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White Mountains reports Q1 loss despite “good start” for Ark

10th May 2021 - Author: Matt Sheehan

Bermuda domiciled financial services holding company White Mountains Insurance Group has reported a net loss of $110.5 million for the first quarter of 2021 despite its recently acquired Ark business seeing a “good start” to the year.

white-mountains-insurance-logoThe result represented an improvement on the $139.6 million loss in Q1 2020, although last year’s loss was mainly caused by COVID-induced volatility in the investment markets.

White Mountains CEO Manning Rountree acknowledged that the company was “off to a bit of a slow start in 2021,” but maintained that underlying operating results were “sound.”

He argued that the poor performance primarily due to a decline in the company’s MediaAlpha position and a loss triggered by NSM’s sale of the Fresh Insurance motor business.

Overall White Mountains revenues came to $178.2 million for the quarter, with Ark contributing $109.1 million on the P&C side of the business.

Ark reported pre-tax loss of $33 million in the first quarter of 2021, although this included $25 million of transaction expenses related to the acquisition by White Mountains, which only closed on January 1st.

Nevertheless, Ark’s adjusted combined ratio was recorded at 108%, due to 17 points of catastrophe losses, of which 14 points were attributable to Winter Storm Uri.

Ian Beaton, CEO of Ark, commented on the performance: “Although catastrophe losses were unusually heavy in the first quarter, we are off to a good start in 2021. All licenses are in hand, and all underwriting platforms are functioning as contemplated. We received an AM Best financial strength rating of “A/stable”, the highest rating in the Class of 2020. Operational execution has been strong, and hiring is more or less complete.”

“Driven by a good January renewal season, gross written premiums were $405 million in the quarter, more than double 2020 levels, with blended renewal pricing up over 10%,” Beaton continued. “The heavy cat losses in the quarter added 17 points to the loss ratio, resulting in an adjusted combined ratio of 108% for the quarter. Looking forward, market conditions remain attractive, and we are optimistic about profitable growth in the book.”

Ark Insurance Holdings Ltd is the parent company of Ark Syndicate Management Limited, which manages syndicates 4020 and 3902 at Lloyd’s, underwriting a mix of reinsurance and insurance business, including property, accident & health, energy, marine and political risks.

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