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White Mountains Reports Second Quarter Results

August 7, 2023 at 8:00 AM EDT

HAMILTON, Bermuda, Aug. 7, 2023 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $1,532 and adjusted book value per share of $1,576 as of June 30, 2023.  Book value per share and adjusted book value per share both increased 1% in the second quarter of 2023 and increased 5% and 6% in the first six months ended June 30, 2023, including dividends.

Manning Rountree, CEO, commented, "ABVPS was up 1% in the quarter.  BAM generated $26 million of total gross written premiums and member surplus contributions in the quarter; year over year primary market issuance is down, while pricing is up.  Ark produced an 89% combined ratio and grew premiums 50% year over year, including risk adjusted rate change of 21%.  Kudu grew annualized adjusted EBITDA to $43 million and closed one new deployment in the quarter.  MediaAlpha's share price declined in the quarter, reducing ABVPS by 2%.  Excluding MediaAlpha, the investment portfolio was up 3% in the quarter, with nice gains in both equities and fixed income.  Following our successful tender offer for MediaAlpha shares during the quarter, undeployed capital now stands at roughly $680 million."

Comprehensive income (loss) attributable to common shareholders was $21 million and $201 million in the second quarter and first six months of 2023 compared to $(174) million and $(143) million in the second quarter and first six months of 2022.  Results in the second quarter and first six months of 2023 included $(77) million and $8 million of unrealized investment gains (losses) from White Mountains's investment in MediaAlpha compared to $(114) million and $(95) million in the second quarter and first six months of 2022. 

HG Global/BAM

BAM's gross written premiums and member surplus contributions (MSC) collected were $26 million and $47 million in the second quarter and first six months of 2023 compared to $41 million and $63 million in the second quarter and first six months of 2022.  BAM insured municipal bonds with par value of $3.4 billion and $6.3 billion in the second quarter and first six months of 2023 compared to $5.9 billion and $9.3 billion in the second quarter and first six months of 2022.  Total pricing was 77 and 75 basis points in the second quarter and first six months of 2023 compared to 70 and 67 basis points in the second quarter and first six months of 2022.  BAM's total claims paying resources were $1,451 million at June 30, 2023 compared to $1,423 million at December 31, 2022 and $1,228 million at June 30, 2022.

Seán McCarthy, CEO of BAM, said, "In the face of higher interest rates, primary market issuance of municipal bonds remained muted for the quarter and half year.  BAM's par insured is down year over year as a result.  Secondary market activity remains a healthy contributor, and total pricing is up year over year.  In June, S&P Global Ratings affirmed BAM's AA rating and Stable outlook."

HG Global reported pre-tax income (loss) of $7 million and $24 million in the second quarter and first six months of 2023 compared to $(8) million and $(23) million in the second quarter and first six months of 2022.  HG Global's results included net realized and unrealized investment gains (losses) of $(6) million and $2 million in the second quarter and first six months of 2023 compared to $(15) million and $(38) million in the second quarter and first six months of 2022.

White Mountains reported pre-tax loss related to BAM of $20 million and $29 million in the second quarter and first six months of 2023 compared to $31 million and $66 million in the second quarter and first six months of 2022.  BAM's results included net realized and unrealized investment gains (losses) of $(4) million and $5 million in the second quarter and first six months of 2023 compared to $(15) million and $(37) million in the second quarter and first six months of 2022.

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 noncontrolling interests.

Ark/WM Outrigger

The Ark/WM Outrigger segment's combined ratio was 87% and 89% in the second quarter and first six months of 2023.  Ark/WM Outrigger reported gross written premiums of $606 million and $1,416 million, net written premiums of $461 million and $1,075 million and net earned premiums of $293 million and $548 million in the second quarter and first six months of 2023.  Ark/WM Outrigger reported pre-tax income of $52 million and $94 million in the second quarter and first six months of 2023.

Ark's combined ratio was 89% and 91% in the second quarter and first six months of 2023 compared to 87% and 93% in the second quarter and first six months of 2022.  Ark's combined ratio in the second quarter and first six months of 2023 both included four points of unfavorable prior year development, primarily due to Winter Storm Elliott and three large claims in the property and marine & energy lines of business, compared to ten points and six points of favorable prior year development in the second quarter and first six months of 2022.  Ark's combined ratio in the second quarter and first six months of 2023 included five points and three points of catastrophe losses compared to 11 points and 14 points of catastrophe losses, driven primarily by losses from the conflict in Ukraine, in the second quarter and first six months of 2022. 

