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White Mountains Reports Third Quarter Results

November 7, 2022 at 8:00 AM EST

HAMILTON, Bermuda, Nov. 7, 2022 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $1,439 and adjusted book value per share of $1,471 as of September 30, 2022.  Book value per share and adjusted book value per share both increased 28% in the third quarter of 2022.  Book value per share and adjusted book value per share increased 23% and 24% in the first nine months of 2022, including dividends.  The increase in book value per share and adjusted book value per share was driven primarily by the net gain from the sale of NSM.

Manning Rountree, CEO, commented, "ABVPS was up 28% in the quarter.  The main driver was the gain on our sale of NSM, which closed on August 1 and added roughly $300 to ABVPS.  Aside from this, ABVPS was up slightly driven primarily by good operating results at our businesses, partially offset by mark-to-market losses in our fixed income portfolio and the decline in MediaAlpha's share price.  BAM produced record levels of premiums.  Ark produced an 87% combined ratio, despite significant catastrophe activity, while growing premiums 33% year-over-year.  The fair value of Kudu's existing participation contracts increased 12% in the quarter, reflecting announced sale transactions and good portfolio performance in a volatile investment environment.  Kudu grew adjusted EBITDA year-over-year and closed two new transactions.  During the quarter, we repurchased a little over $500 million of shares, including the results of our self-tender offer.  Undeployed capital now stands at roughly $1.1 billion."

Comprehensive income (loss) attributable to common shareholders was $890 million and $748 million in the third quarter and first nine months of 2022 compared to $(373) million and $(308) million in the third quarter and first nine months of 2021.  Results in the third quarter and first nine months of 2022 were driven primarily by the net gain from the sale of NSM of $876 million, which includes the impact of compensation and other costs recorded in Other Operations.  Results in the third quarter and first nine months of 2022 also included $19 million and $113 million of unrealized investment losses from White Mountains's investment in MediaAlpha compared to $397 million and $326 million in the third quarter and first nine months of 2021.

HG Global/BAM

BAM's gross written premiums and member surplus contributions (MSC) collected were $46 million and $109 million in the third quarter and first nine months of 2022 compared to $28 million and $84 million in the third quarter and first nine months of 2021.  BAM insured municipal bonds with par value of $4.1 billion and $13.5 billion in the third quarter and first nine months of 2022 compared to $4.0 billion and $12.6 billion in the third quarter and first nine months of 2021.  Total pricing was 110 and 81 basis points in the third quarter and first nine months of 2022 compared to 69 and 66 basis points in the third quarter and first nine months of 2021.  BAM's total claims paying resources were $1,260 million at September 30, 2022 compared to $1,192 million at December 31, 2021 and $1,181 million at September 30, 2021

Seán McCarthy, CEO of BAM, said, "BAM posted good results for par insured and premiums during the third quarter. Demand for insured bonds remained strong as investors focused on liquidity and quality ratings in response to volatile market conditions.  That consistent demand, and the higher rate environment, helped improve pricing over the prior year."

HG Global reported pre-tax income (loss) of $(12) million and $(35) million in the third quarter and first nine months of 2022 compared to $7 million and $16 million in the third quarter and first nine months of 2021.  The decrease in HG Global's pre-tax income (loss) in the third quarter and first nine months of 2022 compared to the third quarter and first nine months of 2021 was driven primarily by net unrealized investment losses on the HG Global fixed income portfolio.

White Mountains reported pre-tax loss related to BAM of $32 million and $98 million in the third quarter and first nine months of 2022 compared to $15 million and $47 million in the third quarter and first nine months of 2021.  The increase in pre-tax loss related to BAM in the third quarter and first nine months of 2022 compared to the third quarter and first nine months of 2021 was driven primarily by net unrealized investment losses on the BAM fixed income portfolio.

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.

Ark

Ark's GAAP combined ratio was 87% and 90% in the third quarter and first nine months of 2022 compared to 92% and 95% in the third quarter and first nine months of 2021.  Ark's adjusted combined ratio, which adds back amounts attributable to third-party capital providers, was 86% and 90% in the third quarter and first nine months of 2022 compared to 89% and 93% in the third quarter and first nine months of 2021.  The adjusted combined ratio for the third quarter and first nine months of 2022 included 21 points and 17 points of catastrophe losses compared to 21 points and 16 points in the third quarter and first nine months of 2021.  Catastrophe losses for the third quarter and first nine months of 2022 included $51 million related to Hurricane Ian on a net basis after reinstatement premiums.  The adjusted combined ratio in the third quarter and first nine months of 2022 also included four points and five points of favorable prior year development compared to six points and five points in the third quarter and first nine months of 2021. 

