White Mountains Insurance(WTM) - 2024 Q4 - Annual Report

Financial Performance - White Mountains ended 2024 with a book value per share of $1,746 and an adjusted book value per share of $1,834, reflecting increases of 6% and 8% respectively, including dividends [322]. - Comprehensive income attributable to common shareholders was $230 million in 2024, down from $511 million in 2023 [322]. - Kudu reported total revenues of $119 million and adjusted EBITDA of $55 million in 2024, down from total revenues of $177 million and adjusted EBITDA of $57 million in 2023 [329]. - Total revenues for White Mountains in 2024 reached $2,239.8 million, a 3.4% increase from $2,166.7 million in 2023 [352]. - The P&C Insurance and Reinsurance segment generated revenues of $1,750.9 million in 2024, up from $1,557.8 million in 2023, marking an increase of 12.4% [352]. - White Mountains's total expenses in 2024 were $1,923.1 million, compared to $1,601.3 million in 2023, representing an increase of 20.1% [352]. - The net income attributable to White Mountains's common shareholders for 2024 was $230.4 million, down from $509.2 million in 2023, a decrease of 54.8% [352]. - Kudu reported total revenues of $119 million in 2024, down from $177 million in 2023, with pre-tax income of $81 million compared to $137 million in the previous year [406]. Premiums and Underwriting - Ark reported gross written premiums of $2,207 million and net earned premiums of $1,500 million in 2024, compared to gross written premiums of $1,898 million and net earned premiums of $1,305 million in 2023 [326]. - Ark's combined ratio was 83% in 2024, including 13 points of catastrophe losses, compared to 82% in 2023 with only 2 points of catastrophe losses [325]. - The Ark/WM Outrigger segment reported gross written premiums of $2,207 million in 2024, up from $1,898 million in 2023, representing a 16.3% increase [364]. - Net written premiums for the Ark/WM Outrigger segment were $1,679 million in 2024, compared to $1,521 million in 2023, reflecting a growth of 10.4% [364]. - The segment's net earned premiums were $1,588 million in 2024, an increase from $1,410 million in 2023, marking a rise of 12.6% [364]. - WM Outrigger Re reported gross written premiums of $87 million and net earned premiums of $88 million in 2024, down from $110 million and $104 million in 2023, respectively [368]. Investment Performance - White Mountains's total consolidated portfolio return on invested assets was 6.9% in 2024, including $38 million of net realized and unrealized investment gains from MediaAlpha [333]. - The fixed income portfolio returned 4.3% in 2024, compared to 5.8% in 2023, outperforming the Bloomberg U.S. Intermediate Aggregate Index returns of 2.5% [437]. - The portfolio of common equity securities returned 11.3% in 2024, underperforming the S&P 500 Index returns of 25.0% [441]. - White Mountains's portfolio of other long-term investments returned 8.9% in 2024, down from 20.6% in 2023 [443]. - Ark reported net investment income of $79.4 million in 2024, compared to $50.4 million in 2023, showing a significant increase of 57.5% [367]. - Kudu's net investment income decreased to $67 million in 2024 from $71 million in 2023, primarily due to a $12 million realization of carried interest in 2023 [407]. Capital and Debt Management - As of December 31, 2024, White Mountains's undeployed capital was approximately $0.7 billion, including net proceeds from a debt recapitalization [324]. - The total debt of White Mountains as of December 31, 2024, was $562.5 million, with a total debt to total capital ratio of 9.9% [485]. - Kudu borrowed $35 million in term loans under the Kudu Credit Facility in 2024 [497]. - Kudu repaid $30 million in outstanding balance and extinguished the Ark 2007 Subordinated Notes in 2024 [497]. Shareholder Returns - White Mountains paid $3 million in common share dividends during 2024 [484]. - In 2024, White Mountains declared and paid a cash dividend of $3 million to its common shareholders [496]. - Bamboo paid $25 million in dividends to shareholders during 2024, with $18 million paid to White Mountains [483]. - Kudu distributed $32 million to unitholders in 2024, with $29 million paid to White Mountains [480]. Acquisitions and Consolidations - White Mountains consolidated Bamboo in its financial statements as of January 2, 2024, following the Bamboo Transaction [355]. - White Mountains invested $297 million in Bamboo, acquiring a 72.8% ownership stake, which included contributions to retire Bamboo's legacy credit facility [411]. Tax and Regulatory Matters - White Mountains expects to be exempt from the Bermuda corporate income tax until January 1, 2030, due to meeting specific requirements [347]. - The company recorded a $5 million tax benefit in Q3 2024 due to the reversal of a deferred tax liability related to the Bermuda economic transition adjustment [347]. - The effective tax rate for 2024 was impacted by income generated in jurisdictions with lower tax rates than the U.S. and a full valuation allowance on net deferred tax assets [463]. Operational Highlights - White Mountains's Other Operations reported pre-tax income of $9 million in 2024, a decrease from $113 million in 2023, primarily due to lower investment gains [421]. - General and administrative expenses for Other Operations were $170 million in 2024, down from $182 million in 2023, reflecting a decrease of 6.6% [423]. - The total contractual obligations and commitments amounted to $3,562.8 million as of December 31, 2024 [488].