Ark reported gross written premiums of $606 million and $1,416 million, net written premiums of $403 million and $973 million and net earned premiums of $284 million and $534 million in the second quarter and first six months of 2023 compared to gross written premiums of $404 million and $1,037 million, net written premiums of $270 million and $814 million and net earned premiums of $217 million and $412 million in the second quarter and first six months of 2022.  Ark reported pre-tax income (loss) of $42 million and $78 million in the second quarter and first six months of 2023 compared to $(21) million and $(45) million in the second quarter and first six months of 2022.  Ark's results included net realized and unrealized investment gains (losses) of $18 million and $43 million in the second quarter and first six months of 2023 compared to $(45) million and $(62) million in the second quarter and first six months of 2022.

Ian Beaton, CEO of Ark, said, "We are off to a good start through the first half of 2023 amidst a continuing strong rate environment, particularly in property and marine & energy.  Ark's combined ratio was 89% for the second quarter.  Gross written premiums were up 50% over prior year in the quarter, with risk adjusted rate change up 21%.  We believe we are well-positioned for the second half of the year."

WM Outrigger Re's combined ratio was 25% and 24% in the second quarter and first six months of 2023.  WM Outrigger Re reported gross and net written premiums of $58 million and $102 million and net earned premiums of $10 million and $15 million in the second quarter and first six months of 2023. 

Kudu

Kudu reported total revenues of $19 million, pre-tax income of $10 million and adjusted EBITDA of $12 million in the second quarter of 2023 compared to total revenues of $(4) million, pre-tax loss of $10 million and adjusted EBITDA of $11 million in the second quarter of 2022.  Total revenues, pre-tax income (loss) and adjusted EBITDA included $15 million of net investment income in the second quarter of 2023 compared to $14 million in the second quarter of 2022.  Total revenues and pre-tax income (loss) also included $5 million of net realized and unrealized investment gains (losses) in the second quarter of 2023 compared to $(18) million in the second quarter of 2022.  

Kudu reported total revenues of $63 million, pre-tax income of $45 million and adjusted EBITDA of $23 million in the first six months of 2023 compared to total revenues of $31 million, pre-tax income of $19 million and adjusted EBITDA of $21 million in the first six months of 2022.  Total revenues, pre-tax income and adjusted EBITDA included $29 million of net investment income in the first six months of 2023 compared to $26 million in the first six months of 2022.  Total revenues and pre-tax income also included $34 million of net realized and unrealized investment gains in the first six months of 2023 compared to $5 million in the first six months of 2022. 

Rob Jakacki, CEO of Kudu, said, "Trailing 12 months net investment income increased 1% quarter-over-quarter to $57 million, notwithstanding the impact of our recent portfolio exits.  Annualized revenues finished the quarter at $57 million and annualized adjusted EBITDA at $43 million.  We are pleased to have closed our investment in Martis Capital, a healthcare investor specializing in buyout and growth equity investments.  Our pipeline remains robust, and we expect additional deployments this year."

MediaAlpha 

During the second quarter of 2023, White Mountains completed a tender offer to purchase 5.9 million additional shares of MediaAlpha at a purchase price of $10.00 per share.  As of June 30, 2023, White Mountains owns 22.9 million shares of MediaAlpha, representing a 36% basic ownership interest (33% on a fully-diluted/fully-converted basis).  As of June 30, 2023, MediaAlpha's closing price was $10.31 per share, which decreased from $14.98 per share at March 31, 2023.  The carrying value of White Mountains's investment in MediaAlpha was $236 million as of June 30, 2023 compared to $254 million at March 31, 2023.  The $18 million decline in MediaAlpha's carrying value included $79 million of mark-to-market losses attributable to the 16.9 million shares of MediaAlpha owned by White Mountains as of March 31, 2023, partially offset by a $59 million increase in the carrying value attributable to the shares acquired in the tender offer and $2 million of mark-to-market gains attributable to the newly acquired shares.  At our current level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $9.00 per share increase or decrease in White Mountains's book value per share and adjusted book value per share.  We encourage you to read MediaAlpha's second quarter earnings release and related shareholder letter, which is available on MediaAlpha's investor relations website at www.investors.mediaalpha.com

