OneBeacon Insurance: Investor Financial Supplement

The following excerpt is from the company's SEC filing.

Following OneBeacon's announcement of the Runoff Transaction, A.M. Best, Fitch, Moody's and Standard & Poor's each issued a press release regarding the ratings implications. A.M. Best placed the subsidiaries being sold in the Runoff Transaction (the "Runoff Subsidiaries") under review with negative implications; Fitch placed the Runoff Subsidiaries on credit watch negative; and Moody's assigned a negative outlook. Standard & Poor's downgraded and subsequently, at the request of OneBeacon, withdrew its rating on the Runoff Subsidiaries. At the same time, all four ratings agencies affirmed the ratings of the remaining subsidiaries (the "Ongoing Subsidiaries") with stable Outlook. The above tables summarize the ratings related to the entities supporting the Ongoing Subsidiaries and, separately the Runoff Subsidiaries.

This report is for informational purposes only and should be read in conjunction with documents filed by OneBeacon Insurance Group, Ltd. (the Company) with the U.S. Securities and Exchange Commission, including the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

•Specialty Products is a collection of niche businesses focused on providing U.S. customers distinct specialty insurance products. Specialty Products includes 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 exited on January 1, 2013.

•Specialty Industries is a collection of niche businesses providing distinct solutions to targeted industry sectors. Specialty Industries includes OneBeacon Entertainment, International Marine Underwriters, OneBeacon Technology Insurance, OneBeacon Accident Group, OneBeacon Government Risks, and OneBeacon Energy Group, which was exited in the first quarter of 2013.

•Investing, Financing and Corporate includes the investing and financing activities for OneBeacon on a consolidated basis, and certain other corporate activities conducted through the top holding company, OneBeacon Insurance Group, Ltd., and its intermediate subsidiaries.

•On October 17, 2012, one of the Company's indirect wholly-owned subsidiaries, OneBeacon Insurance Group LLC, entered into a definitive agreement with Trebuchet US Holdings, Inc., a wholly-owned subsidiary of Armour Group Holdings Limited, to sell its runoff business. OneBeacon's runoff business includes the results of OneBeacon's remaining non-specialty commercial lines business and certain other run-off business, including asbestos and environmental reserves, as well as certain purchase accounting adjustments related to the OneBeacon Acquisition (the "Runoff Business", the sale of which is referred to as the "Runoff Transaction"). The Runoff Business has been included within discontinued operations, with the prior periods reclassified to conform to the current presentation.

•On February 22, 2012, OneBeacon completed the sale of its AutoOne Insurance (“AutoOne”) business to Interboro Holdings, Inc. (“Interboro”). Formed in 2001, the AutoOne division has offered products and services to assigned risk markets primarily in New York and New Jersey. AutoOne has been included within discontinued operations in the statements of operations with the prior periods reclassified to conform to the current presentation.

•The key measure of relative underwriting performance for an insurance company is the combined ratio. The combined ratio is calculated by adding the ratio of incurred loss and loss adjustment expenses ("LAE") to earned premiums (the “loss and LAE ratio”) and the ratio of policy acquisition and other underwriting expenses to earned premiums (the “expense ratio”). A combined ratio under 100% indicates that an insurance company is generating an underwriting profit. However, when considering investment income and investment gains or losses, insurance companies operating at a combined ratio of greater than 100% can be profitable.

•This financial supplement includes non-GAAP financial measures that have been reconciled to their most comparable GAAP financial measures. Management believes these measures to be useful supplements to the comparable GAAP measures in evaluating the Company's financial performance.

•Operating income (loss) is a non-GAAP financial measure that excludes net realized and unrealized investment gains or losses, income (loss) from discontinued operations, gain or (loss) from sale of discontinued operations, and the related tax effects, from net income (loss) attributable to OneBeacon's common shareholders. OneBeacon believes that this non-GAAP financial measure provides a useful alternative picture of the underlying operating activities of the company to the GAAP measure of net income (loss) attributable to OneBeacon's common shareholders, as it removes variability in the timing of realized and unrealized investment gains and losses which may be heavily influenced by investment market conditions and also removes the impact related to discontinued operations. Although key to the company's overall financial performance, OneBeacon believes that net realized and unrealized investment gains or losses are largely independent of the underwriting decision-making process. Management also believes that the impact of operations that have been discontinued are not relevant to evaluating financial performance. The reconciliation of net income (loss) attributable to OneBeacon's common shareholders to operating income (loss) is included on page 3.

•Operating income (loss) per share is calculated by dividing operating income (loss) (a non-GAAP financial measure described above) by the weighted average number of common shares outstanding. Management believes that operating income (loss) per share is a useful alternative picture of the underlying operating activities of the company as it removes variability in the timing of investment gains and losses which may be heavily influenced by investment market conditions. Management also believes that the impact of operations that have been discontinued are not relevant to evaluating financial performance. Net income (loss) attributable to OneBeacon's common shareholders per share is the most directly comparable GAAP measure. As described above, the reconciliation of net income (loss) attributable to OneBeacon's common shareholders to operating income (loss) is included on page 3. The calculation of operating income (loss) per share is also included on page 3.

