Ark helps White Mountains climb to second quarter profit

White Mountains Insurance Group bounced back to a $21 million profit in the second quarter on the back of a strong performance by property and casualty subsidiary Ark Insurance.

However, investment losses in affiliate Media Alpha was a drag on earnings as the company suffered a net realised and unrealised loss of $77 million in the quarter.

The $24 million net income compared to a $174 million loss in the second quarter of 2022 with total revenues of $378.4 million compared to $76.7 million.

Chief executive officer Manning Rountree (pictured), said: “Adjusted book value per share was up 1% in the quarter.

“Build America Mutual 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%.”

He added: “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.”

Bermuda-based Ark, which operates Lloyd’s syndicates and has a Bermuda Class 4 insurer, had earned insurance premiums of $293.3 million compared to $217.3 million in the same period in 2022, while net income rose to $13.7 million from $3.2 million.

It had gross written premiums of $606 million compared to $403 million.

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.”

Loss and loss expenses rose to $167.5 million, up from $120.5 million a year earlier.

Ark’s combined ratio edged up to 89% from 87%  due to unfavourable loss developments from previous years.

Net realised and unrealised gains were $18 million compared to a loss of $44.6 million.