White Mountains Insurance(WTM) - 2025 Q4 - Annual Report

Financial Performance - Comprehensive income attributable to common shareholders was $1,109 million in 2025, significantly up from $230 million in 2024, largely due to the net gain on the sale of the Bamboo Group [309]. - White Mountains reported total revenues of $1,943.8 million for the year ended December 31, 2025, an increase from $1,750.9 million in 2024 [355][356]. - Pre-tax income for White Mountains was $310.2 million in 2025, an increase from $298.8 million in 2024, representing a growth of about 4.7% [355][356]. - The net income attributable to White Mountains's common shareholders was $1,106.4 million in 2024, significantly up from $230.4 million in 2023, representing a 380.5% increase [347]. - White Mountains's total revenues increased to $3,735 million in 2024 from $2,239 million in 2023, marking a 67.0% growth [347]. Asset and Investment Growth - As of December 31, 2025, total assets for White Mountains amounted to $6,354.1 million, an increase from $5,299.0 million in 2024, reflecting a growth of approximately 19.9% [377][378]. - Total investments increased to $3,926.5 million in 2025 from $3,139.7 million in 2024, representing a growth of about 25.1% [377][378]. - The total gross written premiums from the primary market were $43.4 million in 2025, compared to $36.7 million in 2024 [397]. - Kudu deployed a total of $1.2 billion into 30 asset and wealth management firms globally, with combined assets under management of approximately $153 billion [403]. Shareholder Equity and Dividends - White Mountains's common shareholders' equity increased to $1,360.4 million in 2025 from $1,223.8 million in 2024, reflecting a growth of approximately 11.1% [377][378]. - White Mountains declared and paid a $3 million cash dividend to its common shareholders in 2025 [502]. - Ark paid a $41 million dividend to shareholders in 2025, including $30 million to White Mountains [479]. - WM Outrigger Re had $232 million of statutory capital and surplus as of December 31, 2025, and distributed $10 million to White Mountains during 2025 [480]. Sales and Acquisitions - White Mountains completed the sale of approximately 77.3% of its equity interest in the Bamboo Group for net cash proceeds of $848 million on December 5, 2025 [310]. - The acquisition of Distinguished, a full-service MGA, was completed for $225 million in cash, with an additional $50 million in incremental debt [311]. - On April 1, 2025, White Mountains acquired Enterprise Solutions for $58 million in cash consideration [505]. Premiums and Underwriting Performance - The Ark/WM Outrigger segment reported gross written premiums of $2,557 million in 2025, up from $2,207 million in 2024, with a combined ratio of 81% [315]. - Ark reported gross written premiums of $2,557 million and pre-tax income of $265 million in 2025, compared to $2,207 million and $253 million in 2024, respectively [317]. - Direct written premiums for Ark reached $1,260.1 million in 2025, compared to $1,101.5 million in 2024, marking a significant increase of approximately 14.4% [355][356]. - The combined ratio for the Ark/WM Outrigger segment improved to 81.4% in 2025, compared to 81.8% in 2024, indicating better underwriting performance [358][359]. Cash Flow and Financial Obligations - White Mountains reported net cash flows from operations of $551 million for the year ended December 31, 2025, a decrease from $587 million in 2024 [501]. - The total debt of White Mountains increased to $837 million as of December 31, 2025, from $562.5 million in 2024 [490]. - The primary sources of cash for the company include distributions from subsidiaries, net investment income, and proceeds from sales, while primary uses include general and administrative expenses and debt obligations [474]. Investment Returns - As of December 31, 2025, White Mountains's total consolidated portfolio return on invested assets was 9.1%, including $30 million of unrealized investment gains from MediaAlpha [329]. - The fixed income portfolio totaled $4.7 billion as of December 31, 2025, representing 56% of total invested assets, with a return of 5.9% [441][442]. - The portfolio of common equity securities, MediaAlpha investment, and other long-term investments totaled $3.7 billion as of December 31, 2025, with a return of 13.1% [443][444]. - The common equity securities portfolio returned 10.6% in 2025, underperforming the S&P 500 Index return of 17.9% [446]. Operational Performance - White Mountains's Other Operations reported pre-tax income of $810 million in 2025, significantly up from $9 million in 2024, primarily due to the Bamboo Sale Transaction which resulted in a net gain of $816 million [426]. - General and administrative expenses for White Mountains's Other Operations increased to $237 million in 2025 from $170 million in 2024, driven by higher incentive compensation costs and transaction costs [428]. - Bamboo generated total revenues of $246.3 million from January 1, 2025, to December 5, 2025, compared to $179.8 million for the year ended December 31, 2024 [413].