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White Mountains Reports Third Quarter Results

November 6, 2023 at 8:00 AM EST

HAMILTON, Bermuda, Nov. 6, 2023 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $1,542 and adjusted book value per share of $1,588 as of September 30, 2023.  Book value per share and adjusted book value per share both increased 1% in the third quarter of 2023 and 6% in the first nine months ended September 30, 2023, including dividends. 

Manning Rountree, CEO, commented, "ABVPS was up 1% in the quarter and 6% year-to-date.  BAM generated $36 million of total gross written premiums and member surplus contributions in the quarter; primary market issuance remains below historical levels but ticked up slightly year-over-year.  Ark produced an 81% combined ratio while growing premiums 17% year over year.  WM Outrigger Re delivered a 44% combined ratio and $37 million of pre-tax income.  The fair value of Kudu's portfolio of existing participation contracts grew 2% despite a challenging quarter for investment markets.  Kudu grew annualized adjusted EBITDA to $47 million and closed one new deployment in the quarter.  MediaAlpha's share price declined in the quarter, reducing ABVPS by 1%.  Excluding MediaAlpha, the investment portfolio was up 1% in the quarter, outperforming benchmarks.  We were pleased to announce our acquisition of Bamboo and the launch of WM Partners.  Including the Bamboo acquisition, undeployed capital stands at roughly $400 million."

Comprehensive income attributable to common shareholders was $23 million and $224 million in the third quarter and first nine months of 2023 compared to $890 million and $748 million in the third quarter and first nine months of 2022.  Results in the third quarter and first nine months of 2022 included the net gain from the sale of NSM of $876 million.  Results in the third quarter and first nine months of 2023 included $47 million and $39 million of unrealized investment losses from White Mountains's investment in MediaAlpha compared to $19 million and $113 million in the third quarter and first nine months of 2022. 

HG Global/BAM

BAM's gross written premiums and member surplus contributions (MSC) collected were $36 million and $84 million in the third quarter and first nine months of 2023 compared to $46 million and $109 million in the third quarter and first nine months of 2022.  BAM insured municipal bonds with par value of $4.2 billion and $10.5 billion in the third quarter and first nine months of 2023 compared to $4.1 billion and $13.5 billion in the third quarter and first nine months of 2022.  Total pricing was 87 and 80 basis points in the third quarter and first nine months of 2023 compared to 110 and 81 basis points in the third quarter and first nine months of 2022.  BAM's total claims paying resources were $1,474 million at September 30, 2023 compared to $1,423 million at December 31, 2022 and $1,260 million at September 30, 2022.

Seán McCarthy, CEO of BAM, said, "Market conditions improved in the third quarter, and BAM posted its strongest par insured, pricing and premium results so far this year.  Strong demand for bond insurance benefited primary market volume.  The increase in interest rates and volatility, particularly at the end of the quarter, boosted secondary market activity."

HG Global reported pre-tax income (loss) of $(2) million and $22 million in the third quarter and first nine months of 2023 compared to $(12) million and $(35) million in the third quarter and first nine months of 2022.  HG Global's results included net realized and unrealized investment losses of $14 million and $11 million in the third quarter and first nine months of 2023 compared to $20 million and $58 million in the third quarter and first nine months of 2022, driven by increasing interest rates in all periods.

White Mountains reported pre-tax loss related to BAM of $28 million and $57 million in the third quarter and first nine months of 2023 compared to $32 million and $98 million in the third quarter and first nine months of 2022.  BAM's results included net realized and unrealized investment losses of $11 million and $6 million in the third quarter and first nine months of 2023 compared to $19 million and $56 million in the third quarter and first nine months of 2022, driven by increasing interest rates in all periods. 

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 77% and 83% in the third quarter and first nine months of 2023.  Ark/WM Outrigger reported gross written premiums of $251 million and $1,667 million, net written premiums of $231 million and $1,306 million and net earned premiums of $499 million and $1,047 million in the third quarter and first nine months of 2023.  Ark/WM Outrigger reported pre-tax income of $99 million and $193 million in the third quarter and first nine months of 2023.

