

Regarding other segments of White Mountains, he added: “HG Global/BAM continues to grow at improved margins, and most of our businesses at White Mountains Capital are building value at a good clip. Investment returns of 2.7 per cent were a bit disappointing as we were under allocated to equities, post Sirius sale, in a rising stock market.

“We returned $900 million to shareholders, mostly through share repurchases. We still have about $1.8 billion in undeployed capital and continue to look for opportunities, well positioned to deal with a world full of unpredictable developments.”

Last month there were reports by Bloomberg News and Insurance Insider that OneBeacon Insurance Group was exploring a sale.

At the time, a spokeswoman for OneBeacon told The Royal Gazette the company had no comment to make on the matter.

OneBeacon reported a fourth-quarter profit of $8.2 million, compared to $22.1 million for the same period of 2015. The company’s full year profit was $108.4 million, up from $36.8 million in 2015. The total included a $16 million tax benefit related to a settlement with the Internal Revenue Service for tax years 2007 to 2012.

The book value per share, including dividends, was up 1 per cent for the quarter and 11 per cent for the year.

Mike Miller, OneBeacon’s CEO, said: “We are pleased to have delivered solid 11 per cent growth in book value per share in 2016.

“Investment results reflect the benefits of our short-duration fixed-maturity portfolio in a rising interest rate environment and a decent lift from our allocation to risk assets.

“Underwriting results reflect the strong performance of our portfolio of specialty businesses. Going into 2017, we are positioned to continue delivering good underwriting results across our diverse portfolio of businesses.”

OneBeacon’s net written premiums were $236 million in the fourth-quarter, which was flat compared to the same period in 2015. Full year net written premiums were $1.1 billion, down 3 per cent on 2015.

During the final quarter, the company did not repurchase any shares, however, over the course of the year it repurchased 850,349 shares for a total of $10.6 million.

White Mountains repurchased 24,808 common shares in the fourth-quarter, for $20 million. During 2016 it repurchased 1.1 million shares for $887 million.

Disclosure: the writer of this article owns shares in OneBeacon