White Mountains Insurance(WTM) - 2025 Q2 - Quarterly Results

Executive Summary White Mountains achieved a 3% BVPS increase in Q2 and YTD 2025, driven by improved comprehensive income from MediaAlpha gains and strong operating segment performance Overall Financial Highlights White Mountains reported a 3% increase in book value per share (BVPS) for both Q2 2025 and the first six months of 2025, including dividends, with comprehensive income significantly improving due to unrealized investment gains from MediaAlpha | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :------------------------------------------------ | :------ | :------- | :------ | :------- | | Book Value Per Share Increase (incl. dividends) | 3% | 3% | | | | Comprehensive Income (Loss) (attributable to common shareholders) | $124M | $159M | $(55)M | $182M | | Unrealized Investment Gains (Losses) from MediaAlpha | $31M | $(6)M | $(139)M | $72M | CEO Commentary CEO Rountree noted strong operating results and investment returns, with Ark, HG Global, and Bamboo achieving significant growth, and MediaAlpha contributing $31 million in gains - BVPS increased by 3% in the quarter, driven by strong operating company results and good investment returns[3] - Ark achieved an 85% combined ratio and $815 million in gross written premiums, up 17% year-over-year[3] - HG Global generated a record $19 million in gross written premiums and grew book value by 2%[3] - Bamboo had a record quarter with significant growth in managed premiums and adjusted EBITDA[3] - MediaAlpha's share price increased 19% in the quarter, resulting in a $31 million mark-to-market gain[3] - Undeployed capital is approximately $300 million, following the acquisition of Distinguished Programs and the BroadStreet Partners transaction[3] Segment Performance Review White Mountains's operating segments, including Ark, HG Global, Kudu, and Bamboo, showed varied performance, complemented by MediaAlpha investment and Other Operations results Ark/WM Outrigger Ark/WM Outrigger improved its combined ratio to 84% in Q2 2025, with gross written premiums increasing significantly, though WM Outrigger Re's ratio rose due to wildfire losses | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :---------------------- | :------ | :------- | :------ | :------- | | Ark/WM Outrigger | | | | | | Combined Ratio | 84% | 90% | 87% | 89% | | Gross Written Premiums | $815M | $1,923M | $697M | $1,569M | | Net Written Premiums | $579M | $1,306M | $503M | $1,101M | | Net Earned Premiums | $364M | $722M | $318M | $621M | | Ark | | | | | | Combined Ratio | 85% | 90% | 89% | 91% | | Pre-tax Income | $91M | $144M | $50M | $83M | | WM Outrigger Re | | | | | | Combined Ratio | 44% | 120% | 27% | 30% | | Pre-tax Income (Q2) | $6M | | $8M | | - Ark's combined ratio in H1 2025 included 13 points of catastrophe losses from January 2025 California wildfires[5] - Ark's combined ratio included five points and nine points of net favorable prior year development in Q2 and H1 2025, respectively, primarily from property, marine & energy, and specialty lines[5] - WM Outrigger Re's catastrophe losses in H1 2025 included $19 million from California wildfires[8] HG Global HG Global reported a strong Q2 2025, with gross written premiums up 66% to $19 million and pre-tax income more than doubling to $17 million | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :-------------------------------- | :------ | :------- | :------ | :------- | | Gross Written Premiums | $19M | $26M | $12M | $21M | | Earned Premiums | $7M | $15M | $8M | $14M | | Total Par Value of Policies Assumed | $931M | $1,358M | $786M | $1,324M | | Total Gross Pricing | 206 bps | 191 bps | 148 bps | 155 bps | | Pre-tax Income | $17M | $42M | $11M | $17M | | Net Realized & Unrealized Investment Gains (Losses) | $3M | $13M | $(2)M | $(9)M | - Gross written premiums increased 66% year-over-year, driven by higher municipal bond issuance and primary market pricing[13] - The fair value of BAM surplus notes increased to $397 million as of June 30, 2025, due to accrued interest[12] Kudu Kudu's Q2 2025 revenues and pre-tax income decreased due to lower investment gains, but adjusted EBITDA grew 35% to $16 million, despite an 8% ROE | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :-------------------------------- | :------ | :------- | :------ | :------- | | Total Revenues | $20M | $84M | $70M | $81M | | Pre-tax Income | $11M | $64M | $61M | $63M | | Adjusted EBITDA | $16M | $32M | $12M | $26M | | Net Investment Income | $19M | $39M | $16M | $33M | | Net Realized & Unrealized Investment Gains | $1M | $45M | $55M | $48M | | Return on Equity (as of June 30) | 8% | | | | - GAAP ROE dipped to 8% due to lower realized and unrealized gains, while annualized adjusted EBITDA increased 1%, reflecting continued underlying growth[16] - Kudu's investment pipeline remains active, with anticipated continued capital deployment through the rest of 2025[16] Bamboo Bamboo achieved record Q2 2025 performance, with commission and fee revenues up 80% to $59 million, pre-tax income doubling to $16 million, and MGA adjusted EBITDA surging to $26 million | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :-------------------------------- | :------ | :------- | :------ | :------- | | Commission and Fee Revenues | $59M | $103M | $33M | $55M | | Pre-tax Income | $16M | $22M | $6M | $7M | | MGA Pre-tax Income | $15M | $25M | $6M | $7M | | MGA Adjusted EBITDA | $26M | $46M | $12M | $18M | | Managed Premiums | $191M | $338M | $120M | $209M | - Managed premiums increased to $613 million on a trailing 12-month basis, up 72% year-over-year[19] - Trailing 12-month MGA adjusted EBITDA increased threefold to $80 million[19] - Estimates for losses from the January 2025 California wildfires remain unchanged at approximately $160 million as of June 30, 2025[18] MediaAlpha Investment White Mountains held 17.9 million MediaAlpha shares (26% ownership) with a $196 million carrying value, where each $1.00 share price change impacts BVPS by $7.00 | Metric | As of June 30, 2025 | As of March 31, 2025 | | :-------------------------------- | :------------------ | :------------------- | | Shares Owned | 17.9 million | | | Basic Ownership Interest | 26% | | | MediaAlpha Share Price | $10.95 | $9.24 | | Carrying Value of Investment | $196M | $165M | - A $1.00 per share increase or decrease in MediaAlpha's share price results in an approximate $7.00 per share increase or decrease in White Mountains's book value per share[19] Other Operations Other Operations reported a Q2 2025 pre-tax income of $36 million, a significant improvement from a $(153) million loss, driven by MediaAlpha gains and the Enterprise Solutions acquisition | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :------------------------------------------------ | :------ | :------- | :------ | :------- | | Pre-tax Income (Loss) | $36M | $(23)M | $(153)M | $49M | | Unrealized Investment Gains (Losses) from MediaAlpha | $31M | $(6)M | $(139)M | $72M | | Net Realized & Unrealized Investment Gains (Excl. MediaAlpha) | $32M | $35M | $9M | $31M | | Other Revenues | $57M | $70M | $15M | $29M | | Cost of Sales | $42M | $50M | $7M | $15M | | General and Administrative Expenses | $54M | $89M | $43M | $94M | | Bamboo CRV Pre-tax Income (Loss) | $1M | $(7)M | $2M | $2M | - The increase in other revenues and cost of sales was primarily driven by the acquisition of Enterprise Solutions by WTM Partners in Q2 2025[22] - The increase in general and administrative expenses in Q2 2025 was driven by parent company transaction costs and the Enterprise Solutions acquisition[23] - Bamboo CRV results for H1 2025 included $12 million of losses related to the January 2025 California wildfires[24] Investment Performance The total consolidated portfolio returned 2.7% in Q2 2025 (2.3% excluding MediaAlpha), with fixed income matching its benchmark and equity trailing the S&P 500 | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :------------------------------------------ | :------ | :------- | :------ | :------- | | Total Consolidated Portfolio Return | 2.7% | 4.5% | (0.1)% | 4.5% | | Total Consolidated Portfolio Return (Excl. MediaAlpha) | 2.3% | 4.7% | 2.2% | 3.5% | - Excluding MediaAlpha, the fixed income portfolio returned 1.5%, in-line with the Bloomberg Intermediate Aggregate Index[27] - The equity portfolio, excluding MediaAlpha, returned 3.4%, trailing the S&P 500 Index return of 10.9% in Q2 2025, primarily due to lower relative returns from market neutral positions and other long-term investments[27] Additional Information White Mountains, a Bermuda-domiciled financial services holding company