Ark's combined ratio was 81% and 87% in the third quarter and first nine months of 2023 compared to 87% and 90% in the third quarter and first nine months of 2022.  Ark's combined ratio in the third quarter of 2023 included 11 points of catastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to 21 points of catastrophe losses in the third quarter of 2022, driven primarily by losses from Hurricane Ian.  Ark's combined ratio in the first nine months of 2023 included seven points of catastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to 17 points of catastrophe losses in the first nine months of 2022, driven primarily by losses from Hurricane Ian and the conflict in Ukraine.  Ark's combined ratio in the third quarter and first nine months of 2023 included less than one point of net favorable prior year development and two points of net unfavorable prior year development compared to three points and five points of net favorable prior year development in the third quarter and first nine months of 2022. 

Ark reported gross written premiums of $251 million and $1,667 million, net written premiums of $225 million and $1,198 million and net earned premiums of $438 million and $972 million in the third quarter and first nine months of 2023 compared to 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. 

Ark reported pre-tax income (loss) of $62 million and $140 million in the third quarter and first nine months of 2023 compared to $24 million and $(20) million in the third quarter and first nine months of 2022.  Ark's results included net realized and unrealized investment gains (losses) of $(7) million and $36 million in the third quarter and first nine months of 2023 compared to $(14) million and $(77) million in the third quarter and first nine months of 2022.

Ian Beaton, CEO of Ark, said, "Ark had a good third quarter notwithstanding global catastrophe activity.  The combined ratio was 81% in the quarter, an improvement of six points year-over-year.  Gross written premiums were $251 million in the quarter and $1,667 million year-to-date, up 17% and 33%, respectively, from 2022 levels.  Risk-adjusted rate change is up 11% in the quarter and 16% year-to-date.  Momentum remains positive."

WM Outrigger Re's combined ratio was 44% and 40% in the third quarter and first nine months of 2023.  WM Outrigger Re reported gross and net written premiums of $6 million and $108 million and net earned premiums of $61 million and $75 million in the third quarter and first nine months of 2023.  WM Outrigger Re reported pre-tax income of $37 million and $53 million in the third quarter and first nine months of 2023.

Kudu

Kudu reported total revenues of $26 million, pre-tax income of $16 million and adjusted EBITDA of $12 million in the third quarter of 2023 compared to total revenues of $56 million, pre-tax income of $47 million and adjusted EBITDA of $12 million in the third quarter of 2022.  Total revenues, pre-tax income and adjusted EBITDA included $15 million of net investment income in both the third quarter of 2023 and 2022.  Total revenues and pre-tax income also included $11 million of net realized and unrealized investment gains in the third quarter of 2023 compared to $41 million in the third quarter of 2022.

Kudu reported total revenues of $89 million, pre-tax income of $62 million and adjusted EBITDA of $34 million in the first nine months of 2023 compared to total revenues of $87 million, pre-tax income of $66 million and adjusted EBITDA of $33 million in the first nine months of 2022.  Total revenues, pre-tax income and adjusted EBITDA included $44 million of net investment income in the first nine months of 2023 compared to $41 million in the first nine months of 2022.  Total revenues and pre-tax income also included $45 million of net realized and unrealized investment gains in the first nine months of 2023 compared to $46 million in the first nine months of 2022. 

Rob Jakacki, CEO of Kudu, said, "The fair value of Kudu's existing participation contracts was up 2% in the quarter. Trailing 12 months net investment income increased 1% quarter-over-quarter to $57 million, and annualized adjusted EBITDA increased 8% quarter-over-quarter to $47 million. We are pleased to have closed our capital deployment in Apera Asset Management, a European private credit specialist, which further diversifies Kudu's portfolio.  Kudu continues to identify high-quality asset and wealth managers across the globe, and we expect to deploy additional capital this year."

