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Third-Party Reinsurance | 9 Months Ended
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Sep. 30, 2024
Reinsurance Disclosures [Abstract] |
Third-Party Reinsurance | Third-Party Reinsurance P&C Insurance and Reinsurance In the normal course of business, Ark may seek to limit losses that may arise from catastrophes or other events by reinsuring certain risks with third-party reinsurers. Ark remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts. The following table summarizes the effects of reinsurance on written and earned premiums and on loss and LAE for the Ark/WM Outrigger segment for the three and nine months ended September 30, 2024 and 2023:
Millions |  | Three Months Ended September 30, |  | Nine Months Ended September 30, |
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |
Written premiums: |  |  |  |  |  |  |  |  |
Direct |  | $ | 239.0 |  |  | $ | 189.4 |  |  | $ | 863.4 |  |  | $ | 727.1 |  |
Assumed |  | 134.6 |  |  | 61.8 |  |  | 1,079.3 |  |  | 939.6 |  |
Gross written premiums |  | 373.6 |  |  | 251.2 |  |  | 1,942.7 |  |  | 1,666.7 |  |
Ceded (1) |  | (34.2) |  |  | (20.2) |  |  | (502.5) |  |  | (360.3) |  |
Net written premiums |  | $ | 339.4 |  |  | $ | 231.0 |  |  | $ | 1,440.2 |  |  | $ | 1,306.4 |  |
Earned premiums: |  |  |  |  |  |  |  |  |
Direct |  | $ | 317.6 |  |  | $ | 273.1 |  |  | $ | 731.5 |  |  | $ | 624.1 |  |
Assumed |  | 432.6 |  |  | 370.0 |  |  | 805.3 |  |  | 684.6 |  |
Gross earned premiums |  | 750.2 |  |  | 643.1 |  |  | 1,536.8 |  |  | 1,308.7 |  |
Ceded (2) |  | (198.0) |  |  | (144.2) |  |  | (363.5) |  |  | (261.4) |  |
Net earned premiums |  | $ | 552.2 |  |  | $ | 498.9 |  |  | $ | 1,173.3 |  |  | $ | 1,047.3 |  |
Loss and loss adjustment expenses: |  |  |  |  |  |  |  |  |
Gross |  | $ | 350.7 |  |  | $ | 269.3 |  |  | $ | 852.7 |  |  | $ | 627.5 |  |
Ceded (3) |  | (62.4) |  |  | (3.5) |  |  | (208.7) |  |  | (46.4) |  |
Net loss and loss adjustment expenses |  | $ | 288.3 |  |  | $ | 265.8 |  |  | $ | 644.0 |  |  | $ | 581.1 |  |
(1) The three months ended September 30, 2024 and 2023 exclude $8.8 and $6.0, and the nine months ended September 30, 2024 and 2023 exclude $82.0 and $108.4 ceded by Ark to WM Outrigger Re, which eliminate in White Mountains’s consolidated financial statements. (2) The three months ended September 30, 2024 and 2023 exclude $45.0 and $60.6, and the nine months ended September 30, 2024 and 2023 exclude $62.8 and $75.4, ceded by Ark to WM Outrigger Re, which eliminate in White Mountains’s consolidated financial statements. (3) The three months ended September 30, 2024 and 2023 exclude $13.2 and $7.3, and the nine months ended September 30, 2024 and 2023 exclude $13.6 and $7.9, ceded by Ark to WM Outrigger Re, which eliminate in White Mountains’s consolidated financial statements. The following table presents the Ark/WM Outrigger segment’s reinsurance recoverables as of September 30, 2024 and December 31, 2023:
Millions |  | September 30, 2024 |  | December 31, 2023
Reinsurance recoverables on unpaid losses (1) |  | $ | 507.2 |  |  | $ | 340.8 |
Reinsurance recoverables on paid losses |  | 27.9 |  |  | 27.4 |
Ceded unearned premiums (2) |  | 212.9 |  |  | 73.8 |
Reinsurance recoverables |  | $ | 748.0 |  |  | $ | 442.0 |
(1) The reinsurance recoverables on unpaid losses exclude $28.0 and $15.6 ceded by Ark to WM Outrigger Re as of September 30, 2024 and December 31, 2023, which eliminate in White Mountains’s consolidated financial statements. (2) The ceded unearned premiums exclude $25.0 and $5.7 ceded by Ark to WM Outrigger Re as of September 30, 2024 and December 31, 2023, which eliminate in White Mountains’s consolidated financial statements. As reinsurance contracts do not relieve Ark of its obligation to its policyholders, Ark seeks to reduce the credit risk associated with reinsurance balances by avoiding over-reliance on specific reinsurers through the application of concentration limits and thresholds. Ark is selective with its reinsurers, placing reinsurance with only those reinsurers having a strong financial condition. Ark monitors the financial strength of its reinsurers on an ongoing basis. The following table presents the Ark/WM Outrigger segment’s gross and net reinsurance recoverables by the reinsurer’s A.M. Best Company, Inc (“A.M. Best”) ratings as of September 30, 2024:
$ in Millions |  | As of September 30, 2024
A.M. Best Rating(1) |  | Gross |  | Collateral |  | Net |  | % of Total
A+ or better |  | $ | 358.1 |  |  | $ | — |  |  | $ | 358.1 |  |  | 78.9 | %
A- to A |  | 84.2 |  | — |  |  | 84.2 |  | 18.5 |
B++ or lower and not rated |  | 92.8 | (2) | 81.1 | (2) | 11.7 |  |  | 2.6 |
Total |  | $ | 535.1 |  |  | $ | 81.1 |  |  | $ | 454.0 |  |  | 100.0 | %
(1) A.M. Best financial strength ratings as detailed above are: “A+ or better” (Superior) “A- to A” (Excellent), “B++” (Good). (2) Excludes $28.0 ceded by Ark to WM Outrigger Re as of September 30, 2024, which eliminates in White Mountains’s consolidated financial statements. Reinsurance Contracts Accounted for as Deposits Ark has an aggregate excess of loss contract with SiriusPoint Ltd. (“SiriusPoint”), which is accounted for using the deposit method and recorded within other assets. Ark earns an annual crediting rate of 3.0%, which is recorded within other revenue. As of September 30, 2024 and December 31, 2023, the carrying value of Ark’s deposit in SiriusPoint, including accrued interest, was $20.3 million and $20.4 million. Financial Guarantee See Note 10 — “Municipal Bond Guarantee Reinsurance” for third-party reinsurance balances and reinsurance contracts accounted for as deposits related to BAM’s municipal bond guarantee business prior to the deconsolidation of BAM on July 1, 2024.

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