•Adjusted OneBeacon's common shareholders' equity excluding net unrealized investment gains and losses, after-tax, and accumulated other comprehensive income/loss (AOCI/L), the average of which is used in calculating operating returns, is derived by excluding net unrealized gains and losses and net foreign currency gains and losses on investments, after tax, and AOCI/L, after tax, from OneBeacon's common shareholders' equity. For the reasons described above, OneBeacon believes that it is appropriate to remove the variability in net unrealized gains and losses and net foreign currency gains and losses on investments and other comprehensive income and loss items when analyzing certain performance measures. The reconciliation of OneBeacon's common shareholders' equity, the most closely comparable GAAP measure, to adjusted OneBeacon's common shareholders' equity excluding net unrealized investment gains and losses, after tax, and AOCI/L, after tax, is included on page 4.

•Pre-tax operating income (loss) before interest expense on debt is a non-GAAP financial measure that represents pre-tax income from continuing operations less net realized and change in unrealized investment gains as well as interest expense on debt from pre-tax income from continuing operations. Management believes that pre-tax operating income before interest expense on debt provides a useful alternative picture of the underlying operating activities of the Company to the GAAP measure of pre-tax income from continuing operations, as it removes variability in the timing of investment gains which may be heavily influenced by investment market conditions. Although key to the Company's overall financial performance, management believes that realized and unrealized investment gains or losses are largely independent of the underwriting decision-making process. The reconciliation of pre-tax income from continuing operations to pre-tax operating income before interest expense on debt is included on page 16.                                                    

•Interest coverage is calculated by dividing pre-tax operating income before interest expense on debt (a non-GAAP financial measure described above) by interest expense on debt. Management believes that interest coverage is a useful supplement to understanding the Company's capital position. The reconciliation of the numerator to the most closely comparable GAAP measure is described above. The calculation of interest coverage is included on page 16.

  Three Months Ended        Dec 31, Mar 31, Jun 30, Sep 30, Dec 31,        2012 2013 2013 2013 2013      Highlights                Comprehensive (loss) income $(14.5) $68.5 $(2.7) $39.3 $61.5      Net (loss) income (13.3) 68.4 (2.9) 39.1 41.4      Operating (loss) income  (12.4) 49.4 14.2 27.8 22.5                                   As ofDec 31, 2013 As ofDec 31, 2012 % ChangePer Share Amounts                Book value per share [1]           $11.58 $10.63 8.9%Change in book value per share, including dividends, in the quarter [2]               5.9%Change in book value per share, including dividends, in the last twelve months on an IRR basis [3]               17.3%Common shares outstanding            95.4 95.4 Operating income (loss) per share (basic & diluted) (see p.3) [4] $(0.13) $0.52 $0.15 $0.29 $0.24      Weighted average number of common shares outstanding (basic & diluted) [4] 94.5 94.5 94.5 94.5 94.5                                        Financial Ratios                Underwriting ratios:                Loss and LAE ratio 69.1% 52.0% 55.9% 60.1% 54.1%      Expense ratio 42.8% 36.3% 38.2% 36.0% 37.2%      Combined ratio 111.9% 88.3% 94.1% 96.1% 91.3%                                   As ofDec 31, 2013[5] As ofDec 31, 2012[5] % ChangeBalance Sheet                Total investments            $2,364.9 $2,291.5 3.2%Total OneBeacon's common shareholders' equity            $1,104.3 $1,014.5 8.9%Ratio of debt to total capital            19.9% 21.3% (1.4) pts                         

[1] Represents OneBeacon's common shareholders' equity divided by common shares outstanding.[2] Includes a quarterly dividend paid of $0.21 per share.[3] Internal rate of return (IRR) calculated based on beginning book value per share, dividends paid and ending book value per share. Includes dividends of $0.84 per share.[4] Operating income (loss) per share and related weighted average number of common shares outstanding include the impact of unvested restricted shares.[5] Excludes $236.3 million and $338.1 million of investments that have been classified as held for sale as of December 31, 2013 and December 31, 2012, respectively.

  Three Months Ended Year Ended   Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31,    2012 2013 2013 2013 2013 2012 2013 Earned premiums $286.0 $286.5 $280.8 $278.9 $274.2 $1,132.0 $1,120.4 Net investment income 12.1 9.4 11.4 10.1 10.2 53.6 41.1 Net realized and change in unrealized investment gains (2.2) 28.4 (25.5) 17.0 29.5 55.7 49.4 Net other revenues [1] (0.4) 24.0 0.6 5.5 1.1 (0.5) 31.2 Total revenues 295.5 348.3 267.3 311.5 315.0 1,240.8 1,242.1 Loss and loss adjustment expenses 197.5 148.9 157.0 167.8 148.4 650.0 622.1 Policy acquisition expenses 63.8 54.8 52.5 53.6 48.0 249.4 208.9 Other underwriting expenses 59.0 49.3 54.6 46.8 54.1 205.2 204.8 General and administrative expenses 3.7 4.0 2.9 4.1 1.0 13.4 12.0 Interest expense 4.8 3.2 3.3 3.3 3.2 16.9 13.0 Total expenses 328.8 260.2 270.3 275.6 254.7 1,134.91,060.8 Pre-tax (loss) income (33.3) 88.1 (3.0) 35.9 60.3 105.9181.3 Income tax (expense) benefit 19.7 (19.8) 1.0 2.9 (18.4) (8.4) (34.3) Net (loss) income including noncontrolling interests (13.6) 68.3 (2.0) 38.8 41.9 97.5 147.0 Income (loss) from discontinued operations, net of tax [2] 0.5 0.5 (0.5) 0.3 (46.9) (24.3) (46.6) Gain (loss) from sale of discontinued operations, net of tax — — — — 46.6 (91.0) 46.6 Net (loss) income including noncontrolling interests (13.1) 68.8 (2.5) 39.1 41.6 (17.8) 147.0 Less: Net income attributable to noncontrolling interests (0.2) (0.4) (0.4) — (0.2) (1.4) (1.0) Net (loss) income attributable to OneBeacon’s common shareholders (13.3) 68.4 (2.9) 39.1 41.4 (19.2) 146.0 Other comprehensive (loss) income items (1.2) 0.1 0.2 0.2 20.1 (2.9) 20.6 Comprehensive (loss) income attributable to OneBeacon’s common shareholders $(14.5) $68.5 $(2.7) $39.3 $61.5 $(22.1) $166.6 

