HAMILTON, Bermuda, Nov. 8, 2021 /PRNewswire/ -- White Mountains
Insurance Group, Ltd. (NYSE: WTM) reported book value per share of
$1,162 and adjusted book value per
share of $1,176 as of
September 30, 2021. Book value per share and adjusted
book value per share both decreased 9% in the third quarter of
2021. For the first nine months of 2021, book value per share
decreased 8% and adjusted book value per share decreased 7%,
including dividends.
Manning Rountree, CEO, commented, "ABVPS was down 9% in the
third quarter, driven by the decrease in MediaAlpha's share
price. Excluding the mark to market losses at MediaAlpha,
ABVPS was up nicely, reflecting solid performance at our operating
companies. BAM produced $28
million of total premiums and member surplus contributions,
as insured penetration remained high and pricing improved.
Ark produced an 89% adjusted combined ratio while increasing gross
written premiums 79% year over year. NSM posted record levels
of both pro forma controlled premium and pro forma adjusted EBITDA,
driven by solid growth in its existing verticals and the J.C.
Taylor acquisition. Kudu posted strong growth in adjusted
EBITDA and $19 million of unrealized
gains in the fair value of its portfolio, while deploying
$130 million into new
transactions. Excluding MediaAlpha, our investment portfolio
returned 1.4% in the quarter. We completed $87 million of share repurchases during the
quarter and finished the third quarter with roughly $450 million of undeployed capital."
Comprehensive (loss) income attributable to common shareholders
was $(373) million and $(308) million in the third quarter and first
nine months of 2021 compared to $237
million and $220 million in
the third quarter and first nine months of 2020. Results in
the third quarter and first nine months of 2021 were driven
primarily by $397 million and
$326 million of net realized and
unrealized investment losses from White Mountains's investment in
MediaAlpha. Results in the third quarter and first nine
months of 2020 were driven primarily by $305
million and $355 million of
net investment income 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 September 30 closing price of $18.68, which was down from $42.10 at June 30,
the value of White Mountains's investment in MediaAlpha was
$316 million, which was down from
$713 million at June 30, 2021. This accounted for a
decrease of $131 in book value per
share and $132 in adjusted book value
per share in the quarter. At our current level of ownership,
each $1.00 per share increase or
decrease in the share price of MediaAlpha will result in an
approximate $5.60 per share increase
or decrease in White Mountains's book value per share and adjusted
book value per share. At the October
2021 month-end closing price of $17.53 per share, the fair value of White
Mountains's investment in MediaAlpha was $297 million. Our focus remains on
MediaAlpha's intrinsic value, not on fluctuations in its share
price. We encourage you to read MediaAlpha's third quarter
earnings release and related shareholder letter scheduled for
November 10, 2021, which will be
available on MediaAlpha's investor relations website at
www.investors.mediaalpha.com.
HG Global/BAM
BAM's gross written premiums and member surplus contributions
(MSC) collected were $28 million and
$84 million in the third quarter and
first nine months of 2021 compared to $30
million and $93 million in the
third quarter and first nine months of 2020. BAM insured
municipal bonds with par value of $4.0
billion and $12.6 billion in
the third quarter and first nine months of 2021 compared to
$4.7 billion and $11.8 billion in the third quarter and first nine
months of 2020. Total pricing was 69 and 66 basis points in
the third quarter and first nine months of 2021 compared to 63 and
79 basis points in the third quarter and first nine months of
2020. BAM's total claims paying resources were $1,181 million at September 30, 2021
compared to $987 million at
December 31, 2020 and $968
million at September 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 third quarter,
driven by strong institutional investor demand for insurance on new
issues. Market-wide insured penetration remained above 8% for
the third consecutive quarter, and we continued to see insurance
utilized on larger and higher-rated transactions. Pricing
improved, driven in part by interest rate volatility. In
September, BAM surpassed $100 billion
par insured since inception."
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
November 1, 2021 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 $7 million and
$16 million in the third quarter and
first nine months of 2021 compared to pre-tax income of
$10 million and $42 million in the third quarter and first nine
months of 2020. The decrease in HG Global's results for the
third quarter and first nine months of 2021 compared to the third
quarter and first nine 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
$15 million and $47 million in the third quarter and first nine
months of 2021 compared to pre-tax loss related to BAM of
$11 million and $31 million in the third quarter and first nine
months of 2020. The decrease in BAM's results for the third
quarter and first nine months of 2021 compared to the third quarter
and first nine 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 92% and 95% in the third quarter
and first nine months of 2021. Ark's adjusted combined ratio,
which adds back amounts ceded to third-party capital providers, was
89% and 93% in the third quarter and first nine months of
2021. The adjusted combined ratio in the third quarter and
first nine months of 2021 included 21 points and 16 points of
catastrophe losses and six points and five points of net favorable
prior year reserve development.
Ark reported gross written premiums of $162 million, net written premiums of
$121 million and net earned premiums
of $213 million in the third quarter
of 2021. Ark reported gross written premiums of $895 million, net written premiums of
$726 million and net earned premiums
of $436 million in the first nine
months of 2021. Ark reported pre-tax income (loss) of
$11 million and $(4) million in the third quarter and first nine
months of 2021. Ark's pre-tax loss for the first nine 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 good third quarter notwithstanding global catastrophe
activity. The adjusted combined ratio was 89% in the
quarter. This included $50
million of cat losses, principally from the European floods
and Hurricane Ida, and $15 million of
favorable prior year development, principally in property
lines. Gross written premiums were $162 million in the quarter, up 79% from 2020
levels, with risk adjusted rate change up 7%. Market
conditions remain attractive. We raised a total of
$163 million in new subordinated debt
during the quarter, completing our capital raise."
NSM
NSM reported pre-tax loss of $2
million, adjusted EBITDA of $19
million, and commission and other revenues of $82 million in the third quarter of 2021 compared
to pre-tax loss of $1 million,
adjusted EBITDA of $15 million, and
commission and other revenues of $71
million in the third quarter of 2020.
NSM reported pre-tax loss of $34
million, adjusted EBITDA of $53
million, and commission and other revenues of $241 million in the first nine months of 2021
compared to pre-tax loss of $6
million, adjusted EBITDA of $44
million, and commission and other revenues of $212 million in the first nine 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 third quarter and first nine
months of 2021 include the results of J.C. Taylor, an MGA offering
classic and antique collector car insurance, from August 6, 2021, the date of its
acquisition. Results in the third quarter and first nine
months of 2021 and 2020 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, from April 7, 2020, the date of its acquisition.
Geof McKernan, CEO of NSM, said,
"NSM had a good third quarter. Trailing 12 months pro forma
controlled premiums increased to a record $1,186 million, reflecting 4% quarter over
quarter growth in our existing verticals and the J.C. Taylor
acquisition. Pro forma adjusted EBITDA increased to a record
$75 million, reflecting 5% quarter
over quarter growth in our existing verticals and the J.C. Taylor
acquisition. Growth in the quarter was led by the Pet, Social
Services and Other U.S. verticals. We also enjoyed improved
results in the U.K. vertical following the broader reopening of the
U.K. economy."
Kudu
Kudu reported pre-tax income of $23
million, adjusted EBITDA of $7
million and total revenues of $29
million in the third quarter of 2021 compared to pre-tax
income of $13 million, adjusted
EBITDA of $5 million and total
revenues of $16 million in the third
quarter of 2020. Pre-tax income and total revenues in the
third quarter of 2021 included $19
million of unrealized gains on Kudu's participation
contracts compared to $10 million of
unrealized gains on Kudu's participation contracts in the third
quarter of 2020.
