HAMILTON, Bermuda, Nov. 6, 2023
/PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM)
reported book value per share of $1,542 and adjusted book value per share of
$1,588 as of September 30, 2023. Book value per share
and adjusted book value per share both increased 1% in the third
quarter of 2023 and 6% in the first nine months ended September 30, 2023, including
dividends.
Manning Rountree, CEO, commented, "ABVPS was up 1% in the
quarter and 6% year-to-date. BAM generated $36 million of total gross written premiums and
member surplus contributions in the quarter; primary market
issuance remains below historical levels but ticked up slightly
year-over-year. Ark produced an 81% combined ratio while
growing premiums 17% year over year. WM Outrigger Re
delivered a 44% combined ratio and $37
million of pre-tax income. The fair value of Kudu's
portfolio of existing participation contracts grew 2% despite a
challenging quarter for investment markets. Kudu grew
annualized adjusted EBITDA to $47
million and closed one new deployment in the quarter.
MediaAlpha's share price declined in the quarter, reducing ABVPS by
1%. Excluding MediaAlpha, the investment portfolio was up 1%
in the quarter, outperforming benchmarks. We were pleased to
announce our acquisition of Bamboo and the launch of WM
Partners. Including the Bamboo acquisition, undeployed
capital stands at roughly $400
million."
Comprehensive income attributable to common shareholders was
$23 million and $224 million in the third quarter and first nine
months of 2023 compared to $890
million and $748 million in
the third quarter and first nine months of 2022. Results in
the third quarter and first nine months of 2022 included the net
gain from the sale of NSM of $876
million. Results in the third quarter and first nine
months of 2023 included $47 million
and $39 million of unrealized
investment losses from White Mountains's investment in MediaAlpha
compared to $19 million and
$113 million in the third quarter and
first nine months of 2022.
HG Global/BAM
BAM's gross written premiums and member surplus contributions
(MSC) collected were $36 million and
$84 million in the third quarter and
first nine months of 2023 compared to $46
million and $109 million in
the third quarter and first nine months of 2022. BAM insured
municipal bonds with par value of $4.2
billion and $10.5 billion in
the third quarter and first nine months of 2023 compared to
$4.1 billion and $13.5 billion in the third quarter and first nine
months of 2022. Total pricing was 87 and 80 basis points in
the third quarter and first nine months of 2023 compared to 110 and
81 basis points in the third quarter and first nine months of
2022. BAM's total claims paying resources were $1,474 million at September 30, 2023 compared to $1,423 million at December
31, 2022 and $1,260 million at
September 30, 2022.
Seán McCarthy, CEO of BAM, said, "Market conditions improved in
the third quarter, and BAM posted its strongest par insured,
pricing and premium results so far this year. Strong demand
for bond insurance benefited primary market volume. The
increase in interest rates and volatility, particularly at the end
of the quarter, boosted secondary market activity."
HG Global reported pre-tax income (loss) of $(2) million and $22
million in the third quarter and first nine months of 2023
compared to $(12) million and
$(35) million in the third quarter
and first nine months of 2022. HG Global's results included
net realized and unrealized investment losses of $14 million and $11
million in the third quarter and first nine months of 2023
compared to $20 million and
$58 million in the third quarter and
first nine months of 2022, driven by increasing interest rates in
all periods.
White Mountains reported pre-tax loss related to BAM of
$28 million and $57 million in the third quarter and first nine
months of 2023 compared to $32
million and $98 million in the
third quarter and first nine months of 2022. BAM's results
included net realized and unrealized investment losses of
$11 million and $6 million in the third quarter and first nine
months of 2023 compared to $19
million and $56 million in the
third quarter and first nine months of 2022, driven by increasing
interest rates in all periods.
BAM is a mutual insurance company that is owned by its
members. BAM's results are consolidated into White
Mountains's GAAP financial statements and attributed to
noncontrolling interests.
Ark/WM Outrigger
The Ark/WM Outrigger segment's combined ratio was 77% and 83% in
the third quarter and first nine months of 2023. Ark/WM
Outrigger reported gross written premiums of $251 million and $1,667
million, net written premiums of $231
million and $1,306 million and
net earned premiums of $499 million
and $1,047 million in the third
quarter and first nine months of 2023. Ark/WM Outrigger
reported pre-tax income of $99
million and $193 million in
the third quarter and first nine months of 2023.
Ark's combined ratio was 81% and 87% in the third quarter and
first nine months of 2023 compared to 87% and 90% in the third
quarter and first nine months of 2022. Ark's combined ratio
in the third quarter of 2023 included 11 points of catastrophe
losses, which included losses from Hurricane Idalia, the
Maui wildfires and various smaller
events, compared to 21 points of catastrophe losses in the third
quarter of 2022, driven primarily by losses from Hurricane
Ian. Ark's combined ratio in the first nine months of 2023
included seven points of catastrophe losses, which included losses
from Hurricane Idalia, the Maui
wildfires and various smaller events, compared to 17 points of
catastrophe losses in the first nine months of 2022, driven
primarily by losses from Hurricane Ian and the conflict in
Ukraine. Ark's combined ratio in the third quarter and first
nine months of 2023 included less than one point of net favorable
prior year development and two points of net unfavorable prior year
development compared to three points and five points of net
favorable prior year development in the third quarter and first
nine months of 2022.
Ark reported gross written premiums of $251 million and $1,667
million, net written premiums of $225
million and $1,198 million and
net earned premiums of $438 million
and $972 million in the third quarter
and first nine months of 2023 compared to gross written premiums of
$216 million and $1,253 million, net written premiums of
$193 million and $1,007 million and net earned premiums of
$346 million and $758 million in the third quarter and first nine
months of 2022.
Ark reported pre-tax income (loss) of $62
million and $140 million in
the third quarter and first nine months of 2023 compared to
$24 million and $(20) million in the third quarter and first nine
months of 2022. Ark's results included net realized and
unrealized investment gains (losses) of $(7)
million and $36 million in the
third quarter and first nine months of 2023 compared to
$(14) million and $(77) million in the third quarter and first nine
months of 2022.
Ian Beaton, CEO of Ark, said,
"Ark had a good third quarter notwithstanding global catastrophe
activity. The combined ratio was 81% in the quarter, an
improvement of six points year-over-year. Gross written
premiums were $251 million in the
quarter and $1,667 million
year-to-date, up 17% and 33%, respectively, from 2022 levels.
Risk-adjusted rate change is up 11% in the quarter and 16%
year-to-date. Momentum remains positive."
WM Outrigger Re's combined ratio was 44% and 40% in the third
quarter and first nine months of 2023. WM Outrigger Re
reported gross and net written premiums of $6 million and $108
million and net earned premiums of $61 million and $75
million in the third quarter and first nine months of
2023. WM Outrigger Re reported pre-tax income of $37 million and $53
million in the third quarter and first nine months of
2023.
Kudu
Kudu reported total revenues of $26
million, pre-tax income of $16
million and adjusted EBITDA of $12
million in the third quarter of 2023 compared to total
revenues of $56 million, pre-tax
income of $47 million and adjusted
EBITDA of $12 million in the third
quarter of 2022. Total revenues, pre-tax income and adjusted
EBITDA included $15 million of net
investment income in both the third quarter of 2023 and 2022.
Total revenues and pre-tax income also included $11 million of net realized and unrealized
investment gains in the third quarter of 2023 compared to
$41 million in the third quarter of
2022.
