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White Mountains Reports Second Quarter Results

August 7, 2018 at 8:00 AM EDT

HAMILTON, Bermuda, Aug. 7, 2018 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $924 and adjusted book value per share of $912 as of June 30, 2018.  Book value per share and adjusted book value per share both increased 1% in the second quarter of 2018.  Book value per share decreased 1% and adjusted book value per share was near break-even in the first six months of 2018, including dividends.  Comprehensive income (loss) attributable to common shareholders was $3 million and $(45) million in the second quarter and first six months of 2018, compared to comprehensive income attributable to common shareholders of $14 million and $43 million in the second quarter and first six months of 2017.

Manning Rountree, CEO, commented, "We had decent results in the quarter, with ABVPS up 1%.  After a slow start to the year, BAM's results rebounded in the second quarter, with higher par insured volumes and good pricing.  MediaAlpha maintained its momentum, with strong top and bottom line growth.  Our investment portfolio produced a total return of 0.7%, driven largely by the rebound in equity markets.  We made good progress on capital deployment during the quarter, closing the acquisition of NSM and in turn Fresh Insurance, as well as repurchasing 575,068 White Mountains shares for $505 million."

HG Global/BAM

BAM insured municipal bonds with par value of $3.1 billion and $4.4 billion in the second quarter and first six months of 2018, compared to $2.7 billion and $5.1 billion in the second quarter and first six months of 2017.  Gross written premiums and member surplus contributions totaled $29 million and $40 million in the second quarter and first six months of 2018, compared to $20 million and $48 million in the second quarter and first six months of 2017.  Total pricing, which is gross written premiums and MSC adjusted to include the present value of future installment MSC not yet collected and to exclude the impact of gross written premium adjustments on existing policies, weighted by the par value of municipal bonds insured, was 101 and 100 basis points in the second quarter and first six months of 2018, compared to 79 and 98 basis points in the second quarter and first six months of 2017.  BAM's total claims paying resources were $827 million at June 30, 2018, compared to $708 million at December 31, 2017 and $676 million at June 30, 2017.  The increase in claims paying resources was primarily driven by the $100 million reinsurance agreement with Fidus Re completed in the second quarter of 2018.

Seán McCarthy, CEO of BAM, said, "In the second quarter, new-issue municipal bond volume recovered, and longer-term new-money transactions represented a larger share of the total market volume. These favorable trends allowed BAM to more than double its primary and secondary market volume, quarter over quarter, while maintaining attractive risk-adjusted pricing levels.  Claims-paying resources finished the quarter at an all-time high, reflecting the close of the Fidus Re transaction, which added $100 million of reinsurance protection in the form of collateralized insurance-linked securities.  On June 25th, S&P Global Ratings affirmed BAM's AA/Stable rating, citing BAM's market acceptance, proven track record of credit discipline and growth in par insured and premiums written."

HG Global reported pre-tax income of $8 million and $12 million in the second quarter and first six months of 2018, compared to pre-tax income of $7 million and $13 million in the second quarter and first six months of 2017.  White Mountains reported pre-tax loss related to BAM of $17 million and $36 million in the second quarter and first six months of 2018, compared to pre-tax loss of $12 million and $24 million in the second quarter and first six months of 2017.  The changes at BAM were driven primarily by lower investment returns in 2018.

BAM is a mutual insurance company that is owned by its members.  BAM's results are consolidated into White Mountains's GAAP financial statements and attributed to non-controlling interests.

NSM

On May 11, 2018, White Mountains acquired 95% of NSM Insurance HoldCo, LLC ("NSM"), an insurance program administrator.  White Mountains paid $274 million of cash consideration for its equity interest in NSM.

Subsequently, on May 18, 2018, NSM acquired 100% of Fresh Insurance Services Group Limited ("Fresh Insurance"), an insurance broker that specializes in non-standard personal lines, motor trade, van, and travel insurance in the United Kingdom.  NSM paid GBP 37 million (approximately $50 million based on the spot rate at the date of acquisition) of upfront cash consideration for its equity interest in Fresh Insurance.