Ark reported gross written premiums of $216 million and $1,253 million, net written premiums of $193 million and $1,007 million and net earned premiums of $346 million and $758 million in the third quarter and first nine months of 2022 compared to gross written premiums of $162 million and $895 million, net written premiums of $121 million and $726 million and net earned premiums of $213 million and $436 million and in the third quarter and first nine months of 2021.  Ark reported pre-tax income (loss) of $24 million and $(20) million in the third quarter and first nine months of 2022 compared to $11 million and $(4) million in third quarter and first nine months of 2021.  Ark's results included net realized and unrealized investment gains (losses) of $(14) million and $(77) million in the third quarter and first nine months of 2022 compared to $0.3 million and $10 million in the third quarter and first nine months of 2021.  Ark's pre-tax loss for the first nine months of 2021 also included $25 million of transaction expenses related to White Mountains's transaction with Ark.

Ian Beaton, CEO of Ark, said, "Ark had a good third quarter notwithstanding global catastrophe activity.  The adjusted combined ratio was 86% in the quarter.  This included $74 million of catastrophe losses, including the estimated impact of Hurricane Ian, and $13 million of favorable prior year development, principally in property lines.  Gross written premiums were $216 million in the quarter and $1.25 billion year-to-date, up 33% and 40%, respectively, from 2021 levels.  Risk-adjusted rate change is up 9% year-to-date.  Market conditions remain attractive, and we continue to see upward pressure on rates in many of the classes of business we underwrite."

Kudu

Kudu reported total revenues of $56 million, pre-tax income of $47 million and adjusted EBITDA of $12 million in the third quarter of 2022 compared to total revenues of $29 million, pre-tax income of $23 million and adjusted EBITDA of $7 million in the third quarter of 2021.  Total revenues and pre-tax income in the third quarter of 2022 included $41 million of net realized and unrealized investment gains on Kudu's participation contracts compared to $19 million in the third quarter of 2021. 

Kudu reported total revenues of $87 million, pre-tax income of $66 million and adjusted EBITDA of $33 million in the first nine months of 2022 compared to total revenues of $89 million, pre-tax income of $70 million and adjusted EBITDA of $19 million in the first nine months of 2021.  Total revenues and pre-tax income in the first nine months of 2022 included $46 million of realized and unrealized gains on Kudu's participation contracts, compared to $63 million in the first nine months of 2021.

Rob Jakacki, CEO of Kudu, said, "The Kudu portfolio performed well in the third quarter.  Trailing 12 month revenues from participation contracts increased 10% quarter over quarter to $59 million, while adjusted EBITDA increased 10% quarter over quarter to $47 million.  Annualized revenues finished the quarter at $66 million while annualized adjusted EBITDA reached $53 million.  We were pleased to close two investments during the quarter: GenTrust, an independent RIA, and Escalate Capital Partners, a private credit and opportunistic growth equity manager.  We continue to identify specialized high-quality asset and wealth managers worldwide and expect to make additional investments this year."

MediaAlpha

White Mountains owns 16.9 million shares of MediaAlpha, representing a 27% basic ownership interest (25% on a fully-diluted/fully-converted basis).  As of September 30, 2022, the closing price was $8.75 per share, which decreased from $9.85 per share at June 30, 2022.  As of September 30, 2022, the value of White Mountains's investment in MediaAlpha was $148 million, which decreased from $167 million at June 30, 2022.  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 $6.60 per share increase or decrease in White Mountains's book value per share and adjusted book value per share.  Our focus remains on MediaAlpha's intrinsic value, not on fluctuations in its share price.  We encourage you to read MediaAlpha's third 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 loss of $58 million and $191 million in the third quarter and first nine months of 2022 compared to $387 million and $340 million in the third quarter and first nine months of 2021.  Unrealized investment losses from White Mountains's investment in MediaAlpha were $19 million and $113 million in the third quarter and first nine months of 2022 compared to $397 million and $326 million in the third quarter and first nine months of 2021.  Excluding MediaAlpha, net realized and unrealized investment gains (losses) were $(17) million and $3 million in the third quarter and first nine months of 2022 compared to $15 million and $34 million in the third quarter and first nine months of 2021.  Net investment income was $9 million and $14 million in the third quarter and first nine months of 2022 compared to $5 million and $16 million in the third quarter and first nine months of 2021. 

