White Mountains’ subsidiary Ark has reported its financial results for the second quarter and half-year of 2023, reporting a robust combined ratio of 89% and gross written premiums (GWP) growth to $606 million.
Ark’s combined ratio in the quarter compares to the 87% reported in Q2 2022. The combined ratio for the first six months of 2023 was 91%, an improvement compared to the 93% reported in the same period last year.
According to White Mountains, Ark’s combined ratio in Q2 and H1 of 2023 both included four points of unfavourable prior year development, primarily due to Winter Storm Elliott and three large claims in the property and marine & energy lines of business, compared to ten points and six points of favourable prior year development in Q2 and H1 of 2022.
Ark’s combined ratio in this year’s Q2 and H1 included five points and three points of catastrophe losses compared to 11 points and 14 points of catastrophe losses, driven primarily by losses from the conflict in Ukraine, in the second quarter and first six months of 2022.
This quarter, the firm also saw GWP growth slightly over 30%, from $404 million in Q2 2022. GWP in H2 2023 was $1.4 billion compared to roughly $1 billion reported in the same period last year.
Ark’s net earned premiums of $284 million and $534 million in Q2 and H1 of 2023 compare to net written premiums of $270 million and $814 million and net earned premiums of $217 million and $412 million in the same periods the year prior.
Additionally, pre-tax income of $42 million and $78 million in the second quarter and first six months of 2023 compared to a loss of $21 million and $45 million in the second quarter and first six months of 2022.
The firm’s financial results also included net realised and unrealized investment gains of $18 million and $43 million in the second quarter and first six months of 2023 compared to a loss of $45 million and $62 million in Q2 and H2 of 2022.
The firm’s Outrigger Re sidecar has also performed well this year, with a combined ratio of 25% and 24% in the second quarter and first six months of 2023. The sidecar, launched at the end of 2022, also reported gross and net written premiums of $58 million and $102 million, and net earned premiums of $10 million and $15 million in the second quarter and first six months of 2023.
Together, the Ark and Outrigger Re segment’s combined ratio was 87% and 89% in the second quarter and first six months of 2023.
Gross written premiums for the segment were $606 million and $1.4 billion, net written premiums hit $461 million and $1.075 billion, and net earned premiums reached $293 million and $548 million in the second quarter and first six months of 2023.
All in all, pre-tax income in Q2 and H1 of 2023 was $52 million and $94 million, respectively, for the segment.
Ian Beaton, CEO of Ark, commented: “We are off to a good start through the first half of 2023 amidst a continuing strong rate environment, particularly in property and marine & energy.
“Ark’s combined ratio was 89% for the second quarter. Gross written premiums were up 50% over prior year in the quarter, with risk adjusted rate change up 21%. We believe we are well-positioned for the second half of the year.”
