White Mountains seeks opportunity to deploy capital, says CEO

Bermuda-based insurance holding company White Mountains is seeking opportunities to deploy excess capital.

“We ended 2017 with $2.1 billion in undeployed capital,” said CEO Manning Rountree. “We continue to pursue new opportunities with energy, rigor and discipline," Rountree added.

White Mountains returned $724 million in capital to shareholders in 2017 through share repurchases, retiring 18 percent of the shares outstanding in the process.

White Mountains grew net income attributable to common shareholders to $627 million in 2017 from $402 million in the previous year. In the fourth quarter of 2017, net income attributable to common shareholders was $23 million, up from a net loss of $39 million in the same period a year ago.

The firm operates in property and casualty insurance and reinsurance primarily through US municipal bond reinsurer Build America Mutual (BAM)/HG Global, as well as investment manager White Mountains Advisors with $5 billion of assets under management.

BAM is a mutually-owned primary municipal bond insurance company and insures only essential-public-purpose, fixed-rate, long-term municipal bonds.

BAM insured municipal bonds with par value of $10.4 billion in 2017 compared to $11.3 billion in 2016.

Total pricing, which is premiums plus member surplus contributions weighted by the par value of bonds insured, was 99 basis points in 2017, compared to 68 basis points in 2016. BAM's total claims paying resources increased $65 million to $708 million in the year ended December 31, 2017.

“BAM finished the year with strong volume and good pricing in the 4th quarter,” said Rountree. “Uncertainty over tax reform pulled forward issuance volume into the quarter, and we expect a slower start to 2018 for BAM as a result.”

HG Global reported pre-tax income of $26 million in 2017, compared to pre-tax income of $22 million in 2016.

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