Kudu reported pre-tax income of $70
million, adjusted EBITDA of $19
million and total revenues of $89
million in the first nine months of 2021 compared to pre-tax
loss of $9 million, adjusted EBITDA
of $14 million and total revenues of
$21 million in the first nine months
of 2020. Pre-tax income and total revenues in the first nine
months of 2021 included $63 million
of unrealized gains on Kudu's participation contracts compared to
$2 million of unrealized gains on
Kudu's participation contracts in the first nine months of
2020.
As of September 30, 2021, Kudu had deployed $529 million in 15 asset and wealth management
firms globally, which have combined assets under management of
approximately $60 billion, spanning a
range of asset classes. Kudu's capital was deployed at an average
gross cash yield at inception of 10.0%.
Rob Jakacki, CEO of Kudu, said,
"Kudu had a strong third quarter. Quarter over quarter,
trailing 12 months revenues from participation contracts increased
9% to $36 million, while adjusted
EBITDA increased 12% to $27
million. Annualized adjusted EBITDA finished the
quarter at $41 million, reflecting
the full impact of new transactions. We were pleased to close
two transactions in the third quarter: Third Eye Capital, a leading
Canadian private credit manager, and Douglass Winthrop Advisors, a
New York-based registered
investment advisor catering to ultra-high net worth clients and
families. We are evaluating a large number of opportunities
in the US and abroad and we remain optimistic about deploying
capital this year and into 2022."
Other Operations
White Mountains's Other Operations segment reported pre-tax
(loss) income of $(387) million and
$(340) million in the third quarter
and first nine months of 2021 compared to $311 million and $274
million in the third quarter and first nine months of
2020. The Other Operations segment results in the third
quarter and first nine months of 2021 and 2020 were driven
primarily by net realized and unrealized investment gains (losses)
from White Mountains's investment in MediaAlpha. Net realized
and unrealized investment losses from White Mountains's investment
in MediaAlpha were $397 million and
$326 million in the third quarter and
first nine months of 2021 compared to net unrealized investment
gains from White Mountains's investment in MediaAlpha of
$250 million and $295 million in the third quarter and first nine
months of 2020.
Excluding MediaAlpha, net realized and unrealized investment
gains were $15 million and
$34 million in the third quarter and
first nine months of 2021 compared to net realized and unrealized
investment gains (losses) of $44
million and $(17) million in
the third quarter and first nine months of 2020. Net
investment income was $5 million and
$16 million in the third quarter and
first nine months of 2021 compared to $60
million and $79 million in the
third quarter and first nine months of 2020. Net investment
income in 2020 was driven primarily by $55
million of net proceeds received from a dividend
recapitalization at MediaAlpha.
White Mountains's Other Operations segment reported general and
administrative expenses of $15
million and $80 million in the
third quarter and first nine months of 2021 compared to
$44 million and $87 million in
the third quarter and first nine months of 2020. The decrease
in general and administrative expenses in the third quarter and
first nine months of 2021 compared to the third quarter and first
nine months of 2020 was driven primarily by lower incentive
compensation costs.
Share Repurchases
In the third quarter of 2021, White Mountains repurchased and
retired 79,294 of its common shares for $87
million at an average share price of $1,098.82, or 93% of White Mountains's
September 30, 2021 adjusted book
value per share. In the first nine months of 2021, White
Mountains repurchased and retired 86,512 of its common shares for
$95 million at an average share price
of $1,093.87, or 93% of White
Mountains's September 30, 2021
adjusted book value per share.
In the first nine months of 2020, White Mountains repurchased
and retired 99,087 of its common shares for $85 million at an average share price of
$858.81, or 78% of White Mountains's
September 30, 2020 adjusted book
value per share. White Mountains did not repurchase any of
its common shares in the third quarter of 2020.
Investments
The total consolidated portfolio return was -8.0% in the third
quarter of 2021. Excluding MediaAlpha, the total consolidated
portfolio return was 1.4% in the third quarter of 2021. The total
consolidated portfolio return was 13.5% in the third quarter of
2020. Excluding MediaAlpha, the total consolidated portfolio
return was 2.8% in the third quarter of 2020.
The total consolidated portfolio return was -3.7% in the first
nine months of 2021. Excluding MediaAlpha, the total
consolidated portfolio return was 4.6% in the first nine months of
2021. The total consolidated portfolio return was 15.4% in the
first nine months of 2020. Excluding MediaAlpha, the total
consolidated portfolio return was 2.8% in the first nine
months of 2020.
Mark Plourde, Managing Director
of White Mountains Advisors, said, "Excluding MediaAlpha, the total
portfolio was up 1.4% in the quarter, a good result.
Excluding MediaAlpha, the equity portfolio returned 3.7%, well
ahead of the S&P 500 Index return of 0.6%. The fixed
income portfolio was flat, in-line with the longer duration BBIA
Index return."
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)
|
|
|
|
September
30,
2021
|
|
December
31,
2020
|
|
September
30,
2020
|
Assets
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
$
|
898.4
|
|
|
$
|
859.5
|
|
|
$
|
831.8
|
|
Short-term
investments
|
|
50.3
|
|
|
60.4
|
|
|
56.1
|
|
