UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the period ended September 30, 20222023
 
OR
 
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from          to         
Commission file number 1-8993

WHITE MOUNTAINS INSURANCE GROUP, LTD.
(Exact name of Registrant as specified in its charter)
Bermuda 
(State or other jurisdiction of incorporation or organization) 94-2708455
23 South Main Street, Suite 3B (I.R.S. Employer Identification No.)
Hanover, 03755-2053
New Hampshire(Zip Code)
(Address of principal executive offices) 
 
Registrant’s telephone number, including area code: (603) 640-2200
 Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, par value $1.00 per shareWTMNew York Stock Exchange
per shareWTM.BHBermuda Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   ý   No   
 
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes   ý    No   
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerýAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o
 
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐   No  ý

As of November 3, 2022, 2,576,2322, 2023, 2,560,452 common shares with a par value of $1.00 per share were outstanding (which includes 38,35037,595 restricted common shares that were not vested at such date).




WHITE MOUNTAINS INSURANCE GROUP, LTD.

Table of Contents
 
  Page No.
   
 
   
 
   
 
  
 
 
     Three and Nine Months Ended September 30, 20222023 and 2021
2022
 
 
     Three and Nine Months Ended September 30, 20222023 and 2021
2022
 
  
 
  
  
 
  
 
  
 
 
  
 
  
  
  
  
  





Part I.FINANCIAL INFORMATION.
Item 1.Financial Statements
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 2022December 31, 2021
Millions, except share and per share amountsMillions, except share and per share amountsMillions, except share and per share amountsSeptember 30, 2023December 31, 2022
AssetsAssetsAssets
Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)
Fixed maturity investments, at fair valueFixed maturity investments, at fair value$874.4 $934.1 Fixed maturity investments, at fair value$932.2 $909.9 
Short-term investments, at fair valueShort-term investments, at fair value62.3 32.4 Short-term investments, at fair value80.1 65.9 
Total investmentsTotal investments936.7 966.5 Total investments1,012.3 975.8 
CashCash17.3 19.8 Cash4.9 18.2 
Insurance premiums receivableInsurance premiums receivable6.6 6.9 Insurance premiums receivable5.5 6.6 
Deferred acquisition costsDeferred acquisition costs34.9 33.1 Deferred acquisition costs38.5 36.0 
Other assetsOther assets22.3 18.5 Other assets22.2 21.9 
Total Financial Guarantee assetsTotal Financial Guarantee assets1,017.8 1,044.8 Total Financial Guarantee assets1,083.4 1,058.5 
P&C Insurance and Reinsurance (Ark)
P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)
Fixed maturity investments, at fair valueFixed maturity investments, at fair value741.8 688.6 Fixed maturity investments, at fair value775.0 772.8 
Common equity securities, at fair valueCommon equity securities, at fair value286.4 251.1 Common equity securities, at fair value384.9 334.6 
Short-term investments, at fair valueShort-term investments, at fair value309.4 296.2 Short-term investments, at fair value850.0 484.6 
Other long-term investmentsOther long-term investments329.7 326.2 Other long-term investments416.6 373.6 
Total investmentsTotal investments1,667.3 1,562.1 Total investments2,426.5 1,965.6 
CashCash123.4 67.8 Cash129.6 101.5 
Reinsurance recoverablesReinsurance recoverables550.9 448.4 Reinsurance recoverables538.4 595.3 
Insurance premiums receivableInsurance premiums receivable698.6 416.0 Insurance premiums receivable781.6 544.1 
Ceded unearned premiums59.7 67.1 
Deferred acquisition costs and value of in-force business acquired151.4 108.2 
Deferred acquisition costsDeferred acquisition costs178.7 127.2 
Goodwill and other intangible assetsGoodwill and other intangible assets292.5 292.5 Goodwill and other intangible assets292.5 292.5 
Other assetsOther assets62.9 64.9 Other assets66.9 65.2 
Total P&C Insurance and Reinsurance assetsTotal P&C Insurance and Reinsurance assets3,606.7 3,027.0 Total P&C Insurance and Reinsurance assets4,414.2 3,691.4 
Asset Management (Kudu)Asset Management (Kudu)Asset Management (Kudu)
Short-term investments, at fair value Short-term investments, at fair value17.3 — 
Other long-term investments Other long-term investments813.2 669.5  Other long-term investments780.7 695.9 
Cash (restricted $8.9 and $4.5)76.6 21.4 
Total investmentsTotal investments798.0 695.9 
Cash (restricted $0.0 and $12.2) Cash (restricted $0.0 and $12.2)5.4 101.4 
Accrued investment income Accrued investment income12.5 16.9  Accrued investment income15.8 12.4 
Goodwill and other intangible assets Goodwill and other intangible assets8.7 8.9  Goodwill and other intangible assets8.4 8.6 
Other assets Other assets9.7 10.4  Other assets8.3 7.6 
Total Asset Management assetsTotal Asset Management assets920.7 727.1 Total Asset Management assets835.9 825.9 
Other OperationsOther OperationsOther Operations
Fixed maturity investments, at fair value Fixed maturity investments, at fair value238.1 286.2  Fixed maturity investments, at fair value270.7 238.2 
Short-term investments, at fair value824.7 129.5 
Common equity securities, at fair value Common equity securities, at fair value46.4 —  Common equity securities, at fair value252.1 333.8 
Investment in MediaAlpha, at fair valueInvestment in MediaAlpha, at fair value148.2 261.6 Investment in MediaAlpha, at fair value188.8 168.6 
Short-term investments, at fair value Short-term investments, at fair value215.5 373.6 
Other long-term investments Other long-term investments479.8 382.1  Other long-term investments698.5 418.5 
Total investments Total investments1,737.2 1,059.4  Total investments1,625.6 1,532.7 
Cash Cash28.4 38.7  Cash22.9 33.9 
Goodwill and other intangible assets Goodwill and other intangible assets92.0 39.1  Goodwill and other intangible assets71.2 91.3 
Other assets Other assets142.2 59.5  Other assets89.6 155.6 
Assets held for sale - NSM Group 989.0 
Assets held for sale - Other 16.1 
Total Other Operations assets Total Other Operations assets1,999.8 2,201.8  Total Other Operations assets1,809.3 1,813.5 
Total assetsTotal assets$7,545.0 $7,000.7 Total assets$8,142.8 $7,389.3 
See Notes to Consolidated Financial Statements
1





CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Unaudited)
September 30, 2022December 31, 2021
Millions, except share and per share amountsMillions, except share and per share amountsMillions, except share and per share amountsSeptember 30, 2023December 31, 2022
LiabilitiesLiabilitiesLiabilities
Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)
Unearned insurance premiumsUnearned insurance premiums$286.7 $266.3 Unearned insurance premiums$312.3 $298.3 
DebtDebt146.4 — Debt146.8 146.5 
Accrued incentive compensationAccrued incentive compensation21.6 24.7 Accrued incentive compensation19.9 28.0 
Other liabilitiesOther liabilities29.5 30.9 Other liabilities40.0 29.0 
Total Financial Guarantee liabilitiesTotal Financial Guarantee liabilities484.2 321.9 Total Financial Guarantee liabilities519.0 501.8 
P&C Insurance and Reinsurance (Ark)
P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)
Loss and loss adjustment expense reservesLoss and loss adjustment expense reserves1,329.4 894.7 Loss and loss adjustment expense reserves1,571.8 1,296.5 
Unearned insurance premiumsUnearned insurance premiums781.3 495.9 Unearned insurance premiums984.6 623.2 
DebtDebt180.0 185.9 Debt184.6 183.7 
Reinsurance payableReinsurance payable312.7 424.1 Reinsurance payable146.3 251.1 
Contingent considerationContingent consideration32.9 28.0 Contingent consideration62.1 45.3 
Other liabilitiesOther liabilities107.6 93.8 Other liabilities132.0 122.3 
Total P&C Insurance and Reinsurance liabilitiesTotal P&C Insurance and Reinsurance liabilities2,743.9 2,122.4 Total P&C Insurance and Reinsurance liabilities3,081.4 2,522.1 
Asset Management (Kudu)Asset Management (Kudu)Asset Management (Kudu)
DebtDebt253.5 218.2 Debt203.7 208.3 
Other liabilities Other liabilities59.7 42.8 Other liabilities53.6 65.0 
Total Asset Management liabilities Total Asset Management liabilities313.2 261.0 Total Asset Management liabilities257.3 273.3 
Other OperationsOther OperationsOther Operations
DebtDebt35.6 16.8 Debt29.6 36.7 
Accrued incentive compensationAccrued incentive compensation67.2 48.5 Accrued incentive compensation64.0 86.1 
Other liabilitiesOther liabilities34.6 30.1 Other liabilities27.3 34.3 
Liabilities held for sale - NSM Group 495.3 
Total Other Operations liabilitiesTotal Other Operations liabilities137.4 590.7 Total Other Operations liabilities120.9 157.1 
Total liabilitiesTotal liabilities3,678.7 3,296.0 Total liabilities3,978.6 3,454.3 
EquityEquityEquity
White Mountains’s common shareholders’ equityWhite Mountains’s common shareholders’ equityWhite Mountains’s common shareholders’ equity
White Mountains’s common shares at $1 par value per share—authorized 50,000,000
shares; issued and outstanding 2,576,232 and 3,017,772 shares
2.6 3.0 
White Mountains’s common shares at $1 par value per share—authorized 50,000,000
shares; issued and outstanding 2,560,452 and 2,572,156 shares
White Mountains’s common shares at $1 par value per share—authorized 50,000,000
shares; issued and outstanding 2,560,452 and 2,572,156 shares
2.6 2.6 
Paid-in surplusPaid-in surplus532.7585.9Paid-in surplus544.9536.0
Retained earningsRetained earnings3,175.9 2,957.5 Retained earnings3,404.3 3,211.8 
Accumulated other comprehensive income (loss), after-tax:Accumulated other comprehensive income (loss), after-tax:Accumulated other comprehensive income (loss), after-tax:
Net unrealized gains (losses) from foreign currency translation and
interest rate swap
Net unrealized gains (losses) from foreign currency translation and
interest rate swap
(3.2)1.7 Net unrealized gains (losses) from foreign currency translation and interest rate swap(2.7)(3.5)
Total White Mountains’s common shareholders’ equityTotal White Mountains’s common shareholders’ equity3,708.0 3,548.1 Total White Mountains’s common shareholders’ equity3,949.1 3,746.9 
Non-controlling interests158.3 156.6 
Noncontrolling interestsNoncontrolling interests215.1 188.1 
Total equityTotal equity3,866.3 3,704.7 Total equity4,164.2 3,935.0 
Total liabilities and equityTotal liabilities and equity$7,545.0 $7,000.7 Total liabilities and equity$8,142.8 $7,389.3 
See Notes to Consolidated Financial Statements
2


WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Revenues:Revenues:Revenues:
Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)
Earned insurance premiumsEarned insurance premiums$7.1 $6.7 $26.0 $19.6 Earned insurance premiums$7.9 $7.1 $23.3 $26.0 
Net investment incomeNet investment income5.7 4.4 15.1 13.2 Net investment income8.1 5.7 22.9 15.1 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(38.8)(4.0)(114.0)(15.6)Net realized and unrealized investment gains (losses)(24.1)(38.8)(17.0)(114.0)
Other revenuesOther revenues1.3 .3 3.7 .9 Other revenues.7 1.3 2.0 3.7 
Total Financial Guarantee revenuesTotal Financial Guarantee revenues(24.7)7.4 (69.2)18.1 Total Financial Guarantee revenues(7.4)(24.7)31.2 (69.2)
P&C Insurance and Reinsurance (Ark)
P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)
Earned insurance premiumsEarned insurance premiums346.1 213.4 757.8 435.8 Earned insurance premiums498.9 346.1 1,047.3 757.8 
Net investment incomeNet investment income4.9 .6 9.7 1.8 Net investment income16.9 4.9 41.2 9.7 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(14.4).3 (76.5)10.3 Net realized and unrealized investment gains (losses)(6.6)(14.4)35.9 (76.5)
Other revenuesOther revenues6.6 3.4 10.1 9.4 Other revenues3.6 6.6 (1.1)10.1 
Total P&C Insurance and Reinsurance revenuesTotal P&C Insurance and Reinsurance revenues343.2 217.7 701.1 457.3 Total P&C Insurance and Reinsurance revenues512.8 343.2 1,123.3 701.1 
Asset Management (Kudu)Asset Management (Kudu)Asset Management (Kudu)
Net investment incomeNet investment income14.8 9.5 41.2 26.1 Net investment income15.1 14.8 44.0 41.2 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)41.1 18.9 45.8 62.5 Net realized and unrealized investment gains (losses)11.2 41.1 45.4 45.8 
Other revenues .1  .2 
Total Asset Management revenuesTotal Asset Management revenues55.9 28.5 87.0 88.8 Total Asset Management revenues26.3 55.9 89.4 87.0 
Other OperationsOther OperationsOther Operations
Net investment income Net investment income8.5 5.0 13.6 16.1  Net investment income8.0 8.5 22.0 13.6 
Net realized and unrealized investment gains (losses) Net realized and unrealized investment gains (losses)(17.3)15.3 2.8 34.0  Net realized and unrealized investment gains (losses)8.0 (17.3)125.8 2.8 
Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(18.6)(396.8)(113.3)(325.5) Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(46.8)(18.6)(38.9)(113.3)
Commission revenues Commission revenues3.2 2.4 8.7 7.0  Commission revenues3.5 3.2 10.0 8.7 
Other revenues Other revenues33.0 28.1 89.6 57.6  Other revenues15.2 33.0 67.1 89.6 
Total Other Operations revenuesTotal Other Operations revenues8.8 (346.0)1.4 (210.8)Total Other Operations revenues(12.1)8.8 186.0 1.4 
Total revenuesTotal revenues$383.2 $(92.4)$720.3 $353.4 Total revenues$519.6 $383.2 $1,429.9 $720.3 
See Notes to Consolidated Financial Statements
3


CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Expenses:Expenses:Expenses:
Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)
Insurance acquisition expenses$1.7 $3.0 $9.5 $6.5 
Acquisition expensesAcquisition expenses$2.1 $1.7 $6.3 $9.5 
General and administrative expensesGeneral and administrative expenses15.8 12.4 49.5 42.7 General and administrative expenses17.5 15.8 49.7 49.5 
Interest expenseInterest expense2.0 — 5.4 — Interest expense3.8 2.0 10.8 5.4 
Total Financial Guarantee expensesTotal Financial Guarantee expenses19.5 15.4 64.4 49.2 Total Financial Guarantee expenses23.4 19.5 66.8 64.4 
P&C Insurance and Reinsurance (Ark)
P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)
Loss and loss adjustment expensesLoss and loss adjustment expenses213.7 129.2 456.2 247.8 Loss and loss adjustment expenses265.8 213.7 581.1 456.2 
Insurance and reinsurance acquisition expenses74.8 53.7 174.9 124.4 
Acquisition expensesAcquisition expenses90.3 74.8 211.5 174.9 
General and administrative expensesGeneral and administrative expenses26.9 21.8 79.8 84.4 General and administrative expenses35.4 24.2 105.5 74.9 
Change in fair value of contingent considerationChange in fair value of contingent consideration17.0 2.716.8 4.9 
Interest expenseInterest expense3.7 2.1 10.6 4.5 Interest expense5.5 3.7 15.7 10.6 
Total P&C Insurance and Reinsurance expensesTotal P&C Insurance and Reinsurance expenses319.1 206.8 721.5 461.1 Total P&C Insurance and Reinsurance expenses414.0 319.1 930.6 721.5 
Asset Management (Kudu)Asset Management (Kudu)Asset Management (Kudu)
General and administrative expensesGeneral and administrative expenses4.5 3.3 10.2 9.0 General and administrative expenses4.5 4.5 12.3 10.4 
Amortization of other intangible assets — .2 .2 
Interest expenseInterest expense4.2 1.9 10.3 9.2 Interest expense5.5 4.2 15.5 10.3 
Total Asset Management expensesTotal Asset Management expenses8.7 5.2 20.7 18.4 Total Asset Management expenses10.0 8.7 27.8 20.7 
Other OperationsOther OperationsOther Operations
Cost of sales Cost of sales25.0 24.0 68.8 45.9  Cost of sales8.0 25.0 33.5 68.8 
General and administrative expenses General and administrative expenses39.9 14.4 118.9 79.4  General and administrative expenses42.2 41.3 130.7 122.1 
Amortization of other intangible assets1.4 2.0 3.2 2.9 
Interest expense Interest expense.6 .4 1.2 1.1  Interest expense.9 .6 2.9 1.2 
Total Other Operations expensesTotal Other Operations expenses66.9 40.8 192.1 129.3 Total Other Operations expenses51.1 66.9 167.1 192.1 
Total expensesTotal expenses414.2 268.2 998.7 658.0 Total expenses498.5 414.2 1,192.3 998.7 
Pre-tax income (loss) from continuing operationsPre-tax income (loss) from continuing operations(31.0)(360.6)(278.4)(304.6)Pre-tax income (loss) from continuing operations21.1 (31.0)237.6 (278.4)
Income tax (expense) benefit Income tax (expense) benefit7.4 (28.6)26.1 (52.2) Income tax (expense) benefit(7.3)7.4 (19.4)26.1 
Net income (loss) from continuing operationsNet income (loss) from continuing operations(23.6)(389.2)(252.3)(356.8)Net income (loss) from continuing operations13.8 (23.6)218.2 (252.3)
Net income (loss) from discontinued operations, net of tax -
NSM Group
Net income (loss) from discontinued operations, net of tax -
NSM Group
6.3 5.3 16.4 (23.8)Net income (loss) from discontinued operations, net of tax -
NSM Group
 6.3  16.4 
Net gain (loss) from sale of discontinued operations, net of tax -
NSM Group
Net gain (loss) from sale of discontinued operations, net of tax -
NSM Group
886.8 — 886.8  Net gain (loss) from sale of discontinued operations, net of tax -
NSM Group
 886.8  886.8 
Net gain (loss) from sale of discontinued operations, net of tax -
Sirius Group
 —  18.7 
Net income (loss)Net income (loss)869.5 (383.9)650.9 (361.9)Net income (loss)13.8 869.5 218.2 650.9 
Net (income) loss attributable to non-controlling interests18.7 12.5 101.5 53.7 
Net (income) loss attributable to noncontrolling interests Net (income) loss attributable to noncontrolling interests9.8 18.7 4.5 101.5 
Net income (loss) attributable to White Mountains’s
common shareholders
Net income (loss) attributable to White Mountains’s
common shareholders
$888.2 $(371.4)$752.4 $(308.2)Net income (loss) attributable to White Mountains’s
common shareholders
$23.6 $888.2 $222.7 $752.4 
See Notes to Consolidated Financial Statements
4


WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Net income (loss) attributable to White Mountains’s
common shareholders
Net income (loss) attributable to White Mountains’s
common shareholders
$888.2 $(371.4)$752.4 $(308.2)Net income (loss) attributable to White Mountains’s
common shareholders
$23.6 $888.2 $222.7 $752.4 
Other comprehensive income, net of tax:Other comprehensive income, net of tax:
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax(1.4)— (3.0)(.3)Other comprehensive income (loss), net of tax(1.7)(1.4).9 (3.0)
Other comprehensive income (loss) from discontinued operations,
net of tax - NSM Group
Other comprehensive income (loss) from discontinued operations,
net of tax - NSM Group
.7 (2.2)(5.2).9 Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
— .7  (5.2)
Net gain (loss) from foreign currency translation from sale of
discontinued operations, net of tax - NSM Group
Net gain (loss) from foreign currency translation from sale of
discontinued operations, net of tax - NSM Group
2.9 — 2.9 — Net gain (loss) from foreign currency translation from sale of
discontinued operations, net of tax - NSM Group
 2.9  2.9 
Comprehensive income (loss)Comprehensive income (loss)890.4 (373.6)747.1 (307.6)Comprehensive income (loss)21.9 890.4 223.6 747.1 
Other comprehensive (income) loss attributable to
non-controlling interests
(.3).2 .4 — 
Other comprehensive (income) loss attributable to
noncontrolling interests
Other comprehensive (income) loss attributable to
noncontrolling interests
.7 (.3)(.1).4 
Comprehensive income (loss) attributable to
White Mountains’s common shareholders
Comprehensive income (loss) attributable to
White Mountains’s common shareholders
$890.1 $(373.4)$747.5 $(307.6)Comprehensive income (loss) attributable to
White Mountains’s common shareholders
$22.6 $890.1 $223.5 $747.5 

Earnings (loss) per share attributable to White Mountains’s common shareholders:Earnings (loss) per share attributable to White Mountains’s common shareholders:Earnings (loss) per share attributable to White Mountains’s common shareholders:
Basic earnings (loss) per shareBasic earnings (loss) per shareBasic earnings (loss) per share
Continuing operationsContinuing operations$(1.66)$(121.90)$(50.73)$(98.16)Continuing operations$9.19 $(1.66)$86.82 $(50.73)
Discontinued operationsDiscontinued operations308.59 1.72 304.97 (1.29)Discontinued operations 308.59  304.97 
Total consolidated operationsTotal consolidated operations$306.93 $(120.18)$254.24 $(99.45)Total consolidated operations$9.19 $306.93 $86.82 $254.24 
Diluted earnings (loss) per shareDiluted earnings (loss) per shareDiluted earnings (loss) per share
Continuing operationsContinuing operations$(1.66)$(121.90)$(50.73)$(98.16)Continuing operations$9.19 $(1.66)$86.82 $(50.73)
Discontinued operationsDiscontinued operations308.59 1.72 304.97 (1.29)Discontinued operations 308.59  304.97 
Total consolidated operationsTotal consolidated operations$306.93 $(120.18)$254.24 $(99.45)Total consolidated operations$9.19 $306.93 $86.82 $254.24 
Dividends declared and paid per White Mountains’s
common share
Dividends declared and paid per White Mountains’s
common share
$ $— $1.00 $1.00 Dividends declared and paid per White Mountains’s
common share
$ $— $1.00 $1.00 
See Notes to Consolidated Financial Statements.

5


WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)

 White Mountains’s Common Shareholders’ Equity 
MillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal Equity
Balance at June 30, 2022$603.2 $2,725.1 $(5.0)$3,323.3 $168.7 $3,492.0 
Net loss 888.2  888.2 (18.7)869.5 
Net change in foreign currency translation and other  (1.1)(1.1).3 (.8)
Net gain (loss) from foreign currency translation from sale of discontinued operations, net of tax - NSM Group  2.9 2.9  2.9 
Total comprehensive loss 888.2 1.8 890.0 (18.4)871.6 
Dividends to non-controlling interests    (.5)(.5)
Repurchases and retirements of common shares(71.5)(437.4) (508.9) (508.9)
BAM member surplus contribution, net of tax    26.0 26.0 
Amortization of restricted share awards3.8   3.8  3.8 
Recognition of equity-based compensation expense
   of subsidiaries
.4   .4 .2 .6 
Net contributions and dilution from other
   non-controlling interests
(.6)  (.6)(.2)(.8)
Disposition of non-controlling interests    (17.5)(17.5)
Balance at September 30, 2022$535.3 $3,175.9 $(3.2)$3,708.0 $158.3 $3,866.3 
 White Mountains’s Common Shareholders’ Equity 
MillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal Equity
Balance at June 30, 2023$543.2 $3,380.7 $(1.7)$3,922.2 $203.7 $4,125.9 
Net income (loss) 23.6  23.6 (9.8)13.8 
Other comprehensive income (loss), net of tax  (1.0)(1.0)(.7)(1.7)
Total comprehensive income (loss) 23.6 (1.0)22.6 (10.5)12.1 
Dividends to noncontrolling interests    (.5)(.5)
Issuances of common shares      
Repurchases and retirements of common shares      
BAM member surplus contribution, net of tax    19.9 19.9 
Amortization of restricted share awards4.0   4.0  4.0 
Recognition of equity-based compensation expense
   of subsidiaries
.4   .4 .2 .6 
Net contributions and dilution from other
   noncontrolling interests
(.1)  (.1)2.3 2.2 
Balance at September 30, 2023$547.5 $3,404.3 $(2.7)$3,949.1 $215.1 $4,164.2 