Kudu reported total revenues of $89
million, pre-tax income of $62
million and adjusted EBITDA of $34
million in the first nine months of 2023 compared to total
revenues of $87 million, pre-tax
income of $66 million and adjusted
EBITDA of $33 million in the first
nine months of 2022. Total revenues, pre-tax income and
adjusted EBITDA included $44 million
of net investment income in the first nine months of 2023 compared
to $41 million in the first nine
months of 2022. Total revenues and pre-tax income also
included $45 million of net realized
and unrealized investment gains in the first nine months of 2023
compared to $46 million in the first
nine months of 2022.
Rob Jakacki, CEO of Kudu, said,
"The fair value of Kudu's existing participation contracts was up
2% in the quarter. Trailing 12 months net investment income
increased 1% quarter-over-quarter to $57
million, and annualized adjusted EBITDA increased 8%
quarter-over-quarter to $47 million.
We are pleased to have closed our capital deployment in Apera Asset
Management, a European private credit specialist, which further
diversifies Kudu's portfolio. Kudu continues to identify
high-quality asset and wealth managers across the globe, and we
expect to deploy additional capital this year."
MediaAlpha
As of September 30, 2023, White
Mountains owned 22.9 million shares of MediaAlpha, representing a
35% basic ownership interest (33% on a
fully-diluted/fully-converted basis). As of September 30, 2023, MediaAlpha's closing price
was $8.26 per share, which decreased
from $10.31 per share as of
June 30, 2023. The carrying value of White Mountains's
investment in MediaAlpha was $189
million as of September 30,
2023, which decreased from $236
million as of June 30, 2023. At our current level
of ownership, each $1.00 per share
increase or decrease in the share price of MediaAlpha will result
in an approximate $9.00 per share
increase or decrease in White Mountains's book value per share and
adjusted book value per share. We encourage you to read
MediaAlpha's third quarter earnings release and related
shareholder letter, which is available on MediaAlpha's investor
relations website at www.investors.mediaalpha.com.
Other Operations
White Mountains's Other Operations reported pre-tax income
(loss) of $(63) million and
$19 million in the third quarter and
first nine months of 2023 compared to $(58)
million and $(191) million in
the third quarter and first nine months of 2022. Unrealized
investment losses from White Mountains's investment in MediaAlpha
were $47 million and $39 million in the third quarter and first nine
months of 2023 compared to $19
million and $113 million in
the third quarter and first nine months of 2022. Excluding
MediaAlpha, net realized and unrealized investment gains (losses)
were $8 million and $126 million in the third quarter and first nine
months of 2023 compared to $(17)
million and $3 million in the
third quarter and first nine months of 2022. Net investment
income was $8 million and
$22 million in the third quarter and
first nine months of 2023 compared to $9
million and $14 million in the
third quarter and first nine months of 2022. White
Mountains's Other Operations reported general and administrative
expenses of $42 million and
$131 million in the third quarter and
first nine months of 2023 compared to $41
million and $122 million in
the third quarter and first nine months of 2022.
Share Repurchases
White Mountains did not repurchase any of its common shares in
the third quarter of 2023. In the first nine months of 2023,
White Mountains repurchased and retired 24,165 of its common shares
for $33 million at an average share
price of $1,354.88, or 85% of White
Mountains's adjusted book value per share as of September 30, 2023.
In the third quarter of 2022, White Mountains repurchased and
retired 366,645 of its common shares for $509 million at an average share price of
$1,388.24, or 94% of White
Mountains's September 30, 2022
adjusted book value per share. In the first nine months of 2022,
White Mountains repurchased and retired 457,180 of its common
shares for $611 million at an average
share price of $1,335.44, or 91% of
White Mountains's September 30, 2022
adjusted book value per share. These amounts included the
results of White Mountains's self-tender offer in September 2022.
Investments
The total consolidated portfolio return was -0.2% in the third
quarter of 2023. Excluding MediaAlpha, the total consolidated
portfolio return was 0.6% in the third quarter of 2023. The
total consolidated portfolio return was 0.4% in the third quarter
of 2022. Excluding MediaAlpha, the total consolidated
portfolio return was 0.5% in the third quarter of 2022.
The total consolidated portfolio return was 5.3% in the first
nine months of 2023. Excluding MediaAlpha, the total
consolidated portfolio return was 6.3% in the first nine months of
2023. The total consolidated portfolio return was -3.6% in
the first nine months of 2022. Excluding MediaAlpha, the
total consolidated portfolio return was -1.4% in the first nine
months of 2022.
Mark Plourde, President of White
Mountains Advisors, said, "Excluding MediaAlpha, the total
portfolio returned 0.6% in the quarter, a good result in a
challenging market. The fixed income portfolio was flat,
outperforming the longer duration BBIA Index return of -1.9%.
The equity portfolio, excluding MediaAlpha, returned 1.4%, well
ahead of the S&P 500 return of -3.3%. The relative
outperformance was attributable to gains across our other long-term
investments portfolio."
Additional Information
White Mountains is a Bermuda-domiciled financial services holding
company traded on the New York Stock Exchange and the Bermuda Stock
Exchange under the symbol WTM. Additional financial
information and other items of interest are available at the
Company's website located at www.whitemountains.com. White
Mountains expects to file its Form 10-Q today with the Securities
and Exchange Commission and urges shareholders to refer to that
document for more complete information concerning its financial