Total
investments
|
|
948.7
|
|
|
919.9
|
|
|
887.9
|
|
Cash
|
|
21.8
|
|
|
42.8
|
|
|
49.9
|
|
Insurance premiums
receivable
|
|
6.9
|
|
|
6.9
|
|
|
7.2
|
|
Deferred acquisition
costs
|
|
31.7
|
|
|
27.8
|
|
|
26.1
|
|
Other
assets
|
|
18.7
|
|
|
20.4
|
|
|
20.2
|
|
Total Financial
Guarantee assets
|
|
1,027.8
|
|
|
1,017.8
|
|
|
991.3
|
|
P&C Insurance
and Reinsurance (Ark)
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
618.1
|
|
|
—
|
|
|
—
|
|
Common equity
securities
|
|
159.6
|
|
|
—
|
|
|
—
|
|
Short-term
investments
|
|
396.5
|
|
|
—
|
|
|
—
|
|
Other long-term
investments
|
|
320.6
|
|
|
—
|
|
|
—
|
|
Total
investments
|
|
1,494.8
|
|
|
—
|
|
|
—
|
|
Cash
|
|
116.5
|
|
|
—
|
|
|
—
|
|
Reinsurance
recoverables
|
|
465.6
|
|
|
—
|
|
|
—
|
|
Insurance premiums
receivable
|
|
482.3
|
|
|
—
|
|
|
—
|
|
Ceded unearned
premiums
|
|
92.1
|
|
|
—
|
|
|
—
|
|
Deferred acquisition
costs and value of in-force business acquired
|
|
127.8
|
|
|
—
|
|
|
—
|
|
Goodwill and other
intangible assets
|
|
292.5
|
|
|
—
|
|
|
—
|
|
Other
assets
|
|
61.3
|
|
|
—
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance assets
|
|
3,132.9
|
|
|
—
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
Cash (restricted
$92.2, $78.4 and $82.9)
|
|
126.5
|
|
|
126.5
|
|
|
125.0
|
|
Premium and commission
receivable
|
|
78.8
|
|
|
76.7
|
|
|
67.7
|
|
Goodwill and
other intangible assets
|
|
734.8
|
|
|
736.8
|
|
|
730.3
|
|
Other
assets
|
|
56.4
|
|
|
59.6
|
|
|
57.2
|
|
Total Specialty
Insurance Distribution assets
|
|
996.5
|
|
|
999.6
|
|
|
980.2
|
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
Short-term
investments
|
|
.1
|
|
|
.1
|
|
|
.1
|
|
Other long-term
investments
|
|
604.7
|
|
|
400.6
|
|
|
325.5
|
|
Total
investments
|
|
604.8
|
|
|
400.7
|
|
|
325.6
|
|
Cash (restricted
$4.5, $0.0, $0.0)
|
|
14.8
|
|
|
7.8
|
|
|
8.4
|
|
Accrued
investment income
|
|
9.0
|
|
|
9.8
|
|
|
6.2
|
|
Goodwill and
other intangible assets
|
|
9.0
|
|
|
9.2
|
|
|
9.3
|
|
Other
assets
|
|
8.4
|
|
|
2.7
|
|
|
2.4
|
|
Total Asset Management
assets
|
|
646.0
|
|
|
430.2
|
|
|
351.9
|
|
Other Operations
|
|
|
|
|
|
|
Fixed maturity
investments
|
|
316.4
|
|
|
347.7
|
|
|
389.7
|
|
Short-term
investments
|
|
162.6
|
|
|
82.4
|
|
|
515.6
|
|
Common equity
securities
|
|
—
|
|
|
—
|
|
|
140.7
|
|
Investment in
MediaAlpha
|
|
316.4
|
|
|
802.2
|
|
|
—
|
|
Other long-term
investments
|
|
360.2
|
|
|
386.2
|
|
|
845.7
|
|
Total
investments
|
|
1,155.6
|
|
|
1,618.5
|
|
|
1,891.7
|
|
Cash
|
|
31.1
|
|
|
34.1
|
|
|
31.5
|
|
Cash
pre-funded/placed in escrow for Ark transaction
|
|
—
|
|
|
646.3
|
|
|
—
|
|
Goodwill and
other intangible assets
|
|
48.7
|
|
|
36.4
|
|
|
36.7
|
|
Other
assets
|
|
75.0
|
|
|
48.5
|
|
|
100.1
|
|
Total Other Operations
assets
|
|
1,310.4
|
|
|
2,383.8
|
|
|
2,060.0
|
|
Total
assets
|
|
$
|
7,113.6
|
|
|
$
|
4,831.4
|
|
|
$
|
4,383.4
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
|
|
September
30,
2021
|
|
December
31,
2020
|
|
September
30,
2020
|
Liabilities
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
Unearned insurance
premiums
|
|
$
|
257.0
|
|
|
$
|
237.5
|
|
|
$
|
226.9
|
|
Accrued incentive
compensation
|
|
21.0
|
|
|
25.7
|
|
|
19.4
|
|
Other
liabilities
|
|
32.5
|
|
|
28.3
|
|
|
34.2
|
|
Total Financial
Guarantee liabilities
|
|
310.5
|
|
|
291.5
|
|
|
280.5
|
|
P&C Insurance
and Reinsurance (Ark)
|
|
|
|
|
|
|
Loss and loss
adjustment expense reserves
|
|
890.9
|
|
|
—
|
|
|
—
|
|
Unearned insurance
premiums
|
|
596.6
|
|
|
—
|
|
|
—
|
|
Debt
|
|
200.7
|
|
|
—
|
|
|
—
|
|
Reinsurance
payable
|
|
481.4
|
|
|
—
|
|
|
—
|
|
Contingent
consideration
|
|
24.0
|
|
|
—
|
|
|
—
|
|
Other
liabilities
|
|
87.4
|
|
|
—
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance liabilities
|
|
2,281.0
|
|
|
—
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
Debt
|
|
295.0
|
|
|
272.6
|
|
|
270.2
|
|
Premiums
payable
|
|
132.5
|
|
|
113.4
|
|
|
116.9
|
|
Contingent
consideration
|
|
6.7
|
|
|
14.6
|
|
|
11.8
|
|
Other
liabilities
|
|
84.2
|
|
|
91.2
|
|
|
77.5
|
|
Total Specialty
Insurance Distribution liabilities
|
|
518.4
|
|
|
491.8
|
|
|
476.4
|
|
Asset Management
(Kudu)
|
|
|
|
|
|
|
Debt
|
|
195.6
|
|
|
86.3
|
|
|
71.0
|
|
Other
liabilities
|
|
40.2
|
|
|
10.0
|
|
|
10.2
|
|
Total Asset Management
liabilities
|
|
235.8
|
|
|
96.3
|
|
|
81.2
|
|
Other Operations
|
|
|
|
|
|
|
Debt
|
|
19.1
|
|
|
17.5
|
|
|
18.2
|
|
Accrued incentive
compensation
|
|
44.7
|
|
|
70.1
|
|
|
41.9
|
|
Other
liabilities
|
|
49.8
|
|
|
46.3
|
|
|
176.0
|
|
Total Other Operations
liabilities
|
|
113.6
|
|
|
133.9
|
|
|
236.1
|
|
Total
liabilities
|
|
3,459.3
|
|
|
1,013.5
|
|
|
1,074.2
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
White Mountains's
common shareholder's equity
|
|
|
|
|
|
|
White Mountains's common
shares and paid-in surplus
|
|
586.2
|
|
|
595.2
|
|
|
592.1
|
|
Retained earnings
|
|
2,935.3
|
|
|
3,311.2
|
|
|
2,822.1
|
|
Accumulated
other comprehensive income (loss), after tax:
|
|
|
|
|
|
|
Net unrealized
gains (losses) from foreign currency translation and
interest rate swap
|
|
.2
|
|
|
(.4)
|
|
|
(6.5)
|
|
Total White
Mountains's common shareholders' equity
|
|
3,521.7
|
|
|
3,906.0
|
|
|
3,407.7
|
|
Non-controlling
interests
|
|
132.6
|
|
|
(88.1)
|
|
|
(98.5)
|
|
Total
equity
|
|
3,654.3
|
|
|
3,817.9
|
|
|
3,309.2
|
|
Total liabilities
and equity
|
|
$
|
7,113.6
|
|
|
$
|
4,831.4
|
|
|
$
|
4,383.4
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
BOOK VALUE AND
ADJUSTED BOOK VALUE PER SHARE
|
(Unaudited)
|
|
|
|
September
30,
2021
|
|
June 30,
2021
|
|
December
31,
2020
|
|
September
30,
2020
|
|
Book value per
share numerators (in millions):
|
|
|
|
|
|
|
|
|
|
White Mountains's
common shareholders' equity -
GAAP book
