White Mountains Insurance Group Ltd. swung to a profit of $100 million for the fourth quarter of 2009, having posted a net loss of $213 million during the same period in 2008.

The Bermuda-based re/insurer recorded a net income of $470 million last year versus a net loss of $555 million the year prior, while adjusted book value per share rose 18 percent in 2009, driven by strong investment and underwriting results. The company's investment portfolio increased 10 percent in US dollars and eight percent in local currencies.

The company's insurance operation OneBeacon saw book value per share grow 31 percent as a result of strong investment returns and a 94 percent combined ratio following the sale of its personal and non-specialty commercial lines businesses.

Ray Barrette, chairman and CEO of White Mountains, said: "These results were achieved despite a 'de-risked' portfolio with few common stocks. Our fixed income team reinvested the bulk of the proceeds from equity sales into corporate bonds to produce a total return of 18 percent on that portfolio.

"All in all, I am quite pleased with our results for the year. We have strong underwriting operations and we have a solid investment portfolio with much liquidity. We have restored our financial flexibility and intend to restart our existing share repurchase program."

OneBeacon's book value per share increased six percent in the quarter and 31 percent for the year, including dividends.

Its GAAP combined ratio for the fourth quarter of 2009 was 94 percent compared to 86 percent for the fourth quarter of 2008, while the GAAP combined ratio for 2009 was 94 percent compared to 95 percent for 2008.

OneBeacon's 2009 results include pre-tax proceeds of $23 million, reflected in other revenues, from the sale of the renewal rights on its non-specialty commercial lines business to The Hanover Insurance Group that was completed during the fourth quarter.

Mike Miller, CEO of OneBeacon, said: "We are pleased with our performance on every front in 2009. We finished the year with strong results, including 31 percent growth in book value and a 94 percent GAAP combined ratio for both the quarter and the full year.

>"Investment returns were excellent, with a one percent return for the fourth quarter and 10 percent for the year. We enter 2010 with specialty business units that are performing [JUMP]<*t(0,0," ")>well and positioned for continued success."

White Mountains Re's GAAP combined ratio for the fourth quarter of 2009 was 74 percent compared to 88 percent for the prior-year period. The unit's combined ratio for 2009 was 80 percent compared to 106 percent for 2008, mainly due to lower catastrophe losses, $30 million of favourable loss reserve development last year compared to $80 million the year previous, and improved accident year results.

>White Mountains Re's 2009 results included $57 million of catastrophe losses, net of reinsurance and reinstatements, primarily from summer windstorms in Europe and European winter storm Klaus, versus $156 million in 2008, largely from Hurricane Ike and European hailstorms.

>Allan Waters, CEO of White Mountains Re, said: "Our 2009 financial results were strong, benefiting from the absence of North American hurricane losses this year. In a generally softening market, we continued to exercise underwriting discipline in all lines of business.

"For the January 1, 2010 renewals, rates were flat to slightly down in most lines but improved significantly in the trade credit line. Overall, our January 1 portfolio was adequately priced and we are well positioned to react to business opportunities in 2010 and beyond. While the earthquake in Haiti is a tragic event, our financial exposure there will likely be small."

l Moody's has confirmed the A2 insurance financial strength ratings of the OneBeacon Insurance Group inter-company pool members and the Baa2 senior debt rating of its intermediate holding company, OneBeacon US Holdings Inc. following the company's announcement that it plans to sell its standard personal lines business to Tower Group Inc. for approximately $180 million. The outlook on the ratings is negative.