White Mountains highlights 94% Ark CR despite wildfire losses

By David Bull

May 7 - (The Insurer) - White Mountains-owned Ark delivered a combined ratio of 94% in the first quarter that matched the prior-year period, despite 25 points of cat losses driven by the California wildfires as the London and Bermudian (re)insurer benefited from 14 points of net favourable prior-year development.

• Ark pre-tax income jumps from $33 million to $52 million

• Combined ratio of 94% matches prior-year period despite 25 points of wildfire-driven cat losses

• Combined ratio benefited from 14 points of favourable PYD driven by marine & energy and property

• Ark delivered 27% top line growth with GPW of $1.11 billion

• MGA Bamboo doubled revenues to $44 million; renewed reinsurance despite $160 million wildfire losses

• Reinsurance program includes cat bond and sidecar

In its Q1 earnings release, the Bermudian parent company noted that Ark’s Q1 2024 results had included minimal cat losses and slight net favourable prior-year development.

The net favourable development for the first quarter of 2025 was driven by Ark’s marine & energy and property lines of business.

Net losses after reinsurance from the California wildfires totalled $75 million in the quarter.

Ark reported 27% growth in gross premiums written (GPW) to $1.11 billion, with net premiums written of $690 million (Q1 2024: $564 million) and net premiums earned of $346 million (Q1 2024: $293 million).

Premium growth was driven primarily by property and specialty lines of business, said the company.

Its Q1 performance led it to generate $52 million of pre-tax income, up from $33 million in the prior-year period. Ark’s results also benefited from net realized and unrealized gains of $30 million, compared to $11 million in Q1 2024.

Ark CEO Ian Beaton said: “We are off to a good start in 2025, with a combined ratio of 94%. Gross written premiums increased 27% over 2024, aided by the addition of new underwriting teams and lines of business. Market conditions remain attractive, despite rate declines in several lines of business.”

Ark’s earnings are also combined with sidecar vehicle WM Outrigger in White Mountains results, with the segment’s combined ratio up from 91% to 97% in the first quarter.

WM Outrigger’s combined ratio jumped from 32% in Q1 2024 to 166% in Q1 2025 as it took a share of wildfire losses.

BAMBOO WILDFIRE LOSSES TOTAL $160 MILLION

White Mountains CEO Manning Rountree also highlighted the performance and developments at other entities owned by the Bermudian holding company, including insurtech MGA Bamboo.

“Bamboo delivered another great quarter, doubling managed premiums on a trailing 12 months basis and tripling MGA adjusted Ebitda year-over-year, while also successfully renewing its largest reinsurance program,” he said.

Bamboo estimates that losses from the California wildfires in January total around $160 million, including the impact of the state’s FAIR plan assessment and an early estimate for subrogation recoveries.

The bulk of the losses will be absorbed by Bamboo’s cat excess of loss and quota share reinsurance partners, said White Mountains.

The company reported commission and fee revenues that doubled to $44 million, with MGA pre-tax income of $10 million and MGA adjusted Ebitda of $20 million, up from $2 million and $6 million respectively in the first quarter of 2024.

Managed premiums climbed from $90 million to $147 million, driven by growth in its renewal book as well as new business.

Bamboo CEO John Chu said: “We are proud of how we delivered for policyholders amidst the California wildfires. Our programs incurred losses, but these remain well within our reinsurance covers. Our relative loss performance was excellent, and, as a result, we completed our April 1st treaty year renewal on favorable terms with strong demand from our reinsurance partners.”

Sister publication Program Manager reported last month that fronting carrier Sutton National and Bamboo renewed the MGA’s reinsurance program, which included the closing of the Greengrove Re Ltd Series 2025-1 cat bond and the execution and funding of the Greenshoots Re Ltd Series 2025-1 sidecar transaction.

Program Manager had first reported that Bamboo and Sutton National were working on the reinsurance program, which would include an upsized cat bond and sidecar, despite California wildfire losses on the expiring cat program.

Parent White Mountains generated comprehensive income attributable to common shareholders of $35 million in Q1, down from $236 million in the prior-year period as its results were impacted by $37 million of unrealized investment losses related to its MediaAlpha investment, compared to a $211 million gain in the first quarter of 2024.