White Mountains Rebounded as Investment Gains Lifted Earnings
Book value rose 4.1% during the quarter to $2,257.60 a share.
White Mountains Insurance Group (WTM), the insurance holding company, increased second-quarter net income attributable to common shareholders to $199.5 million from $122.9 million a year earlier.
The quarter marked a reversal from the start of the year. Comprehensive income swung to $199 million from a $27 million first-quarter loss as White Mountains recorded a $58 million unrealized gain on MediaAlpha after a $65 million loss in the prior period. Book value per share rose 4.1%, reversing the first quarter’s 0.8% decline.
Revenue rose 22.5% to $844.6 million from $689.2 million a year earlier, while pre-tax income increased 45% to $256.0 million. Earnings attributable to common shareholders were $80.58 a share, up from $47.75 a share.
Ark’s underwriting results improved even as softer property-market conditions weighed on new business. Its combined ratio narrowed to 84% from 91% in the first quarter and 85% a year earlier, helped by stronger favorable reserve development. Gross written premiums fell 5% to $778 million, while net earned premiums rose 5% to $375 million.
Ark estimated $42 million of first-half losses from the Iran war, up from $25 million after the first quarter, though catastrophe losses accounted for three combined-ratio points in the latest period compared with seven points in the first quarter. Ark’s pre-tax income recovered to $78 million from $7 million sequentially but remained below $91 million a year earlier as investment gains declined.
Kudu’s revenue increased to $69 million from $20 million as gains on its investments and participation contracts lifted pre-tax income to $57 million. WTM Partners, established as a separate segment following the Basesix and Hawkeye Electric acquisitions, more than doubled revenue to $93 million and tripled adjusted earnings before interest, taxes, depreciation and amortization to $9 million.
White Mountains repurchased 91,194 shares for $191 million during the quarter at an average price of $2,092.72, equivalent to 93% of quarter-end book value. First-half repurchases totaled $217 million, concentrating most of the period’s buyback activity in the latest quarter.