HAMILTON, Bermuda, Aug. 6, 2021 /PRNewswire/ -- White Mountains
Insurance Group, Ltd. (NYSE: WTM) reported book value per share of
$1,279 and adjusted book value per
share of $1,292 as of June 30,
2021. Book value per share and adjusted book value per share
both increased 4% in the second quarter of 2021 and 2% in the first
six months of 2021, including dividends.
Manning Rountree, CEO, commented, "We had a strong second
quarter. Adjusted book value per share was up 4%, driven by
solid results across our operating companies as well as the
increase in MediaAlpha's share price during the quarter. BAM
produced $30 million of total
premiums and member surplus contributions, as insured penetration
and market share remained strong, while pricing declined. Ark
wrote $328 million of gross written
premiums, up 78% year over year, and produced an 84% adjusted
combined ratio. NSM generated nice growth in both pro forma
controlled premiums and pro forma adjusted EBITDA. Kudu also
posted nice growth in adjusted EBITDA and recognized $28 million in unrealized gains in the fair value
of its portfolio of participation contracts. Excluding
MediaAlpha, our investment portfolio returned 2.4% in the
quarter. We finished the second quarter with roughly
$300 million in undeployed
capital. We expect undeployed capital will increase in the
third quarter upon completion of the subordinated debt raise at
Ark."
Comprehensive income (loss) attributable to common shareholders
was $139 million and $66 million in the second quarter and first six
months of 2021, compared to $116
million and $(17) million in
the second quarter and first six months of 2020. Results in
the second quarter and first six months of 2021 were driven
primarily by $113 million and
$71 million of net realized and
unrealized investment gains from White Mountains's investment in
MediaAlpha.
MediaAlpha
White Mountains owns 16.9 million shares of MediaAlpha,
representing a 28% basic ownership interest (26% on a
fully-diluted/fully-converted basis). At the June 30 closing price of $42.10, the value of White Mountains's investment
in MediaAlpha was $713 million.
At this level of ownership, each $1.00 per share increase or decrease in the share
price of MediaAlpha will result in an approximate $5.50 per share increase or decrease in White
Mountains's book value per share and adjusted book value per
share. At the July 2021
month-end closing price of $33.40 per
share, the fair value of White Mountains's investment in MediaAlpha
was $566 million.
HG Global/BAM
BAM's gross written premiums and member surplus contributions
(MSC) collected were $30 million and
$56 million in the second quarter and
first six months of 2021, compared to $43
million and $63 million in the
second quarter and first six months of 2020. BAM insured
municipal bonds with par value of $5.1
billion and $8.7 billion in
the second quarter and first six months of 2021, compared to
$4.1 billion and $7.1 billion in the second quarter and first six
months of 2020. Total pricing was 59 and 65 basis points in
the second quarter and first six months of 2021, compared to 105
and 89 basis points in the second quarter and first six months of
2020. BAM's total claims paying resources were $1,165 million at June 30, 2021, compared to
$987 million at December 31,
2020 and $957 million at
June 30, 2020. In the first quarter of 2021, BAM
completed a reinsurance agreement with Fidus Re that increased
BAM's claims paying resources by $150
million.
Seán McCarthy, CEO of BAM, said, "BAM had a good second quarter,
with par insured up 25% from the same period in 2020. Demand
for insurance remained strong, keeping insured penetration above
8%. The outlook for municipal credit improved as a result of
the ongoing economic recovery as well as Federal support for
issuers. Declining interest rates and tighter credit spreads
resulted in lower overall pricing. However, risk adjusted
pricing was supported by strong demand for insured bonds of
double-A rated issuers. In July, S&P Global Ratings
completed its annual review and affirmed BAM's "AA/stable"
rating."
The COVID-19 pandemic is negatively impacting the finances of
municipalities to varying degrees, and, over time, financial stress
could emerge. To date, BAM's portfolio continues to perform
as expected. All BAM-insured bond payments due through
August 1 have been made by insureds,
and there are no credits on BAM's watchlist. BAM continues to
monitor the finances of its members and to work proactively with
its members to prepare for any pandemic-related revenue
challenges.
HG Global reported pre-tax income of $11 million and
$9 million in the second quarter and
first six months of 2021, compared to pre-tax income of
$20 million and $32 million in the second quarter and first six
months of 2020. The decrease in HG Global's results for the
second quarter and first six months of 2021, compared to the second
quarter and first six months of 2020, were driven primarily by
lower investment returns on the HG Global investment
portfolio. White Mountains reported pre-tax loss related to
BAM of $9 million and $32 million in the second quarter and first six
months of 2021, compared to pre-tax loss related to BAM of
$9 million and $19 million in the second quarter and first six
months of 2020. The decrease in BAM's results for the first
six months of 2021, compared to the first six months of 2020, was
driven primarily by lower investment returns on the BAM investment
portfolio.
BAM is a mutual insurance company that is owned by its
members. BAM's results are consolidated into White
Mountains's GAAP financial statements and attributed to
non-controlling interests.
Ark
Ark's GAAP combined ratio was 90% and 99% in the second quarter
and first six months of 2021. Ark's adjusted combined ratio,
which adds back amounts ceded to third party capital providers, was
84% and 96% in the second quarter and first six months of
2021. The adjusted combined ratio in the second quarter and
first six months of 2021 included 10 points and 5 points of
favorable prior year development, primarily related to the
Property, Energy and Accident & Health lines of business, and 6
points and 12 points of catastrophe losses.
In the second quarter of 2021, Ark reported gross written
premiums of $328 million, net written
premiums of $262 million and net
earned premiums of $118
million. In the first six months of 2021, Ark reported
gross written premiums of $733
million, net written premiums of $605
million and net earned premiums of $222 million. Ark reported pre-tax income
(loss) of $18 million and
$(15) million in the second quarter
and first six months of 2021. Ark's pre-tax loss for the
first six months of 2021 included $25
million of transaction expenses related to White Mountains's
transaction with Ark.
Ian Beaton, CEO of Ark, said,
"Ark had a solid second quarter. Driven by strong April and
June renewals, gross written premiums were $328 million in the quarter, up 78% from 2020
levels, with risk-adjusted rate change up over 7%. The
adjusted combined ratio was 84% in the quarter reflecting 10 points
of favorable prior year development and light catastrophes.
In July, we closed on €39 million of subordinated debt, and we
continue to make good progress on the balance of our planned
capital raise. Looking forward, market conditions remain
attractive, and we are optimistic about profitable growth in the
book."
NSM
NSM reported pre-tax income of $1
million, adjusted EBITDA of $19
million, and commission and other revenues of $84 million in the second quarter of 2021,
compared to pre-tax loss of $4
million, adjusted EBITDA of $18
million, and commission and other revenues of $76 million in the second quarter of
2020.
NSM reported pre-tax loss of $32
million, adjusted EBITDA of $33
million, and commission and other revenues of $159 million in the first six months of 2021,
compared to pre-tax loss of $5
million, adjusted EBITDA of $29
million, and commission and other revenues of $141 million in the first six months of
2020. On April 12, 2021, NSM
sold its Fresh Insurance motor business, which resulted in a loss
of $29 million recorded in the first
quarter of 2021. Results in the first six months of 2021 and
the first six months of 2020, from the date of acquisition, include
the results of Kingsbridge Group Limited, a leading provider of
commercial lines insurance and consulting services to the
contingent workforce in the United
Kingdom, which was acquired on April
7, 2020.
Geof McKernan, CEO of NSM, said,
"NSM had a good second quarter. Excluding the Fresh Insurance
motor business, trailing 12 months pro forma controlled premiums
increased to $1,102 million and pro
forma adjusted EBITDA increased to a record $65 million, reflecting quarter over quarter
organic growth rates of 3% and 2%, respectively. Growth in
the quarter was led by the Pet, Social Services and Specialty
Transportation verticals, offset by a decline in the Real Estate
vertical. We also benefited from improved results in the U.K.
vertical following the sale of the Fresh Insurance motor business
and the broader reopening of the U.K. economy."
Kudu
Kudu reported pre-tax income of $31
million and adjusted EBITDA of $5
million in the second quarter of 2021, compared to pre-tax
income of $18 million and adjusted
EBITDA of $4 million in the second
quarter of 2020. Pre-tax income in the second quarter of 2021
included $28 million of unrealized
gains on Kudu's participation contracts, compared to $17 million of unrealized gains on Kudu's
participation contracts in the second quarter of 2020. Kudu
reported pre-tax income of $47
million and adjusted EBITDA of $11
million in the first six months of 2021, compared to pre-tax
loss of $4 million and adjusted
EBITDA of $9 million in the first six
months of 2020. Pre-tax income in the first six months of
2021 included $44 million of
unrealized gains on Kudu's participation contracts, compared to
$8 million of unrealized losses on
Kudu's participation contracts in the first six months of 2020,
which reflected the impact of the market dislocation from the
COVID-19 pandemic on Kudu's underlying asset management firms.
