Exhibit 99.1
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions, except share amounts)
(Unaudited)
|
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2005 |
| 2005 |
| 2004 |
| |||
Assets |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Fixed maturity investments |
| $ | 7,582.7 |
| $ | 7,594.2 |
| $ | 7,900.0 |
|
Short-term investments |
| 727.8 |
| 1,027.3 |
| 1,058.2 |
| |||
Common equity securities |
| 967.8 |
| 1,000.1 |
| 1,043.9 |
| |||
Other investments |
| 588.1 |
| 507.1 |
| 527.4 |
| |||
|
|
|
|
|
|
|
| |||
Total investments |
| 9,866.4 |
| 10,128.7 |
| 10,529.5 |
| |||
|
|
|
|
|
|
|
| |||
Reinsurance recoverable on unpaid losses |
| 5,025.7 |
| 4,824.0 |
| 3,797.4 |
| |||
Reinsurance recoverable on paid losses |
| 77.0 |
| 103.3 |
| 92.0 |
| |||
Funds held by ceding companies |
| 620.4 |
| 707.6 |
| 943.8 |
| |||
Insurance and reinsurance premiums receivable |
| 1,014.3 |
| 1,039.7 |
| 942.2 |
| |||
Securities lending collateral |
| 674.9 |
| 786.9 |
| 593.3 |
| |||
Investments in unconsolidated insurance affiliates |
| 479.7 |
| 486.8 |
| 466.6 |
| |||
Deferred acquisition costs |
| 288.4 |
| 308.3 |
| 308.2 |
| |||
Ceded unearned premiums |
| 200.7 |
| 242.2 |
| 224.1 |
| |||
Accounts receivable on unsettled investment sales |
| 21.7 |
| 27.0 |
| 19.9 |
| |||
Other assets |
| 1,148.9 |
| 1,141.3 |
| 1,098.1 |
| |||
|
|
|
|
|
|
|
| |||
Total assets |
| $ | 19,418.1 |
| $ | 19,795.8 |
| $ | 19,015.1 |
|
|
|
|
|
|
|
|
| |||
Liabilities |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Loss and loss adjustment expense reserves |
| $ | 10,231.2 |
| $ | 10,102.6 |
| $ | 9,398.5 |
|
Reserves for structured contracts |
| 224.6 |
| 268.3 |
| 375.9 |
| |||
Unearned insurance and reinsurance premiums |
| 1,582.0 |
| 1,717.9 |
| 1,739.4 |
| |||
Debt |
| 779.1 |
| 775.2 |
| 783.3 |
| |||
Securities lending payable |
| 674.9 |
| 786.9 |
| 593.3 |
| |||
Preferred stock subject to mandatory redemption |
| 234.0 |
| 227.9 |
| 211.9 |
| |||
Ceded reinsurance payable |
| 204.5 |
| 219.1 |
| 201.4 |
| |||
Funds held under reinsurance treaties |
| 171.4 |
| 169.9 |
| 155.4 |
| |||
Accounts payable on unsettled investment purchases |
| 43.4 |
| 162.8 |
| 30.9 |
| |||
Other liabilities |
| 1,439.8 |
| 1,482.4 |
| 1,641.2 |
| |||
|
|
|
|
|
|
|
| |||
Total liabilities |
| 15,584.9 |
| 15,913.0 |
| 15,131.2 |
| |||
|
|
|
|
|
|
|
| |||
Common Shareholders’ Equity |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Common shares and paid-in surplus |
| 1,725.3 |
| 1,726.9 |
| 1,725.8 |
| |||
Retained earnings |
| 1,899.8 |
| 1,888.0 |
| 1,695.9 |
| |||
Accumulated other comprehensive income (loss), after tax: |
|
|
|
|
|
|
| |||
Net unrealized gains on investments |
| 209.7 |
| 249.4 |
| 359.5 |
| |||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio |
| 24.2 |
| 39.4 |
| 56.6 |
| |||
Net unrealized foreign currency translation gains (losses) and other |
| (25.8 | ) | (20.9 | ) | 46.1 |
| |||
|
|
|
|
|
|
|
| |||
Total common shareholders’ equity |
| 3,833.2 |
| 3,882.8 |
| 3,883.9 |
| |||
|
|
|
|
|
|
|
| |||
Total liabilities and common shareholders’ equity |
| $ | 19,418.1 |
| $ | 19,795.8 |
| $ | 19,015.1 |
|
|
|
|
|
|
|
|
| |||
Common shares outstanding (000’s) |
| 10,779 |
| 10,774 |
| 10,773 |
| |||
Common and equivalent shares outstanding (000’s) |
| 10,814 |
| 10,818 |
| 10,819 |
|
1
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(millions, except per share amounts)
(Unaudited)
|
| Three Months Ended |
| Year Ended |
| ||||||||
|
| 2005 |
| 2004 |
| 2005 |
| 2004 |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
