OneBeacon Insurance Group, Ltd. reported a net income loss of $24.3 million for the first quarter of 2008 citing underwriting and investment challenges.

The Bermuda-based company's net income loss was in contrast in net income of $60.5 million in the first quarter of 2007. The insurer reported net written premiums of $426 million compared to $440 million for the first quarter of 2007, a decline of 3.3 percent. The company said that premiums grew by 15.5 percent for specialty lines, but declined in both commercial lines and personal lines.

The reported combined ratio for the first quarter of 2008 was 100.1, compared to 97.5 in 2007. Mike Miller, OneBeacon CEO, said that "specialty lines had an excellent quarter at an 87 percent combined ratio and strong growth, and personal lines generated a solid 96 percent combined ratio. Commercial lines had a tough quarter at a 110 percent combined ratio driven by unusually heavy catastrophe losses and a few large claims."

Mr. Miller said that investment results yielded a zero percent return. OneBeacon reported net investment income of $50.1 million compared to $50.6 million in the first quarter of 2007. The company also said that it had $3.7 million in net realized investment gain for the quarter compared to a $54.9 million net realized investment gain in 2007. The company added, "The first quarter of 2008 also included a $59 million reduction in unrealized investment gains in revenues as a result of adopting FASB Statement No. 159."

Because of the adoption of FASB Statement No. 159, the company said that net income and pretax income for 2008 periods are not directly comparable to such measures for the 2007 periods.

Mr. Miller said of the company's quarterly results, "We had a challenging quarter. Both underwriting and investment results were off, which led to a one percent decrease in adjusted book value per share, including dividends...Our business is in good shape and we expect to deliver better results in the coming quarters."

Special Reports /

OneBeacon Records $24m Net Loss for Quarter

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