MediaAlpha 

As of September 30, 2023, White Mountains owned 22.9 million shares of MediaAlpha, representing a 35% basic ownership interest (33% on a fully-diluted/fully-converted basis).  As of September 30, 2023, MediaAlpha's closing price was $8.26 per share, which decreased from $10.31 per share as of June 30, 2023.  The carrying value of White Mountains's investment in MediaAlpha was $189 million as of September 30, 2023, which decreased from $236 million as of June 30, 2023.  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 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 income (loss) of $(63) million and $19 million in the third quarter and first nine months of 2023 compared to $(58) million and $(191) million in the third quarter and first nine months of 2022.  Unrealized investment losses from White Mountains's investment in MediaAlpha were $47 million and $39 million in the third quarter and first nine months of 2023 compared to $19 million and $113 million in the third quarter and first nine months of 2022.  Excluding MediaAlpha, net realized and unrealized investment gains (losses) were $8 million and $126 million in the third quarter and first nine months of 2023 compared to $(17) million and $3 million in the third quarter and first nine months of 2022.  Net investment income was $8 million and $22 million in the third quarter and first nine months of 2023 compared to $9 million and $14 million in the third quarter and first nine months of 2022.  White Mountains's Other Operations reported general and administrative expenses of $42 million and $131 million in the third quarter and first nine months of 2023 compared to $41 million and $122 million in the third quarter and first nine months of 2022.

Share Repurchases

White Mountains did not repurchase any of its common shares in the third quarter of 2023.  In the first nine 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 85% of White Mountains's adjusted book value per share as of September 30, 2023.

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.  These amounts included the results of White Mountains's self-tender offer in September 2022.

Investments

The total consolidated portfolio return was -0.2% in the third quarter of 2023.  Excluding MediaAlpha, the total consolidated portfolio return was 0.6% in the third quarter of 2023.  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 5.3% in the first nine months of 2023.  Excluding MediaAlpha, the total consolidated portfolio return was 6.3% in the first nine months of 2023.  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.

Mark Plourde, President of White Mountains Advisors, said, "Excluding MediaAlpha, the total portfolio returned 0.6% in the quarter, a good result in a challenging market.  The fixed income portfolio was flat, outperforming the longer duration BBIA Index return of -1.9%.  The equity portfolio, excluding MediaAlpha, returned 1.4%, well ahead of the S&P 500 return of -3.3%.  The relative outperformance was attributable to gains across our other long-term investments portfolio."

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, 2023

 

December 31, 2022

 

September 30, 2022

Assets

           

Financial Guarantee (HG Global/BAM)

           

Fixed maturity investments

 

$                         932.2

 

$                          909.9

 

$                         874.4

Short-term investments

 

80.1

 

65.9

 

62.3

Total investments

 

1,012.3

 

975.8

 

936.7

Cash

 

4.9

 

18.2

 

17.3

Insurance premiums receivable

 

5.5

 

6.6

 

6.6

Deferred acquisition costs

 

38.5

 

36.0

 

34.9

Other assets

 

22.2

 

21.9

 

22.3

Total Financial Guarantee assets

 

1,083.4

 

1,058.5

 

1,017.8

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

           

Fixed maturity investments

 

775.0

 

772.8

 

741.8

Common equity securities

 

384.9

 

334.6

 

286.4

Short-term investments

 

850.0

 

484.6

 

309.4

Other long-term investments

 

416.6

 

373.6

 

329.7

Total investments

 

2,426.5

 

1,965.6

 

1,667.3

Cash

 

129.6

 

101.5

 

123.4

Reinsurance recoverables

 

538.4

 

595.3

 

610.6

Insurance premiums receivable

 

781.6

 

544.1

 

698.6

Deferred acquisition costs

 

178.7

 

127.2

 

151.4

Goodwill and other intangible assets

 

292.5

 

292.5

 

292.5

Other assets

 

66.9

 

65.2

 

62.9

Total P&C Insurance and Reinsurance assets

 

4,414.2

 

3,691.4

 

3,606.7

Asset Management (Kudu)

           

 Short-term investments

 

17.3

 

 

 Other long-term investments

 

780.7

 

695.9

 

813.2

Total investments

 

798.0

 

695.9

 

813.2

 Cash (restricted $—, $12.2, $8.9)

 

5.4

 

101.4

 

76.6

 Accrued investment income

 

15.8

 

12.4

 

12.5

 Goodwill and other intangible assets

 

8.4

 

8.6

 

8.7

 Other assets

 

8.3

 

7.6

 