White Mountains's Other Operations reported general and administrative expenses of $40 million and $119 million in the third quarter and first nine months of 2022 compared to $14 million and $79 million in the third quarter and first nine months of 2021.  The increases in general and administrative expenses in the third quarter and first nine months of 2022 compared to the third quarter and first nine months of 2021 were driven by higher incentive compensation costs, primarily in connection with the sale of NSM.

Share Repurchases

In the third quarter of 2022, White Mountains repurchased and retired 366,645 of its common shares for $509 million at an average share price of $1,388.24, or 94% of White Mountains's September 30, 2022 adjusted book value per share.  In the first nine months of 2022, White Mountains repurchased and retired 457,180 of its common shares for $611 million at an average share price of $1,335.44, or 91% of White Mountains's September 30, 2022 adjusted book value per share.

In the third quarter of 2021, White Mountains repurchased and retired 79,294 of its common shares for $87 million at an average share price of $1,098.82, or 93% of White Mountains's September 30, 2021 adjusted book value per share.  In the first nine months of 2021, White Mountains repurchased and retired 86,512 of its common shares for $95 million at an average share price of $1,093.87 or 93% of White Mountains's September 30, 2021 adjusted book value per share.

Investments

The total consolidated portfolio return was 0.4% in the third quarter of 2022.  Excluding MediaAlpha, the total consolidated portfolio return was 0.5% in the third quarter of 2022.  The total consolidated portfolio return was -8.0% in the third quarter of 2021.  Excluding MediaAlpha, the total consolidated portfolio return was 1.4% in the third quarter of 2021.

The total consolidated portfolio return was -3.6% in the first nine months of 2022.  Excluding MediaAlpha, the total consolidated portfolio return was -1.4% in the first nine months of 2022.  The total consolidated portfolio return was -3.7% in the first nine months of 2021.  Excluding MediaAlpha, the total consolidated portfolio return was 4.6% in the first nine months of 2021.

Mark Plourde, President of White Mountains Advisors, said, "Excluding MediaAlpha, the total portfolio was up 0.5% in the quarter.  Positive equity results offset mark-to-market losses in the fixed income portfolio as interest rates continued to increase in the quarter.  Our short duration fixed income portfolio returned -0.8%, ahead of the BBIA Index return of -3.8%. The equity portfolio, excluding MediaAlpha, returned 2.8%, ahead of the S&P 500 return of -4.9%, driven primarily by gains from Kudu's participation contracts."

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)

 
   

September 30,

2022

 

December 31,

2021

 

September 30,

2021

Assets

           

Financial Guarantee (HG Global/BAM)

           

Fixed maturity investments

 

$                         874.4

 

$                         934.1

 

$                         898.4

Short-term investments

 

62.3

 

32.4

 

50.3

Total investments

 

936.7

 

966.5

 

948.7

Cash

 

17.3

 

19.8

 

21.8

Insurance premiums receivable

 

6.6

 

6.9

 

6.9

Deferred acquisition costs

 

34.9

 

33.1

 

31.7

Other assets

 

22.3

 

18.5

 

18.7

Total Financial Guarantee assets

 

1,017.8

 

1,044.8

 

1,027.8

P&C Insurance and Reinsurance (Ark)

           

Fixed maturity investments

 

741.8

 

688.6

 

618.1

Common equity securities

 

286.4

 

251.1

 

159.6

Short-term investments

 

309.4

 

296.2

 

396.5

Other long-term investments

 

329.7

 

326.2

 

320.6

Total investments

 

1,667.3

 

1,562.1

 

1,494.8

Cash

 

123.4

 

67.8

 

116.5

Reinsurance recoverables

 

550.9

 

448.4

 

465.6

Insurance premiums receivable

 

698.6

 

416.0

 

482.3

Ceded unearned premiums

 

59.7

 

67.1

 

92.1

Deferred acquisition costs and value of in-force business acquired

 

151.4

 

108.2

 

127.8

Goodwill and other intangible assets

 

292.5

 

292.5

 

292.5

Other assets

 

62.9

 

64.9

 

61.3

Total P&C Insurance and Reinsurance assets

 

3,606.7

 

3,027.0

 

3,132.9

Asset Management (Kudu)

           

 Other long-term investments

 

813.2

 

669.5

 

604.8

 Cash (restricted $8.9, $4.5, $4.5)

 

76.6

 

21.4

 

14.8

 Accrued investment income

 

12.5

 

16.9

 

9.0

 Goodwill and other intangible assets

 

8.7

 

8.9

 