White Mountains’s Common Shareholders’ Equity  White Mountains’s Common Shareholders’ Equity 
MillionsMillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal EquityMillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal Equity
Balance at June 30, 2021$597.2 $3,378.6 $2.4 $3,978.2 $129.8 $4,108.0 
Balance at June 30, 2022Balance at June 30, 2022$603.2 $2,725.1 $(5.0)$3,323.3 $168.7 $3,492.0 
Net income (loss)Net income (loss)— (371.4)— (371.4)(12.5)(383.9)Net income (loss)— 888.2 — 888.2 (18.7)869.5 
Net change in foreign currency translation and other— — (2.2)(2.2)(.2)(2.4)
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax— — (1.8)(1.8).3 (1.5)
Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
— — .7 .7 — .7 
Net gain (loss) from foreign currency translation
from sale of discontinued operations, net of tax -
NSM Group
Net gain (loss) from foreign currency translation
from sale of discontinued operations, net of tax -
NSM Group
— — 2.9 2.9 — 2.9 
Total comprehensive income (loss)Total comprehensive income (loss)— (371.4)(2.2)(373.6)(12.7)(386.3)Total comprehensive income (loss)— 888.2 1.8 890.0 (18.4)871.6 
Dividends to non-controlling interests— — — — (.6)(.6)
Dividends to noncontrolling interestsDividends to noncontrolling interests— — — — (.5)(.5)
Repurchases and retirements of common sharesRepurchases and retirements of common shares(15.2)(71.9)— (87.1)— (87.1)Repurchases and retirements of common shares(71.5)(437.4)— (508.9)— (508.9)
BAM member surplus contributions, net of taxBAM member surplus contributions, net of tax— — — — 14.7 14.7 BAM member surplus contributions, net of tax— — — — 26.0 26.0 
Amortization of restricted share awardsAmortization of restricted share awards3.6 — — 3.6 — 3.6 Amortization of restricted share awards3.8 — — 3.8 — 3.8 
Recognition of equity-based compensation expense
of subsidiary
.2 — — .2 — .2 
Net contributions and dilution from other
non-controlling interests
.4 — — .4 1.4 1.8 
Recognition of equity-based compensation expense
of subsidiaries
Recognition of equity-based compensation expense
of subsidiaries
.4 — — .4 .2 .6 
Net contributions and dilution from other
noncontrolling interests
Net contributions and dilution from other
noncontrolling interests
(.6)— — (.6)(.2)(.8)
Disposition of noncontrolling interestsDisposition of noncontrolling interests— — — — (17.5)(17.5)
Balance at September 30, 2021$586.2 $2,935.3 $.2 $3,521.7 $132.6 $3,654.3 
Balance at September 30, 2022Balance at September 30, 2022$535.3 $3,175.9 $(3.2)$3,708.0 $158.3 $3,866.3 
See Notes to Consolidated Financial Statements.
6


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
(Unaudited)

White Mountains’s Common Shareholders’ Equity  White Mountains’s Common Shareholders’ Equity 
MillionsMillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal EquityMillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal Equity
Balance at January 1, 2022$588.9 $2,957.5 $1.7 $3,548.1 $156.6 $3,704.7 
Balance at January 1, 2023Balance at January 1, 2023$538.6 $3,211.8 $(3.5)$3,746.9 $188.1 $3,935.0 
Net income (loss)Net income (loss) 752.4  752.4 (101.5)650.9 Net income (loss) 222.7  222.7 (4.5)218.2 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax  (7.8)(7.8)(.4)(8.2)Other comprehensive income (loss), net of tax  .8 .8 .1 .9 
Net gain (loss) from foreign currency translation from sale of discontinued operations, net of tax - NSM Group  2.9 2.9  2.9 
Total comprehensive income (loss)Total comprehensive income (loss) 752.4 (4.9)747.5 (101.9)645.6 Total comprehensive income (loss) 222.7 .8 223.5 (4.4)219.1 
Dividends declared on common sharesDividends declared on common shares (3.0) (3.0) (3.0)Dividends declared on common shares (2.6) (2.6) (2.6)
Dividends to non-controlling interests    (7.5)(7.5)
Dividends to noncontrolling interestsDividends to noncontrolling interests    (8.3)(8.3)
Issuances of common sharesIssuances of common shares3.0   3.0  3.0 Issuances of common shares2.1   2.1  2.1 
Issuance of shares of non-controlling interests    74.6 74.6 
Repurchases and retirements of common sharesRepurchases and retirements of common shares(89.2)(521.3) (610.5) (610.5)Repurchases and retirements of common shares(5.1)(27.6) (32.7) (32.7)
BAM member surplus contributions, net of taxBAM member surplus contributions, net of tax    62.3 62.3 BAM member surplus contributions, net of tax    46.4 46.4 
Amortization of restricted share awardsAmortization of restricted share awards10.3   10.3  10.3 Amortization of restricted share awards11.2   11.2  11.2 
Recognition of equity-based compensation expense
of subsidiaries
Recognition of equity-based compensation expense
of subsidiaries
8.1   8.1 .8 8.9 Recognition of equity-based compensation expense
of subsidiaries
1.3   1.3 .5 1.8 
Net contributions and dilution from other
non-controlling interests
14.2 (9.7) 4.5 (9.1)(4.6)
Disposition of non-controlling interests    (17.5)(17.5)
Net contributions (distributions) and dilution from
other noncontrolling interests
Net contributions (distributions) and dilution from
other noncontrolling interests
(.6)  (.6)2.2 1.6 
Disposition of noncontrolling interestsDisposition of noncontrolling interests    (9.4)(9.4)
Balance at September 30, 2022$535.3 $3,175.9 $(3.2)$3,708.0 $158.3 $3,866.3 
Balance at September 30, 2023Balance at September 30, 2023$547.5 $3,404.3 $(2.7)$3,949.1 $215.1 $4,164.2 

White Mountains’s Common Shareholders’ Equity  White Mountains’s Common Shareholders’ Equity 
MillionsMillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal EquityMillionsCommon shares and paid-in surplusRetained earningsAOCI, after taxTotalNon-controlling interestTotal Equity
Balance at January 1, 2021$595.2 $3,311.2 $(.4)$3,906.0 $(88.1)$3,817.9 
Balance at January 1, 2022Balance at January 1, 2022$588.9 $2,957.5 $1.7 $3,548.1 $156.6 $3,704.7 
Net income (loss)Net income (loss)— (308.2)— (308.2)(53.7)(361.9)Net income (loss)— 752.4 — 752.4 (101.5)650.9 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax— — .4 .4 — .4 Other comprehensive income (loss), net of tax— — (2.6)(2.6)(.4)(3.0)
Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
— — (5.2)(5.2)— (5.2)
Net gain (loss) from foreign currency translation from
sale of discontinued operations, net of tax - NSM
Group
Net gain (loss) from foreign currency translation from
sale of discontinued operations, net of tax - NSM
Group
— — 2.9 2.9 — 2.9 
Total comprehensive income (loss)Total comprehensive income (loss)— (308.2).4 (307.8)(53.7)(361.5)Total comprehensive income (loss)— 752.4 (4.9)747.5 (101.9)645.6 
Dividends declared on common sharesDividends declared on common shares— (3.1)— (3.1)— (3.1)Dividends declared on common shares— (3.0)— (3.0)— (3.0)
Dividends to non-controlling interests— — — — (1.8)(1.8)
Dividends to noncontrolling interestsDividends to noncontrolling interests— — — — (7.5)(7.5)
Issuances of common sharesIssuances of common shares1.7 — — 1.7 — 1.7 Issuances of common shares3.0 — — 3.0 — 3.0 
Issuance of shares of non-controlling interests— — — — 6.1 6.1 
Issuances of shares to noncontrolling interestsIssuances of shares to noncontrolling interests— — — — 74.6 74.6 
Repurchases and retirements of common sharesRepurchases and retirements of common shares(16.6)(78.0)— (94.6)— (94.6)Repurchases and retirements of common shares(89.2)(521.3)— (610.5)— (610.5)
BAM member surplus contributions, net of taxBAM member surplus contributions, net of tax— — — — 44.8 44.8 BAM member surplus contributions, net of tax— — — — 62.3 62.3 
Amortization of restricted share awardsAmortization of restricted share awards11.1 — — 11.1 — 11.1 Amortization of restricted share awards10.3 — — 10.3 — 10.3 
Recognition of equity-based compensation expense
of subsidiary
2.0 — — 2.0 .3 2.3 
Net contributions and dilution from other
non-controlling interests
(7.2)13.4 .2 6.4 (5.3)1.1 
Acquisition of non-controlling interests— — — — 230.3 230.3 
Recognition of equity-based compensation expense
of subsidiaries
Recognition of equity-based compensation expense
of subsidiaries
8.1 — — 8.1 .8 8.9 
Net contributions and dilution from other
noncontrolling interests
Net contributions and dilution from other
noncontrolling interests
14.2 (9.7)— 4.5 (9.1)(4.6)
Disposition of noncontrolling interestsDisposition of noncontrolling interests— — — — (17.5)(17.5)
Balance at September 30, 2021$586.2 $2,935.3 $.2 $3,521.7 $132.6 $3,654.3 
Balance at September 30, 2022Balance at September 30, 2022$535.3 $3,175.9 $(3.2)$3,708.0 $158.3 $3,866.3 
See Notes to Consolidated Financial Statements.
7



WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)Nine Months Ended September 30,
Millions20222021
Cash flows from operations:
Net income (loss)$650.9 $(361.9)
Adjustments to reconcile net income to net cash provided from (used for) operations:  
Net realized and unrealized investment (gains) losses141.9 (91.2)
Net realized and unrealized investment (gains) losses from investment in MediaAlpha113.3 325.5 
Deferred income tax expense22.1 36.7 
Amortization of restricted share awards10.3 11.1 
Amortization and depreciation7.0 13.6 
Net (income) loss from discontinued operation, net of tax - NSM Group(16.4)23.8 
Net (gain) loss from sale of discontinued operations, net of tax - NSM Group and Sirius Group(886.8)(18.7)
Other operating items: 
Net change in reinsurance recoverables(102.5)(32.3)
Net change in insurance premiums receivable(282.3)(245.7)
Net change in ceded unearned premiums7.4 78.1 
Net change in loss and loss adjustment expense reserves434.7 194.9 
Net change in unearned insurance premiums305.8 290.0 
Net change in deferred acquisition costs(45.0)(60.0)
Net change in reinsurance payable(111.4)(46.8)
Net change in restricted cash4.4 4.5 
Investments in Kudu Participation Contracts(97.9)(141.6)
Net change in other assets and liabilities, net(37.3)25.7 
Net cash provided from (used for) operations - continuing operations118.2 5.7 
Net cash provided from (used for) operations - NSM Group discontinued operations (Note 19)
38.7 40.3 
Net cash provided from (used for) operations156.9 46.0 
Cash flows from investing activities:  
Net change in short-term investments(735.4)(83.7)
Sales of fixed maturity investments212.4 215.9 
Maturities, calls and paydowns of fixed maturity investments107.3 144.6 
Sales of common equity securities and investment in MediaAlpha 176.8 
Distributions and redemptions of other long-term investments55.0 98.2 
Proceeds from the sale of NSM Group, net of cash sold of $143.9 and $0.01,364.8 — 
Proceeds from the sale of Other Operations, net of cash sold of $0.5 and $0.019.5 — 
Release of cash pre-funded/placed in escrow for Ark Transaction 646.3 
Purchases of consolidated subsidiaries, net of cash acquired of $0.3 and $52.2(67.9)10.6 
Purchases of other long-term investments(136.9)(206.5)
Purchases of common equity securities(88.0)(119.7)
Purchases of fixed maturity investments(474.1)(996.0)
Other investing activities, net3.7 (1.3)
Net cash provided from (used for) investing activities - continuing operations260.4 (114.8)
Net cash provided from (used for) investing activities - NSM Group discontinued operations (Note 19)
7.1 (54.6)
Net cash provided from (used for) investing activities267.5 (169.4)
Cash flows from financing activities:  
Draw down of debt and revolving line of credit211.8 368.9 
Repayment of debt and revolving line of credit(10.5)(94.8)
Cash dividends paid to the Company’s common shareholders(3.0)(3.1)
Common shares repurchased(610.5)(94.6)
Net distributions from non-controlling interest shareholders(9.2)1.1 
Contributions from discontinued operations11.6 — 
Capital contributions from BAM members62.3 44.8 
Acquisition of subsidiary shares by non-controlling interest shareholders74.6 6.1 
Fidus Re premium payment(5.6)(6.9)
Other financing activities, net(2.1)(13.0)
Net cash provided from (used for) financing activities - continuing operations(280.6)208.5 
Net cash provided from (used for) financing activities - NSM Group discontinued operations (Note 19)
(17.5)13.8 
Net cash provided from (used for) financing activities(298.1)222.3 
Net change in cash during the period - continuing operations98.0 99.4 
Cash balances at beginning of period (includes restricted cash balances of $4.5 and $0.0 and excludes
   discontinued operations cash balances of $111.6 and $126.6)
147.7 84.6 
Cash balances at end of period (includes restricted cash balances of $8.9 and $4.0 and excludes discontinued
   operations cash balances of $0.0 and 126.7)
$245.7 $184.0 
Supplemental cash flows information: 
Interest paid$(10.9)$(5.3)
Net income tax payments$(3.2)$(2.1)
(Unaudited)
Nine Months Ended September 30,
Millions20232022
Cash flows from operations:
Net income (loss)$218.2 $650.9 
Adjustments to reconcile net income to net cash provided from (used for) operations:  
Net realized and unrealized investment (gains) losses(190.1)141.9 
Net realized and unrealized investment (gains) losses from investment in MediaAlpha38.9 113.3 
Deferred income tax expense (benefit)1.9 22.1 
Amortization of restricted share awards11.2 10.3 
Amortization (accretion) and depreciation(10.3)7.0 
Net (income) loss from discontinued operation, net of tax - NSM Group (16.4)
Net (gain) loss from sale of discontinued operations, net of tax - NSM Group (886.8)
Other operating items: 
Net change in reinsurance recoverables56.9 (95.1)
Net change in insurance premiums receivable(236.4)(282.3)
Net change in deferred acquisition costs(54.0)(45.0)
Net change in loss and loss adjustment expense reserves275.3 434.7 
Net change in unearned insurance premiums375.4 305.8 
Net change in reinsurance payable(104.8)(111.4)
Net change in restricted cash(12.2)4.4 
Contributions to Kudu’s Participation Contracts(108.3)(97.9)
Proceeds from Kudu’s Participation Contracts sold74.6 — 
Net other operating activities43.3 (37.3)
Net cash provided from (used for) operations - continuing operations379.6 118.2 
Net cash provided from (used for) operations - NSM Group discontinued operations (Note 19)
 38.7 
Net cash provided from (used for) operations379.6 156.9 
Cash flows from investing activities:  
Net change in short-term investments(194.9)(735.4)
Sales of fixed maturity investments107.9 212.4 
Maturities, calls and paydowns of fixed maturity investments212.6 107.3 
Sales of common equity securities129.9 — 
Distributions and redemptions of other long-term investments26.8 55.0 
Proceeds from the sale of NSM Group and Other Operating Businesses, net of cash sold of $0.8 and $144.417.3 1,384.3 
Purchases of consolidated subsidiaries, net of cash acquired of $0.0 and $0.3 (67.9)
Purchases of fixed maturity investments(392.9)(474.1)
Purchases of common equity securities and investment in MediaAlpha(114.2)(88.0)
Purchases of other long-term investments(237.7)(136.9)
Net other investing activities(9.8)3.7 
Net cash provided from (used for) investing activities - continuing operations(455.0)260.4 
Net cash provided from (used for) investing activities - NSM Group discontinued operations (Note 19)
 7.1 
Net cash provided from (used for) investing activities(455.0)267.5 
Cash flows from financing activities:  
Draw down of debt and revolving lines of credit12.2 211.8 
Repayment of debt and revolving lines of credit(24.3)(10.5)
Cash dividends paid to common shareholders(2.6)(3.0)
Repurchases and retirements of common shares(32.7)(610.5)
Net contributions from (distributions to) other noncontrolling interests(5.3)(9.2)
Net (contributions to) distributions from discontinued operations 11.6 
Issuances of shares to noncontrolling interests 74.6 
BAM member surplus contributions46.4 62.3 
Fidus Re premium payments(10.3)(5.6)
Net other financing activities(.2)(2.1)
Net cash provided from (used for) financing activities - continuing operations(16.8)(280.6)
Net cash provided from (used for) financing activities - NSM Group discontinued operations (Note 19)
 (17.5)
Net cash provided from (used for) financing activities(16.8)(298.1)
Net change in cash during the period - continuing operations(92.2)98.0 
Cash balances at beginning of period (includes restricted cash balances of $12.2 and $4.5 and excludes
   discontinued operations cash balances of $0.0 and $111.6)
255.0 147.7 
Cash balances at end of period (includes restricted cash balances of $0.0 and $8.9 and excludes
   discontinued operations cash balances of $0.0 and $0.0)
$162.8 $245.7 
Supplemental cash flows information: 
Interest paid$(18.0)$(10.9)
Net income tax payments(29.9)(3.2)
See Notes to Consolidated Financial Statements
8


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

White Mountains Insurance Group, Ltd. (the “Company” or the “Registrant”) is an exempted Bermuda limited liability company whose principal businesses are conducted through its subsidiaries and other affiliates. The Company’s headquarters is located at 26 Reid Street, Hamilton, Bermuda HM 11, its principal executive office is located at 23 South Main Street, Suite 3B, Hanover, New Hampshire 03755-2053 and its registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda HM 11. The Company’s website is www.whitemountains.com. The information contained on White Mountains’s website is not incorporated by reference into, and is not a part of, this report.
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company, its subsidiaries (collectively with the Company, “White Mountains”) and other entities required to be consolidated under GAAP. Intercompany transactions have been eliminated in consolidation. Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
These interim financial statements include all adjustments considered necessary by management to fairly state the financial position, results of operations and cash flows of White Mountains. These interim financial statements may not be indicative of financial results for the full year and should be read in conjunction with the Company’s 20212022 Annual Report on Form 10-K.

Reportable Segments
White Mountains has determined its reportable segments based on the nature of the underlying businesses, the manner in which the Company’s subsidiaries and affiliates are organized and managed and the organization of the financial information provided to the chief operating decision maker to assess performance and make decisions regarding allocation of resources. As of September 30, 2022,2023, White Mountains’sMountains conducted its operations through three reportable segments weresegments: (1) HG Global/BAM, Ark(2) Ark/WM Outrigger, and (3) Kudu, with our remaining operating businesses, holding companies and other assets included in Other Operations. White Mountains has made its segment determination based on consideration of the following criteria: (i) the nature of the business activities of each of the Company’s subsidiaries and affiliates; (ii) the manner in which the Company’s subsidiaries and affiliates are organized; (iii) the existence of primary managers responsible for specific subsidiaries and affiliates; and (iv) the organization of information provided to the Company’s chief operating decision makers and its Board of Directors. See Note 14 — “Segment Information.”
The HG Global/BAM segment consists of HG Global Ltd. and its wholly-owned subsidiaries (“HG(collectively, “HG Global”) and the consolidated results of Build America Mutual Assurance Company (“BAM”) (collectively with HG Global, “HG Global/BAM”). BAM is the first and only mutual municipal bond insurance company in the United States. By insuring the timely payment of principal and interest, BAM provides market access to, and lowers interest expense for, issuers of municipal bonds used to finance essential public purpose projects, such as schools, utilities and transportation facilities. BAM is owned by and operated for the benefit of its members, the municipalities that purchase BAM’s insurance for their debt issuances. HG Global was established to fund the startup of BAM and, through its reinsurance subsidiary, HG Re Ltd. (“HG Re”), to provide up to 15%-of-par, first loss reinsurance protection for policies underwritten by BAM. HG Global, together with its subsidiaries, funded the initial capitalization of BAM through the purchase of $503.0 million of surplus notes issued by BAM (the “BAM Surplus Notes”). As of September 30, 20222023 and December 31, 2021,2022, White Mountains owned 96.9% of HG Global’s preferred equity and 88.4% of its common equity. White Mountains does not have an ownership interest in BAM. However, White Mountains is required to consolidate BAM’s results in its financial statements because BAM is a variable interest entity (“VIE”) for which White Mountains is the primary beneficiary. BAM’s results are all attributed to non-controllingnoncontrolling interests.
9


The ArkArk/WM Outrigger segment consists of Ark Insurance Holdings Limited and its subsidiaries (collectively, “Ark”) and Outrigger Re Ltd. Segregated Account 2023-1 (“WM Outrigger Re”) (collectively with Ark, “Ark/WM Outrigger”). Ark is a specialty property and casualty insurance and reinsurance company that offers a wide range of niche insurance and reinsurance products, including property, specialty, marine & energy, specialty,casualty and accident & health and casualty.health. Ark underwrites select coverages through Lloyd’s Syndicates 4020 and 3902 (the “Syndicates”) and its wholly-owned subsidiary Group Ark Insurance Limited (“GAIL”). White Mountains acquired a controlling ownership interest in Ark on January 1, 2021 (the “Ark Transaction”). See Note 2 — “Significant Transactions.As of September 30, 20222023 and December 31, 2021,2022, White Mountains owned 72.0% of Ark on a basic shares outstanding basis (63.0% after taking account of management’s equity incentives). The remaining shares are owned by current and former employees. In the future, management rollover shareholders could earn additional shares in Ark if and to the extent that White Mountains achieves certain multiple of invested capital return thresholds. If fully earned, these additional shares would represent 12.5% of the shares outstanding at closing. The liability related to these additional shares is recorded as contingent consideration. For the years of account prior to the Ark Transaction, a significant proportion of the Syndicates’ underwriting capital was provided by third-party insurance and reinsurance groups (“TPC Providers”) using whole account reinsurance contracts with Ark’s corporate member. For the years of account subsequent to the Ark Transaction, Ark is no longer using TPC Providers to provide underwriting capital for the Syndicates. Captions within results of operations and other comprehensive income for the three and nine months ended September 30, 2022 are shown net of amounts relating to the TPC ProvidersProviders’ share of the Syndicates’ results, including investment results. During the fourth quarter of 2022, Ark sponsored the formation of Outrigger Re Ltd., a Bermuda company registered as a special purpose insurer and segregated accounts company, to provide collateralized reinsurance protection on Ark’s Bermuda global property catastrophe excess of loss portfolio written in calendar year 2023. Outrigger Re Ltd. issued non-voting redeemable preference shares on behalf of four segregated accounts to White Mountains and unrelated third-party investors. White Mountains consolidates the results of its segregated account, WM Outrigger Re, in its financial statements. See
9


Note 2 — “Significant Transactions.”
As of September 30, 2023 and December 31, 2022, White Mountains owned 100.0% of WM Outrigger Re’s preferred equity.
The Kudu segment consists of Kudu Investment Management, LLC and its subsidiaries (collectively “Kudu”). Kudu provides capital solutions for boutique asset and wealth managers for a variety of purposes including generational ownership transfers, management buyouts, acquisition and growth finance and legacy partner liquidity. Kudu also provides strategic assistance to investees from time to time. Kudu’s capital solutions typicallygenerally are structured as minority preferred equity stakes with distribution rights, generallytypically tied to gross revenues and designed to generate strong, stableimmediate cash yields. As of September 30, 20222023 and December 31, 2021,2022, White Mountains owned 89.2% and 89.3% and 99.3% of theKudu’s basic units outstanding (76.1% and 84.7%76.1% on a fully diluted, fully converted basis).
White Mountains’s Other Operations consists of the Company and its wholly-owned subsidiary, White Mountains Capital, LLC (“WM Capital”), its other intermediate holding companies, its wholly-owned investment management subsidiary, White Mountains Advisors LLC (“WM Advisors”), investment assets managed by WM Advisors, its interests in MediaAlpha, Inc. (“MediaAlpha”), PassportCard Limited (“PassportCard”) and DavidShield Life Insurance Agency (2000) Ltd. (“DavidShield”) (collectively, “PassportCard/DavidShield”), Elementum Holdings LP (“Elementum”), and certain other consolidated and unconsolidated entities (“Other Operating Businesses”) and certain other assets.

Discontinued Operations
On August 1, 2022, White Mountains Holdings (Luxembourg) S.à r.l. (“WTM Holdings Seller”), an indirect wholly owned subsidiary of White Mountains, completed the previously announced sale of White Mountains Catskill Holdings, Inc. and NSM Insurance HoldCo, LLC (“NSM” and, collectively with White Mountains Catskill Holdings, Inc., the “NSM Group”) to Riser Merger Sub, Inc., an affiliate of The Carlyle Group Inc. (the “NSM Transaction”), pursuant to the terms of the securities purchase agreement dated as of May 9, 2022. See Note 2 — “Significant Transactions.” NSM is a full-service managing general agent (“MGA”) and program administrator with delegated binding authorities for specialty property and casualty insurance. As of December 31, 2021, White Mountains owned 96.5% of the basic units outstanding of NSM (87.3% on a fully diluted, fully converted basis).
As a result of the NSM Transaction, the assets and liabilities of NSM Group have been presented in the balance sheet as held for sale for periods prior to the closing of the transaction, and the results of operations for NSM Group have been classified as discontinued operations in the statements of operations and comprehensive income through the closing of the transaction. Prior period amounts have been reclassified to conform to the current period’s presentation. See Note 19 — “Held for Sale and Discontinued Operations.”

