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OneBeacon Reports $11.56 Book Value Per Share

HAMILTON, Bermuda, Feb. 3, 2012 /PRNewswire/ -- OneBeacon Insurance Group, Ltd. (NYSE: OB) today reported book value per share of $11.56, an increase of 1.7% for the fourth quarter and 3.1% through twelve months, including dividends.

Mike Miller, CEO of OneBeacon, said, "Our financial results for the quarter were disappointing due to a number of negative items outside of our core Specialty business. Our bottom line was hurt by an increase in our runoff reserves, principally for ULAE, and by a decrease in the level of overfunding of our pension plan. Our Specialty results were quite strong at an 85% combined ratio for the quarter and 92% for the year, with good net premium growth of 12% and 8%, respectively. Investment results were solid given the positioning of our portfolio. We enter 2012 with a profitable and growing Specialty business and a strong balance sheet in what we hope will be a continued improving market."

For the fourth quarter, comprehensive income was $19 million, net income was $31 million and operating income was $15 million, or $0.16 per share. For the year ended December 31, 2011, comprehensive income was $44 million, net income was $55 million and operating income was $48 million, or $0.51 per share. Operating income is a non-GAAP financial measure which is explained later in this release.

OneBeacon's fourth quarter and full-year results reflect the impact of an $11 million after tax decrease in the qualified pension plan's overfunded status driven by a decline in value of the investment assets in the plan, and a $1 million after tax increase in the estimated loss on the announced sale of AutoOne. Full-year results were also impacted by an $8 million after tax loss from the purchase of a portion of the Senior Notes and a $19 million after tax charge for the estimated loss on the sale of AutoOne.

Insurance Operations: The fourth quarter GAAP combined ratio was 100.3%, compared to 96.1% for the fourth quarter of 2010, and 95.8% through December 31, 2011 compared to 99.9% for the full-year 2010. The increase in the fourth quarter reflects an 11 point increase in the loss and LAE ratio, partially offset by a 7 point decrease in the expense ratio, primarily related to other underwriting expenses. A detailed review of runoff expenses resulted in a $37 million or 14 point increase in runoff loss and LAE reserves, which was partially offset by a $15 million or 6 point decrease in specialty loss and LAE reserves. In contrast, the fourth quarter of 2010 benefited from 6 points of favorable loss reserve development. For the full year, the favorable variance in the combined ratio was due to a 4 point decrease in the loss and LAE ratio, primarily related to improved noncatastrophe current accident year results. Loss reserve development for the full year had no impact on the combined ratio, while results for 2010 included 4 points of favorable loss reserve development.

Fourth quarter net written premiums were $241 million as compared to $216 million for the fourth quarter of 2010, driven by a 12% increase in Specialty Insurance Operations' premiums. Several business units experienced particularly strong growth; specifically, OneBeacon Technology Insurance, OneBeacon Government Risks and OneBeacon Accident Group.

For the twelve months ended December 31, 2011, net written premiums were $1,063 million as compared to $1,159 million for the comparable period last year, reflecting the sale of the traditional personal lines business in July 2010. Specialty Insurance Operations' premiums were $1,063 million compared to $988 million, an increase of 8% over the prior year.

Consolidated Investment Results: OneBeacon's fourth quarter total return on invested assets was 1.5% compared to 0.6% for the fourth quarter of 2010. These results included net realized and unrealized investment gains of $24 million and net investment income of $16 million, compared to net realized and unrealized investment losses of $5 million and net investment income of $22 million for the fourth quarter of 2010. The average market value of invested assets was $2.8 billion in the fourth quarter of 2011 as compared to $3.3 billion in the fourth quarter of 2010, reflecting the impact of the company's capital management activities and payments on runoff reserves.

For the full year, total return on invested assets was 3.0% compared to 4.9% through twelve months of 2010. These results included net realized and unrealized investment gains of $11 million and net investment income of $71 million, compared to net realized and unrealized investment gains of $75 million and net investment income of $97 million through December 31, 2010. The average market value of invested assets was $3.0 billion through full year 2011 as compared to $3.7 billion through December 31, 2010, reflecting the impact of the company's capital management activities, the sale of traditional personal lines in July 2010 and payments on runoff reserves.

Recent Developments: In January 2012, OneBeacon completed the sale of one of its subsidiaries, OneBeacon Holdings (Luxembourg) S.a.r.l., to a subsidiary of White Mountains Insurance Group, Ltd. As a result of completing the sale, OneBeacon expects book value per share to increase by $0.14.

Company to Host Webcast: OneBeacon will host its fourth quarter and full-year 2011 webcast for analysts and investors at 10:00 a.m. ET on Friday, February 3. A copy of the earnings release, the slide presentation to be referenced during the call and a financial supplement are available on the company's website: www.onebeacon.com. An audio playback of the teleconference will be available on the website shortly following the webcast.

About OneBeacon: OneBeacon Insurance Group, Ltd. is a Bermuda-domiciled holding company that is publicly traded on the New York Stock Exchange under the symbol "OB." OneBeacon's underwriting companies offer a range of specialty insurance products sold through independent agencies, regional and national brokers, wholesalers and managing general agencies. The company's businesses include OneBeacon Professional Insurance, International Marine Underwriters, OneBeacon Accident Group, OneBeacon Entertainment, OneBeacon Energy Group, OneBeacon Government Risks, A.W.G. Dewar (tuition refund), collector cars and boats written through Hagerty Insurance Agency, OneBeacon Technology Insurance, OneBeacon Specialty Property, OneBeacon Property and Inland Marine, and OneBeacon Excess and Surplus Lines. The company also offers products and services to assigned risk markets through its AutoOne division. OneBeacon's insurance businesses are national in scope.



                                                            ONEBEACON INSURANCE GROUP, LTD.
                                                              CONSOLIDATED BALANCE SHEETS
                                                                    ($ in millions)
                                                                      (Unaudited)

                                                                            December 31,                September 30,   December 31,
                                                                                       2011                      2011           2010
                                                                                       ----                      ----           ----
    Assets
    Investment securities:
      Fixed maturity investments                                                     $1,886.2                  $2,019.3       $2,415.5
      Short-term investments                                                          320.0                     185.8          300.0
      Common equity securities                                                        266.5                     244.5          285.3
      Convertible bonds                                                                79.8                      80.9           93.8
      Other investments                                                               155.1                     157.1          171.4
                                                                                      -----                     -----          -----

        Total investments                                                           2,707.6                   2,687.6        3,266.0
    Cash                                                                               54.9                      63.0           33.6
    Reinsurance recoverable on unpaid losses                                        2,167.5                   2,239.1        1,893.2
    Reinsurance recoverable on paid losses                                             16.5                      13.7           44.5
    Premiums receivable                                                               230.9                     243.7          275.0
    Deferred acquisition costs                                                        123.5                     129.6          114.5
    Ceded unearned premiums                                                            10.7                      11.5          113.9
    Net deferred tax asset                                                             93.6                     122.2          101.2
    Investment income accrued                                                          14.1                      13.3           19.4
    Accounts receivable on unsettled investment
     sales                                                                              0.5                      18.1            5.4
    Other assets                                                                      269.2                     260.3          300.0
    Assets held for sale (1)                                                          132.6                     123.2              -
                                                                                      -----                     -----            ---

        Total assets                                                               $5,821.6                  $5,925.3       $6,166.7
                                                                                   ========                  ========       ========

    Liabilities
    Loss and loss adjustment expense reserves                                      $3,358.6                  $3,458.9       $3,295.5
    Unearned premiums                                                                 528.0                     559.4          627.5
    Debt                                                                              269.7                     269.7          419.6
    Ceded reinsurance payable                                                          23.4                      24.3          149.3
    Accounts payable on unsettled investment
     purchases                                                                         22.7                      18.6           14.1
    Other liabilities                                                                 397.7                     381.8          411.8
    Liabilities held for sale (1)                                                     107.6                      98.2              -
                                                                                      -----                      ----            ---

        Total liabilities                                                           4,707.7                   4,810.9        4,917.8
                                                                                    -------                   -------        -------

    OneBeacon's common shareholders' equity and
     noncontrolling interests

    OneBeacon's common shareholders' equity:
      Common shares and paid-in surplus                                             1,002.2                   1,001.7        1,000.5
      Retained earnings                                                               108.5                      97.9          228.2
      Accumulated other comprehensive (loss)
       income, after tax:
        Other comprehensive income and loss items                                     (10.9)                      0.6            0.3
                                                                                      -----                       ---            ---

          Total OneBeacon's common shareholders' equity                             1,099.8                   1,100.2        1,229.0

          Total noncontrolling interests                                               14.1                      14.2           19.9
                                                                                       ----                      ----           ----
    Total OneBeacon's common shareholders' equity
     and noncontrolling interests                                                   1,113.9                   1,114.4        1,248.9
                                                                                    -------                   -------        -------

    Total liabilities, OneBeacon's common
     shareholders' equity and noncontrolling
     interests                                                                     $5,821.6                  $5,925.3       $6,166.7
                                                                      ===          ========                  ========       ========

    (1) Represents assets and liabilities being sold as part of the sale of the AutoOne business required to be
     presented separately in the December 31, 2011 and September 30, 2011 consolidated balance sheets.



                                         ONEBEACON INSURANCE GROUP, LTD.
                         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                     (in millions, except per share amounts)
                                                   (Unaudited)

                                                                Three Months Ended               Year Ended
                                                                       December 31,                 December 31,
                                                               -------------------             -------------
                                                                  2011    2010 (1)           2011    2010 (1)
                                                                  ----     -------           ----     -------
    Revenues:
      Earned premiums                                         $264.3      $269.2       $1,015.5    $1,403.9
      Net investment income                                     15.6        21.7           71.4        96.6
      Net realized and unrealized
       investment gains (losses)                                23.9        (5.0)          10.6        74.6
      Net other (expenses) revenues                             (0.1)        7.7          (10.7)        9.6
                                                                ----         ---          -----         ---

          Total revenues                                       303.7       293.6        1,086.8     1,584.7
                                                               -----       -----        -------     -------
    Expenses:
      Loss and loss adjustment expenses                        166.0       138.9          580.9       858.2
      Policy acquisition expenses                               57.9        63.3          219.0       311.6
      Other underwriting expenses                               41.2        56.5          173.3       233.1
      General and administrative expenses                        2.4         3.6            9.8        13.0
      Interest expense on debt                                   4.1         6.2           20.5        29.6


          Total expenses                                       271.6       268.5        1,003.5     1,445.5
                                                               -----       -----        -------     -------

    Pre-tax income from continuing
     operations                                                 32.1        25.1           83.3       139.2

      Income tax benefit (expense)                               0.9        (0.7)          (2.1)      (12.4)
                                                                 ---        ----           ----       -----

    Net income from continuing
     operations                                                 33.0        24.4           81.2       126.8

      Loss from discontinued operations,
       net of tax (2)                                           (1.5)       (1.5)          (5.9)       (6.9)
      Loss from sale of discontinued
       operations, net of tax (2)                               (1.0)          -          (19.2)          -
                                                                ----         ---          -----         ---

    Net income including noncontrolling
     interests                                                  30.5        22.9           56.1       119.9

      Less:  Net loss (income)
       attributable to noncontrolling
       interests                                                 0.1           -           (1.0)       (1.6)
                                                                 ---         ---           ----        ----

    Net income attributable to
     OneBeacon's common shareholders                            30.6        22.9           55.1       118.3

      Change in foreign currency
       translation                                                 -         0.7              -         0.7
      Change in other comprehensive income
       and loss items                                          (11.5)        5.9          (11.2)        5.8
                                                               -----         ---          -----         ---

    Comprehensive income attributable to
     OneBeacon's common shareholders                           $19.1       $29.5          $43.9      $124.8
                                                               =====       =====          =====      ======

    Earnings (loss) per common share -basic and
     diluted
      Net income from continuing
       operations per share                                    $0.35       $0.26          $0.86       $1.34
      Loss from discontinued operations,
       net of tax, per share                                   (0.02)      (0.02)         (0.06)      (0.07)
      Loss from sale of discontinued
       operations, net of tax, per share                       (0.01)          -          (0.20)          -
      Net income attributable to
       OneBeacon's common shareholders per
       share                                                    0.32        0.24           0.58        1.25

      Weighted average number of common
       shares outstanding (3)                                   95.1        94.4           94.8        94.8


    (1) Certain amounts in the prior period financial statements have been
     reclassified to conform to the current presentation.
    (2) As a result of entering into a definitive agreement to sell the AutoOne
     business on August 30, 2011, results for AutoOne are reported as
     discontinued operations for all periods presented. During the three months
     and year ended December 31, 2011, OneBeacon recorded an estimated loss on
     sale of the AutoOne business of $1.6 million pre-tax ($1.0 million after
     tax) and $29.6 million pre-tax ($19.2 million after tax), respectively.
     (3) Weighted average common shares outstanding includes the impact of
      unvested restricted shares and also the impact of repurchases of Class A
      common shares made through the company's share repurchase program.



                            ONEBEACON INSURANCE GROUP, LTD.
                           SEGMENT STATEMENTS OF OPERATIONS
                                    ($ in millions)
                                      (Unaudited)

     For the
      Three
      Months
      Ended
      December
      31,
      2011                         Investing,
     ---------
                              Specialty           Other       Financing

                              Insurance         Insurance   and Corporate
                             Operations        Operations    Operations            Total
                             ----------        ----------    ----------            -----

         Earned
          premiums                $264.2              $0.1              $-           $264.3
         Loss
          and
          loss
          adjustment
          expenses                (127.1)         (38.9)           -        (166.0)
         Policy
          acquisition
          expenses                 (59.7)              1.8               -            (57.9)
         Other
          underwriting
          expenses                 (37.8)             (3.4)              -            (41.2)

              Underwriting
              income
              (loss)                39.6             (40.4)              -             (0.8)
                                    ----             -----             ---             ----

         Net
          investment
          income                       -                 -            15.6             15.6
         Net
          realized
          and
          unrealized
          investment
          gains                        -              -         23.9          23.9
         Net
          other
          revenues
          (expenses)                 0.1                 -            (0.2)            (0.1)
         General
          and
          administrative
          expenses                  (0.4)                -            (2.0)            (2.4)
          Interest
          expense
          on
          debt                         -                 -            (4.1)            (4.1)


       Pre-
        tax
        income
        (loss)                     $39.3            $(40.4)          $33.2            $32.1
                                   =====            ======           =====            =====


     For the
      Three
      Months
      Ended
      December
      31,
      2010
     ---------
                                                             Investing,

                              Specialty           Other       Financing

                              Insurance         Insurance   and Corporate
                             Operations        Operations    Operations            Total
                             ----------        ----------    ----------            -----

         Earned
          premiums                $252.5             $16.7              $-           $269.2
         Loss
          and
          loss
          adjustment
          expenses                (131.1)          (7.8)           -        (138.9)
         Policy
          acquisition
          expenses                 (59.4)             (3.9)              -            (63.3)
         Other
          underwriting
          expenses                 (45.1)            (11.4)              -            (56.5)

              Underwriting
              income
              (loss)                16.9              (6.4)              -             10.5
                                    ----              ----             ---             ----

         Net
          investment
          income                       -                 -            21.7             21.7
         Net
          realized
          and
          unrealized
          investment
          losses                       -              -         (5.0)         (5.0)
         Net
          other
          revenues
          (expenses)                 1.3               6.5            (0.1)             7.7
         General
          and
          administrative
          expenses                  (0.8)                -            (2.8)            (3.6)
          Interest
          expense
          on
          debt                         -                 -            (6.2)            (6.2)


       Pre-
        tax
        income                     $17.4              $0.1            $7.6            $25.1
                                   =====              ====            ====            =====



                                  ONEBEACON INSURANCE GROUP, LTD.
                                  SEGMENT STATEMENTS OF OPERATIONS
                                          ($ in millions)
                                            (Unaudited)

     For the Year Ended
      December 31, 2011                                             Investing,
     ------------------
                                   Specialty            Other        Financing

                                   Insurance          Insurance    and Corporate
                                   Operations         Operations    Operations     Total
                                   ----------         ----------    ----------     -----

         Earned premiums              $1,012.1               $3.4              $-  $1,015.5
         Loss and loss adjustment
          expenses                      (548.4)             (32.5)              -    (580.9)
         Policy acquisition
          expenses                      (221.0)               2.0               -    (219.0)
         Other underwriting
          expenses                      (162.2)             (11.1)              -    (173.3)

             Underwriting income
              (loss)                      80.5              (38.2)              -      42.3
                                          ----              -----             ---      ----

         Net investment income               -                  -            71.4      71.4
         Net realized and
          unrealized investment
          gains                              -                  -            10.6      10.6
         Net other revenues
          (expenses)                       0.6                1.6           (12.9)    (10.7)
         General and
          administrative expenses         (1.7)                 -            (8.1)     (9.8)
         Interest expense on debt            -                  -           (20.5)    (20.5)


       Pre-tax income (loss)             $79.4             $(36.6)          $40.5     $83.3
                                         =====             ======           =====     =====


     For the Year Ended
      December 31, 2010
     ------------------
                                                                    Investing,

                                   Specialty            Other        Financing

                                   Insurance          Insurance    and Corporate
                                   Operations         Operations    Operations     Total
                                   ----------         ----------    ----------     -----

         Earned premiums                $979.2             $424.7              $-  $1,403.9
         Loss and loss adjustment
          expenses                      (539.6)            (318.6)              -    (858.2)
         Policy acquisition
          expenses                      (212.7)             (98.9)              -    (311.6)
         Other underwriting
          expenses                      (163.6)             (69.5)              -    (233.1)

             Underwriting income
              (loss)                      63.3              (62.3)              -       1.0
                                          ----              -----             ---       ---

         Net investment income               -                  -            96.6      96.6
         Net realized and
          unrealized investment
          gains                              -                  -            74.6      74.6
         Net other revenues
          (expenses)                       2.7               18.7           (11.8)      9.6
         General and
          administrative expenses         (2.3)              (0.1)          (10.6)    (13.0)
         Interest expense on debt            -                  -           (29.6)    (29.6)


       Pre-tax income (loss)             $63.7             $(43.7)         $119.2    $139.2
                                         =====             ======          ======    ======



                                                                                           ONEBEACON INSURANCE GROUP, LTD.
                                                                                           SUMMARY OF RATIOS AND PREMIUMS
                                                                                                   ($ in millions)
                                                                                                     (Unaudited)


    Three Months Ended December 31, 2011

                                                                                                                                                    Specialty                                    Consolidated
                                                                                                       MGA            Specialty          Specialty           Insurance           Other Insurance           Insurance
                                                                                                    Business         Industries          Products         Operations (1)       Operations (2) (3)       Operations (3)
                                                                                        ---------         ----------         ----------       ---------------      -------------------      ---------------
    Net written premiums                                                                     $57.7              $98.7              $84.8               $241.2                    $(0.6)               $240.6
    Earned premiums                                                                          $72.5              $94.5              $97.2               $264.2                     $0.1                $264.3
    Ratios

           Loss and loss adjustment expenses                                                 40.3%              45.1%              56.9%                48.1%                     n/m                  62.8%
           Expense                                                                            41.8%              35.4%              34.7%                36.9%                     n/m                  37.5%

                    GAAP combined                                                             82.1%              80.5%              91.6%                85.0%                     n/m                 100.3%
                    -------------                                                             ----               ----               ----                 ----                      ---                 -----


    Three Months Ended December 31, 2010
    ------------------------------------
                                                                                                                                                  Specialty                                    Consolidated
                                                                                                    MGA            Specialty          Specialty           Insurance           Other Insurance           Insurance
                                                                                                 Business         Industries          Products         Operations (1)       Operations (2) (3)       Operations (3)
                                                                                        ---------         ----------         ----------       ---------------      -------------------      ---------------
    Net written premiums                                                                     $51.3              $77.8              $87.3               $216.4                    $(0.4)               $216.0
    Earned premiums                                                                          $69.9              $79.2             $103.4               $252.5                    $16.7                $269.2

    Ratios
           Loss and loss adjustment expenses                                                 48.2%              50.9%              55.2%                51.9%                    46.7%                 51.6%
           Expense                                                                            46.6%              43.4%              36.3%                41.4%                    91.6%                 44.5%

                    GAAP combined                                                             94.8%              94.3%              91.5%                93.3%                   138.3%                 96.1%
                    -------------                                                             ----               ----               ----                 ----                    -----                  ----


    Year Ended December 31, 2011
    ----------------------------
                                                                                                                                                  Specialty                                    Consolidated
                                                                                                    MGA            Specialty          Specialty           Insurance           Other Insurance           Insurance
                                                                                                 Business         Industries          Products         Operations (1)       Operations (2) (3)       Operations (3)
                                                                                        ---------         ----------         ----------       ---------------      -------------------      ---------------
    Net written premiums                                                                    $288.4             $376.9             $397.4             $1,062.7                     $0.2              $1,062.9
    Earned premiums                                                                         $276.6             $349.3             $386.2             $1,012.1                     $3.4              $1,015.5

    Ratios
           Loss and loss adjustment expenses                                                 48.0%              51.7%              60.8%                54.2%                     n/m                  57.2%
           Expense                                                                            42.4%              38.2%              34.3%                37.9%                     n/m                  38.6%

                    GAAP combined                                                             90.4%              89.9%              95.1%                92.1%                     n/m                  95.8%
                    -------------                                                             ----               ----               ----                 ----                      ---                  ----


    Year Ended December 31, 2010
    ----------------------------
                                                                                                                                                  Specialty                                    Consolidated
                                                                                                    MGA            Specialty          Specialty           Insurance           Other Insurance           Insurance
                                                                                                 Business         Industries          Products         Operations (1)       Operations (2) (3)       Operations (3)
                                                                                        ---------         ----------         ----------       ---------------      -------------------      ---------------
    Net written premiums                                                                    $269.2             $317.6             $401.2               $988.0                   $171.0              $1,159.0
    Earned premiums                                                                         $266.0             $302.2             $411.0               $979.2                   $424.7              $1,403.9

    Ratios
           Loss and loss adjustment expenses                                                 49.8%              54.0%              59.2%                55.1%                    75.0%                 61.1%
           Expense                                                                            41.4%              41.8%              33.9%                38.4%                    39.7%                 38.8%

                    GAAP combined                                                             91.2%              95.8%              93.1%                93.5%                   114.7%                 99.9%
                    -------------                                                             ----               ----               ----                 ----                    -----                  ----

    (1)  Within Specialty Insurance Operations, OneBeacon reports its businesses through three major underwriting units, representing an aggregation of its specialty
     lines businesses. MGA Business includes Collector Cars and Boats, A.W.G. Dewar and OneBeacon Entertainment. Specialty Industries includes International Marine
     Underwriters, OneBeacon Technology Insurance, OneBeacon Accident Group, OneBeacon Government Risks and OneBeacon Energy Group. Specialty Products includes
     OneBeacon Professional Insurance, OneBeacon Property and Inland Marine, OneBeacon Specialty Property and OneBeacon Excess and Surplus.
    (2)  Other Insurance Operations includes the nonspecialty commercial lines business that was subject to the renewal rights agreement with The Hanover that began
     with January 1, 2010 effective dates, the traditional personal lines business that was subject to the sale to Tower Group, Inc. completed July 1, 2010, and other
     run-off business. As Other Insurance Operations consists of business in run-off, GAAP ratios for the 2011 periods are not meaningful. For the three months
     ended December 31, 2011 and 2010, Other Insurance Operations reported an underwriting loss of $40.4 million and $6.4 million, respectively. For the years ended
     December 31, 2011 and 2010, Other Insurance Operations reported an underwriting loss of $38.2 million and $62.3 million, respectively.
    (3)  As a result of entering into a definitive agreement to sell the AutoOne business on August 30, 2011, results for AutoOne are reported as discontinued
     operations in a single financial statement caption outside of underwriting results for all periods presented.



                                             ONEBEACON INSURANCE GROUP, LTD.
                                                   BOOK VALUE PER SHARE
                                         (in millions, except per share amounts)
                                                       (Unaudited)

                                                                         December        September  December
                                                                            31,            30,       31,
                                                                              2011           2011      2010
                                                                              ----           ----      ----
    Numerator
    OneBeacon's common shareholders' equity                               $1,099.8       $1,100.2  $1,229.0

    Denominator
    Common shares outstanding (1)                                             95.1           95.1      94.4
                                                                              ----           ----      ----

    Book value per share                                                    $11.56         $11.57    $13.02





    Change in book value per share, including dividends,
     in the quarter
      on an IRR basis (2)                                                      1.7%

    Growth in book value per share, including dividends,
     in the last twelve months
      on an IRR basis (3)                                                      3.1%


    (1)  Common shares outstanding includes the impact of unvested restricted shares and
     also the impact of repurchases of Class A common shares made through the company's
     share repurchase program.

    (2)  Internal rate of return (IRR) calculated based on beginning book value per
     share, dividends paid and ending book value per share. Includes a quarterly
     dividend of $0.21 per share.

    (3)  IRR calculated based on beginning book value per share, dividends paid and
     ending book value per share. Includes dividends of $0.84 per share (a quarterly
     dividend of $0.21 per share) and a special dividend of $1.00 per share paid in June
     2011.



                                                ONEBEACON INSURANCE GROUP, LTD.
                                     COMPREHENSIVE INCOME, NET INCOME AND OPERATING INCOME
                                            (in millions, except per share amounts)
                                                          (Unaudited)

                                                                  Three Months Ended
                                                                     December 31,             Year Ended December 31,
                                                                 -------------------          -----------------------
                                                                  2011              2010       2011            2010
                                                                  ----              ----       ----            ----

    Comprehensive income attributable to
     OneBeacon's common shareholders                             $19.1             $29.5      $43.9          $124.8
                                                                 =====             =====      =====          ======


    Net income attributable to
     OneBeacon's common shareholders                             $30.6             $22.9      $55.1          $118.3

    Weighted average common shares
     outstanding (1)                                              95.1              94.4       94.8            94.8
                                                                  ----              ----       ----            ----

    Net income attributable to
     OneBeacon's common shareholders per
     share                                                       $0.32             $0.24      $0.58           $1.25
                                                                 =====             =====      =====           =====


    Net income attributable to
     OneBeacon's common shareholders                             $30.6             $22.9      $55.1          $118.3
    Less:
    Net realized and unrealized
     investment gains and losses                                 (23.9)              5.0      (10.6)          (74.6)
    Tax effect on net realized and
     unrealized investment gains and
     losses                                                        8.4              (1.8)       3.7            26.1
                                                                   ---              ----        ---            ----
      Operating income (2)                                       $15.1             $26.1      $48.2           $69.8
                                                                 =====             =====      =====           =====

    Weighted average common shares
     outstanding (1)                                              95.1              94.4       94.8            94.8
                                                                  ----              ----       ----            ----

    Operating income per share (2)                               $0.16             $0.28      $0.51           $0.74
                                                                 =====             =====      =====           =====


    (1) Weighted average common shares outstanding includes the impact of unvested restricted
     shares and also the impact of repurchases of Class A common shares made through the
     company's share repurchase program.

    (2) Represents a non-GAAP financial measure. See discussion of Non-GAAP financial
     measures.



                                                                  ONEBEACON INSURANCE GROUP, LTD.
                                                       COMPREHENSIVE AND OPERATING RETURNS ON AVERAGE EQUITY
                                                                          ($ in millions)
                                                                            (Unaudited)



                                                                                                                                                  Year Ended
                                                                                                                                              December 31, 2011
                                                                                                                                              -----------------
    Numerator:
    [A]  Comprehensive income attributable to OneBeacon's common shareholders                                                                            $43.9

    [B]  Operating income (1)                                                                                                                            $48.2

                                                                                                   As of                         As of
                                                                                            December 31, 2011             December 31, 2010       Average
                                                                                            -----------------             -----------------       -------
    Denominator:
    [C]  OneBeacon's common shareholders' equity                                                              $1,099.8              $1,229.0          $1,164.4

      Less:
      Net unrealized gains and losses and net foreign currency
       gains and losses on investments (2)                                                                      (102.9)               (150.1)
      Tax effect on net unrealized gains and losses and net
       foreign currency gains and losses on investments                                                           36.0                  52.5
      Accumulated OCI/L, after-tax                                                                                10.9                  (0.3)
                                                                                                                  ----                  ----


          Adjusted OneBeacon's common shareholders' equity excluding net
    [D]   unrealized investment gains and losses, after tax, and AOCI/L (1)                                   $1,043.8              $1,131.1          $1,087.5
                                                                                    ----------------------------------              --------



    Returns:
      Comprehensive return on average OneBeacon's common
       shareholders' equity  [ A /C ]                                                                                                                      3.8%

      Operating return on average adjusted OneBeacon's common shareholders' equity excluding net
       unrealized investment gains and losses, after tax, and AOCI/L [ B / D ]                                                                             4.4%

    (1)  Represents a non-GAAP financial measure. See discussion of Non-GAAP financial measures.
    (2)  Net unrealized gains and losses and net foreign currency gains and losses on investments as of December 31, 2011
     and 2010 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.

Discussion of Non-GAAP Financial Measures This earnings release includes non-GAAP financial measures that have been reconciled to their most comparable GAAP financial measures. OneBeacon believes these measures to be useful supplements to the comparable GAAP measures in evaluating OneBeacon's financial performance.

Operating income is a non-GAAP financial measure that excludes net realized and unrealized investment gains or losses and the related tax effects from net income 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 attributable to OneBeacon's common shareholders, as it removes variability in the timing of investment gains and losses which may be heavily influenced by investment market conditions. 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.

Operating income per share is calculated by dividing operating income (a non-GAAP financial measure described above) by the weighted average number of common shares outstanding. Management believes that operating income 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. Net income attributable to OneBeacon's common shareholders per share is the most directly comparable GAAP measure.

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 accumulated other comprehensive income or loss (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.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this release which address activities, events or developments which we expect or anticipate will or may occur in the future are forward-looking statements. The words "will," "believe," "intend," "expect," "anticipate," "project," "estimate," "predict" and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to OneBeacon's:

    --  change in book value per share or return on equity;
    --  business strategy;
    --  financial and operating targets or plans;
    --  incurred loss and loss adjustment expenses and the adequacy of its loss
        and loss adjustment expense reserves and related reinsurance;
    --  projections of revenues, income (or loss), earnings (or loss) per share,
        dividends, market share or other financial forecasts;
    --  expansion and growth of our business and operations; and
    --  future capital expenditures.

These statements are based on certain assumptions and analyses made by OneBeacon in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that could cause actual results to differ materially from expectations, including:

    --  claims arising from catastrophic events, such as hurricanes, windstorms,
        earthquakes, floods, or terrorist attacks;
    --  recorded loss and loss adjustment expense reserves subsequently proving
        to have been inadequate;
    --  the continued availability and cost of reinsurance coverage;
    --  the continued availability of capital and financing;
    --  general economic, market or business conditions;
    --  business opportunities (or lack thereof) that may be presented to it and
        pursued;
    --  competitive forces, including the conduct of other property and casualty
        insurers and agents;
    --  changes in domestic or foreign laws or regulations, or their
        interpretation, applicable to OneBeacon, its competitors, its agents or
        its customers;
    --  an economic downturn or other economic conditions adversely affecting
        its financial position including stock market volatility;
    --  actions taken by ratings agencies from time to time, such as financial
        strength or credit ratings downgrades or placing ratings on negative
        watch;
    --  the risks that are described from time to time in OneBeacon's filings
        with the Securities and Exchange Commission, including but not limited
        to OneBeacon's Annual Report on the Form 10-K for the fiscal year ended
        December 31, 2010 filed February 28, 2011.

Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by OneBeacon will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, OneBeacon or its business or operations. OneBeacon assumes no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE OneBeacon Insurance Group, Ltd.

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