White Mountains has reported that for full year 2024, its investment into the Outrigger Re collateralized reinsurance sidecar, which supports its property and casualty insurance and reinsurance subsidiary Ark, delivered income of $46 million, down 33% on 2023 as catastrophe losses had a far greater impact.
As we’ve discussed previously, White Mountains total commitment toward the 2024 underwriting year of the Outrigger Re reinsurance sidecar reduced to $130 million of the $250 million in capital for the year.But despite a year-on-year reduction in the premiums written under its specific cell, or segregated account, of the broader reinsurance sidecar called WM Outrigger, the collateralised reinsurance vehicle still generated attractive profits for White Mountains in 2024, despite increased catastrophe losses when compared with 2023.
Today, White Mountains has reported that its income earned from its stake in Outrigger Re amounted to $46 million for 2024, which is lower than the $69 million reported for 2023.
For just the fourth-quarter of 2024, Outrigger Re generated income of $6 million, so $10 million less than the $16 million generated for Q4 2023.
In 2023, White Mountains notes that major catastrophe losses affecting Outrigger Re were minimal, but in 2024, the collateralised reinsurance sidecar was hit with losses from Hurricanes Milton, Helene, Debby, and Beryl.
As a result, Outrigger Re’s combined ratio increased to 86% and 60% for Q4 and full year 2024, respectively, compared to 55% and 44% in the respective comparable prior year periods.
In terms of premiums, White Mountains has reported Outrigger Re gross and net written premiums of $5 million and $87 million, and net earned premiums of $25 million and $88 million for Q4 and full year 2024, respectively. In contrast, for 2023, Outrigger Re generated gross and net written premiums of $2 million and $110 million, and net earned premiums of $29 million and $104 million for Q4 and the full year, respectively.
The year-on-year dip in net earned premiums reflects White Mountains’ lower capital commitment to the reinsurance sidecar in 2024.
Given the severity of the Los Angeles wildfires, White Mountains has confirmed today that Ark/WM Outrigger will have exposure primarily via its property book, but there’s also potential for limited specialty and excess casualty claims over time. However, Ark does not participate on the reinsurance program that backs the California FAIR plan, which will help to limit losses. Currently, says White Mountains, Ark does not expect the LA wildfire losses will cause full year 2025 actual catastrophe losses for Ark/WM Outrigger to diverge materially from planned catastrophe losses for the year.
It’s worth highlighting that Ark renewed its collateralized reinsurance sidecar Outrigger Re at a slightly smaller size of $230 million for 2025, with the White Mountains total commitment toward the 2025 underwriting year amounting to $150 million.
Ian Beaton, CEO of Ark, said, “Ark had a good quarter and full year, producing combined ratios of 77% and 83%, respectively. Full year gross written premiums were $2.2 billion, up 16% year-over-year, aided by new underwriting teams and products. In November, AM Best affirmed Ark’s ‘A/stable’ financial strength rating. Although the rate environment is moderating, we continue to see opportunities for profitable growth in 2025.”