9.7

Total Asset Management assets

 

835.9

 

825.9

 

920.7

   Other Operations

           

 Fixed maturity investments

 

270.7

 

238.2

 

238.1

 Common equity securities

 

252.1

 

333.8

 

824.7

 Investment in MediaAlpha

 

188.8

 

168.6

 

46.4

 Short-term investments

 

215.5

 

373.6

 

148.2

 Other long-term investments

 

698.5

 

418.5

 

479.8

Total investments

 

1,625.6

 

1,532.7

 

1,737.2

 Cash

 

22.9

 

33.9

 

28.4

 Goodwill and other intangible assets

 

71.2

 

91.3

 

92.0

 Other assets

 

89.6

 

155.6

 

142.2

Total Other Operations assets

 

1,809.3

 

1,813.5

 

1,999.8

Total assets

 

$                      8,142.8

 

$                       7,389.3

 

$                      7,545.0

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(millions)

(Unaudited)

 
   

September 30, 2023

 

December 31, 2022

 

September 30, 2022

Liabilities

           

Financial Guarantee (HG Global/BAM)

           

Unearned insurance premiums

 

$                         312.3

 

$                         298.3

 

$                         286.7

Debt

 

146.8

 

146.5

 

146.4

Accrued incentive compensation

 

19.9

 

28.0

 

21.6

Other liabilities

 

40.0

 

29.0

 

29.5

Total Financial Guarantee liabilities

 

519.0

 

501.8

 

484.2

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

           

Loss and loss adjustment expense reserves

 

1,571.8

 

1,296.5

 

1,329.4

Unearned insurance premiums

 

984.6

 

623.2

 

781.3

Debt

 

184.6

 

183.7

 

180.0

Reinsurance payable

 

146.3

 

251.1

 

312.7

Contingent consideration

 

62.1

 

45.3

 

32.9

Other liabilities

 

132.0

 

122.3

 

107.6

Total P&C Insurance and Reinsurance liabilities

 

3,081.4

 

2,522.1

 

2,743.9

Asset Management (Kudu)

           

Debt

 

203.7

 

208.3

 

253.5

Other liabilities

 

53.6

 

65.0

 

59.7

Total Asset Management liabilities

 

257.3

 

273.3

 

313.2

   Other Operations

           

Debt

 

29.6

 

36.7

 

35.6

Accrued incentive compensation

 

64.0

 

86.1

 

67.2

Other liabilities

 

27.3

 

34.3

 

34.6

Total Other Operations liabilities

 

120.9

 

157.1

 

137.4

Total liabilities

 

3,978.6

 

3,454.3

 

3,678.7

             

Equity

           

White Mountains's common shareholder's equity

           

  White Mountains's common shares and paid-in surplus

 

547.5

 

538.6

 

535.3

     Retained earnings

 

3,404.3

 

3,211.8

 

3,175.9

 Accumulated other comprehensive income (loss), after tax:

           

 Net unrealized gains (losses) from foreign currency translation and interest rate swap

 

(2.7)

 

(3.5)

 

(3.2)

Total White Mountains's common shareholders' equity

 

3,949.1

 

3,746.9

 

3,708.0

Noncontrolling interests

 

215.1

 

188.1

 

158.3

Total equity

 

4,164.2

 

3,935.0

 

3,866.3

Total liabilities and equity

 

$                      8,142.8

 

$                      7,389.3

 

$                      7,545.0

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE

(Unaudited)

 
   

September 30,
2023

 

June 30,
2023

 

December 31,
2022

 

September 30,
2022

Book value per share numerators (in millions):

               

White Mountains's common shareholders' equity -

  GAAP book value per share numerator

 

$       3,949.1

 

$       3,922.2

 

$       3,746.9

 

$       3,708.0

HG Global's unearned premium reserve (1)

 

254.2

 

246.8

 

242.1

 

232.2

HG Global's net deferred acquisition costs (1)

 

(73.1)

 

(70.7)

 

(69.0)

 

(65.9)

Time value of money discount on expected future payments on the

   BAM surplus notes (1)

 

(90.2)

 

(91.8)

 

(95.1)

 

(110.8)

