Foreign currency losses have dented the profits of White Mountains Insurance Group in the first quarter of 2015.
Its profits fell to $84 million in the first quarter of 2015, compared with $96 million for the same period of the prior year.
White Mountains posted a small increase in earned re/insurance premiums to $494.3 million in the first quarter of 2015, compared with $493.6 million in the first quarter of 2014.
Reinsurer Sirius, a subsidiary of White Mountains, posted a combined ratio of 81 percent for the first quarter of 2015, compared with 73 percent for the first quarter of 2014, driven by lower favourable loss reserve development and a change in business mix.
Its gross written premiums (GWP) decreased 6 percent to $423 million, dragged down by foreign currency effects resulting from a strengthening US dollar.
Sirius said that in local currencies, GWP were essentially flat compared with the first quarter last year, as decreases in property catastrophe excess were mostly offset by increases in accident and health and other property lines.
Sirius’ net written premiums decreased 9 percent, although 5 percent in local currencies, to $303 million, driven by a decrease in property business and increased retrocessional purchases.
Allan Waters, chief executive officer (CEO) of Sirius, said: "Our 81 percent combined ratio for the first quarter was another strong start. Premiums were flat in local currencies. Excluding currency effects, adjusted book value per share grew 2 percent in the first quarter.
“Due to the soft market, the property catastrophe business contracted at 1/1/15 renewals but we were able to increase writings in lower margin but less capital intensive business in other property lines and accident and health.”
US insurer OneBeacon posted a combined ratio of 95 percent for the first quarter of 2015, compared with 89 percent in the same period of the prior year. The insurer said the increase was partially driven by a higher current accident year loss ratio.
Its net written premiums fell 8 percent to $287 million in the first quarter of 2015. This was driven by the exit from the lawyers liability business ($10 million), the termination of an affiliated reinsurance treaty ($7 million), and the implementation of an earlier cut-off date for recording spring crop premiums ($12 million).
Mike Miller, CEO of OneBeacon, said, "We had a good start to the year, producing book value growth of 2 percent and a 95 percent combined ratio. Premium growth for our ongoing business remains healthy in the context of an increasingly competitive market."
Ray Barrette, chairman and chief executive officer, said: "It was a flat quarter. Foreign currency losses of $8 per share offset what was an otherwise decent quarter. Our investment portfolio returned about 1 percent in local currencies, an OK performance in a quarter where interest rates fell again.”
White Mountains Insurance Group, Sirius, OneBeacon, Bermuda, First Quarter 2015 Results