NEWS RELEASE | ||
For Immediate Release | ||
Investor Relations | Media | |
Contact: Paul McDonough | Carmen Duarte | |
Phone: 952.852.6020 | 781.332.7268 | |
Email: ir@onebeacon.com | cduarte@onebeacon.com | |
Website: www.onebeacon.com |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
Assets | ||||||||
Investment securities: | ||||||||
Fixed maturity investments | $ | 2,028.7 | $ | 2,080.5 | ||||
Short-term investments | 119.7 | 69.2 | ||||||
Common equity securities | 275.9 | 298.7 | ||||||
Other investments | 137.8 | 143.0 | ||||||
Total investment securities | 2,562.1 | 2,591.4 | ||||||
Cash | 108.8 | 95.2 | ||||||
Reinsurance recoverables | 167.0 | 193.5 | ||||||
Premiums receivable | 230.4 | 219.0 | ||||||
Deferred acquisition costs | 102.0 | 100.7 | ||||||
Ceded unearned premiums | 36.3 | 29.5 | ||||||
Net deferred tax asset | 134.1 | 140.2 | ||||||
Investment income accrued | 9.4 | 10.1 | ||||||
Accounts receivable on unsettled investment sales | 4.5 | 30.5 | ||||||
Other assets | 174.4 | 192.5 | ||||||
Total assets | $ | 3,529.0 | $ | 3,602.6 | ||||
Liabilities | ||||||||
Unpaid loss and loss adjustment expense reserves | $ | 1,343.8 | $ | 1,389.8 | ||||
Unearned premiums | 568.6 | 560.3 | ||||||
Funds held under insurance contracts | 134.9 | 137.7 | ||||||
Debt | 272.9 | 272.9 | ||||||
Accounts payable on unsettled investment purchases | 1.5 | — | ||||||
Other liabilities | 187.5 | 237.4 | ||||||
Total liabilities | 2,509.2 | 2,598.1 | ||||||
OneBeacon's common shareholders' equity and noncontrolling interests | ||||||||
OneBeacon's common shareholders' equity: | ||||||||
Common shares and paid-in surplus | 1,011.1 | 1,022.0 | ||||||
Retained earnings (deficit) | 10.7 | (15.9 | ) | |||||
Accumulated other comprehensive loss | (5.2 | ) | (5.2 | ) | ||||
Total OneBeacon's common shareholders' equity | 1,016.6 | 1,000.9 | ||||||
Total noncontrolling interests | 3.2 | 3.6 | ||||||
Total OneBeacon's common shareholders' equity and noncontrolling interests | 1,019.8 | 1,004.5 | ||||||
Total liabilities, OneBeacon's common shareholders' equity and noncontrolling interests | $ | 3,529.0 | $ | 3,602.6 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Revenues | ||||||||
Earned premiums | $ | 278.6 | $ | 286.6 | ||||
Net investment income | 14.4 | 10.5 | ||||||
Net realized and change in unrealized investment gains | 16.6 | 14.2 | ||||||
Net other revenues (expenses) | 0.9 | (3.1 | ) | |||||
Total revenues | 310.5 | 308.2 | ||||||
Expenses | ||||||||
Loss and loss adjustment expenses | 158.8 | 165.9 | ||||||
Policy acquisition expenses | 51.0 | 51.0 | ||||||
Other underwriting expenses | 55.3 | 55.9 | ||||||
General and administrative expenses | 3.9 | 4.1 | ||||||
Interest expense | 3.3 | 3.2 | ||||||
Total expenses | 272.3 | 280.1 | ||||||
Pre-tax income from continuing operations | 38.2 | 28.1 | ||||||
Income tax benefit (expense) | 8.7 | (3.4 | ) | |||||
Net income from continuing operations | 46.9 | 24.7 | ||||||
Net loss from discontinued operations, net of tax | — | (0.1 | ) | |||||
Net income including noncontrolling interests | 46.9 | 24.6 | ||||||
Less: Net income attributable to noncontrolling interests | (0.5 | ) | (0.5 | ) | ||||
Net income attributable to OneBeacon's common shareholders | 46.4 | 24.1 | ||||||
Net change in benefit plan assets and obligations, net of tax | — | 0.2 | ||||||
Comprehensive income attributable to OneBeacon's common shareholders | $ | 46.4 | $ | 24.3 | ||||
Earnings per share attributable to OneBeacon's common shareholders—basic and diluted | ||||||||
Net income attributable to OneBeacon's common shareholders per share | $ | 0.49 | $ | 0.25 | ||||
Weighted average number of common shares outstanding | 94.1 | 94.8 |
Three Months Ended March 31, 2016 | ||||||||||||||||
Specialty Products (1) | Specialty Industries (2) | Investing, Financing and Corporate | Total | |||||||||||||
Earned premiums | $ | 133.4 | $ | 145.2 | $ | — | $ | 278.6 | ||||||||