results.
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(millions)
|
(Unaudited)
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
September 30,
2022
|
Assets
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
$
932.2
|
|
$
909.9
|
|
$
874.4
|
Short-term
investments
|
|
80.1
|
|
65.9
|
|
62.3
|
Total
investments
|
|
1,012.3
|
|
975.8
|
|
936.7
|
Cash
|
|
4.9
|
|
18.2
|
|
17.3
|
Insurance premiums
receivable
|
|
5.5
|
|
6.6
|
|
6.6
|
Deferred acquisition
costs
|
|
38.5
|
|
36.0
|
|
34.9
|
Other
assets
|
|
22.2
|
|
21.9
|
|
22.3
|
Total Financial
Guarantee assets
|
|
1,083.4
|
|
1,058.5
|
|
1,017.8
|
P&C Insurance
and Reinsurance (Ark/WM Outrigger)
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
775.0
|
|
772.8
|
|
741.8
|
Common equity
securities
|
|
384.9
|
|
334.6
|
|
286.4
|
Short-term
investments
|
|
850.0
|
|
484.6
|
|
309.4
|
Other long-term
investments
|
|
416.6
|
|
373.6
|
|
329.7
|
Total
investments
|
|
2,426.5
|
|
1,965.6
|
|
1,667.3
|
Cash
|
|
129.6
|
|
101.5
|
|
123.4
|
Reinsurance
recoverables
|
|
538.4
|
|
595.3
|
|
610.6
|
Insurance premiums
receivable
|
|
781.6
|
|
544.1
|
|
698.6
|
Deferred acquisition
costs
|
|
178.7
|
|
127.2
|
|
151.4
|
Goodwill and other
intangible assets
|
|
292.5
|
|
292.5
|
|
292.5
|
Other
assets
|
|
66.9
|
|
65.2
|
|
62.9
|
Total P&C
Insurance and Reinsurance assets
|
|
4,414.2
|
|
3,691.4
|
|
3,606.7
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
Short-term
investments
|
|
17.3
|
|
—
|
|
—
|
Other long-term
investments
|
|
780.7
|
|
695.9
|
|
813.2
|
Total
investments
|
|
798.0
|
|
695.9
|
|
813.2
|
Cash (restricted
$—, $12.2, $8.9)
|
|
5.4
|
|
101.4
|
|
76.6
|
Accrued
investment income
|
|
15.8
|
|
12.4
|
|
12.5
|
Goodwill and
other intangible assets
|
|
8.4
|
|
8.6
|
|
8.7
|
Other
assets
|
|
8.3
|
|
7.6
|
|
9.7
|
Total Asset Management
assets
|
|
835.9
|
|
825.9
|
|
920.7
|
Other Operations
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
270.7
|
|
238.2
|
|
238.1
|
Common equity
securities
|
|
252.1
|
|
333.8
|
|
824.7
|
Investment in
MediaAlpha
|
|
188.8
|
|
168.6
|
|
46.4
|
Short-term
investments
|
|
215.5
|
|
373.6
|
|
148.2
|
Other long-term
investments
|
|
698.5
|
|
418.5
|
|
479.8
|
Total
investments
|
|
1,625.6
|
|
1,532.7
|
|
1,737.2
|
Cash
|
|
22.9
|
|
33.9
|
|
28.4
|
Goodwill and
other intangible assets
|
|
71.2
|
|
91.3
|
|
92.0
|
Other
assets
|
|
89.6
|
|
155.6
|
|
142.2
|
Total Other Operations
assets
|
|
1,809.3
|
|
1,813.5
|
|
1,999.8
|
Total
assets
|
|
$
8,142.8
|
|
$
7,389.3
|
|
$
7,545.0
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
September 30,
2022
|
Liabilities
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
Unearned insurance
premiums
|
|
$
312.3
|
|
$
298.3
|
|
$
286.7
|
Debt
|
|
146.8
|
|
146.5
|
|
146.4
|
Accrued incentive
compensation
|
|
19.9
|
|
28.0
|
|
21.6
|
Other
liabilities
|
|
40.0
|
|
29.0
|
|
29.5
|
Total Financial
Guarantee liabilities
|
|
519.0
|
|
501.8
|
|
484.2
|
P&C Insurance
and Reinsurance (Ark/WM Outrigger)
|
|
|
|
|
|
|
Loss and loss
adjustment expense reserves
|
|
1,571.8
|
|
1,296.5
|
|
1,329.4
|
Unearned insurance
premiums
|
|
984.6
|
|
623.2
|
|
781.3
|
Debt
|
|
184.6
|
|
183.7
|
|
180.0
|
Reinsurance
payable
|
|
146.3
|
|
251.1
|
|
312.7
|
Contingent
consideration
|
|
62.1
|
|
45.3
|
|
32.9
|
Other
liabilities
|
|
132.0
|
|
122.3
|
|
107.6
|
Total P&C
Insurance and Reinsurance liabilities
|
|
3,081.4
|
|
2,522.1
|
|
2,743.9
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
Debt
|
|
203.7
|
|
208.3
|
|
253.5
|
Other
liabilities
|
|
53.6
|
|
65.0
|
|
59.7
|
Total Asset Management
liabilities
|
|
257.3
|
|
273.3
|
|
313.2
|
Other Operations
|
|
|
|
|
|
|
Debt
|
|
29.6
|
|
36.7
|
|
35.6
|
Accrued incentive
compensation
|
|
64.0
|
|
86.1
|
|
67.2
|
Other
liabilities
|
|
27.3
|
|
34.3
|
|
34.6
|
Total Other Operations
liabilities
|
|
120.9
|
|
157.1
|
|
137.4
|
Total
liabilities
|
|
3,978.6
|
|
3,454.3
|
|
3,678.7
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
White Mountains's
common shareholder's equity
|
|
|
|
|
|
|
White
Mountains's common shares and paid-in surplus
|
|
547.5
|
|
538.6
|
|
535.3
|
Retained earnings
|
|
3,404.3
|
|
3,211.8
|
|
3,175.9
|
Accumulated
other comprehensive income (loss), after tax:
|
|
|
|
|
|
|
Net unrealized
gains (losses) from foreign currency translation and interest rate
swap
|
|
(2.7)
|
|
(3.5)
|
|
(3.2)
|
Total White
Mountains's common shareholders' equity
|
|
3,949.1
|
|
3,746.9
|
|
3,708.0
|
Noncontrolling
interests
|
|
215.1
|
|
188.1
|
|
158.3
|
Total
equity
|
|
4,164.2
|
|
3,935.0
|
|
3,866.3
|
Total liabilities
and equity
|
|
$
8,142.8
|
|
$
7,389.3
|
|
$
7,545.0
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
BOOK VALUE AND
ADJUSTED BOOK VALUE PER SHARE
|
(Unaudited)
|
|
|
|
September
30,
2023
|
|
June 30,
2023
|
|
December 31,
2022
|
|
September
30,
2022
|
Book value per share
numerators (in millions):
|
|
|
|
|
|
|
|
|
White Mountains's
common shareholders' equity -
GAAP book value
per share numerator
|
|
$
3,949.1
|
|
$
3,922.2
|
|
$
3,746.9
|
|
$
3,708.0
|
HG Global's unearned
premium reserve (1)
|
|
254.2
|
|
246.8
|
|
242.1
|
|
232.2
|
HG Global's net
deferred acquisition costs (1)
|
|
(73.1)
|
|
(70.7)
|
|
(69.0)
|
|
(65.9)
|
Time value of money
discount on expected future payments on the
BAM
surplus notes (1)
|
|
(90.2)
|
|
(91.8)
|
|
(95.1)
|
|
(110.8)
|
Adjusted book value per
share numerator
|
|
$
4,040.0
|
|
$
4,006.5
|
|
$
3,824.9
|
|
$
3,763.5
|
Book value per share
denominators (in thousands of shares):
|
|
|
|
|
|
|
|
|
Common shares
outstanding - GAAP book value per share denominator
|
|
2,560.5
|
|
2,560.5
|
|
2,572.1
|
|
2,576.2
|
Unearned restricted
common shares
|
|
(15.7)
|
|
(19.1)
|
|
(14.1)
|
|
(17.5)
|
Adjusted book value per
share denominator
|
|
2,544.8
|
|
2,541.4
|
|
2,558.0
|
|
2,558.7
|
GAAP book value per
share
|
|
$ 1,542.36
|
|
1,531.84
|
|
$ 1,456.74
|
|
$ 1,439.31
|
Adjusted book value
per share
|
|
$ 1,587.59
|
|
1,576.46
|
|
$ 1,495.28
|
|
$ 1,470.84
|
(1) Amount
reflects White Mountains's preferred share ownership in HG Global
of 96.9%.
