By Chris Munro

Feb 7 - (The Insurer) - White Mountains-owned Ark's Q4 2024 combined ratio climbed 7 percentage points year on year to 77 percent, with the increase driven in part by 27 points of catastrophe losses from hurricanes Milton and Helene.

• Ark Q4 2024 CR up 7 pts YoY to 77%

• Suffers 27 pts of cat losses in Q4 2024

• Ark’s Q4 GPW climbs $32mn YoY to $264mn

• Ark’s FY 2024 CR up 1 pt YoY to 83%

• Confirms Outrigger Re sidecar renewed for 2025

• WM confirms Ark and Outrigger Re have exposure to California wildfires

In 2023’s fourth quarter, Ark had faced “negligible” catastrophe losses.

The London/Bermuda-based (re)insurer's fourth quarter 2024 combined ratio also included 7 points of net favourable prior year development, driven primarily by Ark’s specialty line of business.

In Q4 2023, Ark had booked 2 points of net unfavourable prior year development, primarily related to losses from Hurricane Ian and Winter Storm Elliott.

Ark generated $264mn of gross premiums written (GPW) in 2024’s fourth quarter, up from $232mn in the prior-year period. Net premiums written $(NPW.SI)$ grew to $234mn in the final three months of 2024, compared with $213mn in Q4 2023.

The (re)insurer recorded pre-tax income of $51mn for the final quarter of 2024, down from the prior-year period’s $109mn.

Ark suffered a net realised and unrealised investment loss of $34mn in 2024’s final quarter, compared with a gain of $50mn in the fourth quarter of 2023.

Ark FY 2024 CR up 10 bps

For the full year, Ark’s combined ratio increased 1 point to 83 percent.

Its full-year combined ratio included 13 points of catastrophe losses, driven primarily by hurricanes Milton, Helene, Debby and Beryl. That compared with 2 points of catastrophe losses in 2023, which predominantly came from hurricanes Otis and Idalia, along with the Maui wildfires.

The company’s 2024 combined ratio benefited from 4 points of net favourable prior year development, driven by its specialty and property operations.

In 2023, Ark’s 2 points of net unfavourable prior year development came largely from Hurricane Ian and Winter Storm Elliott.

Full-year GPW hit $2.21bn, compared with 2023’s $1.90bn. Its NPW for 2024 reached $1.59bn, up from the prior year’s $1.41bn.

Pre-tax income for 2024 reached $253mn, a marginal increase on the prior year’s $249mn.

Net realised and unrealised investment gains totalled $50mn in 2024, down from 2023’s $86mn.

“Ark had a good quarter and full year, producing combined ratios of 77 percent and 83 percent, respectively,” said Ark’s CEO Ian Beaton.

“Full-year gross written premiums were $2.2bn, up 16 percent 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,” Beaton added.

Outrigger Re Q4 CR up 31 points YoY

In its Q4 and full-year 2024 earnings release, White Mountains also provided updates on Ark’s P&C-focused Outrigger Re sidecar.

Outrigger Re’s Q4 2024 combined ratio was 86 percent, compared with 55 percent in the prior-year period. For the full year, Outrigger Re’s combined ratio increased 16 points year on year to 60 percent.

“Catastrophe losses in 2024 included hurricanes Milton, Helene, Debby and Beryl. Major catastrophe losses affecting WM Outrigger Re in 2023 were minimal,” White Mountains said.

Outrigger Re’s GPW and NPW totalled $5mn in 2024’s fourth quarter, compared with $2mn in the prior-year period. Full-year GPW and NPW of $87mn in 2024 was down from 2023’s $110mn.

During 2024’s fourth quarter, White Mountains said Ark had renewed Outrigger Re Ltd for the 2025 underwriting year, with a $150mn total commitment toward the 2025 underwriting year.

On a consolidated basis, Ark and Outrigger Re posted a Q4 2024 combined ratio of 77 percent, up 8 points year on year.

Ark/Outrigger Re’s 2024 combined ratio was 82 percent, an increase of 2 points from 2023.

The combined operations generated GPW of $264mn and $2.21bn in Q4 and 2024, respectively.

NPW for Ark/Outrigger Re totalled $239mn in Q4 and $1.68bn for the full year.

CA wildfire update

The California wildfires “represent a significant industry loss event”, White Mountains said in its earnings report.

While acknowledging that industry estimates are still preliminary and range widely, White Mountains confirmed that Ark and Outrigger Re will have exposure to the wildfires, “primarily through the property line of business”.

“There is also potential for limited specialty and excess casualty claims over time,” White Mountains said.

“Ark does not participate on the reinsurance program backing the California Fair plan,” it stated.

“At this time, Ark does not expect the wildfire losses will cause full year 2025 actual catastrophe losses for Ark/WM Outrigger to diverge materially from 2025 planned catastrophe losses,” the company added.

WM swings to Q4 comprehensive loss

Across White Mountains, the company generated a comprehensive loss attributable to common shareholders of $131mn in Q4 2024, compared with income of $288mn in the prior-year period.

For the full year, Manning Rountree-led White Mountains booked comprehensive income of $230mn, down from 2023’s $511mn.

The fourth quarter 2024 result included a $122mn net realised and unrealised investment loss from White Mountains’ investment in MediaAlpha, compared with a gain of $66mn in the prior-year period.

Its full-year result included $38mn of net realised and unrealised investment gains from the MediaAlpha investment, up from 2023’s $27mn gain.