White Mountains profits down in 2018

07-02-2019

White Mountains Insurance Group had a challenging 2018, having made an overall loss attributable to common shareholders across its portfolio of businesses.

White Mountains posted a comprehensive loss of £141 million for the fourth quarter of 2018, compared with a profit of $23 million for the same period in 2017.

For the full year, White Mountains made a loss of $146 million, compared with a profit of $631 million in 2017.

Manning Rountree, CEO of White Mountains, admitted the overall company had a "tough fourth quarter" in 2018, however suggested its mutual insurance company subsidiary Build America Mutual (BAM) had strong results. The company provides financial guaranty insurance for municipal bonds, focusing exclusively on bonds issued to finance essential public purposes, such as schools, utilities and transportation facilities.

"BAM enjoyed a strong fourth quarter, ending the year at new highs for par in force, total premiums and claims paying resources and, in December, making a $23 million cash payment on the surplus notes," added Rountree.

The mutual's gross written premiums totaled $51 million and $107 million in the fourth quarter and year ended December 31, 2018, compared to $33 million and $101 million in the fourth quarter and year ended December 31, 2017.

Seán McCarthy, CEO of BAM, added: "Total premiums grew 7 percent in 2018 to a record high of $111 million, despite lower new-issue municipal bond volume.  Solid investor demand for BAM's guaranty, including increasing interest from large institutions, helped BAM's secondary market activity grow 21 percent. We also completed our first assumed reinsurance transaction, bringing total par in force to a new high of $52 billion."

White Mountains still reported a pre-tax loss related to BAM of $8 million and $61 million in the fourth quarter and year ended December 31, 2018, compared to pre-tax loss of $14 million and $50 million in the fourth quarter and year ended December 31, 2017.  

The group's other insurance subsidiary NSM also reported a pre-tax loss of $3 million and $5 million in the fourth quarter of 2018 and the period from May 11, 2018 through December 31, 2018.

NSM is a managing general agent and programme administrator for specialty property & casualty insurance.

Geof McKernan, CEO of NSM, added: "We had mixed results in the quarter, with growth in the transportation and real estate verticals offset by shrink in the social services vertical.  During the quarter, we closed our acquisitions of both US-based KBK Insurance Group and UK-based MGA start-up First Specialty. We remain acquisitive, with a strong appetite for profitable specialty insurance businesses, and we continue to invest in technology and talent to drive organic growth."

White Mountains, Results, Insurance, BAM, NSM, Bermuda

Bermuda Re