White Mountains Reports Second Quarter Results

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HAMILTON, Bermuda , Aug. 7, 2020 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $1,021 and adjusted book value per share of $1,022 as of June 30, 2020.  Book value per share and adjusted book value per share both increased approximately 4% in the second quarter of 2020.  Book value per share decreased 0.2% and adjusted book value per share increased 0.4% in the first six months of 2020, including dividends.

Manning Rountree, CEO, commented, "We had a good second quarter.  ABVPS increased 4% to $1,022 , driven primarily by a 6.5% return on our investment portfolio.  BAM wrote $43 million of direct premiums and member surplus contributions, its biggest quarter ever, driven by robust demand for insurance and higher pricing.  NSM saw 2% organic growth in controlled premiums, quarter over quarter, and closed the Kingsbridge acquisition in April.  Kudu enjoyed a strong quarter, benefiting from the rebound in investment markets and closing the Sequoia transaction in June.  MediaAlpha had another excellent quarter, driven by strong performance in its insurance verticals.  At PassportCard/DavidShield, the global slowdown in travel activity has caused a significant decline in premiums and revenues; in May we invested $15 million to support operations and to continue global expansion.  During the quarter, we repurchased $31 million of shares at an average price of $887 .  We ended the quarter with $0.8 billion of undeployed capital and ample liquidity."

Comprehensive income (loss) attributable to common shareholders was $116 million and $(17) million in the second quarter and first six months of 2020, compared to comprehensive income attributable to common shareholders of $18 million and $302 million in the second quarter and first six months of 2019.  The results in the first six months of 2019 include $182 million of realized and unrealized gains from MediaAlpha's sale of a significant minority stake to Insignia Capital Group on February 26, 2019 (the "MediaAlpha Transaction").

HG Global/BAM

BAM's gross written premiums and member surplus contributions (MSC) collected were $43 million and $63 million in the second quarter and first six months of 2020, compared to $25 million and $40 million in the second quarter and first six months of 2019.  BAM insured municipal bonds with par value of $4.1 billion and $7.1 billion in the second quarter and first six months of 2020, compared to $2.9 billion and $4.8 billion in the second quarter and first six months of 2019.  Total pricing was 105 and 89 basis points in the second quarter and first six months of 2020, compared to 84 and 83 basis points in the second quarter and first six months of 2019.  BAM's total claims paying resources were $957 million at June 30, 2020 , compared to $938 million at December 31, 2019 and $895 million at June 30, 2019 .

Seán McCarthy, CEO of BAM, said, "BAM had a strong quarter.  Institutional and retail investor concerns about credit volatility drove robust demand for insurance and expanded our opportunities to insure higher-quality bonds.  This was evident in both the primary market, which reopened in April and experienced increased insured penetration, and the secondary market, which was highly active.  The COVID-19 pandemic is negatively impacting the finances of municipalities to varying degrees, and, over time, financial stress could emerge.  We continue to monitor the finances of our member issuers and are working proactively to make sure they are prepared for any pandemic-related revenue losses.  BAM's existing credit portfolio is of high quality and structured to be resilient during economic slowdowns; all BAM-insured bond payments due through August 1 have been made by insureds.  Also, in late June, S&P Global Ratings affirmed BAM's "AA/stable" rating."

HG Global reported pre-tax income of $20 million and $32 million in the second quarter and first six months of 2020, compared to pre-tax income of $15 million and $31 million and in the second quarter and first six months of 2019.  The increases were driven primarily by higher investment returns.  White Mountains reported pre-tax loss related to BAM of $9 million and $19 million in the second quarter and first six months of 2020, compared to pre-tax loss related to BAM of $7 million and $17 million in the second quarter and first six months of 2019. 

BAM is a mutual insurance company that is owned by its members.  BAM's results are consolidated into White Mountains's GAAP financial statements and attributed to non-controlling interests.

NSM

NSM reported pre-tax loss of $4 million , adjusted EBITDA of $18 million , and commission and other revenues of $76 million in the second quarter of 2020, compared to pre-tax income of $1 million , adjusted EBITDA of $16 million , and commission and other revenues of $66 million in the second quarter of 2019.  Results for the second quarter of 2020 include the results of Kingsbridge Group Limited, a leading provider of commercial lines insurance and consulting services to the contingent workforce in the U.K.  Kingsbridge was acquired on April 7 , 2020.  NSM reported pre-tax loss of $5 million, adjusted EBITDA of $29 million , and commission and other revenues of $141 million in the first six months of 2020, compared to pre-tax loss of $1 million , adjusted EBITDA of $26 million , and commission and other revenues of $115 million in the first six months of 2019. 