9.0

 Other assets

 

9.7

 

10.4

 

8.4

Total Asset Management assets

 

920.7

 

727.1

 

646.0

   Other Operations

           

 Fixed maturity investments

 

238.1

 

286.2

 

316.4

 Short-term investments

 

824.7

 

129.5

 

156.8

 Common equity securities

 

46.4

 

 

 Investment in MediaAlpha

 

148.2

 

261.6

 

316.4

 Other long-term investments

 

479.8

 

382.1

 

360.2

Total investments

 

1,737.2

 

1,059.4

 

1,149.8

 Cash

 

28.4

 

38.7

 

30.9

 Goodwill and other intangible assets

 

92.0

 

39.1

 

48.7

 Other assets

 

142.2

 

59.5

 

71.2

 Assets held for sale - NSM Group

 

 

989.0

 

1,006.3

 Assets held for sale

 

 

16.1

 

Total Other Operations assets

 

1,999.8

 

2,201.8

 

2,306.9

Total assets

 

$                      7,545.0

 

$                      7,000.7

 

$                      7,113.6

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(millions)

(Unaudited)

 
   

September 30,

2022

 

December 31,

2021

 

September 30,

2021

Liabilities

           

Financial Guarantee (HG Global/BAM)

           

Unearned insurance premiums

 

$                         286.7

 

$                         266.3

 

$                         257.0

Debt

 

146.4

 

 

Accrued incentive compensation

 

21.6

 

24.7

 

21.0

Other liabilities

 

29.5

 

30.9

 

32.5

Total Financial Guarantee liabilities

 

484.2

 

321.9

 

310.5

P&C Insurance and Reinsurance (Ark)

           

Loss and loss adjustment expense reserves

 

1,329.4

 

894.7

 

890.9

Unearned insurance premiums

 

781.3

 

495.9

 

596.6

Debt

 

180.0

 

185.9

 

200.7

Reinsurance payable

 

312.7

 

424.1

 

481.4

Contingent consideration

 

32.9

 

28.0

 

24.0

Other liabilities

 

107.6

 

93.8

 

87.4

Total P&C Insurance and Reinsurance liabilities

 

2,743.9

 

2,122.4

 

2,281.0

Asset Management (Kudu)

           

Debt

 

253.5

 

218.2

 

195.6

Other liabilities

 

59.7

 

42.8

 

40.2

Total Asset Management liabilities

 

313.2

 

261.0

 

235.8

   Other Operations

           

Debt

 

35.6

 

16.8

 

19.1

Accrued incentive compensation

 

67.2

 

48.5

 

44.7

Other liabilities

 

34.6

 

30.1

 

49.7

       Liabilities held for sale -  NSM Group

 

 

495.3

 

518.5

Total Other Operations liabilities

 

137.4

 

590.7

 

632.0

Total liabilities

 

3,678.7

 

3,296.0

 

3,459.3

             

Equity

           

White Mountains's common shareholder's equity

           

  White Mountains's common shares and paid-in surplus

 

535.3

 

588.9

 

586.2

     Retained earnings

 

3,175.9

 

2,957.5

 

2,935.3

 Accumulated other comprehensive income (loss), after tax:

           

 Net unrealized gains (losses) from foreign currency translation and

    interest rate swap

 

(3.2)

 

1.7

 

.2

Total White Mountains's common shareholders' equity

 

3,708.0

 

3,548.1

 

3,521.7

Non-controlling interests

 

158.3

 

156.6

 

132.6

Total equity

 

3,866.3

 

3,704.7

 

3,654.3

Total liabilities and equity

 

$                      7,545.0

 

$                      7,000.7

 

$                      7,113.6

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE

(Unaudited)

 
   

September 30,

2022

 

June 30,

2022

 

December 31,

2021

 

September 30,

2021

Book value per share numerators (in millions):

               

White Mountains's common shareholders' equity -

  GAAP book value per share numerator

 

$           3,708.0

 

$        3,323.3

 

$           3,548.1

 

$           3,521.7

Time value of money discount on expected future payments on the

   BAM Surplus Notes (1)

 

(110.8)

 

(115.9)

 

(125.9)

 

(128.0)

HG Global's unearned premium reserve (1)

 

232.2

 

221.6

 

214.6

 

206.8

HG Global's net deferred acquisition costs (1)

 

(65.9)

 

(62.6)

 

(60.8)

 

(58.1)

Adjusted book value per share numerator

 

$           3,763.5

 

$        3,366.4

 

$           3,576.0

 

