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WHITE MOUNTAINS INSURANCE GROUP LTD

WTM
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Business Summary

White Mountains Insurance Group, Ltd. is a Bermuda exempted company engaged in making opportunistic and value-oriented acquisitions of businesses and assets in the insurance, financial services and related sectors, operating these businesses and assets through its subsidiaries and, if and when attractive exit valuations become available, disposing of these businesses and assets. As of December 31, 2025, White Mountains conducted its business primarily in five areas: property and casualty insurance and reinsurance, municipal bond guarantee reinsurance, capital solutions for asset and wealth management firms, specialty insurance distribution and other operations.

In the property and casualty insurance and reinsurance sector, Ark competes with other Lloyd's syndicates, London market participants and major U.S., Bermuda, European and other international insurance and reinsurance companies, including American International Group, Inc., Arch Capital Group Ltd., Ascot Group Ltd., Aspen Insurance Holdings Ltd., Chubb Ltd., Everest Re Group, Markel Group, Inc., RenaissanceRe Holdings Ltd., Sompo Holdings Inc., SiriusPoint Ltd., AXIS Capital Holdings Ltd., Beazley plc, Canopius Group Ltd., Convex Group Ltd., Hiscox plc, Lancashire Holdings Ltd., QBE Insurance Group Ltd. and other syndicates. In the municipal bond guarantee reinsurance sector, BAM's primary competitor is Assured Guaranty Ltd. In the specialty insurance distribution sector, Distinguished's primary competitors are typically specialty insurance distribution and underwriting businesses and their agents. White Mountains believes that municipal bonds insured by BAM have strong appeal to retail investors, who buy smaller, less liquid issuances, have less portfolio diversification and have fewer credit differentiation skills and analytical resources than institutional investors.

White Mountains generates revenue through a diversified model: property and casualty insurance and reinsurance premiums (Ark/WM Outrigger), municipal bond guarantee reinsurance premiums and interest on surplus notes (HG Global), revenue and earnings participation contracts from capital solutions for asset and wealth management firms (Kudu), and commission and fee revenues from specialty insurance distribution (Distinguished). Other Operations includes investment income from assets managed by WM Advisors, equity method investments, and other operating businesses. The mix includes both recurring income from insurance premiums and investment income, as well as transactional income from realized investment gains and dispositions.

The Ark/WM Outrigger segment consists of Ark and WM Outrigger Re. Ark is a specialty property and casualty insurance and reinsurance company offering niche products including property, specialty, marine & energy, casualty and accident & health. Ark underwrites through Lloyd's Syndicates 4020 and 3902 and ACSN 3832 in the United Kingdom, and through GAIL in Bermuda. Ark's gross written premiums by line of business for 2025 were: Property $1,178.0 million , Specialty $646.7 million , Marine & Energy $453.6 million , Casualty $168.8 million , and Accident & Health $110.1 million , totaling $2,557.2 million . WM Outrigger Re provides collateralized reinsurance protection on Ark's Bermuda global property catastrophe excess of loss portfolio. White Mountains's capital commitment to WM Outrigger Re was $150 million for the 2025 underwriting year, $130 million for the 2024 underwriting year and $205 million for the 2023 underwriting year. WM Outrigger Re is not participating in the 2026 underwriting year.

The HG Global segment consists of HG Global and its reinsurance subsidiary HG Re, which provides first-loss reinsurance protection of up to 15%-of-par outstanding for each policy assumed from BAM under the FLRT. HG Re is only licensed to provide reinsurance to BAM. As of December 31, 2025, HG Re's insured portfolio had an outstanding par value of policies assumed of $20,559.9 million with a weighted average credit rating of A . The Kudu segment provides capital solutions for boutique asset and wealth managers, structured as noncontrolling equity interests in the form of Participation Contracts. As of December 31, 2025, Kudu had deployed $1.2 billion , including transaction costs, into 30 asset and wealth management firms globally, with combined AUM of approximately $153 billion . The Distinguished segment is a full-service MGA and program administrator for specialty property and casualty insurance, earning commissions based on volume and profitability. For the period from September 2, 2025 through December 31, 2025, Distinguished reported managed premiums of $187.9 million and commission and fee revenues of $56.7 million .

On December 5, 2025, White Mountains completed the sale of a controlling financial interest in the Bamboo Group to affiliates of funds advised by CVC Capital Partners, selling approximately 77.3% of its equity interest for net cash proceeds at closing of $848 million and retaining an indirect equity interest valued at $250 million . On September 2, 2025, White Mountains acquired a controlling financial interest in Distinguished, paying $225 million of cash consideration, including a post-closing purchase price adjustment of $1 million , while Distinguished borrowed $50 million of incremental debt and utilized $7 million of cash on hand. On July 18, 2025, White Mountains invested $150 million into BroadStreet through the BroadStreet SPV. On April 1, 2025, White Mountains acquired a majority interest in Enterprise Solutions, paying $58 million of cash consideration, with Enterprise Solutions borrowing $15 million in new debt. In 2025, White Mountains repurchased and retired 100,581 of its common shares for $203 million at an average share price of $2,013.67 , including 64,064 shares repurchased through a self-tender offer in December at $2,082.60 per share.

White Mountains ended 2025 with book value per share of $2,187.97 , an increase of 25% for the year, including dividends. Comprehensive income attributable to common shareholders was $1,108.9 million in 2025, compared to $230.3 million in 2024. Total revenues were $3,735.0 million in 2025, compared to $2,239.8 million in 2024. Net income attributable to White Mountains's common shareholders was $1,106.4 million in 2025, compared to $230.4 million in 2024. The increase was driven largely by the net gain on sale of the Bamboo Group of approximately $320 per share (based on 2.54 million shares outstanding at December 5, 2025).

Business Outlook

White Mountains expects to deploy up to $500 million of equity capital through WTM Partners over time. WTM Partners deployed $58 million in Enterprise Solutions in 2025, which was the first acquisition by WTM Partners. Kudu expects to fund new capital deployments predominantly through excess operating cash flows, recycling of certain sales transaction proceeds, and available debt capacity, with additional equity contributions from White Mountains and other existing investors as needed.

Kudu's growth vector is providing capital solutions for boutique asset and wealth managers for purposes including generational ownership transfers, management buyouts, acquisition and growth finance and legacy partner liquidity. As of December 31, 2025, Kudu had deployed $1.2 billion into 30 asset and wealth management firms globally. Since inception, Kudu's capital was deployed at an initial average gross cash yield of 9.3% based on expected cash in the first year following deployment. Kudu's average capital deployment to date has been approximately $39 million , with a range from $14 million to $81 million . Kudu prioritizes the private capital segment as the underlying clients of these firms tend to be locked-up for an extended period, which can provide stability of revenues in a potential market downturn.

HG Global's primary sources of cash flows are interest payments on the BAM Surplus Notes that are made outside the Collateral Trusts and releases of excess balances from the Collateral Trusts. For the year ended December 31, 2025, HG Re received a distribution from the Supplemental Trust of $61 million , which consisted of an assignment of $30 million of accrued interest on the BAM Surplus Notes and a cash distribution of $31 million . During 2025, HG Global received cash payments of principal and interest on the BAM Surplus Notes totaling $35 million . The FLRT is a perpetual agreement with terms that can be renegotiated every five years; for the next renegotiation period, either party may provide notice during 2028 to trigger a renegotiation that would take effect on January 1, 2030 .

White Mountains's investment philosophy is to maximize long-term, after-tax total returns while taking prudent levels of risk and maintaining a diversified portfolio. As of December 31, 2025, the fixed income portfolio duration, including short-term investments, was 1.5 years . White Mountains's total consolidated portfolio return on invested assets was 9.1% in 2025, which included $30 million of unrealized investment gains from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 8.9% in 2025.

White Mountains expects to meet the requirements to be exempt from the Bermuda corporate income tax until January 1, 2030 . White Mountains also expects to meet the requirements to be exempt from the U.K. UTPR until January 1, 2030 , and from the Luxembourg UTPR until January 1, 2030 .

In 2025, White Mountains repurchased and retired 100,581 of its common shares for $203 million at an average share price of $2,013.67 , or 92% of White Mountains's December 31, 2025 book value per share. Including a distribution of $128 million from WM Outrigger Re received in January, undeployed capital stands at roughly $1.0 billion . White Mountains expects to receive additional distributions of reinsurance profits from the 2025 underwriting year in 2026.

White Mountains faces structural headwinds from the cyclical nature of the property and casualty insurance and reinsurance industries, which have historically experienced periods of severe price competition and less selective underwriting standards (soft markets) followed by periods of relatively high prices and more selective underwriting standards (hard markets). The ease of entry into the reinsurance sector facilitates competition from third-party capital in the property catastrophe excess reinsurance line, including catastrophe bonds, industry loss warranties, sidecars and other vehicles. Climate change, characterized by higher temperatures, sea level rise and more extreme weather events, increases the frequency and severity of certain major natural catastrophes.

White Mountains faces execution risks related to its ability to identify and complete future acquisitions and dispositions, which could limit its ability to create shareholder value. The company also faces risks related to the potential inadequacy of loss and LAE reserves, particularly for casualty lines where settlements can extend for long periods. Additionally, White Mountains is exposed to volatility from the valuation of the BAM Surplus Notes, which are carried at fair value using a discounted cash flow analysis, and from its investment in MediaAlpha, which is valued based on the publicly-traded share price.

Risk Factors

White Mountains faces material risks from unpredictable catastrophic events, as Ark underwrites policies covering natural disasters such as hurricanes, windstorms, earthquakes, floods, wildfires, tornadoes, tsunamis and severe weather, as well as man-made catastrophes including cyber attacks, terrorism and war. Ark's net after-tax peak exposure for a 1-in-250 year event related to its largest PML zone is expected to approximate 20-35% of its tangible capital, which was $1,833 million as of December 31, 2025. The company also faces significant risk from the potential inadequacy of loss and LAE reserves, which are inherently uncertain estimates. As of December 31, 2025, White Mountains had total goodwill and other intangible assets of $1,020.2 million on its consolidated balance sheet, of which $578 million relates to Distinguished and $293 million relates to Ark; an impairment of these assets could materially adversely affect results. Additionally, White Mountains is exposed to volatility from the fair value of the BAM Surplus Notes, which were $339 million as of December 31, 2025, and from its investment in MediaAlpha, valued at $231 million based on the publicly-traded share price of $12.95 per share.

