White Mountains reported that in the first six months of 2025, its investment into the Outrigger Re collateralized reinsurance sidecar, that supports its P&C insurance and reinsurance subsidiary Ark, was impacted by the Los Angeles wildfires, which contributed to a pre-tax income of just $0.3 million for the sidecar in the period, as well as a combined ratio of 120%.
White Mountains investment into the Outrigger sidecar structure is reported under the WM Outrigger Re segment of its results and in the first half of 2025 the impact of the Los Angeles wildfires are clear.
“WM Outrigger Re’s combined ratio was 44% and 120% in the second quarter and first six months of 2025 compared to 27% and 30% in the second quarter and first six months of 2024,” the company explained.
Adding: “Catastrophe losses in the first six months of 2025 included $19 million of losses related to the California wildfires (net of reinstatement premiums).”
But the sidecar structure has continued to expand in importance for Ark, taking on more of the re/insurers risk in the latest half-year period.
The WM Outrigger Re segment’s gross and net written premiums increased to $43 million and $80 million in the second quarter of 2025 and the first six months of 2025, compared to gross and net written premiums of $39 million and $73 million from Q2’24 and H1’24.
The company explained that the increase in gross and net written premiums was driven by White Mountains larger capital commitment to WM Outrigger Re for the 2025 underwriting year.
Moreover, the WM Outrigger Re segment posted a pre-tax income of $6 million in Q2 2025, which was primarily due to a $7 million gain from the 2025 underwriting year, offset by a $1 million loss from 2024.
This was slightly lower than the $8 million pre-tax income the segment recorded in Q2 2024, which came from gains in both the 2024 and 2023 underwriting years.
For the first six months of 2025, the WM Outrigger Re segment posted a pre-tax income of just $0.3 million, as a $10 million profit from the 2025 underwriting year was largely cancelled out by a $10 million loss from 2024.
In contrast, the first half of 2024 saw a much stronger performance from the WM Outrigger Re segment, which posted $18 million in pre-tax income, thanks to an income of $14 million for the 2024 underwriting year and $4 million from the 2023 underwriting year.
“Through June 30, 2025, WM Outrigger Re generated pre-tax income of $10 million from the 2025 underwriting year, $28 million from the 2024 underwriting year and $76 million from the 2023 underwriting year,” White Mountains reported.
It’s important to remember that this is all attributed to White Mountains own investment commitment to the Outrigger Re sidecar, but the combined ratio of 120% in H1’25 suggests the other investors backing the structure will also have felt the effects of the wildfires throughout the period, as you’d expect.
The Outrigger Re reinsurance sidecar supports White Mountains Ark business with third-party capital and Ark itself reported an 85% and 90% combined ratio for the second quarter and first half of 2025.
H1’25’s combined ratio included 13 points of catastrophe losses largely related to the January 2025 California wildfires, the company explained.
This perhaps suggests that Ark benefitted from its third-party capital strategy in H1’25, as the Outrigger Re vehicle has likely helped to moderate its overall loss experience, through the sharing of major catastrophe impacts with investors in the structure, including parent White Mountain itself.
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