Significant Accounting Policies

Refer to the Company’s 20212022 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s significant accounting policies.

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Note 2. Significant Transactions

NSM

On August 1, 2022, the NSM Transaction closed. White Mountains received $1.4 billion in net cash proceeds at closing and recognized a net transaction gain of $875.7 million, which was comprised of $886.8 million of net gain from sale of discontinued operations and $2.9 million of comprehensive income related to the recognition of foreign currency translation gains (losses) from the sale, partially offset by $14.0 million of compensation and other costs related to the transaction recorded in Other Operations.

WM Outrigger Re

During the fourth quarter of 2022, Ark sponsored the formation of Outrigger Re Ltd., a Bermuda company registered as a special purpose insurer and segregated accounts company, to provide reinsurance capacity to Ark. On December 20, 2022, Outrigger Re Ltd. issued $250.0 million of non-voting redeemable preference shares on behalf of four segregated accounts to White Mountains and unrelated third-party investors. Upon issuance of the preference shares, Outrigger Re Ltd. entered into collateralized quota share agreements with GAIL to provide reinsurance protection on Ark’s Bermuda global property catastrophe excess of loss portfolio written in calendar year 2023. The proceeds from the issuance of the preference shares were deposited into collateral trust accounts to fund any potential obligations under the reinsurance agreements with GAIL. Outrigger Re Ltd.’s obligations under the reinsurance agreements with GAIL are subject to an aggregate limit equal to the assets in the collateral trusts at any point in time. The terms of the reinsurance agreements are renewable upon the mutual agreement of Ark and the applicable preference shareholder.
White Mountains purchased 100% of the preference shares issued by its segregated account, WM Outrigger Re, for $205.0 million. White Mountains consolidates WM Outrigger Re’s results in its financial statements. WM Outrigger Re’s quota share reinsurance agreement with GAIL eliminates in White Mountains’s consolidated financial statements.

Kudu

On May 26, 2022, Kudu raised $114.5 million of equity capital (the “Kudu Transaction”) from Massachusetts Mutual Life Insurance Company (“Mass Mutual”), White Mountains and Kudu management. Mass Mutual, White Mountains and Kudu management contributed $64.1 million, $50.0 million and $0.4 million and in each case, at a pre-money valuation of 1.3x book value, or $114.0 million above the December 31, 2021 equity value of Kudu’s go-forward portfolio of revenue and earnings participation contracts. As of September 30, 2022, Kudu’scontracts (“Participation Contracts”). The go-forward portfolio of participation contracts excludes $41.1Kudu’s Participation Contracts excluded $54.3 million of enterprise value as of December 31, 2021 relating to two portfolio companies that had announced sale transactions prior to the capital raise. As a result of the Kudu Transaction, White Mountains’s basic ownership of Kudu decreased from 99.1% to 89.3%.
10


Ark
On October 1, 2020, White Mountains entered into a subscription and purchase agreement (the “Ark SPA”) with Ark and certain selling shareholders (collectively with Ark, the “Ark Sellers”). Under the terms of the Ark SPA, White Mountains agreed to contribute $605.4 million of equity capital to Ark, at a pre-money valuation of $300.0 million, and to purchase $40.9 million of shares from the Ark Sellers. White Mountains also agreed to contribute up to an additional $200.0 million of equity capital to Ark in 2021. In accordance with the Ark SPA, in the fourth quarter of 2020, White Mountains pre-funded/placed in escrow a total of $646.3 million in preparation for closing the Ark Transaction, including $280.0 million funded directly to Lloyd’s on behalf of Ark under the terms of a credit facility agreement and $366.3 million placed in escrow.
On January 1, 2021, White Mountains completed the Ark Transaction in accordance with the terms of the Ark SPA. As of September 30, 2022, White Mountains owned 72.0% of Ark on a basic shares outstanding basis (63.0%) after taking account of management’s equity incentives). The remaining shares are owned by current and former employees. In the future, management rollover shareholders could earn additional shares in Ark if and to the extent that White Mountains achieves certain multiple of invested capital return thresholds. If fully earned, these additional shares would represent 12.5% of the shares outstanding at closing.
White Mountains recognized total assets acquired related to the Ark Transaction of $2.5 billion, including goodwill and other intangible assets of $292.5 million, and total liabilities of $1.7 billion, including contingent consideration of $22.5 million and non-controlling interest of $220.2 million. Ark incurred transaction costs of $25.3 million in the first quarter of 2021.     
In the third quarter of 2021, Ark issued $163.3 million of floating rate unsecured subordinated notes (the “Ark 2021 Subordinated Notes”) in three separate transactions. See Note 7 — “Debt.” In connection with the issuance of the Ark 2021 Subordinated Notes, White Mountains and Ark terminated White Mountains’s commitment to provide up to $200.0 million of additional equity capital to Ark in 2021.
The following presents additional details of the assets acquired and liabilities assumed as of the January 1, 2021 acquisition date:
MillionsAs of January 1, 2021
Investments$594.3
Cash52.0(1)
Reinsurance recoverables433.4
Insurance premiums receivable236.7
Ceded unearned premiums170.2
Value of in-force business acquired71.7
Other assets88.9
Loss and loss adjustment expense reserves(696.0)
Unearned insurance premiums(326.1)
Debt(46.4)
Ceded reinsurance payable(528.3)
Other liabilities(25.9)
   Net tangible assets acquired24.5
Goodwill116.8
Other intangible assets - syndicate underwriting capacity175.7
Deferred tax liability on other intangible assets(33.4)
  Net assets acquired$283.6
(1) Cash excludes the White Mountains cash contribution of $605.4 as part of the Ark transaction.

The values of net tangible assets acquired and the resulting goodwill, other intangible assets and contingent consideration were recorded at fair value using Level 3 inputs. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill, other intangible assets and the contingent consideration liability were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. White Mountains developed internal estimates for the expected future cash flows and discount rates used in the present value calculations.
11


The value of in-force business acquired represents the estimated profits relating to the unexpired contracts, net of related prepaid reinsurance, at the acquisition date through the expiration date of the contracts. For the three and nine months ended September 30, 2022, Ark recognized $0.7 million and $6.8 million of amortization expense on the value of in-force business acquired. For the three and nine months ended September 30, 2021, Ark recognized $11.0 million and $54.9 million of amortization expense on the value of in-force business acquired. The value of the syndicate underwriting capacity intangible asset was estimated using net cash flows attributable to Ark’s rights to write business in the Lloyd’s market. The value of the in-force business acquired and the syndicate underwriting capacity were estimated using a discounted cash flow method. Significant inputs to the valuation models include estimates of growth in premium revenues, investment returns, claim costs, expenses and discount rates based on a weighted average cost of capital.
In evaluating the fair value of Ark’s loss and loss adjustment expense reserves (“LAE”), White Mountains determined that the risk-free rate of interest was approximately equal to the risk factor reflecting the uncertainty within the reserves and that no adjustment was necessary.
As of September 30, 2022 and December 31, 2021, Ark recognized total contingent consideration liabilities of $32.9 million and $28.0 million. Any future adjustments to contingent consideration liabilities will be recognized through pre-tax income (loss). For the three and nine months ended September 30, 2022, Ark recognized pre-tax expense of $2.7 million and $4.9 million for the change in the fair value of its contingent consideration liabilities. For both the three and nine months ended September 30, 2021, Ark recognized pre-tax expense of $1.5 million for the change in the fair value of its contingent consideration liabilities.

MediaAlpha
On October 30, 2020, MediaAlpha completed an initial public offering (the “MediaAlpha IPO”). In the offering, White Mountains sold 3.6 million shares at $19.00 per share ($17.67 per share net of underwriting fees) and received total proceeds of $63.8 million. White Mountains also received $55.0 million of net proceeds related to a dividend recapitalization at MediaAlpha.
Subsequent to the MediaAlpha IPO, White Mountains’s investment in MediaAlpha is accounted for at fair value based on the publicly traded share price of MediaAlpha’s common stock, and White Mountains presents its investment in MediaAlpha as a separate line item on the balance sheet.
On March 23, 2021, MediaAlpha completed a secondary offering of 8.05 million shares. In the secondary offering, White Mountains sold 3.6 million shares at $46.00 per share ($44.62 per share net of underwriting fees) for net proceeds of $160.3 million.
As of September 30, 2022, White Mountains owned 16.9 million shares, representing a 27.4% basic ownership interest (25.0% fully-diluted/fully-converted basis). At this current level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $6.60 per share increase or decrease in White Mountains’s book value per share. At the September 30, 2022 closing price of $8.75 per share, the fair value of White Mountains’s investment in MediaAlpha was $148.2 million. See Note 16 — “Equity-Method Eligible Investments.”

PassportCard/DavidShield
On January 24, 2018, White Mountains acquired a 50.0% ownership interest in DavidShield, its joint venture partner in PassportCard. DavidShield is an MGA that is the leading provider of expatriate medical insurance in Israel and uses the same card-based delivery system as PassportCard. As part of the transaction, White Mountains reorganized its equity stake in PassportCard so that White Mountains and its partner in DavidShield would each own 50.0% of both businesses. To facilitate the transaction, White Mountains provided financing to its partner in the form of a non-interest-bearing loan that is secured by the partner’s equity in PassportCard and DavidShield. The gross purchase price for the 50.0% interest in DavidShield was $41.8 million, or $28.3 million net of the financing provided for the restructuring.
On May 7, 2020, White Mountains made an additional $15.0 million investment in PassportCard/DavidShield to support operations through the ongoing COVID-19 pandemic. The transaction increased White Mountains’s ownership interest from 50.0% to 53.8%, but had no impact on the governance structure of the companies, including White Mountains’s board representation or other investor rights. The governance structures for both PassportCard and DavidShield were designed to give White Mountains and its co-investor equal power to make the decisions that most significantly impact the operations of PassportCard and DavidShield. Because White Mountains does not have the unilateral power to direct the operations of PassportCard or DavidShield, White Mountains does not hold a controlling financial interest in either PassportCard or DavidShield and does not consolidate either entity. White Mountains’s ownership interest gives White Mountains the opportunity to exert significant influence over the significant financial and operating activities of PassportCard and DavidShield. Accordingly, PassportCard and DavidShield meet the criteria to be accounted for under the equity method. White Mountains has taken the fair value option for its investment in PassportCard and DavidShield. Changes in the fair value of PassportCard and DavidShield are recorded in realized and unrealized investment gains. White Mountains’s maximum exposure to loss on its equity investment in PassportCard/DavidShield and the non-interest-bearing loan to its partner is limited to the total carrying value of $143.0 million.
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Note 3.  Investment Securities

White Mountains’s portfolio of investment securities held for general investment purposes consists of fixed maturity investments, short-term investments, common equity securities, its investment in MediaAlpha and other long-term investments, which are classified as trading securities. Trading securities are reported at fair value as of the balance sheet date.  Net realized and unrealized investment gains (losses) on trading securities are reported in pre-tax revenues.
White Mountains’s fixed maturity investments are generally valued using industry standard pricing methodologies. Key inputs include benchmark yields, benchmark securities, reported trades, issuer spreads, bids, offers, credit ratings and prepayment speeds. Income on mortgage and asset-backed securities is recognized using an effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from anticipated prepayments, the estimated economic life is recalculated and the remaining unamortized premium or discount is amortized prospectively over the remaining economic life.
Realized investment gains (losses) resulting from sales of investment securities are accounted for using the specific identification method. Premiums and discounts on all fixed maturity investments are amortized or accreted to income over the anticipated life of the investment. Short-term investments consist of interest-bearing money market funds, certificates of deposit and other securities, which at the time of purchase, mature or become available for use within one year.  Short-term investments are carried at fair value, which approximated amortized cost, as of September 30, 20222023 and December 31, 2021.2022.
Other long-term investments consist primarily of unconsolidated entities, including Kudu’s Participation Contracts, private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits, insurance-linked securities (“ILS”) funds and private debt investments.instruments.