Other Operations

White Mountains's Other Operations reported pre-tax income (loss) of $(31) million and $82 million in the second quarter and first six months of 2023 compared to $(162) million and $(133) million in the second quarter and first six months of 2022.  Unrealized investment gains (losses) from White Mountains's investment in MediaAlpha were $(77) million and $8 million in the second quarter and first six months of 2023 compared to $(114) million and $(95) million in the second quarter and first six months of 2022.  Excluding MediaAlpha, net realized and unrealized investment gains (losses) were $76 million and $118 million in the second quarter and first six months of 2023 compared to $(12) million and $20 million in the second quarter and first six months of 2022.  Net investment income was $7 million and $14 million in the second quarter and first six months of 2023 compared to $3 million and $5 million in the second quarter and first six months of 2022.  The increase in net investment income in the second quarter and first six months of 2023 compared to the second quarter and first six months of 2022 was driven primarily by the increase in invested assets resulting from the sale of NSM in the third quarter of 2022.  White Mountains's Other Operations reported general and administrative expenses of $49 million and $89 million in the second quarter and first six months of 2023 compared to $51 million and $81 million in the second quarter and first six months of 2022.

Share Repurchases

In the second quarter of 2023, White Mountains repurchased and retired 5,542 of its common shares for $7 million at an average share price of $1,336.68, or 85% of White Mountains's adjusted book value per share at June 30, 2023.  In the first six months of 2023, White Mountains repurchased and retired 24,165 of its common shares for $33 million at an average share price of $1,354.88, or 86% of White Mountains's adjusted book value per share at June 30, 2023.

In the second quarter of 2022, White Mountains repurchased and retired 53,100 of its common shares for $63 million at an average share price of $1,179.96.  In the first six months of 2022, White Mountains repurchased and retired 90,535 of its common shares for $102 million at an average share price of $1,121.60.

Investments

The total consolidated portfolio return was 0.9% in the second quarter of 2023.  Excluding MediaAlpha, the total consolidated portfolio return was 3.0% in the second quarter of 2023.  The total consolidated portfolio return was -4.7% in the second quarter of 2022.  Excluding MediaAlpha, the total consolidated portfolio return was -2.1% in the second quarter of 2022. 

The total consolidated portfolio return was 5.5% in the first six months of 2023. Excluding MediaAlpha, the total consolidated portfolio return was 6.1% in the first six months of 2023.  The total consolidated portfolio return was -4.0% in the first six months of 2022.  Excluding MediaAlpha, the total consolidated portfolio return was -1.9% in the first six months of 2022.

Mark Plourde, President of White Mountains Advisors, said, "Excluding MediaAlpha, the total portfolio returned 3.0% in the quarter.  Our short-duration fixed income portfolio returned 0.5%, well ahead of the BBIA Index return of -0.7% as interest rates rose in the quarter.  The equity portfolio, excluding MediaAlpha, returned 4.9%, a solid absolute result but behind the S&P 500 Index return of 8.7%."

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, 2023

 

December 31, 2022

 

June 30, 2022

             

Financial Guarantee (HG Global/BAM)

           

Fixed maturity investments

 

$                         932.9

 

$                          909.9

 

$                         884.4

Short-term investments

 

67.5

 

65.9

 

55.3

Total investments

 

1,000.4

 

975.8

 

939.7

Cash

 

2.9

 

18.2

 

21.6

Insurance premiums receivable

 

6.4

 

6.6

 

6.9

Deferred acquisition costs

 

37.4

 

36.0

 

33.9

Other assets

 

25.3

 

21.9

 

19.7

Total Financial Guarantee assets

 

1,072.4

 

1,058.5

 

1,021.8

P&C Insurance and Reinsurance (Ark/WM Outrigger)

           

Fixed maturity investments

 

755.8

 

772.8

 

739.3

Common equity securities

 

382.6

 

334.6

 

278.6

Short-term investments

 

640.3

 

484.6

 

101.2

Other long-term investments

 

410.7

 

373.6

 

330.0

Total investments

 

2,189.4

 

1,965.6

 

1,449.1

Cash

 

101.7

 

101.5

 

214.6

Reinsurance recoverables

 

669.7

 

595.3

 

504.1

Insurance premiums receivable

 

1,077.2

 

544.1

 

894.8

Deferred acquisition costs

 

232.1

 

127.2

 

192.4

Goodwill and other intangible assets

 

292.5

 

292.5

 

292.5

Other assets

 

69.4

 

65.2

 

67.9

Total P&C Insurance and Reinsurance assets

 

4,632.0

 

3,691.4

 

3,615.4

Asset Management (Kudu)

           

 Short-term investments

 

4.1

 

 

 Other long-term investments

 

737.1

 

695.9

 

727.0

Total investments

 

741.2

 

695.9

 

727.0

 Cash (restricted $13.4, $12.2, $7.3)

 

25.0

 

101.4

 

124.1

 Accrued investment income

 

13.1

 

12.4

 

11.2

 Goodwill and other intangible assets

 

8.4

 

