White Mountains Insurance Group (WTM -1.16%), a Bermuda-based financial services holding company specializing in insurance and related businesses, released its Q2 2025 results on August 7, 2025. The headline news was a diluted earnings per share (GAAP) of $47.75, below analyst expectations of $57.00 (GAAP), representing a 16.2% miss on GAAP EPS. The company delivered revenue of $689.2 million (GAAP). Book value per share (GAAP) reached $1,803.57 as of June 30, 2025, up approximately 4.7% from June 30, 2024. Broad-based growth in specialty insurance, insurance distribution, and solid risk management contributed to overall operational improvement, though equity investment returns underperformed broader benchmarks. The quarter reflected progress in critical operating segments, capital deployment activity, and improved underwriting results, amid continued market and investment volatility.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Diluted EPS (GAAP) | $47.75 | $57.00 | $(21.24) | nm |
| Revenue (GAAP) | $689.2 million | $395.4 million | 74.4 % | |
| Book Value per Share | $1,803.57 | $1,722.02 | 4.7 % | |
| Ark/WM Outrigger Combined Ratio | 84.4 % | 87.0 % | (2.6 pp) | |
| Gross Written Premiums – Ark/WM Outrigger | $815.2 million | $697.0 million | 17.0 % | |
| MGA Adjusted EBITDA – Bamboo | $25.6 million | $11.5 million | 122.6 % |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
White Mountains Insurance Group operates through several specialty insurance and financial segments, including property and casualty insurance, reinsurance, insurance distribution, and asset management capital solutions. Its businesses are mainly centered around brands like Ark/WM Outrigger (specialty property and casualty insurance and reinsurance), Bamboo (an insurance distribution and managing general agent platform), HG Global (municipal bond insurance), and Kudu (asset management capital solutions). Its approach focuses on disciplined risk selection, capital growth, and a diverse investment portfolio.
In recent years, White Mountains has concentrated on scaling its core insurance and distribution operations, building strategic partnerships with brokers and intermediaries, and optimizing capital through targeted acquisitions. Key success factors include strong underwriting, careful investment allocation, strict regulatory compliance, and innovation in distributing insurance products through managing general agents and specialized channels. Maintaining robust capital adequacy has also been central to its strategy.
Quarter Highlights: Financial and Operational Performance
The quarter featured broad growth across White Mountains’ specialty insurance and distribution platforms, offset by mark-to-market volatility in investments and a GAAP earnings miss. Within Ark/WM Outrigger, gross written premiums—a measure of the value of policies underwritten before deductions for reinsurance—grew 17% to $815 million. The combined ratio, a critical measure of underwriting profitability that compares total costs to premiums (a value below 100% signals profitability), improved to 84.4% from 87.0% in Q2 2024. This improvement was attributed to favorable reserve developments and strong performance in property, marine & energy, and specialty lines, despite significant catastrophe losses from the January 2025 wildfires in California.
Bamboo reported commission and fee revenues of $59 million, compared to $33 million in the second quarter of 2024. Bamboo’s adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA, a measure of core earnings) more than doubled year-over-year to $26 million from $12 million in Q2 2024. Managed premiums also surged, indicating both increased retention and the onboarding of new business. However, persistent exposure to California wildfire risk remained an area of caution, with program losses unchanged at approximately $160 million year to date as of June 30, 2025.
The asset management arm, Kudu, saw stable recurring earnings but a sharp drop in overall revenue compared to an unusually high prior-year quarter, where significant realized and unrealized investment gains had boosted performance. White Mountains also absorbed continued mark-to-market swings from its equity stake in the MediaAlpha technology platform for insurance marketing, with a positive impact due to MediaAlpha’s strong share price but ongoing sensitivity to future market moves.
Across all businesses, consolidated investment returns were positive but the equity portfolio (excluding MediaAlpha) notably underperformed major benchmarks like the S&P 500 Index, returning 3.4% versus the S&P 500 Index return of 10.9%. Investment results added to the overall growth in book value per share.
Looking Ahead: Financial Outlook and Investor Considerations
Management expressed optimism about continued opportunities for organic and acquired growth, particularly in specialty insurance and distribution businesses such as Bamboo. The company also signaled ongoing plans for capital deployment, including recent acquisitions that reduced undeployed capital to about $300 million as of July 2025.
For investors, the main factors to monitor going forward include underwriting profitability (especially the combined ratio in the Ark/WM Outrigger segment), investment returns relative to equity and fixed income benchmarks, and the impact of catastrophe losses. Volatility tied to large equity positions such as MediaAlpha and sector-specific risks in insurance distribution will also shape performance in future periods.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