Loss and loss adjustment expenses | (91.8 | ) | (67.0 | ) | — | (158.8 | ) | |||||||||
Policy acquisition expenses | (24.0 | ) | (27.0 | ) | — | (51.0 | ) | |||||||||
Other underwriting expenses | (23.4 | ) | (31.9 | ) | — | (55.3 | ) | |||||||||
Underwriting income (loss) | (5.8 | ) | 19.3 | — | 13.5 | |||||||||||
Net investment income | — | — | 14.4 | 14.4 | ||||||||||||
Net realized and change in unrealized investment gains | — | — | 16.6 | 16.6 | ||||||||||||
Net other revenues (expenses) | (0.1 | ) | 0.3 | 0.7 | 0.9 | |||||||||||
General and administrative expenses | — | (0.5 | ) | (3.4 | ) | (3.9 | ) | |||||||||
Interest expense | — | — | (3.3 | ) | (3.3 | ) | ||||||||||
Pre-tax income (loss) | $ | (5.9 | ) | $ | 19.1 | $ | 25.0 | $ | 38.2 |
Three Months Ended March 31, 2015 | ||||||||||||||||
Specialty Products (1) | Specialty Industries (2) | Investing, Financing and Corporate | Total | |||||||||||||
Earned premiums | $ | 136.1 | $ | 150.5 | $ | — | $ | 286.6 | ||||||||
Loss and loss adjustment expenses | (74.1 | ) | (91.8 | ) | — | (165.9 | ) | |||||||||
Policy acquisition expenses | (22.9 | ) | (28.1 | ) | — | (51.0 | ) | |||||||||
Other underwriting expenses | (25.7 | ) | (30.2 | ) | — | (55.9 | ) | |||||||||
Underwriting income | 13.4 | 0.4 | — | 13.8 | ||||||||||||
Net investment income | — | — | 10.5 | 10.5 | ||||||||||||
Net realized and change in unrealized investment gains | — | — | 14.2 | 14.2 | ||||||||||||
Net other revenues (expenses) | — | 0.2 | (3.3 | ) | (3.1 | ) | ||||||||||
General and administrative expenses | — | (0.5 | ) | (3.6 | ) | (4.1 | ) | |||||||||
Interest expense | — | — | (3.2 | ) | (3.2 | ) | ||||||||||
Pre-tax income | $ | 13.4 | $ | 0.1 | $ | 14.6 | $ | 28.1 |
(1) | The Specialty Products reportable segment includes the results of OneBeacon Healthcare Group, OneBeacon Management Liability, OneBeacon Financial Services, Other Professional Lines (which includes OneBeacon Architects and Engineers), A.W.G. Dewar, OneBeacon Specialty Property, OneBeacon Environmental, OneBeacon Surety Group, OneBeacon Programs Group, OneBeacon Financial Institutions and OneBeacon Crop Insurance, which was exited during the third quarter of 2015. |
(2) | Specialty Industries includes the results of OneBeacon Entertainment, International Marine Underwriters (IMU) - Ocean Marine, IMU - Inland Marine, OneBeacon Technology Insurance, OneBeacon Accident Group, and OneBeacon Government Risks. |
Three Months Ended March 31, 2016 | ||||||||||||
Specialty Products | Specialty Industries | Consolidated Insurance (1) | ||||||||||
Net written premiums | $ | 144.7 | $ | 135.4 | $ | 280.1 | ||||||
Earned premiums | $ | 133.4 | $ | 145.2 | $ | 278.6 | ||||||
Underwriting ratios | ||||||||||||
Loss and loss adjustment expense ratio | 68.8 | % | 46.1 | % | 57.0 | % | ||||||
Expense ratio | 35.6 | 40.5 | 38.2 | |||||||||
Combined ratio | 104.4 | % | 86.6 | % | 95.2 | % | ||||||
Three Months Ended March 31, 2015 | ||||||||||||
Specialty Products | Specialty Industries | Consolidated Insurance (1) | ||||||||||
Net written premiums | $ | 133.6 | $ | 153.5 | $ | 287.1 | ||||||
Earned premiums | $ | 136.1 | $ | 150.5 | $ | 286.6 | ||||||
Underwriting ratios | ||||||||||||
Loss and loss adjustment expense ratio | 54.4 | % | 61.0 | % | 57.9 | % | ||||||
Expense ratio | 35.8 | 38.7 | 37.3 | |||||||||
Combined ratio | 90.2 | % | 99.7 | % | 95.2 | % |
(1) | Results for the runoff business, which closed on December 23, 2014, are reported as discontinued operations for all periods presented. |
March 31, | December 31, | March 31, | ||||||||||
2016 | 2015 | 2015 | ||||||||||
Numerator | ||||||||||||
OneBeacon's common shareholders' equity | $ | 1,016.6 | $ | 1,000.9 | $ | 1,049.1 | ||||||
Denominator | ||||||||||||
Common shares outstanding | 94.3 | 95.1 | 95.3 | |||||||||
Book value per share | $ | 10.78 | $ | 10.53 | $ | 11.01 | ||||||