value per share numerator
|
|
$
|
3,521.7
|
|
|
$
|
3,978.2
|
|
|
$
|
3,906.0
|
|
|
$
|
3,407.7
|
|
|
Time value of money
discount on expected future payments on the
BAM
Surplus Notes (1)
|
|
(128.0)
|
|
|
(132.8)
|
|
|
(142.5)
|
|
|
(144.3)
|
|
|
HG Global's unearned
premium reserve (1)
|
|
206.8
|
|
|
201.5
|
|
|
190.0
|
|
|
181.0
|
|
|
HG Global's net
deferred acquisition costs (1)
|
|
(58.1)
|
|
|
(56.3)
|
|
|
(52.4)
|
|
|
(49.5)
|
|
|
Adjusted book value
per share numerator
|
|
$
|
3,542.4
|
|
|
$
|
3,990.6
|
|
|
$
|
3,901.1
|
|
|
$
|
3,394.9
|
|
|
Book value per
share denominators (in thousands of shares):
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding - GAAP book value per share denominator
|
|
3,029.6
|
|
|
3,109.2
|
|
|
3,102.0
|
|
|
3,102.0
|
|
|
Unearned restricted
common shares
|
|
(17.0)
|
|
|
(20.6)
|
|
|
(14.8)
|
|
|
(19.3)
|
|
|
Adjusted book value
per share denominator
|
|
3,012.6
|
|
|
3,088.6
|
|
|
3,087.2
|
|
|
3,082.7
|
|
|
GAAP book value
per share
|
|
$
|
1,162.44
|
|
|
$
|
1,279.49
|
|
|
$
|
1,259.18
|
|
|
$
|
1,098.56
|
|
|
Adjusted book
value per share
|
|
$
|
1,175.86
|
|
|
$
|
1,292.03
|
|
|
$
|
1,263.64
|
|
|
$
|
1,101.28
|
|
|
(1) Amount
reflects White Mountains's preferred share ownership in HG Global
of 96.9%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
2021
|
|
June 30,
2021
|
|
December
31,
2020
|
|
September
30,
2020
|
|
Quarter-to-date
change in GAAP book value per share,
including dividends:
|
|
(9.1)
|
%
|
|
3.9
|
%
|
|
14.6
|
%
|
|
7.6
|
%
|
|
Quarter-to-date
change in adjusted book value per share,
including dividends:
|
|
(9.0)
|
%
|
|
4.1
|
%
|
|
14.7
|
%
|
|
7.8
|
%
|
|
Year-to-date
change in GAAP book value per share,
including dividends:
|
|
(7.6)
|
%
|
|
1.7
|
%
|
|
23.1
|
%
|
|
7.4
|
%
|
|
Year-to-date
change in adjusted book value per share,
including dividends:
|
|
(6.9)
|
%
|
|
2.3
|
%
|
|
24.2
|
%
|
|
8.2
|
%
|
|
Year-to-date
dividends per share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
GOODWILL AND OTHER
INTANGIBLE ASSETS
|
(Unaudited)
|
|
|
|
September
30,
2021
|
|
June 30,
2021
|
|
December
31,
2020
|
|
September
30,
2020
|
|
Summary of
goodwill and other intangible assets (in millions):
|
|
|
|
|
|
|
|
|
|
Goodwill:
|
|
|
|
|
|
|
|
|
|
Ark
|
|
$
|
116.8
|
|
|
$
|
116.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
NSM
|
|
529.6
|
|
(1)
|
477.9
|
|
|
506.4
|
|
|
511.8
|
|
(3)
|
Kudu
|
|
7.6
|
|
|
7.6
|
|
|
7.6
|
|
|
7.6
|
|
|
Other
Operations
|
|
17.4
|
|
|
27.1
|
|
(2)
|
11.5
|
|
|
20.7
|
|
(3)
|
Total
goodwill
|
|
671.4
|
|
|
629.4
|
|
|
525.5
|
|
|
540.1
|
|
|
Other intangible
assets:
|
|
|
|
|
|
|
|
|
|
Ark
|
|
175.7
|
|
|
175.7
|
|
|
—
|
|
|
—
|
|
|
NSM
|
|
205.2
|
|
|
213.7
|
|
|
230.4
|
|
|
218.5
|
|
|
Kudu
|
|
1.4
|
|
|
1.5
|
|
|
1.6
|
|
|
1.7
|
|
|
Other
Operations
|
|
31.3
|
|
|
23.9
|
|
|
24.9
|
|
|
16.0
|
|
|
Total other
intangible assets
|
|
413.6
|
|
|
414.8
|
|
|
256.9
|
|
|
236.2
|
|
|
Total goodwill and
other intangible assets
|
|
1,085.0
|
|
|
1,044.2
|
|
|
782.4
|
|
|
776.3
|
|
|
Goodwill and other
intangible assets attributed to
non-controlling interests
|
|
(118.0)
|
|
|
(115.9)
|
|
|
(28.1)
|
|
|
(27.1)
|
|
|
Goodwill and other
intangible assets included in
White
Mountains's common shareholders' equity
|
|
$
|
967.0
|
|
|
$
|
928.3
|
|
|
$
|
754.3
|
|
|
$
|
749.2
|
|
|
|
|
(1)
|
The relative fair
values of goodwill and of other intangible assets recognized in
connection with the acquisition of JC Taylor had not yet been
finalized at September 30, 2021.
|
(2)
|
The relative fair
values of goodwill and of other intangible assets recognized in
connection with an acquisition within Other Operations had not yet
been finalized at June 30, 2021.
|
(3)
|
The relative fair
values of goodwill and of other intangible assets recognized in
connection with the acquisition of Kingsbridge and an acquisition
within Other Operations had not yet been finalized at September 30,
2020.
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
6.7
|
|
|
$
|
6.2
|
|
|
$
|
19.6
|
|
|
$
|
17.2
|
|
Net investment
income
|
|
4.4
|
|
|
4.7
|
|
|
13.2
|
|
|
15.1
|
|
Net realized and
unrealized investment (losses) gains
|
|
(4.0)
|
|
|
3.2
|
|
|
(15.6)
|
|
|
23.7
|
|
Other
revenues
|
|
.3
|
|
|
.4
|
|
|
.9
|
|
|
2.1
|
|
Total Financial
Guarantee revenues
|
|
7.4
|
|
|
14.5
|
|
|
18.1
|
|
|
58.1
|
|
P&C
Insurance and Reinsurance (Ark)
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
213.4
|
|
|
—
|
|
|
435.8
|
|
|
—
|
|
Net investment
income
|
|
.6
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
Net realized and
unrealized investment gains
|
|
.3
|
|
|
—
|
|
|
10.3
|
|
|
—
|
|
Other
revenues
|
|
3.4
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance revenues
|
|
217.7
|
|
|
—
|
|
|
457.3
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
|
|
Commission
revenues
|
|
67.0
|
|
|
58.2
|
|
|
194.6
|
|
|
174.2
|
|
Other
revenues
|
|
15.3
|
|
|
12.5
|
|
|
46.8
|
|
|
37.6
|
|
Total Specialty
Insurance Distribution revenues
|
|
82.3
|
|
|
70.7
|
|
|
241.4
|
|
|
211.8
|
|
Asset
Management (Kudu)
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
9.5
|
|
|
6.4
|
|
|
26.1
|
|
|
19.3
|
|
Net realized and
unrealized investment gains
|
|
18.9
|
|
|
9.8
|
|
|
62.5
|
|
|
1.5
|
|
Other
revenues
|
|
.1
|
|
|
.1
|
|
|
.2
|
|
|
.2
|
|
Total Asset Management
revenues
|
|
28.5
|
|
|
16.3
|
|
|
88.8
|
|
|
21.0
|
|
Other
Operations
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
5.0
|
|
|
60.1
|
|
|
16.1
|
|
|
79.3
|
|
Net realized and
unrealized investment gains (losses)
|
|
15.3
|
|
|
43.6
|
|
|
34.0
|
|
|
(17.4)
|
|
Net realized and
unrealized investment (losses) gains from
investment in
MediaAlpha
|
|
(396.8)
|
|
|
250.0
|
|
|
(325.5)
|
|
|
295.0
|
|
Commission
revenues
|
|