NSM reported revenues of $24 million and pre-tax income of $3 million for the period from May 11, 2018 through June 30, 2018.

Geof McKernan, CEO of NSM Insurance Group, said, "We are excited to partner with White Mountains, whose insurance expertise and patient approach to value creation are a natural fit with NSM.  We've hit the ground running, closing the Fresh acquisition only one week after joining White Mountains.  With Fresh, we've added a strong operation with non-standard personal lines expertise that will complement Vantage Insurance Group, our UK specialist insurance agency.  More broadly, our business is performing well across most lines, in the US and the UK, producing modest top and bottom line growth during the quarter."

MediaAlpha

MediaAlpha reported pre-tax income of $5 million and $4 million in the second quarter and first six months of 2018, compared to pre-tax loss of $2 million and $3 million in the second quarter and first six months of 2017.  MediaAlpha's adjusted EBITDA was $8 million and $17 million in the second quarter and first six months of 2018, compared to $1 million and $3 million in the second quarter and first six months of 2017.  MediaAlpha reported revenues of $72 million and $144 million in the second quarter and first six months of 2018, compared to $31 million and $63 million in the second quarter and first six months of 2017.  The increases in pre-tax income, adjusted EBITDA and revenues for both periods were primarily driven by growth in the P&C vertical and the Health, Medicare and Life vertical, which includes the impact of the acquisition of assets from Healthplans.com in the fourth quarter of 2017.

Cost of sales was $60 million and $117 million in the second quarter and first six months of 2018, compared to $26 million and $54 million in the second quarter and first six months of 2017.  The increase in cost of sales was primarily driven by transaction volume growth.  General and administrative expenses were $5 million and $16 million in the second quarter and first six months of 2018, compared to $4 million and $7 million in the second quarter and first six months of 2017.  The increase for the first six months of 2018 compared to the first six months of 2017 was primarily driven by the recognition of non-cash equity-based compensation expense of $7 million in the first six months of 2018.

Other Operations

White Mountains's Other Operations segment reported pre-tax loss of $11 million and $62 million in the second quarter and first six months of 2018, compared to pre-tax income of $4 million and $7 million in the second quarter and first six months of 2017.  The changes were driven primarily by lower investment returns in 2018, partially offset by a reduction in general and administrative expenses.  Net realized and unrealized gains (losses) were $13 million and $(33) million in the second quarter and first six months of 2018, compared to net realized and unrealized gains of $33 million and $68 million in the second quarter and first six months of 2017.  Net investment income was $8 million and $24 million in the second quarter and first six months of 2018, compared to $12 million and $22 million in the second quarter and first six months of 2017.  General and administrative expenses were $31 million and $53 million in the second quarter and first six months of 2018, compared to $41 million and $86 million in the second quarter and first six months of 2017, which included higher incentive compensation costs.

Share Repurchases

During the second quarter of 2018, White Mountains repurchased and retired 575,068 of its common shares for $505 million at an average price per share of $878, or approximately 96% of White Mountains's June 30, 2018 adjusted book value per share.  For the first six months of 2018, White Mountains repurchased and retired 585,033 of its common shares for $513 million at an average share price of $877, or approximately 96% of White Mountains's June 30, 2018 adjusted book value per share.  This activity left White Mountains with $1.3 billion of undeployed capital as of June 30, 2018.

Investments

The total return on invested assets was 0.7% in the second quarter of 2018 and -0.3% in the first six months of 2018, compared to returns of 1.4% in the second quarter of 2017 and 2.9% in the first six months of 2017.

Mark Plourde, Managing Director of White Mountains Advisors, said, "The total portfolio was up 0.7% in the quarter, a decent result.  The fixed income portfolio returned 0.3%, outperforming the BBIA Index.  Common stocks and ETFs returned 2.1%, lagging the S&P 500 Index, primarily due to underperformance in our international common stock positions."

Additional Information   

White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM.  Additional financial information and other items of interest are available at the company's website located at www.whitemountains.com.  White Mountains expects to file its Form 10-Q today with the Securities and Exchange Commission and urges shareholders to refer to that document for more complete information concerning its financial results.