Adjusted book value per share numerator

 

$       4,040.0

 

$       4,006.5

 

$       3,824.9

 

$       3,763.5

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

               

Common shares outstanding - GAAP book value per share denominator

 

2,560.5

 

2,560.5

 

2,572.1

 

2,576.2

Unearned restricted common shares

 

(15.7)

 

(19.1)

 

(14.1)

 

(17.5)

Adjusted book value per share denominator

 

2,544.8

 

2,541.4

 

2,558.0

 

2,558.7

GAAP book value per share

 

$     1,542.36

 

1,531.84

 

$     1,456.74

 

$     1,439.31

Adjusted book value per share

 

$     1,587.59

 

1,576.46

 

$     1,495.28

 

$     1,470.84

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

                 
   

September 30,
2023

 

June 30,
2023

 

December 31,
2022

 

September 30,
2022

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

   including dividends:

 

0.7 %

 

0.7 %

 

1.2 %

 

27.5 %

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

   including dividends:

 

0.7 %

 

0.6 %

 

1.7 %

 

27.7 %

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

   including dividends:

 

5.9 %

 

5.2 %

 

24.0 %

 

22.5 %

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

   including dividends:

 

6.2 %

 

5.5 %

 

25.7 %

 

23.6 %

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 September 30,

 

Nine Months Ended September 30,

   

2023

 

2022

 

2023

 

2022

Revenues:

               

Financial Guarantee (HG Global/BAM)

               

Earned insurance premiums

 

$                   7.9

 

$                    7.1

 

$                 23.3

 

$                 26.0

Net investment income

 

8.1

 

5.7

 

22.9

 

15.1

Net realized and unrealized investment gains (losses)

 

(24.1)

 

(38.8)

 

(17.0)

 

(114.0)

Other revenues

 

.7

 

1.3

 

2.0

 

3.7

Total Financial Guarantee revenues

 

(7.4)

 

(24.7)

 

31.2

 

(69.2)

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

               

Earned insurance premiums

 

498.9

 

346.1

 

1,047.3

 

757.8

Net investment income

 

16.9

 

4.9

 

41.2

 

9.7

Net realized and unrealized investment gains (losses)

 

(6.6)

 

(14.4)

 

35.9

 

(76.5)

Other revenues

 

3.6

 

6.6

 

(1.1)

 

10.1

Total P&C Insurance and Reinsurance revenues

 

512.8

 

343.2

 

1,123.3

 

701.1

Asset Management (Kudu)

               

Net investment income

 

15.1

 

14.8

 

44.0

 

41.2

Net realized and unrealized investment gains (losses)

 

11.2

 

41.1

 

45.4

 

45.8

Total Asset Management revenues

 

26.3

 

55.9

 

89.4

 

87.0

Other Operations

               

Net investment income

 

8.0

 

8.5

 

22.0

 

13.6

Net realized and unrealized investment gains (losses)

 

8.0

 

(17.3)

 

125.8

 

2.8

Net realized and unrealized investment gains (losses)

   from investment in MediaAlpha

 

(46.8)

 

(18.6)

 

(38.9)

 

(113.3)

Commission revenues

 

3.5

 

3.2

 

10.0

 

8.7

Other revenues

 

15.2

 

33.0

 

67.1

 

89.6

Total Other Operations revenues

 

(12.1)

 

8.8

 

186.0

 

1.4

Total revenues

 

$                519.6

 

$                383.2

 

$             1,429.9

 

$               720.3

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

(millions)

(Unaudited)

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2023

 

2022

 

2023

 

2022

Expenses:

               

Financial Guarantee (HG Global/BAM)

               

Acquisition expenses

 

$                   2.1

 

$                   1.7

 

$                  6.3

 

$                  9.5

General and administrative expenses

 

17.5

 

15.8

 

49.7

 

49.5

 Interest expense

 

3.8

 

2.0

 

10.8

 

5.4

Total Financial Guarantee expenses

 

23.4

 

19.5

 

66.8

 

64.4

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

               

Loss and loss adjustment expenses

 

265.8

 

213.7

 

581.1

 

456.2

Acquisition expenses

 

90.3

 

74.8

 