2.4
|
|
|
2.1
|
|
|
7.0
|
|
|
6.1
|
|
Other
revenues
|
|
28.1
|
|
|
2.2
|
|
|
57.6
|
|
|
6.0
|
|
Total Other Operations
revenues
|
|
(346.0)
|
|
|
358.0
|
|
|
(210.8)
|
|
|
369.0
|
|
Total
revenues
|
|
$
|
(10.1)
|
|
|
$
|
459.5
|
|
|
$
|
594.8
|
|
|
$
|
659.9
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Expenses:
|
|
|
|
|
|
|
|
|
Financial
Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
|
|
Insurance acquisition
expenses
|
|
$
|
3.0
|
|
|
$
|
1.6
|
|
|
$
|
6.5
|
|
|
$
|
5.4
|
|
General and
administrative expenses
|
|
12.4
|
|
|
14.0
|
|
|
42.7
|
|
|
41.4
|
|
Total Financial
Guarantee expenses
|
|
15.4
|
|
|
15.6
|
|
|
49.2
|
|
|
46.8
|
|
P&C
Insurance and Reinsurance (Ark)
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
129.2
|
|
|
—
|
|
|
247.8
|
|
|
—
|
|
Insurance and
reinsurance acquisition expenses
|
|
53.7
|
|
|
—
|
|
|
124.4
|
|
|
—
|
|
General and
administrative expenses
|
|
21.8
|
|
|
—
|
|
|
84.4
|
|
|
—
|
|
Interest
expense
|
|
2.1
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
Total P&C
Insurance and Reinsurance expenses
|
|
206.8
|
|
|
—
|
|
|
461.1
|
|
|
—
|
|
Specialty
Insurance Distribution (NSM)
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
48.8
|
|
|
42.9
|
|
|
142.1
|
|
|
131.0
|
|
Broker commission
expenses
|
|
20.4
|
|
|
17.1
|
|
|
60.9
|
|
|
56.4
|
|
Change in fair value of
contingent consideration
|
|
.6
|
|
|
.7
|
|
|
.8
|
|
|
(1.6)
|
|
Amortization of other
intangible assets
|
|
8.2
|
|
|
5.1
|
|
|
25.0
|
|
|
16.2
|
|
Loss on assets held for
sale
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
—
|
|
Interest
expense
|
|
5.9
|
|
|
6.1
|
|
|
17.7
|
|
|
16.1
|
|
Total Specialty
Insurance Distribution expenses
|
|
83.9
|
|
|
71.9
|
|
|
275.2
|
|
|
218.1
|
|
Asset
Management (Kudu)
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
3.3
|
|
|
2.2
|
|
|
9.0
|
|
|
7.5
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
.1
|
|
|
.2
|
|
|
.3
|
|
Interest
expense
|
|
1.9
|
|
|
1.4
|
|
|
9.2
|
|
|
4.3
|
|
Total Asset Management
expenses
|
|
5.2
|
|
|
3.7
|
|
|
18.4
|
|
|
12.1
|
|
Other
Operations
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
24.0
|
|
|
2.3
|
|
|
45.9
|
|
|
6.5
|
|
General and
administrative expenses
|
|
14.5
|
|
|
44.3
|
|
|
79.7
|
|
|
87.1
|
|
Amortization of other
intangible assets
|
|
2.0
|
|
|
.2
|
|
|
2.9
|
|
|
.6
|
|
Interest
expense
|
|
.4
|
|
|
.3
|
|
|
1.1
|
|
|
.8
|
|
Total Other Operations
expenses
|
|
40.9
|
|
|
47.1
|
|
|
129.6
|
|
|
95.0
|
|
Total
expenses
|
|
352.2
|
|
|
138.3
|
|
|
933.5
|
|
|
372.0
|
|
Pre-tax (loss)
income from continuing operations
|
|
(362.3)
|
|
|
321.2
|
|
|
(338.7)
|
|
|
287.9
|
|
Income tax
expense
|
|
(21.6)
|
|
|
(98.5)
|
|
|
(41.9)
|
|
|
(97.1)
|
|
Net (loss) income
from continuing operations
|
|
(383.9)
|
|
|
222.7
|
|
|
(380.6)
|
|
|
190.8
|
|
Net (loss) gain
from sale of discontinued operations, net of tax
|
|
—
|
|
|
(.7)
|
|
|
18.7
|
|
|
(.8)
|
|
Net (loss)
income
|
|
(383.9)
|
|
|
222.0
|
|
|
(361.9)
|
|
|
190.0
|
|
Net loss
attributable to non-controlling interests
|
|
12.5
|
|
|
10.9
|
|
|
53.7
|
|
|
29.5
|
|
Net (loss) income
attributable to White Mountains's
common shareholders
|
|
$
|
(371.4)
|
|
|
$
|
232.9
|
|
|
$
|
(308.2)
|
|
|
$
|
219.5
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
(millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net (loss) income
attributable to White Mountains's
common shareholders
|
|
$
|
(371.4)
|
|
|
$
|
232.9
|
|
|
$
|
(308.2)
|
|
|
$
|
219.5
|
|
Other comprehensive
(loss) income, net of tax
|
|
(2.2)
|
|
|
3.9
|
|
|
.6
|
|
|
1.0
|
|
Comprehensive
(loss) income
|
|
(373.6)
|
|
|
236.8
|
|
|
(307.6)
|
|
|
220.5
|
|
Other comprehensive
loss (gain) attributable to non-controlling interests
|
|
.2
|
|
|
(.1)
|
|
|
—
|
|
|
(.3)
|
|
Comprehensive
(loss) income attributable to White Mountains's
common shareholders
|
|
$
|
(373.4)
|
|
|
$
|
236.7
|
|
|
$
|
(307.6)
|
|
|
$
|
220.2
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
EARNINGS PER
SHARE
|
(Unaudited)
|
|
Income (loss) per
share attributable to White Mountains's common
shareholders
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Basic (loss)
earnings per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(120.18)
|
|
|
$
|
75.32
|
|
|
$
|
(105.48)
|
|
|
$
|
70.40
|
|
Discontinued
operations
|
|
—
|
|
|
(.23)
|
|
|
6.03
|
|
|
(.26)
|
|
Total consolidated
operations
|
|
$
|
(120.18)
|
|
|
$
|
75.09
|
|
|
$
|
(99.45)
|
|
|
$
|
70.14
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(120.18)
|
|
|
$
|
75.32
|
|
|
$
|
(105.48)
|
|
|
$
|
70.40
|
|
Discontinued
operations
|
|
—
|
|
|
(.23)
|
|
|
6.03
|
|
|
(.26)
|
|
Total consolidated
operations
|
|
$
|
(120.18)
|
|
|
$
|
75.09
|
|
|
$
|
(99.45)
|
|
|
$
|
70.14
|
|
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 September 30, 2021
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
5.5
|
|
|
$
|
1.2
|
|
|
$
|
213.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
220.1
|
|
Net investment
income
|
|
1.9
|
|
|
2.5
|
|
|
.6
|
|
|
—
|
|
|
9.5
|
|
|
5.0
|
|
|
19.5
|
|
Net investment income
(expense) - BAM surplus note
interest
|
|
3.1
|
|
|
(3.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment (losses) gains
|
|
(2.0)
|
|
|
(2.0)
|
|
|
.3
|
|
|
—
|
|
|
18.9
|
|
|
15.3
|
|
|
30.5
|
|
Net realized and
unrealized investment losses from investment in MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(396.8)
|
|
|
(396.8)
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67.0
|
|
|
—
|
|
|
2.4
|
|
|
69.4
|
|
Other
revenues
|
|
.1
|
|
|
.2
|
|
|
3.4
|
|
|
15.3
|
|
|
.1
|
|
|
28.1
|
|
|
47.2
|
|
Total
revenues
|
|
8.6
|
|
|
(1.2)
|
|
|
217.7
|
|
|
82.3
|
|
|
28.5
|
|
|
(346.0)
|
|
|
(10.1)
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
|
—
|
|
