White Mountains announces Q3 gains for 2017
White Mountains has announced that its net income for the third quarter of 2017 came to $562 million, up on the $91 million it made in the same period of 2016. The company reported net income of $605 million for the first nine months of 2017 again up on the $441 million it made in the first nine months of 2016.
The company pointed out that on September 28, 2017 it 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's 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. “Our underlying growth in ABVPS was 1.8 percent, driven by solid investment results, with our portfolio up 1.4 percent in the quarter. BAM's par insured dipped in the quarter, while its pricing levels improved meaningfully.
During the quarter, we repurchased roughly 822,000 White Mountains common shares for $715 million, leaving us with $2.3 billion in undeployed capital. In October, we announced bolt-on acquisitions at both MediaAlpha and PassportCard, where we see exciting potential. On the other hand, we made small but nevertheless disappointing downward revisions to our prior period financials relating to Wobi, one of our overseas portfolio companies.”