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10 August 2021News

White Mountains reports strong second quarter at Ark, BAM and NSM

Bermuda-based White Mountains’ adjusted book value per share was up 4% in the second quarter, driven by robust results across the firm’s investee companies Ark, BAM and NSM.

P&C insurer and reinsurer Ark had a solid second quarter. Driven by strong April and June renewals, Ark’s gross written premiums rose by 78% in the quarter to $328 million from 2020 levels, with risk-adjusted rate change up over 7%. The adjusted combined ratio was 84% in the quarter reflecting 10 points of favourable prior year development and light catastrophes.

Ian Beaton, CEO of Ark, said in a statement: “In July, we closed on €39 million of subordinated debt, and we continue to make good progress on the balance of our planned capital raise. Looking forward, market conditions remain attractive, and we are optimistic about profitable growth in the book.”

Manning Rountree, CEO of White Mountains, said the company finished the second quarter with roughly $300 million in undeployed capital, which it expects to increase in the third quarter upon completion of the subordinated debt raise at Ark.

BAM also had a good second quarter, with par insured up 25% from the same period in 2020. Demand for insurance remained strong, keeping insured penetration above 8%. The firm produced $30 million of total premiums and member surplus contributions, as insured penetration and market share remained strong, while pricing declined. In the first quarter of 2021, BAM completed a reinsurance agreement with Fidus Re that increased BAM’s claims paying resources by $150 million.

“The outlook for municipal credit improved as a result of the ongoing economic recovery as well as Federal support for issuers. Declining interest rates and tighter credit spreads resulted in lower overall pricing. However, risk adjusted pricing was supported by strong demand for insured bonds of double-A rated issuers,” said Seán McCarthy, CEO of BAM.

White Mountains noted, however, that the COVID-19 pandemic is negatively impacting the finances of municipalities to varying degrees, and, over time, financial stress could emerge.

NSM generated growth in both pro forma controlled premiums and pro forma adjusted EBITDA. Speciality insurer NSM reported pre-tax income of $1 million in the second quarter of 2021, compared to a pre-tax loss of $4 million in the second quarter of 2020. The firm also delivered adjusted EBITDA of $19 million, and commission and other revenues of $84 million, compared to $18 million and $76 million respectively in the second quarter of 2020.

Geof McKernan, CEO of NSM, said: “Growth in the quarter was led by the pet, social services and specialty transportation verticals, offset by a decline in the real estate vertical. We also benefited from improved results in the UK vertical following the sale of the fresh insurance motor business and the broader reopening of the UK economy.”




More on this story

News
11 May 2021   White Mountains Insurance Group reported a loss in the first quarter of 2021, with the chief executive admitting the business had got off to a slow start this year, but stressing the fundamental health of the business.
article
3 December 2021   Liam Caffrey will begin in March.
article
1 April 2022   HG expects to receive the proceeds of the loan on or prior to 31 May.

More on this story

News
11 May 2021   White Mountains Insurance Group reported a loss in the first quarter of 2021, with the chief executive admitting the business had got off to a slow start this year, but stressing the fundamental health of the business.
article
3 December 2021   Liam Caffrey will begin in March.
article
1 April 2022   HG expects to receive the proceeds of the loan on or prior to 31 May.