211.5

 

174.9

General and administrative expenses

 

35.4

 

24.2

 

105.5

 

74.9

Change in fair value of contingent consideration

 

17.0

 

2.7

 

16.8

 

4.9

Interest expense

 

5.5

 

3.7

 

15.7

 

10.6

Total P&C Insurance and Reinsurance expenses

 

414.0

 

319.1

 

930.6

 

721.5

Asset Management (Kudu)

               

General and administrative expenses

 

4.5

 

4.5

 

12.3

 

10.4

Interest expense

 

5.5

 

4.2

 

15.5

 

10.3

Total Asset Management expenses

 

10.0

 

8.7

 

27.8

 

20.7

Other Operations

               

Cost of sales

 

8.0

 

25.0

 

33.5

 

68.8

General and administrative expenses

 

42.2

 

41.3

 

130.7

 

122.1

Interest expense

 

.9

 

.6

 

2.9

 

1.2

Total Other Operations expenses

 

51.1

 

66.9

 

167.1

 

192.1

Total expenses

 

498.5

 

414.2

 

1,192.3

 

998.7

Pre-tax income (loss) from continuing operations

 

21.1

 

(31.0)

 

237.6

 

(278.4)

 Income tax (expense) benefit

 

(7.3)

 

7.4

 

(19.4)

 

26.1

Net income (loss) from continuing operations

 

13.8

 

(23.6)

 

218.2

 

(252.3)

Net income (loss) from discontinued operations,

   net of tax - NSM Group

 

 

6.3

 

 

16.4

Net gain (loss) from sale of discontinued operations,

   net of tax - NSM Group

 

 

886.8

 

 

886.8

Net income (loss)

 

13.8

 

869.5

 

218.2

 

650.9

 Net (income) loss attributable to noncontrolling interests

 

9.8

 

18.7

 

4.5

 

101.5

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

   shareholders

 

$                 23.6

 

$               888.2

 

$              222.7

 

$              752.4

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(Unaudited)

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2023

 

2022

 

2023

 

2022

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

   shareholders

 

$                 23.6

 

$               888.2

 

$               222.7

 

$               752.4

Other comprehensive income (loss), net of tax

 

(1.7)

 

(1.4)

 

.9

 

(3.0)

Other comprehensive income (loss) from discontinued operations, net of tax - NSM Group

 

 

.7

 

 

(5.2)

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

   discontinued operations, net of tax - NSM Group

 

 

2.9

 

 

2.9

Comprehensive income (loss)

 

21.9

 

890.4

 

223.6

 

747.1

Other comprehensive (income) loss attributable to

   noncontrolling interests

 

.7

 

(.3)

 

(.1)

 

.4

Comprehensive income (loss) attributable to

   White Mountains's common shareholders

 

$                 22.6

 

$               890.1

 

$               223.5

 

$               747.5

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

EARNINGS PER SHARE 

(Unaudited) 

 

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

   common shareholders

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2023

 

2022

 

2023

 

2022

Basic earnings (loss) per share

               

Continuing operations

 

$                  9.19

 

$                (1.66)

 

$                86.82

 

$              (50.73)

Discontinued operations

 

 

308.59

 

 

304.97

Total consolidated operations

 

$                  9.19

 

$              306.93

 

$                86.82

 

$              254.24

                 

Diluted earnings (loss) per share

               

Continuing operations

 

$                  9.19

 

$                (1.66)

 

$                86.82

 

$              (50.73)

Discontinued operations

 

 

308.59

 

 

304.97

Total consolidated operations

 

$                  9.19

 

$              306.93

 

$                86.82

 

$              254.24

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, 2023

 

HG Global/BAM

 

Ark/WM Outrigger

           
   

HG
Global

 

BAM

 

Ark

 

WM
Outrigger Re

 

Kudu

 

Other
Operations

 

Total

Revenues:

                           

Earned insurance premiums

 

$         6.6

 

$         1.3

 

$     438.3

 

$           60.6

 

$          —

 

$            —

 

$      506.8

Net investment income

 

4.3

 

3.8

 

13.9

 

3.0

 

15.1

 

8.0

 

