Sirius top line eroded; OneBeacon hit with large claims

White Mountains Insurance Group has posted strong results despite large claims resulting in a 99 percent combined ratio at OneBeacon and decreases in property cat excess reinsurance driving the erosion of Sirius Group’s top line.

White Mountains saw its earned insurance and reinsurance premiums grow to $503.4 million in the quarter, compared with $497.5 million in the second quarter of 2013. Pre-tax income from continuing operations soared to $109 million in the second quarter, compared with $3.6 million in the third quarter of 2013.

The reinsurance arm, Sirius Group, saw its gross written premiums (GWP) fall by 8 percent to $239 million and net written premiums decrease by 9 percent to $187 million in the quarter. White Mountains said this reflected decreases in property catastrophe excess business.

Sirius’ combined ratio was 81 percent for the quarter, compared with 79 percent for the second quarter of 2013. The group added that the combined ratios for the 2014 periods benefited from lower catastrophe losses compared to the 2013 periods, while the 2013 periods benefited from profit commissions earned on European property retrocessional treaties.

Despite an increase in book value per share to 2.3 percent for the quarter, OneBeacon’s combined ratio hit 99 percent, compared with 94 percent for the second quarter of 2013. However, its net written premiums grew to $296 million in the quarter, an increase of 20 percent from the year before, reflecting strong growth in OneBeacon’s newer units.

Ray Barrette, chairman and chief executive officer, 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."