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White Mountains Insurance Group Ltd (WTM) Q1 2024 Earnings: Solid Performance with Key Growth ...

GuruFocus Research
·4-min read

  • Comprehensive Income: $236 million in Q1 2024, up from $180 million in Q1 2023, driven by $211 million in unrealized investment gains from MediaAlpha.

  • Gross Written Premiums: Ark segment reported $872 million, an 8% increase year-over-year, with a stable combined ratio of 94%.

  • Investment Portfolio Performance: Excluding MediaAlpha, returned 1.2% in Q1 2024, with fixed income and equities contributing positively.

  • Net Investment Income: Increased to $19.9 million in Q1 2024 from $10.6 million in Q1 2023, reflecting stronger performance across the portfolio.

  • Bamboo Performance: Managed premiums surged to $90 million, more than tripling year-over-year, with commission and fee revenues also tripling to $22 million.

  • Book Value Per Share: Increased by 5.3% to $1,742, with adjusted book value per share rising 5.5% to $1,797, including dividends.

  • Share Repurchases: Company repurchased and retired 5,269 shares for $8 million at an average price of $1,518.72 per share in Q1 2024.

On May 9, 2024, White Mountains Insurance Group Ltd (NYSE:WTM) disclosed its first-quarter financial results through its 8-K filing. The company, a strategic investor and acquirer in the insurance and financial services sector, reported a notable increase in both book value per share and adjusted book value per share, which rose by 5% and 6% respectively, closing the quarter with figures of $1,742 and $1,797.

Strategic Highlights and Financial Performance

CEO Manning Rountree highlighted the significant impact of MediaAlpha on the company's performance, noting a $211 million unrealized gain as the stock price surged by approximately $9 during the quarter. Excluding MediaAlpha, the investment portfolio still performed robustly, yielding a 1.2% return. This was supported by gains across both fixed income and equities.

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The insurance operations under Ark and BAM also demonstrated strong growth. Ark reported an 8% increase in gross written premiums year-over-year, amounting to $872 million, with a stable combined ratio of 94%. BAM, on the other hand, increased its insured municipal bonds to $3.6 billion, up from $2.9 billion in the previous year, reflecting a growing demand for bond insurance.

Operational Success Across Diverse Segments

White Mountains's diverse operations saw varied success. The newly acquired Bamboo, an insurance distribution platform, significantly expanded its managed premiums, which more than tripled compared to the first quarter of 2023. Kudu, the asset management arm, reported a solid quarter with a 5% increase in adjusted EBITDA year-over-year. However, HG Global faced challenges, with a pre-tax income drop influenced by unfavorable movements in interest rates.

The financial statements reveal a robust increase in total assets to $9.59 billion as of March 31, 2024, up from $8.39 billion at the end of 2023. This growth in assets was accompanied by a comprehensive income of $236 million for the quarter, a significant improvement from $180 million in the prior year's first quarter.

Investment Insights and Future Outlook

Mark Plourde, President of White Mountains Advisors, commented on the investment results, noting that excluding MediaAlpha, the portfolio's 1.2% return was a solid outcome, albeit mixed against benchmarks. The fixed income portfolio outperformed the longer duration BBIA Index, while the equity portfolio, excluding MediaAlpha, lagged behind the S&P 500 Index.

Looking forward, White Mountains appears well-positioned to leverage its substantial undeployed capital of approximately $600 million, potentially enhancing its strategic investments and operational capabilities across its diversified business segments.

Conclusion

White Mountains Insurance Group Ltd demonstrated a strong start to 2024, driven by significant unrealized gains from MediaAlpha and solid performance across its insurance and reinsurance operations. With strategic management and a diversified investment approach, the company is poised for continued growth in a dynamic market environment. Investors and stakeholders are encouraged to review the detailed financial statements and management discussions filed with the SEC for a deeper insight into the company's operations and financial health.

For a more detailed exploration of White Mountains Insurance Group Ltd's first-quarter financial results and strategic initiatives, please visit the company's website at www.whitemountains.com and refer to the latest 10-Q filing with the SEC.

Explore the complete 8-K earnings release (here) from White Mountains Insurance Group Ltd for further details.

This article first appeared on GuruFocus.