Hurricanes hit White Mountains’ bottom line
Hurricane-related losses caused White Mountains Insurance Group to fall far short of the earnings target it set for last year.
The company reported net income of $269 million in 2005, down from $419 million in 2004. The last quarter it netted $12 million compared to $165 million in the same quarter in 2004.
The combined losses of Hurricanes Katrina, Rita and Wilma were the chief culprit, contributing to a hurricane-related loss of $288 million after taxes. Some $91 million was loss in the fourth quarter alone.
The company also record a $104 after-tax decrease in the value of its Montpelier Re holdings for the year, but that was offset by the strong performance of the company’s other subsidiaries, particularly OneBeacon. The Boston-based subsidiary also reported a $35 million gain from the settlement of its retirement benefit plan through an independent trust.
“Our return in 2005 was well below our target,” said CEO Steve Fass. “These losses mask very strong underwriting results produced by OneBeacon and Esurance’s good year with premium growth of 75 percent.”
Premium growth and increasing premiums in the reinsurance market position the company for next year, Fass said. – BOB SANDERS