White Mountains sees income down after OneBeacon sale
White Mountains Insurance Group has released its first set of results in the wake of its sale of OneBeacon to Intact Financial Corporation for around $1.7 billion.
The company reported net income of $15.5 million for the second quarter of 2017, a fall from the $341.1 million it made in the same period of 2016. Net income for the first half of 2017 came to $49.8 million, again a fall on the $354.1 million it made in the first six months of 2016.
The reason behind the fall is that, according to White Mountains, OneBeacon's results were economically transferred to the buyer at signing. The transaction is expected to close in the third or fourth quarter of 2017 and is subject to regulatory approval and other customary closing conditions.
White Mountains did announce an increase in net investment income, which rose from $6.1 million in the second quarter of 2016 to $14.7 million in the same period of 2017. Investment income for the first six months of 2017 totalled $27.5 million, a substantial rise from the $8.6 million the company reported for the first half of 2016.
“Including the estimated gain from the OneBeacon Transaction, we ended the quarter with an adjusted book value per share (ABVPS) of $896,” said Manning Rountree, CEO of White Mountains. “This included the $23 per share decrease arising from adjustments to the value of HG Global/BAM. Our underlying growth in ABVPS was 1.4 percent. The investment portfolio returned 1.4 percent in the quarter, a good result. In July, we repurchased 235,000 White Mountains common shares for $200 million, leaving us with $1.5 billion in undeployed capital, which will grow to $2.8 billion when the OneBeacon transaction closes.”