White Mountains takes loss as media subsidiary's value falls

Bermuda-based White Mountains Insurance Group lost $55 million in the second quarter, driven by a $139 million loss in the value of the company's subsidiary MediaAlpha. 

The loss compared to a $20.6 million profit in the same period in 2023. For the first six months of 2024, White Mountains earned $181.6 million, compared to 200.9 million in 2023. 

The company's Bermuda-based subsidiary, Ark reported pre-tax income of $50 million and $83 million in the second quarter and first six months of 2024 compared to $42 million and $78 million in the same periods in 2023.  Ark's results included net realized and unrealized investment gains of $20 million and $31 million in the second quarter and first six months of 2024 compared to $18 million and $43 million in the second quarter and first six months of 2023.

Its sidecar, WM Outrigger Re, reported a profit of $8 million and $18 million in the second quarter and first six months of 2024 compared to $10 million and $16 million in the same periods in 2023.

Of the parent company, chief executive officer Manning Rountree, CEO, said: "Average book value per share was down 1% in the quarter, due primarily to our investment in MediaAlpha.  Excluding MediaAlpha, ABVPS was up 2%, driven by solid results at our operating companies and good investment returns.  

"Ark produced an 89% combined ratio and $697 million of gross written premiums in the quarter, up 15% year-over-year. 

"BAM generated $28 million of total gross written premiums and member surplus contributions in the quarter, up 7% year-over-year due to strong primary market volume. At Kudu, trailing 12 months adjusted EBITDA increased, while the value of the continuing portfolio grew 7%.  

"Bamboo had another strong quarter, once again tripling managed premiums year-over-year and growing adjusted EBITDA.  

"MediaAlpha's share price declined 35% in the quarter, producing a $139 million loss.  Excluding MediaAlpha, investment returns were good on an absolute and relative basis.  Undeployed capital now stands at roughly $650 million." 

Ian Beaton, CEO of Ark, said: "We are off to a good start through the first half of 2024.  Ark's combined ratio was 89% for the second quarter and 91% year to date, both in line with prior year.  Gross written premiums were up 15% over prior year in the quarter.  Risk adjusted rate change was flat overall.  We are seeing good growth in select lines of business, including marine & energy and accident & health, and in new product classes."

The Ark/WM Outrigger segment's combined ratio was 87% and 89% in the second quarter and first six months of 2024 compared to 87% and 89% in 2023.

The segment had reported gross written premiums of $697 million and $1.57 billion, net written premiums of $503 million and $1.1 billion and net earned premiums of $318 million and $621 million in the second quarter and first six months of 2024 compared to gross written premiums of $606 million and $1.4 billion, net written premiums of $461 million and $1.08 billion and net earned premiums of $293 million and $548 million in the sane periods in 2023. 

White Mountains said Ark's combined ratio in the second quarter and first six months of 2024 included minimal catastrophe losses compared to five points and three points of catastrophe losses in the second quarter and first six months of 2023.  

Non-catastrophe losses in the second quarter of 2024 included $19 million related to a political risk claim, $14 million related to tornado damage in Oklahoma and $13 million related to two satellite losses, all on a net basis.  Ark's combined ratio in the second quarter and first six months of 2024 included two points and one point of net favorable prior year development, primarily due to property lines of business, compared to four points of net unfavorable prior year development in both the second quarter and first six months of 2023, primarily due to Winter Storm Elliott and three large claims in the property and marine & energy lines of business. 

WM Outrigger Re's combined ratio was 27% and 30% in the second quarter and first six months of 2024 compared to 25% and 24% in the second quarter and first six months of 2023.   WM Outrigger Re reported gross and net written premiums of $39 million and $73 million and net earned premiums of $8 million and $18 million in the second quarter and first six months of 2024 compared to gross and net written premiums of $58 million and $102 million and net earned premiums of $10 million and $15 million in 2023.  

Gross and net written premiums decreased due to White Mountains's lower capital commitment to WM Outrigger Re in 2024.

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