Geof McKernan , CEO of NSM, said, "NSM had a sound second quarter despite the challenging environment.  Trailing 12 months pro forma controlled premiums crossed the $1.0 billion threshold for the first time ever, reflecting both the Kingsbridge acquisition and 2% organic growth in our existing verticals.  Pro forma adjusted EBITDA was $57 million , reflecting both the Kingsbridge acquisition and flat results in our existing verticals, as we continue to invest for growth.  We saw significant growth in certain U.S. verticals, including pet and real estate, offset by a decline in the U.K. vertical."

Kudu

Kudu reported pre-tax income of $18 million and adjusted EBITDA of $4 million in the second quarter of 2020, compared to pre-tax income of $2 million and adjusted EBITDA of $3 million in the second quarter of 2019.  Pre-tax income in the second quarter of 2020 included a $17 million unrealized gain on Kudu's participation contracts, reflecting the impact of the market rebound on Kudu's underlying asset management businesses.  Kudu reported pre-tax loss of $4 million and adjusted EBITDA of $9 million in the first six months of 2020.  Pre-tax loss in the first six months of 2020 included an $8 million unrealized loss on Kudu's participation contracts, reflecting the impact of the market dislocation from the COVID-19 pandemic in the first quarter of 2020 on Kudu's underlying asset management businesses.

In the second quarter of 2020, Kudu deployed $37 million in Sequoia Financial Group, LLC, a registered investment advisor with $4.7 billion in client assets.  As of June 30, 2020 , Kudu has deployed a total of $324 million in 11 asset management firms with combined assets under management of approximately $38 billion , spanning a range of asset classes, including real estate, real assets, wealth management, hedge funds, private equity and alternative credit strategies.

Rob Jakacki , CEO of Kudu, said, "Kudu's diversified portfolio has proven resilient through a period of uncertainty in global markets.  We were pleased to close our investment in Sequoia, a wealth manager with an impressive platform, and we are excited to partner with the firm to support its growth.  We have now deployed $324 million across 11 firms with an average cash yield to Kudu at inception of 10.2%.  Our model of providing tailored permanent capital solutions to asset and wealth managers has broad appeal, and our pipeline is strong."

Other Operations

White Mountains's Other Operations segment reported pre-tax income (loss) of $107 million and $(37) million in the second quarter and first six months of 2020, compared to pre-tax income of $5 million and $288 million in the second quarter first six months of 2019.  Net realized and unrealized investment gains (losses) were $122 million and $(16) million in the second quarter and first six months of 2020, compared to net realized and unrealized investment gains of $23 million and $142 million in the second quarter and first six months of 2019.  Pre-tax income for the first six months of 2019 also included $182 million of gains from the MediaAlpha Transaction, which consisted of $67 million of realized gains and $115 million of unrealized investment gains.  General and administrative expenses were $25 million and $43 million in the second quarter and first six months of 2020, compared to $30 million and $60 million in the second quarter and first six months of 2019.  The decreases were driven primarily by lower incentive compensation costs.

Share Repurchases

In the second quarter of 2020, White Mountains repurchased and retired 34,684 of its common shares for $31 million at an average share price of $886.70 , or 87% of White Mountains's June 30, 2020 adjusted book value per share.  In the first six months of 2020, White Mountains repurchased and retired 99,087 of its common shares for $85 million at an average share price of $858.81 , or 84% of White Mountains's June 30, 2020 adjusted book value per share.

Investments

The total return on invested assets was 6.5% in the second quarter of 2020 compared to 2.0% in the second quarter of 2019.  The total return on invested assets was 1.7% in the first six months of 2020 compared to 12.4% in the first six months of 2019, which included $115 million of unrealized investment gains from the MediaAlpha Transaction.  Excluding the MediaAlpha Transaction, the total return on invested assets was 7.9% in the first six months of 2019.