As of June 30, 2021, Kudu has
deployed $398 million in 13 asset
management firms globally, with combined assets under management of
approximately $52 billion, spanning a
range of asset classes, including real estate, real assets, wealth
management, hedge funds, private equity and alternative credit
strategies. The capital deployed has generated an average
gross cash yield to Kudu at inception of 10.3%.
Rob Jakacki, CEO of Kudu, said,
"Kudu had a strong second quarter. Quarter over quarter,
trailing 12 months revenues from participation contracts increased
9% to $33 million, while adjusted
EBITDA increased 7% to $24
million. Annualized adjusted EBITDA finished the
quarter at $28 million, reflecting
the full impact of new transactions. Second quarter
unrealized gains of $28 million
reflected the strong asset growth and performance of Kudu's
portfolio of asset managers. We continue to see a large
number of opportunities in both the U.S. and internationally,
particularly within the private capital and wealth management
segments. We are optimistic about making additional capital
deployments in the coming quarters."
Other Operations
White Mountains's Other Operations segment reported pre-tax
income (loss) of $110 million and
$47 million in the second quarter and
first six months of 2021, compared to $107
million and $(37) million in
the second quarter and first six months of 2020. The Other
Operations segment results in the second quarter and first six
months of 2021 were driven primarily by net realized and unrealized
investment gains from White Mountains's investment in MediaAlpha,
while the results in the second quarter and first six months of
2020 were driven primarily by net unrealized investment gains
(losses). Net realized and unrealized investment gains from
White Mountains's investment in MediaAlpha were $113 million and $71
million in the second quarter and first six months of 2021,
compared to net unrealized investment gains from White Mountains's
investment in MediaAlpha of $15
million and $45 million in the
second quarter and first six months of 2020. Net realized and
unrealized investment gains were $17
million and $19 million in the
second quarter and first six months of 2021, compared to net
realized and unrealized investment gains (losses) $107 million and $(61)
million in the second quarter and first six months of 2020,
as equity markets declined in the first quarter of 2020 in reaction
to the COVID-19 pandemic and partially rebounded in the second
quarter of 2020.
White Mountains's Other Operations segment reported general and
administrative expenses of $30
million and $65 million in the
second quarter and first six months of 2021, compared to
$25 million and $43 million in
the second quarter and first six months of 2020. The increase
in general and administrative expenses in the second quarter and
first six months of 2021 compared to the second quarter and first
six months of 2020 was driven primarily by higher incentive
compensation costs, in turn driven primarily by the increase in the
White Mountains's share price.
Investments
The total return on invested assets was 5.0% in the second
quarter of 2021. This return included $113 million of net unrealized investment gains
from White Mountains's investment in MediaAlpha. Excluding
MediaAlpha, the total return on invested assets was 2.4% in the
second quarter of 2021. The total return on invested assets
was 6.5% in the second quarter of 2020. This return included
$18 million of net investment income
and net unrealized investment gains from White Mountains's
investment in MediaAlpha. Excluding MediaAlpha, the total
return on invested assets was 6.4% in the second quarter of
2020.
The total return on invested assets was 4.7% in the first six
months of 2021. This return included $71 million of net realized and unrealized
investment gains from White Mountains's investment in
MediaAlpha. Excluding MediaAlpha, the total return on
invested assets was 3.1% in the first six months of 2021. The
total return on invested assets was 1.7% in the first six months of
2020. This return included $50
million of net investment income and unrealized investment
gains from White Mountains's investment in MediaAlpha.
Excluding MediaAlpha, the total return on invested assets was flat
in the first six months of 2020.
Mark Plourde, Managing Director
of White Mountains Advisors, said, "Excluding MediaAlpha, the total
portfolio was up 2.4% in the quarter. The fixed income
portfolio returned 0.8%, in-line with the longer duration BBIA
Index return. The equity portfolio returned 5.4%, a solid
absolute result but behind the S&P 500 Index return of
8.5%."
Additional Information
White Mountains is a Bermuda-domiciled financial services holding
company traded on the New York Stock Exchange and the Bermuda Stock
Exchange under the symbol WTM. Additional financial
information and other items of interest are available at the
Company's website located at www.whitemountains.com. White
Mountains expects to file its Form 10-Q today with the Securities
and Exchange Commission and urges shareholders to refer to that
document for more complete information concerning its financial
results.
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(millions)
|
(Unaudited)
|
|
|
|
June
30,
2021
|
|
December
31,
2020
|
|
June
30,
2020
|
Assets
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
$
|
884.6
|
|
|
$
|
859.5
|
|
|
$
|
821.7
|
|
Short-term
investments
|
|
44.9
|
|
|
60.4
|
|
|
54.7
|
|
Total
investments
|
|
929.5
|
|
|
919.9
|
|
|
876.4
|
|
Cash
|
|
20.6
|
|
|
42.8
|
|
|
32.0
|
|
Insurance premiums
receivable
|
|
6.9
|
|
|
6.9
|
|
|
7.3
|
|
Deferred acquisition
costs
|
|
30.5
|
|
|
27.8
|
|
|
25.0
|
|
Accrued investment
income
|
|
5.0
|
|
|
5.0
|
|
|
5.2
|
|
Other
assets
|
|
14.0
|
|
|
15.4
|
|
|
14.6
|
|
Total Financial
Guarantee assets
|
|
1,006.5
|
|
|
1,017.8
|
|
|
960.5
|
|
P&C Insurance
and Reinsurance (Ark)
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
519.8
|
|
|
—
|
|
|
—
|
|
Common equity
securities
|
|
142.0
|
|
|
—
|
|
|
—
|
|
Short-term
investments
|
|
251.0
|
|
|
—
|
|
|
—
|
|
Other long-term
investments
|
|
257.5
|
|
|
—
|
|
|
—
|
|
Total
investments
|
|
1,170.3
|
|
|
—
|
|
|
—
|
|
Cash
|
|
110.6
|
|
|
—
|
|
|
—
|
|
Reinsurance
recoverables
|
|
431.3
|
|
|
—
|
|
|
—
|
|
Insurance premiums
receivable
|
|
589.0
|
|
|
—
|
|
|
—
|
|
Ceded unearned
premiums
|
|
116.1
|
|
|
—
|
|
|
—
|
|
Deferred acquisition
cost
|
|
122.8
|
|
|
—
|
|
|
—
|
|
Value of in-force
business acquired
|
|
27.8
|
|
|
—
|
|
|
—
|
|
Goodwill and other
intangible assets
|
|
292.5
|
|
|
—
|
|
|
—
|
|
Other
assets
|
|
113.9
|
|
|
—
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance assets
|
|
2,974.3
|
|
|
—
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
Cash (restricted
$90.3, $78.4 and $96.3)
|
|
154.6
|
|
|
126.5
|
|
|
140.5
|
|
Premium and commission
receivable
|
|
85.1
|
|
|
76.7
|
|
|
76.7
|
|
Goodwill and
other intangible assets
|
|
691.6
|
|
|
736.8
|
|
|
728.6
|
|
Other
assets
|
|
55.7
|
|
|
59.6
|
|
|
55.1
|
|
Total Specialty
Insurance Distribution assets
|
|
987.0
|
|
|
999.6
|
|
|
1,000.9
|
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
Short-term
investments
|
|
.1
|
|
|
.1
|
|
|
.1
|
|
Other long-term
investments
|
|
455.5
|
|
|
400.6
|
|
|
315.6
|
|
Total
investments
|
|
455.6
|
|
|
400.7
|
|
|
315.7
|
|
Cash (restricted
$4.0, $0.0, $0.0)
|
|
13.5
|
|
|
7.8
|
|
|
5.9
|
|
Accrued investment
income
|
|
7.6
|
|
|
9.8
|
|
|
5.6
|
|
Goodwill and other
intangible assets
|
|
9.1
|
|
|
9.2