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions)

(Unaudited)

 
   

June 30,
 2018

 

December 31,
 2017

 

June 30,
 2017

Assets

           

   Financial Guarantee (HG Global/BAM)

           

     Fixed maturity investments

 

$

650.2

   

$

623.6

   

$

641.6

 

     Short-term investments

 

66.3

   

69.8

   

24.1

 

   Total investments

 

716.5

   

693.4

   

665.7

 

     Cash

 

13.9

   

25.6

   

15.5

 

     Insurance premiums receivable

 

6.3

   

4.5

   

2.8

 

     Deferred acquisition costs

 

17.2

   

14.8

   

13.0

 

     Accrued investment income

 

4.2

   

3.4

   

3.2

 

     Accounts receivable on unsettled investment sales

 

   

.1

   

 

     Other assets

 

4.4

   

5.6

   

4.7

 

   Total Financial Guarantee assets

 

762.5

   

747.4

   

704.9

 
             

Specialty Insurance Distribution (NSM)

           

     Cash

 

73.3

   

   

 

    Premium and commission receivable

 

32.8

   

   

 

     Goodwill and other intangible assets

 

436.2

   

   

 

     Other assets

 

14.8

   

   

 

   Total Specialty Insurance Distribution assets

 

557.1

   

   

 
             

   Marketing Technology (MediaAlpha)

           

     Cash

 

15.0

   

9.1

   

5.4

 

     Goodwill and other intangible assets

 

48.3

   

53.7

   

31.8

 

     Accounts receivable from publishers and advertisers

 

34.9

   

32.4

   

17.7

 

     Other assets

 

1.5

   

1.3

   

.8

 

   Total Marketing Technology assets

 

99.7

   

96.5

   

55.7

 
             

   Other

           

     Fixed maturity investments

 

458.5

   

1,506.1

   

925.3

 

     Short-term investments

 

255.4

   

106.3

   

47.5

 

     Common equity securities

 

911.2

   

866.1

   

827.9

 

     Other long-term investments

 

255.5

   

208.8

   

226.5

 

   Total investments

 

1,880.6

   

2,687.3

   

2,027.2

 

     Cash

 

28.9

   

62.4

   

32.4

 

     Accrued investment income

 

6.3

   

13.9

   

12.8

 

     Accounts receivable on unsettled investment sales

 

3.5

   

20.9

   

199.5

 

     Goodwill and other intangible assets

 

8.3

   

8.4

   

8.5

 

     Other assets

 

17.9

   

19.1

   

12.9

 

     Assets held for sale - OneBeacon

 

   

   

3,696.4

 

     Assets held for sale - Other

 

3.3

   

3.3

   

6.9

 

   Total Other assets

 

1,948.8

   

2,815.3

   

5,996.6

 

   Total assets

 

$

3,368.1

   

$

3,659.2

   

$

6,757.2

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(millions)

(Unaudited)

 
   

June 30,
 2018

 

December 31,
 2017

 

June 30,
 2017

Liabilities

           

   Financial Guarantee (HG Global/BAM)

           

     Unearned insurance premiums

 

$

155.5

   

$

136.8

   

$

109.9

 

     Accounts payable on unsettled investment purchases

 

11.7

   

.6

   

 

     Other liabilities

 

29.3

   

29.6

   

22.7

 

      Total Financial Guarantee liabilities

 

196.5

   

167.0

   

132.6

 
             

Specialty Insurance Distribution (NSM)

           

  Debt

 

149.8

   

   

 

  Premiums payable

 

72.2

   

   

 

  Premiums billed in advance

 

7.6

   

   

 

  Contingent earnout liability

 

17.5

   

   

 

   Other liabilities

 

19.5

   

   

 

      Total Specialty Insurance Distribution liabilities

 

266.6

   

   

 
             

   Marketing Technology (MediaAlpha)

           

     Debt

 

19.8

   

23.8

   

10.6

 

     Amounts due to publishers and advertisers

 

38.3

   

31.6

   

