White Mountains profit climbs 31%

Bermuda-based White Mountains Insurance Group recorded a 31% increase in net income, largely driven by a jump in net unrealized investment gains in affiliate Media Alpha. 

The company's Bermuda-based subsidiary Ark, which manages two Lloyd's syndicates and a Class 4 Bermuda reinsurer, produced net income of $33 million in the first quarter, down from $36 million in the 2023, largely due to a drop in net realized gains in the period. 

Ark increased gross written premium of $872 million in the quarter compared to $809 million in 2023 while the combined ratio was 94%, on par with 2023. 

White Mountains' net income rose to $236 million from $180 million, as the gain from MediaAlpha increased to $211 million from $85 million in the same period in 2023.  

Manning Rountree, CEO of White Mountains, said: "We had a good first quarter, with adjusted book value per share up 6%.  Our position in MediaAlpha was a key driver.  

"Away from MediaAlpha, we had solid operating and investment results.  Ark delivered a 94% combined ratio while writing $872 million of gross written premiums in the quarter, up 8% year-over-year.  BAM produced $22 million of gross written premiums and member surplus contributions in the quarter.  Kudu grew net investment income and adjusted EBITDA year-over-year. Bamboo had a strong first quarter under our ownership, more than tripling managed premiums year-over-year. 

"MediaAlpha's share price was up roughly $9 in the quarter, producing a $211 million unrealized gain. Excluding MediaAlpha, the investment portfolio returned 1.2% in the quarter, with gains in both fixed income and equities.  Undeployed capital now stands at approximately $600 million."

Ark, which also sponsors WM Outrigger as a sidecar, had a combined ratio for the two entities of 91% compared to 92% a year earlier and the two businesses reported gross written premiums of $872 million, net written premiums of $598 million and net earned premiums of $303 million in the first quarter of 2024 compared to gross written premiums of $809 million, net written premiums of $614 million and net earned premiums of $255 million in the first quarter of 2023. 

Ask said its combined ratio of 94% included slight net favourable prior year development compared to three points of net unfavourable prior year development in the first quarter of 2023, primarily due to Winter Storm Elliott.  Non-catastrophe losses in the first quarter of 2024 included $15 million on a net basis related to the collapse of the Francis Scott Key Bridge in Baltimore and $16 million on a net basis related to a satellite loss.

Ark reported gross written premiums of $872 million, net written premiums of $564 million and net earned premiums of $293 million in the first quarter of 2024 compared to gross written premiums of $809 million, net written premiums of $570 million and net earned premiums of $250 million in the first quarter of 2023. 

Ian Beaton, CEO of Ark, said: "We are off to a good start in 2024, with a combined ratio of 94%.  Gross written premiums increased 8% year-over-year, with risk adjusted rate change up 3%.  Market conditions remain attractive, although rate growth is slowing in several lines of business."

WM Outrigger Re's combined ratio was 32% in the first quarter of 2024 compared to 21% in the first quarter of 2023.  Catastrophe losses were minimal in both periods.  In the first quarter of 2024, WM Outrigger Re's combined ratio was 26% for underwriting year 2024 and 42% for underwriting year 2023.  

WM Outrigger Re reported gross and net written premiums of $34 million and net earned premiums of $10 million in the first quarter of 2024 compared to gross and net written premiums of $44 million and net earned premiums of $5 million in the first quarter of 2023. 

Gross and net written premiums decreased due to White Mountains's lower capital commitment to WM Outrigger Re in 2024.  WM Outrigger Re reported pre-tax income of $10 million in the first quarter of 2024, of which $7 million was attributable to the 2024 underwriting year and $3 million to the 2023 underwriting year, compared to $6 million in the first quarter of 2023.

White Mountains' bond insurance subsidiary BAM collected gross written premiums and member surplus contributions totalling $22 million in the first quarter of 2024 compared to $21 million in the first quarter of 2023.  BAM insured municipal bonds with par value of $3.6 billion in the first quarter of 2024 compared to $2.9 billion in the first quarter of 2023.  Total pricing was 61 basis points in the first quarter of 2024 compared to 73 basis points in the first quarter of 2023.  BAM's total claims paying resources were $1,508 million as of March 31, 2024 compared to $1,501 million as of December 31, 2023 and $1,433 million as of March 31, 2023.

HG Global reported pre-tax income of $6 million in the first quarter of 2024 compared to $18 million in the first quarter of 2023.  HG Global's results included net realized and unrealized investment losses of $7 million in the first quarter of 2024 compared to a gain of $8 million in the first quarter of 2023, driven by the movement of interest rates.

BAM lost $21 million in the first quarter of 2024 compared to $9 million in the first quarter of 2023. 

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.

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