White Mountains Insurance Turns To Profit In Q3

10/30/2009 3:55 PM ET

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(RTTNews) - Friday, White Mountains Insurance Group Ltd. (WTM: News ) reported a profit for the third quarter, reflecting investment gains compared with investment losses for the prior year period, despite a decline in premiums earned.

The Hamilton, Bermuda-based company's net income attributable to the shareholders was $159.6 million, compared with a loss of $276.7 million in the prior year period.

Adjusted comprehensive income was $242.6 million, compared with a loss of $409.3 million in the prior year period. On per share basis, earnings per share was $18.02 compared with loss per share of $26.19 a year earlier.

On average, three analysts polled by Thomson Reuters expected earnings per share of $5.08 for the third quarter. Analysts' estimate typically excludes one-time items.

White Mountains' total revenues rose to $1.20 billion from $618 million for the same period last year, helped by net realized and unrealized investment gains of $170.7 million, compared with net realized and unrealized investment losses of $429.7 million a year-ago.

Earned insurance and reinsurance premiums came down to $902.0 million from $935.7 million for the prior year quarter and net investment income declined to $66.2 million from $105.7 million last year.

The company's OneBeacon segment which offers specialty line products earned premiums of $492.8 million, up from $471.2 million a year earlier and combined ratios of the segment improved to 97% from 100% last year.

White Mountains Re segment which provides reinsurance coverage improved its total combined ratio to $79% from 127% a year-ago as loss and loss adjustment expense ratios of the segment improved to 49% from 95% last year. Still, the segment's earned premiums declined to $213.4 million from $255.3 million last year.

The company's smallest segment, Esurance earned premiums of $195.8 million, down from $209.2 million and total combined ratio remained unchanged at 102%.

Total expenses for the third quarter declined to $944.4 million from $1.10 billion a year earlier, helped by a decline loss and loss adjustment expenses to $544.1 million from $697.6 million for the year-ago period.

For the nine months period, net income attributable to shareholders was $370.2 million compared with loss attributable to shareholders of $342.7 million for the same period last year and adjusted comprehensive income was $468.9 million compared with loss of $426.4 million last year. Earnings per share was $41.84 per share, compared with loss per share of $32.53 for the same period prior year.