|
129.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
129.2
|
|
Insurance acquisition
expenses
|
|
1.5
|
|
|
1.5
|
|
|
53.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56.7
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.0
|
|
|
24.0
|
|
General and
administrative expenses
|
|
.2
|
|
|
12.2
|
|
|
21.8
|
|
|
48.8
|
|
|
3.3
|
|
|
14.5
|
|
|
100.8
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.4
|
|
|
—
|
|
|
—
|
|
|
20.4
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.6
|
|
|
—
|
|
|
—
|
|
|
.6
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
—
|
|
|
2.0
|
|
|
10.2
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|
5.9
|
|
|
1.9
|
|
|
.4
|
|
|
10.3
|
|
Total
expenses
|
|
1.7
|
|
|
13.7
|
|
|
206.8
|
|
|
83.9
|
|
|
5.2
|
|
|
40.9
|
|
|
352.2
|
|
Pre-tax income
(loss)
|
|
$
|
6.9
|
|
|
$
|
(14.9)
|
|
|
$
|
10.9
|
|
|
$
|
(1.6)
|
|
|
$
|
23.3
|
|
|
$
|
(386.9)
|
|
|
$
|
(362.3)
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
QTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
For the Three
Months Ended September 30, 2020
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
5.1
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.2
|
|
Net investment
income
|
|
1.8
|
|
|
2.9
|
|
|
—
|
|
|
6.4
|
|
|
60.1
|
|
|
71.2
|
|
Net investment income
(expense) - BAM surplus note
interest
|
|
4.6
|
|
|
(4.6)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment gains
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
9.8
|
|
|
43.6
|
|
|
56.6
|
|
Net
unrealized investment gains from
investment in MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250.0
|
|
|
250.0
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
58.2
|
|
|
—
|
|
|
2.1
|
|
|
60.3
|
|
Other
revenues
|
|
.2
|
|
|
.2
|
|
|
12.5
|
|
|
.1
|
|
|
2.2
|
|
|
15.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
11.7
|
|
|
2.8
|
|
|
70.7
|
|
|
16.3
|
|
|
358.0
|
|
|
459.5
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance acquisition
expenses
|
|
1.1
|
|
|
.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
2.3
|
|
General and
administrative expenses
|
|
.6
|
|
|
13.4
|
|
|
42.9
|
|
|
2.2
|
|
|
44.3
|
|
|
103.4
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
17.1
|
|
|
—
|
|
|
—
|
|
|
17.1
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
.7
|
|
|
—
|
|
|
—
|
|
|
.7
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
5.1
|
|
|
.1
|
|
|
.2
|
|
|
5.4
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
1.4
|
|
|
.3
|
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
1.7
|
|
|
13.9
|
|
|
71.9
|
|
|
3.7
|
|
|
47.1
|
|
|
138.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
|
10.0
|
|
|
$
|
(11.1)
|
|
|
$
|
(1.2)
|
|
|
$
|
12.6
|
|
|
$
|
310.9
|
|
|
$
|
321.2
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
YTD SEGMENT
STATEMENTS OF PRE-TAX (LOSS) INCOME
|
(millions)
|
(Unaudited)
|
|
For the Nine
Months Ended September 30, 2021
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
Ark
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
16.1
|
|
|
$
|
3.5
|
|
|
$
|
435.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
455.4
|
|
Net investment
income
|
|
5.4
|
|
|
7.8
|
|
|
1.8
|
|
|
—
|
|
|
26.1
|
|
|
16.1
|
|
|
57.2
|
|
Net investment income
(expense) -
BAM surplus note
interest
|
|
9.1
|
|
|
(9.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment (losses) gains
|
|
(9.5)
|
|
|
(6.1)
|
|
|
10.3
|
|
|
—
|
|
|
62.5
|
|
|
34.0
|
|
|
91.2
|
|
Net
realized and unrealized investment losses from
investment in MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(325.5)
|
|
|
(325.5)
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
194.6
|
|
|
—
|
|
|
7.0
|
|
|
201.6
|
|
Other
revenue
|
|
.3
|
|
|
.6
|
|
|
9.4
|
|
|
46.8
|
|
|
.2
|
|
|
57.6
|
|
|
114.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
21.4
|
|
|
(3.3)
|
|
|
457.3
|
|
|
241.4
|
|
|
88.8
|
|
|
(210.8)
|
|
|
594.8
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
—
|
|
|
—
|
|
|
247.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
247.8
|
|
Insurance acquisition
expenses
|
|
4.3
|
|
|
2.2
|
|
|
124.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130.9
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45.9
|
|
|
45.9
|
|
General and
administrative expenses
|
|
1.3
|
|
|
41.4
|
|
|
84.4
|
|
|
142.1
|
|
|
9.0
|
|
|
79.7
|
|
|
357.9
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60.9
|
|
|
—
|
|
|
—
|
|
|
60.9
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.8
|
|
|
—
|
|
|
—
|
|
|
.8
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.0
|
|
|
.2
|
|
|
2.9
|
|
|
28.1
|
|
Loss on assets held
for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|
17.7
|
|
|
9.2
|
|
|
1.1
|
|
|
32.5
|
|
Total
expenses
|
|
5.6
|
|
|
43.6
|
|
|
461.1
|
|
|
275.2
|
|
|
18.4
|
|
|
129.6
|
|
|
933.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
|
15.8
|
|
|
$
|
(46.9)
|
|
|
$
|
(3.8)
|
|
|
$
|
(33.8)
|
|
|
$
|
70.4
|
|
|
$
|
(340.4)
|
|
|
$
|
(338.7)
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
YTD SEGMENT
STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
For the Nine
Months Ended September 30, 2020
|
|
HG
Global/BAM
|
|
|
|
|
|
|
|
|
|
|
HG
Global
|
|
BAM
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned insurance
premiums
|
|
$
|
14.1
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.2
|
|
Net investment
income
|
|
6.1
|
|
|
9.0
|
|
|
—
|
|
|
19.3
|
|
|
79.3
|
|
|
113.7
|
|
Net investment income
(expense) -
BAM surplus note
interest
|
|
14.1
|
|
|
(14.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized and
unrealized investment gains (losses)
|
|
12.1
|
|
|
11.6
|
|
|
—
|
|
|
1.5
|
|
|
(17.4)
|
|
|
7.8
|
|
Net unrealized
investment gains from
investment in
MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295.0