8.6

 

8.7

 Other assets

 

10.0

 

7.6

 

10.4

Total Asset Management assets

 

797.7

 

825.9

 

881.4

   Other Operations

           

 Fixed maturity investments

 

252.0

 

238.2

 

243.0

 Common equity securities

 

272.5

 

333.8

 

 Investment in MediaAlpha

 

235.7

 

168.6

 

166.9

 Short-term investments

 

274.2

 

373.6

 

88.6

 Other long-term investments

 

667.2

 

418.5

 

411.7

Total investments

 

1,701.6

 

1,532.7

 

910.2

 Cash

 

24.9

 

33.9

 

23.1

 Goodwill and other intangible assets

 

72.7

 

91.3

 

96.8

 Other assets

 

75.0

 

155.6

 

114.4

 Assets held for sale - NSM Group

 

 

 

997.8

Total Other Operations assets

 

1,874.2

 

1,813.5

 

2,142.3

Total assets

 

$                      8,376.3

 

$                       7,389.3

 

$                      7,660.9

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(millions)

(Unaudited)

 
   

June 30, 2023

 

December 31, 2022

 

June 30, 2022

Liabilities

           

Financial Guarantee (HG Global/BAM)

           

Unearned insurance premiums

 

$                         303.7

 

$                         298.3

 

$                         274.0

Debt

 

146.7

 

146.5

 

146.3

Accrued incentive compensation

 

14.7

 

28.0

 

16.5

Other liabilities

 

34.6

 

29.0

 

32.7

Total Financial Guarantee liabilities

 

499.7

 

501.8

 

469.5

P&C Insurance and Reinsurance (Ark/WM Outrigger)

           

Loss and loss adjustment expense reserves

 

1,421.0

 

1,296.5

 

1,022.1

Unearned insurance premiums

 

1,376.5

 

623.2

 

1,020.6

Debt

 

185.1

 

183.7

 

183.5

Reinsurance payable

 

247.0

 

251.1

 

418.8

Contingent consideration

 

45.1

 

45.3

 

30.2

Other liabilities

 

116.6

 

122.3

 

105.1

Total P&C Insurance and Reinsurance liabilities

 

3,391.3

 

2,522.1

 

2,780.3

Asset Management (Kudu)

           

Debt

 

203.7

 

208.3

 

253.3

Other liabilities

 

51.0

 

65.0

 

45.3

Total Asset Management liabilities

 

254.7

 

273.3

 

298.6

   Other Operations

           

Debt

 

30.6

 

36.7

 

35.0

Accrued incentive compensation

 

51.0

 

86.1

 

51.1

Other liabilities

 

23.1

 

34.3

 

30.0

       Liabilities held for sale - NSM Group

 

 

 

504.4

Total Other Operations liabilities

 

104.7

 

157.1

 

620.5

Total liabilities

 

4,250.4

 

3,454.3

 

4,168.9

             

Equity

           

White Mountains's common shareholder's equity

           

  White Mountains's common shares and paid-in surplus

 

543.2

 

538.6

 

603.2

     Retained earnings

 

3,380.7

 

3,211.8

 

2,725.1

 Accumulated other comprehensive income (loss), after tax:

           

 Net unrealized gains (losses) from foreign currency translation and

    interest rate swap

 

(1.7)

 

(3.5)

 

(5.0)

Total White Mountains's common shareholders' equity

 

3,922.2

 

3,746.9

 

3,323.3

Noncontrolling interests

 

203.7

 

188.1

 

168.7

Total equity

 

4,125.9

 

3,935.0

 

3,492.0

Total liabilities and equity

 

$                      8,376.3

 

$                      7,389.3

 

$                      7,660.9

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE

(Unaudited)

 
   

June 30,
2023

 

March 31,
2023

 

December 31,
2022

 

June 30,
2022

Book value per share numerators (in millions):

               

White Mountains's common shareholders' equity -

  GAAP book value per share numerator

 

$       3,922.2

 

$       3,902.4

 

$       3,746.9

 

$       3,323.3

Time value of money discount on expected future payments on the

   BAM surplus notes (1)

 

(91.8)

 

(93.4)

 

(95.1)

 

(115.9)

HG Global's unearned premium reserve (1)

 

246.8

 

243.3

 

242.1

 

221.6

HG Global's net deferred acquisition costs (1)

 

(70.7)

 

(69.4)

 

(69.0)

 

(62.6)

Adjusted book value per share numerator

 

$       4,006.5

 

$       3,982.9

 

$       3,824.9

 

$       3,366.4

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

               

Common shares outstanding - GAAP book value per share denominator

 

