OneBeacon sale bumps up White Mountain Q3 results

White Mountains has posted a jump in its third-quarter results, driven by the sale of specialty insurer OneBeacon.

The Bermuda-based insurance group recorded an increase in net income for the third quarter of 2017 to $562 million, up on the $91 million it made in the same period of 2016.

The company pointed out that on Sept. 28, 2017 White Mountains received $1.3 billion in cash proceeds from the OneBeacon transaction and recorded a gain of $555 million, net of transaction costs. It added that as a result of the OneBeacon transaction, OneBeacon's results have been reported as discontinued operations within White Mountains' GAAP financial statements.

Because the OneBeacon transaction was a fixed price deal, OneBeacon's results were economically transferred to the buyer at signing.

White Mountains reported a net loss from OneBeacon of $15 million in discontinued operations in the third quarter of 2017, driven primarily by underwriting losses. It said that OneBeacon's combined ratio for the third quarter of 2017 was 113 percent, driven by 9 points of net unfavourable loss reserve development, primarily in the program, healthcare and government risk businesses, and 9 points of catastrophe losses, primarily due to losses from Hurricane Harvey.

“With the successful closing of the OneBeacon transaction, we ended the quarter with adjusted book value per share of $906,” said CEO Manning Rountree.

Pre-tax income from continuing operations, excluding the sale of OneBeacon was $8.4 million in the third quarter, an improvement from a pre-tax loss of $13.8 million in the same period of 2016.

During the quarter, the company repurchased roughly 822,000 White Mountains common shares for $715 million, leaving it with $2.3 billion in undeployed capital. In October, White Mountains announced bolt-on acquisitions at both MediaAlpha and PassportCard.

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