Bermuda-based White Mountains Insurance Group Ltd. scraped a $2.5 million profit in the second quarter, compared to more than $180 million in the same period last year.

The group, which comprises reinsurer White Mountains Re and insurers OneBeacon and Esurance, said its book value per share — its preferred measure of performance — dropped one percent to $406 during the quarter.

Chairman and chief executive officer Ray Barrette said: "We had an OK quarter. Adjusted book value per share declined one percent, mostly due to the impact of a strengthening dollar on WMRe Sirius that reduced our book value per share by $7.

"We remain enthusiastic about our large non-US dollar investment in WMRe Sirius. Otherwise, we had small gains from investments and underwriting."

White Mountains Re reported a 94 percent combined ratio, impacted by an additional $20 million of losses from the Chile earthquake in February. In addition, the reinsurer was hit by a $9 million loss from the Deepwater Horizon oil rig explosion.

OneBeacon reported a 97 percent combined ratio and closed the sale of its personal lines business to Tower Group on July 1, significantly reducing White Mountains' investment in a business with falling returns and large catastrophe exposures. The sale will result in a $19 million after-tax gain for White Mountains in the third quarter.

Esurance had an improved quarter with a 101 percent adjusted combined ratio and premium growth of eight percent. But the company said Esurance saw a greater incidence of large injury claims, a decline in the average premium per policy on new business, and an increase in catastrophe claims.

White Mountains' shares closed at $314.05 on Friday, far below its $406 per share book value, a discount which Mr. Barrette said was encouraging the company to continue buying back its own shares.

"We continue to pursue many value enhancing opportunities, but with our shares trading at these prices, we believe buying shares back is the best use of our undeployed capital for now," Mr. Barrette said.

Chief financial officer David Foy also commented on the company's undeployed capital.

"At the investor day in May, I mentioned that undeployed capital would grow to $1.2 billion to $1.3 billion this year absent capital management activities," Mr. Foy said. "This was accomplished as of July 1 when the OneBeacon Personal Lines transaction closed. We have utilised about $200 million to repurchase debt at OneBeacon and over $100 million to repurchase White Mountains shares, leaving us with roughly $900 million in the consolidated organisation.

"We expect to continue to repurchase shares in the second half of the year."