[1] The three months ended March 31, 2013 and year ended December 31, 2013 include other revenues of $23.0 million related to the gain on sale of Essentia, net of transaction costs. The three months ended September 30, 2013 and year ended December 31, 2013 include other revenues of $4.0 million related to a software licensing agreement.

[2] Results for the Runoff Business and AutoOne are reported as discontinued operations for all periods presented. The AutoOne transaction closed in February 2012.

  Three Months Ended Year Ended  Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31,  2012 2013 2013 2013 2013 2012 2013Comprehensive (loss) income attributable to OneBeacon’s common shareholders $(14.5) $68.5 $(2.7) $39.3 $61.5 $(22.1) $166.6               Net (loss) income attributable to OneBeacon’s common shareholders $(13.3) $68.4 $(2.9) $39.1 $41.4 $(19.2) $146.0               Weighted average number of common shares outstanding [1] 94.5 94.5 94.5 94.5 94.5 94.5 94.5               Net (loss) income attributable to OneBeacon’s common shareholders per share $(0.14) $0.71 $(0.03) $0.41 $0.43 $(0.21) $1.52               Net (loss) income attributable to OneBeacon’s common shareholders $(13.3) $68.4 $(2.9) $39.1 $41.4 $(19.2) $146.0Less:              Net realized and change in unrealized investment (gains) losses 2.2 (28.4) 25.5 (17.0) (29.5) (55.7) (49.4)Tax effect on net realized and change in unrealized investment gains (losses) (0.8) 9.9 (8.9) 6.0 10.3 19.5 17.3(Income) loss from discontinued operations, net of tax (0.5) (0.5) 0.5 (0.3) 46.9 24.3 46.6(Gain) loss from sale of discontinued operations, net of tax — — — — (46.6) 91.0 (46.6)Operating (loss) income [2] $(12.4) $49.4 $14.2 $27.8 $22.5 $59.9 $113.9               Weighted average number of common shares outstanding [1] 94.5 94.5 94.5 94.5 94.5 94.5 94.5               Operating (loss) income per share [2] $(0.13) $0.52 $0.15 $0.29 $0.24 $0.63 $1.21

  YearEndedDec 31, 2013Numerator:  [A] Comprehensive income attributable to OneBeacon’s common shareholders  $166.6     [B] Operating income [1]  $113.9  As of As of    Dec 31, 2013 Dec 31, 2012 AverageDenominator:      [C] OneBeacon’s common shareholders’ equity $1,104.3 $1,014.5 $1,059.4  Less:        Net unrealized gains and losses and net foreign currency gains and losses on investments [2] (124.6) (119.6)    Tax effect on net unrealized gains and losses and net foreign currency gains and losses on investments 43.6 41.9    Accumulated other comprehensive (income) loss (AOCI), after-tax (6.8) 13.8  [D] Adjusted OneBeacon’s common shareholders’ equity excluding cumulative net unrealized investment gains and losses and AOCI after tax [1] $1,016.5 $950.6 $983.6Returns:        Comprehensive return on average OneBeacon's common shareholders' equity [ A / C ] 15.7%       Operating return on average adjusted OneBeacon's common shareholders' equity excluding cumulative net unrealized investment gains and losses and AOCI after tax [ B / D ]  11.6%

[2] Net unrealized gains and losses and net foreign currency gains and losses on investments as of December 31, 2013 and 2012 includes unrealized gains and losses on investments held as well as deferred gains and losses relating to sales of investments to entities under common control.

  As of  Dec 31, 2013 Dec 31, 2012Assets    Investment securities    Fixed maturity investments $1,700.9 $1,593.3Short-term investments 157.0 232.8Common equity securities 336.9 259.0Convertible bonds 30.5 62.6Other investments 139.6 143.8Total investment securities 2,364.9 2,291.5Cash 168.1 43.9Reinsurance recoverables 89.9 110.6Premiums receivable 228.2 225.6Deferred acquisition costs 103.7 123.9Net deferred tax asset 90.6 137.8Investment income accrued 10.1 12.1Accounts receivable on unsettled investment sales 3.3 2.1Other assets 272.7 227.2Assets held for sale [1] 1,880.1 2,226.8Total assets $5,211.6 $5,401.5Liabilities    Loss and LAE reserves $1,054.3 $1,000.0Unearned premiums 544.9 573.8Debt 274.7 274.7Accounts payable on unsettled investment purchases 11.6 6.2Other liabilities 338.6 302.7Liabilities held for sale [1] 1,880.1 2,226.8Total liabilities 4,104.2 4,384.2OneBeacon’s common shareholders’ equity and noncontrolling interests    OneBeacon’s common shareholders’ equity:    Common shares and paid-in surplus, 95,404,138 shares issued and outstanding 1,022.5 1,019.1Retained earnings 75.0 9.2Accumulated other comprehensive income (loss), after tax:  6.8 (13.8)Total OneBeacon’s common shareholders’ equity 1,104.3 1,014.5Total noncontrolling interests 3.1 2.8Total OneBeacon’s common shareholders’ equity and noncontrolling interests 1,107.4 1,017.3Total liabilities, OneBeacon’s common shareholders’ equity and noncontrolling interests $5,211.6 $5,401.5     Total OneBeacon’s common shareholders’ equity $1,104.3 $1,014.5Common shares outstanding 95.4 95.4Book value per share $11.58 $10.63

[1] Assets and liabilities being sold as part of the Runoff Transaction are presented separately in the December 31, 2013 and 2012 consolidated balance sheet.

  Three Months Ended Year Ended   Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31,   2012 2013 2013 2013 2013 2012 2013 Net written premiums $248.8 $265.1 $246.9 $314.1 $262.5 $1,179.2 $1,088.6 Earned premiums 286.0 286.5 280.8 278.9 274.2 1,132.0 1,120.4                 Total loss and LAE (197.5) (148.9) (157.0) (167.8) (148.4) (650.0) (622.1) Policy acquisition expenses (63.8) (54.8) (52.5) (53.6) (48.0) (249.4) (208.9) Other underwriting expenses (59.0) (49.3) (54.6) (46.8) (54.1) (205.2) (204.8) Underwriting (loss) income (34.3) 33.5 16.7 10.7 23.7 27.4 84.6                 Net investment income 12.1 9.4 11.4 10.1 10.2 53.6 41.1 Net realized and change in unrealized investment gains  (2.2) 28.4 (25.5) 17.0 29.5 55.7 49.4 Net other (expenses) revenues  (0.4) 24.0 0.6 5.5 1.1 (0.5) 31.2 General and administrative expenses (3.7) (4.0) (2.9) (4.1) (1.0) (13.4) (12.0) Interest expense (4.8) (3.2) (3.3) (3.3) (3.2) (16.9) (13.0) Pre-tax (loss) income from continuing operations $(33.3) $88.1 $(3.0) $35.9 $60.3 $105.9 $181.3                                                 Underwriting ratios [2]               Loss and LAE ratio               Current year:               Non-cat loss and LAE  56.8% 51.9 % 55.0 % 57.5% 54.4 % 53.9 % 54.7% Catastrophe loss and LAE 12.2% 1.1 % 1.3 % 1.2% (0.3)% 4.2 % 0.8% Total loss and LAE 69.0% 53.0 % 56.3 % 58.7% 54.1 % 58.1 % 55.5% Prior year: unfav (fav)               Total loss and LAE 0.1% (1.0)% (0.4)% 1.4% — % (0.7)% —% Total loss and LAE ratio 69.1% 52.0 % 55.9 % 60.1% 54.1 % 57.4 % 55.5%                 Policy acquisition expenses 22.3% 19.1 % 18.7 % 19.2% 17.5 % 22.0 % 18.6% Other underwriting expenses 20.5% 17.2 % 19.5 % 16.8% 19.7 % 18.1 % 18.3% Total expense ratio 42.8% 36.3 % 38.2 % 36.0% 37.2 % 40.1 % 36.9%                 Total combined ratio 111.9% 88.3 % 94.1 % 96.1% 91.3 % 97.5 % 92.4% 

[1] Results for Runoff and AutoOne are reported as discontinued operations for all periods presented. The AutoOne transaction closed in February 2012. Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation.

[2] The combined ratio is calculated by adding the ratio of incurred loss and loss adjustment expenses to earned premiums ("loss and LAE ratio") and the ratio of policy acquisition and other underwriting expenses to earned premiums ("expense ratio").

  Specialty Products [1] Specialty Industries [2] Investing, Financing and Corporate Consolidated  2013 2012 2013 2012 2013 2012 2013 2012Earned premiums $126.6 $154.8 $147.6 $131.2 $— $— $274.2 $286.0Loss and LAE (71.7) (99.9) (76.7) (97.6) — — (148.4) (197.5)Policy acquisition expenses (22.0) (38.7) (26.0) (25.1) — — (48.0) (63.8)Other underwriting expenses (24.9) (28.5) (29.2) (30.5) — — (54.1) (59.0)Underwriting income (loss) 8.0 (12.3) 15.7 (22.0) — — 23.7 (34.3)                 Net investment income — — — — 10.2 12.1 10.2 12.1Net realized and change in unrealized investment gains — — — — 29.5 (2.2) 29.5 (2.2)Net other revenues (expenses) — — 0.2 0.2 0.9 (0.6) 1.1 (0.4)General and administrative expenses 0.1 — (0.1) (0.5) (1.0) (3.2) (1.0) (3.7)Interest expense — — — — (3.2) (4.8) (3.2) (4.8)Pre-tax income (loss) from continuing operations $8.1 $(12.3) $15.8 $(22.3) $36.4 $1.3 $60.3 $(33.3)                 Underwriting Ratios [3]                Loss and LAE ratio 56.6% 64.5% 52.0% 74.4%     54.1% 69.1%Expense ratio 37.1% 43.2% 37.4% 42.4%     37.2% 42.8%Total combined ratio 93.7% 107.7% 89.4% 116.8%     91.3% 111.9%

[3] The combined ratio is calculated by adding the ratio of incurred loss and loss adjustment expenses to earned premiums ("loss and LAE ratio") and the ratio of policy acquisition and other underwriting expenses to earned premiums ("expense ratio").

  Specialty Products [1] Specialty Industries [2] Investing, Financing and Corporate Consolidated  2013 2012 2013 2012 2013 2012 2013 2012Earned premiums $553.5 $604.0 $566.9 $528.0 $— $— $1,120.4 $1,132.0Loss and LAE (312.3) (345.6) (309.8) (304.4) — — (622.1) (650.0)Policy acquisition expenses (106.3) (150.3) (102.6) (99.1) — — (208.9) (249.4)Other underwriting expenses (97.4) (96.2) (107.4) (109.0) — — (204.8) (205.2)Underwriting income 37.5 11.9 47.1 15.5 — — 84.6 27.4                 Net investment income — — — — 41.1 53.6 41.1 53.6Net realized and change in unrealized investment gains — — — — 49.4 55.7 49.4 55.7Net other revenues (expenses) 0.3 0.4 1.1 (0.8) 29.8 (0.1) 31.2 (0.5)General and administrative expenses — — (2.4) (1.9) (9.6) (11.5) (12.0) (13.4)Interest expense — — — — (13.0) (16.9) (13.0) (16.9)Pre-tax income from continuing operations $37.8 $12.3 $45.8 $12.8 $97.7 $80.8 $181.3 $105.9                 Underwriting Ratios [3]                Loss and LAE ratio 56.4% 57.2% 54.7% 57.7%     55.5% 57.4%Expense ratio 36.8% 40.7% 37.0% 39.4%     36.9% 40.1%Total combined ratio 93.2% 97.9% 91.7% 97.1%     92.4% 97.5%

  Three months ended December, 31 Year ended December, 31  2013 2012 2013 2012Gross beginning loss and LAE reserves [1] $1,052.9 $911.6 $1,000.0 $3,358.6Less beginning reinsurance recoverable on unpaid losses [1] (80.2) (41.3) (107.3) (2,167.5)Net beginning loss and LAE reserves 972.7 870.3 892.7 1,191.1         Loss and LAE incurred relating to:        Current year losses 148.3 197.5 622.1 657.4Prior year losses 0.1 — — (7.4)Total incurred loss and LAE from continuing operations 148.4 197.5 622.1 650.0          Loss and LAE paid relating to:        Current year losses (73.5) (101.6) (188.6) (224.6)Prior year losses (73.4) (74.3) (352.1) (340.5)Total loss and LAE payments from continuing operations (146.9) (175.9) (540.7) (565.1)         Net loss and LAE reserves 974.2 891.9 974.1 1,276.0Total incurred loss and LAE from discontinued operations 71.4 — 78.9 48.4Total loss and LAE payments from discontinued operations (13.7) (43.7) (102.3) (220.8)Net loss and LAE reserves 1,031.9 848.2 950.7 1,103.6Net change in loss and LAE reserves reported in liabilities held for sale [2] [3] (57.8) 44.5 23.4 (147.1)Net loss and LAE reserves sold [3] — — — (63.8)Net ending loss and LAE reserves 974.1 892.7 974.1 892.7Plus ending reinsurance recoverable on unpaid losses [1] 80.2 107.3 80.2 107.3Gross ending loss and LAE reserves [1] $1,054.3 $1,000.0 $1,054.3 $1,000.0         Earned premiums $274.2 $286.0 $1,120.4 $1,132.0Calendar year loss and LAE paid ratio 53.6% 61.5% 48.3% 49.9 %Calendar year loss and LAE incurred ratio 54.1% 69.1% 55.5% 57.4 %(Fav) / Unfav prior accident year development ratio —% —% —% (0.7)%Current accident year loss and LAE paid to incurred ratio 49.6% 51.4% 30.3% 34.2 %

[1] Gross beginning loss and LAE reserves and reinsurance recoverables on unpaid losses rollforward include purchase accounting adjustments relating to the OneBeacon acquisition. As further described below, the remaining fair value reductions to both loss and LAE reserves and reinsurance recoverables on unpaid losses were reclassified to held for sale.

[2] Assets and liabilities being sold as part of the Runoff Transaction are presented separately in the consolidated balance sheets for all periods presented.

  Three Months Ended Year Ended   Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31,   2012 2013 2013 2013 2013 2012 2013 Net written premiums $120.6 $123.9 $97.4 $172.0 $116.3 $630.9 $509.6 Earned premiums 154.8 153.7 141.0 132.2 126.6 604.0 553.5                 Total loss and LAE (99.9) (78.6) (77.8) (84.2) (71.7) (345.6) (312.3) Policy acquisition expenses (38.7) (30.4) (26.5) (27.4) (22.0) (150.3) (106.3) Other underwriting expenses (28.5) (24.3) (27.0) (21.2) (24.9) (96.2) (97.4) Underwriting (loss) income (12.3) 20.4 9.7 (0.6) 8.0 11.9 37.5                 Net other revenues — 0.3 — — — 0.4 0.3 General and administrative expenses — — (0.1) — 0.1 — — Pre-tax (loss) income from continuing operations $(12.3) $20.7 $9.6 $(0.6) $8.1 $12.3 $37.8                                                 Underwriting ratios               Loss and LAE ratio               Current year:               Non-cat loss and LAE  53.5 % 50.5 % 53.5% 58.4% 57.3 % 53.7 % 54.7% Catastrophe loss and LAE 12.5 % 1.0 % 1.3% 0.2% — % 3.8 % 0.6% Total loss and LAE 66.0 % 51.5 % 54.8% 58.6% 57.3 % 57.5 % 55.3% Prior year: (fav) unfav                Total loss and LAE (1.5)% (0.3)% 0.3% 5.1% (0.7)% (0.3)% 1.1% Total loss and LAE ratio 64.5 % 51.2 % 55.1% 63.7% 56.6 % 57.2 % 56.4%                 Policy acquisition expenses 25.0 % 19.8 % 18.8% 20.7% 17.4 % 24.9 % 19.2% Other underwriting expenses 18.2 % 15.7 % 19.2% 16.0% 19.7 % 15.8 % 17.6% Total expense ratio 43.2 % 35.5 % 38.0% 36.7% 37.1 % 40.7 % 36.8%                 Total combined ratio 107.7 % 86.7 % 93.1% 100.4% 93.7 % 97.9 % 93.2% 

  Three Months Ended Year Ended   Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31,  Dec 31,    2012 2013 2013 2013 2013 2012 2013 Net written premiums $128.2 $141.2 $149.5 $142.1 $146.2 $548.3 $579.0 Earned premiums 131.2 132.8 139.8 146.7 147.6 528.0 566.9                 Total loss and LAE (97.6) (70.3) (79.2) (83.6) (76.7) (304.4) (309.8) Policy acquisition expenses (25.1) (24.4) (26.0) (26.2) (26.0) (99.1) (102.6) Other underwriting expenses (30.5) (25.0) (27.6) (25.6) (29.2) (109.0) (107.4) Underwriting income (loss) (22.0) 13.1 7.0 11.3 15.7 15.5 47.1                 Net other (expenses) revenues 0.2 0.2 0.1 0.6 0.2 (0.8) 1.1 General and administrative expenses (0.5) (0.6) (0.6) (1.1) (0.1) (1.9) (2.4) Pre-tax income (loss) from continuing operations $(22.3) $12.7 $6.5 $10.8 $15.8 $12.8 $45.8                                                 Underwriting ratios               Loss and LAE ratio               Current year:               Non-cat loss and LAE  60.9% 53.5 % 56.6 % 56.7 % 52.0 % 54.1 % 54.8 % Catastrophe loss and LAE 11.7% 1.2 % 1.3 % 2.1 % (0.6)% 4.7 % 1.0 % Total loss and LAE 72.6% 54.7 % 57.9 % 58.8 % 51.4 % 58.8 % 55.8 % Prior year: unfav (fav)               Total loss and LAE 1.8% (1.8)% (1.2)% (1.9)% 0.6 % (1.1)% (1.1)% Total loss and LAE ratio 74.4% 52.9 % 56.7 % 56.9 % 52.0 % 57.7 % 54.7 %                 Policy acquisition expenses 19.2% 18.3 % 18.6 % 17.9 % 17.6 % 18.8 % 18.1 % Other underwriting expenses 23.2% 18.9 % 19.7 % 17.5 % 19.8 % 20.6 % 18.9 % Total expense ratio 42.4% 37.2 % 38.3 % 35.4 % 37.4 % 39.4 % 37.0 %                 Total combined ratio 116.8% 90.1 % 95.0 % 92.3 % 89.4 % 97.1 % 91.7 % 

  Three Months Ended Year Ended   Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31,   2012 2013 2013 2013 2013 2012 2013 Net investment income $12.1 $9.4 $11.4 $10.1 $10.2 $53.6 $41.1 Net realized and change in unrealized investment gains (2.2) 28.4 (25.5) 17.0 29.5 55.7 49.4 Net other revenues (expenses) (0.6) 23.5 0.5 4.9 0.9 (0.1) 29.8 General and administrative expenses (3.2) (3.4) (2.2) (3.0) (1.0) (11.5) (9.6) Interest expense (4.8) (3.2) (3.3) (3.3) (3.2) (16.9) (13.0) Pre-tax income (loss) from continuing operations $1.3 $54.7 $(19.1) $25.7 $36.4 $80.8 $97.7 

  Three Months Ended Year Ended   Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31,  Dec 31,    2012 2013 2013 2013 2013 2012 2013 Net investment income               Fixed maturity investments $10.5 $9.9 $10.4 $10.4 $9.9 $49.1 $40.6 Short-term investments — — — — — 0.1 — Common equity securities 2.0 1.3 1.6 1.5 1.8 6.8 6.2 Convertible fixed maturity investments 1.2 0.4 0.3 0.2 0.3 4.6 1.2 Other investments — (0.3) 0.7 (0.4) (0.1) (0.4) (0.1) Total investment income 13.7 11.3 13.0 11.7 11.9 60.2 47.9 Less investment expenses 1.6 1.9 1.6 1.6 1.7 6.6 6.8 Net investment income $12.1 $9.4 $11.4 $10.1 $10.2 $53.6 $41.1                 Net realized investment gains (losses)               Fixed maturity investments $0.4 $3.9 $3.9 $(5.0) $(0.7) $27.1 $2.1 Short-term investments — — 0.1 — (0.1) — — Common equity securities 2.3 16.7 1.2 2.7 15.5 2.1 36.1 Convertible fixed maturity investments (1.6) 1.5 (1.9) — 0.7 0.4 0.3 Other investments 19.6 1.8 2.9 (1.9) 2.9 21.2 5.7 Net realized investment gains (losses) $20.7 $23.9 $6.2 $(4.2) $18.3 $50.8 $44.2                 Change in net unrealized investment gains                Fixed maturity investments $(1.4) $(4.4) $(29.8) $0.5 $(0.7) $7.2 $(34.4) Short-term investments — — — — 0.1 — 0.1 Common equity securities (5.5) 7.9 (2.4) 15.8 10.7 11.5 32.0 Convertible fixed maturity investments 1.6 (0.9) (0.7) 1.0 1.7 (0.4) 1.1 Other investments (17.5) 1.9 1.3 3.7 (0.6) (13.5) 6.3 Change in net unrealized investment gains $(22.8) $4.5 $(31.6) $21.0 $11.2 $4.8 $5.1                 Change in net unrealized foreign currency translation               Fixed maturity investments $(0.1) $— $(0.1) $0.1 $— $0.1 $— Short-term investments — — — — — — — Common equity securities — — — 0.1 — — 0.1 Convertible fixed maturity investments — — — — — — — Other investments — — — — — — — Change in net unrealized foreign currency translation $(0.1) $— $(0.1) $0.2 $— $0.1 $0.1                 Total investment return               Fixed maturity investments $9.3 $9.4 $(15.6) $6.0 $8.5 83.4 8.3 Short-term investments — — 0.1 — — 0.1 0.1 Common equity securities (1.2) 25.9 0.4 20.1 28.0 20.4 74.4 Convertible fixed maturity investments 1.2 1.0 (2.3) 1.2 2.7 4.6 2.6 Other investments 2.1 3.4 4.9 1.4 2.2 7.3 11.9 Total investment return $11.4 $39.7 $(12.5) $28.7 $41.4 $115.8 $97.3 

  Three Months Ended Year Ended  Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31,  2012 2013 2013 2013 2013 2012 [2] 2013Average market value of investments              Fixed maturity investments $1,891.4 $1,896.3 $1,885.0 $1,887.6 $1,901.5 $1,851.2 $1,900.9Short-term investments 253.5 223.6 185.2 159.0 159.5 256.4 184.4Common equity securities 277.2 277.6 297.4 313.0 332.2 273.8 303.6Convertible fixed maturity investments 67.6 50.5 34.1 30.9 31.2 74.2 38.7Other investments 150.3 144.0 144.7 145.6 142.9 153.4 143.7Total average market value $2,640.0 $2,592.0 $2,546.4 $2,536.1 $2,567.3 $2,609.0 $2,571.3               Investment returns              Fixed maturity investments 0.5 % 0.5 % (0.8)% 0.3 % 0.4 % 4.5 % 0.4 %Short-term investments — % — % 0.1 % — % — % — % 0.1 %Total fixed income 0.5 % 0.4 % (0.7)% 0.3 % 0.4 % 4.0 % 0.4 %Common equity securities (0.4)% 9.3 % 0.1 % 6.4 % 8.4 % 7.5 % 24.5 %Convertible fixed maturity investments 1.8 % 2.0 % (6.7)% 3.9 % 8.7 % 6.2 % 6.7 %Total common equity & convertible fixed maturity securities — % 8.2 % (0.6)% 6.2 % 8.4 % 7.2 % 22.5 %Other investments 1.4 % 2.4 % 3.4 % 1.0 % 1.5 % 4.8 % 8.3 %Total common equity, convertible fixed maturity securities & other investments 0.4 % 6.4 % 0.6 % 4.6 % 6.5 % 6.4 % 18.3 %               Total return 0.5 % 1.5 % (0.5)% 1.1 % 1.6 % 4.4 % 3.8 %               Average amortized cost of investments              Fixed maturity investments $1,652.7 $1,849.0 $1,855.1 $1,871.7 $1,885.4 $1,783.4 $1,872.6Short-term investments 253.5 223.6 185.2 159.0 159.5 256.4 184.4Common equity securities 236.9 236.3 253.3 262.1 267.9 241.5 252.8Convertible fixed maturity investments 65.3 47.9 32.3 28.8 27.8 70.9 35.9Other investments 118.5 114.1 113.3 111.9 107.7 121.3 111.4Total average amortized cost $2,326.9 $2,470.9 $2,439.2 $2,433.5 $2,448.3 $2,473.5 $2,457.1               Investment yield              Fixed maturity investments 0.6 % 0.5 % 0.6 % 0.6 % 0.5 % 2.7 % 2.2 %Short-term investments — % — % — % — % — % — % — %Common equity securities 0.8 % 0.6 % 0.6 % 0.6 % 0.7 % 2.8 % 2.5 %Convertible fixed maturity investments 1.8 % 0.8 % 0.9 % 0.7 % 1.1 % 6.5 % 3.3 %Other investments — % (0.3)% 0.6 % (0.4)% (0.1)% (0.3)% (0.1)%Total investment yield 0.6 % 0.5 % 0.5 % 0.5 % 0.5 % 2.4 % 1.9 %

[1] For all periods presented, average market value of investments and amortized cost of investments were calculated prior to the reclassification of assets being sold as part of the Runoff Transaction, which were required to be presented separately in the consolidated balance sheets.

[2] For the years ended December 31, 2013 and 2012, the average market value of investments and amortized cost of investments were calculated prior to the reclassification of assets being sold as part of the Runoff Transaction which were required to be presented separately in the consolidated balance sheets. The AutoOne transaction closed in February 2012.

  Dec 31,2012  Mar 31,2013  Jun 30,2013  Sep 30,2013  Dec 31,2013   Amount Percent Amount Percent Amount Percent Amount Percent Amount PercentFixed maturity investments $1,931.4 73.4% $1,861.0 72.8% $1,909.3 75.2% $1,865.8 73.6% $1,937.2 74.5%Short-term investments 232.8 8.9% 214.4 8.4% 155.9 6.1% 162.0 6.4% 157.0 6.0%Common equity securities 259.0 9.8% 296.2 11.6% 298.6 11.8% 327.5 12.9% 336.9 13.0%Convertible fixed maturity investments 62.6 2.4% 38.5 1.5% 29.8 1.2% 31.9 1.3% 30.5 1.2%Other investments 143.8 5.5% 144.4 5.7% 145.0 5.7% 146.2 5.8% 139.6 5.3%Total investments, market value $2,629.6 100.0% $2,554.5 100.0% $2,538.6 100.0% $2,533.4 100.0% $2,601.2 100.0%                     Inflation indexed treasuries $18.4 1.0% $4.1 0.2% $6.4 0.3% $0.6 —% $0.6 —%Other U.S. government obligations 179.2 9.3% 156.3 8.4% 212.4 11.1% 137.0 7.3% 130.5 6.7%Debt securities issued by industrial corporations 711.5 36.8% 746.8 40.1% 723.7 38.0% 732.2 39.3% 754.5 39.0%Municipal obligations 3.2 0.2% 3.2 0.2% 3.1 0.2% 3.0 0.2% 16.5 0.9%Asset-backed securities 927.9 48.0% 861.1 46.3% 875.4 45.8% 907.9 48.7% 949.5 49.0%Foreign government obligations 6.5 0.3% 3.9 0.2% 3.7 0.2% 2.4 0.1% 2.3 0.1%Preferred stocks 84.7 4.4% 85.6 4.6% 84.6 4.4% 82.7 4.4% 83.3 4.3%Total fixed maturity investments, market value $1,931.4 100.0% $1,861.0 100.0% $1,909.3 100.0% $1,865.8 100.0% $1,937.2 100.0%                     Government bonds $203.1 10.8% $163.5 9.0% $224.0 11.8% $139.4 7.5% $133.0 6.9%AAA/Aaa 287.8 15.3% 207.0 11.4% 225.8 11.9% 349.0 18.9% 340.3 17.7%AA/Aa 643.4 34.2% 631.4 34.8% 618.4 32.6% 482.9 26.2% 533.7 27.8%A/A 305.5 16.2% 371.5 20.5% 347.8 18.4% 424.1 22.9% 445.8 23.2%BBB/Baa 356.4 18.9% 345.7 19.0% 359.4 19.0% 340.9 18.4% 363.3 18.9%Other/not rated 85.8 4.6% 96.7 5.3% 118.7 6.3% 113.1 6.1% 105.3 5.5%Total fixed maturity investments, amortized cost $1,882.0 100.0% $1,815.8 100.0% $1,894.1 100.0% $1,849.4 100.0% $1,921.4 100.0%

[1]  Market value and amortized cost of investments as of December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012 were calculated prior to the reclassification of $236.3, $239.7, $260.8, $296.9 and $338.1 million, respectively, of assets being sold as part of the Runoff Transaction which are presented as assets held for sale in the respective consolidated balance sheets.

Interest Coverage: Year Ended  Dec 31, 2013 Dec 31, 2012 Pre-tax income $181.3 $105.9 Less:     Net realized and change in unrealized investment gains (49.4) (55.7) Interest expense on debt 13.0 16.9[A]Pre-tax operating income before interest expense on debt [1] $144.9 $67.1      [B]Interest expense on debt $13.0 $16.9       Interest coverage [A/B] [1] 11.1x  4.0x

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. OneBeacon Insurance Group next reports earnings on February 07, 2014.

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Other recent filings from the company include the following:

Registration statement under Securities Act of 1933 - July 18, 2014

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