18.3

 

     Other liabilities

 

2.4

   

4.4

   

1.5

 

      Total Marketing Technology liabilities

 

60.5

   

59.8

   

30.4

 
             

   Other

           

     Accrued incentive compensation

 

30.9

   

60.6

   

52.2

 

     Accounts payable on unsettled investment purchases

 

10.0

   

   

114.6

 

     Other liabilities

 

6.1

   

11.0

   

13.8

 

     Liabilities held for sale - OneBeacon

 

   

   

2,678.8

 

      Total Other liabilities

 

47.0

   

71.6

   

2,859.4

 

      Total liabilities

 

570.6

   

298.4

   

3,022.4

 
             

Equity

           

White Mountains's common shareholder's equity

           

     White Mountains's common shares and paid-in surplus

 

575.8

   

670.6

   

815.8

 

     Retained earnings

 

2,366.5

   

2,823.2

   

2,807.4

 

   Accumulated other comprehensive loss, after tax:

           

     Net unrealized foreign currency translation losses and other

 

(2.2)

   

(1.3)

   

(1.3)

 

     Accumulated other comprehensive loss from net change in benefit plan

      assets and obligations

 

   

   

(3.0)

 

      Total White Mountains's common shareholders' equity

 

2,940.1

   

3,492.5

   

3,618.9

 

Non-controlling interests

 

(142.6)

   

(131.7)

   

115.9

 

Total equity

 

2,797.5

   

3,360.8

   

3,734.8

 

Total liabilities and equity

 

$

3,368.1

   

$

3,659.2

   

$

6,757.2

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE

(Unaudited)

 
   

June 30,
 2018

 

March 31,
 2018

 

December 31,
 2017

 

June 30,
 2017

Book value per share numerators (in millions):

               

White Mountains's common shareholders' equity - GAAP book value per

   share numerator

 

$

2,940.1

   

$

3,439.0

   

$

3,492.5

   

$

3,618.9

 

Time value of money discount on expected future payments on the

   BAM Surplus Notes (1)

 

(150.1)

   

(154.1)

   

(157.0)

   

(166.7)

 

HG Global's unearned premium reserve (1)

 

119.5

   

106.8

   

103.9

   

81.5

 

HG Global's net deferred acquisition costs (1)

 

(29.1)

   

(25.2)

   

(24.3)

   

(17.6)

 

Adjusted book value per share numerator

 

$

2,880.4

   

$

3,366.5

   

$

3,415.1

   

$

3,516.1

 

Book value per share denominators (in thousands of shares):

               

Common shares outstanding - GAAP book value per share denominator

 

3,180.4

   

3,753.4

   

3,750.2

   

4,571.6

 

Unearned restricted common shares

 

(22.4)

   

(26.2)

   

(16.8)

   

(27.4)

 

Adjusted book value per share denominator

 

3,158.0

   

3,727.2

   

3,733.4

   

4,544.2

 

GAAP book value per share

 

$

924.46

   

$

916.24

   

$

931.30

   

$

791.61

 

Adjusted book value per share

 

$

912.08

   

$

903.22

   

$

914.75

   

$

773.77

 
                 

(1) Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%.

   

June 30,
 2018

 

March 31,
 2018

 

December 31,
 2017

 

June 30,
 2017

                 

Quarter-to-date change in GAAP book value per share,

   including dividends:

 

0.9

%

 

(1.5)%

   

0.7

%

 

0.6

%

Quarter-to-date change in adjusted book value per share,

   including dividends:

 

1.0

%

 

(1.2)%

   

1.0

%

 

(2.4)%

 

Year-to-date change in GAAP book value per share,

   including dividends:

 

(0.6)%

   

(1.5)%

   

18.8

%

 

1.0

%

Year-to-date change in adjusted book value per share,

   including dividends:

 

(0.2)%

   

(1.2)%

   

16.1

%

 

(1.8)%

 

Year-to-date dividends per share

 

$

1.00

   

$

1.00

   

$

1.00

   

$

1.00

 
                 
   

June 30,
 2018

 