|
|
|
9.4
|
|
Other
assets
|
|
8.5
|
|
|
2.7
|
|
|
2.7
|
|
Total Asset Management
assets
|
|
494.3
|
|
|
430.2
|
|
|
339.3
|
|
Other Operations
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
352.9
|
|
|
347.7
|
|
|
369.9
|
|
Short-term
investments
|
|
236.5
|
|
|
82.4
|
|
|
62.8
|
|
Common equity
securities
|
|
—
|
|
|
—
|
|
|
567.2
|
|
Investment in
MediaAlpha
|
|
713.2
|
|
|
802.2
|
|
|
225.0
|
|
Other long-term
investments
|
|
368.4
|
|
|
386.2
|
|
|
357.5
|
|
Total
investments
|
|
1,671.0
|
|
|
1,618.5
|
|
|
1,582.4
|
|
Cash
|
|
27.4
|
|
|
34.1
|
|
|
32.9
|
|
Cash pre-funded/placed
in escrow for Ark transaction
|
|
—
|
|
|
646.3
|
|
|
—
|
|
Accounts receivable on
unsettled investment sales
|
|
1.7
|
|
|
3.4
|
|
|
23.4
|
|
Goodwill and other
intangible assets
|
|
51.0
|
|
|
36.4
|
|
|
21.9
|
|
Other
assets
|
|
66.7
|
|
|
45.1
|
|
|
39.0
|
|
Total Other Operations
assets
|
|
1,817.8
|
|
|
2,383.8
|
|
|
1,699.6
|
|
Total
assets
|
|
$
|
7,279.9
|
|
|
$
|
4,831.4
|
|
|
$
|
4,000.3
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
|
|
June
30,
2021
|
|
December
31,
2020
|
|
June
30,
2020
|
Liabilities
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
Unearned insurance
premiums
|
|
$
|
250.9
|
|
|
$
|
237.5
|
|
|
$
|
218.6
|
|
Accrued incentive
compensation
|
|
16.1
|
|
|
25.7
|
|
|
14.1
|
|
Other
liabilities
|
|
28.5
|
|
|
28.3
|
|
|
30.3
|
|
Total Financial
Guarantee liabilities
|
|
295.5
|
|
|
291.5
|
|
|
263.0
|
|
P&C Insurance
and Reinsurance (Ark)
|
|
|
|
|
|
|
Loss and loss
adjustment expense reserves
|
|
760.0
|
|
|
—
|
|
|
—
|
|
Unearned insurance
premiums
|
|
718.7
|
|
|
—
|
|
|
—
|
|
Debt
|
|
44.2
|
|
|
—
|
|
|
—
|
|
Reinsurance
payable
|
|
512.8
|
|
|
—
|
|
|
—
|
|
Contingent
consideration
|
|
22.5
|
|
|
—
|
|
|
—
|
|
Accounts payable on
unsettled investment purchases
|
|
1.9
|
|
|
—
|
|
|
—
|
|
Other
liabilities
|
|
73.0
|
|
|
—
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance liabilities
|
|
2,133.1
|
|
|
—
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
Debt
|
|
270.7
|
|
|
272.6
|
|
|
268.4
|
|
Premiums
payable
|
|
137.9
|
|
|
113.4
|
|
|
139.7
|
|
Contingent
consideration
|
|
7.3
|
|
|
14.6
|
|
|
11.7
|
|
Other
liabilities
|
|
89.7
|
|
|
91.2
|
|
|
81.1
|
|
Total Specialty
Insurance Distribution liabilities
|
|
505.6
|
|
|
491.8
|
|
|
500.9
|
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
Debt
|
|
94.5
|
|
|
86.3
|
|
|
70.8
|
|
Other
liabilities
|
|
31.1
|
|
|
10.0
|
|
|
6.5
|
|
Total Asset Management
liabilities
|
|
125.6
|
|
|
96.3
|
|
|
77.3
|
|
Other Operations
|
|
|
|
|
|
|
Debt
|
|
19.4
|
|
|
17.5
|
|
|
10.6
|
|
Accrued incentive
compensation
|
|
50.1
|
|
|
70.1
|
|
|
18.9
|
|
Other
liabilities
|
|
42.6
|
|
|
46.3
|
|
|
66.3
|
|
Total Other Operations
liabilities
|
|
112.1
|
|
|
133.9
|
|
|
95.8
|
|
Total
liabilities
|
|
3,171.9
|
|
|
1,013.5
|
|
|
937.0
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
White Mountains's
common shareholder's equity
|
|
|
|
|
|
|
White Mountains's common
shares and paid-in surplus
|
|
597.2
|
|
|
595.2
|
|
|
587.0
|
|
Retained earnings
|
|
3,378.6
|
|
|
3,311.2
|
|
|
2,589.3
|
|
Accumulated
other comprehensive income (loss), after tax:
|
|
|
|
|
|
|
Net unrealized
gains (losses) from foreign currency translation and
interest rate swap
|
|
2.4
|
|
|
(.4)
|
|
|
(10.3)
|
|
Total White
Mountains's common shareholders' equity
|
|
3,978.2
|
|
|
3,906.0
|
|
|
3,166.0
|
|
Non-controlling
interests
|
|
129.8
|
|
|
(88.1)
|
|
|
(102.7)
|
|
Total
equity
|
|
4,108.0
|
|
|
3,817.9
|
|
|
3,063.3
|
|
Total liabilities
and equity
|
|
$
|
7,279.9
|
|
|
$
|
4,831.4
|
|
|
$
|
4,000.3
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
|
BOOK VALUE AND
ADJUSTED BOOK VALUE PER SHARE
|
|
(Unaudited)
|
|
|
|
|
|
June
30,
2021
|
|
March
31,
2021
|
|
December
31,
2020
|
|
June
30,
2020
|
|
Book value per
share numerators (in millions):
|
|
|
|
|
|
|
|
|
|
White Mountains's
common shareholders' equity - GAAP
book value per share numerator
|
|
$
|
3,978.2
|
|
|
$
|
3,825.9
|
|
|
$
|
3,906.0
|
|
|
$
|
3,166.0
|
|
|
Time value of money
discount on expected future payments on the BAM Surplus Notes (1)
|
|
(132.8)
|
|
|
(137.7)
|
|
|
(142.5)
|
|
|
(146.7)
|
|
|
HG Global's unearned
premium reserve (1)
|
|
201.5
|
|
|
195.3
|
|
|
190.0
|
|
|
173.8
|
|
|
HG Global's net
deferred acquisition costs (1)
|
|
(56.3)
|
|
|
(54.2)
|
|
|
(52.4)
|
|
|
(47.0)
|
|
|
Adjusted book value
per share numerator
|
|
$
|
3,990.6
|
|
|
$
|
3,829.3
|
|
|
$
|
3,901.1
|
|
|
$
|
3,146.1
|
|
|
Book value per
share denominators (in thousands of shares):
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding - GAAP book value per share denominator
|
|
3,109.2
|
|
|
3,107.3
|
|
|
3,102.0
|
|
|
3,101.8
|
|
|
Unearned restricted
common shares
|
|
(20.6)
|
|
|
(23.4)
|
|
|
(14.8)
|
|
|
(23.1)
|
|
|
Adjusted book value
per share denominator
|
|
3,088.6
|
|
|
3,083.9
|
|
|
3,087.2
|
|
|
3,078.7
|
|
|
GAAP book value
per share
|
|
$
|
1,279.49
|
|
|
$
|
1,231.27
|
|
|
$
|
1,259.18
|
|
|
$
|
1,020.71
|
|
|
Adjusted book
value per share
|
|
$
|
1,292.03
|
|
|
$
|
1,241.71
|
|
|
$
|
1,263.64
|
|
|
$
|
1,021.91
|
|
|
|
|
(1) Amount
reflects White Mountains's preferred share ownership in HG Global
of 96.9%.
|
|
|
|
|
|
|
|
June
30,
2021
|
|
March
31,
2021
|
|
December
31,
2020
|
|
June
30,
2020
|
|
Quarter-to-date
change in GAAP book value per share, including dividends:
|
|
3.9
|
%
|
|
(2.1)
|
%
|
|
14.6
|
%
|
|
4.0
|
%
|
|
Quarter-to-date
change in adjusted book value per share, including dividends:
|
|
4.1
|
%
|
|
(1.7)
|
%
|
|
14.7
|
%
|
|
4.3
|
%
|
|
Year-to-date
change in GAAP book value per share, including dividends:
|
|
1.7
|
%
|
|
(2.1)
|
%
|
|
23.1
|
%
|
|
(0.2)
|
%
|
|
Year-to-date
change in adjusted book value per share, including dividends:
|
|
2.3
|
%
|
|
(1.7)
|
%
|
|
24.2
|
%
|
|
0.4
|
%
|
|
Year-to-date
dividends per share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
June
30,
2021
|
|
March
31,
2021
|
|
December
31,
2020
|
|
June
30,
2020
|
|
Summary of
goodwill and other intangible assets (in millions):
|
|
|
|
|
|
|
|
|
|
Goodwill:
|
|
|
|
|
|
|
|
|
|
Ark
|
|
$
|
116.8
|
|
|
$
|
116.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
NSM
|
|
477.9
|
|
|
477.7
|
|
|
506.4
|
|
|
504.9
|
|
(2)
|
Kudu
|
|
7.6
|
|
|
7.6
|
|
|
7.6
|
|
|
7.6
|
|
|
Other
Operations
|
|
27.1
|
|
(1)
|
11.3
|
|
|
11.5
|
|
|
5.7
|
|
|
Total
goodwill
|
|
629.4
|
|
|
613.4
|
|
|
525.5
|
|
|
518.2
|
|
|
Other intangible
assets:
|
|
|
|
|
|
|
|
|
|
Ark
|
|
175.7
|
|
|
175.7
|
|
|
—
|
|
|
—
|
|
|
NSM
|
|
213.7
|
|
|
222.0
|
|
|
230.4
|
|
|
223.7
|
|
|
Kudu
|
|
1.5
|
|
|
1.5
|
|
|
1.6
|
|
|
1.8
|
|
|
Other
Operations
|
|
23.9
|
|
|
24.4
|
|
|
24.9
|
|
|
16.2
|
|
|
Total other
intangible assets
|
|
414.8
|
|
|
423.6
|
|
|
256.9
|
|
|
241.7
|
|
|
Total goodwill and
other intangible assets
|
|
1,044.2
|
|
|
1,037.0
|
|
|
782.4
|
|
|
759.9
|
|
|
Goodwill and other
intangible assets attributed to non-controlling interests
|
|
(115.9)
|
|
|
(108.4)
|
|
|
(28.1)
|
|
|
(25.9)
|
|
|
Goodwill and other
intangible assets included in White Mountains's common shareholders'
equity
|
|
$
|
928.3
|
|
|
$
|
928.6
|
|
|
$
|
754.3
|
|
|
$
|
734.0
|
|
|
|
|
(1)
|
The relative fair
values of goodwill and of other intangible assets recognized in
connection with the acquisition within Other Operations had not yet
been finalized at June 30, 2021.
|
(2)
|
The relative fair
values of goodwill and of other intangible assets recognized in
connection with the acquisition of Kingsbridge had not yet been
finalized at June 30, 2020.
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
6.5
|
|
|
$
|
5.6
|
|
|
$
|
12.9
|
|
|
$
|
11.0
|
|
Net investment
income
|
|
4.3
|
|
|
4.9
|
|
|
8.8
|
|
|
10.4
|
|
Net realized and
unrealized investment gains (losses)
|
|
6.3
|
|
|
14.4
|
|
|
(11.6)
|
|
|
20.5
|
|
Other
revenues
|
|
.3
|
|
|
1.2
|
|
|
.6
|
|
|
1.7
|
|
Total Financial
Guarantee revenues
|
|
17.4
|
|
|
26.1
|
|
|
10.7
|
|
|
43.6
|
|
P&C
Insurance and Reinsurance (Ark)
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
117.8
|
|
|
—
|
|
|
222.4
|
|
|
—
|
|
Net investment
income
|
|
.4
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
Net realized and
unrealized investment gains
|
|
8.9
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
Other
revenues
|
|
3.4
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance revenues
|
|
130.5
|
|
|
—
|
|
|
239.6
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
|
|
Commission
revenues
|
|
68.0
|
|
|
63.0
|
|
|
127.6
|
|
|
116.0
|
|
Other
revenues
|
|
16.3
|
|
|
13.1
|
|
|
31.5
|
|
|
25.1
|
|
Total Specialty
Insurance Distribution revenues
|
|
84.3
|
|
|
76.1
|
|
|
159.1
|
|
|
141.1
|
|
Asset
Management (Kudu)
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
8.4
|
|
|
5.6
|
|
|
16.6
|
|
|
12.9
|
|
Net realized and
unrealized investment gains (losses)
|
|
27.8
|
|
|
16.5
|
|
|
43.6
|
|
|
(8.3)
|
|
Other
revenues
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
.1
|
|
Total Asset Management
revenues
|
|
36.2
|
|
|
22.1
|
|
|
60.3
|
|
|
4.7
|
|
Other
Operations
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
4.0
|
|
|
9.1
|
|
|
11.1
|
|
|
19.2
|
|
Net realized and
unrealized investment gains (losses)
|
|
16.6
|
|
|
107.0
|
|
|
18.7
|
|
|
(61.0)
|
|
Net realized and
unrealized investment gains from investment in MediaAlpha
|
|
113.0
|
|
|
15.0
|
|
|
71.3
|
|
|
45.0
|
|
Commission
revenues
|
|
2.3
|
|
|
1.9
|
|
|
4.6
|
|
|
4.0
|
|
Other
revenues
|
|
22.4
|
|
|
2.3
|
|
|
29.5
|
|
|
3.8
|
|
Total Other Operations
revenues
|
|
158.3
|
|
|
135.3
|
|
|
135.2
|
|
|
11.0
|
|
Total
revenues
|
|
$
|
426.7
|
|
|
$
|
259.6
|
|
|
$
|
604.9
|
|
|
$
|
200.4
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Expenses:
|
|
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
|
|
Insurance acquisition
expenses
|
|
$
|
1.6
|
|
|
$
|
2.1
|
|
|
$
|
3.5
|
|
|
$
|
3.8
|
|
General and
administrative expenses
|
|
13.9
|
|
|
12.7
|
|
|
30.3
|
|
|
27.4
|
|
Total Financial
Guarantee expenses
|
|
15.5
|
|
|
14.8
|
|
|
33.8
|
|
|
31.2
|
|
P&C
Insurance and Reinsurance (Ark)
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
52.6
|
|
|
—
|
|
|
118.6
|
|
|
—
|
|
Insurance and
reinsurance acquisition expenses
|
|
34.0
|
|
|
—
|
|
|
70.7
|
|
|
—
|
|
Other underwriting
expenses
|
|
19.1
|
|
|
—
|
|
|
30.3
|
|
|
—
|
|
General and
administrative expenses
|
|
5.7
|
|
|
—
|
|
|
32.3
|
|
|
—
|
|
Interest
expense
|
|
1.3
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance expenses
|
|
112.7
|
|
|
—
|
|
|
254.3
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
47.3
|
|
|
48.5
|
|
|
93.3
|
|
|
88.1
|
|
Broker commission
expenses
|
|
21.6
|
|
|
21.0
|
|
|
40.5
|
|
|
39.3
|
|
Change in fair value of
contingent consideration
|
|
.2
|
|
|
(1.7)
|
|
|
.2
|
|
|
(2.3)
|
|
Amortization of other
intangible assets
|
|
8.2
|
|
|
6.3
|
|
|
16.8
|
|
|
11.1
|
|
Loss on assets held for
sale
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
—
|
|
Interest
expense
|
|
5.9
|
|
|
5.7
|
|
|
11.8
|
|
|
10.0
|
|
Total Specialty
Insurance Distribution expenses
|
|
83.2
|
|
|
79.8
|
|
|
191.3
|
|
|
146.2
|
|
Asset
Management (Kudu)
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
3.2
|
|
|
2.8
|
|
|
5.7
|
|
|
5.3
|
|
Amortization of other
intangible assets
|
|
.1
|
|
|
.1
|
|
|
.2
|
|
|
.2
|
|
Interest
expense
|
|
1.5
|
|
|
1.5
|
|
|
7.3
|
|
|
2.9
|
|
Total Asset Management
expenses
|
|
4.8
|
|
|
4.4
|
|
|
13.2
|
|
|
8.4
|
|
Other
Operations
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
17.9
|
|
|
2.2
|
|
|
21.9
|
|
|
4.2
|
|
General and
administrative expenses
|
|
29.5
|
|
|
25.3
|
|
|
65.2
|
|
|
42.8
|
|
Amortization of other
intangible assets
|
|
.4
|
|
|
.2
|
|
|
.9
|
|
|
.4
|
|
Interest
expense
|
|
.4
|
|
|
.2
|
|
|
.7
|
|
|
.5
|
|
Total Other Operations
expenses
|
|
48.2
|
|
|
27.9
|
|
|
88.7
|
|
|
47.9
|
|
Total
expenses
|
|
264.4
|
|
|
126.9
|
|
|
581.3
|
|
|
233.7
|
|
Pre-tax income
(loss) from continuing operations
|
|
162.3
|
|
|
132.7
|
|
|
23.6
|
|
|
(33.3)
|
|
Income tax
(expense) benefit
|
|
(29.8)
|
|
|
(24.1)
|
|
|
(20.3)
|
|
|
1.4
|
|
Net income (loss)
from continuing operations
|
|
132.5
|
|
|
108.6
|
|
|
3.3
|
|
|
(31.9)
|
|
Net (loss) gain
from sale of discontinued operations, net of tax
|
|
—
|
|
|
(1.0)
|
|
|
18.7
|
|
|
(.1)
|
|
Net income
(loss)
|
|
132.5
|
|
|
107.6
|
|
|
22.0
|
|
|
(32.0)
|
|
Net loss
attributable to non-controlling interests
|
|
6.0
|
|
|
7.8
|
|
|
41.2
|
|
|
18.6
|
|
Net income (loss)
attributable to White Mountains's common shareholders
|
|
$
|
138.5
|
|
|
$
|
115.4
|
|
|
$
|
63.2
|
|
|
$
|
(13.4)
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income (loss)
attributable to White Mountains's common shareholders
|
|
$
|
138.5
|
|
|
$
|
115.4
|
|
|
$
|
63.2
|
|
|
$
|
(13.4)
|
|
Other comprehensive
income (loss), net of tax
|
|
1.0
|
|
|
.5
|
|
|
2.8
|
|
|
(2.9)
|
|
Comprehensive
income (loss)
|
|
139.5
|
|
|
115.9
|
|
|
66.0
|
|
|
(16.3)
|
|
Other comprehensive
loss attributable to non-controlling interests
|
|
(.1)
|
|
|
(.2)
|
|
|
(.2)
|
|
|
(.2)
|
|
Comprehensive
income (loss) attributable to White Mountains's
common shareholders
|
|
$
|
139.4
|
|
|
$
|
115.7
|
|
|
$
|
65.8
|
|
|
$
|
(16.5)
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
EARNINGS PER
SHARE
|
(Unaudited)
|
|
Income (loss) per
share attributable to White Mountains's common
shareholders
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Basic earnings
(loss) per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
44.56
|
|
|
$
|
37.46
|
|
|
$
|
14.32
|
|
|
$
|
(4.25)
|
|
Discontinued
operations
|
|
—
|
|
|
(.32)
|
|
|
6.03
|
|
|
(.03)
|
|
Total consolidated
operations
|
|
$
|
44.56
|
|
|
$
|
37.14
|
|
|
$
|
20.35
|
|
|
$
|
(4.28)
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
44.56
|
|
|
$
|
37.46
|
|
|
$
|
14.32
|
|
|
$
|
(4.25)
|
|
Discontinued
operations
|
|
—
|
|
|
(.32)
|
|
|
6.03
|
|
|
(.03)
|
|
Total consolidated
operations
|
|
$
|
44.56
|
|
|
$
|
37.14
|
|
|
$
|
20.35
|
|
|
$
|
(4.28)
|
|
Dividends declared
per White Mountains's common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
QTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS)
|
(millions)
|
(Unaudited)
|
|
For the Three
Months Ended June 30, 2021
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
5.3
|
|
|
$
|
1.2
|
|
|
$
|