listed on NYSE and BSX, expects to file its Form 10-Q with the SEC today - White Mountains is listed on the New York Stock Exchange (WTM) and the Bermuda Stock Exchange (WTM.BH)[28] - The company expects to file its Form 10-Q with the Securities and Exchange Commission today[28] Condensed Consolidated Financial Statements This section presents White Mountains's condensed consolidated balance sheets, book value per share, statements of operations, comprehensive income, and earnings per share Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $11,822.9 million, liabilities to $6,482.7 million, and equity to $5,340.2 million from December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :-------------------- | :------------ | :---------------- | :------------ | | Total Assets | $11,822.9M | $9,925.6M | $10,166.9M | | Total Liabilities | $6,482.7M | $4,794.6M | $5,294.7M | | Total Equity | $5,340.2M | $5,131.0M | $4,872.2M | - P&C Insurance and Reinsurance assets increased significantly to $6,905.5 million as of June 30, 2025, from $5,299.0 million at December 31, 2024, driven by increases in reinsurance recoverables and insurance premiums receivable[30] - P&C Insurance and Reinsurance liabilities also saw a substantial rise, with unearned insurance premiums increasing to $1,847.3 million from $853.3 million between December 31, 2024, and June 30, 2025[32] Book Value Per Share Book value per share increased to $1,803.57 as of June 30, 2025, representing a 2.9% quarter-to-date and 3.4% year-to-date growth, including dividends | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------------------ | :------------ | :------------- | :---------------- | :------------ | | Book Value Per Share | $1,803.57 | $1,752.17 | $1,745.87 | $1,722.02 | | Quarter-to-date change in book value per share (incl. dividends) | 2.9% | 0.4% | (2.8)% | (1.2)% | | Year-to-date change in book value per share (incl. dividends) | 3.4% | 0.4% | 5.5% | 4.0% | | Year-to-date dividends per share | $1.00 | $1.00 | $1.00 | $1.00 | Condensed Consolidated Statements of Operations Total revenues significantly increased to $689.2 million in Q2 2025, leading to a pre-tax income of $176.5 million and positive net income of $122.9 million for common shareholders | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :------------------------------------------------ | :------ | :------- | :------ | :------- | | Total Revenues | $689.2M | $1,267.0M | $395.4M | $1,042.7M | | Total Expenses | $512.7M | $1,018.1M | $430.1M | $844.8M | | Pre-tax Income (Loss) | $176.5M | $248.9M | $(34.7)M | $197.9M | | Net Income (Loss) attributable to White Mountains's common shareholders | $122.9M | $156.8M | $(54.6)M | $181.8M | - P&C Insurance and Reinsurance revenues increased to $447.9 million in Q2 2025 from $363.3 million in Q2 2024, driven by higher earned insurance premiums and net realized/unrealized investment gains[36] - Other Operations revenues significantly improved from a loss of $(95.8) million in Q2 2024 to $134.2 million in Q2 2025, largely due to a reversal in investment gains/losses from MediaAlpha[36] Condensed Consolidated Statements of Comprehensive Income (Loss) Comprehensive income attributable to common shareholders significantly improved to $123.7 million in Q2 2025 from a $(54.6) million loss in Q2 2024 | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :------------------------------------------------ | :------ | :------- | :------ | :------- | | Comprehensive Income (Loss) attributable to White Mountains's common shareholders | $123.7M | $158.8M | $(54.6)M | $181.6M | Earnings Per Share Basic and diluted EPS were $47.75 for Q2 2025, a significant turnaround from a $(21.24) loss per share in Q2 2024 | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :------------------------------------------------ | :------ | :------- | :------ | :------- | | Basic Earnings (Loss) Per Share | $47.75 | $60.99 | $(21.24) | $70.93 | | Diluted Earnings (Loss) Per Share | $47.75 | $60.99 | $(21.24) | $70.93 | | Dividends Declared and Paid Per Common Share | $0 | $1.00 | $0 | $1.00 | Segment Statements of Pre-Tax Income (Loss) This section details the pre-tax income and loss for each operating segment on both a quarter-to-date and year-to-date basis QTD Segment Statements of Pre-Tax Income (Loss) All segments reported