48.1

Net investment income (expense) -

 BAM surplus note interest

 

6.6

 

(6.6)

 

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(13.6)

 

(10.5)

 

(6.6)

 

 

11.2

 

8.0

 

(11.5)

   Net realized and unrealized investment gains

     (losses) from investment in MediaAlpha

 

 

 

 

 

 

(46.8)

 

(46.8)

Commission revenues

 

 

 

 

 

 

3.5

 

3.5

Other revenues

 

 

.7

 

3.6

 

 

 

15.2

 

19.5

                             

Total revenues

 

3.9

 

(11.3)

 

449.2

 

63.6

 

26.3

 

(12.1)

 

519.6

Expenses:

                           

Loss and loss adjustment expenses

 

 

 

258.5

 

7.3

 

 

 

265.8

Acquisition expenses

 

2.0

 

.1

 

71.0

 

19.3

 

 

 

92.4

Cost of sales

 

 

 

 

 

 

8.0

 

8.0

General and administrative expenses

 

.5

 

17.0

 

35.3

 

.1

 

4.5

 

42.2

 

99.6

Change in fair value of contingent consideration

 

 

 

17.0

 

 

 

 

17.0

Interest expense

 

3.8

 

 

5.5

 

 

5.5

 

.9

 

15.7

Total expenses

 

6.3

 

17.1

 

387.3

 

26.7

 

10.0

 

51.1

 

498.5

                             

Pre-tax income (loss)

 

$       (2.4)

 

$     (28.4)

 

$       61.9

 

$           36.9

 

$       16.3

 

$       (63.2)

 

$        21.1

                             

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

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

(millions) 

(Unaudited) 

 

For the Three Months Ended September 30, 2022

 

HG Global/BAM

 

Ark/WM

Outrigger

           
   

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

Acquisition expenses

 

1.6

 

.1

 

74.8

 

 

 

76.5

Cost of sales

 

 

 

 

 

25.0

 

25.0

General and administrative expenses

 

.6

 

15.2

 

24.2

 

4.5

 

41.3

 

85.8

Change in fair value of contingent consideration

 

 

 

2.7

 

 

 

2.7

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. 

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) 

(millions) 

(Unaudited) 

 

For the Nine Months Ended September 30, 2023

 

HG Global/BAM

 

Ark/WM Outrigger

           
   

HG
Global

 

BAM

 

Ark

 

WM
Outrigger Re

 

Kudu

 

Other
Operations

 

Total

Revenues:

                           

Earned insurance premiums

 

$       19.4

 

$         3.9

 

$     971.9

 

$           75.4

 

$          —

 

$            —

 

$   1,070.6

Net investment income

 

12.4

 

10.5

 

33.5

 

7.7

 

44.0

 

22.0

 

130.1

Net investment income (expense) -

 BAM surplus note interest

 

19.7

 

(19.7)

 

 

 

 

 

Net realized and unrealized investment gains (losses)

 

(11.4)

 

(5.6)

 

35.9

 

 

45.4

 

125.8

 

190.1

   Net realized and unrealized investment gains

     (losses) from investment in MediaAlpha

 

 

 

 

 

 

(38.9)

 

(38.9)

Commission revenues

 

 

 

 

 

 

10.0

 

10.0

Other revenues

 

 

2.0

 

(1.1)

 

 

 

67.1

 

68.0

                             

Total revenues

 

40.1

 

(8.9)

 

1,040.2

 

83.1

 

89.4

 

186.0

 

1,429.9

Expenses:

                           

Loss and loss adjustment expenses

 

 

 

573.2

 

7.9

 

 

 

581.1

Acquisition expenses

 

5.6

 

.7

 

189.3

 

22.2

 

 

 

217.8

Cost of sales

 

 

 

 

 

 

33.5

 

33.5

General and administrative expenses

 

1.9

 

47.8

 

105.3

 

.2

 

12.3

 

130.7

 

298.2

Change in fair value of contingent consideration

 

 

 

16.8

 

 

 

 

16.8

Interest expense

 

10.8

 

 

15.7

 

 

15.5

 

2.9

 

44.9

Total expenses

 

18.3

 

48.5

 

900.3

 

30.3

 

27.8

 

167.1

 

1,192.3

                             

Pre-tax income (loss)

 

$       21.8

 

$     (57.4)

 

$     139.9

 

$           52.8

 

$       61.6

 

$         18.9

 

$      237.6

 

WHITE MOUNTAINS INSURANCE GROUP, LTD. 

