White Mountains Group has flat 2Q

White Mountain Insurance Group basically had a flat quarter, posting a net income of $12 million, up from $3 million during the second quarter of 2010. That translates into diluted earnings per share of $1.51, on a stock that closed last week at $421.39 per share.The insurance conglomerate, officially located in Bermuda but run out of Hanover, said it had a book value of $448 per share, which was also flat – up only $1 for the quarter. It would have gone up $4, but the firm had to pay various executives “compensation accruals” from the pending $700 million sale of Esurance and Answer Financial auto insurance subsidiaries to Allstate. A breakout of that sale reveals that the company recorded a $22.5 million expense as a result of that compensation. Gains from the transaction won’t be realized until the fall, but the company estimates the net assets for sale was worth $434 million at the end of the quarter.The company’s two major remaining subsidiaries – One Beacon and White Mountain Re – made money despite catastrophic losses resulting from tornadoes in the Midwest and the continuing claims coming in from the Japanese earthquake and tsunami. One Beacon reported pretax income of $20. The tornado accounts for some of One Beacon’s $152 million in losses. Premiums were down thanks to the sale of personal lines in 2010, but the company specialty lines are paying off. White Mountain Re reported pretax income of $46.3 million, despite losses of $141 million. That included $25 million from the tornadoes and an additional $10 million of claims as a result of greater-than-expected reported property losses from non-Japanese companies that were exposed to the earthquake there.It was the other operations that resulted in a pretax loss of $31.8 million offsetting the gains, due primarily to the $38.6 million of general administrative expenses that includes at least part of the Esurance/Answer executive payoff. –BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW