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Sep 30, 2020
White Mountains Q3 2020 Earnings Report
Reported an increase in book value per share and adjusted book value per share, driven by investment portfolio performance and MediaAlpha's increased fair value.
Key Takeaways
White Mountains reported strong Q3 2020 results, with significant increases in book value per share and adjusted book value per share. The investment portfolio performed well, and the company benefited from the increased fair value of its investment in MediaAlpha. The company also announced a transaction with Ark, expected to close in January 2021, and celebrated the successful IPO of MediaAlpha.
Book value per share and adjusted book value per share both increased 8% in Q3 2020.
Investment portfolio returned 2.8% in Q3 2020, with positive contributions from both equity and fixed income markets.
BAM wrote $30 million of total premiums and member surplus contributions, reflecting elevated demand for bond insurance.
NSM saw 3% quarter over quarter growth in pro forma controlled premiums and 1% quarter over quarter growth in pro forma adjusted EBITDA.
White Mountains
White Mountains
White Mountains Revenue by Segment
Revenue by Segment
Financial Guarantee Revenue
CapyFin.comAsset Management Revenue
CapyFin.comOther Operations Revenue
CapyFin.com Forward Guidance
White Mountains expects the Ark transaction to close in January 2021 and anticipates further capital deployments in the coming quarters.
Positive Outlook
- Ark transaction remains on track for a January 2021 closing.
- Partnership with Ian Beaton and Nick Bonnar is expected to create a significant market opportunity.
- Successful IPO of MediaAlpha unlocked tremendous shareholder value.
- Demand for bond insurance remained elevated.
- Kudu's diversified portfolio continues to demonstrate durability.
Challenges Ahead
- COVID-19 pandemic is negatively impacting the finances of municipalities.
- Financial stress could emerge over time.
- Decline in the U.K. where NSM is repositioning the business for growth during the COVID-19 pandemic and beyond.
- Lower investment returns at HG Global.
- Lower investment returns at BAM.
Revenue & Expenses
Visualization of income flow from segment revenue to net income