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

(millions) 

(Unaudited) 

 

For the Nine Months Ended September 30, 2022

 

HG Global/BAM

 

Ark/WM
Outrigger

           
   

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

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

 

74.9

 

10.4

 

122.1

 

256.9

Change in fair value of contingent consideration

 

 

 

4.9

 

 

 

4.9

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.

SELECTED FINANCIAL DATA

($ in millions)

(Unaudited)

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

BAM

 

2023

 

2022

 

2023

 

2022

Gross par value of primary market policies issued

 

$            3,659.9

 

$            3,269.0

 

$            8,735.5

 

$          10,147.8

Gross par value of secondary market policies issued

 

542.4

 

826.5

 

1,746.9

 

3,269.4

Gross par value of assumed reinsurance

 

 

42.5

 

 

42.5

Total gross par value of market policies issued

 

$            4,202.3

 

$            4,138.0

 

$          10,482.4

 

$          13,459.7

Gross written premiums

 

$                  16.5

 

$                  19.7

 

$                  37.3

 

$                  46.2

MSC collected

 

19.9

 

26.0

 

46.4

 

62.3

Total gross written premiums and MSC collected

 

$                  36.4

 

$                  45.7

 

$                  83.7

 

$                108.5

Total pricing

 

87 bps

 

110 bps

 

80 bps

 

81 bps

 

   

As of
September 30, 2023

 

As of
December 31, 2022

 

As of
September 30, 2022

Policyholders' surplus

 

$                   285.8

 

$                   283.4

 

$                   316.9

Contingency reserve

 

131.5

 

118.2

 

113.9

Qualified statutory capital

 

417.3

 

401.6

 

430.8

Statutory net unearned premiums

 

58.3

 

55.3

 

53.3

Present value of future installment premiums and MSC

 

10.9

 

13.3

 

13.3

HG Re, Ltd collateral trusts at statutory value

 

587.5

 

553.1

 

512.7

Fidus Re, Ltd collateral trust at statutory value

 

400.0

 

400.0

 

250.0

Claims paying resources

 

$               1,474.0

 

$               1,423.3

 

$               1,260.1

 

   

Three Months Ended September 30,

 

Nine Months Ended September 30,

HG Global

 

2023

 

2022

 

2023

 

2022

Net written premiums

 

$                  14.2

 

$                  16.8

 

$                  31.9

 

$                  39.6

Earned premiums

 

$                    6.6

 

$                    5.9

 

$                  19.4

 

$                  21.5

 

   

As of
September 30, 2023

 

As of
December 31, 2022

 

As of
September 30, 2022

Unearned premiums

 

$                   262.3

 

$                   249.8

 

$                   239.7

Deferred acquisition costs

 

$                     75.4

 

$                     71.2

 

$                     68.0

 

WHITE MOUNTAINS INSURANCE GROUP, LTD.

SELECTED FINANCIAL DATA (CONTINUED)

($ in millions)

(Unaudited)

 
   

Three Months Ended September 30,

Ark/WM Outrigger

 

2023

 

2022

   

Ark

 

WM

Outrigger Re

 

Elimination

 

Total

 

Ark

Insurance premiums:

                   

Gross written premiums

 

$     251.2

 

$           6.0

 

$        (6.0)

 

$    251.2

 

$    215.5

Net written premiums

 

$     225.0

 

$           6.0

 

$           —

 

$    231.0

 

$    192.6

Net earned premiums

 

$     438.3

 

$         60.6

 

$           —

 

$    498.9

 

$    346.1

                     

Insurance expenses:

                   

Loss and loss adjustment expenses

 

$     258.5

 

$           7.3

 

$           —

 

$    265.8

 

$    213.7

Acquisition expenses

 

71.0

 

19.3

 

 

90.3

 

74.8

Other underwriting expenses (1)