2,560.4

 

2,564.5

 

2,572.1

 

2,942.9

Unearned restricted common shares

 

(19.0)

 

(22.3)

 

(14.1)

 

(20.9)

Adjusted book value per share denominator

 

2,541.4

 

2,542.2

 

2,558.0

 

2,922.0

GAAP book value per share

 

$     1,531.84

 

1,521.73

 

$     1,456.74

 

$     1,129.27

Adjusted book value per share

 

$     1,576.46

 

1,566.73

 

$     1,495.28

 

$     1,152.12

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

                 
   

June 30,
2023

 

March 31,
2023

 

December 31,
2022

 

June 30,
2022

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

   including dividends:

 

0.7 %

 

4.5 %

 

1.2 %

 

(4.5) %

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

   including dividends:

 

0.6 %

 

4.8 %

 

1.7 %

 

(4.3) %

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

   including dividends:

 

5.2 %

 

4.5 %

 

24.0 %

 

(3.9) %

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

   including dividends:

 

5.5 %

 

4.8 %

 

25.7 %

 

(3.1) %

Year-to-date dividends per share

 

$           1.00

 

$           1.00

 

$           1.00

 

$           1.00

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(millions)

(Unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2023

 

2022

 

2023

 

2022

Revenues:

               

Financial Guarantee (HG Global/BAM)

               

Earned insurance premiums

 

$                 7.7

 

$               10.5

 

$               15.4

 

$               18.9

Net investment income

 

7.6

 

4.8

 

14.8

 

9.4

Net realized and unrealized investment gains (losses)

 

(9.9)

 

(30.1)

 

7.1

 

(75.2)

Other revenues

 

.5

 

1.6

 

1.3

 

2.4

Total Financial Guarantee revenues

 

5.9

 

(13.2)

 

38.6

 

(44.5)

P&C Insurance and Reinsurance (Ark/WM Outrigger)

               

Earned insurance premiums

 

293.3

 

217.3

 

548.4

 

411.7

Net investment income

 

13.7

 

3.2

 

24.3

 

4.8

Net realized and unrealized investment gains (losses)

 

18.0

 

(44.6)

 

42.5

 

(62.1)

Other revenues

 

(2.0)

 

6.3

 

(4.7)

 

3.5

Total P&C Insurance and Reinsurance revenues

 

323.0

 

182.2

 

610.5

 

357.9

Asset Management (Kudu)

               

Net investment income

 

14.7

 

13.8

 

28.9

 

26.4

Net realized and unrealized investment gains (losses)

 

4.6

 

(17.6)

 

34.2

 

4.7

Total Asset Management revenues

 

19.3

 

(3.8)

 

63.1

 

31.1

Other Operations

               

Net investment income

 

7.0

 

3.3

 

14.0

 

5.1

Net realized and unrealized investment gains (losses)

 

76.0

 

(11.8)

 

117.8

 

20.1

Net realized and unrealized investment gains (losses)

   from investment in MediaAlpha

 

(77.3)

 

(113.5)

 

7.9

 

(94.7)

Commission revenues

 

3.2

 

2.6

 

6.5

 

5.5

Other revenues

 

21.3

 

30.9

 

51.9

 

56.6

Total Other Operations revenues

 

30.2

 

(88.5)

 

198.1

 

(7.4)

Total revenues

 

$             378.4

 

$               76.7

 

$              910.3

 

$              337.1

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

(millions)

(Unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2023

 

2022

 

2023

 

2022

Expenses:

               

Financial Guarantee (HG Global/BAM)

               

Acquisition expenses

 

$                 1.5

 

$                 4.8

 

$                 4.2

 

$                 7.8

General and administrative expenses

 

14.9

 

17.4

 

32.2

 

33.7

 Interest expense

 

2.5

 

3.4

 

7.0

 

3.4

Total Financial Guarantee expenses

 

18.9

 

25.6

 

43.4

 

44.9

P&C Insurance and Reinsurance (Ark/WM Outrigger)

               

Loss and loss adjustment expenses

 

167.5

 

120.5

 

315.3

 

242.5

Acquisition expenses

 

61.4

 

50.2

 

121.2

 

100.1

General and administrative expenses

 

34.9

 

29.7

 

70.1

 

50.7

Change in fair value of contingent consideration

 

2.2

 

.1

 

(.2)

 

2.2

Interest expense

 

5.2

 

3.1

 

10.2

 

6.9

Total P&C Insurance and Reinsurance expenses

 

271.2

 

203.6

 

516.6

 

402.4

Asset Management (Kudu)

               