Mark Plourde , Managing Director of White Mountains Advisors, said, "The total portfolio was up 6.5%; a strong result, driven by the rebound in equity markets during the quarter.  Our portfolio of common stocks and ETFs returned 19.2%, just behind the S&P 500 return of 20.5%.  Other long-term investments returned 4.0%, which included a $17 million increase in the fair value of Kudu's participation contracts and a $15 million increase in the fair value of our investment in MediaAlpha.  Fixed income returned 2.8%, ahead of the BBIA Index return of 2.1%."

Additional Information

White Mountains is a Bermuda -domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM.  Additional financial information and other items of interest are available at the company's website located at www.whitemountains.com .  White Mountains expects to file its Form 10-Q today with the Securities and Exchange Commission and urges shareholders to refer to that document for more complete information concerning its financial results.

CONTACT: Todd Pozefsky
(203) 458-5807  



WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions)

(Unaudited)



June 30,

2020


December 31,

2019


June 30,

2019

Assets






   Financial Guarantee (HG Global/BAM)






     Fixed maturity investments

$

821.7



$

799.3



$

762.9


     Short-term investments

54.7



46.3



34.8


Total investments

876.4



845.6



797.7


     Cash

32.0



24.2



10.3


     Insurance premiums receivable

7.3



6.7



6.6


     Deferred acquisition costs

25.0



22.1



20.5


     Accrued investment income

5.2



5.4



5.3


     Accounts receivable on unsettled investment sales



3.9



8.0


     Other assets   

14.6



16.1



16.1


Total Financial Guarantee assets

960.5



924.0



864.5


Specialty Insurance Distribution (NSM)






     Short-term investments





.2


     Cash (restricted $96.3, $56.3 and $88.8)

140.5



89.7



119.7


Premium and commission receivable

76.7



70.8



57.6


     Goodwill and other intangible assets

728.6



623.0



636.8


     Other assets

55.1



41.7



36.8


Total Specialty Insurance Distribution assets

1,000.9



825.2



851.1


Asset Management (Kudu)






Short-term investments

.1



.1



.1


Other long-term investments

315.6



266.5



142.2


Total investments

315.7



266.6



142.3


Cash

5.9



5.8



2.7


Accrued investment income

5.6



5.8



2.7


Goodwill and other intangible assets

9.4



9.6



9.8


Other assets

2.7



2.7



2.9


Total Asset Management assets

339.3



290.5



160.4


   Other Operations






     Fixed maturity investments

369.9



406.5



346.5


     Short-term investments

62.8



154.8



152.0


     Common equity securities

567.2



683.9



709.2


     Other long-term investments

582.5



589.8



522.2


Total investments

1,582.4



1,835.0



1,729.9


     Cash

32.9



41.3



17.6


     Accrued investment income

4.0



5.7



5.4


     Accounts receivable on unsettled investment sales

23.4



5.1



72.8


     Goodwill and other intangible assets

21.9



22.1



21.0


     Other assets

32.0



31.3



26.7


     Assets held for sale

3.0



3.0



2.8


Total Other Operations assets

1,699.6



1,943.5



1,876.2


Total assets

$

4,000.3



$

3,983.2



$

3,752.2





WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(millions)

(Unaudited)



June 30,

2020


December 31,

2019


June 30,

2019

Liabilities






   Financial Guarantee (HG Global/BAM)






     Unearned insurance premiums

$

218.6



$

198.4



$

187.8


     Accrued incentive compensation

14.1



21.7



14.5


     Accounts payable on unsettled investment purchases

3.0






     Other liabilities

27.3



26.7



27.4


Total Financial Guarantee liabilities

263.0



246.8



229.7


Specialty Insurance Distribution (NSM)






Debt

268.4



219.2



219.7


Premiums payable

139.7



102.3



118.7


Contingent consideration earnout liabilities

11.7



20.6



30.9


     Other liabilities

81.1



59.0



56.1


Total Specialty Insurance Distribution liabilities

500.9



401.1



425.4


Asset Management (Kudu)






Debt

70.8



53.6




Other liabilities

6.5



3.4



3.5


Total Asset Management liabilities

77.3



57.0



3.5


   Other Operations






Debt

10.6



10.7



10.8


Accrued incentive compensation

18.9



55.1



36.8


Other liabilities

66.3



67.8



38.1


Total Other Operations liabilities

95.8



133.6



85.7


Total liabilities

937.0



838.5



744.3








Equity






White Mountains's common shareholder's equity






White Mountains's common shares and paid-in surplus

587.0



596.3



590.5


Retained earnings

2,589.3



2,672.4



2,562.8


Accumulated other comprehensive loss, after tax:






Net unrealized foreign currency translation losses and interest rate swap

(10.3)



(7.2)



(9.0)


Total White Mountains's common shareholders' equity

3,166.0



3,261.5



3,144.3


Non-controlling interests

(102.7)



(116.8)



(136.4)


Total equity

3,063.3



3,144.7



3,007.9


Total liabilities and equity

$

4,000.3



$

3,983.2



$

3,752.2








WHITE MOUNTAINS INSURANCE GROUP, LTD.


BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE


(Unaudited)





June 30,

2020


March 31,

2020


December 31,

2019


June 30,

2019


Book value per share numerators (in millions):









White Mountains's common shareholders' equity - GAAP book value per share numerator

$

3,166.0



$

3,076.7



$

3,261.5



$

3,144.3



Time value of money discount on expected future payments on the BAM Surplus Notes (1)

(146.7)



(149.2)



(151.6)



(135.7)



HG Global's unearned premium reserve (1)

173.8



160.5



156.7



147.2



HG Global's net deferred acquisition costs (1)

(47.0)



(42.9)



(41.5)



(37.9)



Adjusted book value per share numerator

$

3,146.1



$

3,045.1



$

3,225.1



$

3,117.9



Book value per share denominators (in thousands of shares):









Common shares outstanding - GAAP book value per share denominator

3,101.8



3,135.0



3,185.4



3,185.4



Unearned restricted common shares

(23.1)



(26.9)



(18.5)



(24.5)



Adjusted book value per share denominator

3,078.7



3,108.1



3,166.9



3,160.9



GAAP book value per share

$

1,020.71



$

981.39



$

1,023.91



$

987.12



Adjusted book value per share

$

1,021.91



$

979.74



$

1,018.41



$

986.39





(1) Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%.





June 30,

2020


March 31,

2020


December 31,

2019


June 30,

2019


Quarter-to-date change in GAAP book value per share, including dividends:

4.0

%


(4.1)

%


2.1

%


0.6

%


Quarter-to-date change in adjusted book value per share, including dividends:

4.3

%


(3.7)

%


1.4

%


0.8

%


Year-to-date change in GAAP book value per share, including dividends:

(0.2)

%


(4.1)

%


14.4

%


10.3

%


Year-to-date change in adjusted book value per share, including dividends:

0.4

%


(3.7)

%


14.8

%


11.2

%


Year-to-date dividends per share

$

1.00



$

1.00



$

1.00



$

1.00





June 30,

2020


March 31,

2020


December 31,

2019


June 30,

2019


Summary of goodwill and other intangible assets (in millions):









Goodwill:









NSM

$

504.9


(1)

$

379.1



$

381.6



$

398.4


(2)

Kudu

7.6



7.6



7.6



9.8


(2)

Other Operations

5.7



5.7



5.5



20.4



Total goodwill

518.2



392.4



394.7



428.6



Other intangible assets:









NSM

223.7



236.1



241.4



238.4



Kudu

1.8



1.9



2.0





Other Operations

16.2



16.4



16.6



.6



Total other intangible assets

241.7



254.4



260.0



239.0



Total goodwill and other intangible assets

759.9



646.8



654.7



667.6



Goodwill and other intangible assets attributed to non-controlling interests

(25.9)



(23.5)



(23.4)



(25.4)



Goodwill and other intangible assets included in White Mountains's common shareholders' equity

$

734.0



$

623.3



$

631.3



$

642.2





(1)

The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisition of Kingsbridge had not yet been finalized at June 30, 2020.

(2)

The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisition of Embrace and the Kudu transaction had not yet been finalized at June 30, 2019.