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
2023
|
|
June 30,
2023
|
|
December 31,
2022
|
|
September
30,
2022
|
Quarter-to-date
change in GAAP book value per share,
including dividends:
|
|
0.7 %
|
|
0.7 %
|
|
1.2 %
|
|
27.5 %
|
Quarter-to-date
change in adjusted book value per share,
including dividends:
|
|
0.7 %
|
|
0.6 %
|
|
1.7 %
|
|
27.7 %
|
Year-to-date change
in GAAP book value per share,
including dividends:
|
|
5.9 %
|
|
5.2 %
|
|
24.0 %
|
|
22.5 %
|
Year-to-date change
in adjusted book value per share,
including dividends:
|
|
6.2 %
|
|
5.5 %
|
|
25.7 %
|
|
23.6 %
|
Year-to-date
dividends per share
|
|
$
1.00
|
|
$
1.00
|
|
$
1.00
|
|
$
1.00
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
7.9
|
|
$
7.1
|
|
$
23.3
|
|
$
26.0
|
Net investment
income
|
|
8.1
|
|
5.7
|
|
22.9
|
|
15.1
|
Net realized and
unrealized investment gains (losses)
|
|
(24.1)
|
|
(38.8)
|
|
(17.0)
|
|
(114.0)
|
Other
revenues
|
|
.7
|
|
1.3
|
|
2.0
|
|
3.7
|
Total Financial
Guarantee revenues
|
|
(7.4)
|
|
(24.7)
|
|
31.2
|
|
(69.2)
|
P&C Insurance
and Reinsurance (Ark/WM Outrigger)
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
498.9
|
|
346.1
|
|
1,047.3
|
|
757.8
|
Net investment
income
|
|
16.9
|
|
4.9
|
|
41.2
|
|
9.7
|
Net realized and
unrealized investment gains (losses)
|
|
(6.6)
|
|
(14.4)
|
|
35.9
|
|
(76.5)
|
Other
revenues
|
|
3.6
|
|
6.6
|
|
(1.1)
|
|
10.1
|
Total P&C
Insurance and Reinsurance revenues
|
|
512.8
|
|
343.2
|
|
1,123.3
|
|
701.1
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
15.1
|
|
14.8
|
|
44.0
|
|
41.2
|
Net realized and
unrealized investment gains (losses)
|
|
11.2
|
|
41.1
|
|
45.4
|
|
45.8
|
Total Asset Management
revenues
|
|
26.3
|
|
55.9
|
|
89.4
|
|
87.0
|
Other
Operations
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
8.0
|
|
8.5
|
|
22.0
|
|
13.6
|
Net realized and
unrealized investment gains (losses)
|
|
8.0
|
|
(17.3)
|
|
125.8
|
|
2.8
|
Net realized and
unrealized investment gains (losses)
from
investment in MediaAlpha
|
|
(46.8)
|
|
(18.6)
|
|
(38.9)
|
|
(113.3)
|
Commission
revenues
|
|
3.5
|
|
3.2
|
|
10.0
|
|
8.7
|
Other
revenues
|
|
15.2
|
|
33.0
|
|
67.1
|
|
89.6
|
Total Other Operations
revenues
|
|
(12.1)
|
|
8.8
|
|
186.0
|
|
1.4
|
Total
revenues
|
|
$
519.6
|
|
$
383.2
|
|
$
1,429.9
|
|
$
720.3
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Expenses:
|
|
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
|
|
Acquisition
expenses
|
|
$
2.1
|
|
$
1.7
|
|
$
6.3
|
|
$
9.5
|
General and
administrative expenses
|
|
17.5
|
|
15.8
|
|
49.7
|
|
49.5
|
Interest
expense
|
|
3.8
|
|
2.0
|
|
10.8
|
|
5.4
|
Total Financial
Guarantee expenses
|
|
23.4
|
|
19.5
|
|
66.8
|
|
64.4
|
P&C Insurance
and Reinsurance (Ark/WM Outrigger)
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
265.8
|
|
213.7
|
|
581.1
|
|
456.2
|
Acquisition
expenses
|
|
90.3
|
|
74.8
|
|
211.5
|
|
174.9
|
General and
administrative expenses
|
|
35.4
|
|
24.2
|
|
105.5
|
|
74.9
|
Change in fair value of
contingent consideration
|
|
17.0
|
|
2.7
|
|
16.8
|
|
4.9
|
Interest
expense
|
|
5.5
|
|
3.7
|
|
15.7
|
|
10.6
|
Total P&C
Insurance and Reinsurance expenses
|
|
414.0
|
|
319.1
|
|
930.6
|
|
721.5
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
4.5
|
|
4.5
|
|
12.3
|
|
10.4
|
Interest
expense
|
|
5.5
|
|
4.2
|
|
15.5
|
|
10.3
|
Total Asset Management
expenses
|
|
10.0
|
|
8.7
|
|
27.8
|
|
20.7
|
Other
Operations
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
8.0
|
|
25.0
|
|
33.5
|
|
68.8
|
General and
administrative expenses
|
|
42.2
|
|
41.3
|
|
130.7
|
|
122.1
|
Interest
expense
|
|
.9
|
|
.6
|
|
2.9
|
|
1.2
|
Total Other Operations
expenses
|
|
51.1
|
|
66.9
|
|
167.1
|
|
192.1
|
Total
expenses
|
|
498.5
|
|
414.2
|
|
1,192.3
|
|
998.7
|
Pre-tax income
(loss) from continuing operations
|
|
21.1
|
|
(31.0)
|
|
237.6
|
|
(278.4)
|
Income tax
(expense) benefit
|
|
(7.3)
|
|
7.4
|
|
(19.4)
|
|
26.1
|
Net income (loss)
from continuing operations
|
|
13.8
|
|
(23.6)
|
|
218.2
|
|
(252.3)
|
Net income (loss) from
discontinued operations,
net of
tax - NSM Group
|
|
—
|
|
6.3
|
|
—
|
|
16.4
|
Net gain (loss) from
sale of discontinued operations,
net of
tax - NSM Group
|
|
—
|
|
886.8
|
|
—
|
|
886.8
|
Net income
(loss)
|
|
13.8
|
|
869.5
|
|
218.2
|
|
650.9
|
Net (income) loss
attributable to noncontrolling interests
|
|
9.8
|
|
18.7
|
|
4.5
|
|
101.5
|
Net income (loss)
attributable to White Mountains's common
shareholders
|
|
$
23.6
|
|
$
888.2
|
|
$
222.7
|
|
$
752.4
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
attributable to White Mountains's common
shareholders
|
|
$
23.6
|
|
$
888.2
|
|
$
222.7
|
|
$
752.4
|
Other comprehensive
income (loss), net of tax
|
|
(1.7)
|
|
(1.4)
|
|
.9
|
|
(3.0)
|
Other comprehensive
income (loss) from discontinued operations, net of tax - NSM
Group
|
|
—
|
|
.7
|
|
—
|
|
(5.2)
|
Net gain (loss) from
foreign currency translation from sale of
discontinued operations, net of tax - NSM Group
|
|
—
|
|
2.9
|
|
—
|
|
2.9
|
Comprehensive income
(loss)
|
|
21.9
|
|
890.4
|
|
223.6
|
|
747.1
|
Other comprehensive
(income) loss attributable to
noncontrolling interests
|
|
.7
|
|
(.3)
|
|
(.1)
|
|
.4
|
Comprehensive income
(loss) attributable to
White
Mountains's common shareholders
|
|
$
22.6
|
|
$
890.1
|
|
$
223.5
|
|
$
747.5
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
EARNINGS PER
SHARE
|
(Unaudited)
|
|
Earnings (loss) per
share attributable to White Mountains's
common
shareholders
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Basic earnings
(loss) per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
9.19
|
|
$
(1.66)
|
|
$
86.82
|
|
$
(50.73)
|
Discontinued
operations
|
|
—
|
|
308.59
|
|
—
|
|
304.97
|
Total consolidated
operations
|
|
$
9.19
|
|
$
306.93
|
|
$
86.82
|
|
$
254.24
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
9.19
|
|
$
(1.66)
|
|
$
86.82
|
|
$
(50.73)
|
Discontinued
operations
|
|
—
|
|
308.59
|
|
—
|
|
304.97
|
Total consolidated
operations
|
|
$
9.19
|
|
$
306.93
|
|
$