Net Investment Income

White Mountains’s net investment income is comprised primarily of interest income associated with White Mountains’s fixed maturity investments and short-term investments, dividend income from common equity securities, distributions from its investment in MediaAlpha and distributions from other long-term investments.
The following table presents pre-tax net investment income for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months EndedNine Months Ended
September 30,September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Fixed maturity investmentsFixed maturity investments$11.1 $8.2 $28.6 $21.9 Fixed maturity investments$16.6 $11.1 $46.6 $28.6 
Short-term investmentsShort-term investments6.7 — 7.2 .5 Short-term investments13.8 6.7 34.8 7.2 
Common equity securitiesCommon equity securities.1 .1 .2 .1 Common equity securities1.0 .1 3.6 .2 
Other long-term investmentsOther long-term investments17.1 12.0 45.9 37.1 Other long-term investments17.4 17.1 46.8 45.9 
Amount attributable to TPC ProvidersAmount attributable to TPC Providers(.3)(.2)(.8)(.8)Amount attributable to TPC Providers (.3) (.8)
Total investment incomeTotal investment income34.7 20.1 81.1 58.8 Total investment income48.8 34.7 131.8 81.1 
Third-party investment expensesThird-party investment expenses(.8)(.6)(1.5)(1.6)Third-party investment expenses(.7)(.8)(1.7)(1.5)
Net investment income, pre-taxNet investment income, pre-tax$33.9 $19.5 $79.6 $57.2 Net investment income, pre-tax$48.1 $33.9 $130.1 $79.6 














1312


Net Realized and Unrealized Investment Gains (Losses)
The following table presents net realized and unrealized investment gains (losses) for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Realized investment gains (losses)Realized investment gains (losses)Realized investment gains (losses)
Fixed maturity investmentsFixed maturity investments$(4.9)$1.0 $(10.8)$3.8 Fixed maturity investments$(.3)$(4.9)$(1.7)$(10.8)
Short-term investmentsShort-term investments(.1)(.3)(.4)— Short-term investments(.2)(.1)(.3)(.4)
Common equity securitiesCommon equity securities —  .4 Common equity securities1.2 — 13.8 — 
Investment in MediaAlpha —  160.3 
Other long-term investmentsOther long-term investments3.4 9.2 24.1 0.9 Other long-term investments.6 3.4 48.9 24.1 
Net realized investment gains (losses)Net realized investment gains (losses)(1.6)9.9 12.9 165.4 Net realized investment gains (losses)1.3 (1.6)60.7 12.9 
Unrealized investment gains (losses)Unrealized investment gains (losses)Unrealized investment gains (losses)
Fixed maturity investmentsFixed maturity investments(58.8)(7.9)(192.9)(27.0)Fixed maturity investments(27.9)(58.8)(9.7)(192.9)
Short-term investmentsShort-term investments(2.1)— (2.6)— Short-term investments(.6)(2.1).7 (2.6)
Common equity securitiesCommon equity securities4.3 1.6 (6.3)7.3 Common equity securities(18.5)4.3 29.8 (6.3)
Investment in MediaAlphaInvestment in MediaAlpha(18.6)(396.8)(113.3)(485.8)Investment in MediaAlpha(46.8)(18.6)(38.9)(113.3)
Other long-term investmentsOther long-term investments27.5 28.4 40.8 112.3 Other long-term investments34.2 27.5 108.6 40.8 
Net unrealized investment gains (losses)Net unrealized investment gains (losses)(47.7)(374.7)(274.3)(393.2)Net unrealized investment gains (losses)(59.6)(47.7)90.5 (274.3)
Net realized and unrealized investment gains (losses), before
amount attributable to TPC providers(1)
Net realized and unrealized investment gains (losses), before
amount attributable to TPC providers(1)
(49.3)(364.8)(261.4)(227.8)
Net realized and unrealized investment gains (losses), before
amount attributable to TPC providers (1)
(58.3)(49.3)151.2 (261.4)
Amount attributable to TPC ProvidersAmount attributable to TPC Providers1.3 (1.7)6.2 (6.5)Amount attributable to TPC Providers 1.3  6.2 
Net realized and unrealized investment gains (losses)
Net realized and unrealized investment gains (losses)
$(48.0)$(366.5)$(255.2)$(234.3)
Net realized and unrealized investment gains (losses)
$(58.3)$(48.0)$151.2 $(255.2)
Fixed maturity and short-term investmentsFixed maturity and short-term investmentsFixed maturity and short-term investments
Net realized and unrealized investment gains (losses) Net realized and unrealized investment gains (losses)$(65.9)$(7.2)$(206.7)$(23.2) Net realized and unrealized investment gains (losses)$(29.0)$(65.9)$(11.0)$(206.7)
Less: net realized and unrealized gains (losses) on investment
securities sold during the period
Less: net realized and unrealized gains (losses) on investment
securities sold during the period
.1 (5.7)(3.0)(6.9)Less: net realized and unrealized gains (losses) on investment
securities sold during the period
2.5 .1 4.7 (3.0)
Net unrealized investment gains (losses) on investment
securities held at the end of the period
$(66.0)$(1.5)$(203.7)$(16.3)
Net unrealized investment gains (losses) recognized during the period on
investment securities held at the end of the period
Net unrealized investment gains (losses) recognized during the period on
investment securities held at the end of the period
$(31.5)$(66.0)$(15.7)$(203.7)
Common equity securities and investment in MediaAlphaCommon equity securities and investment in MediaAlphaCommon equity securities and investment in MediaAlpha
Net realized and unrealized investment gains (losses) on common
equity securities
Net realized and unrealized investment gains (losses) on common
equity securities
$4.3 $1.6 $(6.3)$7.7 Net realized and unrealized investment gains (losses) on common
equity securities
$(17.3)$4.3 $43.6 $(6.3)
Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(18.6)(396.8)(113.3)(325.5)Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(46.8)(18.6)(38.9)(113.3)
Total net realized and unrealized investment gains (losses)Total net realized and unrealized investment gains (losses)(14.3)(395.2)(119.6)(317.8)Total net realized and unrealized investment gains (losses)(64.1)(14.3)4.7 (119.6)
Less: net realized and unrealized gains (losses) on investment
securities sold during the period
Less: net realized and unrealized gains (losses) on investment
securities sold during the period
 .4  20.3 Less: net realized and unrealized gains (losses) on investment
securities sold during the period
(.1)— 3.7 — 
Net unrealized investment gains (losses) on investment
securities held at the end of the period
$(14.3)$(395.6)$(119.6)$(338.1)
Net unrealized investment gains (losses) recognized during the period on
investment securities held at the end of the period
Net unrealized investment gains (losses) recognized during the period on
investment securities held at the end of the period
$(64.0)$(14.3)$1.0 $(119.6)
(1) For the three months ended September 30, 2023 and 2022, includes $(12.8) and 2021, includes $(22.6) and $(7.0) of net realized and unrealized investment gains (losses) related to foreign currency exchange. For the nine months endedending September 30, 2023 and 2022, includes $(1.9) and 2021, includes $(44.4) and $(7.4) of net realized and unrealized investment gains (losses) related to foreign currency exchange.

The following table presents total net unrealized gains included in earnings(losses) attributable to net unrealized investment gains for Level 3 investments for the three and nine months ended September 30, 20222023 and 20212022 for investments still held at the end of the period:
Three Months EndedNine Months Ended
 September 30,September 30,
Millions2022202120222021
Other long-term investments$40.8 $26.5 $57.7 $75.5 
Total net unrealized investment gains, pre-tax - Level 3 investments$40.8 $26.5 $57.7 $75.5 
Three Months Ended September 30,Nine Months Ended September 30,
Millions2023202220232022
Total net unrealized investment gains on other long-term
   investments held at the end of the period, pre-tax
$24.6 $40.8 $76.0 $57.7 
1413


Investment Holdings

The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses) and carrying values of White Mountains’s fixed maturity investments as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022 September 30, 2023
MillionsMillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency Gains (Losses)
Carrying
Value
MillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency Gains (Losses)
Carrying
Value
U.S. Government and agency obligationsU.S. Government and agency obligations$227.9 $— $(11.0)$— $216.9 U.S. Government and agency obligations$270.1 $— $(9.0)$— $261.1 
Debt securities issued by corporationsDebt securities issued by corporations1,068.8 — (91.2)(3.1)974.5 Debt securities issued by corporations1,038.8 .1 (74.6)(2.7)961.6 
Municipal obligationsMunicipal obligations289.3 — (24.4)— 264.9 Municipal obligations264.6 — (26.4)— 238.2 
Mortgage and asset-backed securitiesMortgage and asset-backed securities278.3 — (37.6)— 240.7 Mortgage and asset-backed securities372.6 — (47.2)— 325.4 
Collateralized loan obligationsCollateralized loan obligations169.7 — (7.6)(4.8)157.3 Collateralized loan obligations196.5 .3 (3.1)(2.1)191.6 
Total fixed maturity investmentsTotal fixed maturity investments$2,034.0 $ $(171.8)$(7.9)$1,854.3 Total fixed maturity investments$2,142.6 $.4 $(160.3)$(4.8)$1,977.9 

December 31, 2021 December 31, 2022
MillionsMillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency
Gains (Losses)
Carrying
Value
MillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency
Gains (Losses)
Carrying
Value
U.S. Government and agency obligationsU.S. Government and agency obligations$212.1 $.5 $(1.1)$— $211.5 U.S. Government and agency obligations$216.6 $— $(10.2)$— $206.4 
Debt securities issued by corporationsDebt securities issued by corporations993.3 8.7 (8.7)(.4)992.9 Debt securities issued by corporations1,098.3 .6 (78.3)(1.8)1,018.8 
Municipal obligationsMunicipal obligations276.4 16.8 (1.3)— 291.9 Municipal obligations281.6 .4 (23.4)— 258.6 
Mortgage and asset-backed securitiesMortgage and asset-backed securities277.2 2.9 (2.5)— 277.6 Mortgage and asset-backed securities288.7 — (34.5)— 254.2 
Collateralized loan obligationsCollateralized loan obligations136.5 — (.4)(1.1)135.0 Collateralized loan obligations190.8 .1 (6.0)(2.0)182.9 
Total fixed maturity investmentsTotal fixed maturity investments$1,895.5 $28.9 $(14.0)$(1.5)$1,908.9 Total fixed maturity investments$2,076.0 $1.1 $(152.4)$(3.8)$1,920.9 

The following table presents the cost or amortized cost and carrying values of White Mountains’s fixed maturity investments by contractual maturity as of September 30, 2022.2023. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.
September 30, 2022September 30, 2023
MillionsMillionsCost or Amortized CostCarrying ValueMillionsCost or Amortized CostCarrying Value
Due in one year or lessDue in one year or less$207.5 $203.8 Due in one year or less$307.6 $301.2 
Due after one year through five yearsDue after one year through five years917.9 849.4 Due after one year through five years870.9 813.4 
Due after five years through ten yearsDue after five years through ten years354.8 309.3 Due after five years through ten years302.7 267.6 
Due after ten yearsDue after ten years105.8 93.8 Due after ten years92.3 78.7 
Mortgage and asset-backed securities and collateralized loan obligationsMortgage and asset-backed securities and collateralized loan obligations448.0 398.0 Mortgage and asset-backed securities and collateralized loan obligations569.1 517.0 
Total fixed maturity investmentsTotal fixed maturity investments$2,034.0 $1,854.3 Total fixed maturity investments$2,142.6 $1,977.9 


1514


The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses), and carrying values of common equity securities, White Mountains’s investment in MediaAlpha and other long-term investments as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022 September 30, 2023
MillionsMillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency Gains (Losses)
Carrying
Value
MillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency Gains (Losses)
Carrying
Value
Common equity securitiesCommon equity securities$324.2 $32.7 $(8.7)$(15.4)$332.8 Common equity securities$599.5 $51.6 $(4.8)$(9.3)$637.0 
Investment in MediaAlphaInvestment in MediaAlpha$ $148.2 $ $ $148.2 Investment in MediaAlpha$59.2 $139.9 $(10.3)$ $188.8 
Other long-term investmentsOther long-term investments$1,390.7 $345.0 $(90.0)$(23.0)$1,622.7 Other long-term investments$1,639.9 $390.9 $(116.6)$(18.4)$1,895.8 
 December 31, 2021
MillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency
Gains (Losses)
Carrying
Value
Common equity securities$236.3 $16.1 $— $(1.3)$251.1 
Investment in MediaAlpha$— $261.6 $— $— $261.6 
Other long-term investments$1,186.7 $239.0 $(44.1)$(3.8)$1,377.8 

 December 31, 2022
MillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency
Gains (Losses)
Carrying
Value
Common equity securities$660.6 $26.7 $(8.4)$(10.5)$668.4 
Investment in MediaAlpha$— $168.6 $— $— $168.6 
Other long-term investments$1,340.8 $271.1 $(107.1)$(16.8)$1,488.0 

Fair Value Measurements

Fair value measurements are categorized into a hierarchy that distinguishes between inputs based on market data from independent sources (observable inputs) and a reporting entity’s internal assumptions based upon the best information available when external market data is limited or unavailable (unobservable inputs). Quoted prices in active markets for identical assets or liabilities have the highest priority (Level 1), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities (Level 2) and unobservable inputs, including the reporting entity’s estimates of the assumptions that market participants would use, having the lowest priority (Level 3). See Note 17 — “Fair Value of Financial Instruments.”
As of September 30, 20222023 and December 31, 2021,2022, White Mountains used quoted market prices or other observable inputs to determine fair value for approximately 69%68% and 68%72% of the investment portfolio.

