White Mountains Insurance(WTM) - 2024 Q3 - Quarterly Report

Financial Performance - As of September 30, 2024, White Mountains reported a book value per share of $1,795 and an adjusted book value per share of $1,883, reflecting increases of 4% and 6% in Q3 2024, and 9% and 11% in the first nine months of 2024[173]. - White Mountains reported total revenues of $839.1 million for the three months ended September 30, 2024, compared to $519.6 million for the same period in 2023, representing a 61.6% increase[183]. - The company's net income attributable to common shareholders for the three months ended September 30, 2024, was $179.0 million, up from $23.6 million in the same period of 2023, reflecting a significant increase[183]. - The company’s pre-tax income for the three months ended September 30, 2024, was $239.5 million, compared to $21.1 million in the same period of 2023, showing a substantial improvement[183]. - Total expenses for the three months ended September 30, 2024, were $599.6 million, up from $498.5 million in the same period of 2023, which is a 20.3% increase[183]. Segment Performance - The Ark/WM Outrigger segment's combined ratio improved to 77% in Q3 2024 from 77% in Q3 2023, with gross written premiums increasing to $374 million in Q3 2024 from $251 million in Q3 2023[173]. - Ark reported pre-tax income of $119 million in Q3 2024, up from $62 million in Q3 2023, with net realized and unrealized investment gains of $53 million compared to a loss of $7 million in the prior year[175]. - Kudu's total revenues increased to $47 million in Q3 2024 from $26 million in Q3 2023, with pre-tax income rising to $38 million from $16 million[175]. - Bamboo's managed premiums grew to $148 million in Q3 2024 from $71 million in Q3 2023, driven by new business volume and a growing renewal book[175]. - The Ark/WM Outrigger segment reported pre-tax income of $141 million in Q3 2024, up from $99 million in Q3 2023[1]. Investment Performance - White Mountains's total consolidated portfolio return on invested assets was 4.6% in Q3 2024, including $88 million of unrealized investment gains from MediaAlpha, compared to -0.2% in Q3 2023[177]. - The company reported net realized and unrealized investment gains of $53.2 million for the three months ended September 30, 2024, compared to a loss of $6.6 million in the same period of 2023[186][188]. - The portfolio of common equity securities, including MediaAlpha, returned 6.5% in Q3 2024, with $88 million of unrealized gains from MediaAlpha, compared to -0.4% in Q3 2023[257]. - The fixed income portfolio returned 2.9% in Q3 2024, compared to a flat return in Q3 2023, underperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index which returned 4.6%[256]. - Total common equity securities and other long-term investments returned 15.1% in the first nine months of 2024, including $160 million of net gains from MediaAlpha[257]. Capital Structure - White Mountains's undeployed capital was approximately $650 million as of September 30, 2024[173]. - Total adjusted capital increased to $6,002.2 million as of September 30, 2024, compared to $5,367.0 million as of December 31, 2023[276]. - As of September 30, 2024, total debt decreased to $544.9 million from $564.6 million as of December 31, 2023, resulting in a total debt to total capital ratio of 9.4%[276]. - The total debt to total adjusted capital ratio improved to 9.1% as of September 30, 2024, from 10.5% as of December 31, 2023[276]. - The interest rate on the BAM Surplus Notes was amended to 10.0% effective July 1, 2024, with a higher proportion of payments applied to outstanding principal[268]. Dividends and Shareholder Returns - During the nine months ended September 30, 2024, Ark declared and paid a $33 million dividend to its shareholders, including $24 million to White Mountains[266]. - Kudu distributed $24 million to unitholders during the nine months ended September 30, 2024, substantially all of which was paid to White Mountains[269]. - The company declared and paid a $3 million cash dividend to common shareholders for both the nine months ended September 30, 2024, and 2023[279]. - White Mountains repurchased 5,269 common shares for $8 million at an average price of $1,505, which was approximately 80% of the adjusted book value per share as of September 30, 2024[277]. - Bamboo Captive has the ability to pay a dividend of up to $1 million during 2024, equal to 15% of its statutory capital surplus reported as of December 31, 2023[271]. Risks and Compliance - White Mountains acknowledges various risks and uncertainties that could impact actual results compared to forward-looking statements[299]. - The company has evaluated the effectiveness of its disclosure controls and procedures as of September 30, 2024, concluding they are adequate and effective[302]. - No changes to internal control over financial reporting occurred during Q3 2024 that materially affected the company's financial reporting[302]. - White Mountains was in compliance with all material covenants under its debt instruments as of September 30, 2024[274]. - The BAM Surplus Notes are classified as Level 3 measurements, indicating a reliance on unobservable inputs for valuation[296].