Management Priorities

Management's message emphasizes the successful creation of shareholder value through acquisitions and dispositions, highlighted by the sale of a controlling interest in Bamboo for net cash proceeds of $848 million and a retained interest valued at $250 million , generating a net gain of approximately $320 per share . The tone is forward-looking, focusing on deploying undeployed capital of roughly $1.0 billion into opportunistic and value-oriented acquisitions. Key strategic priorities include growing the Ark/WM Outrigger segment through disciplined underwriting and new underwriting teams, expanding Kudu's capital solutions platform, integrating the recently acquired Distinguished and Enterprise Solutions businesses, and continuing to deploy capital through WTM Partners, which expects to deploy up to $500 million of equity capital over time.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Ark/WM Outrigger
  2. [2] Item 1, Business — Ark/WM Outrigger
  3. [3] Item 1, Business — Ark/WM Outrigger
  4. [4] Item 1, Business — Ark/WM Outrigger
  5. [5] Item 1, Business — Ark/WM Outrigger
  6. [6] Item 1, Business — Ark/WM Outrigger
  7. [7] Item 1, Business — Ark/WM Outrigger
  8. [8] Item 1, Business — Ark/WM Outrigger
  9. [9] Item 1, Business — Ark/WM Outrigger
  10. [10] Item 1, Business — HG Global
  11. [11] Item 1, Business — HG Global
  12. [12] Item 1, Business — HG Global
  13. [13] Item 1, Business — Kudu
  14. [14] Item 1, Business — Kudu
  15. [15] Item 1, Business — Kudu
  16. [16] Item 1, Business — Distinguished
  17. [17] Item 1, Business — Distinguished
  18. [18] Item 1, Business — Other Operations
  19. [19] Item 1, Business — Other Operations
  20. [20] Item 1, Business — Other Operations
  21. [21] Item 7, MD&A — Results of Operations
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Results of Operations
  24. [24] Item 7, MD&A — Results of Operations
  25. [25] Item 1, Business — Other Operations
  26. [26] Item 7, MD&A — Results of Operations
  27. [27] Item 7, MD&A — Results of Operations
  28. [28] Item 7, MD&A — Results of Operations
  29. [29] Item 7, MD&A — Results of Operations
  30. [30] Item 7, MD&A — Results of Operations
  31. [31] Item 5, Market for the Company's Common Equity
  32. [32] Item 5, Market for the Company's Common Equity
  33. [33] Item 7, MD&A — Results of Operations
  34. [34] Item 7, MD&A — Results of Operations
  35. [35] Item 7, MD&A — Summary of Consolidated Results
  36. [36] Item 7, MD&A — Summary of Consolidated Results
  37. [37] Item 7, MD&A — Summary of Consolidated Results
  38. [38] Item 7, MD&A — Summary of Consolidated Results
  39. [39] Item 7, MD&A — Summary of Consolidated Results
  40. [40] Item 7, MD&A — Summary of Consolidated Results
  41. [41] Item 7, MD&A — Results of Operations
  42. [42] Item 1, Business — Other Operations
  43. [43] Item 1, Business — Other Operations
  44. [44] Item 1, Business — Kudu
  45. [45] Item 1, Business — Kudu
  46. [46] Item 1, Business — Kudu
  47. [47] Item 1, Business — Kudu
  48. [48] Item 1, Business — Kudu
  49. [49] Item 1, Business — Kudu
  50. [50] Item 1, Business — HG Global
  51. [51] Item 1, Business — HG Global
  52. [52] Item 1, Business — HG Global
  53. [53] Item 1, Business — HG Global
  54. [54] Item 1, Business — HG Global
  55. [55] Item 1, Business — HG Global
  56. [56] Item 1, Business — Investments
  57. [57] Item 7, MD&A — Results of Operations
  58. [58] Item 7, MD&A — Results of Operations
  59. [59] Item 7, MD&A — Results of Operations
  60. [60] Item 1A, Risk Factors
  61. [61] Item 1A, Risk Factors
  62. [62] Item 1A, Risk Factors
  63. [63] Item 7, MD&A — Results of Operations
  64. [64] Item 7, MD&A — Results of Operations
  65. [65] Item 7, MD&A — Results of Operations
  66. [66] Item 7, MD&A — Results of Operations
  67. [67] Item 7, MD&A — Results of Operations
  68. [68] Item 7, MD&A — Results of Operations
  69. [69] Item 1, Business — Ark/WM Outrigger
  70. [70] Item 1, Business — Ark/WM Outrigger
  71. [71] Item 7, MD&A — Goodwill and Other Intangible Assets
  72. [72] Item 7, MD&A — Goodwill and Other Intangible Assets
  73. [73] Item 7, MD&A — Goodwill and Other Intangible Assets
  74. [74] Item 1, Business — HG Global
  75. [75] Item 1, Business — Other Operations
  76. [76] Item 1, Business — Other Operations
  77. [77] Item 1, Business — Other Operations
  78. [78] Item 1, Business — Other Operations
  79. [79] Item 7, MD&A — Results of Operations
  80. [80] Item 7, MD&A — Results of Operations
  81. [81] Item 1, Business — Other Operations
  82. [82] Item 7, MD&A — Summary of Consolidated Results
  83. [83] Item 7, MD&A — Summary of Consolidated Results
  84. [84] Item 7, MD&A — Summary of Consolidated Results
  85. [85] Item 7, MD&A — Summary of Consolidated Results
  86. [86] Item 7, MD&A — Results of Operations
  87. [87] Item 7, MD&A — Results of Operations
  88. [88] Item 7, MD&A — Ark/WM Outrigger
  89. [89] Item 7, MD&A — Ark/WM Outrigger
  90. [90] Item 7, MD&A — Ark/WM Outrigger
  91. [91] Item 7, MD&A — Ark/WM Outrigger
  92. [92] Item 7, MD&A — HG Global
  93. [93] Item 7, MD&A — Summary of Consolidated Results
  94. [94] Item 7, MD&A — Results of Operations
  95. [95] Item 7, MD&A — Summary of Consolidated Results
  96. [96] Item 7, MD&A — Summary of Consolidated Results
  97. [97] Item 7, MD&A — Summary of Consolidated Results
  98. [98] Item 7, MD&A — Summary of Consolidated Results
  99. [99] Item 7, MD&A — Results of Operations
  100. [100] Item 7, MD&A — Results of Operations
  101. [101] Item 7, MD&A — Results of Operations
  102. [102] Item 7, MD&A — Results of Operations

Analysis on 6/8/2026