White Mountains Q3 Net Income $162 Million; $374 Million for 9 Months

The Bermuda-based White Mountains Insurance Group, Ltd. returned to profitability in the third quarter of 2006, posting net income of $162.1 million, compared to a loss of $66.3 million in the same period last year. The group’s net income for the first nine months was $373.9 million.

White Mountains noted that it “ended the third quarter of 2006 with a fully converted tangible book value per share of $373, an increase of 5.7 percent for the quarter and 10.8 percent for the first nine months of 2006, including dividends.”

CEO Steve Fass commented: “I am very pleased with our growth in tangible book value per share this quarter. OneBeacon had another excellent quarter, with a combined ratio of 94 percent. White Mountains Re, aided by favorable weather, also had a strong quarter, with an 89 percent combined ratio. Esurance continues to grow quickly while keeping its loss ratio on target. While our fixed income and equity returns lagged their benchmarks in the quarter, absolute returns were solid, and our investment performance for the first nine months remains strong.”

The earnings bulletin said: “Adjusted comprehensive net income for the third quarter of 2006 was $211 million, compared to adjusted comprehensive net loss of $131 million in the third quarter of 2005, while for the first nine months of 2006 adjusted comprehensive net income was $377 million, compared to $80 million in the comparable period last year.”

OneBeacon, the group’s principle U.S. operation, posted pre-tax income for the third quarter of $107 million, compared to $90 million for the third quarter of 2005. “The GAAP combined ratio was 94 percent for the third quarter of 2006, compared to 107 percent for the third quarter of last year,” said the announcement. “The increase in pre-tax income was primarily due to lower catastrophe losses, $55 million of which were recorded during the third quarter of last year from hurricanes Katrina and Rita, mostly in the specialty property unit. The increase in pre-tax income was partially offset by lower net realized investment gains as a result of the sale of several highly appreciated common stocks in the third quarter of 2005. Additionally, the third quarter of 2006 includes a $30 million gain on the sale of the renewal rights of Agri, while the third quarter last year includes a $28 million gain on the sale of NFU.”

The full earnings report may be obtained on the Group’s Website at : http://investor.whitemountains.com.