White Mountain Net Soars In Final Quarter

NU Online News Service, Feb. 3, 3:55 p.m.EST?Hamilton, Bermuda-based White Mountain Insurance Groupsaw its fortunes improve in the 2003 fourth quarter as net incomerose 226 percent, from $45 million to $147 million, helped by itsinvestment portfolio returns, management said.[@@]

For the year, net income was down by 63 percent even as combinedratio improved.

In the year ending Dec. 31, 2003, net income dropped $468million from $748 million in 2002 to $281 million in 2003. Revenuesdeclined 10 percent, or $406 million, going from $4.2 billion to$3.8 billion.

Fourth-quarter revenues decreased 4 percent, or $39 million,from $1 billion to $963 million.

Underwriting performance improved. The company's 2002 combinedratio dropped to 98 in 2003 from 107 percent in 2002. This was onnet written premium of $2 billion for 2003 compared to $2.5 billionin 2002. The White Mountain Group includes One BeaconInsurance.

The company's reinsurance segment, Folksamerica Reinsurance Co.,saw a five percentage point drop in its combined ratio, going to95, on net written premium of $889 million in 2003 from 100, on netwritten premium of $679 million in 2002.

Ray Barrette, chief executive officer for the company, said in astatement that White Mountain achieved "terrific underwritingresults" and earned nice returns on its investment portfolio.However, runoff operations shaved two to three percentage pointsoff its book value growth. The company said its book value pershare increased from $259 at the end of 2002 to $291.

During the fourth quarter, White Mountain acquired or began theprocess of acquiring:

? The renewal rights to the treaty business of CNAReinsurance.

? The Atlantic Specialty, the commercial insurance business ofAtlantic Mutual.

? Sierra Insurance Group, a runoff insurance company, fromSierra Health Services.

? Sirius Insurance Group, an international reinsuranceoperation, from ABB Holdings, Ltd.