NEWS
RELEASE
For Immediate Release
Investor Relations
Media
Contact: Paul McDonough
Carmen Duarte
Phone: 952.852.6020
781.332.7268
Email:
[email protected]
[email protected]
OneBeacon’s solutions target ocean and inland marine; entertainment, sports and leisure; group
accident; crop; public entities; technology; tuition refund; professional liability; environmental; excess
property; programs; and commercial surety. For further information about our products and services
visit:
www.onebeacon.com
and to remain up to date on OneBeacon’s news, follow us on Twitter
@OneBeaconIns
or visit our online newsroom:
www.onebeacon.com/newsroom
.
ONEBEACON INSURANCE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
($ in millions)
(Unaudited)
September 30, December 31, 2013 2012 Assets Investment securities:Fixed maturity investments $ 1,626.1 $ 1,593.3
Short-term investments 162.0 232.8
Common equity securities 327.5 259.0
Convertible fixed maturity investments 31.9 62.6
Other investments 146.2 143.8
Total investment securities 2,293.7 2,291.5
Cash 173.8 43.9
Reinsurance recoverables 86.1 110.6
Premiums receivable 255.9 225.6
Deferred acquisition costs 107.7 123.9
Net deferred tax asset 127.2 137.8
Investment income accrued 10.6 12.1
Accounts receivable on unsettled investment sales 9.4 2.1
Other assets 203.5 227.2
Assets held for sale (1) 1,957.2 2,226.8
Total assets $ 5,225.1 $ 5,401.5
Liabilities
Loss and loss adjustment expense reserves $ 1,052.9 $ 1,000.0
Unearned premiums 552.7 573.8
Debt 274.7 274.7
Accounts payable on unsettled investment purchases 5.9 6.2
Other liabilities 316.7 302.7
Liabilities held for sale (1) 1,957.2 2,226.8
Total liabilities 4,160.1 4,384.2
OneBeacon's common shareholders' equity and noncontrolling interests
OneBeacon's common shareholders' equity:
Common shares and paid-in surplus 1,021.7 1,019.1
Retained earnings 53.7 9.2
Accumulated other comprehensive loss, after tax (13.3) (13.8) Total OneBeacon's common shareholders' equity 1,062.1 1,014.5
Total noncontrolling interests 2.9 2.8
Total OneBeacon's common shareholders' equity and noncontrolling interests 1,065.0 1,017.3 Total liabilities, OneBeacon's common shareholders' equity and noncontrolling
interests $ 5,225.1 $ 5,401.5
(1) Assets and liabilities being sold as part of the Runoff Transaction are presented separately in the September 30, 2013 and December 31,
ONEBEACON INSURANCE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30, Nine Months EndedSeptember 30,
2013 2012 (1) 2013 2012 (1) Revenues
Earned premiums $ 278.9 $ 293.9 $ 846.2 $ 846.0
Net investment income 10.1 12.8 30.9 41.5
Net realized and change in unrealized investment gains 17.0 40.0 19.9 57.9 Net other revenues (expenses) 5.5 (0.4) 30.1 (0.1)
Total revenues 311.5 346.3 927.1 945.3
Expenses
Loss and loss adjustment expenses 167.8 164.7 473.7 452.5 Policy acquisition expenses 53.6 66.6 160.9 185.6 Other underwriting expenses 46.8 47.4 150.7 146.2 General and administrative expenses 4.1 4.4 11.0 9.7
Interest expense 3.3 4.0 9.8 12.1
Total expenses 275.6 287.1 806.1 806.1
Pre-tax income from continuing operations 35.9 59.2 121.0 139.2
Income tax benefit (expense) 2.9 (14.2) (15.9) (28.1)
Net income from continuing operations 38.8 45.0 105.1 111.1
Net income (loss) from discontinued operations, net of tax (2) 0.3 (15.8) 0.3 (24.8)
Loss from sale of discontinued operations, net of tax — (91.0) — (91.0)
Net income including noncontrolling interests 39.1 (61.8) 105.4 (4.7)
Less: Net income attributable to noncontrolling interests — (0.4) (0.8) (1.2)
Net income (loss) attributable to OneBeacon's common shareholders 39.1 (62.2) 104.6 (5.9)
Change in other comprehensive income and loss items 0.2 (2.0) 0.5 (1.7)
Comprehensive income (loss) attributable to OneBeacon's common
shareholders $ 39.3 $ (64.2) $ 105.1 $ (7.6)
Earnings per share attributable to OneBeacon's common shareholders—
basic and diluted (3)
Net income from continuing operations per share $ 0.41 $ 0.47 $ 1.09 $ 1.15 Net loss from discontinued operations, net of tax, per share — (0.17) — (0.27) Loss from sale of discontinued operations, net of tax, per share — (0.95) — (0.95) Net income (loss) attributable to OneBeacon's common shareholders per share $ 0.41 $ (0.65) $ 1.09 $ (0.07)
Weighted average number of common shares outstanding (3) 94.5 94.5 94.5 94.5
(1) Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation.
