CONTACT: David Foy (203) 458-5850
WHITE MOUNTAINS REPORTS ADJUSTED BOOK VALUE PER SHARE OF $588,
UP 8.6% FOR THE FULL YEAR 2012
HAMILTON, Bermuda (February 5, 2013) - White Mountains Insurance Group, Ltd. reported adjusted book value per share of $588 at December 31, 2012, up 2.4% for the quarter and 8.6% for the year, including dividends.
Ray Barrette, Chairman and CEO, commented, “It was a productive year. Investments had a good year with a GAAP total return of 4.9%. OneBeacon finished the year at a 98% GAAP combined ratio, somewhat disappointing even when adjusting for hurricane Sandy claims, though the underlying loss ratio remains solid. Sirius Group reported a full year GAAP combined ratio of 90%, a pleasant result given the magnitude of hurricane Sandy and crop losses. BAM, the new muni bond insurer we funded, is getting traction in the marketplace. The regulatory review of the agreement to sell the OneBeacon runoff is proceeding as expected. We had $76 million in net tax gains in the quarter, mostly from the reduction in the Swedish corporate tax rate, and we successfully protected the value of our foreign tax assets from other changes in Swedish tax laws. We returned $676 million of capital to shareholders, mostly by buying 18% of our beginning shares outstanding at attractive prices. We do not see major business improvements in the near term, as most insurance markets remain quite competitive, new capital is entering the profitable property-cat market, interest rates remain quite low, risk spreads are thin, equities have had a good run and every opportunity continues to be chased by a world full of cash. We remain defensively positioned and in good shape in all areas. We have roughly $1 billion of undeployed capital, and we are actively pursuing potential transactions.”
Adjusted comprehensive income was $72 million in the fourth quarter of 2012 and $245 million in the year, compared to $802 million in the fourth quarter of 2011 and $745 million last year. Net income attributable to common shareholders was $68 million in the fourth quarter of 2012 and $207 million in the year, compared to $800 million in the fourth quarter of 2011 and $768 million last year. The 2011 periods include an after-tax gain of $678 million from the sale of Esurance and AFI to Allstate.
OneBeacon's book value per share decreased 1.4% for the quarter and 0.8% for the year, including dividends. OneBeacon's 2012 results include $101 million of after-tax GAAP losses related to the sale of its runoff business announced in October. OneBeacon's GAAP combined ratio was 112% for the fourth quarter of 2012 compared to 85% for the fourth quarter of 2011, primarily driven by higher catastrophe losses from hurricane Sandy. Higher expenses, lower favorable loss reserve development and higher non-catastrophe current accident year losses also contributed to the increase. The GAAP combined ratio was 98% for 2012 compared to 92% for 2011, primarily driven by higher catastrophe losses, lower favorable loss reserve development and higher expenses.
Mike Miller, CEO of OneBeacon, said, “We had a tough fourth quarter. The combined ratio was high primarily due to losses from hurricane Sandy. Our large marine book accounted for nearly half of our gross losses from Sandy in what is estimated to be the largest marine industry loss in history. The other half came primarily from our collector car and excess property businesses. Underlying loss ratios in our various businesses continue to be good and pricing trends remain encouraging in most of them. Current expense levels are somewhat elevated due to adding two new Specialty segments and staff transfers to Minnesota. We should see a reversing of this trend in 2013. We successfully refinanced our debt for 10 years at good terms in November. We closed the sale of Essentia in early January and will book a nice gain in the first quarter of 2013. The regulatory review of the sale of our runoff business is progressing, and we expect to close in the second half of this year. The closing of that sale will
The following information was filed by White Mountains Insurance Group Ltd (WTM) on Tuesday, February 5, 2013 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.