White Mountains has released its third-quarter results for 2022, saying that its Ark partner firm saw gross written premiums rise $54m between Q3 2021 and Q3 2022.
According to the firm, Ark reported gross written premiums of $216m and $1,253m, net written premiums of $193m and $1,007m and net earned premiums of $346m and $758m in the third quarter and first nine months of 2022 compared to gross written premiums of $162m and $895m, net written premiums of $121m and $726m and net earned premiums of $213m and $436m and in the third quarter and first nine months of 2021.
Ian Beaton, CEO of Ark, said, “Ark had a good third quarter notwithstanding global catastrophe activity. The adjusted combined ratio was 86% in the quarter. This included $74m of catastrophe losses, including the estimated impact of Hurricane Ian, and $13m of favourable prior year development, principally in property lines. Gross written premiums were $216m in the quarter and $1.25 billion year-to-date, up 33% and 40%, respectively, from 2021 levels. Risk-adjusted rate change is up 9% year-to-date. Market conditions remain attractive, and we continue to see upward pressure on rates in many of the classes of business we underwrite.”
White Mountains, meanwhile, said that its comprehensive income attributable to common shareholders was $890m and $748m in the third quarter and first nine months of 2022 compared to losses of $373m and $308m in the third quarter and first nine months of 2021.
Back then, the firm blamed global catastrophe activity for the losses.
Regarding these latest results, White Mountains says that results in the third quarter and first nine months of 2022 were driven primarily by the net gain from the sale of NSM of $876m to Carlyle in August, which includes the impact of compensation and other costs recorded in Other Operations. The transaction, originally announced in May, valued NSM at $1.775bn.
Results in the third quarter and first nine months of 2022 also included $19m and $113m of unrealized investment losses from White Mountains’s investment in MediaAlpha compared to $397m and $326m in the third quarter and first nine months of 2021.
Manning Rountree, CEO of White Mountains, said: “ABVPS was up 28% in the quarter. The main driver was the gain on our sale of NSM, which closed on August 1 and added roughly $300 to ABVPS. Aside from this, ABVPS was up slightly driven primarily by good operating results at our businesses, partially offset by mark-to-market losses in our fixed income portfolio and the decline in MediaAlpha’s share price. BAM produced record levels of premiums.”
He added: “Ark produced an 87% combined ratio, despite significant catastrophe activity, while growing premiums 33% year-over-year. The fair value of Kudu’s existing participation contracts increased 12% in the quarter, reflecting announced sale transactions and good portfolio performance in a volatile investment environment. Kudu grew adjusted EBITDA year-over-year and closed two new transactions. During the quarter, we repurchased a little over $500m of shares, including the results of our self-tender offer. Undeployed capital now stands at roughly $1.1bn.”