117.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
124.3
|
|
Net investment
income
|
|
1.7
|
|
|
2.6
|
|
|
.4
|
|
|
—
|
|
|
8.4
|
|
|
4.0
|
|
|
17.1
|
|
Net investment income
(expense) - BAM surplus note
interest
|
|
3.0
|
|
|
(3.0)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment gains
|
|
2.4
|
|
|
3.9
|
|
|
8.9
|
|
|
—
|
|
|
27.8
|
|
|
16.6
|
|
|
59.6
|
|
Net realized and
unrealized investment gains from investment in MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113.0
|
|
|
113.0
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68.0
|
|
|
—
|
|
|
2.3
|
|
|
70.3
|
|
Other
revenues
|
|
.1
|
|
|
.2
|
|
|
3.4
|
|
|
16.3
|
|
|
—
|
|
|
22.4
|
|
|
42.4
|
|
Total
revenues
|
|
12.5
|
|
|
4.9
|
|
|
130.5
|
|
|
84.3
|
|
|
36.2
|
|
|
158.3
|
|
|
426.7
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
|
—
|
|
|
52.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52.6
|
|
Insurance acquisition
expenses
|
|
1.3
|
|
|
.3
|
|
|
34.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.6
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.9
|
|
|
17.9
|
|
General and
administrative expenses
|
|
.5
|
|
|
13.4
|
|
|
24.8
|
|
|
47.3
|
|
|
3.2
|
|
|
29.5
|
|
|
118.7
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.6
|
|
|
—
|
|
|
—
|
|
|
21.6
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
.1
|
|
|
.4
|
|
|
8.7
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
5.9
|
|
|
1.5
|
|
|
.4
|
|
|
9.1
|
|
Total
expenses
|
|
1.8
|
|
|
13.7
|
|
|
112.7
|
|
|
83.2
|
|
|
4.8
|
|
|
48.2
|
|
|
264.4
|
|
Pre-tax income
(loss)
|
|
$
|
10.7
|
|
|
$
|
(8.8)
|
|
|
$
|
17.8
|
|
|
$
|
1.1
|
|
|
$
|
31.4
|
|
|
$
|
110.1
|
|
|
$
|
162.3
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
QTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
For the Three
Months Ended June 30, 2020
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
4.6
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.6
|
|
Net investment
income
|
|
2.0
|
|
|
2.9
|
|
|
—
|
|
|
5.6
|
|
|
9.1
|
|
|
19.6
|
|
Net investment income
(expense) - BAM surplus note
interest
|
|
4.7
|
|
|
(4.7)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment gains
|
|
10.7
|
|
|
3.7
|
|
|
—
|
|
|
16.5
|
|
|
107.0
|
|
|
137.9
|
|
Net
unrealized investment gains from investment in MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
|
15.0
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
63.0
|
|
|
—
|
|
|
1.9
|
|
|
64.9
|
|
Other
revenues
|
|
.1
|
|
|
1.1
|
|
|
13.1
|
|
|
—
|
|
|
2.3
|
|
|
16.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
22.1
|
|
|
4.0
|
|
|
76.1
|
|
|
22.1
|
|
|
135.3
|
|
|
259.6
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance acquisition
expenses
|
|
1.2
|
|
|
.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
2.2
|
|
General and
administrative expenses
|
|
.5
|
|
|
12.2
|
|
|
48.5
|
|
|
2.8
|
|
|
25.3
|
|
|
89.3
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
(1.7)
|
|
|
—
|
|
|
—
|
|
|
(1.7)
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
.1
|
|
|
.2
|
|
|
6.6
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
5.7
|
|
|
1.5
|
|
|
.2
|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
1.7
|
|
|
13.1
|
|
|
79.8
|
|
|
4.4
|
|
|
27.9
|
|
|
126.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
|
20.4
|
|
|
$
|
(9.1)
|
|
|
$
|
(3.7)
|
|
|
$
|
17.7
|
|
|
$
|
107.4
|
|
|
$
|
132.7
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
YTD SEGMENT
STATEMENTS OF PRE-TAX (LOSS) INCOME
|
(millions)
|
(Unaudited)
|
|
For the Six Months
Ended June 30, 2021
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
10.6
|
|
|
$
|
2.3
|
|
|
$
|
222.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
235.3
|
|
Net investment
income
|
|
3.5
|
|
|
5.3
|
|
|
1.2
|
|
|
—
|
|
|
16.6
|
|
|
11.1
|
|
|
37.7
|
|
Net investment income
(expense) - BAM surplus note
interest
|
|
6.0
|
|
|
(6.0)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment (losses) gains
|
|
(7.5)
|
|
|
(4.1)
|
|
|
10.0
|
|
|
—
|
|
|
43.6
|
|
|
18.7
|
|
|
60.7
|
|
Net
realized and unrealized investment gains from investment in MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71.3
|
|
|
71.3
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127.6
|
|
|
—
|
|
|
4.6
|
|
|
132.2
|
|
Other
revenue
|
|
.2
|
|
|
.4
|
|
|
6.0
|
|
|
31.5
|
|
|
.1
|
|
|
29.5
|
|
|
67.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
12.8
|
|
|
(2.1)
|
|
|
239.6
|
|
|
159.1
|
|
|
60.3
|
|
|
135.2
|
|
|
604.9
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
|
—
|
|
|
118.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118.6
|
|
Insurance acquisition
expenses
|
|
2.8
|
|
|
.7
|
|
|
70.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74.2
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.9
|
|
|
21.9
|
|
General and
administrative expenses
|
|
1.1
|
|
|
29.2
|
|
|
62.6
|
|
|
93.3
|
|
|
5.7
|
|
|
65.2
|
|
|
257.1
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.5
|
|
|
—
|
|
|
—
|
|
|
40.5
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.8
|
|
|
.2
|
|
|
.9
|
|
|
17.9
|
|
Loss on assets held
for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
11.8
|
|
|
7.3
|
|
|
.7
|
|
|
22.2
|
|
Total
expenses
|
|
3.9
|
|
|
29.9
|
|
|
254.3
|
|
|
191.3
|
|
|
13.2
|
|
|
88.7
|
|
|
581.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
|
8.9
|
|
|
$
|
(32.0)
|
|
|
$
|
(14.7)
|
|
|
$
|
(32.2)
|
|
|
$
|
47.1
|
|
|
$
|
46.5
|
|
|
$
|
23.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
YTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
For the Six Months
Ended June 30, 2020
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
9.0
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.0
|
|
Net investment
income
|
|
4.3
|
|
|
6.1
|
|
|
—
|
|
|
12.9
|
|
|
19.2
|
|
|
42.5
|
|
Net investment income
(expense) - BAM surplus note
interest
|
|
9.5
|
|
|
(9.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment gains (losses)
|
|
12.1
|
|
|
8.4
|
|
|
—
|
|
|
(8.3)
|
|
|
(61.0)
|
|
|
(48.8)
|
|
Net unrealized
investment gains from investment
in MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45.0
|
|
|
45.0
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
116.0
|
|
|
—
|
|
|
4.0
|
|
|
120.0
|
|
Other
revenue
|
|
.1
|
|
|
1.6
|
|
|
25.1
|
|
|
.1
|
|
|
3.8
|
|
|
30.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
35.0
|
|
|
8.6
|
|
|
141.1
|
|
|
4.7
|
|
|
11.0
|
|
|
200.4
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance acquisition
expenses
|
|
2.2
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
4.2
|
|
General and
administrative expenses
|
|
1.0
|
|
|
26.4
|
|
|
88.1
|
|
|
5.3
|
|
|
42.8
|
|
|
163.6
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
39.3
|
|
|
—
|
|
|
—
|
|
|
39.3
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
(2.3)
|
|
|
—
|
|
|
—
|
|
|
(2.3)