WHITE MOUNTAINS INSURANCE GROUP, LTD.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(millions)


(Unaudited)





Three Months Ended June 30,


Six Months Ended June 30,



2020


2019


2020


2019


Revenues:









Financial Guarantee (HG Global/BAM)









Earned insurance premiums

$

5.6



$

4.3



$

11.0



$

8.5



Net investment income

4.9



5.4



10.4



10.7



Net realized and unrealized investment gains

14.4



11.5



20.5



23.3



Other revenues

1.2



.4



1.7



1.0



Total Financial Guarantee revenues

26.1



21.6



43.6



43.5



Specialty Insurance Distribution (NSM)









Commission revenues

63.0



54.9



116.0



98.2



Other revenues

13.1



11.2



25.1



17.2



Total Specialty Insurance Distribution revenues

76.1



66.1



141.1



115.4



Asset Management (Kudu)









Net investment income

5.6



4.0



12.9



4.0



Net realized and unrealized investment gains (losses)

16.5



.4



(8.3)



.4



Other revenues





.1





Total Asset Management revenues

22.1



4.4



4.7



4.4


(1)

Marketing Technology (MediaAlpha)









Advertising and commission revenues







48.8



Total Marketing Technology revenues







48.8


(2)

Other Operations









Net investment income

9.1



11.6



19.2



22.3



Net realized and unrealized investment gains (losses)

122.0



23.3



(16.0)



142.4



Realized gain and unrealized investment gain from the MediaAlpha Transaction







182.2



Advertising and commission revenues

1.9



1.3



4.0



2.6



Other revenues

2.3



.7



3.8



1.0



Total Other Operations revenues

135.3



36.9



11.0



350.5



Total revenues

$

259.6



$

129.0



$

200.4



$

562.6





(1)

Kudu's results are from April 4, 2019, the date White Mountains began consolidating Kudu, to June 30, 2019.

(2)

MediaAlpha's results are from January 1, 2019 to February 26, 2019, the date of the MediaAlpha Transaction.




WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

(millions)

(Unaudited)



Three Months Ended June 30,


Six Months Ended June 30,



2020


2019


2020


2019


Expenses:









Financial Guarantee (HG Global/BAM)









Insurance acquisition expenses

$

2.1



$

1.4



$

3.8



$

2.7



Other underwriting expenses

.2



.1



.2



.2



General and administrative expenses

12.5



12.3



27.2



26.6



Total Financial Guarantee expenses

14.8



13.8



31.2



29.5



Specialty Insurance Distribution (NSM)









General and administrative expenses

48.5



32.8



88.1



58.1



Broker commission expenses

21.0



18.1



39.3



33.6



Change in fair value of contingent consideration earnout liabilities

(1.7)



6.3



(2.3)



7.6



Amortization of other intangible assets

6.3



4.1



11.1



9.1



Interest expense

5.7



4.1



10.0



7.8



Total Specialty Insurance Distribution expenses

79.8



65.4



146.2



116.2



Asset Management (Kudu)









General and administrative expenses

2.8



2.2



5.3



2.2



Amortization of other intangible assets

.1





.2





Interest expense

1.5





2.9





Total Asset Management expenses

4.4



2.2



8.4



2.2


(1)

Marketing Technology (MediaAlpha)









Cost of sales







40.6



General and administrative expenses







12.5



Amortization of other intangible assets







1.6



Interest expense







.2



Total Marketing Technology expenses







54.9


(2)

Other Operations









Cost of sales

2.2



1.6



4.2



2.7



General and administrative expenses

25.3



30.1



42.8



59.5



Amortization of other intangible assets

.2



.1



.4



.1



Interest expense

.2





.5





Total Other Operations expenses

27.9



31.8



47.9



62.3



Total expenses

126.9



113.2



233.7



265.1



Pre-tax income (loss) from continuing operations

132.7



15.8



(33.3)



297.5



Income tax (expense) benefit

(24.1)



.1



1.4



(10.1)



Net income (loss) from continuing operations

108.6



15.9



(31.9)



287.4



Net (loss) income from sale of discontinued operations, net of tax

(1.0)





(.1)



.7



Net income (loss)

107.6



15.9



(32.0)



288.1



Net loss attributable to non-controlling interests

7.8



4.6



18.6



16.8



Net income (loss) attributable to White Mountains's common shareholders

$

115.4



$

20.5



$

(13.4)



$

304.9





(1)

Kudu's results are from April 4, 2019, the date White Mountains began consolidating Kudu, to June 30, 2019.

(2)

MediaAlpha's results are from January 1, 2019 to February 26, 2019, the date of the MediaAlpha Transaction.




WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(Unaudited)



Three Months Ended June 30,


Six Months Ended June 30,


2020


2019


2020


2019

Net income (loss) attributable to White Mountains's common shareholders

$

115.4



$

20.5



$

(13.4)



$

304.9


Other comprehensive income (loss), net of tax

.5



(3.1)



(2.9)



(3.4)


Comprehensive income (loss)

115.9



17.4



(16.3)



301.5


Other comprehensive (income) loss attributable to non-controlling interests

(.2)



.2



(.2)



.2


Comprehensive income (loss) attributable to White Mountains's common shareholders

$

115.7



$

17.6



$

(16.5)



$

301.7





WHITE MOUNTAINS INSURANCE GROUP, LTD.

EARNINGS PER SHARE

(Unaudited)


Income (loss) per share attributable to White Mountains's common shareholders

Three Months Ended June 30,


Six Months Ended June 30,


2020


2019


2020


2019

Basic earnings (loss) per share








Continuing operations

$

37.46



$

6.44



$

(4.25)



$

95.71


Discontinued operations

(.32)





(.03)



.22


Total consolidated operations

$

37.14



$

6.44



$

(4.28)



$

95.93










Diluted earnings (loss) per share








Continuing operations

$

37.46



$

6.44



$

(4.25)



$

95.71


Discontinued operations

(.32)





(.03)



.22


Total consolidated operations

$

37.14



$

6.44



$

(4.28)



$

95.93


Dividends declared per White Mountains's common share

$



$



$

1.00



$

1.00





WHITE MOUNTAINS INSURANCE GROUP, LTD.

QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)

(millions)

(Unaudited)


For the Three Months Ended June 30, 2020

HG Global/BAM










HG Global


BAM


NSM


Kudu


Other
Operations


Total

Revenues:












Earned insurance premiums

$

4.6



$

1.0



$



$



$



$

5.6


Net investment income

2.0



2.9





5.6



9.1



19.6


Net investment income (expense) - BAM surplus note interest

4.7



(4.7)










Net realized and unrealized investment gains

10.7



3.7





16.5



122.0



152.9


Advertising and commission revenues





63.0





1.9



64.9


Other revenues

.1



1.1



13.1





2.3



16.6


Total revenues

22.1



4.0



76.1



22.1



135.3



259.6


Expenses:












Insurance acquisition expenses

1.2



.9









2.1


Other underwriting expenses



.2









.2


Cost of sales









2.2



2.2


General and administrative expenses

.5



12.0



48.5



2.8



25.3



89.1


Broker commission expenses





21.0







21.0


Change in fair value of contingent consideration earnout liabilities





(1.7)







(1.7)


Amortization of other intangible assets





6.3



.1



.2



6.6


Interest expense





5.7



1.5



.2



7.4


Total expenses

1.7



13.1



79.8



4.4



27.9



126.9


Pre-tax income (loss)

$

20.4



$

(9.1)



$

(3.7)



$

17.7



$

107.4



$

132.7





WHITE MOUNTAINS INSURANCE GROUP, LTD.

QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)

(millions)

(Unaudited)


For the Three Months Ended June 30, 2019

HG Global/BAM










HG Global


BAM


NSM


Kudu


Other
Operations


Total

Revenues:












Earned insurance premiums

$

3.4



$

.9



$



$



$



$

4.3


Net investment income

1.9



3.5





4.0



11.6



21.0


Net investment income (expense) - BAM surplus note interest

6.8



(6.8)










Net realized and unrealized investment gains

4.0



7.5





.4



23.3



35.2


Advertising and commission revenues





54.9





1.3



56.2


Other revenues



.4



11.2





.7



12.3














Total revenues

16.1



5.5



66.1



4.4



36.9



129.0


Expenses:












Insurance acquisition expenses

.9



.5









1.4


Other underwriting expenses



.1









.1


Cost of sales









1.6



1.6


General and administrative expenses

.4



11.9



32.8



2.2



30.1



77.4


Broker commission expenses





18.1







18.1


Change in fair value of contingent consideration earnout liabilities





6.3







6.3


Amortization of other intangible assets





4.1





.1



4.2


Interest expense





4.1







4.1














Total expenses

1.3



12.5



65.4



2.2



31.8



113.2














Pre-tax income (loss)

$

14.8



$

(7.0)



$

.7



$

2.2



$

5.1



$

15.8





WHITE MOUNTAINS INSURANCE GROUP, LTD.