(2) Results for the Runoff Business are reported as discontinued operations for all periods presented. Results of AutoOne are reported as
discontinued operations for the three and nine months ended September 30, 2012. The AutoOne transaction closed in February 2012.
ONEBEACON INSURANCE GROUP, LTD.
SEGMENT STATEMENTS OF OPERATIONS
($ in millions)
(Unaudited)
For the Three Months Ended September 30, 2013
Specialty
Products (1) Industries Specialty (2)
Investing, Financing
and
Corporate Total
Earned premiums $ 132.2 $ 146.7 $ — $ 278.9
Loss and loss adjustment expenses (84.2) (83.6) — (167.8)
Policy acquisition expenses (27.4) (26.2) — (53.6)
Other underwriting expenses (21.2) (25.6) — (46.8)
Underwriting (loss) income (0.6) 11.3 — 10.7
Net investment income — — 10.1 10.1
Net realized and change in unrealized investment gains — — 17.0 17.0
Net other revenues — 0.6 4.9 5.5
General and administrative expenses — (1.1) (3.0) (4.1)
Interest expense — — (3.3) (3.3)
Pre-tax (loss) income $ (0.6) $ 10.8 $ 25.7 $ 35.9
For the Three Months Ended September 30, 2012
Specialty
Products (1) Industries Specialty (2)
Investing, Financing
and
Corporate Total
Earned premiums $ 157.4 $ 136.5 $ — $ 293.9
Loss and loss adjustment expenses (90.4) (74.3) — (164.7) Policy acquisition expenses (40.3) (26.3) — (66.6) Other underwriting expenses (21.9) (25.5) — (47.4)
Underwriting income 4.8 10.4 — 15.2
Net investment income — — 12.8 12.8
Net realized and change in unrealized investment gains — — 40.0 40.0 Net other revenues (expenses) 0.1 (1.1) 0.6 (0.4) General and administrative expenses — (0.6) (3.8) (4.4)
Interest expense — — (4.0) (4.0)
Pre-tax income $ 4.9 $ 8.7 $ 45.6 $ 59.2
(1) Specialty Products includes the results of A.W.G. Dewar, OneBeacon Professional Insurance, OneBeacon Specialty Property, OneBeacon
Environmental, OneBeacon Surety Group, OneBeacon Program Group, OneBeacon Crop Insurance, and Collector Cars and Boats, which was sold on January 1, 2013.
(2) Specialty Industries includes the results of OneBeacon Entertainment, International Marine Underwriters, OneBeacon Technology
For the Nine Months Ended September 30, 2013
Specialty
Products (1) Industries Specialty (2)
Investing, Financing
and
Corporate Total
Earned premiums $ 426.9 $ 419.3 $ — $ 846.2
Loss and loss adjustment expenses (240.6) (233.1) — (473.7)
Policy acquisition expenses (84.3) (76.6) — (160.9)
Other underwriting expenses (72.5) (78.2) — (150.7)
Underwriting income 29.5 31.4 — 60.9
Net investment income — — 30.9 30.9
Net realized and change in unrealized investment gains — — 19.9 19.9
Net other revenues 0.3 0.9 28.9 30.1
General and administrative expenses (0.1) (2.3) (8.6) (11.0)
Interest expense — — (9.8) (9.8)
Pre-tax income $ 29.7 $ 30.0 $ 61.3 $ 121.0
For the Nine Months Ended September 30, 2012
Specialty
Products (1) Industries Specialty (2)
Investing, Financing
and
Corporate Total
Earned premiums $ 449.2 $ 396.8 $ — $ 846.0
Loss and loss adjustment expenses (245.7) (206.8) — (452.5) Policy acquisition expenses (111.6) (74.0) — (185.6) Other underwriting expenses (67.7) (78.5) — (146.2)
Underwriting income 24.2 37.5 — 61.7
Net investment income — — 41.5 41.5
Net realized and change in unrealized investment gains — — 57.9 57.9 Net other revenues (expenses) 0.4 (1.0) 0.5 (0.1) General and administrative expenses — (1.4) (8.3) (9.7)
Interest expense — — (12.1) (12.1)
ONEBEACON INSURANCE GROUP, LTD. SUMMARY OF RATIOS AND PREMIUMS
($ in millions) (Unaudited) Three Months Ended September 30, 2013
Specialty
Products IndustriesSpecialty Consolidated Insurance (1)
Net written premiums $ 172.0 $ 142.1 $ 314.1
Earned premiums $ 132.2 $ 146.7 $ 278.9
Underwriting ratios
Loss and loss adjustment expense ratio 63.7% 56.9% 60.1%
Expense ratio 36.7% 35.4% 36.0%
Combined ratio 100.4% 92.3% 96.1%
Three Months Ended September 30, 2012
Specialty
Products IndustriesSpecialty Consolidated Insurance (1)
Net written premiums $ 203.9 $ 131.3 $ 335.2
Earned premiums $ 157.4 $ 136.5 $ 293.9
Underwriting ratios
Loss and loss adjustment expense ratio 57.4 % 54.4 % 56.0 %
Expense ratio 39.5 % 37.9 % 38.8 %
Combined ratio 96.9 % 92.3 % 94.8 %
Nine Months Ended September 30, 2013
Specialty
Products IndustriesSpecialty Consolidated Insurance (1)
Net written premiums $ 393.3 $ 432.8 $ 826.1
Earned premiums $ 426.9 $ 419.3 $ 846.2
Underwriting ratios
Loss and loss adjustment expense ratio 56.4% 55.6% 56.0%
Expense ratio 36.7% 36.9% 36.8%
Combined ratio 93.1% 92.5% 92.8%
Nine Months Ended September 30, 2012
Specialty
Products IndustriesSpecialty Consolidated Insurance (1)
Net written premiums $ 510.3 $ 420.1 $ 930.4
Earned premiums $ 449.2 $ 396.8 $ 846.0
Underwriting ratios
Loss and loss adjustment expense ratio 54.7 % 52.1 % 53.5 %
Expense ratio 39.9 % 38.4 % 39.2 %
ONEBEACON INSURANCE GROUP, LTD.