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
11.1
|
|
|
.2
|
|
|
.4
|
|
|
11.7
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|
2.9
|
|
|
.5
|
|
|
13.4
|
|
Total
expenses
|
|
3.2
|
|
|
28.0
|
|
|
146.2
|
|
|
8.4
|
|
|
47.9
|
|
|
233.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
|
31.8
|
|
|
$
|
(19.4)
|
|
|
$
|
(5.1)
|
|
|
$
|
(3.7)
|
|
|
$
|
(36.9)
|
|
|
$
|
(33.3)
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA
|
($ in
millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
BAM
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Gross par value of
primary market policies issued
|
|
$
|
4,815.5
|
|
|
$
|
3,196.1
|
|
|
$
|
7,357.5
|
|
|
$
|
5,704.2
|
|
Gross par value of
secondary market policies issued
|
|
312.1
|
|
|
878.5
|
|
|
489.2
|
|
|
1,347.0
|
|
Gross par value of
assumed reinsurance
|
|
—
|
|
|
36.9
|
|
|
805.5
|
|
|
36.9
|
|
Total gross par value
of market policies issued
|
|
$
|
5,127.6
|
|
|
$
|
4,111.5
|
|
|
$
|
8,652.2
|
|
|
$
|
7,088.1
|
|
Gross written
premiums
|
|
$
|
13.7
|
|
|
$
|
21.5
|
|
|
$
|
26.2
|
|
|
$
|
31.2
|
|
MSC
collected
|
|
16.3
|
|
|
21.5
|
|
|
30.1
|
|
|
31.5
|
|
Total gross written
premiums and MSC collected
|
|
$
|
30.0
|
|
|
$
|
43.0
|
|
|
$
|
56.3
|
|
|
$
|
62.7
|
|
Present value of future
installment MSC collections
|
|
—
|
|
|
.3
|
|
|
—
|
|
|
.3
|
|
Gross written premium
adjustments on existing installment policies
|
|
.1
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
Gross written
premiums and MSC from new
business
|
|
$
|
30.1
|
|
|
$
|
43.3
|
|
|
$
|
56.4
|
|
|
$
|
63.0
|
|
Total
pricing
|
|
59
bps
|
|
|
105 bps
|
|
|
65
bps
|
|
|
89 bps
|
|
|
|
|
|
As
of June 30, 2021
|
|
As
of December 31, 2020
|
|
As
of June 30, 2020
|
Policyholders'
surplus
|
|
$
|
323.1
|
|
|
$
|
324.7
|
|
|
$
|
345.1
|
|
Contingency
reserve
|
|
97.4
|
|
|
86.4
|
|
|
76.9
|
|
Qualified statutory
capital
|
|
420.5
|
|
|
411.1
|
|
|
422.0
|
|
Statutory net unearned
premiums
|
|
47.4
|
|
|
45.2
|
|
|
42.4
|
|
Present value of future
installment premiums and
MSC
|
|
13.8
|
|
|
14.0
|
|
|
14.6
|
|
HG Re, Ltd collateral
trusts at statutory value
|
|
433.0
|
|
|
417.0
|
|
|
378.1
|
|
Fidus Re, Ltd
collateral trust at statutory value
|
|
250.0
|
|
|
100.0
|
|
|
100.0
|
|
Claims paying
resources
|
|
$
|
1,164.7
|
|
|
$
|
987.3
|
|
|
$
|
957.1
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
HG
Global
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net written
premiums
|
|
$
|
11.8
|
|
|
$
|
18.3
|
|
|
$
|
22.5
|
|
|
$
|
26.6
|
|
Earned
premiums
|
|
$
|
5.3
|
|
|
$
|
4.6
|
|
|
$
|
10.6
|
|
|
$
|
9.0
|
|
|
|
|
|
As
of June 30, 2021
|
|
As
of December 31, 2020
|
|
As
of June 30, 2020
|
Unearned
premiums
|
|
$
|
208.0
|
|
|
$
|
196.1
|
|
|
$
|
179.4
|
|
Deferred acquisition
costs
|
|
$
|
58.1
|
|
|
$
|
54.1
|
|
|
$
|
48.5
|
|
|
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
($ in
millions)
|
(Unaudited)
|
|
Ark
|
|
Three Months Ended
June 30, 2021
|
|
|
GAAP
|
|
Third Party
Capital Share
|
|
Adjusted
|
Insurance
premiums:
|
|
|
|
|
|
|
Gross written
premiums
|
|
$
|
328.1
|
|
|
$
|
—
|
|
|
$
|
328.1
|
|
Net written
premiums
|
|
$
|
262.2
|
|
|
$
|
(3.0)
|
|
|
$
|
259.2
|
|
Net earned
premiums
|
|
$
|
117.8
|
|
|
$
|
15.7
|
|
|
$
|
133.5
|
|
|
|
|
|
|
|
|
Insurance
expenses:
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
$
|
52.6
|
|
|
$
|
6.6
|
|
|
$
|
59.2
|
|
Insurance acquisition
expenses
|
|
34.1
|
|
|
—
|
|
|
34.1
|
|
Other underwriting
expenses
|
|
19.1
|
|
|
(.1)
|
|
|
19.0
|
|
Total insurance
expenses
|
|
$
|
105.8
|
|
|
$
|
6.5
|
|
|
$
|
112.3
|
|
|
|
|
|
|
|
|
Ratios:
|
|
|
|
|
|
|
Loss and loss
adjustment expense
|
|
44.7
|
%
|
|
|
|
44.3
|
%
|
Insurance acquisition
expense
|
|
28.9
|
%
|
|
|
|
25.5
|
%
|
Other underwriting
expense
|
|
16.2
|
%
|
|
|
|
14.2
|
%
|
Combined
Ratio
|
|
89.8
|
%
|
|
|
|
84.0
|
%
|
|
|
|
|
Six Months Ended
June 30, 2021
|
|
|
GAAP
|
|
Third Party
Capital Share
|
|
Adjusted
|
Insurance
premiums:
|
|
|
|
|
|
|
Gross written
premiums
|
|
$
|
732.6
|
|
|
$
|
—
|
|
|
$
|
732.6
|
|
Net written
premiums
|
|
$
|
604.6
|
|
|
$
|
(8.0)
|
|
|
$
|
596.6
|
|
Net earned
premiums
|
|
$
|
222.4
|
|
|
$
|
46.9
|
|
|
$
|
269.3
|
|
|
|
|
|
|
|
|
Insurance
expenses:
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
$
|
118.6
|
|
|
$
|
38.2
|
|
|
$
|
156.8
|
|
Insurance acquisition
expenses
|
|
70.8
|
|
|
—
|
|
|
70.8
|
|
Other underwriting
expenses
|
|
30.3
|
|
|
1.2
|
|
|
31.5
|
|
Total insurance
expenses
|
|
$
|
219.7
|
|
|
$
|
39.4
|
|
|
$
|
259.1
|
|
|
|
|
|
|
|
|
Ratios:
|
|
|
|
|
|
|
Loss and loss
adjustment expense
|
|
53.3
|
%
|
|
|
|
58.2
|
%
|
Insurance acquisition
expense
|
|
31.8
|
%
|
|
|
|
26.3
|
%
|
Other underwriting
expense
|
|
13.6
|
%
|
|
|
|
11.7
|
%
|
Combined
Ratio
|
|
98.7
|
%
|
|
|
|
96.2
|
%
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
NSM
|
|
Three Months
Ended June 30,
2020
|
|
Three Months
Ended June 30,
2021
|
|
Six Months
Ended June 30,
2020
|
|
Six
Months Ended June 30, 2021
|
|
Twelve Months
Ended
July 1, 2020
to
June 30, 2021
|
Commission
revenues
|
|
$
|
63.0
|
|
|
$
|
68.0
|
|
|
$
|
116.0
|
|
|
$
|
127.6
|
|
|
$
|
244.1
|
|
Broker commission
expenses
|
|
21.0
|
|
|
21.6
|
|
|
$
|
39.3
|
|
|
40.5
|
|
|
76.5
|
|
Gross
profit
|
|
42.0
|
|
|
46.4
|
|
|
76.7
|
|
|
87.1
|
|
|
167.6
|
|
Other
revenues
|
|
13.1
|
|
|
16.3
|
|
|
25.1
|
|
|
31.5
|
|
|
59.0
|
|
General and
administrative expenses
|
|
48.5
|
|
|
47.3
|
|
|
88.1
|
|
|
93.3
|
|
|
182.1
|
|
Change in fair value
of contingent consideration
|
|
(1.7)
|
|
|
.2
|
|
|
(2.3)
|
|
|
.2
|
|
|
(.8)
|
|
Amortization of other
intangible assets
|
|
6.3
|
|
|
8.2
|
|
|
11.1
|
|
|
16.8
|
|
|
32.4
|
|
Loss on assets held
for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
28.7
|
|
Interest
expense
|
|
5.7
|
|
|
5.9
|
|
|
10.0
|
|
|
11.8
|
|
|
23.9
|
|
GAAP pre-tax (loss)
income
|
|
(3.7)
|
|
|
1.1
|
|
|
(5.1)
|
|
|
(32.2)
|
|
|
(39.7)
|
|
Income tax (benefit)
expense
|
|
(2.2)
|
|
|
1.2
|
|
|
(2.9)
|
|
|
(6.8)
|
|
|
(9.6)
|
|
GAAP net
loss
|
|
(1.5)
|
|
|
(.1)
|
|
|
(2.2)
|
|
|
(25.4)
|
|
|
(30.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
5.7
|
|
|
5.9
|
|
|
10.0
|
|
|
11.8
|
|
|
23.9
|
|
Income tax (benefit)
expense
|
|
(2.2)
|
|
|
1.2
|
|
|
(2.9)
|
|
|
(6.8)
|
|
|
(9.6)
|
|
General and
administrative expenses – depreciation
|
|
.8
|
|
|
1.2
|
|
|
1.7
|
|
|
2.3
|
|
|
5.1
|
|
Amortization of other
intangible assets
|
|
6.3
|
|
|
8.2
|
|
|
11.1
|
|
|
16.8
|
|
|
32.4
|
|
EBITDA
|
|
9.1
|
|
|
16.4
|
|
|
17.7
|
|
|
(1.3)
|
|
|
21.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
Change in fair value
of contingent consideration
|
|
(1.7)
|
|
|
.2
|
|
|
(2.3)
|
|
|
.2
|
|
|
(.8)
|
|
Non-cash
equity-based compensation
expense
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
