GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

White Mountains Insurance Group Ltd. Reports Operating Results (10-Q)

July 29, 2011 | About:
insider

10qk

18 followers
White Mountains Insurance Group Ltd. (WTM) filed Quarterly Report for the period ended 2011-06-30.

White Mountains Insurance Group Ltd. has a market cap of $3.35 billion; its shares were traded at around $421.12 with a P/E ratio of 30.1 and P/S ratio of 0.9. The dividend yield of White Mountains Insurance Group Ltd. stocks is 0.2%.

Highlight of Business Operations:

White Mountains ended the second quarter of 2011 with an adjusted book value per share of $448, up $1 for the second quarter and $8 for the first six months of 2011, including dividends. White Mountains reported adjusted comprehensive income of $6 million and $40 million for the second quarter and first six months of 2011, compared to adjusted comprehensive loss of $67 million and $118 million for the second quarter and first six months of 2010. Both OneBeacon and White Mountains Re had profitable underwriting results despite $39 million of after-tax catastrophe losses, primarily related to severe weather and tornado activity in the United States. Compensation accruals resulting from the Esurance Sale reduced adjusted book value per share by about $3 in the second quarter of 2011. Investment returns on the short duration fixed income portfolio trailed the Barclays U.S. Intermediate Aggregate Index, as interest rates declined. The equity portfolio was flat in the second quarter of 2011, in line with the S&P 500 index. The overall impact of foreign currency exchange in the second quarter of 2011 was slightly negative as a small negative effect on liabilities slightly exceeded a small positive effect on assets. The net negative impact of foreign currency exchange on White Mountains adjusted book value per share was less than $1. The results for the first six months of 2011 were impacted by $135 million of after-tax catastrophe losses, primarily from the Japan earthquake and tsunami and the New Zealand earthquake in the first quarter, as well as the series of severe weather and tornado activity that affected the Southeastern and Midwestern United States in the second quarter. The first six months of 2010 were impacted by $148 million of after-tax catastrophe losses, primarily from the Chile earthquake and winter weather in the Northeastern United States and Europe. Adjusted book value per share increased $5 in the first six months of 2011 from foreign currency translation gains, due primarily to the weakening U.S. dollar. In addition, share repurchases increased adjusted book value per share by $3 in the first six months of 2011.

White Mountains GAAP pre-tax total return on invested assets was 1.1% and 3.1% for the second quarter and first six months of 2011, which included 0.2% and 1.0% of foreign currency gains, compared to -0.8% and 0.6% for the second quarter and first six months of last year, which included -1.1% and -1.4% of foreign currency losses. During the second quarter and first six months of 2011, White Mountains repurchased and retired 19,295 and 265,579 of its common shares under its share repurchase program for $7 million and $93 million. These repurchases were completed at an average price of 83% and 78% of White Mountains June 30, 2011 adjusted book value per share.

White Mountains Res GAAP combined ratio for the second quarter of 2011 was 92% compared to 94% for the second quarter of last year, while the GAAP combined ratio for the first six months of 2011 was 112% compared to 113% for the first six months of 2010. Catastrophe losses significantly impacted the combined ratio for each period. The combined ratio for the second quarter of 2011 included 17 points ($39 million) of catastrophe losses, primarily from $25 million of losses from severe weather and tornados in the Midwestern United States and $10 million of additional losses from the Japan earthquake and tsunami that occurred in the first quarter. The combined ratio for the second quarter of 2010 included 15 points ($33 million) of catastrophe losses. For the first six months of 2011, the combined ratio included 36 points ($163 million) of catastrophe losses, primarily from $90 million of losses from the Japan earthquake and tsunami and $40 million of losses from the February 2011 New Zealand earthquake. For the first six months of 2010, the combined ratio included 36 points ($156 million) of catastrophe losses, primarily from the Chile earthquake. Both the first six months of 2011 and 2010 included 3 points of favorable loss reserve development.

White Mountains total net written premiums decreased 10% and 12% to $497 million in the second quarter and $1,112 million in the first six months of 2011 compared to $551 million and $1,265 million in the second quarter and first six months of 2010. OneBeacons net written premiums decreased 18% and 22% to $281 million and $559 million in the second quarter and first six months of 2011, reflecting the Personal Lines Transaction. OneBeacons specialty lines premiums increased 12% and 5% to $266 million and $524 million in the second quarter and first six months of 2011. Excluding the $88 million and $176 million of net written premiums in the second quarter and first six months of 2010 related to the exited business at OneBeacon, White Mountains net written premiums increased $33 million, or 7%, and $24 million, or 2%, in the second quarter and first six months of 2011. White Mountains Res net written premiums were $216 million and $553 million in the second quarter and first six months of 2011, increases of 4% and 1% from the comparable 2010 periods, primarily due to changes in foreign currency exchange rates and increases in the accident and health and trade credit lines, partially offset by decreases in property lines.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 5.0/5 (1 vote)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide