I asume that with a loss recognized of $100 million for tghis exit from runoff business, it will reduce teh book value by that amount? right or wrong? If it does reduce BV, it will be about a 7% reduction?....maybe 70 cents or so? But then OB will recod a $23 million gain when they recognize the sale of Essentia segment.
I also am concerned that if Obama wins, then he is going to raise the taxes on DIVIDENDS by a large amount. So would it make sense for OB to keep paying out at over 6%???? if a big beneficiary of that will be Obama and the Gov't?
I also wonder if WTM just isn't cleaning all of OB up.....and sucking out large dividends, just so they can SELL OB. But they felt they had to clean up and get rid of the runoff business? And I see another $6 million writedown? It looks to me like they are prettying up OB... Would WTM sell it? I dunno. But I am nervous of a fairly big drop in OB book value....and I also worry that if Obama wins, a 6% (plus) dividend won't make good sense. Lower book value and a cut dividend, means OB goes down. OR? Would WTM just sell it? Buffet woudl like specialty insurance at the right price. And WTM is somewhat close to Buffet, via John Byrnes.
OB is similar to RLI now, yes...but RLI is a far stronger company. RLI has a 13% ROE. OB is far less. RLI is more profitable. RLI has $100 million debt and $113 million cash. So by all measures, RLI is a far stronger and more profitable company with a bullet proof balance sheet....And RLI pays less than a 2% dividend.so they are able to reinvest and grow business. OB pays out almost all their profits to dividends, largely to WTM. So it's harder for them to grow.