Fair Value Measurements by Level

The following tables present White Mountains’s fair value measurements for investments as of September 30, 20222023 and December 31, 20212022 by level. The major security types were based on the legal form of the securities. White Mountains has disaggregated its fixed maturity investments based on the issuing entity type, which impacts credit quality, with debt securities issued by U.S. government entities carrying minimal credit risk, while the credit and other risks associated with other issuers, such as corporations, municipalities or entities issuing mortgage and asset-backed securities vary depending on the nature of the issuing entity type. White Mountains further disaggregates debt securities issued by corporations by industry sector because investors often reference commonly used benchmarks and their subsectors to monitor risk and performance. Accordingly, White Mountains has further disaggregated this asset class into subclasses based on the similar sectors and industry classifications it uses to evaluate investment risk and performance against commonly used benchmarks, such as the Bloomberg Barclays U.S. Intermediate Aggregate.
1615


September 30, 2022 September 30, 2023
MillionsMillionsFair ValueLevel 1Level 2Level 3MillionsFair ValueLevel 1Level 2Level 3
Fixed maturity investments:Fixed maturity investments:    Fixed maturity investments:    
U.S. Government and agency obligationsU.S. Government and agency obligations$216.9 $216.9 $ $ U.S. Government and agency obligations$261.1 $261.1 $ $ 
Debt securities issued by corporations:Debt securities issued by corporations: Debt securities issued by corporations:
FinancialsFinancials269.0  269.0  Financials290.1  290.1  
ConsumerConsumer181.4  181.4  Consumer188.3  188.3  
HealthcareHealthcare109.1  109.1  
IndustrialIndustrial115.8  115.8  Industrial107.8  107.8  
Healthcare114.3  114.3  
TechnologyTechnology110.8  110.8  Technology107.5  107.5  
UtilitiesUtilities75.9  75.9  Utilities66.6  66.6  
CommunicationsCommunications49.1  49.1  Communications42.4  42.4  
EnergyEnergy36.1  36.1  Energy29.1  29.1  
MaterialsMaterials22.1  22.1  Materials20.7  20.7  
Total debt securities issued by corporationsTotal debt securities issued by corporations974.5  974.5  Total debt securities issued by corporations961.6  961.6  
Municipal obligationsMunicipal obligations264.9  264.9  Municipal obligations238.2  238.2  
Mortgage and asset-backed securitiesMortgage and asset-backed securities240.7  240.7  Mortgage and asset-backed securities325.4  325.4  
Collateralized loan obligationsCollateralized loan obligations157.3  157.3  Collateralized loan obligations191.6  191.6  
Total fixed maturity investmentsTotal fixed maturity investments1,854.3 216.9 1,637.4  Total fixed maturity investments1,977.9 261.1 1,716.8  
Short-term investmentsShort-term investments1,196.4 1,196.4   Short-term investments1,162.9 1,149.7 13.2  
Common equity securities (1)
332.8 46.4 286.4  
Common equity securities:Common equity securities:
Exchange-traded fundsExchange-traded funds252.1 252.1   
Other (1)
Other (1)
384.9  384.9  
Total common equity securitiesTotal common equity securities637.0 252.1 384.9  
Investment in MediaAlphaInvestment in MediaAlpha148.2 148.2   Investment in MediaAlpha188.8 188.8   
Other long-term investmentsOther long-term investments1,058.0  13.9 1,044.1 Other long-term investments1,090.7  15.4 1,075.3 
Other long-term investments NAV (2)
Other long-term investments NAV (2)
564.7    
Other long-term investments NAV (2)
805.1    
Total other long-term investmentsTotal other long-term investments1,622.7  13.9 1,044.1 Total other long-term investments1,895.8  15.4 1,075.3 
Total investmentsTotal investments$5,154.4 $1,607.9 $1,937.7 $1,044.1 Total investments$5,862.4 $1,851.7 $2,130.3 $1,075.3 
(1) Consist of investments in exchange traded funds (“ETFs”) and listed funds that predominantly invest in international equities.
(2)Consists of private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured at net asset value (“NAV”) using the practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.


17


 December 31, 2021
MillionsFair ValueLevel 1Level 2Level 3
Fixed maturity investments:    
U.S. Government and agency obligations$211.5 $211.5 $— $— 
Debt securities issued by corporations:    
Financials264.2 — 264.2 — 
Consumer178.1 — 178.1 — 
Technology117.9 — 117.9 — 
Industrial112.9 — 112.9 — 
Healthcare112.8 — 112.8 — 
Utilities70.9 — 70.9 — 
Communications56.0 — 56.0 — 
Energy48.0 — 48.0 — 
Materials32.1 — 32.1 — 
Total debt securities issued by corporations992.9 — 992.9 — 
Municipal obligations291.9 — 291.9 — 
Mortgage and asset-backed securities277.6 — 277.6 — 
Collateralized loan obligations135.0 — 135.0 — 
Total fixed maturity investments1,908.9 211.5 1,697.4 — 
Short-term investments465.9 465.9 — — 
Common equity securities (1)
251.1 — 251.1 — 
Investment in MediaAlpha261.6 261.6 — — 
Other long-term investments895.3 — 4.7 890.6 
Other long-term investments NAV (2)
482.5 — — — 
Total other long-term investments1,377.8 — 4.7 890.6 
Total investments$4,265.3 $939.0 $1,953.2 $890.6 
(1) Consist of investments in listed funds that predominantly invest in international equities.
(2) Consists of private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured atusing NAV using theas a practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.


16


December 31, 2022
MillionsFair ValueLevel 1Level 2Level 3
Fixed maturity investments:    
U.S. Government and agency obligations$206.4 $206.4 $— $— 
Debt securities issued by corporations:
Financials291.2 — 291.2 — 
Consumer191.9 — 191.9 — 
Healthcare121.3 — 121.3 — 
Industrial115.4 — 115.4 — 
Technology123.7 — 123.7 — 
Utilities73.8 — 73.8 — 
Communications47.9 — 47.9 — 
Energy33.9 — 33.9 — 
Materials19.7 — 19.7 — 
Total debt securities issued by corporations1,018.8 — 1,018.8 — 
Municipal obligations258.6 — 258.6 — 
Mortgage and asset-backed securities254.2 — 254.2 — 
Collateralized loan obligations182.9 — 182.9 — 
Total fixed maturity investments1,920.9 206.4 1,714.5 — 
Short-term investments924.1 924.1 — — 
Common equity securities:
Exchange-traded funds333.8 333.8 — — 
Other (1)
334.6 — 334.6 — 
Total common equity securities668.4 333.8 334.6 — 
Investment in MediaAlpha168.6 168.6 — — 
Other long-term investments926.4 — 14.8 911.6 
Other long-term investments NAV (2)
561.6 — — — 
Total other long-term investments1,488.0 — 14.8 911.6 
Total investments$5,170.0 $1,632.9 $2,063.9 $911.6 
(1) Consists of investments in listed funds that predominantly invest in international equities.
(2) Consists of private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured using NAV as a practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.


17


Investments Held on Deposit or as Collateral

As of September 30, 20222023 and December 31, 2021,2022, investments of $455.1$531.8 million and $479.5$500.5 million were held in trusts required to be maintained in relation to HG Global’s reinsurance agreements with BAM.
HG Global is required to maintain an interest reserve account in connection with its senior notes issued in 2022. As of September 30, 2023 and December 31, 2022, the fair value of the interest reserve account, which is included in short-term investments, was $29.9 million and $31.2 million. See Note 7 — “Debt.”
BAM is required to maintain deposits with certain insurance regulatory agencies in order to maintain theirits insurance licenses. The fair value of such deposits, which represent state deposits and are included within the investment portfolio, totaled $4.6 million and $4.8 million as of both September 30, 20222023 and December 31, 2021.2022.
Lloyd’s trust deposits are generally required of Lloyd's syndicates to protect policyholders in non-U.K. markets and are pledged into Lloyd’s trust accounts to provide a portion of the capital needed to support obligations at Lloyd’s. As of September 30, 20222023 and December 31, 2021,2022, Ark held Lloyd’s trust deposits with a fair value of $117.8$150.3 million and $113.8 million$137.4 million.
The underwriting capacity of a member of Lloyd’s must be supported by providing a deposit (“Funds at Lloyd’s”) in the form of cash, securities or letters of credit in an amount determined by Lloyd’s. The amount of such deposit is calculated for each member through the completion of an annual capital adequacy exercise. These requirements allow Lloyd’s to evaluate thatwhether each member has sufficient assets to meet its underwriting liabilities plus a required solvency margin. As of September 30, 20222023 and December 31, 2021,2022, the fair value of Ark’s Funds at Lloyd’s investment deposits totaled $311.4$335.2 million and $342.8$319.2 million.
As of September 30, 2023 and December 31, 2022, Ark held additional investments on deposit or as collateral for insurance regulators and reinsurance counterparties of $232.4 million and $257.0 million.
As of September 30, 20222023 and December 31, 2021,2022, Ark had $49.8$147.2 million and $50.0$90.3 million of short-term investments pledged as collateral under an uncommitted standby letterletters of credit. See Note 7 — “Debt.”
As of September 30, 2023 and December 31, 2022, short-term investments of $233.3 million and $203.7 million were held in a collateral trust account required to be maintained in relation to WM Outrigger Re’s reinsurance agreement with GAIL.

Kudu is required to maintain an interest reserve account in connection with its credit facility. As of September 30, 2023, the interest reserve account of $14.1 million was held in short term investments. As of December 31, 2022, the interest reserve account of $12.2 million was held in restricted cash. See
Note 7 - “Debt.”

18


Debt Securities Issued by Corporations

The following table presents the credit ratings of debt securities issued by corporations held in White Mountains’s investment portfolio as of September 30, 20222023 and December 31, 2021:2022:
Fair Value atFair Value at
MillionsMillionsSeptember 30, 2022December 31, 2021MillionsSeptember 30, 2023December 31, 2022
AAAAAA$11.2 $12.0 AAA$12.6 $11.3 
AAAA90.5 85.0 AA84.3 96.0 
AA524.0 490.4 A509.6 567.9 
BBBBBB343.0 396.8 BBB349.1 337.7 
OtherOther5.8 8.7 Other6.0 5.9 
Debt securities issued by corporations (1)
Debt securities issued by corporations (1)
$974.5 $992.9 
Debt securities issued by corporations (1)
$961.6 $1,018.8 
(1)    Credit ratings are based upon issuer credit ratings provided by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”), or if unrated by Standard & Poor’s, long-term obligation ratings provided by Moody’s Investor Service, Inc.