positive pre-tax income in Q2 2025, contributing to a consolidated pre-tax income of $176.5 million, a significant improvement from Q2 2024 | Segment | Q2 2025 Pre-tax Income (Loss) | Q2 2024 Pre-tax Income (Loss) | | :----------------------- | :---------------------------- | :---------------------------- | | Ark | $91.3M | $50.1M | | WM Outrigger Re | $6.2M | $8.4M | | HG Global | $16.7M | $11.1M | | Kudu | $10.7M | $61.3M | | Bamboo | $16.1M | $6.4M | | Other Operations | $35.5M | $(153.1)M | | Total | $176.5M | $(34.7)M | - Other Operations significantly improved from a pre-tax loss of $(153.1) million in Q2 2024 to a pre-tax income of $35.5 million in Q2 2025, largely due to investment gains[44][46] YTD Segment Statements of Pre-Tax Income (Loss) Consolidated pre-tax income for YTD 2025 increased to $248.9 million, with positive contributions from most segments, and an improved loss in Other Operations | Segment | YTD 2025 Pre-tax Income (Loss) | YTD 2024 Pre-tax Income (Loss) | | :----------------------- | :----------------------------- | :----------------------------- | | Ark | $143.6M | $83.1M |\ | WM Outrigger Re | $0.3M | $18.3M |\ | HG Global | $41.7M | $16.6M |\ | Kudu | $64.1M | $63.0M |\ | Bamboo | $22.4M | $7.3M |\ | Other Operations | $(23.2)M | $49.1M |\ | Total | $248.9M | $197.9M | - Ark's pre-tax income for YTD 2025 significantly increased to $143.6 million from $83.1 million in YTD 2024[49][51] - WM Outrigger Re's pre-tax income for YTD 2025 decreased substantially to $0.3 million from $18.3 million in YTD 2024, primarily due to catastrophe losses[49][51] Selected Financial Data by Segment This section provides selected financial data for the Ark/WM Outrigger, HG Global, Kudu, and Bamboo segments Ark/WM Outrigger Selected Financial Data Ark/WM Outrigger improved its Q2 2025 combined ratio to 84.4% with strong gross written premium growth, though WM Outrigger Re's ratio increased due to higher losses | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Ark/WM Outrigger Total | | | | | | Gross Written Premiums | $815.2M | $697.0M | $1,922.8M | $1,569.1M | | Net Written Premiums | $578.6M | $502.8M | $1,306.3M | $1,100.8M | | Net Earned Premiums | $364.2M | $318.3M | $722.2M | $621.1M | | Combined Ratio | 84.4% | 87.0% | 90.4% | 89.2% | | Ark | | | | | | Combined Ratio | 85.2% | 88.5% | 89.5% | 90.9% | | WM Outrigger Re | | | | | | Combined Ratio | 43.7% | 26.7% | 120.4% | 29.8% | - Ark's gross written premiums increased by 17% in Q2 2025 compared to Q2 2024[53] - WM Outrigger Re's loss and loss adjustment expense ratio for YTD 2025 was 114.7%, significantly higher than 2.3% in YTD 2024, contributing to its increased combined ratio[55] HG Global Selected Financial Data HG Global showed strong Q2 2025 growth, with total par value of policies assumed increasing to $930.5 million and gross written premiums rising to $19.2 million | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :-------------------------------- | :------ | :------- | :------ | :------- | | Total Par Value of Policies Assumed | $930.5M | $1,357.8M | $785.9M | $1,323.9M | | Total Gross Written Premiums | $19.2M | $25.9M | $11.6M | $20.5M |\ | Total Gross Pricing | 206 bps | 191 bps | 148 bps | 155 bps | | Earned Premiums | $7.1M | $15.3M | $7.5M | $14.0M | - Gross pricing from the primary market increased to 199 bps in Q2 2025 from 98 bps in Q2 2024[57] - Unearned premiums, net of deferred acquisition costs, increased to $217.5 million as of June 30, 2025, from $210.7 million at December 31, 2024[57] Kudu Selected Financial Data Kudu's Q2 2025 total revenues decreased to $20.4 million due to lower investment gains, but adjusted EBITDA increased to $16.2 million, with ROE at 7.8% | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | TTM June 30, 2025 | | :-------------------------------- | :------ | :------- | :------ | :------- | :---------------- | | Total Revenues | $20.4M | $84.2M | $70.2M | $80.9M | $122.1M | | GAAP Pre-tax Income (Loss) | $10.7M | $64.1M | $61.3M | $63.0M | $82.4M | | Adjusted EBITDA | $16.2M | $32.0M | $12.4M | $26.3M | $60.2M | | Annualized Adjusted EBITDA | | | | | $65.3M | | Return on Equity | | | | | 7.8% | - The ending balance of Kudu's participation contracts was $1,121.1 million as of June 30, 2025, up from $901.3 million as of June 30, 2024[61] - Net