White Mountains Reports Third Quarter Results
White Mountains Insurance Group, Ltd. reported book value per share of $1,099 and adjusted book value per share of $1,101 as of September 30, 2020.
The company said, “Book value per share and adjusted book value per share both increased 8% in the third quarter of 2020. For the first nine months of 2020, book value per share increased 7% and adjusted book value per share increased 8%, including dividends.
“Marking the value of White Mountains’s investment in MediaAlpha to its initial public offering [MediaAlpha IPO] price of $19.00 per share and giving effect to a related internal reorganization in October, which resulted in the release of a $124 million deferred tax liability, book value per share would have been $1,132 and adjusted book value per share would have been $1,135 as of September 30, 2020.
“Subsequent to the MediaAlpha IPO, each $1.00 per share increase or decrease in the stock price of MediaAlpha will result in an approximate $7 per share increase or decrease in White Mountains’s book value per share and adjusted book value per share. For example, further marking the value of White Mountains’s investment in MediaAlpha to its October month-end closing price of $33.83 per share, book value per share would have been $1,230 and adjusted book value per share would have been $1,233 as of September 30, 2020.”
Manning Rountree, CEO, commented, “We had an active quarter, producing both noteworthy transactions and good results. On October 1, we announced our transaction with Ark, which remains on track for a January 2021 closing. We are delighted to partner with Ian Beaton and Nick Bonnar, and we are excited about the market opportunity in front of us.
“Later in October, we celebrated the successful IPO of MediaAlpha. Steve Yi, Eugene Nonko, Ambrose Wang, Tigran Sinanyan and team have built a great company from scratch, unlocking tremendous shareholder value along the way. Thank you! During the quarter, our investment portfolio returned 2.8% as both equity and fixed income markets edged higher. BAM wrote $30 million of total premiums and member surplus contributions, as demand for bond insurance remained elevated.
“NSM saw 3% quarter over quarter growth in pro forma controlled premiums and 1% quarter over quarter growth in pro forma adjusted EBITDA. Kudu had another good quarter, benefiting from the move higher in investment markets. In August and September, we liquidated the bulk of our common stocks in anticipation of funding the Ark transaction. When reflecting each of the Ark transaction and the MediaAlpha IPO, our capital base is now more or less fully deployed.”
Comprehensive income attributable to common shareholders was $237 million and $220 million in the third quarter and first nine months of 2020, compared to comprehensive income attributable to common shareholders of $46 million and $348 million in the third quarter and first nine months of 2019.
Results in the third quarter and first nine months of 2020 included $305 million and $355 million of net investment income and unrealized investment gains from White Mountains’s investment in MediaAlpha.
Results in the third quarter and first nine months of 2019 included $37 million and $222 million of net investment income, realized gains and unrealized investment gains from White Mountains’s investment in MediaAlpha, $182 million of which was from MediaAlpha’s sale of a significant minority stake to Insignia Capital Group on February 26, 2019 [MediaAlpha Transaction].”