March 31,
 2018

 

December 31,
 2017

 

June 30,
 2017

Summary of goodwill and other intangible assets (in millions):

               

Goodwill and other intangible assets:

               

NSM

 

$

436.2

   

$

   

$

   

$

 

MediaAlpha

 

48.3

   

50.8

   

53.7

   

31.8

 

Other

 

8.3

   

8.4

   

8.4

   

8.5

 

Total goodwill and other intangible assets

 

492.8

   

59.2

   

62.1

   

40.3

 
                 

Goodwill and other intangible assets held for sale

 

   

   

   

.6

 
                 

Goodwill and other intangible assets attributed to

   non-controlling interests

 

(41.7)

   

(21.1)

   

(21.1)

   

(15.2)

 
                 

Goodwill and other intangible assets included in White Mountains's
   common shareholders' equity

 

$

451.1

   

$

38.1

   

$

41.0

   

$

25.7

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(millions)

(Unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2018

 

2017

 

2018

 

2017

Revenues:

               

   Financial Guarantee (HG Global/BAM)

               

     Earned insurance premiums

 

$

3.4

   

$

2.2

   

$

6.4

   

$

4.2

 

     Net investment income

 

4.0

   

3.0

   

7.7

   

5.6

 

     Net realized and unrealized (losses) gains

 

(2.4)

   

1.1

   

(10.3)

   

2.4

 

     Other revenues

 

.4

   

.2

   

.6

   

.6

 

    Total Financial Guarantee revenues

 

5.4

   

6.5

   

4.4

   

12.8

 

Specialty Insurance Distribution (NSM)

               

  Commission revenues

 

22.6

   

   

22.6

   

 

  Other revenues

 

.9

   

   

.9

   

 

    Total Specialty Insurance Distribution revenues

 

23.5

   

   

23.5

   

 

   Marketing Technology (MediaAlpha)

               

     Advertising & commission revenues

 

71.8

   

30.8

   

141.9

   

63.3

 

     Other revenues

 

   

   

1.6

   

 

    Total Marketing Technology revenues

 

71.8

   

30.8

   

143.5

   

63.3

 

   Other

               

     Earned insurance premiums

 

   

   

   

1.0

 

     Net investment income

 

7.8

   

11.7

   

23.8

   

21.9

 

     Net realized and unrealized gains (losses)

 

12.9

   

32.6

   

(32.9)

   

67.6

 

     Advertising & commission revenues

 

1.0

   

.5

   

1.9

   

1.8

 

     Other revenues

 

(.1)

   

1.4

   

.2

   

3.9

 

    Total Other revenues

 

21.6

   

46.2

   

(7.0)

   

96.2

 

    Total revenues

 

122.3

   

83.5

   

164.4

   

172.3

 

Expenses:

               

   Financial Guarantee (HG Global/BAM)

               

     Insurance acquisition expenses

 

1.3

   

.9

   

2.7

   

2.1

 

     Other underwriting expenses

 

.1

   

.1

   

.2

   

.2

 

     General and administrative expenses

 

13.4

   

10.3

   

25.2

   

20.9

 

    Total Financial Guarantee expenses

 

14.8

   

11.3

   

28.1

   

23.2

 

Specialty Insurance Distribution (NSM)

               

     General and administrative expenses

 

12.1

   

   

12.1

   

 

     Broker commission expense

 

6.6

   

   

6.6

   

 

     Interest expense

 

1.6

   

   

1.6

   

 

    Total Specialty Insurance Distribution expenses

 

20.3

   

   

20.3

   

 

   Marketing Technology (MediaAlpha)

               

     Cost of sales

 

59.9

   

26.1

   

117.3

   

53.8

 

     General and administrative expenses

 

4.6

   

3.7

   

15.8

   

6.9

 

     Amortization of other intangible assets

 

2.5

   

2.5

   

5.4

   

4.9

 

     Interest expense

 

.3

   

.3

   

.7

   

.5

 

    Total Marketing Technology expenses

 

67.3

   

32.6

   

139.2

   

66.1

 

   Other

               

