Ark’s Outrigger Re sidecar generates $69m of income for White Mountains in 2024

Over the course of full-year 2023, White Mountains has reported that its investment into the Outrigger Re collateralized reinsurance sidecar that supports its re/insurer subsidiary Ark, generated the company $69 million in pre-tax income.

For 2023, White Mountains demonstrated its appetite for deploying capital to insurance-linked securities (ILS) and reinsurance-linked investments as it became the lead investor behind its subsidiary Ark Insurance Holdings’ $250 million collateralized reinsurance sidecar Outrigger Re Ltd.

It was already clear after the third-quarter that Ark and parent White Mountains were reaping the benefits from the reinsurance sidecar in the hard market environment.

Now, with the full-year results in, White Mountains has reported that income earned from its stake in the Outrigger Re sidecar reached $69 million for 2023.

The fourth-quarter saw the Outrigger Re sidecar experience more loss activity though, as its full-year combined ration rose to 44%, up from the 40% it was tracking at after Q3.

For Q4 2023 alone, the WM Outrigger Re segment was reported to have a 55% combined ratio, so a more elevated, compared to the prior quarter, loss experience, but still relatively low.

WM Outrigger Re reported gross and net written premiums of $2 million and $110 million and net earned premiums of $29 million and $104 million in the fourth quarter and full-year.

While in Q4, WM Outrigger Re earned pre-tax income of $16 million and for the full-year it reached $69 million.

Ian Beaton, CEO of Ark, noted the sidecar helped his company in 2023, saying, “Ark had a good quarter and full year, producing combined ratios of 70% and 82%, respectively.  Premiums grew 31% year over year, including risk adjusted rate change of 15%.  Growth was particularly strong in the property line of business, aided by the rate environment and capacity from Outrigger Re.  We look forward to continued profitable growth in the business in 2024.”

Manning Rountree, CEO, of White Mountains noted, “We had a strong fourth quarter to cap off a good year.  Ark produced good underwriting results in both the quarter and the full year, while growing full-year gross written premiums by 31%.  We redeployed $130 million into Outrigger Re for the coming year.”

Here, Rountree was referring to the recent renewal of the Outrigger Re sidecar for the 2024 underwriting year, which as we explained saw White Mountains remaining as the the lead investor, with its $130 million contribution towards the $250 million of capital the sidecar has for 2024.

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