86.82
|
|
$
254.24
|
Dividends declared
per White Mountains's common share
|
|
$
—
|
|
$
—
|
|
$
1.00
|
|
$
1.00
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
QTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS)
|
(millions)
|
(Unaudited)
|
|
For the Three Months
Ended September 30, 2023
|
|
HG
Global/BAM
|
|
Ark/WM
Outrigger
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
WM
Outrigger Re
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
6.6
|
|
$
1.3
|
|
$ 438.3
|
|
$
60.6
|
|
$
—
|
|
$
—
|
|
$
506.8
|
Net investment
income
|
|
4.3
|
|
3.8
|
|
13.9
|
|
3.0
|
|
15.1
|
|
8.0
|
|
48.1
|
Net investment income
(expense) -
BAM surplus note
interest
|
|
6.6
|
|
(6.6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Net realized and
unrealized investment gains (losses)
|
|
(13.6)
|
|
(10.5)
|
|
(6.6)
|
|
—
|
|
11.2
|
|
8.0
|
|
(11.5)
|
Net
realized and unrealized investment gains
(losses) from investment in
MediaAlpha
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(46.8)
|
|
(46.8)
|
Commission
revenues
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3.5
|
|
3.5
|
Other
revenues
|
|
—
|
|
.7
|
|
3.6
|
|
—
|
|
—
|
|
15.2
|
|
19.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
3.9
|
|
(11.3)
|
|
449.2
|
|
63.6
|
|
26.3
|
|
(12.1)
|
|
519.6
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
—
|
|
258.5
|
|
7.3
|
|
—
|
|
—
|
|
265.8
|
Acquisition
expenses
|
|
2.0
|
|
.1
|
|
71.0
|
|
19.3
|
|
—
|
|
—
|
|
92.4
|
Cost of
sales
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8.0
|
|
8.0
|
General and
administrative expenses
|
|
.5
|
|
17.0
|
|
35.3
|
|
.1
|
|
4.5
|
|
42.2
|
|
99.6
|
Change in fair value
of contingent consideration
|
|
—
|
|
—
|
|
17.0
|
|
—
|
|
—
|
|
—
|
|
17.0
|
Interest
expense
|
|
3.8
|
|
—
|
|
5.5
|
|
—
|
|
5.5
|
|
.9
|
|
15.7
|
Total
expenses
|
|
6.3
|
|
17.1
|
|
387.3
|
|
26.7
|
|
10.0
|
|
51.1
|
|
498.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
(2.4)
|
|
$ (28.4)
|
|
$ 61.9
|
|
$
36.9
|
|
$ 16.3
|
|
$
(63.2)
|
|
$
21.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
QTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS)
(CONTINUED)
|
(millions)
|
(Unaudited)
|
|
For the Three Months
Ended September 30, 2022
|
|
HG
Global/BAM
|
|
Ark/WM
Outrigger
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$ 5.9
|
|
$ 1.2
|
|
$ 346.1
|
|
$ —
|
|
$
—
|
|
$
353.2
|
Net investment
income
|
|
2.8
|
|
2.9
|
|
4.9
|
|
14.8
|
|
8.5
|
|
33.9
|
Net investment income
(expense) -
BAM surplus note
interest
|
|
2.9
|
|
(2.9)
|
|
—
|
|
—
|
|
—
|
|
—
|
Net realized and
unrealized investment gains (losses)
|
|
(19.6)
|
|
(19.2)
|
|
(14.4)
|
|
41.1
|
|
(17.3)
|
|
(29.4)
|
Net
realized and unrealized investment gains (losses)
from investment in
MediaAlpha
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(18.6)
|
|
(18.6)
|
Commission
revenues
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3.2
|
|
3.2
|
Other
revenues
|
|
.1
|
|
1.2
|
|
6.6
|
|
—
|
|
33.0
|
|
40.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
(7.9)
|
|
(16.8)
|
|
343.2
|
|
55.9
|
|
8.8
|
|
383.2
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
—
|
|
213.7
|
|
—
|
|
—
|
|
213.7
|
Acquisition
expenses
|
|
1.6
|
|
.1
|
|
74.8
|
|
—
|
|
—
|
|
76.5
|
Cost of
sales
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25.0
|
|
25.0
|
General and
administrative expenses
|
|
.6
|
|
15.2
|
|
24.2
|
|
4.5
|
|
41.3
|
|
85.8
|
Change in fair value
of contingent consideration
|
|
—
|
|
—
|
|
2.7
|
|
—
|
|
—
|
|
2.7
|
Interest
expense
|
|
2.0
|
|
—
|
|
3.7
|
|
4.2
|
|
.6
|
|
10.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
4.2
|
|
15.3
|
|
319.1
|
|
8.7
|
|
66.9
|
|
414.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
(12.1)
|
|
$
(32.1)
|
|
$
24.1
|
|
$
47.2
|
|
$
(58.1)
|
|
$
(31.0)
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
YTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS)
|
(millions)
|
(Unaudited)
|
|
For the Nine Months
Ended September 30, 2023
|
|
HG
Global/BAM
|
|
Ark/WM
Outrigger
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
WM
Outrigger Re
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$ 19.4
|
|
$
3.9
|
|
$ 971.9
|
|
$
75.4
|
|
$
—
|
|
$
—
|
|
$
1,070.6
|
Net investment
income
|
|
12.4
|
|
10.5
|
|
33.5
|
|
7.7
|
|
44.0
|
|
22.0
|
|
130.1
|
Net investment income
(expense) -
BAM surplus note
interest
|
|
19.7
|
|
(19.7)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Net realized and
unrealized investment gains (losses)
|
|
(11.4)
|
|
(5.6)
|
|
35.9
|
|
—
|
|
45.4
|
|
125.8
|
|
190.1
|
Net
realized and unrealized investment gains
(losses) from investment in
MediaAlpha
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(38.9)
|
|
(38.9)
|
Commission
revenues
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10.0
|
|
10.0
|
Other
revenues
|
|
—
|
|
2.0
|
|
(1.1)
|
|
—
|
|
—
|
|
67.1
|
|
68.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
40.1
|
|
(8.9)
|
|
1,040.2
|
|
83.1
|
|
89.4
|
|
186.0
|
|
1,429.9
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
—
|
|
573.2
|
|
7.9
|
|
—
|
|
—
|
|
581.1
|
Acquisition
expenses
|
|
5.6
|
|
.7
|
|
189.3
|
|
22.2
|
|
—
|
|
—
|
|
217.8
|
Cost of
sales
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
33.5
|
|
33.5
|
General and
administrative expenses
|
|
1.9
|
|
47.8
|
|
105.3
|
|
.2
|
|
12.3
|
|
130.7
|
|
298.2
|
Change in fair value
of contingent consideration
|
|
—
|
|
—
|
|
16.8
|
|
—
|
|
—
|
|
—
|
|
16.8
|
Interest
expense
|
|
10.8
|
|
—
|
|
15.7
|
|
—
|
|
15.5
|
|
2.9
|
|
44.9
|
Total
expenses
|
|
18.3
|
|
48.5
|
|
900.3
|
|
30.3
|
|
27.8
|
|
167.1
|
|
1,192.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$ 21.8
|
|
$ (57.4)
|
|
$ 139.9
|
|
$
52.8
|
|
$ 61.6
|
|
$
18.9
|
|
$
237.6
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
YTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS)
(CONTINUED)
|
(millions)
|
(Unaudited)
|
|
For the Nine Months
Ended September 30, 2022
|
|
HG
Global/BAM
|
|
Ark/WM
Outrigger
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