$           3,542.4

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

               

Common shares outstanding - GAAP book value per share denominator

 

2,576.2

 

2,942.9

 

3,017.8

 

3,029.6

Unearned restricted common shares

 

(17.5)

 

(20.9)

 

(13.7)

 

(17.0)

Adjusted book value per share denominator

 

2,558.7

 

2,922.0

 

3,004.1

 

3,012.6

GAAP book value per share

 

$        1,439.31

 

1,129.27

 

$        1,175.73

 

$        1,162.44

Adjusted book value per share

 

$         1,470.84

 

1,152.12

 

$         1,190.39

 

$         1,175.86

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

                 
   

September 30,

2022

 

June 30,

2022

 

December 31,

2021

 

September 30,

2021

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

   including dividends:

 

27.5 %

 

(4.5) %

 

1.1 %

 

(9.1) %

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

   including dividends:

 

27.7 %

 

(4.3) %

 

1.2 %

 

(9.0) %

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

   including dividends:

 

22.5 %

 

(3.9) %

 

(6.5) %

 

(7.6) %

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

   including dividends:

 

23.6 %

 

(3.1) %

 

(5.7) %

 

(6.9) %

Year-to-date dividends per share

 

$               1.00

 

$            1.00

 

$               1.00

 

$               1.00

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

GOODWILL AND OTHER INTANGIBLE ASSETS

(Unaudited)

 
   

September 30,

2022

 

June 30,

2022

 

December 31,

2021

 

September 30,

2021

 

Summary of goodwill and other intangible assets

   (in millions):

                 

Goodwill:

                 

Ark

 

$               116.8

 

$            116.8

 

$               116.8

 

$               116.8

 

Kudu

 

7.6

 

7.6

 

7.6

 

7.6

 

Other Operations

 

51.1

 

77.4

(1)

17.9

 

17.4

(2)

Total goodwill

 

175.5

 

201.8

 

142.3

 

141.8

 

Other intangible assets:

                 

Ark

 

175.7

 

175.7

 

175.7

 

175.7

 

Kudu

 

1.1

 

1.1

 

1.3

 

1.4

 

Other Operations

 

40.9

 

19.4

 

21.2

 

31.3

 

Total other intangible assets

 

217.7

 

196.2

 

198.2

 

208.4

 

Total goodwill and other intangible assets

 

393.2

 

398.0

 

340.5

 

350.2

 

Goodwill and other intangible assets attributed to

   non-controlling interests

 

(103.1)

 

(103.4)

 

(91.8)

 

(92.0)

 

Goodwill and other intangible assets included in

   White Mountains's common shareholders' equity

 

$               290.1

 

$            294.6

 

$               248.7

 

$               258.2

 
   

1)

The relative fair values of goodwill and of other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized June 30, 2022.

2)

The relative fair values of goodwill and of other intangible assets recognized in connection with an acquisition within Other Operations had not yet been finalized September 30, 2021.

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(millions)

(Unaudited)

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2022

 

2021

 

2022

 

2021

Revenues:

               

Financial Guarantee (HG Global/BAM)

               

Earned insurance premiums

 

$                    7.1

 

$                    6.7

 

$                  26.0

 

$                  19.6

Net investment income

 

5.7

 

4.4

 

15.1

 

13.2

Net realized and unrealized investment gains (losses)

 

(38.8)

 

(4.0)

 

(114.0)

 

(15.6)

Other revenues

 

1.3

 

.3

 

3.7

 

.9

Total Financial Guarantee revenues

 

(24.7)

 

7.4

 

(69.2)

 

18.1

P&C Insurance and Reinsurance (Ark)

               

Earned insurance premiums

 

346.1

 

213.4

 

757.8

 

435.8

Net investment income

 

4.9

 

.6

 

9.7

 

1.8

Net realized and unrealized investment gains (losses)

 

(14.4)

 

.3

 

(76.5)

 

10.3

Other revenues

 

6.6

 

3.4

 

10.1

 

9.4

Total P&C Insurance and Reinsurance revenues

 

343.2

 

217.7

 

701.1

 

457.3

Asset Management (Kudu)

               

Net investment income

 

14.8

 

9.5

 

41.2

 

26.1

Net realized and unrealized investment gains (losses)

 

41.1

 

18.9

 

45.8

 

62.5

Other revenues

 

 

.1

 

 

.2

Total Asset Management revenues

 

55.9

 

28.5

 

87.0

 

88.8

Other Operations

               

Net investment income

 

8.5

 

5.0

 

13.6

 