BOOK VALUE PER SHARE
(in millions, except per share amounts)
(Unaudited)
September 30, June 30, December 31, September 30,
2013 2013 2012 2012
Numerator
OneBeacon's common shareholders' equity $ 1,062.1 $ 1,042.1 $ 1,014.5 $ 1,048.4
Denominator
Common shares outstanding 95.4 95.4 95.4 95.4
Book value per share $ 11.13 $ 10.92 $ 10.63 $ 10.99
Change in book value per share, including dividends, in the
quarter 3.8%
Change in book value per share, including dividends, in the last
twelve months on an IRR basis(1) 9.2%
(1) IRR calculated based on beginning book value per share, dividends paid, and ending book value per share. Includes dividends of $0.84
ONEBEACON INSURANCE GROUP, LTD.
COMPREHENSIVE INCOME (LOSS), NET INCOME (LOSS), AND OPERATING INCOME FROM CONTINUING
OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30, Nine Months EndedSeptember 30, Twelve Months EndedSeptember 30,
2013 2012 2013 2012 2013
Comprehensive income (loss) attributable to
OneBeacon's common shareholders $ 39.3 $ (64.2) $ 105.1 $ (7.6) $ 90.6
Net income (loss) attributable to OneBeacon's common
shareholders $ 39.1 $ (62.2) $ 104.6 $ (5.9) $ 91.3
Weighted average number of common shares outstanding (1) 94.5 94.5 94.5 94.5 94.5
Net income (loss) attributable to OneBeacon's common
shareholders per share $ 0.41 $ (0.65) $ 1.09 $ (0.07) $ 0.95
Net income (loss) attributable to OneBeacon's common
shareholders $ 39.1 $ (62.2) $ 104.6 $ (5.9) $ 91.3
Less:
Net realized and change in unrealized investment gains (17.0) (40.0) (19.9) (57.9) (17.7)
Tax effect on net realized and change in unrealized
investment gains 6.0 14.0 7.0 20.3 6.2
(Income) loss from discontinued operations, net of tax (0.3) 15.8 (0.3) 24.8 (0.8)
Loss from sale of discontinued operations, net of tax — 91.0 — 91.0 —
Operating income (2) $ 27.8 $ 18.6 $ 91.4 $ 72.3 $ 79.0
Weighted average number of common shares outstanding (1) 94.5 94.5 94.5 94.5 94.5
Operating income per share (2) $ 0.29 $ 0.19 $ 0.97 $ 0.76 $ 0.84
(1) Operating income per share and related weighted average number of common shares outstanding include the impact of unvested restricted
shares.
ONEBEACON INSURANCE GROUP, LTD.
COMPREHENSIVE AND OPERATING RETURNS FROM CONTINUING OPERATIONS ON AVERAGE EQUITY
($ in millions)
(Unaudited)
Twelve Months Ended September 30, 2013 Numerator:[A] Comprehensive income attributable to OneBeacon’s common shareholders $ 90.6
[B] Operating income (1) $ 79.0
As of
September 30, 2013 September 30, 2012As of Average
Denominator:
[C] OneBeacon’s common shareholders’ equity $ 1,062.1 $ 1,048.4 $ 1,055.3 Less:
Net unrealized gains and net foreign currency gains and losses on
investments (2) (113.3) (130.7)
Tax effect on net unrealized gains and net foreign currency gains
and losses on investments 39.7 45.7
Accumulated other comprehensive loss, after tax 13.3 12.6 [D] Adjusted OneBeacon's common shareholders' equity excluding
net unrealized investment gains, after tax, and accumulated other
comprehensive loss (1) $ 1,001.8 $ 976.0 $ 988.9
Returns:
Comprehensive return on average OneBeacon's common shareholders' equity [ A / C ] 8.6%
Operating return on average adjusted OneBeacon's common shareholders' equity excluding net
unrealized investment gains, after tax, and accumulated other comprehensive loss [ B / D ] 8.0%
(1) Represent non-GAAP financial measures. See discussion of Non-GAAP financial measures.
(2) Net unrealized gains and net foreign currency gains and losses on investments as of September 30, 2013 and 2012 include net unrealized