     Loss and loss adjustment expenses

 

   

   

   

1.1

 

     Cost of sales

 

1.1

   

.7

   

1.8

   

1.8

 

     General and administrative expenses

 

31.0

   

40.9

   

53.0

   

85.5

 

     Amortization of other intangible assets

 

.1

   

   

.1

   

 

     Interest expense

 

.1

   

.2

   

.3

   

.4

 

    Total Other expenses

 

32.3

   

41.8

   

55.2

   

88.8

 

    Total expenses

 

134.7

   

85.7

   

242.8

   

178.1

 

Pre-tax loss from continuing operations

 

(12.4)

   

(2.2)

   

(78.4)

   

(5.8)

 

Income tax (expense) benefit

 

(2.5)

   

1.0

   

(3.2)

   

1.3

 

Net loss from continuing operations

 

(14.9)

   

(1.2)

   

(81.6)

   

(4.5)

 

(Loss) gain from sale of discontinued operations, net of tax

 

   

(.6)

   

.1

   

(1.6)

 

Net income from discontinued operations, net of tax

 

   

3.4

   

   

35.7

 

Net (loss) income

 

(14.9)

   

1.6

   

(81.5)

   

29.6

 

Net loss attributable to non-controlling interests

 

18.4

   

12.0

   

37.0

   

13.0

 

Net income (loss) attributable to White Mountains's common shareholders

 

3.5

   

13.6

   

(44.5)

   

42.6

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(Unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2018

 

2017

 

2018

 

2017

Net income (loss) attributable to White Mountains's

   common shareholders

 

$

3.5

   

$

13.6

   

$

(44.5)

   

$

42.6

 

Other comprehensive (loss) income, net of tax

 

(.9)

   

   

(.9)

   

.1

 

Comprehensive income from discontinued operations, net of tax

 

   

.2

   

   

.3

 

Comprehensive income (loss)

 

2.6

   

13.8

   

(45.4)

   

43.0

 

Other comprehensive income attributable to non-controlling interests

 

   

   

   

 

Comprehensive income (loss) attributable to White Mountains's

   common shareholders

 

$

2.6

   

$

13.8

   

$

(45.4)

   

$

43.0

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

EARNINGS PER SHARE

(Unaudited)

 

Income (loss) per share attributable to White Mountains's

    common shareholders

 

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2018

 

2017

 

2018

 

2017

Basic income (loss) per share

               

Continuing operations

 

$

1.02

   

$

2.36

   

$

(12.44)

   

$

1.84

 

Discontinued operations

 

   

.61

   

.03

   

7.47

 

Total consolidated operations

 

$

1.02

   

$

2.97

   

$

(12.41)

   

$

9.31

 
                 

Diluted income (loss) per share

               

Continuing operations

 

$

1.02

   

$

2.36

   

$

(12.44)

   

$

1.84

 

Discontinued operations

 

   

.61

   

.03

   

7.47

 

Total consolidated operations

 

$

1.02

   

$

2.97

   

$

(12.41)

   

$

9.31

 

Dividends declared per White Mountains's common share

 

$

   

$

   

$

1.00

   

$

1.00

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)

(millions)

(Unaudited)

 

For the Three Months Ended June 30, 2018

 

HG Global/BAM

               
   

HG Global

 

BAM

 

NSM (1)

 

MediaAlpha

 

Other

 

Total

Revenues:

                       

Earned insurance premiums

 

$

2.7

   

$

.7

   

$

   

$

   

$

   

$

3.4

 

Net investment income

 

1.3

   

2.7

   

   

   

7.8

   

11.8

 

Net investment income (loss) - BAM surplus note interest

 

5.8

   

(5.8)

   

   

   

   

 

Net realized and unrealized investment (losses) gains

 

(1.2)

   

(1.2)

   

   

   

12.9

   

10.5

 

Advertising and commission revenues

 

   

   

22.6

   

71.8

   

1.0

   

95.4

 

Other revenues

 

   

.4

   

.9

   

   

(.1)

   

1.2

 
                         

Total revenues

 

