White Mountains Insurance Group (WTM) Investor Day 2024 summary

Strategic highlights and capital deployment

• Achieved 14% growth in adjusted book value per share (ABVPS) in 2023, with a 7% stock price increase and an additional 20% gain year-to-date in 2024.

• Cumulative capital deployed since 1Q17 reached $2.9 billion, with $600 million undeployed as of Q1 2024.

• Major capital deployments include launching Outrigger, acquiring a control stake in Bamboo, and a $150 million incremental commitment to Kudu.

• Preference for control positions in insurance and related financial services, with significant management ownership aligning interests.

• Launched White Mountains Partners to extend the capital deployment model into non-insurance sectors, targeting essential services, light industrials, and specialty consumer businesses.

Operating company performance and market outlook

• Ark delivered a 2023 combined ratio of 82%, grew tangible book value over 40%, and increased gross written premiums by 31% in 2023 and 8% in Q1 2024.

• Outrigger produced a 35% return in its first year and was fully renewed for 2024; commitment recalibrated based on available capital.

• Kudu posted a 17% GAAP ROE and a stable 12% levered return in 2023, with a diversified portfolio of 23 investee companies and a robust deal pipeline.

• Bamboo, acquired in January 2024, tripled managed premiums year-over-year to $277 million and turned EBITDA positive.

• MediaAlpha rebounded in Q1 2024 with TTM adjusted EBITDA up 49% year-over-year and positive momentum in the P&C vertical.

Financial position and investment strategy

• Total capital stands at $5.6 billion, with a consolidated debt-to-capital ratio of 10% and no parent-level financial leverage.

• Investment portfolio of $4.1 billion is positioned with shorter duration fixed income and higher equity exposure than peers; 22% in equities and alternatives.

• Total portfolio return was 9.1% in 2023 and 1.3% in Q1 2024, outperforming conventional benchmarks, aided by private equity and floating rate instruments.

• Capital management includes a baseline 3% cash yield target for operating companies, with a focus on redeploying free cash flow for growth.

• Focus remains on long-term per-share value growth, disciplined underwriting, and patient capital deployment, with no current plans for major exits or IPOs.