| ||||
Earned insurance and reinsurance premiums |
| $ | 917.8 |
| $ | 999.1 |
| $ | 3,798.6 |
| $ | 3,820.5 |
|
Net investment income |
| 102.2 |
| 113.3 |
| 491.5 |
| 360.9 |
| ||||
Net realized investment gains (losses) |
| (6.7 | ) | 71.3 |
| 112.6 |
| 181.1 |
| ||||
Other revenue |
| 44.8 |
| 64.4 |
| 229.2 |
| 190.5 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total revenues |
| 1,058.1 |
| 1,248.1 |
| 4,631.9 |
| 4,553.0 |
| ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Loss and loss adjustment expenses |
| 739.1 |
| 656.6 |
| 2,858.2 |
| 2,591.1 |
| ||||
Insurance and reinsurance acquisition expenses |
| 188.3 |
| 199.2 |
| 761.2 |
| 744.4 |
| ||||
Other underwriting expenses |
| 72.7 |
| 133.7 |
| 428.9 |
| 520.4 |
| ||||
General and administrative expenses |
| 18.1 |
| 106.9 |
| 156.8 |
| 309.3 |
| ||||
Accretion of fair value adjustment to loss and loss adjustment expense reserves |
| 8.8 |
| 10.2 |
| 36.9 |
| 43.3 |
| ||||
Interest expense on debt |
| 9.7 |
| 13.5 |
| 44.5 |
| 49.1 |
| ||||
Interest expense - dividends on preferred stock subject to mandatory redemption |
| 7.6 |
| 7.6 |
| 30.3 |
| 30.3 |
| ||||
Interest expense - accretion on preferred stock subject to mandatory redemption |
| 6.0 |
| 4.7 |
| 22.1 |
| 17.3 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total expenses |
| 1,050.3 |
| 1,132.4 |
| 4,338.9 |
| 4,305.2 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Pretax income (loss) |
| 7.8 |
| 115.7 |
| 293.0 |
| 247.8 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax benefit (provision) |
| 19.6 |
| 18.7 |
| (36.5 | ) | (47.0 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income before equity in earnings of unconsolidated affiliates and extraordinary item |
| 27.4 |
| 134.4 |
| 256.5 |
| 200.8 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Equity in earnings of unconsolidated insurance affiliates |
| 5.9 |
| 10.6 |
| 33.6 |
| 37.4 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income before extraordinary item |
| 33.3 |
| 145.0 |
| 290.1 |
| 238.2 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Excess of fair value of acquired net assets over cost |
| — |
| 19.8 |
| — |
| 180.5 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| 33.3 |
| 164.8 |
| 290.1 |
| 418.7 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Change in net unrealized gains on investments |
| (54.9 | ) | 38.9 |
| (182.2 | ) | 130.1 |
| ||||
Change in foreign currency translation and other |
| (4.9 | ) | 37.8 |
| (71.9 | ) | 46.4 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Comprehensive net income (loss) |
| (26.5 | ) | 241.5 |
| 36.0 |
| 595.2 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Deduct: Change in net unrealized gains and losses from Symetra’s fixed maturity portfolio |
| 15.2 |
| (8.5 | ) | 32.4 |
| (56.6 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Adjusted comprehensive net income (loss) |
| $ | (11.3 | ) | $ | 233.0 |
| $ | 68.4 |
| $ | 538.6 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income before extraordinary item |
| $ | 3.10 |
| $ | 13.48 |
| $ | 26.96 |
| $ | 24.05 |
|
Net income |
| 3.10 |
| 15.31 |
| 26.96 |
| 42.28 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income before extraordinary item |
| $ | 2.82 |
| $ | 13.48 |
| $ | 26.56 |
| $ | 22.67 |
|
Net income |
| 2.82 |
| 15.31 |
| 26.56 |
| 39.92 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Dividends declared and paid per common share |
| $ | 2.00 |
| $ | — |
| $ | 8.00 |
| $ | 1.00 |
|
2
WHITE MOUNTAINS INSURANCE GROUP, LTD.