21.5
|
|
$
4.5
|
|
$
757.8
|
|
$
—
|
|
$
—
|
|
$
783.8
|
Net investment
income
|
|
7.1
|
|
8.0
|
|
9.7
|
|
41.2
|
|
13.6
|
|
79.6
|
Net investment income
(expense) -
BAM surplus note
interest
|
|
8.8
|
|
(8.8)
|
|
—
|
|
—
|
|
—
|
|
—
|
Net realized and
unrealized investment gains (losses)
|
|
(57.8)
|
|
(56.2)
|
|
(76.5)
|
|
45.8
|
|
2.8
|
|
(141.9)
|
Net realized and
unrealized investment gains (losses)
from
investment in MediaAlpha
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(113.3)
|
|
(113.3)
|
Commission
revenues
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8.7
|
|
8.7
|
Other
revenues
|
|
.3
|
|
3.4
|
|
10.1
|
|
—
|
|
89.6
|
|
103.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
(20.1)
|
|
(49.1)
|
|
701.1
|
|
87.0
|
|
1.4
|
|
720.3
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
—
|
|
456.2
|
|
—
|
|
—
|
|
456.2
|
Acquisition
expenses
|
|
7.6
|
|
1.9
|
|
174.9
|
|
—
|
|
—
|
|
184.4
|
Cost of
sales
|
|
—
|
|
—
|
|
—
|
|
—
|
|
68.8
|
|
68.8
|
General and
administrative expenses
|
|
2.1
|
|
47.4
|
|
74.9
|
|
10.4
|
|
122.1
|
|
256.9
|
Change in fair value
of contingent consideration
|
|
—
|
|
—
|
|
4.9
|
|
—
|
|
—
|
|
4.9
|
Interest
expense
|
|
5.4
|
|
—
|
|
10.6
|
|
10.3
|
|
1.2
|
|
27.5
|
Total
expenses
|
|
15.1
|
|
49.3
|
|
721.5
|
|
20.7
|
|
192.1
|
|
998.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
(35.2)
|
|
$
(98.4)
|
|
$
(20.4)
|
|
$
66.3
|
|
$
(190.7)
|
|
$
(278.4)
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA
|
($ in
millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
BAM
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross par value of
primary market policies issued
|
|
$
3,659.9
|
|
$
3,269.0
|
|
$
8,735.5
|
|
$
10,147.8
|
Gross par value of
secondary market policies issued
|
|
542.4
|
|
826.5
|
|
1,746.9
|
|
3,269.4
|
Gross par value of
assumed reinsurance
|
|
—
|
|
42.5
|
|
—
|
|
42.5
|
Total gross par value
of market policies issued
|
|
$
4,202.3
|
|
$
4,138.0
|
|
$
10,482.4
|
|
$
13,459.7
|
Gross written
premiums
|
|
$
16.5
|
|
$
19.7
|
|
$
37.3
|
|
$
46.2
|
MSC
collected
|
|
19.9
|
|
26.0
|
|
46.4
|
|
62.3
|
Total gross written
premiums and MSC collected
|
|
$
36.4
|
|
$
45.7
|
|
$
83.7
|
|
$
108.5
|
Total
pricing
|
|
87
bps
|
|
110 bps
|
|
80
bps
|
|
81 bps
|
|
|
As of
September 30, 2023
|
|
As of
December 31, 2022
|
|
As of
September 30, 2022
|
Policyholders'
surplus
|
|
$
285.8
|
|
$
283.4
|
|
$
316.9
|
Contingency
reserve
|
|
131.5
|
|
118.2
|
|
113.9
|
Qualified statutory
capital
|
|
417.3
|
|
401.6
|
|
430.8
|
Statutory net unearned
premiums
|
|
58.3
|
|
55.3
|
|
53.3
|
Present value of future
installment premiums and MSC
|
|
10.9
|
|
13.3
|
|
13.3
|
HG Re, Ltd collateral
trusts at statutory value
|
|
587.5
|
|
553.1
|
|
512.7
|
Fidus Re, Ltd
collateral trust at statutory value
|
|
400.0
|
|
400.0
|
|
250.0
|
Claims paying
resources
|
|
$
1,474.0
|
|
$
1,423.3
|
|
$
1,260.1
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
HG
Global
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net written
premiums
|
|
$
14.2
|
|
$
16.8
|
|
$
31.9
|
|
$
39.6
|
Earned
premiums
|
|
$
6.6
|
|
$
5.9
|
|
$
19.4
|
|
$
21.5
|
|
|
As of
September 30, 2023
|
|
As of
December 31, 2022
|
|
As of
September 30, 2022
|
Unearned
premiums
|
|
$
262.3
|
|
$
249.8
|
|
$
239.7
|
Deferred acquisition
costs
|
|
$
75.4
|
|
$
71.2
|
|
$
68.0
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
($ in
millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
Ark/WM
Outrigger
|
|
2023
|
|
2022
|
|
|
Ark
|
|
WM
Outrigger
Re
|
|
Elimination
|
|
Total
|
|
Ark
|
Insurance
premiums:
|
|
|
|
|
|
|
|
|
|
|
Gross written
premiums
|
|
$ 251.2
|
|
$
6.0
|
|
$
(6.0)
|
|
$
251.2
|
|
$
215.5
|
Net written
premiums
|
|
$ 225.0
|
|
$
6.0
|
|
$
—
|
|
$
231.0
|
|
$
192.6
|
Net earned
premiums
|
|
$ 438.3
|
|
$
60.6
|
|
$
—
|
|
$
498.9
|
|
$
346.1
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
expenses:
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
$ 258.5
|
|
$
7.3
|
|
$
—
|
|
$
265.8
|
|
$
213.7
|
Acquisition
expenses
|
|
71.0
|
|
19.3
|
|
—
|
|
90.3
|
|
74.8
|
Other underwriting
expenses (1)
|
|
25.5
|
|
—
|
|
—
|
|
25.5
|
|
13.2
|
Total insurance
expenses
|
|
$ 355.0
|
|
$
26.6
|
|
$
—
|
|
$
381.6
|
|
$
301.7
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
ratios:
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense
|
|
59.0 %
|
|
12.0 %
|
|
— %
|
|
53.3 %
|
|
61.7 %
|
Acquisition
expense
|
|
16.2
|
|
31.8
|
|
—
|
|
18.1
|
|
21.6
|
Other underwriting
expense
|
|
5.8
|
|
—
|
|
—
|
|
5.1
|
|
3.8
|
Combined
Ratio
|
|
81.0 %
|
|
43.8 %
|
|
— %
|
|
76.5 %
|
|
87.1 %
|
|
(1) Included
within general and administrative expenses.
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
($ in
millions)
|
(Unaudited)
|
|
|
|
Nine Months Ended
September 30,
|
Ark/WM
Outrigger
|
|
2023
|
|
2022
|
|
|
Ark
|
|
WM
Outrigger
Re
|
|
Elimination
|
|
Total
|
|
Ark
|
Insurance
premiums:
|
|
|
|
|
|
|
|
|
|
|
Gross written
premiums
|
|
$
1,666.7
|
|
$
108.4
|
|
$
(108.4)
|
|
$
1,666.7
|
|
$ 1,252.5
|
Net written
premiums
|
|
$
1,198.0
|
|
$
108.4
|
|
$
—
|
|
$
1,306.4
|
|
$ 1,006.5
|
Net earned
premiums
|
|
$ 971.9
|
|
$
75.4
|
|
$
—
|
|
$
1,047.3
|
|
$
757.8
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
expenses:
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
$ 573.2
|
|
$
7.9
|
|
$
—
|
|
$
581.1
|
|
$
456.2
|
Acquisition
expenses
|
|
189.3
|
|
22.2
|
|
—
|
|
211.5
|
|
174.9
|
Other underwriting
expenses (1)
|
|
78.5
|
|
—
|
|
—
|
|
78.5
|
|
53.9
|
Total insurance
expenses
|
|
$ 841.0
|
|
$
30.1
|
|
$
—
|
|
$
871.1
|
|
$
685.0
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
ratios:
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense
|
|
59.0 %
|
|
10.5 %
|
|
— %
|
|
55.5 %
|
|
60.2 %
|
Acquisition
expense
|
|
19.5
|
|
29.4
|
|
—
|
|
20.2
|
|
23.1
|
Other underwriting
expense
|
|
8.1
|
|
—
|
|
—
|
|
7.5
|
|
7.1
|
Combined
Ratio
|
|
86.6 %
|
|
39.9 %
|
|
— %
|
|
83.2 %
|
|
90.4 %
|
|
(1) Included
within general and administrative expenses.