16.1

Net realized and unrealized investment gains (losses)

 

(17.3)

 

15.3

 

2.8

 

34.0

Net realized and unrealized investment gains (losses)

   from investment in MediaAlpha

 

(18.6)

 

(396.8)

 

(113.3)

 

(325.5)

Commission revenues

 

3.2

 

2.4

 

8.7

 

7.0

Other revenues

 

33.0

 

28.1

 

89.6

 

57.6

Total Other Operations revenues

 

8.8

 

(346.0)

 

1.4

 

(210.8)

Total revenues

 

$                383.2

 

$                 (92.4)

 

$                720.3

 

$                353.4

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

(millions)

(Unaudited)

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2022

 

2021

 

2022

 

2021

Expenses:

               

Financial Guarantee (HG Global/BAM)

               

Insurance acquisition expenses

 

$                    1.7

 

$                    3.0

 

$                    9.5

 

$                    6.5

General and administrative expenses

 

15.8

 

12.4

 

49.5

 

42.7

 Interest expense

 

2.0

 

 

5.4

 

Total Financial Guarantee expenses

 

19.5

 

15.4

 

64.4

 

49.2

P&C Insurance and Reinsurance (Ark)

               

Loss and loss adjustment expenses

 

213.7

 

129.2

 

456.2

 

247.8

Insurance and reinsurance acquisition expenses

 

74.8

 

53.7

 

174.9

 

124.4

General and administrative expenses

 

26.9

 

21.8

 

79.8

 

84.4

Interest expense

 

3.7

 

2.1

 

10.6

 

4.5

Total P&C Insurance and Reinsurance expenses

 

319.1

 

206.8

 

721.5

 

461.1

Asset Management (Kudu)

               

General and administrative expenses

 

4.5

 

3.3

 

10.2

 

9.0

Amortization of other intangible assets

 

 

 

.2

 

.2

Interest expense

 

4.2

 

1.9

 

10.3

 

9.2

Total Asset Management expenses

 

8.7

 

5.2

 

20.7

 

18.4

Other Operations

               

Cost of sales

 

25.0

 

24.0

 

68.8

 

45.9

General and administrative expenses

 

39.9

 

14.4

 

118.9

 

79.4

Amortization of other intangible assets

 

1.4

 

2.0

 

3.2

 

2.9

Interest expense

 

.6

 

.4

 

1.2

 

1.1

Total Other Operations expenses

 

66.9

 

40.8

 

192.1

 

129.3

Total expenses

 

414.2

 

268.2

 

998.7

 

658.0

Pre-tax income (loss) from continuing operations

 

(31.0)

 

(360.6)

 

(278.4)

 

(304.6)

 Income tax (expense) benefit

 

7.4

 

(28.6)

 

26.1

 

(52.2)

Net income (loss) from continuing operations

 

(23.6)

 

(389.2)

 

(252.3)

 

(356.8)

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

   NSM Group

 

6.3

 

5.3

 

16.4

 

(23.8)

Net gain (loss) from sale of discontinued operations,

   net of tax - NSM Group

 

886.8

 

 

886.8

 

Net gain (loss) from sale of discontinued operations,

   net of tax - Sirius Group

 

 

 

 

18.7

Net income (loss)

 

869.5

 

(383.9)

 

650.9

 

(361.9)

 Net (income) loss attributable to non-controlling interests

 

18.7

 

12.5

 

101.5

 

53.7

Net income (loss) attributable to White Mountains's

   common shareholders

 

$                888.2

 

$               (371.4)

 

$                752.4

 

$              (308.2)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(Unaudited)

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2022

 

2021

 

2022

 

2021

Net income (loss) attributable to White Mountains's

   common shareholders

 

$               888.2

 

$              (371.4)

 

$               752.4

 

$              (308.2)

Other comprehensive income (loss), net of tax

 

(1.4)

 

 

(3.0)

 

(.3)

Other comprehensive income (loss) from discontinued

   operations, net of tax - NSM Group

 

.7

 

(2.2)

 

(5.2)

 

.9

Net gain (loss) from foreign currency translation from sale of

   discontinued operations, net of tax - NSM Group

 

2.9

 

 

2.9

 

Comprehensive income (loss)

 

890.4

 

(373.6)

 

747.1

 

(307.6)

Other comprehensive (income) loss attributable to

   non-controlling interests

 

(.3)

 

.2

 

.4

 

Comprehensive income (loss) attributable to

   White Mountains's common shareholders

 

$               890.1

 

$              (373.4)

