White Mountain Net Soars In Final Quarter

White Mountain Net Soars In Final Quarter

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

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

In the year ending Dec. 31, 2003, net income dropped $468 million from $748 million in 2002 to $281 million in 2003. Revenues declined 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 combined ratio dropped to 98 in 2003 from 107 percent in 2002. This was on net written premium of $2 billion for 2003 compared to $2.5 billion in 2002. The White Mountain Group includes One Beacon Insurance.

The company's reinsurance segment, Folksamerica Reinsurance Co., saw a five percentage point drop in its combined ratio, going to 95, on net written premium of $889 million in 2003 from 100, on net written premium of $679 million in 2002.

Ray Barrette, chief executive officer for the company, said in a statement that White Mountain achieved "terrific underwriting results" and earned nice returns on its investment portfolio. However, runoff operations shaved two to three percentage points off its book value growth. The company said its book value per share increased from $259 at the end of 2002 to $291.

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

? The renewal rights to the treaty business of CNA Reinsurance.

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

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

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