White Mountains Insurance Group Ltd Reports Solid Growth in Book Value Per Share

• Book Value Per Share: Increased by 7% in Q4 and 14% for the full year 2023, reaching $1,656.

• Adjusted Book Value Per Share: Grew by 7% in Q4 and 14% for the full year 2023, reaching $1,704.

• Comprehensive Income: Attributable to common shareholders was $288 million in Q4 and $511 million for the full year 2023.

• Gross Written Premiums: BAM produced $48 million in Q4, while Ark grew full-year gross written premiums by 31%.

• Investment Portfolio: Achieved a 6% increase in Q4 and an 11% increase for the full year.

• MediaAlpha Investment: Grew in value by $66 million in Q4 and $27 million for the full year.

• Undeployed Capital: Stands at approximately $500 million after strategic redeployments.

On February 7, 2024, White Mountains Insurance Group Ltd (NYSE:WTM) released its 8-K filing, showcasing a robust performance for the fourth quarter and the full year ended December 31, 2023. The company, known for its opportunistic and value-oriented acquisitions in the insurance and financial services sectors, reported significant growth in both book value per share and adjusted book value per share, which includes dividends.

Performance Highlights and Challenges

WTM's CEO, Manning Rountree, expressed satisfaction with the strong fourth quarter and overall positive year. The company's operating companies delivered solid results, and the investment portfolio saw excellent returns. However, the company's comprehensive income for the year, although strong at $511 million, was lower compared to the previous year's $788 million, partly due to the absence of a significant one-time gain from the sale of NSM in 2022.

The newly enacted 15% corporate income tax in Bermuda, effective January 1, 2025, poses a potential challenge. However, WTM expects to be exempt from this tax and the Pillar Two worldwide minimum tax until January 1, 2030, thanks to the economic transition adjustment provided in the legislation.

Financial Achievements and Industry Impact

WTM's financial achievements, particularly the growth in book value per share, are a testament to the company's strategic investments and operational efficiency. In the insurance industry, where trust and financial stability are paramount, these achievements underscore WTM's strength and reliability as a partner and insurer. The increase in gross written premiums by BAM and Ark's underwriting results reflect the company's ability to grow and manage risk effectively.

Key Financial Metrics

WTM's financial statements reveal a strong balance sheet with total assets of $8.39 billion as of December 31, 2023. The company's investment in MediaAlpha, a significant asset, increased in value, contributing to the overall financial health of the company. The total consolidated portfolio return, excluding MediaAlpha, was 4.8% in the fourth quarter and 11.4% for the year, indicating robust investment performance.

"We had a strong fourth quarter to cap off a good year. ABVPS was up 7% in the quarter and 14% for the full year. In the quarter, we had good results from our operating companies and excellent returns in our investment portfolio," said Manning Rountree, CEO of WTM.

WTM's earnings per share and other financial details will be further elaborated in the company's Form 10-K, which is expected to be filed on or before February 29, 2024.

Analysis of Company Performance

WTM's performance in the fourth quarter and throughout 2023 reflects a company that is effectively navigating the complexities of the insurance market. The growth in book value per share and adjusted book value per share is a positive indicator for investors, signaling the company's ability to create shareholder value. The strategic deployment of capital, such as the $130 million into Outrigger Re and the acquisition of Bamboo, demonstrates WTM's commitment to growth and adaptation in a competitive landscape.

While the company did not repurchase any common shares in the fourth quarter of 2023, the year saw a repurchase and retirement of 24,165 common shares, indicating a proactive approach to managing its capital structure. The company's investment strategy, particularly in MediaAlpha, has paid off, contributing to the overall increase in book value.

As WTM looks ahead, the company's strong balance sheet, coupled with its undeployed capital, positions it well for future growth opportunities and potential challenges that may arise from regulatory changes or market dynamics.

For a more detailed analysis of White Mountains Insurance Group Ltd's financial performance, including the full earnings release and financial statements, please visit the company's website at www.whitemountains.com.

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

This article first appeared on GuruFocus.