 

$               747.5

 

$              (307.6)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

EARNINGS PER SHARE 

(Unaudited) 

 

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

   common shareholders

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2022

 

2021

 

2022

 

2021

Basic earnings (loss) per share

               

Continuing operations

 

$                (1.66)

 

$            (121.90)

 

$              (50.73)

 

$              (98.16)

Discontinued operations

 

308.59

 

1.72

 

304.97

 

(1.29)

Total consolidated operations

 

$              306.93

 

$            (120.18)

 

$              254.24

 

$              (99.45)

                 

Diluted earnings (loss) per share

               

Continuing operations

 

$                (1.66)

 

$            (121.90)

 

$              (50.73)

 

$              (98.16)

Discontinued operations

 

308.59

 

1.72

 

304.97

 

(1.29)

Total consolidated operations

 

$              306.93

 

$            (120.18)

 

$              254.24

 

$              (99.45)

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 September 30, 2022

 

HG Global/BAM

               
   

HG
Global

 

BAM

 

Ark

 

Kudu

 

Other
Operations

 

Total

Revenues:

                       

Earned insurance premiums

 

$       5.9

 

$       1.2

 

$  346.1

 

$          —

 

$            —

 

$     353.2

Net investment income

 

2.8

 

2.9

 

4.9

 

14.8

 

8.5

 

33.9

Net investment income (expense) -

BAM surplus note interest

 

2.9

 

(2.9)

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(19.6)

 

(19.2)

 

(14.4)

 

41.1

 

(17.3)

 

(29.4)

Net realized and unrealized investment gains (losses)

   from investment in MediaAlpha

 

 

 

 

 

(18.6)

 

(18.6)

Commission revenues

 

 

 

 

 

3.2

 

3.2

Other revenues

 

.1

 

1.2

 

6.6

 

 

33.0

 

40.9

                         

Total revenues

 

(7.9)

 

(16.8)

 

343.2

 

55.9

 

8.8

 

383.2

Expenses:

                       

Loss and loss adjustment expenses

 

 

 

213.7

 

 

 

213.7

Insurance acquisition expenses

 

1.6

 

.1

 

74.8

 

 

 

76.5

Cost of sales

 

 

 

 

 

25.0

 

25.0

General and administrative expenses

 

.6

 

15.2

 

26.9

 

4.5

 

39.9

 

87.1

Amortization of other intangible assets

 

 

 

 

 

1.4

 

1.4

Interest expense

 

2.0

 

 

3.7

 

4.2

 

.6

 

10.5

Total expenses

 

4.2

 

15.3

 

319.1

 

8.7

 

66.9

 

414.2

                         

Pre-tax income (loss)

 

$    (12.1)

 

$    (32.1)

 

$    24.1

 

$       47.2

 

$       (58.1)

 

$     (31.0)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

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

(millions) 

(Unaudited) 

 

For the Three Months Ended September 30, 2021

 

HG Global/BAM

               
   

HG
Global

 

BAM

 

Ark

 

Kudu

 

Other
Operations

 

Total

Revenues:

                       

Earned insurance premiums

 

$       5.5

 

$       1.2

 

$   213.4

 

$       —

 

$             —

 

$  220.1

Net investment income

 

1.9

 

2.5

 

.6

 

9.5

 

5.0

 

19.5

Net investment income (expense) -

 BAM surplus note interest

 

3.1

 

(3.1)

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(2.0)

 

(2.0)

 

.3

 

18.9

 

15.3

 

30.5

   Net unrealized investment gains (losses) from

 investment in MediaAlpha

 

 

 

 

 

(396.8)

 

(396.8)

Commission revenues

 

 

 

 

 

2.4

 

2.4

Other revenues

 

.1

 

.2

 

3.4

 

.1

 

28.1

 

31.9

                         

Total revenues

 

8.6

 

(1.2)

 

217.7

 

28.5

 

(346.0)

 

(92.4)

Expenses:

                       

Loss and loss adjustment expenses

 

 

 

129.2

 

 

 

129.2

Insurance acquisition expenses

 

1.5

 

1.5

 

53.7

 

 

 

56.7

Cost of sales

 

 

 

 

 

24.0

 

24.0

General and administrative expenses

 

.2

 

12.2

 

21.8

 

3.3

 

14.4

 

51.9

Amortization of other intangible assets

 

 

 

 

 

2.0

 

2.0

Interest expense

 

 

 

2.1

 

1.9

 

.4

 

4.4

                         

Total expenses

 

1.7

 