unrealized investment gains (losses) on participation contracts (all other) were $(8.6) million in Q2 2025, compared to $57.6 million in Q2 2024[61] Bamboo Selected Financial Data Bamboo's Q2 2025 commission and fee revenues grew to $59.1 million, GAAP pre-tax income increased to $16.1 million, and MGA adjusted EBITDA rose to $25.6 million | Metric | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | TTM June 30, 2025 | | :-------------------------------- | :------ | :------- | :------ | :------- | :---------------- | | Commission and Fee Revenues | $59.1M | $103.3M | $32.7M | $54.6M | $183.3M | | Total Revenues | $62.5M | $123.9M | $42.0M | $73.1M | $230.6M | | GAAP Pre-tax Income (Loss) | $16.1M | $22.4M | $6.4M | $7.3M | $47.8M | | MGA Adjusted EBITDA | $25.6M | $45.5M | $11.5M | $17.9M | $80.3M | - Broker commission expenses increased to $19.8 million in Q2 2025 from $12.7 million in Q2 2024, reflecting business growth[63] - Amortization of other intangible assets for MGA EBITDA was $4.0 million in Q2 2025, contributing to the adjusted EBITDA calculation[63] Non-GAAP Financial Measures (Regulation G) This section defines and reconciles non-GAAP financial measures for Kudu, Bamboo, and investment portfolio returns, providing alternative performance insights Kudu Non-GAAP Measures This section defines Kudu's non-GAAP measures, including EBITDA, Adjusted EBITDA, Annualized Revenue, and Cash Revenue Yield, used to evaluate performance - EBITDA is GAAP net income (loss) adjusted for interest expense, income tax, depreciation, and amortization of other intangible assets[64] - Adjusted EBITDA further excludes net realized and unrealized investment gains (losses) on participation contracts, non-cash equity-based compensation, and transaction expenses[64][68] - Annualized Adjusted EBITDA annualizes partial year revenues from acquired participation contracts and removes partial year revenues from sold contracts[65] - Cash Revenue Yield is annualized revenue as a percentage of total net capital drawn and invested, providing a cash-based performance indicator[66] Bamboo Non-GAAP Measures This section outlines Bamboo's non-GAAP measures, including MGA pre-tax income, MGA EBITDA, and MGA Adjusted EBITDA, to clarify MGA operational performance - MGA pre-tax income (loss) and MGA net income (loss) exclude the results of the Bamboo captive from consolidated GAAP figures[67] - MGA EBITDA adds back interest expense, income tax, depreciation, and amortization of other intangible assets to MGA net income (loss)[69] - MGA Adjusted EBITDA further excludes non-cash equity-based compensation, software implementation expenses, and restructuring expenses[70][72] Investment Portfolio Return Non-GAAP Measures This section details non-GAAP measures for investment portfolio returns, excluding MediaAlpha's impact to show underlying portfolio performance - Total consolidated portfolio return excluding MediaAlpha removes net investment income and net realized/unrealized investment gains (losses) from the MediaAlpha investment[71] - Total equity portfolio return excluding MediaAlpha similarly removes the MediaAlpha investment impact to show underlying equity portfolio performance[71] | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Total consolidated portfolio return | 2.7% | (0.1)% | 4.5% | 4.5% | | Total consolidated portfolio return excluding MediaAlpha | 2.3% | 2.2% | 4.7% | 3.5% | | Total equity portfolio return (Q2) | 4.2% | | | | | Total equity portfolio return excluding MediaAlpha (Q2) | 3.4% | | | | Safe Harbor Statement This safe harbor statement cautions that forward-looking statements are subject to risks like catastrophic events, market fluctuations, and regulatory changes, and White Mountains disclaims any update obligation - The release contains forward-looking statements regarding future activities, events, or developments, identified by words like 'could', 'will', 'believe', 'intend', 'expect', 'anticipate', 'project', 'estimate', 'predict'[73] - Key risks and uncertainties include claims from catastrophic events (hurricanes, wildfires, cyber attacks), inadequate loss reserves, market value of MediaAlpha investment, rating agency actions, economic conditions, and regulatory changes[74][76] - White Mountains assumes no obligation to publicly update any forward-looking statements[75]