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CONTACT: David Foy
WHITE MOUNTAINS REPORTS ADJUSTED BOOK VALUE PER SHARE OF $542,
A 23% INCREASE FOR THE YEAR
HAMILTON, Bermuda (February 3, 2012) White Mountains Insurance Group, Ltd. reported an adjusted book value per share of $542 at December 31, 2011, an increase of 23% for the year, including dividends. On October 7, 2011, White Mountains completed the sale of Esurance and Answer Financial, which increased adjusted book value per share by $89.
Ray Barrette, Chairman and CEO, commented, White Mountains had a very good year. The main event was the sale of Esurance and Answer Financial at a significant premium. Sirius Group reported breakeven underwriting results for the year, despite record catastrophe events around the world, demonstrating the strong discipline of our Sirius Group team. The reorganization of our reinsurance operations also freed up an additional $300 million of undeployed capital and allowed for the utilization of $130 million of deferred tax assets in Luxembourg, again demonstrating the strength of our capital structure. OneBeacon had a mixed year with strong results in Specialty but losses in AutoOne and run-off. Our investment portfolio returned 2.9%, a good result given our short duration. We wrote down our Symetra common stock to $15 per share in the quarter due to the prolonged low interest rate environment but we continue to be pleased with Symetras operating performance in these difficult markets. We repurchased approximately 647,000 shares, or 8% of the Company, at good prices and finished the year with about $2 billion of undeployed capital. We are focused on creating superior value for our shareholders from this strong capital base.
Adjusted comprehensive income was $802 million in the fourth quarter of 2011 and $745 million in the year, compared to $81 million in the fourth quarter of 2010 and $141 million last year. Net income was $800 million in the fourth quarter of 2011 and $768 million in the year, compared to $73 million in the fourth quarter of 2010 and $87 million last year.
OneBeacons book value per share increased 2% for the fourth quarter of 2011 and 3% for the year, including dividends. The GAAP combined ratio was 100% for the fourth quarter of 2011 compared to 96% for the fourth quarter of last year. A detailed review of run-off expenses resulted in a $37 million (14 points) increase in run-off loss and LAE reserves, which was partially offset by a $15 million (6 points) decrease in Specialty loss and LAE reserves. The Specialty GAAP combined ratio was 85% compared to 93% last year.
The GAAP combined ratio for 2011 was 96% compared to 100% for 2010. The decrease was due to a 4 point decrease in the loss and LAE ratio, primarily related to improved current accident year results as there was no net loss reserve development in 2011. The GAAP combined ratio for 2010 included 4 points of favorable loss reserve development. The Specialty GAAP combined ratio was 92% compared to 94% last year.
Adjusted comprehensive income in the fourth quarter and the year was reduced by an $11 million after-tax decrease in the overfunded status of the pension plan, driven by a decline in value of the investment assets in the plan. Adjusted comprehensive income in the year also includes the impact of an $8 million after-tax loss related to the repurchase and retirement of a portion of OneBeacons senior notes and a $19 million after-tax loss on the sale of AutoOne.
The following information was filed by White Mountains Insurance Group Ltd (WTM) on Friday, February 3, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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