White Mountains suffers fourth quarter loss

White Mountains Insurance Group lost $131 million in the fourth quarter of 2024, as the group was hit by losses in its financial guarantee and asset management businesses.

The loss compared to a profit of $298.5 million in 2024 for the Bermuda-based company. The loss also hit the company’s full year profit, which fell from $509 million to $230 million.

The company was also hurt by a 38% decline in the quarter at its troubled subsidiary MediaAlpha. producing a $122 million mark-to-market loss on our position.  Excluding MediaAlpha, investment returns were down slightly in the quarter but up 6.5% for the year, the company said.

White Mountains chief executive officer Manning Rountree (pictured) said: "Average Bbook value per share was down three per cent in the quarter, driven primarily by mark-to-market declines in our investment portfolio, including our position in MediaAlpha.

“On a full-year basis, ABVPS was up eight per cent, driven by solid results at our operating companies and positive returns in our investment portfolio.”

By segment, the company’s Bermuda-based re/insurer Ark and its sidecar Outrigger had earned insurance premiums in the fourth quarter of $415 million, up from $362 million and loss and loss expenses of $212 million compared to $146 million.

Ark and Outrigger had a 77% combined ratio and gross written premiums of $264 million, up 14% year over year. The companies’ loss and loss adjustment were $211 million, up from $146 million in 2023.

Ark's combined ratio was 77% and 83% in the fourth quarter and year ended December 31, 2024 compared to 70% and 82% in the fourth quarter and year ended December 31, 2023.

Whiite Mountains said Ark's combined ratio included 27 points of catastrophe losses in the fourth quarter of 2024, driven primarily by Hurricanes Milton and Helene, compared to negligible new catastrophe losses in the fourth quarter of 2023.

Ark's combined ratio included 13 points of catastrophe losses in the year ended December 31, 2024, driven primarily by Hurricanes Milton, Helene, Debby and Beryl, compared to two points of catastrophe losses in the year ended December 31, 2023, driven primarily by Hurricanes Otis and Idalia as well as the Maui wildfires.

It also included seven points and four points of net favourable prior year development in the fourth quarter and year ended December 31, 2024 compared to two points of net unfavourable prior year development in both the fourth quarter and year in 2023.

Net favourable development for the fourth quarter of 2024 was driven primarily by the specialty line of business.  Net favourable development for the year ended December 31, 2024 was driven primarily by specialty and property lines of business.

Ark reported pre-tax income of $51 million and $253 million in the fourth quarter and year in 2024 compared to $109 million and $249 million in the fourth quarter and year in 2023.

Ark had a $34 million realised and unrealised investment loss in the fourth quarter, compared to a fourth quarter realised and unrealised gain of $50 million in the same period in 2023. For the year, the companies had a net realised and unrealised investment losse of  $34 million for 2024  and a $50 million gain for the tear compared to gains of $50 million and $86 million in the fourth quarter and year in 2023.

Ian Beaton, CEO of Ark, said: "Ark had a good quarter and full year, producing combined ratios of 77% and 83%, respectively.  Full year gross written premiums were $2.2 billion, up 16% year-over-year, aided by new underwriting teams and products.

“In November, AM Best affirmed Ark's 'A/stable' financial strength rating.  Although the rate environment is moderating, we continue to see opportunities for profitable growth in 2025."

WM Outrigger Re's combined ratio was 86% and 60% in the fourth quarter and year ended December 31, 2024 compared to 55% and 44% in the fourth quarter and year ended December 31, 2023.

Catastrophe losses in 2024 included Hurricanes Milton, Helene, Debby and Beryl.  Major catastrophe losses affecting WM Outrigger Re in 2023 were minimal.  WM Outrigger Re reported gross and net written premiums of $5 million and $87 million and net earned premiums of $25 million and $88 million in the fourth quarter and year in 2024 compared to gross and net written premiums of $2 million and $110 million and net earned premiums of $29 million and $104 million in the fourth quarter and year in 2023

Net earned premiums in the year ended December 31, 2024 decreased due to White Mountains's lower capital commitment to WM Outrigger Re in 2024 compared to 2023.

WM Outrigger Re reported pre-tax income of $6 million and $46 million in the fourth quarter and 2024 year compared to $16 million and $69 million in the fourth quarter and year in 2023.

The company said it would have exposure to the California wildfires but it did not expect the losses to “diverge materially from 2025 planned catastrophe losses”.

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