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)

(millions)

(Unaudited)


For the Six Months Ended June 30, 2020

HG Global/BAM










HG Global


BAM


NSM


Kudu


Other
Operations


Total

Revenues:












Earned insurance premiums

$

9.0



$

2.0



$



$



$



$

11.0


Net investment income

4.3



6.1





12.9



19.2



42.5


Net investment income (expense) - BAM surplus note interest

9.5



(9.5)










Net realized and unrealized investment gains (loss)

12.1



8.4





(8.3)



(16.0)



(3.8)


Advertising and commission revenues





116.0





4.0



120.0


Other revenue

.1



1.6



25.1



.1



3.8



30.7














Total revenues

35.0



8.6



141.1



4.7



11.0



200.4


Expenses:












Insurance acquisition expenses

2.2



1.6









3.8


Other underwriting expenses



.2









.2


Cost of sales









4.2



4.2


General and administrative expenses

1.0



26.2



88.1



5.3



42.8



163.4


Broker commission expenses





39.3







39.3


Change in fair value of contingent consideration earnout liabilities





(2.3)







(2.3)


Amortization of other intangible assets





11.1



.2



.4



11.7


Interest expense





10.0



2.9



.5



13.4














Total expenses

3.2



28.0



146.2



8.4



47.9



233.7














Pre-tax income (loss)

$

31.8



$

(19.4)



$

(5.1)



$

(3.7)



$

(36.9)



$

(33.3)





WHITE MOUNTAINS INSURANCE GROUP, LTD.

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)

(millions)

(Unaudited)


For the Six Months Ended June 30, 2019

HG Global/BAM












HG Global


BAM


NSM


Kudu (1)


MediaAlpha (2)


Other
Operations


Total

Revenues:














Earned insurance premiums

$

6.8



$

1.7



$



$



$



$



$

8.5


Net investment income

3.8



6.9





4.0





22.3



37.0


Net investment income (expense) -
BAM surplus note interest

13.7



(13.7)












Net realized and unrealized
investment gains

9.1



14.2





.4





142.4



166.1


Realized gain and unrealized
investment gain from the
MediaAlpha Transaction











182.2



182.2


Advertising and commission
revenues





98.2





48.8



2.6



149.6


Other revenue



1.0



17.2







1.0



19.2
















Total revenues

33.4



10.1



115.4



4.4



48.8



350.5



562.6


Expenses:














Insurance acquisition expenses

1.7



1.0











2.7


Other underwriting expenses



.2











.2


Cost of sales









40.6



2.7



43.3


General and administrative expenses

.9



25.7



58.1



2.2



5.7



59.5



152.1


General and administrative expenses
- MediaAlpha transaction related
costs









6.8





6.8


Broker commission expense





33.6









33.6


Change in fair value of contingent
consideration earnout liabilities





7.6









7.6


Amortization of other intangible
assets





9.1





1.6



.1



10.8


Interest expense





7.8





.2





8.0
















Total expenses

2.6



26.9



116.2



2.2



54.9



62.3



265.1
















Pre-tax income (loss)

$

30.8



$

(16.8)



$

(.8)



$

2.2



$

(6.1)



$

288.2



$

297.5
















(1)

Kudu's results are from April 4, 2019, the date White Mountains began consolidating Kudu, to June 30, 2019.

(2)

MediaAlpha's results are from January 1, 2019 to February 26, 2019, the date of the MediaAlpha Transaction.




WHITE MOUNTAINS INSURANCE GROUP, LTD.

SELECTED FINANCIAL DATA

(millions)

(Unaudited)



Three Months Ended June 30,


Six Months Ended June 30,

BAM

2020


2019


2020


2019

Gross par value of primary market policies issued

$

3,196.1



$

2,624.2



$

5,704.2



$

4,010.0


Gross par value of secondary market policies issued

878.5



293.2



1,347.0



832.4


Gross par value of assumed reinsurance

36.9





36.9




Total gross par value of market policies issued

$

4,111.5



$

2,917.4



$

7,088.1



$

4,842.4










Gross written premiums

$

21.5



$

12.5



$

31.2



$

20.4


MSC collected

21.5



12.0



31.5



19.9


Total gross written premiums and MSC collected

$

43.0



$

24.5



$

62.7



$

40.3


Present value of future installment MSC collections

.3





.3



.2


Gross written premium adjustments on existing installment policies







(.1)


Gross written premiums and MSC from new business

$

43.3



$

24.5



$

63.0



$

40.4


Total pricing

105 bps



84 bps



89 bps



83 bps