1.1
|
|
|
3.5
|
|
Impairments of
intangible assets
|
|
6.2
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
Loss on assets held
for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
28.7
|
Acquisition-related
transaction expenses
|
|
3.3
|
|
|
.2
|
|
|
5.0
|
|
|
.2
|
|
|
2.4
|
|
Investments made in
the development of new business
lines
|
|
.4
|
|
|
.1
|
|
|
.4
|
|
|
.1
|
|
|
.6
|
|
Restructuring
expenses
|
|
.7
|
|
|
1.6
|
|
|
1.5
|
|
|
4.4
|
|
|
7.7
|
|
Adjusted
EBITDA
|
|
$
|
18.0
|
|
|
$
|
19.0
|
|
|
$
|
28.5
|
|
|
$
|
33.4
|
|
|
$
|
63.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
Fresh Insurance motor
business's adjusted EBITDA
|
|
|
|
|
|
1.5
|
|
Pro forma adjusted
EBITDA
|
|
|
|
|
|
|
|
$
|
65.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
Kudu
|
|
Three Months
Ended
June 30,
2020
|
|
Three Months
Ended
June 30,
2021
|
|
Six Months
Ended
June 30,
2020
|
|
Six Months
Ended
June 30,
2021
|
|
Twelve Months
Ended
July 1, 2020
to
June 30, 2021
|
Net investment
income
|
|
$
|
5.6
|
|
|
8.4
|
|
|
$
|
12.9
|
|
|
$
|
16.6
|
|
|
$
|
33.2
|
|
Net unrealized
investment gains (losses)
|
|
16.5
|
|
|
27.8
|
|
|
(8.3)
|
|
|
43.6
|
|
|
67.8
|
|
Other
revenues
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
.1
|
|
|
.3
|
|
Total
revenues
|
|
22.1
|
|
|
36.2
|
|
|
4.7
|
|
|
60.3
|
|
|
101.3
|
|
General and
administrative expenses
|
|
2.8
|
|
|
3.2
|
|
|
5.3
|
|
|
5.7
|
|
|
12.2
|
|
Amortization of other
intangible assets
|
|
.1
|
|
|
.1
|
|
|
.2
|
|
|
.2
|
|
|
.3
|
|
Interest
expense
|
|
1.5
|
|
|
1.5
|
|
|
2.9
|
|
|
7.3
|
|
|
10.4
|
|
Total
expenses
|
|
4.4
|
|
|
4.8
|
|
|
8.4
|
|
|
13.2
|
|
|
22.9
|
|
GAAP pre-tax income
(loss)
|
|
17.7
|
|
|
31.4
|
|
|
(3.7)
|
|
|
47.1
|
|
|
78.4
|
|
Income tax expense
(benefit)
|
|
4.8
|
|
|
9.7
|
|
|
(.6)
|
|
|
17.5
|
|
|
25.1
|
|
GAAP net
income
|
|
12.9
|
|
|
21.7
|
|
|
(3.1)
|
|
|
29.6
|
|
|
53.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
1.5
|
|
|
1.5
|
|
|
2.9
|
|
|
7.3
|
|
|
10.4
|
|
Income tax expense
(benefit)
|
|
4.8
|
|
|
9.7
|
|
|
(.6)
|
|
|
17.5
|
|
|
25.1
|
|
Amortization of other
intangible assets
|
|
.1
|
|
|
.1
|
|
|
.2
|
|
|
.2
|
|
|
.3
|
|
EBITDA
|
|
19.3
|
|
|
33.0
|
|
|
(.6)
|
|
|
54.6
|
|
|
89.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
investment (gains) losses
|
|
(16.5)
|
|
|
(27.8)
|
|
|
8.3
|
|
|
(43.6)
|
|
|
(67.8)
|
|
Non-cash equity-based
compensation
expense
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
.2
|
|
|
.6
|
|
Acquisition-related
transaction expenses
|
|
.9
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
2.2
|
|
Adjusted
EBITDA
|
|
$
|
3.7
|
|
|
$
|
5.3
|
|
|
$
|
9.2
|
|
|
$
|
11.2
|
|
|
24.1
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Adjustment to
annualize partial year
revenues
|
|
|
|
|
|
|
|
|
|
4.3
|
|
Annualized Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
$
|
28.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulation G
This earnings release includes non-GAAP financial measures that
have been reconciled to their most comparable GAAP financial
measures.
- Adjusted book value per share is a non-GAAP financial measure
which is derived by adjusting (i) the GAAP book value per share
numerator and (ii) the common shares outstanding denominator, as
described below.
The GAAP book value per share numerator is adjusted (i) to include
a discount for the time value of money arising from the modeled
timing of cash payments of principal and interest on the BAM
surplus notes and (ii) to add back the unearned premium reserve,
net of deferred acquisition costs, at HG Global.
Under GAAP, White Mountains is required to carry the BAM surplus
notes, including accrued interest, at nominal value with no
consideration for time value of money. Based on a debt
service model that forecasts operating results for BAM through
maturity of the surplus notes, the present value of the BAM surplus
notes, including accrued interest and using an 8% discount rate,
was estimated to be $137 million,
$142 million, $147 million and $151
million less than the nominal GAAP carrying values as of
June 30, 2021, March 31, 2021, December
31, 2020 and June 30, 2020,
respectively.
The value of HG Global's unearned premium reserve, net of deferred
acquisition costs, was $150 million,
$146 million, $142 million and $131
million as of June 30, 2021,
March 31, 2021, December 31, 2020 and June
30, 2020, respectively.
White Mountains believes these adjustments are useful to management
and investors in analyzing the intrinsic value of HG Global,
including the value of the BAM surplus notes and the value of the
in-force business at HG Re, HG Global's reinsurance subsidiary.
The denominator used in the calculation of adjusted book value per
share equals the number of common shares outstanding adjusted to
exclude unearned restricted common shares, the compensation cost of
which, at the date of calculation, has yet to be amortized.
Restricted common shares are earned on a straight-line basis over
their vesting periods. The reconciliation of GAAP book value
per share to adjusted book value per share is included on page
8.
- BAM's gross written premiums and MSC from new business is a
non-GAAP financial measure, which is derived by adjusting gross
written premiums and MSC collected (i) to include the present value
of future installment MSC not yet collected and (ii) to exclude the
impact of gross written premium adjustments related to policies
closed in prior periods. White Mountains believes these
adjustments are useful to management and investors in evaluating
the volume and pricing of new business closed during the
period. The reconciliation from GAAP gross written premiums
to gross written premiums and MSC from new business is included on
page 16.
- Ark's adjusted loss and loss adjustment expense ratio, adjusted
insurance acquisition expense ratio, adjusted other underwriting
expense ratio and adjusted combined ratio are non-GAAP financial
measures, which are derived by adjusting the GAAP ratios to add
back the impact of whole-account quota-share reinsurance
arrangements related to third party capital providers for Ark's
Lloyd's syndicates. The impact of these reinsurance
arrangements relates to years of account prior to White Mountains's
transaction with Ark. White Mountains believes these
adjustments are useful to management and investors in evaluating
Ark's results on a fully aligned basis. The reconciliation
from the GAAP ratios to the adjusted ratios is included on page
17.
- NSM's EBITDA, adjusted EBITDA and pro forma adjusted EBITDA are
non-GAAP financial measures.
EBITDA is a non-GAAP financial measure that excludes interest
expense on debt, income tax expense (benefit), depreciation and
amortization of other intangible assets from GAAP net income
(loss).
