"We are very pleased with our strong third-quarter and year-to-date growth in book value," said OneBeacon CEO Mike Miller. "OneBeacon experienced an excellent quarter by any measure in today's market, reflecting strong current accident year results, favorable development on prior accident years, minimal catastrophe losses and solid investment returns."
Miller continued, "Our 84% combined ratio for the quarter reflected good results from all of our businesses. In addition, it was positively impacted by the gain on the partial settlement of our pension liabilities and a state premium tax refund. Excluding these items, our combined ratio would have been 91% compared to 94% last year. Net written premiums were down less than 1% for the quarter and 2% through nine months, excluding the 2006 Agri business. Recently, we reduced our workforce by approximately ten percent to bring our expenses more in line with our business needs. We will continue to focus on disciplined underwriting and manage expenses accordingly."
Adjusted for the economic defeasance of the company's mandatorily redeemable preferred stock, comprehensive net income for the quarter was $90 million, net income was $96 million or $0.96 per share and operating income was $76 million or $0.76 per share. These adjusted amounts are non-GAAP financial measures which are explained later in this release.
These third-quarter results reflect the after-tax net favorable impact from certain nonrecurring items, including a gain from the partial settlement of the company's qualified pension plan, prior year premium tax refunds and a gain on the sale of an inactive licensed insurance company, partially offset by higher withholding taxes. The after-tax impact of the nonrecurring items increased adjusted comprehensive income by $21 million and increased both adjusted net income and adjusted operating income by $23 million. Normalizing for these unusual items, adjusted comprehensive net income for the quarter was $69 million, adjusted net income was $73 million or $0.73 per share and adjusted operating income was $53 million or $0.53 per share.