YTD SEGMENT INCOME STATEMENT
(in millions)
(Unaudited)
For the Year Ended December 31, 2005
|
| OneBeacon |
| WM Re |
| Esurance |
| Other |
| Total |
| |||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| |||||
Earned insurance and reinsurance premiums |
| $ | 2,118.4 |
| $ | 1,371.6 |
| $ | 306.8 |
| $ | 1.8 |
| $ | 3,798.6 |
|
Net investment income |
| 238.1 |
| 148.9 |
| 9.8 |
| 94.7 |
| 491.5 |
| |||||
Net realized investment gains (losses) |
| 123.8 |
| 76.8 |
| 2.1 |
| (90.1 | ) | 112.6 |
| |||||
Other revenue |
| 134.0 |
| 33.5 |
| 3.0 |
| 58.7 |
| 229.2 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total revenues |
| 2,614.3 |
| 1,630.8 |
| 321.7 |
| 65.1 |
| 4,631.9 |
| |||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Loss and loss adjustment expenses |
| 1,401.5 |
| 1,237.9 |
| 206.2 |
| 12.6 |
| 2,858.2 |
| |||||
Insurance and reinsurance acquisition expenses |
| 390.7 |
| 279.6 |
| 90.8 |
| 0.1 |
| 761.2 |
| |||||
Other underwriting expenses |
| 283.1 |
| 107.0 |
| 37.2 |
| 1.6 |
| 428.9 |
| |||||
General and administrative expenses |
| 88.4 |
| 12.4 |
| — |
| 56.0 |
| 156.8 |
| |||||
Accretion of fair value adjustment to loss and lae reserves |
| — |
| 10.9 |
| — |
| 26.0 |
| 36.9 |
| |||||
Interest expense on debt |
| 1.4 |
| 0.4 |
| — |
| 42.7 |
| 44.5 |
| |||||
Interest expense - dividends and accretion on preferred stock subject to mandatory redemption |
| — |
| — |
| — |
| 52.4 |
| 52.4 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total expenses |
| 2,165.1 |
| 1,648.2 |
| 334.2 |
| 191.4 |
| 4,338.9 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Pretax income (loss) |
| $ | 449.2 |
| $ | (17.4 | ) | $ | (12.5 | ) | $ | (126.3 | ) | $ | 293.0 |
|
For the Year Ended December 31, 2004
|
| OneBeacon |
| WM Re |
| Esurance |
| Other |
| Total |
| |||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| |||||
Earned insurance and reinsurance premiums |
| $ | 2,378.5 |
| $ | 1,265.5 |
| $ | 176.5 |
| $ | — |
| $ | 3,820.5 |
|
Net investment income |
| 221.4 |
| 98.5 |
| 3.5 |
| 37.5 |
| 360.9 |
| |||||
Net realized investment gains |
| 129.6 |
| 29.6 |
| 1.1 |
| 20.8 |
| 181.1 |
| |||||
Other revenue |
| 141.8 |
| 36.1 |
| 2.2 |
| 10.4 |
| 190.5 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total revenues |
| 2,871.3 |
| 1,429.7 |
| 183.3 |
| 68.7 |
| 4,553.0 |
| |||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Loss and loss adjustment expenses |
| 1,545.2 |
| 918.9 |
| 122.4 |
| 4.6 |
| 2,591.1 |
| |||||
Insurance and reinsurance acquisition expenses |
| 442.3 |
| 271.8 |
| 30.3 |
| — |
| 744.4 |
| |||||
Other underwriting expenses |
| 369.2 |
| 122.9 |
| 26.8 |
| 1.5 |
| 520.4 |
| |||||
General and administrative expenses |
| 122.2 |
| 15.1 |
| — |
| 172.0 |
| 309.3 |
| |||||
Accretion of fair value adjustment to loss and lae reserves |
| — |
| 10.1 |
| — |
| 33.2 |
| 43.3 |
| |||||
Interest expense on debt |
| 1.0 |
| 3.8 |
| — |
| 44.3 |
| 49.1 |
| |||||
Interest expense - dividends and accretion on preferred stock subject to mandatory redemption |
| — |
| — |
| — |
| 47.6 |
| 47.6 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total expenses |
| 2,479.9 |
| 1,342.6 |
| 179.5 |
| 303.2 |
| 4,305.2 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Pretax income (loss) |
| $ | 391.4 |
| $ | 87.1 |
| $ | 3.8 |
| $ | (234.5 | ) | $ | 247.8 |
|
3
WHITE MOUNTAINS INSURANCE GROUP, LTD.