Adjusted EBITDA is a non-GAAP financial measure that excludes
certain other items in GAAP net income (loss) in addition to those
excluded from EBITDA. The adjustments relate to (i) change in
fair value of contingent consideration liabilities, (ii) non-cash
equity-based compensation expense, (iii) impairments of intangible
assets, (iv) loss on assets held for sale, (v) acquisition-related
transaction expenses, (vi) investments made in the development of
new business lines and (vii) restructuring expenses. A
description of each follows:
-
- Change in fair value of contingent consideration
liabilities - Contingent consideration liabilities are
amounts payable to the sellers of businesses purchased by NSM that
are contingent on the earnings of such businesses in periods
subsequent to their acquisition. Under GAAP, contingent
consideration liabilities are initially recorded at fair value as
part of purchase accounting, with the periodic change in the fair
value of these liabilities recorded as income or an expense.
- Non-cash equity-based compensation expense -
Represents non-cash expenses related to NSM's management
compensation emanating from the grants of equity units.
- Impairments of intangible assets - Represents
expense related to NSM's write-off of intangible assets. For
the periods presented, the impairments related primarily to NSM's
write-off of intangible assets in its U.K. vertical. The
impairments related to lower premium volumes, including due to the
impact of the COVID-19 pandemic, and certain reorganization
initiatives in the U.K. vertical.
- Loss on assets held for sale - Represents the loss
on the net assets held for sale related to the sale of the Fresh
Insurance motor business.
- Acquisition-related transaction expenses -
Represents costs directly related to NSM's transactions to acquire
businesses, such as transaction-related compensation, banking,
accounting and external lawyer fees, which are not capitalized and
are expensed under GAAP.
- Investments made in the development of new business
lines - Represents the net loss related to the start-up of
newly established lines of business, which NSM views as
investments.
- Restructuring expenses - Represents expenses
associated with eliminating redundant work force and facilities
that often arise as a result of NSM's post-acquisition integration
strategies. For the periods presented, this adjustment relates
primarily to NSM's expenses incurred in certain reorganization
initiatives in the U.K. vertical.
Pro forma adjusted EBITDA is a
non-GAAP financial measure that starts with adjusted EBITDA and
also (i) includes the earnings of acquired businesses for the
period of time over the previous 12 months that the businesses were
not owned by White Mountains and (ii) removes the earnings (losses)
of sold businesses for the period of time over the previous 12
months that the businesses were owned by White Mountains.
White Mountains believes that these non-GAAP financial measures are
useful to management and investors in evaluating NSM's
performance. White Mountains also believes that pro forma
adjusted EBITDA is useful to management and investors to
demonstrate the earnings profile of NSM's business as of the end of
the period for a full 12 month period. See page 18 for the
reconciliation of NSM's GAAP net income (loss) to EBITDA, adjusted
EBITDA and pro forma adjusted EBITDA.
- Kudu's EBITDA, adjusted EBITDA and annualized adjusted EBITDA
are non-GAAP financial measures.
EBITDA is a non-GAAP financial measure that excludes interest
expense on debt, income tax expense (benefit), depreciation and
amortization of other intangible assets from GAAP net income
(loss).
Adjusted EBITDA is a non-GAAP financial measure that excludes
certain other items in GAAP net income (loss) in addition to those
excluded from EBITDA. The adjustments relate to (i) net
unrealized investment (gains) losses on Kudu's revenue and earnings
participation contracts, (ii) non-cash equity-based compensation
expense and (iii) acquisition-related transaction expenses. A
description of each adjustment follows:
-
- Net unrealized investment (gains) losses -
Represents net unrealized investment gains and losses recorded on
Kudu's revenue and earnings participation contracts, which are
recorded at fair value under GAAP.
- Non-cash equity-based compensation expense -
Represents non-cash expenses related to Kudu's management
compensation that are settled with equity units in Kudu.
- Acquisition-related transaction expenses -
Represents costs directly related to Kudu's transactions to acquire
revenue and earnings participation contracts, such as external
lawyer, banker, consulting and placement agent fees, which are not
capitalized and are expensed under GAAP.
Annualized adjusted EBITDA is a
non-GAAP financial measure that annualizes revenues related to
Kudu's earnings and revenue participation contracts that were in
place as of the end of the 12-month period but were not in effect
for the full 12-month period. The amount added was calculated on a
contract-by-contract basis by annualizing the revenues received for
the partial 12-month period. For example, if a participation
contract was in effect for four months, the amount added equals
twice that amount.
White Mountains believes that these non-GAAP financial measures are
useful to management and investors in evaluating Kudu's
performance. White Mountains also believes that annualized
adjusted EBITDA is useful to management and investors to
demonstrate the earnings profile of Kudu's business as of the end
of the period for a full 12-month period. See page 19 for the
reconciliation of Kudu's GAAP net income (loss) to EBITDA, adjusted
EBITDA and annualized adjusted EBITDA.
- Total consolidated portfolio return excluding MediaAlpha and
total equity portfolio return excluding MediaAlpha are non-GAAP
financial measures that remove the net investment income and net
realized and unrealized investment gains (losses) from White
Mountains's investment in MediaAlpha. White Mountains
believes these measures to be useful to management and investors by
showing the underlying performance of White Mountains's investment
portfolio and equity portfolio without regard to White Mountains's
investment in MediaAlpha. A reconciliation from GAAP to the
reported percentage is as
follows:
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total consolidated
portfolio return
|
|
5.0
|
%
|
|
6.5
|
%
|
|
4.7
|
%
|
|
1.7
|
%
|
Remove
MediaAlpha
|
|
(2.6)
|
%
|
|
(0.1)
|
%
|
|
(1.6)
|
%
|
|
(1.7)
|
%
|
Total consolidated
portfolio return excluding
MediaAlpha
|
|
2.4
|
%
|
|
6.4
|
%
|
|
3.1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
2021
|
Total equity portfolio
return
|
|
|
10.0
|
%
|
|
Remove
MediaAlpha
|
|
|
(4.6)
|
%
|
|
Total equity portfolio
return excluding MediaAlpha
|
|
|
5.4
|
%
|
|
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
This earnings release may contain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of
1934. All statements, other than statements of historical
facts, included or referenced in this release which address
activities, events or developments which White Mountains expects or
anticipates will or may occur in the future are forward-looking
statements. The words "could", "will", "believe", "intend",
"expect", "anticipate", "project", "estimate", "predict" and
similar expressions are also intended to identify forward-looking
statements. These forward-looking statements include, among
others, statements with respect to White Mountains's:
- change in book value or adjusted book value per share or return
on equity;
- business strategy;
- financial and operating targets or plans;
- incurred loss and loss adjustment expenses and the adequacy of
its loss and loss adjustment expense reserves and related
reinsurance;
- projections of revenues, income (or loss), earnings (or loss)
per share, EBITDA, adjusted EBITDA, dividends, market share or
other financial forecasts of White Mountains or its
businesses;
- expansion and growth of its business and operations; and
- future capital expenditures.
These statements are based on certain assumptions and analyses
made by White Mountains in light of its experience and perception
of historical trends, current conditions and expected future
developments, as well as other factors believed to be appropriate
in the circumstances. However, whether actual results and
developments will conform to its expectations and predictions is
subject to risks and uncertainties that could cause actual results
to differ materially from expectations, including:
- the risks that are described from time to time in White
Mountains's filings with the Securities and Exchange Commission,
including but not limited to White Mountains's Annual Report on
Form 10-K for the fiscal year ended December
31, 2020;
- claims arising from catastrophic events, such as hurricanes,
earthquakes, floods, fires, terrorist attacks or severe winter
weather;
- recorded loss reserves subsequently proving to have been
inadequate;
- the market value of White Mountains's investment in
MediaAlpha;
- the trends and uncertainties from the COVID-19 pandemic,
including judicial interpretations on the extent of insurance
coverage provided by insurers for COVID-19 pandemic related
claims;
- business opportunities (or lack thereof) that may be presented
to it and pursued;
- actions taken by ratings agencies, such as financial strength
or credit ratings downgrades or placing ratings on negative
watch;
- the continued availability of capital and financing;
- deterioration of general economic, market or business
conditions, including due to outbreaks of contagious disease
(including the COVID-19 pandemic) and corresponding mitigation
efforts;
- competitive forces, including the conduct of other
insurers;
- changes in domestic or foreign laws or regulations, or their
interpretation, applicable to White Mountains, its competitors or
its customers; and
- other factors, most of which are beyond White Mountains's
control.
Consequently, all of the forward-looking statements made in this
earnings release are qualified by these cautionary statements, and
there can be no assurance that the actual results or developments
anticipated by White Mountains will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, White Mountains or its business or
operations. White Mountains assumes no obligation to publicly
update any such forward-looking statements, whether as a result of
new information, future events or otherwise.
CONTACT: Todd Pozefsky
(203) 458-5807
View original
content:https://www.prnewswire.com/news-releases/white-mountains-reports-second-quarter-results-301350164.html
SOURCE White Mountains Insurance Group, Ltd.