White Mountains reports Outrigger Re sidecar loss in Q1 2025 on wildfires and 2024 cats

White Mountains reported that in the first-quarter of 2025 its investment into the Outrigger Re collateralized reinsurance sidecar, that supports its property and casualty insurance and reinsurance subsidiary Ark, was impacted by the California wildfires which contributed to a loss for the sidecar and an elevated 166% combined ratio for the period.

It’s worth noting here that Ark renewed its collateralized reinsurance sidecar Outrigger Re at a slightly smaller size of $230 million for 2025, but the White Mountains investment commitment toward the 2025 underwriting year amounted to $150 million, which was up on the firm’s $130 million investment into the structure in 2024.

White Mountains investment into the Outrigger sidecar structure is reported under the WM Outrigger Re segment of its results and in the first-quarter of 2025 the impact of the Los Angeles wildfires are clear, as too are some continued effects of catastrophes from 2024.

“WM Outrigger Re’s combined ratio was 166% in the first quarter of 2025 compared to 32% in the first quarter of 2024,” the company explained. Adding that, “Catastrophe losses in 2025 included $19 million net of reinstatement premiums related to the California wildfires, while major catastrophe losses in 2024 were minimal.”

The WM Outrigger Re segment fell to a -$6 million pre-tax loss for the period as a result of the wildfires and also effects from prior period catastrophe events.

White Mountains said that $4 million of income came from the 2025 underwriting year, down from $10 million in Q1 2024, so we suspect the LA wildfire event has dented the current year income.

But the 2024 underwriting year contributed a -$10 million loss to the pre-tax income figure for the WM Outrigger Re segment for Q1 2025, White Mountains reported, where as in the prior year quarter $3 million of the positive income came from the 2023 underwriting year.

“Through March 31, 2025, WM Outrigger Re generated pre-tax income of $29 million from the 2024 underwriting year.  This included losses of $17 million net of reinstatement premiums related to the California wildfires,” White Mountains reported.

Remember that this is all attributed to White Mountains own investment commitment to the Outrigger Re sidecar, but the elevated combined ratio of 166% suggests the other investors backing the structure will also have felt the effects of the wildfires and the losses from 2024 events that hit Q1 income.

White Mountains also reported that, in the first-quarter of 2025, WM Outrigger Re’s combined ratio was 72% for underwriting year 2025 and 256% for underwriting year 2024, compared to 26% for underwriting year 2024 and 42% for underwriting year 2023 in the first quarter of 2024.

In terms of business written in the period, this increased for the White Mountains allocation to Outrigger Re, which is due to the firm’s larger capital commitment for the 2025 underwriting year.

The company said that the WM Outrigger Re segment saw gross and net written premiums of $38 million and net earned premiums of $12 million in Q1 2025, higher than the gross and net written premiums of $34 million and net earned premiums of $10 million in Q1 2024.

The risk adjusted rate change on the Outrigger Re Ltd. portfolio of global property reinsurance is reported at -6% in the first quarter of 2025, reflecting market softening.

The Outrigger Re reinsurance sidecar supports White Mountains Ark business with third-party capital and Ark itself reported a 94% combined ratio for the first-quarter of this year, which included 25 points of catastrophe losses largely related to the January 2025 California wildfires totalling $75 million on a net basis after reinsurance and reinstatement premiums, the company explained.

Which suggests that Ark benefitted from its third-party capital strategy in Q1 2025, as the Outrigger Re vehicle has perhaps moderated its overall loss experience, through the sharing of major catastrophe impacts with investors in the structure, including parent White Mountain itself.