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
Kudu
|
|
Three Months
Ended
September 30,
2022
|
|
Three Months
Ended
September 30,
2023
|
|
Nine Months
Ended
September 30,
2022
|
|
Nine Months
Ended
September 30,
2023
|
|
Twelve Months
Ended
September 30,
2023
|
Net investment
income (1)
|
|
$
14.8
|
|
$
15.1
|
|
$
41.2
|
|
$
44.0
|
|
$
57.2
|
Net realized and
unrealized investment gains (losses)
|
|
41.1
|
|
11.2
|
|
45.8
|
|
45.4
|
|
63.7
|
Total
revenues
|
|
55.9
|
|
26.3
|
|
87.0
|
|
89.4
|
|
120.9
|
General and
administrative expenses
|
|
4.5
|
|
4.5
|
|
10.4
|
|
12.3
|
|
16.6
|
Interest
expense
|
|
4.2
|
|
5.5
|
|
10.3
|
|
15.5
|
|
20.2
|
Total
expenses
|
|
8.7
|
|
10.0
|
|
20.7
|
|
27.8
|
|
36.8
|
GAAP pre-tax income
(loss)
|
|
47.2
|
|
16.3
|
|
66.3
|
|
61.6
|
|
84.1
|
Income tax (expense)
benefit
|
|
(16.6)
|
|
(4.6)
|
|
(21.1)
|
|
(13.9)
|
|
(19.7)
|
GAAP net income
(loss)
|
|
30.6
|
|
11.7
|
|
45.2
|
|
47.7
|
|
64.4
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
4.2
|
|
5.5
|
|
10.3
|
|
15.5
|
|
20.2
|
Income tax expense
(benefit)
|
|
16.6
|
|
4.6
|
|
21.1
|
|
13.9
|
|
19.7
|
General and
administrative expenses – depreciation
|
|
—
|
|
.1
|
|
—
|
|
.1
|
|
.2
|
Amortization of other
intangible assets
|
|
—
|
|
—
|
|
.2
|
|
.2
|
|
.3
|
EBITDA
|
|
51.4
|
|
21.9
|
|
76.8
|
|
77.4
|
|
104.8
|
|
|
|
|
|
|
|
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
Net realized and
unrealized investment (gains) losses
|
|
(41.1)
|
|
(11.2)
|
|
(45.8)
|
|
(45.4)
|
|
(63.7)
|
Non-cash equity-based
compensation expense
|
|
—
|
|
—
|
|
.1
|
|
—
|
|
.1
|
Transaction
expenses
|
|
1.2
|
|
1.1
|
|
1.4
|
|
2.4
|
|
2.5
|
Adjusted
EBITDA
|
|
$
11.5
|
|
$
11.8
|
|
$
32.5
|
|
$
34.4
|
|
$
43.7
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to annualize
partial year revenues from participation contracts
acquired
|
5.9
|
Adjustment to remove
partial year revenues from participation contracts sold
|
(3.1)
|
Annualized adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
$
46.5
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net investment
income (1)
|
|
|
|
|
|
|
|
|
|
$
57.2
|
Adjustment to annualize
partial year revenues from participation contracts
acquired
|
5.9
|
Adjustment to remove
partial year revenues from participation contracts sold
|
(3.1)
|
Annualized
revenue
|
|
|
|
|
|
|
|
|
|
$
60.0
|
|
|
|
|
|
|
|
|
|
|
|
Net equity capital
drawn
|
|
|
|
|
|
|
|
|
|
$
328.1
|
Debt capital
drawn
|
|
|
|
|
|
|
|
|
|
210.3
|
Total net capital drawn
and invested (2)
|
|
|
|
|
|
|
|
|
|
$
538.4
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net investment
income revenue yield
|
|
|
|
|
|
|
|
|
|
10.6 %
|
|
|
|
|
|
|
|
|
|
|
|
Cash revenue
yield
|
|
|
|
|
|
|
|
|
|
11.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Net investment income includes revenues from participation
contracts and income from short-term and other long-term
investments.
|
(2)
Total net capital drawn represents equity and debt capital drawn
and invested less cumulative distributions.
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
Kudu (continued)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Beginning balance of
Kudu's participation contracts
|
|
$
737.1
|
|
$
727.0
|
|
$
695.9
|
|
$
669.5
|
Contributions to participation contracts
|
|
26.7
|
|
45.1
|
|
144.1
|
|
97.9
|
Proceeds
from participation contracts sold
|
|
—
|
|
—
|
|
(110.4)
|
|
—
|
Net realized and
unrealized investment gains (losses) on
participation contracts sold and pending sale
(1)
|
|
(.6)
|
|
16.3
|
|
(1.8)
|
|
40.7
|
Net unrealized
investment gains (losses) on participation
contracts
- all other (2)
|
|
12.1
|
|
24.8
|
|
47.5
|
|
5.1
|
Ending balance of
Kudu's participation contracts (3)
|
|
$
775.3
|
|
$
813.2
|
|
$
775.3
|
|
$
813.2
|
(1)
|
Includes realized and
unrealized investment gains (losses) recognized from participation
contracts beginning in the quarter a contract is classified as
pending sale.
|
(2)
|
Includes unrealized
investment gains (losses) recognized from (i) ongoing participation
contracts and (ii) participation contracts prior to classification
as pending sale.
|
(3)
|
As of September 30,
2023, Kudu's other long-term investments also include $5.4 related
to a private debt instrument.
|
Regulation G
This earnings release includes non-GAAP financial measures that
have been reconciled from their most comparable GAAP financial
measures.
- Adjusted book value per share is a non-GAAP financial measure
which is derived by adjusting (i) the GAAP book value per share
numerator and (ii) the common shares outstanding denominator, as
described below.
The GAAP book value per share numerator is adjusted (i) to add back
the unearned premium reserve, net of deferred acquisition costs, at
HG Global and (ii) to include a discount for the time value of
money arising from the modeled timing of cash payments of principal
and interest on the BAM surplus notes.
The value of HG Global's unearned premium reserve, net of deferred
acquisition costs, was $187 million,
$182 million, $179 million and $172
million as of September 30,
2023, June 30, 2023,
December 31, 2022 and September 30, 2022, respectively.
Under GAAP, White Mountains is required to carry the BAM surplus
notes, including accrued interest, at nominal value with no
consideration for time value of money. Based on a debt
service model that forecasts operating results for BAM through
maturity of the surplus notes, the present value of the BAM surplus
notes, including accrued interest and using an 8% discount rate,
was estimated to be $93 million,
$95 million, $98 million and $114
million less than the nominal GAAP carrying values as of
September 30, 2023, June 30, 2023, December
31, 2022 and September 30,
2022, respectively.
White Mountains believes these adjustments are useful to management
and investors in analyzing the intrinsic value of HG Global,
including the value of the in-force business at HG Re, HG Global's
reinsurance subsidiary, and the value of the BAM surplus
notes.
The denominator used in the calculation of adjusted book value per
share equals the number of common shares outstanding adjusted to
exclude unearned restricted common shares, the compensation cost of
which, at the date of calculation, has yet to be amortized.
Restricted common shares are earned on a straight-line basis over
their vesting periods. The reconciliation of GAAP book value
per share to adjusted book value per share is included on page
7.