General and administrative expenses

 

4.0

 

3.1

 

7.8

 

5.9

Interest expense

 

5.3

 

3.3

 

10.0

 

6.1

Total Asset Management expenses

 

9.3

 

6.4

 

17.8

 

12.0

Other Operations

               

Cost of sales

 

11.6

 

22.4

 

25.5

 

43.8

General and administrative expenses

 

48.8

 

51.0

 

88.5

 

80.8

Interest expense

 

1.2

 

.3

 

2.0

 

.6

Total Other Operations expenses

 

61.6

 

73.7

 

116.0

 

125.2

Total expenses

 

361.0

 

309.3

 

693.8

 

584.5

Pre-tax income (loss) from continuing operations

 

17.4

 

(232.6)

 

216.5

 

(247.4)

 Income tax (expense) benefit

 

(.2)

 

16.0

 

(12.1)

 

18.7

Net income (loss) from continuing operations

 

17.2

 

(216.6)

 

204.4

 

(228.7)

Net income (loss) from discontinued operations, net of tax - NSM

   Group

 

 

6.4

 

 

10.1

Net income (loss)

 

17.2

 

(210.2)

 

204.4

 

(218.6)

 Net (income) loss attributable to noncontrolling interests

 

2.4

 

41.0

 

(5.3)

 

82.8

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

   shareholders

 

$               19.6

 

$           (169.2)

 

$             199.1

 

$           (135.8)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(Unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2023

 

2022

 

2023

 

2022

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

   shareholders

 

$                 19.6

 

$              (169.2)

 

$               199.1

 

$              (135.8)

Other comprehensive income (loss), net of tax

 

1.4

 

(1.1)

 

2.6

 

(1.5)

Other comprehensive income (loss) from discontinued operations,

   net of tax - NSM Group

 

 

(4.0)

 

 

(5.9)

Comprehensive income (loss)

 

21.0

 

(174.3)

 

201.7

 

(143.2)

Other comprehensive (income) loss attributable to noncontrolling interests

 

(.4)

 

.5

 

(.8)

 

.7

Comprehensive income (loss) attributable to

   White Mountains's common shareholders

 

$                 20.6

 

$              (173.8)

 

$               200.9

 

$              (142.5)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

EARNINGS PER SHARE 

(Unaudited) 

 

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

   common shareholders

 

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2023

 

2022

 

2023

 

2022

Basic earnings (loss) per share

               

Continuing operations

 

$                  7.65

 

$              (58.78)

 

$                77.57

 

$              (48.57)

Discontinued operations

 

 

1.98

 

 

3.17

Total consolidated operations

 

$                  7.65

 

$              (56.80)

 

$                77.57

 

$              (45.40)

                 

Diluted earnings (loss) per share

               

Continuing operations

 

$                  7.65

 

$              (58.78)

 

$                77.57

 

$              (48.57)

Discontinued operations

 

 

1.98

 

 

3.17

Total consolidated operations

 

$                  7.65

 

$              (56.80)

 

$                77.57

 

$              (45.40)

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, 2023

 

HG Global/BAM

 

Ark/WM Outrigger

           
   

HG
Global

 

BAM

 

Ark

 

WM
Outrigger Re

 

Kudu

 

Other
Operations

 

Total

Revenues:

                           

Earned insurance premiums

 

$         6.4

 

$         1.3

 

$     283.7

 

$             9.6

 

$          —

 

$            —

 

$      301.0

Net investment income

 

4.1

 

3.5

 

11.2

 

2.5

 

14.7

 

7.0

 

43.0

Net investment income (expense) -

 BAM surplus note interest

 

6.5

 

(6.5)

 

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(5.7)

 

(4.2)

 

18.0

 

 

4.6

 

76.0

 

88.7

   Net realized and unrealized investment gains

     (losses) from investment in MediaAlpha

 

 

 

 

 

 

(77.3)

 

(77.3)

Commission revenues

 

 

 

 

 

 

3.2

 

3.2

Other revenues

 

 

.5

 

(2.0)

 

 

 

21.3

 

19.8

                             

Total revenues

 

11.3

 

(5.4)

 

310.9

 

12.1

 

19.3

 

30.2

 

378.4

Expenses:

                           

Loss and loss adjustment expenses

 

 

 

167.1

 

.4

 

 

 

167.5

Acquisition expenses

 

1.8

 

(.3)

 

59.4

 

2.0

 

 

 

62.9

Cost of sales

 

 

 

 

 

 

11.6

 

11.6

General and administrative expenses

 

.3

 

14.6

 

34.9

 

 

4.0

 