8.6

   

(3.2)

   

23.5

   

71.8

   

21.6

   

122.3

 

Expenses:

                       

Insurance acquisition expenses

 

.7

   

.6

   

   

   

   

1.3

 

Other underwriting expenses

 

   

.1

   

   

   

   

.1

 

Cost of sales

 

   

   

   

59.9

   

1.1

   

61.0

 

General and administrative expenses

 

.2

   

13.2

   

12.1

   

4.6

   

31.0

   

61.1

 

Broker commission expense

 

   

   

6.6

   

   

   

6.6

 

Amortization of other intangible assets

 

   

   

   

2.5

   

.1

   

2.6

 

Interest expense

 

   

   

1.6

   

.3

   

.1

   

2.0

 
                         

Total expenses

 

.9

   

13.9

   

20.3

   

67.3

   

32.3

   

134.7

 
                         

Pre-tax income (loss)

 

$

7.7

   

$

(17.1)

   

$

3.2

   

$

4.5

   

$

(10.7)

   

$

(12.4)

 
 

(1)  NSM's results are from May 11, 2018, the date of acquisition, to the end of the second quarter.

 

For the Three Months Ended June 30, 2017

 

HG Global/BAM

           
   

HG Global

 

BAM

 

MediaAlpha

 

Other

 

Total

Revenues:

                   

Earned insurance premiums

 

$

1.7

   

$

.5

   

$

   

$

   

$

2.2

 

Net investment income

 

.8

   

2.2

   

   

11.7

   

14.7

 

Net investment income (loss) - BAM surplus note interest

 

4.7

   

(4.7)

   

   

   

 

Net realized and unrealized investment gains

 

   

1.1

   

   

32.6

   

33.7

 

Advertising and commission revenues

 

   

   

30.8

   

.5

   

31.3

 

Other revenues

 

   

.2

   

   

1.4

   

1.6

 
                     

Total revenues

 

7.2

   

(.7)

   

30.8

   

46.2

   

83.5

 

Expenses:

                   

Insurance acquisition expenses

 

.3

   

.6

   

   

   

.9

 

Other underwriting expenses

 

   

.1

   

   

   

.1

 

Cost of sales

 

   

   

26.1

   

.7

   

26.8

 

General and administrative expenses

 

.2

   

10.1

   

3.7

   

40.9

   

54.9

 

Amortization of other intangible assets

 

   

   

2.5

   

   

2.5

 

Interest expense

 

   

   

.3

   

.2

   

.5

 
                     

Total expenses

 

.5

   

10.8

   

32.6

   

41.8

   

85.7

 
                     

Pre-tax income (loss)

 

$

6.7

   

$

(11.5)

   

$

(1.8)

   

$

4.4

   

$

(2.2)

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)

(millions)

(Unaudited)

 

For the Six Months Ended June 30, 2018

 

HG Global/BAM

               
   

HG Global

 

BAM

 

NSM (1)

 

MediaAlpha

 

Other

 

Total

Revenues:

                       

Earned insurance premiums

 

$

5.0

   

$

1.4

   

$

   

$

   

$

   

$

6.4

 

Net investment income

 

2.5

   

5.2

   

   

   

23.8

   

31.5

 

Net investment income (loss) - BAM surplus note interest

 

11.5

   

(11.5)

   

   

   

   

 

Net realized and unrealized investment losses

 

(4.8)

   

(5.5)

   

   

   

(32.9)

   

(43.2)

 

Advertising and commission revenues

 

   

   

22.6

   

141.9

   

1.9

   

166.4

 

Other revenue

 

   

.6

   

.9

   

1.6

   

.2

   

3.3

 
                         

Total revenues

 

14.2

   

(9.8)

   

23.5

   

143.5

   

(7.0)

   

164.4

 

Expenses:

                       

Insurance acquisition expenses

 

1.2

   

1.5

   

   

   

   

2.7

 

Other underwriting expenses

 

   

.2

   

   

   

   

.2

 

Cost of sales

 

   

   

   

117.3

   

1.8

   

119.1

 