- The reduction in adjusted book value per share from the decline
in MediaAlpha's share price on page 1 is a non-GAAP financial
measure. White Mountains believes this measure to be useful
to management and investors by showing the impact of changes in
MediaAlpha's share price to White Mountains's adjusted book value
per share. The following table presents the reconciliation
from GAAP to the reported percentage:
|
|
Book value per
share
|
|
Adjustments to
book
value per share (1)
|
|
Adjusted book
value per share
|
Balance as of June 30,
2023
|
|
$
1,531.84
|
|
$
44.62
|
|
$
1,576.46
|
Unrealized investment
losses per
share from
White Mountains's
investment
in MediaAlpha in the
third
quarter of 2023
|
|
$
(18.28)
|
|
$
(.11)
|
|
$
(18.39)
|
Reduction in book value
per share
and
adjusted book value per share
from
decline in MediaAlpha's
share
price
|
|
(1) %
|
|
|
|
(1) %
|
|
(1) See
reconciliation on page 7.
|
- Kudu's EBITDA, adjusted EBITDA, annualized adjusted EBITDA,
annualized revenue and cash revenue yield are non-GAAP financial
measures.
EBITDA is a non-GAAP financial measure that excludes interest
expense on debt, income tax (expense) benefit, depreciation and
amortization of other intangible assets from GAAP net income
(loss).
Adjusted EBITDA is a non-GAAP financial measure that excludes
certain other items in GAAP net income (loss) in addition to those
excluded from EBITDA. The adjustments relate to (i) net
realized and unrealized investment gains (losses) on Kudu's revenue
and earnings participation contracts, (ii) non-cash equity-based
compensation expense and (iii) transaction expenses. A
description of each adjustment follows:
-
- Net realized and unrealized investment gains
(losses) - Represents net unrealized investment gains and
losses recorded on Kudu's revenue and earnings participation
contracts, which are recorded at fair value under GAAP, and
realized investment gains and losses from participation contracts
sold during the period.
- Non-cash equity-based compensation expense -
Represents non-cash expenses related to Kudu's management
compensation that are settled with equity units in Kudu.
- Transaction expenses - Represents costs directly
related to Kudu's mergers and acquisitions activity, such as
external lawyer, banker, consulting and placement agent fees, which
are not capitalized and are expensed under GAAP.
Annualized adjusted EBITDA is a non-GAAP
financial measure that (i) annualizes partial year revenues related
to Kudu's revenue and earnings participation contracts acquired
during the previous 12-month period and (ii) removes partial year
revenues related to revenue and earnings participation contracts
sold during the previous 12-month period.
Annualized revenue is a non-GAAP financial
measure that adds the adjustments for annualized adjusted EBITDA to
GAAP net investment income.
Cash revenue yield is a non-GAAP financial
measure that is derived using annualized revenue as a percentage of
total net capital drawn and invested.
White Mountains believes that these non-GAAP
financial measures are useful to management and investors in
evaluating Kudu's performance. White Mountains also believes
that annualized adjusted EBITDA is useful to management and
investors in understanding the full earnings profile of Kudu's
business as of the end of any 12-month period. See page
18 for the reconciliation of Kudu's GAAP net income (loss) to
EBITDA, adjusted EBITDA and annualized adjusted EBITDA, and the
reconciliation of Kudu's GAAP net investment income to annualized
revenue.
- Total consolidated portfolio return excluding MediaAlpha and
total equity portfolio return excluding MediaAlpha are non-GAAP
financial measures that remove the net investment income and net
realized and unrealized investment gains (losses) from White
Mountains's investment in MediaAlpha. White Mountains
believes these measures to be useful to management and investors by
showing the underlying performance of White Mountains's investment
portfolio and equity portfolio without regard to White Mountains's
investment in MediaAlpha. The following tables present
reconciliations from GAAP to the reported
percentages:
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Total consolidated
portfolio return
|
|
(0.2) %
|
|
0.4 %
|
|
5.3 %
|
|
(3.6) %
|
Remove
MediaAlpha
|
|
0.8 %
|
|
0.1 %
|
|
1.0 %
|
|
2.2 %
|
Total consolidated
portfolio return excluding
MediaAlpha
|
|
0.6 %
|
|
0.5 %
|
|
6.3 %
|
|
(1.4) %
|
|
|
Three Months Ended
September 30, 2023
|
Total equity portfolio
return
|
|
(0.4) %
|
Remove
MediaAlpha
|
|
1.8 %
|
Total equity portfolio
return excluding MediaAlpha
|
|
1.4 %
|
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
This earnings release may contain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All
statements, other than statements of historical facts, included or
referenced in this release which address activities, events or
developments which White Mountains expects or anticipates will or
may occur in the future are forward-looking statements. The
words "could", "will", "believe", "intend", "expect", "anticipate",
"project", "estimate", "predict" and similar expressions are also
intended to identify forward-looking statements. These
forward-looking statements include, among others, statements with
respect to White Mountains's:
- change in book value per share, adjusted book value per share
or return on equity;
- business strategy;
- financial and operating targets or plans;
- incurred loss and loss adjustment expenses and the adequacy of
its loss and loss adjustment expense reserves and related
reinsurance;
- projections of revenues, income (or loss), earnings (or loss)
per share, EBITDA, adjusted EBITDA, dividends, market share or
other financial forecasts of White Mountains or its
businesses;
- expansion and growth of its business and operations; and
- future capital expenditures.
These statements are based on certain assumptions and analyses
made by White Mountains in light of its experience and perception
of historical trends, current conditions and expected future
developments, as well as other factors believed to be appropriate
in the circumstances. However, whether actual results and
developments will conform to its expectations and predictions is
subject to risks and uncertainties that could cause actual results
to differ materially from expectations, including:
- the risks that are described from time to time in White
Mountains's filings with the Securities and Exchange Commission,
including but not limited to White Mountains's Annual Report on
Form 10-K for the fiscal year ended December
31, 2022;
- claims arising from catastrophic events, such as hurricanes,
windstorms, earthquakes, floods, wildfires, tornadoes, tsunamis,
severe winter weather, public health crises, terrorist attacks, war
and war-like actions, explosions, infrastructure failures or
cyber-attacks;
- recorded loss reserves subsequently proving to have been
inadequate;
- the market value of White Mountains's investment in
MediaAlpha;
- the trends and uncertainties from the COVID-19 pandemic,
including judicial interpretations on the extent of insurance
coverage provided by insurers for COVID-19 pandemic related
claims;
- business opportunities (or lack thereof) that may be presented
to it and pursued;
- actions taken by rating agencies, such as financial strength or
credit ratings downgrades or placing ratings on negative
watch;
- the continued availability of capital and financing;
- deterioration of general economic, market or business
conditions, including due to outbreaks of contagious disease
(including the COVID-19 pandemic) and corresponding mitigation
efforts;
- competitive forces, including the conduct of other
insurers;
- changes in domestic or foreign laws or regulations, or their
interpretation, applicable to White Mountains, its competitors or
its customers; and
- other factors, most of which are beyond White Mountains's
control.
Consequently, all of the forward-looking statements made in this
earnings release are qualified by these cautionary statements, and
there can be no assurance that the actual results or developments
anticipated by White Mountains will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, White Mountains or its business or
operations. White Mountains assumes no obligation to publicly
update any such forward-looking statements, whether as a result of
new information, future events or otherwise.
CONTACT: Rob Seelig
(603) 640-2212
View original
content:https://www.prnewswire.com/news-releases/white-mountains-reports-third-quarter-results-301978217.html
SOURCE White Mountains Insurance Group, Ltd.