48.8

 

102.6

Change in fair value of contingent consideration

 

 

 

2.2

 

 

 

 

2.2

Interest expense

 

2.5

 

 

5.2

 

 

5.3

 

1.2

 

14.2

Total expenses

 

4.6

 

14.3

 

268.8

 

2.4

 

9.3

 

61.6

 

361.0

                             

Pre-tax income (loss)

 

$         6.7

 

$     (19.7)

 

$       42.1

 

$             9.7

 

$       10.0

 

$       (31.4)

 

$        17.4

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED) 

(millions) 

(Unaudited) 

 

For the Three Months Ended June 30, 2022

 

HG Global/BAM

 

Ark/WM

Outrigger

           
   

HG
Global

 

BAM

 

Ark

 

Kudu

 

Other
Operations

 

Total

Revenues:

                       

Earned insurance premiums

 

$       8.7

 

$       1.8

 

$    217.3

 

$       —

 

$             —

 

$  227.8

Net investment income

 

2.2

 

2.6

 

3.2

 

13.8

 

3.3

 

25.1

Net investment income (expense) -

 BAM surplus note interest

 

3.0

 

(3.0)

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(14.7)

 

(15.4)

 

(44.6)

 

(17.6)

 

(11.8)

 

(104.1)

   Net realized and unrealized investment gains (losses)

      from investment in MediaAlpha

 

 

 

 

 

(113.5)

 

(113.5)

Commission revenues

 

 

 

 

 

2.6

 

2.6

Other revenues

 

.1

 

1.5

 

6.3

 

 

30.9

 

38.8

                         

Total revenues

 

(.7)

 

(12.5)

 

182.2

 

(3.8)

 

(88.5)

 

76.7

Expenses:

                       

Loss and loss adjustment expenses

 

 

 

120.5

 

 

 

120.5

Acquisition expenses

 

3.4

 

1.4

 

50.2

 

 

 

55.0

Cost of sales

 

 

 

 

 

22.4

 

22.4

General and administrative expenses

 

.8

 

16.6

 

29.7

 

3.1

 

51.0

 

101.2

Change in fair value of contingent consideration

 

 

 

.1

 

 

 

.1

Interest expense

 

3.4

 

 

3.1

 

3.3

 

.3

 

10.1

                         

Total expenses

 

7.6

 

18.0

 

203.6

 

6.4

 

73.7

 

309.3

                         

Pre-tax income (loss)

 

$     (8.3)

 

$   (30.5)

 

$    (21.4)

 

$  (10.2)

 

$      (162.2)

 

$ (232.6)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED) 

(millions) 

(Unaudited) 

 

For the Six Months Ended June 30, 2023

 

HG Global/BAM

 

Ark/WM Outrigger

           
   

HG
Global

 

BAM

 

Ark

 

WM
Outrigger Re

 

Kudu

 

Other
Operations

 

Total

Revenues:

                           

Earned insurance premiums

 

$       12.8

 

$         2.6

 

$     533.6

 

$           14.8

 

$          —

 

$            —

 

$      563.8

Net investment income

 

8.1

 

6.7

 

19.6

 

4.7

 

28.9

 

14.0

 

82.0

Net investment income (expense) -

 BAM surplus note interest

 

13.1

 

(13.1)

 

 

 

 

 

Net realized and unrealized investment gains (losses)

 

2.2

 

4.9

 

42.5

 

 

34.2

 

117.8

 

201.6

   Net realized and unrealized investment gains

     (losses) from investment in MediaAlpha

 

 

 

 

 

 

7.9

 

7.9

Commission revenues

 

 

 

 

 

 

6.5

 

6.5

Other revenues

 

 

1.3

 

(4.7)

 

 

 

51.9

 

48.5

                             

Total revenues

 

36.2

 

2.4

 

591.0

 

19.5

 

63.1

 

198.1

 

910.3

Expenses:

                           

Loss and loss adjustment expenses

 

 

 

314.7

 

.6

 

 

 

315.3

Acquisition expenses

 

3.6

 

.6

 

118.3

 

2.9

 

 

 

125.4

Cost of sales

 

 

 

 

 

 

25.5

 

25.5

General and administrative expenses

 

1.4

 

30.8

 

70.0

 

.1

 

7.8

 

88.5

 

198.6

Change in fair value of contingent consideration

 

 

 

(.2)

 

 

 

 

(.2)

Interest expense

 

7.0

 

 

10.2

 

 

10.0

 

2.0

 

29.2

Total expenses

 

12.0

 

31.4

 

513.0

 

3.6

 

17.8

 