13.7

 

206.8

 

5.2

 

40.8

 

268.2

                         

Pre-tax income (loss)

 

$       6.9

 

$    (14.9)

 

$     10.9

 

$    23.3

 

$      (386.8)

 

$ (360.6)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

YTD SEGMENT STATEMENTS OF PRE-TAX (LOSS) INCOME 

(millions) 

(Unaudited) 

 

For the Nine Months Ended September 30, 2022

 

HG Global/BAM

               
   

HG
Global

 

BAM

 

Ark

 

Kudu

 

Other
Operations

 

Total

Revenues:

                       

Earned insurance premiums

 

$       21.5

 

$         4.5

 

$     757.8

 

$          —

 

$            —

 

$      783.8

Net investment income

 

7.1

 

8.0

 

9.7

 

41.2

 

13.6

 

79.6

Net investment income (expense) -

 BAM surplus note interest

 

8.8

 

(8.8)

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(57.8)

 

(56.2)

 

(76.5)

 

45.8

 

2.8

 

(141.9)

   Net realized and unrealized investment gains (losses)

      from investment in MediaAlpha

 

 

 

 

 

(113.3)

 

(113.3)

Commission revenues

 

 

 

 

 

8.7

 

8.7

Other revenues

 

.3

 

3.4

 

10.1

 

 

89.6

 

103.4

                         

Total revenues

 

(20.1)

 

(49.1)

 

701.1

 

87.0

 

1.4

 

720.3

Expenses:

                       

Loss and loss adjustment expenses

 

 

 

456.2

 

 

 

456.2

Insurance and reinsurance acquisition expenses

 

7.6

 

1.9

 

174.9

 

 

 

184.4

Cost of sales

 

 

 

 

 

68.8

 

68.8

General and administrative expenses

 

2.1

 

47.4

 

79.8

 

10.2

 

118.9

 

258.4

Amortization of other intangible assets

 

 

 

 

.2

 

3.2

 

3.4

Interest expense

 

5.4

 

 

10.6

 

10.3

 

1.2

 

27.5

Total expenses

 

15.1

 

49.3

 

721.5

 

20.7

 

192.1

 

998.7

                         

Pre-tax income (loss)

 

$     (35.2)

 

$     (98.4)

 

$     (20.4)

 

$       66.3

 

$     (190.7)

 

$     (278.4)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

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

(millions) 

(Unaudited) 

 

For the Nine Months Ended September 30, 2021

 

HG Global/BAM

               
   

HG
Global

 

BAM

 

Ark

 

Kudu

 

Other
Operations

 

Total

Revenues:

                       

Earned insurance premiums

 

$       16.1

 

$         3.5

 

$     435.8

 

$          —

 

$               —

 

$     455.4

Net investment income

 

5.4

 

7.8

 

1.8

 

26.1

 

16.1

 

57.2

Net investment income (expense) -

 BAM surplus note interest

 

9.1

 

(9.1)

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(9.5)

 

(6.1)

 

10.3

 

62.5

 

34.0

 

91.2

Net unrealized investment gains (losses) from

 investment in MediaAlpha

 

 

 

 

 

(325.5)

 

(325.5)

Commission revenues

 

 

 

 

 

7.0

 

7.0

Other revenues

 

.3

 

.6

 

9.4

 

.2

 

57.6

 

68.1

                         

Total revenues

 

21.4

 

(3.3)

 

457.3

 

88.8

 

(210.8)

 

353.4

Expenses:

                       

Loss and loss adjustment expenses

 

 

 

247.8

 

 

 

247.8

Insurance and reinsurance acquisition expenses

 

4.3

 

2.2

 

124.4

 

 

 

130.9

Cost of sales

 

 

 

 

 

45.9

 

45.9

General and administrative expenses

 

1.3

 

41.4

 

84.4

 

9.0

 

79.4

 

215.5

Amortization of other intangible assets

 

 

 

 

.2

 

2.9

 

3.1

Interest expense

 

 

 

4.5

 

9.2

 

1.1

 

14.8

Total expenses

 

5.6

 

43.6

 

461.1

 

18.4

 

129.3

 

658.0

                         

Pre-tax income (loss)

 

$       15.8

 

$     (46.9)

 

$       (3.8)

 

$       70.4

 

$         (340.1)

 

$   (304.6)

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

SELECTED FINANCIAL DATA

($ in millions)

(Unaudited)

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

BAM

 

2022

 

2021

 

2022

 

2021

Gross par value of primary market policies issued

 

$              3,269.0