General and administrative expenses

 

.6

   

24.6

   

12.1

   

15.8

   

53.0

   

106.1

 

Broker commission expense

 

   

   

6.6

   

   

   

6.6

 

Amortization of other intangible assets

 

   

   

   

5.4

   

.1

   

5.5

 

Interest expense

 

   

   

1.6

   

.7

   

.3

   

2.6

 
                         

Total expenses

 

1.8

   

26.3

   

20.3

   

139.2

   

55.2

   

242.8

 
                         

Pre-tax income (loss)

 

$

12.4

   

$

(36.1)

   

$

3.2

   

$

4.3

   

$

(62.2)

   

$

(78.4)

 
 

(1)  NSM's results are from May 11, 2018, the date of acquisition, to the end of the second quarter.

 

For the Six Months Ended June 30, 2017

 

HG Global/BAM

           
   

HG Global

 

BAM

 

MediaAlpha

 

Other

 

Total

Revenues:

                   

Earned insurance premiums

 

$

3.2

   

$

1.0

   

$

   

$

1.0

   

$

5.2

 

Net investment income

 

1.4

   

4.2

   

   

21.9

   

27.5

 

Net investment income (loss) - BAM surplus note interest

 

9.5

   

(9.5)

   

   

   

 

Net realized and unrealized investment gains

 

.3

   

2.1

   

   

67.6

   

70.0

 

Advertising and commission revenues

 

   

   

63.3

   

1.8

   

65.1

 

Other revenue

 

   

.6

   

   

3.9

   

4.5

 
                     

Total revenues

 

14.4

   

(1.6)

   

63.3

   

96.2

   

172.3

 

Expenses:

                   

Loss and loss adjustment expenses

 

   

   

   

1.1

   

1.1

 

Insurance acquisition expenses

 

.6

   

1.5

   

   

   

2.1

 

Other underwriting expenses

 

   

.2

   

   

   

.2

 

Cost of sales

 

   

   

53.8

   

1.8

   

55.6

 

General and administrative expenses

 

.5

   

20.4

   

6.9

   

85.5

   

113.3

 

Amortization of other intangible assets

 

   

   

4.9

   

   

4.9

 

Interest expense

 

   

   

.5

   

.4

   

.9

 
                     

Total expenses

 

1.1

   

22.1

   

66.1

   

88.8

   

178.1

 
                     

Pre-tax income (loss)

 

$

13.3

   

$

(23.7)

   

$

(2.8)

   

$

7.4

   

$

(5.8)

 

 

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

SELECTED FINANCIAL DATA

(millions)

(Unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

BAM

 

2018

 

2017

 

2018

 

2017

Gross par value of primary market policies issued

 

$

2,774.7

   

$

2,574.3

   

$

3,924.2

   

$

4,615.3

 

Gross par value of secondary market policies issued

 

311.5

   

118.6

   

460.1

   

456.7

 

  Total gross par value of market policies issued

 

$

3,086.2

   

$

2,692.9

   

$

4,384.3

   

$

5,072.0

 
                 

Gross written premiums

 

$

18.6

   

$

12.4

   

$

25.0

   

$

31.1

 

Member surplus contributions collected

 

9.9

   

7.7

   

14.8

   

17.3

 

  Total gross written premiums and MSC collected

 

$

28.5

   

$

20.1

   

$

39.8

   

$

48.4

 

Present value of future installment MSC collections

 

1.6

   

1.2

   

2.8

   

1.2

 

Gross written premium adjustments on existing installment policies

 

1.1

   

   

1.1

   

 

Gross written premiums and MSC from new business

 

$

31.2

   

$

21.3

   

$

43.7

   

$

49.6

 

Total pricing

 

101 bps

   

79 bps

   

100 bps

   

98 bps

 
 
 
                   

As of
June 30, 2018

 

As of
December 31, 2017

Policyholders' surplus

                 

$

420.2

   

$

427.3

 

Contingency reserve

                 

41.4

   

34.8

 

  Qualified statutory capital

                 

461.6

   

462.1

 

Statutory net unearned premiums