On August 7, 2024, White Mountains Insurance Group Ltd (WTM, Financial) released its 8-K filing for the second quarter of 2024. The company, which focuses on opportunistic and value-oriented acquisitions in the insurance and financial services sectors, reported a book value per share of $1,722 and an adjusted book value per share of $1,777 as of June 30, 2024. Both metrics decreased by 1% in the second quarter but increased by 4% over the first six months of 2024, including dividends.
Company Overview
White Mountains Insurance Group Ltd operates through its subsidiaries in four main areas: municipal bond insurance, property and casualty insurance and reinsurance, capital solutions for asset and wealth management firms, and other operations. The company is known for making strategic acquisitions and managing these assets until attractive exit valuations are available.
Performance and Challenges
The company's performance in the second quarter was impacted by a significant decline in the share price of MediaAlpha, resulting in a $139 million loss. Excluding MediaAlpha, the adjusted book value per share (ABVPS) increased by 2%, driven by solid results from operating companies and good investment returns. CEO Manning Rountree commented, “ABVPS 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.”
Financial Achievements
Despite the challenges, White Mountains reported several financial achievements. Ark, one of its subsidiaries, produced an 89% combined ratio and $697 million of gross written premiums in the quarter, up 15% year-over-year. BAM generated $28 million in total gross written premiums and member surplus contributions, a 7% increase year-over-year. Kudu saw a 7% growth in the value of its continuing portfolio, while Bamboo tripled its managed premiums year-over-year and grew its adjusted EBITDA.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
|---|---|---|---|---|
| Gross Written Premiums (Ark) | $697 million | $606 million | $1,569 million | $1,416 million |
| Net Earned Premiums (Ark) | $318 million | $293 million | $621 million | $548 million |
| Comprehensive Income (Loss) | $(55) million | $21 million | $182 million | $201 million |
Balance Sheet and Cash Flow
White Mountains reported total assets of $10.17 billion as of June 30, 2024, up from $8.39 billion at the end of 2023. The company's undeployed capital stands at approximately $650 million, providing a buffer for future investments and acquisitions.
Commentaries
“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.” - Ian Beaton, CEO of Ark
Analysis
White Mountains Insurance Group Ltd's performance in the second quarter of 2024 highlights both its strengths and vulnerabilities. While the decline in MediaAlpha's share price negatively impacted the company's book value, the strong performance of its subsidiaries like Ark, BAM, and Kudu demonstrates the resilience and potential for growth in its core operations. The company's strategic focus on opportunistic acquisitions and robust capital management positions it well for future opportunities, despite the current challenges.
For more detailed financial information, readers are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from White Mountains Insurance Group Ltd for further details.