|
|
|
295.0
|
|
Commission
revenues
|
|
—
|
|
|
—
|
|
|
174.2
|
|
|
—
|
|
|
6.1
|
|
|
180.3
|
|
Other
revenue
|
|
.3
|
|
|
1.8
|
|
|
37.6
|
|
|
.2
|
|
|
6.0
|
|
|
45.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
46.7
|
|
|
11.4
|
|
|
211.8
|
|
|
21.0
|
|
|
369.0
|
|
|
659.9
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance acquisition
expenses
|
|
3.3
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
Cost of
sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
6.5
|
|
General and
administrative expenses
|
|
1.6
|
|
|
39.8
|
|
|
131.0
|
|
|
7.5
|
|
|
87.1
|
|
|
267.0
|
|
Broker commission
expenses
|
|
—
|
|
|
—
|
|
|
56.4
|
|
|
—
|
|
|
—
|
|
|
56.4
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
—
|
|
|
(1.6)
|
|
|
—
|
|
|
—
|
|
|
(1.6)
|
|
Amortization of other
intangible assets
|
|
—
|
|
|
—
|
|
|
16.2
|
|
|
.3
|
|
|
.6
|
|
|
17.1
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
16.1
|
|
|
4.3
|
|
|
.8
|
|
|
21.2
|
|
Total
expenses
|
|
4.9
|
|
|
41.9
|
|
|
218.1
|
|
|
12.1
|
|
|
95.0
|
|
|
372.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income
(loss)
|
|
$
|
41.8
|
|
|
$
|
(30.5)
|
|
|
$
|
(6.3)
|
|
|
$
|
8.9
|
|
|
$
|
274.0
|
|
|
$
|
287.9
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA
|
($ in
millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
BAM
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Gross par value of
primary market policies issued
|
|
$
|
3,813.7
|
|
|
$
|
4,420.8
|
|
|
$
|
11,171.2
|
|
|
$
|
10,125.0
|
|
Gross par value of
secondary market policies issued
|
|
157.4
|
|
|
318.7
|
|
|
646.6
|
|
|
1,665.7
|
|
Gross par value of
assumed reinsurance
|
|
—
|
|
|
—
|
|
|
805.5
|
|
|
36.9
|
|
Total gross par value
of market policies issued
|
|
$
|
3,971.1
|
|
|
$
|
4,739.5
|
|
|
$
|
12,623.3
|
|
|
$
|
11,827.6
|
|
Gross written
premiums
|
|
$
|
12.8
|
|
|
$
|
14.4
|
|
|
$
|
39.0
|
|
|
$
|
45.6
|
|
MSC
collected
|
|
14.7
|
|
|
15.4
|
|
|
44.8
|
|
|
46.9
|
|
Total gross written
premiums and MSC collected
|
|
27.5
|
|
|
29.8
|
|
|
83.8
|
|
|
92.5
|
|
Present value of future
installment MSC collections
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.3
|
|
Gross written premium
adjustments on existing
installment
policies
|
|
.1
|
|
|
.1
|
|
|
.1
|
|
|
.1
|
|
Gross written
premiums and MSC from
new
business
|
|
$
|
27.6
|
|
|
$
|
29.9
|
|
|
$
|
83.9
|
|
|
$
|
92.9
|
|
Total
pricing
|
|
69
bps
|
|
63 bps
|
|
66
bps
|
|
79 bps
|
|
|
As of
September 30, 2021
|
|
As of
December 31, 2020
|
|
As of
September 30, 2020
|
Policyholders'
surplus
|
|
$
|
322.8
|
|
|
$
|
324.7
|
|
|
$
|
347.2
|
|
Contingency
reserve
|
|
102.7
|
|
|
86.4
|
|
|
81.6
|
|
Qualified statutory
capital
|
|
425.5
|
|
|
411.1
|
|
|
428.8
|
|
Statutory net unearned
premiums
|
|
48.3
|
|
|
45.2
|
|
|
43.6
|
|
Present value of future
installment premiums
and
MSC
|
|
13.9
|
|
|
14.0
|
|
|
14.4
|
|
HG Re, Ltd collateral
trusts at statutory value
|
|
442.8
|
|
|
417.0
|
|
|
381.0
|
|
Fidus Re, Ltd
collateral trust at statutory value
|
|
250.0
|
|
|
100.0
|
|
|
100.0
|
|
Claims paying
resources
|
|
$
|
1,180.5
|
|
|
$
|
987.3
|
|
|
$
|
967.8
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
HG
Global
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net written
premiums
|
|
$
|
10.9
|
|
|
$
|
12.5
|
|
|
$
|
33.4
|
|
|
$
|
39.1
|
|
Earned
premiums
|
|
$
|
5.5
|
|
|
$
|
5.1
|
|
|
$
|
16.1
|
|
|
$
|
14.1
|
|
|
|
As of
September 30, 2021
|
|
As of
December 31, 2020
|
|
As of
September 30, 2020
|
Unearned
premiums
|
|
$
|
213.4
|
|
|
$
|
196.1
|
|
|
$
|
186.8
|
|
Deferred acquisition
costs
|
|
$
|
59.9
|
|
|
$
|
54.1
|
|
|
$
|
51.1
|
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
($ in
millions)
|
(Unaudited)
|
|
Ark
|
|
For the Three
Months Ended September 30, 2021
|
|
|
GAAP
|
|
Third-Party
Capital Share
|
|
Adjusted
|
Insurance
premiums:
|
|
|
|
|
|
|
Gross written
premiums
|
|
$
|
162.4
|
|
|
$
|
—
|
|
|
$
|
162.4
|
|
Net written
premiums
|
|
$
|
120.9
|
|
|
$
|
2.0
|
|
|
$
|
122.9
|
|
Net earned
premiums
|
|
$
|
213.4
|
|
|
$
|
18.2
|
|
|
$
|
231.6
|
|
|
|
|
|
|
|
|
Insurance
expenses:
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
$
|
129.2
|
|
|
$
|
9.0
|
|
|
$
|
138.2
|
|
Insurance acquisition
expenses
|
|
53.7
|
|
|
—
|
|
|
53.7
|
|
Other underwriting
expenses (1)
|
|
13.3
|
|
|
.4
|
|
|
13.7
|
|
Total insurance
expenses
|
|
$
|
196.2
|
|
|
$
|
9.4
|
|
|
$
|
205.6
|
|
|
|
|
|
|
|
|
Ratios:
|
|
|
|
|
|
|
Loss and loss
adjustment expense
|
|
60.5
|
%
|
|
|
|
59.7
|
%
|
Insurance acquisition
expense
|
|
25.2
|
%
|
|
|
|
23.2
|
%
|
Other underwriting
expense
|
|
6.2
|
%
|
|
|
|
5.9
|
%
|
Combined
Ratio
|
|
91.9
|
%
|
|
|
|
88.8
|
%
|
|
(1) Included within general and
administrative expenses.
|
|
|
|
|
For the Nine
Months Ended September 30, 2021
|
|
|
GAAP
|
|
Third-Party
Capital Share
|
|
Adjusted
|
Insurance
premiums:
|
|
|
|
|
|
|
Gross written
premiums
|
|
$
|
895.0
|
|
|
$
|
—
|
|
|
$
|
895.0
|
|
Net written
premiums
|
|
$
|
725.5
|
|
|
$
|
(5.9)
|
|
|
$
|
719.6
|
|
Net earned
premiums
|
|
$
|
435.8
|
|
|
$
|
65.0
|
|
|
$
|
500.8
|
|
|
|
|
|
|
|
|
Insurance
expenses:
|
|
|
|
|
|
|
Loss and loss
adjustment expenses
|
|
$
|
247.8
|
|
|
$
|
47.2
|
|
|
$
|
295.0
|
|
Insurance acquisition
expenses
|
|
124.4
|
|
|
—
|
|
|
124.4
|
|
Other underwriting
expenses (1)
|
|
43.6
|
|
|
1.6
|
|
|
45.2
|
|
Total insurance
expenses
|
|
$
|
415.8
|
|
|
$
|
48.8
|
|
|
$
|
464.6
|
|
|
|
|
|
|
|
|
Ratios:
|
|
|
|
|
|
|
Loss and loss
adjustment expense
|
|
56.9
|
%
|
|
|
|
58.9
|
%
|
Insurance acquisition
expense
|
|
28.5
|
%
|
|
|
|
24.8
|
%
|
Other underwriting
expense
|
|
10.0
|
%
|
|
|
|
9.0
|
%
|
Combined
Ratio
|
|
95.4
|
%
|
|
|
|
92.7
|
%
|
|
(1) Included within general and
administrative expenses.