Change in book value per share, including dividends, in the quarter | 4.4 | % | ||||||||||
Change in book value per share, including dividends, in the last twelve months on an IRR basis(1) | 5.7 | % |
(1) | IRR calculated based on beginning book value per share, dividends paid, and ending book value per share. Includes dividends of $0.84 per share (a quarterly dividend of $0.21 per share). |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||
2016 | 2015 | 2016 | |||||||||
Comprehensive income attributable to OneBeacon's common shareholders | $ | 46.4 | $ | 24.3 | $ | 58.9 | |||||
Net income attributable to OneBeacon's common shareholders | $ | 46.4 | $ | 24.1 | $ | 59.1 | |||||
Weighted average number of common shares outstanding | 94.1 | 94.8 | 94.7 | ||||||||
Net income attributable to OneBeacon's common shareholders per share | $ | 0.49 | $ | 0.25 | $ | 0.62 | |||||
Net income attributable to OneBeacon's common shareholders | $ | 46.4 | $ | 24.1 | $ | 59.1 | |||||
Less: | |||||||||||
Net realized and change in unrealized investment gains | (16.6 | ) | (14.2 | ) | 32.7 | ||||||
Tax effect on net realized and change in unrealized investment gains | 5.8 | 5.0 | (11.5 | ) | |||||||
Loss from discontinued operations, net of tax | — | 0.1 | 0.4 | ||||||||
Loss (gain) from sale of discontinued operations, net of tax | — | — | (0.3 | ) | |||||||
Operating income (1) | $ | 35.6 | $ | 15.0 | $ | 80.4 | |||||
Weighted average number of common shares outstanding | 94.1 | 94.8 | 94.7 | ||||||||
Operating income per share (1) | $ | 0.38 | $ | 0.16 | $ | 0.85 |
(1) | Represent a non-GAAP financial measure. See discussion of Non-GAAP financial measures on page 10. |
• | incurred loss and loss adjustment expenses and the adequacy of our loss and loss adjustment expense reserves and related reinsurance; |
• | projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts; |
• | changes in interest rates, debt or equity markets or other market volatility that negatively impact our investment portfolio; |
• | competitive forces and the cyclicality of the property and casualty insurance industry; |
• | recorded loss and loss adjustment expense reserves subsequently proving to have been inadequate; |
• | claims arising from catastrophic events, such as hurricanes, windstorms, earthquakes, floods or terrorist attacks; |
• | the continued availability of capital and financing; |
• | the continued availability and cost of reinsurance coverage and our ability to collect reinsurance recoverables; |
• | the outcome of litigation and other legal or regulatory proceedings; |
• | our ability to continue meeting our debt and related service obligations or to pay dividends; |
• | the ability of our technology resources to prevent a data breach and the ability of our internal controls to ensure compliance with legal and regulatory policies; |
• | our ability to successfully develop new specialty businesses; |
• | actions taken by rating agencies from time to time with respect to us, such as financial strength or credit rating downgrades or placing our ratings on negative watch; |
• | changes in laws or regulations, or their interpretations, which are applicable to us, our competitors, our agents or our customers; |
• | participation in guaranty funds and mandatory market mechanisms; |
• | changes to current shareholder dividend practice and regulatory restrictions on dividends; |
• | credit risk exposure in certain of our business operations; |
• | our ability to retain key personnel; |
• | our status as a subsidiary of White Mountains, including potential conflicts of interest; |
• | changes in tax laws or tax treaties; and |
• | other factors, most of which are beyond our control, including the risks that are described from time to time in OneBeacon's filing with the Securities and Exchange Commission, including but not limited to OneBeacon's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed February 26, 2016. |