Profits up at White Mountains; Sirius Group premiums fall
White Mountains Insurance Group, the parent company of OneBeacon and Sirius Group, posted strong second quarter results.
The company’s net income rose to $96 million in the quarter, compared with $26 million in the second quarter of 2013.
Sirius Group, the reinsurance segment of White Mountains, saw erosion in its top line as gross written premiums fell to $238.6 million in the quarter, compared with $259 million in the second quarter of 2013.
Its combined ratio deteriorated 2 percentage points to 81 percent, compared with 79 percent in the prior year quarter. However, its pre-tax income more than doubled to $76.7 million in the quarter, compared with $35.6 million in the second quarter of 2013.
OneBeacon’s gross written premiums saw an increase to $331.5 million in the quarter, compared with $264.2 million in the second quarter of 2013. Its combined ratio deteriorated 5 percent points to 99 percent as its pre-tax income for the quarter rose to $31.2 million, compared with a loss of $3 million in the second quarter of 2013.
Ray Barrette, chairman and chief executive officer (CEO), 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."
Mike Miller, CEO of OneBeacon, 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 6 percent over the first half of last year. We expect to close the runoff sale in the second half of the year."