QTD SEGMENT INCOME STATEMENT
(in millions)
(Unaudited)
For the Three Months Ended December 31, 2005
|
| OneBeacon |
| WM Re |
| Esurance |
| Other |
| Total |
| |||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| |||||
Earned insurance and reinsurance premiums |
| $ | 496.4 |
| $ | 327.6 |
| $ | 93.8 |
| $ | — |
| $ | 917.8 |
|
Net investment income |
| 46.4 |
| 39.8 |
| 3.3 |
| 12.7 |
| 102.2 |
| |||||
Net realized investment gains (losses) |
| (22.8 | ) | 45.8 |
| (1.2 | ) | (28.5 | ) | (6.7 | ) | |||||
Other revenue |
| 35.1 |
| 3.1 |
| 0.7 |
| 5.9 |
| 44.8 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total revenues |
| 555.1 |
| 416.3 |
| 96.6 |
| (9.9 | ) | 1,058.1 |
| |||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Loss and loss adjustment expenses |
| 341.0 |
| 323.1 |
| 64.7 |
| 10.3 |
| 739.1 |
| |||||
Insurance and reinsurance acquisition expenses |
| 90.7 |
| 68.8 |
| 28.8 |
| — |
| 188.3 |
| |||||
Other underwriting expenses |
| 35.3 |
| 24.9 |
| 12.2 |
| 0.3 |
| 72.7 |
| |||||
General and administrative expenses |
| 35.7 |
| 3.4 |
| — |
| (21.0 | ) | 18.1 |
| |||||
Accretion of fair value adjustment to loss and lae reserves |
| — |
| 2.3 |
| — |
| 6.5 |
| 8.8 |
| |||||
Interest expense on debt |
| 0.3 |
| (1.3 | ) | — |
| 10.7 |
| 9.7 |
| |||||
Interest expense - dividends and accretion on preferred stock subject to mandatory redemption |
| — |
| — |
| — |
| 13.6 |
| 13.6 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total expenses |
| 503.0 |
| 421.2 |
| 105.7 |
| 20.4 |
| 1,050.3 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Pretax income (loss) |
| $ | 52.1 |
| $ | (4.9 | ) | $ | (9.1 | ) | $ | (30.3 | ) | $ | 7.8 |
|
For the Three Months Ended December 31, 2004
|
| OneBeacon |
| WM Re |
| Esurance |
| Other |
| Total |
| |||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| |||||
Earned insurance and reinsurance premiums |
| $ | 584.0 |
| $ | 362.1 |
| $ | 53.0 |
| $ | — |
| $ | 999.1 |
|
Net investment income |
| 59.7 |
| 38.3 |
| 1.3 |
| 14.0 |
| 113.3 |
| |||||
Net realized investment gains |
| 22.6 |
| 20.6 |
| 0.5 |
| 27.6 |
| 71.3 |
| |||||
Other revenue |
| 48.8 |
| 13.1 |
| 0.9 |
| 1.6 |
| 64.4 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total revenues |
| 715.1 |
| 434.1 |
| 55.7 |
| 43.2 |
| 1,248.1 |
| |||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Loss and loss adjustment expenses |
| 365.0 |
| 263.6 |
| 33.4 |
| (5.4 | ) | 656.6 |
| |||||
Insurance and reinsurance acquisition expenses |
| 114.2 |
| 74.6 |
| 10.4 |
| — |
| 199.2 |
| |||||
Other underwriting expenses |
| 85.2 |
| 39.8 |
| 8.5 |
| 0.2 |
| 133.7 |
| |||||
General and administrative expenses |
| 31.4 |
| 3.5 |
| (0.3 | ) | 72.3 |
| 106.9 |
| |||||
Accretion of fair value adjustment to loss and lae reserves |
| — |
| 3.7 |
| — |
| 6.5 |
| 10.2 |
| |||||
Interest expense on debt |
| 0.3 |
| 1.1 |
| — |
| 12.1 |
| 13.5 |
| |||||
Interest expense - dividends and accretion on preferred stock subject to mandatory redemption |
| — |
| — |
| — |
| 12.3 |
| 12.3 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total expenses |
| 596.1 |
| 386.3 |
| 52.0 |
| 98.0 |
| 1,132.4 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Pretax income (loss) |
| $ | 119.0 |
| $ | 47.8 |
| $ | 3.7 |
| $ | (54.8 | ) | $ | 115.7 |
|
4