116.0

 

693.8

                             

Pre-tax income (loss)

 

$       24.2

 

$     (29.0)

 

$       78.0

 

$           15.9

 

$       45.3

 

$         82.1

 

$      216.5

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED) 

(millions) 

(Unaudited) 

 
 

For the Six Months Ended June 30, 2022

 

HG Global/BAM

 

Ark/WM
Outrigger

           
   

HG Global

 

BAM

 

Ark

 

Kudu

 

Other
Operations

 

Total

Revenues:

                       

Earned insurance premiums

 

$        15.6

 

$          3.3

 

$             411.7

 

$             —

 

$               —

 

$          430.6

Net investment income

 

4.3

 

5.1

 

4.8

 

26.4

 

5.1

 

45.7

Net investment income (expense) -

 BAM surplus note interest

 

5.9

 

(5.9)

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(38.2)

 

(37.0)

 

(62.1)

 

4.7

 

20.1

 

(112.5)

Net realized and unrealized investment gains (losses)

   from investment in MediaAlpha

 

 

 

 

 

(94.7)

 

(94.7)

Commission revenues

 

 

 

 

 

5.5

 

5.5

Other revenues

 

.2

 

2.2

 

3.5

 

 

56.6

 

62.5

                         

Total revenues

 

(12.2)

 

(32.3)

 

357.9

 

31.1

 

(7.4)

 

337.1

Expenses:

                       

Loss and loss adjustment expenses

 

 

 

242.5

 

 

 

242.5

Acquisition expenses

 

6.0

 

1.8

 

100.1

 

 

 

107.9

Cost of sales

 

 

 

 

 

43.8

 

43.8

General and administrative expenses

 

1.5

 

32.2

 

50.7

 

5.9

 

80.8

 

171.1

Change in fair value of contingent consideration

 

 

 

2.2

 

 

 

2.2

Interest expense

 

3.4

 

 

6.9

 

6.1

 

.6

 

17.0

Total expenses

 

10.9

 

34.0

 

402.4

 

12.0

 

125.2

 

584.5

                         

Pre-tax income (loss)

 

$       (23.1)

 

$       (66.3)

 

$             (44.5)

 

$          19.1

 

$        (132.6)

 

$        (247.4)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

SELECTED FINANCIAL DATA

($ in millions)

(Unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

BAM

 

2023

 

2022

 

2023

 

2022

Gross par value of primary market policies issued

 

$            2,890.2

 

$            4,123.7

 

$            5,075.6

 

$            6,878.8

Gross par value of secondary market policies issued

 

500.3

 

1,743.8

 

1,204.5

 

2,442.9

Total gross par value of market policies issued

 

$            3,390.5

 

$            5,867.5

 

$            6,280.1

 

$            9,321.7

Gross written premiums

 

$                 11.6

 

$                 17.1

 

$                 20.8

 

$                 26.5

MSC collected

 

14.7

 

24.0

 

26.5

 

36.3

Total gross written premiums and MSC collected

 

$                 26.3

 

$                 41.1

 

$                 47.3

 

$                 62.8

Total pricing

 

77 bps

 

70 bps

 

75 bps

 

67 bps

 

   

As of
June 30, 2023

 

As of
December 31, 2022

 

As of
June 30, 2022

Policyholders' surplus

 

$                   281.5

 

$                   283.4

 

$                   303.4

Contingency reserve

 

126.9

 

118.2

 

109.8

Qualified statutory capital

 

408.4

 

401.6

 

413.2

Statutory net unearned premiums

 

56.9

 

55.3

 

51.1

Present value of future installment premiums and MSC

 

12.5

 

13.3

 

13.9

HG Re, Ltd collateral trusts at statutory value

 

573.4

 

553.1

 

499.4

Fidus Re, Ltd collateral trust at statutory value

 

400.0

 

400.0

 

250.0

Claims paying resources

 

$               1,451.2

 

$               1,423.3

 

$               1,227.6

 

   

Three Months Ended June 30,

 

Six Months Ended June 30,

HG Global

 

2023

 

2022

 

2023

 

2022

Net written premiums

 

$                  10.0

 

$                  14.7

 

$                  17.7

 

$                  22.8

Earned premiums

 

$                    6.4

 

$                    8.7

 

$                  12.8

 

$                  15.6

 

   

As of
June 30, 2023

 

As of
December 31, 2022

 

As of
June 30, 2022

Unearned premiums

 

$                   254.7

 

$                   249.8

 

$                   228.7

Deferred acquisition costs

 

$                     72.9

 

$                     71.2

 

$                     64.6