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
NSM
|
|
Three Months
Ended
September 30,
2020
|
|
Three Months
Ended
September 30,
2021
|
|
Nine Months
Ended
September 30,
2020
|
|
Nine Months
Ended
September 30,
2021
|
|
Twelve Months
Ended September 30,
2021
|
Commission
revenues
|
|
$
|
58.2
|
|
|
$
|
67.0
|
|
|
$
|
174.2
|
|
|
$
|
194.6
|
|
|
$
|
252.9
|
|
Broker commission
expenses
|
|
17.1
|
|
|
20.4
|
|
|
56.4
|
|
|
60.9
|
|
|
79.8
|
|
Gross
profit
|
|
41.1
|
|
|
46.6
|
|
|
117.8
|
|
|
133.7
|
|
|
173.1
|
|
Other
revenues
|
|
12.5
|
|
|
15.3
|
|
|
37.6
|
|
|
46.8
|
|
|
61.8
|
|
General and
administrative expenses
|
|
42.9
|
|
|
48.8
|
|
|
131.0
|
|
|
142.1
|
|
|
188.0
|
|
Change in fair value
of contingent
consideration
|
|
.7
|
|
|
.6
|
|
|
(1.6)
|
|
|
.8
|
|
|
(.9)
|
|
Amortization of other
intangible assets
|
|
5.1
|
|
|
8.2
|
|
|
16.2
|
|
|
25.0
|
|
|
35.5
|
|
Loss on assets held
for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
28.7
|
|
Interest
expense
|
|
6.1
|
|
|
5.9
|
|
|
16.1
|
|
|
17.7
|
|
|
23.7
|
|
GAAP pre-tax
loss
|
|
(1.2)
|
|
|
(1.6)
|
|
|
(6.3)
|
|
|
(33.8)
|
|
|
(40.1)
|
|
Income tax expense
(benefit)
|
|
.1
|
|
|
(.8)
|
|
|
(2.8)
|
|
|
(7.6)
|
|
|
(10.5)
|
|
GAAP net
loss
|
|
(1.3)
|
|
|
(.8)
|
|
|
(3.5)
|
|
|
(26.2)
|
|
|
(29.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
6.1
|
|
|
5.9
|
|
|
16.1
|
|
|
17.7
|
|
|
23.7
|
|
Income tax expense
(benefit)
|
|
.1
|
|
|
(.8)
|
|
|
(2.8)
|
|
|
(7.6)
|
|
|
(10.5)
|
|
General and
administrative expenses –
depreciation
|
|
1.2
|
|
|
1.4
|
|
|
2.9
|
|
|
3.7
|
|
|
5.3
|
|
Amortization of other
intangible assets
|
|
5.1
|
|
|
8.2
|
|
|
16.2
|
|
|
25.0
|
|
|
35.5
|
|
EBITDA
|
|
11.2
|
|
|
13.9
|
|
|
28.9
|
|
|
12.6
|
|
|
24.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
Change in fair value
of contingent
consideration
|
|
.7
|
|
|
.6
|
|
|
(1.6)
|
|
|
.8
|
|
|
(.9)
|
|
Non-cash
equity-based
compensation expense
|
|
1.0
|
|
|
.2
|
|
|
1.0
|
|
|
1.3
|
|
|
2.7
|
|
Impairments of
intangible assets
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
Loss on assets held
for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
28.7
|
Acquisition-related
transaction expenses
|
|
.6
|
|
|
3.4
|
|
|
5.6
|
|
|
3.6
|
|
|
5.2
|
|
Investments made in
the development
of new
business lines
|
|
.2
|
|
|
.3
|
|
|
.6
|
|
|
.4
|
|
|
.7
|
|
Restructuring
expenses
|
|
1.7
|
|
|
.7
|
|
|
3.2
|
|
|
5.1
|
|
|
6.7
|
|
Adjusted
EBITDA
|
|
$
|
15.4
|
|
|
$
|
19.1
|
|
|
$
|
43.9
|
|
|
$
|
52.5
|
|
|
67.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remove Fresh Insurance motor
business's adjusted EBITDA from October 1, 2020
|
|
|
|
1.6
|
|
Include J.C. Taylor's adjusted
EBITDA from October 1, 2020 to August 6, 2021
|
|
|
|
5.6
|
|
Pro forma adjusted
EBITDA
|
|
|
|
|
|
|
|
$
|
74.7
|
|
|
|
|
|
|
|
|
|
|
|
|
WHITE MOUNTAINS
INSURANCE GROUP, LTD.
|
SELECTED FINANCIAL
DATA (CONTINUED)
|
(millions)
|
(Unaudited)
|
|
Kudu
|
|
Three Months
Ended
September 30,
2020
|
|
Three Months
Ended
September 30,
2021
|
|
Nine Months
Ended
September 30,
2020
|
|
Nine Months
Ended
September 30,
2021
|
|
Twelve Months
Ended
September 30,
2021
|
Net investment
income
|
|
$
|
6.4
|
|
|
9.5
|
|
|
$
|
19.3
|
|
|
$
|
26.1
|
|
|
$
|
36.3
|
|
Net unrealized
investment gains
|
|
9.8
|
|
|
18.9
|
|
|
1.5
|
|
|
62.5
|
|
|
76.9
|
|
Other
revenues
|
|
.1
|
|
|
.1
|
|
|
.2
|
|
|
.2
|
|
|
.3
|
|
Total
revenues
|
|
16.3
|
|
|
28.5
|
|
|
21.0
|
|
|
88.8
|
|
|
113.5
|
|
General and
administrative expenses
|
|
2.2
|
|
|
3.3
|
|
|
7.5
|
|
|
9.0
|
|
|
13.3
|
|
Amortization of other
intangible assets
|
|
.1
|
|
|
—
|
|
|
.3
|
|
|
.2
|
|
|
.2
|
|
Interest
expense
|
|
1.4
|
|
|
1.9
|
|
|
4.3
|
|
|
9.2
|
|
|
10.9
|
|
Total
expenses
|
|
3.7
|
|
|
5.2
|
|
|
12.1
|
|
|
18.4
|
|
|
24.4
|
|
GAAP pre-tax
income
|
|
12.6
|
|
|
23.3
|
|
|
8.9
|
|
|
70.4
|
|
|
89.1
|
|
Income tax
expense
|
|
3.8
|
|
|
7.9
|
|
|
3.2
|
|
|
25.4
|
|
|
29.2
|
|
GAAP net
income
|
|
8.8
|
|
|
15.4
|
|
|
5.7
|
|
|
45.0
|
|
|
59.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
1.4
|
|
|
1.9
|
|
|
4.3
|
|
|
9.2
|
|
|
10.9
|
|
Income tax
expense
|
|
3.8
|
|
|
7.9
|
|
|
3.2
|
|
|
25.4
|
|
|
29.2
|
|
Amortization of other
intangible assets
|
|
.1
|
|
|
—
|
|
|
.3
|
|
|
.2
|
|
|
.2
|
|
EBITDA
|
|
14.1
|
|
|
25.2
|
|
|
13.5
|
|
|
79.8
|
|
|
100.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
investment gains
|
|
(9.8)
|
|
|
(18.9)
|
|
|
(1.5)
|
|
|
(62.5)
|
|
|
(76.9)
|
|
Non-cash equity-based
compensation
expense
|
|
.1
|
|
|
.2
|
|
|
.1
|
|
|
.4
|
|
|
.7
|
|
Acquisition-related
transaction expenses
|
|
.1
|
|
|
.9
|
|
|
1.6
|
|
|
.9
|
|
|
3.0
|
|
Adjusted
EBITDA
|
|
$
|
4.5
|
|
|
$
|
7.4
|
|
|
$
|
13.7
|
|
|
$
|
18.6
|
|
|
27.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to
annualize partial year revenues
|
|
|
|
|
|
13.7
|
|
Annualized adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
$
|
40.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $132 million,
$137 million, $147 million and $149
million less than the nominal GAAP carrying values as of
September 30, 2021, June 30, 2021, December
31, 2020 and September 30,
2020, respectively.
The value of HG Global's unearned premium reserve, net of deferred
acquisition costs, was $154 million,
$150 million, $142 million and $136
million as of September 30,
2021, June 30, 2021,
December 31, 2020 and September 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 17.
- 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
18.
- 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) for the previous 12 months
related to businesses sold 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 19 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 20 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. The following tables present
reconciliations from GAAP to the reported
percentages:
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total consolidated
portfolio return
|
|
(8.0)
|
%
|
|
13.5
|
%
|
|
(3.7)
|
%
|
|
15.4
|
%
|
Remove
MediaAlpha
|
|
9.4
|
%
|
|
(10.7)
|
%
|
|
8.3
|
%
|
|
(12.6)
|
%
|
Total consolidated
portfolio return
excluding
MediaAlpha
|
|
1.4
|
%
|
|
2.8
|
%
|
|
4.6
|
%
|
|
2.8
|
%
|
|
|
Three Months
Ended
September 30,
2021
|
Total equity portfolio
return
|
|
(17.2)%
|
Remove
MediaAlpha
|
|
20.9%
|
Total equity portfolio
return excluding MediaAlpha
|
|
3.7%
|
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 per share 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-third-quarter-results-301418217.html
SOURCE White Mountains Insurance Group, Ltd.