18


Mortgage and Asset-backed Securities and Collateralized Loan Obligations

The following table presents the fair value of White Mountains’s mortgage and asset-backed securities and collateralized loan obligations as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022December 31, 2021 September 30, 2023December 31, 2022
MillionsMillionsFair ValueLevel 2Level 3Fair ValueLevel 2Level 3MillionsFair ValueLevel 2Level 3Fair ValueLevel 2Level 3
Mortgage-backed securities:Mortgage-backed securities:      Mortgage-backed securities:      
Agency:Agency:      Agency:      
FNMAFNMA$114.1 $114.1 $ $125.4 $125.4 $— FNMA$162.5 $162.5 $ $124.5 $124.5 $— 
FHLMCFHLMC74.5 74.5  90.5 90.5 — FHLMC114.3 114.3  78.8 78.8 — 
GNMAGNMA28.9 28.9  40.1 40.1 — GNMA29.2 29.2  28.3 28.3 — 
Total agency (1)
Total agency (1)
217.5 217.5  256.0 256.0 — 
Total agency (1)
306.0 306.0 — 231.6 231.6  
Non-agency: ResidentialNon-agency: Residential.4 .4  .5 .5 — Non-agency: Residential.2 .2  .3 .3 — 
Total non-agencyTotal non-agency.4 .4  .5 .5 —  Total non-agency.2 .2  .3 .3 — 
Total mortgage-backed securities Total mortgage-backed securities217.9 217.9  256.5 256.5 —  Total mortgage-backed securities306.2 306.2 — 231.9 231.9 — 
Other asset-backed securities:Other asset-backed securities:  Other asset-backed securities:
Credit card receivablesCredit card receivables11.9 11.9  12.3 12.3 — Credit card receivables3.2 3.2  11.9 11.9 — 
Vehicle receivablesVehicle receivables10.9 10.9  8.8 8.8 — Vehicle receivables13.5 13.5  10.4 10.4 — 
OtherOther2.5 2.5 — — — — 
Total other asset-backed securities Total other asset-backed securities22.8 22.8  21.1 21.1 — Total other asset-backed securities19.2 19.2  22.3 22.3 — 
Total mortgage and asset-backed securitiesTotal mortgage and asset-backed securities240.7240.7 277.6 277.6 — Total mortgage and asset-backed securities325.4325.4 254.2254.2 
Collateralized loan obligationsCollateralized loan obligations157.3 157.3  135.0 135.0 — Collateralized loan obligations191.6 191.6  182.9 182.9 — 
Total mortgage and asset-backed securities and collateralized loan obligationsTotal mortgage and asset-backed securities and collateralized loan obligations$398.0 $398.0 $ $412.6 $412.6 $— Total mortgage and asset-backed securities
and collateralized loan obligations
$517.0 $517.0 $— $437.1 $437.1 $— 
(1)    Represents publicly traded mortgage-backed securities which carry the full faith and credit guaranty of the U.S. Government (i.e., GNMA) or are guaranteed
by a government sponsored entity (i.e., FNMA, FHLMC).

As of September 30, 2023 and December 31, 2022, White Mountains’s investment portfolio included $157.3$191.6 million and $182.9 million of collateralized loan obligations that are within the senior tranches of their respective fund securitization structures. All of White Mountains’s collateral loan obligations were rated AAA or AA as of September 30, 2023 and December 31, 2022.

Investment in MediaAlpha

In 2020, MediaAlpha completed an initial public offering (the “MediaAlpha IPO”). Following the MediaAlpha IPO, White Mountains’s investment in MediaAlpha is accounted for at fair value based on the publicly traded share price of MediaAlpha’s common stock and is presented as a separate line item on the balance sheet.
During the second quarter of 2023, White Mountains completed a tender offer to purchase 5.9 million additional shares of MediaAlpha at a purchase price of $10.00 per share. As of September 30, 2023, White Mountains owned 22.9 million shares, representing a 35.3% basic ownership interest (33.0% on a fully diluted, fully converted basis). See Note 16 — “Equity Method Eligible Investments.” At White Mountains’s current level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $9.00 per share increase or decrease in White Mountains’s book value per share. At the September 30, 20222023 closing price of $8.75$8.26 per share, the fair value of White Mountains’s investment in MediaAlpha was $148.2$188.8 million. See
Note 2 — “Significant Transactions.”
19


Other Long-Term Investments

The following table presents the carrying values of White Mountains’s other long-term investments by reportable segment as of September 30, 20222023 and December 31, 2021:2022:
Fair Value atFair Value at September 30, 2023
MillionsMillionsSeptember 30, 2022December 31, 2021MillionsArk/ WM OutriggerKuduOtherTotal
Kudu’s Participation ContractsKudu’s Participation Contracts$813.2 $669.5 Kudu’s Participation Contracts$ $775.3 $ $775.3 
PassportCard/DavidShield
PassportCard/DavidShield
132.0 120.0 
PassportCard/DavidShield
  150.0 150.0 
Elementum Holdings, L.P.Elementum Holdings, L.P.45.0 45.0 Elementum Holdings, L.P.  35.0 35.0 
Mandatorily redeemable preferred
securities
Mandatorily redeemable preferred
securities
— — 58.5 58.5 
Other unconsolidated entities (1)
Other unconsolidated entities (1)
37.0 34.4 
Other unconsolidated entities (1)
  41.8 41.8 
Total unconsolidated entitiesTotal unconsolidated entities1,027.2 868.9 Total unconsolidated entities 775.3 285.3 1,060.6 
Private equity funds and hedge fundsPrivate equity funds and hedge funds239.8 153.8 Private equity funds and hedge funds55.4  243.9 299.3 
Bank loan fundBank loan fund155.7 163.0 Bank loan fund189.3   189.3 
ILS fundsILS funds  159.5 159.5 
Lloyd’s trust depositsLloyd’s trust deposits117.8 113.8 Lloyd’s trust deposits150.3   150.3 
ILS funds49.4 51.9 
Private debt investments13.0 14.1 
Private debt instrumentsPrivate debt instruments 5.4 9.4 14.8 
OtherOther19.8 12.3 Other21.6  .4 22.0 
Total other long-term investmentsTotal other long-term investments$1,622.7 $1,377.8 Total other long-term investments$416.6 $780.7 $698.5 $1,895.8 
(1) Includes White Mountains’s non-controllingnoncontrolling equity interests in certain preferred securities, private common equity securities, convertiblelimited liability company units and Simple Agreement for Future Equity (“SAFE”) investments.
Fair Value at December 31, 2022
MillionsArk/ WM OutriggerKuduOtherTotal
Kudu’s Participation Contracts$— $695.9 $— $695.9 
PassportCard/DavidShield
— — 135.0 135.0 
Elementum Holdings, L.P.— — 30.0 30.0 
Other unconsolidated entities (1)
— — 37.2 37.2 
Total unconsolidated entities— 695.9 202.2 898.1 
Private equity funds and hedge funds40.4 — 157.4 197.8 
Bank loan fund174.8 — — 174.8 
ILS funds— — 49.3 49.3 
Lloyd’s trust deposits137.4 — — 137.4 
Private debt instruments— — 9.6 9.6 
Other21.0 — — 21.0 
Total other long-term investments$373.6 $695.9 $418.5 $1,488.0 
(1) Includes White Mountains’s noncontrolling equity interests in certain preferred securities, private common equity securities, limited liability company units and Simple Agreement for Future Equity (“SAFE”) investments.

Private Equity Funds and Hedge Funds
White Mountains invests in private equity funds and hedge funds, which are included in other long-term investments. The fair value of these investments is generally estimated using the NAV of the funds. As of September 30, 2022,2023, White Mountains held investments in 16eighteen private equity funds and two hedge funds. The largest investment in a single private equity fund or hedge fund was $49.3 million and $31.3$53.4 million as of September 30, 20222023 and $49.0 million as of December 31, 2021.2022.
20


The following table presents the fair value of investments and unfunded commitments in private equity funds and hedge funds by investment objective and sector as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022December 31, 2021 September 30, 2023December 31, 2022
MillionsMillionsFair ValueUnfunded
Commitments
Fair ValueUnfunded
Commitments
MillionsFair ValueUnfunded
Commitments
Fair ValueUnfunded
Commitments
Private equity fundsPrivate equity funds    Private equity funds    
Aerospace/Defense/GovernmentAerospace/Defense/Government$102.9 $45.1 $69.8 $11.8 Aerospace/Defense/Government$146.4 $25.5 $59.4 $37.5 
Financial servicesFinancial services77.9 54.9 67.7 29.3 Financial services88.6 41.8 77.1 54.3 
Real estateReal estate4.3 2.5 4.3 2.9 Real estate4.2 2.5 4.1 2.5 
Total private equity fundsTotal private equity funds185.1 102.5 141.8 44.0 Total private equity funds239.2 69.8 140.6 94.3 
Hedge fundsHedge funds    Hedge funds   
Long/short equity financials and business servicesLong/short equity financials and business services49.3  — — Long/short equity financials and business services51.1  49.0 — 
European small/mid capEuropean small/mid cap5.4  12.0 — European small/mid cap9.0  8.2 — 
Total hedge fundsTotal hedge funds54.7  12.0 — Total hedge funds60.1  57.2 — 
Total private equity funds and hedge funds
included in other long-term investments
Total private equity funds and hedge funds
included in other long-term investments
$239.8 $102.5 $153.8 $44.0 
Total private equity funds and hedge funds included
in other long-term investments
$299.3 $69.8 $197.8 $94.3 
 

Investments in private equity funds are generally subject to a lock-up period during which investors may not request a redemption. Distributions prior to the expected termination date of the fund may be limited to dividends or proceeds arising from the liquidation of the fund’s underlying investments. In addition, certain private equity funds have the option to extend the lock-up period.

20


The following table presents investments in private equity funds that were subject to lock-up periods as of September 30, 2022:2023:
MillionsMillions1 – 3 years3 – 5 years5 – 10 years>10 yearsTotalMillions1 – 3 years3 – 5 years5 – 10 years>10 yearsTotal
Private equity funds — expected lock-up period remainingPrivate equity funds — expected lock-up period remaining$27.5$19.0$135.4$3.2$185.1Private equity funds — expected lock-up period remaining$4.4$72.1$148.8$13.9$239.2

Investors in private equity funds are generally subject to indemnification obligations outside of the capital commitment period and prior to the winding up of the fund. As of September 30, 20222023 and December 31, 2021,2022, White Mountains is not aware of any indemnification claims relating to its investments in private equity funds. 
Redemption of investments in most hedge funds is subject to restrictions, including lock-up periods where no redemptions or withdrawals are allowed, restrictions on redemption frequency and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. Advance notice requirements for redemptions from White Mountains’s hedge fundsfund investments range from 45 to 90 days. One of White Mountains’s hedge fund investments also limits redemptions to every second anniversary following the date of the initial investment.

Bank Loan Fund
White Mountains’s other long-term investments include a bank loan fund with a fair value of $155.7$189.3 million and $174.8 million as of September 30, 2023 and December 31, 2022. The fair value of this investment is estimated using the NAV of the fund. The bank loan fund’s investment objective is to provide, on an unleveraged basis, high current income consistent with preservation of capital and low duration. The bank loan fund primarily invests in a broad portfolio of U.S. dollar-denominated, non-investment grade, floating-rate senior secured loans and may invest in other financial instruments, such as secured and unsecured corporate debt, credit default swaps, reverse repurchase agreements, synthetic indices and cash and cash equivalents.
The investment in the bank loan fund is subject to restrictions on redemption frequency and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. White Mountains may redeem all or a portion of its bank loan fund investment as of any calendar month-end upon 15 calendar days advanced written notice.

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Lloyd’s Trust Deposits
White Mountains’s other long-term investments include Lloyd’s trust deposits, which consist of non-U.K. deposits and Canadian comingled pooled funds. The Lloyd’s trust deposits invest primarily in short-term government securities, agency securities and corporate bonds held in trusts that are managed by Lloyd's of London. These investments are generally required of Lloyd's syndicates to protect policyholders in non-U.K. markets and are pledged into Lloyd’s trust accounts to provide a portion of the capital needed to support obligations at Lloyd’s. The fair value of the Lloyd’s trust deposits is generally estimated using the NAV of the funds. As of September 30, 2023 and December 31, 2022, White Mountains held Lloyd’s trust deposits with a fair value of $117.8$150.3 million and $137.4 million.

Insurance-Linked Securities Funds
White Mountains’s other long-term investments include ILS fund investments. The fair value of these investments is generally estimated using the NAV of the funds. As of September 30, 2023 and December 31, 2022, White Mountains held investments in ILS funds with a fair value of $49.4$159.5 million and $49.3 million.
Investments in ILS funds are generally subject to restrictions, including lock-up periods where no redemptions or withdrawals are allowed, non-renewal clauses, restrictions on redemption frequency and advance notice periods for redemptions. From time to time, natural catastrophe, liquidity, market or other events will occur that make the determination of fair value for underlying investments in ILS funds less certain due to the potential for loss development. In such circumstances, the impacted investments may be subject to additional lock-up provisions.


21


ILS funds are typically subject to monthly and annual restrictions on redemptions and advance redemption notice period requirements that range between 30 and 90 days. Amounts requested for redemption remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period.
One of the ILS funds in White Mountains’s portfolio requires shareholders to provide advance redemption notice onperiod, or before September 15 of each calendar year. Amounts requested for redemption in this fund remain subject to market fluctuation until the underlying investment has fully matured or been commuted, which may be up to a period of three years from the start of each calendar year.commuted.

Rollforward of Level 3 Investments

Level 3 measurements as of September 30, 20222023 and 20212022 consist of securities for which the estimated fair value has not been determined based upon quoted market price inputs for identical or similar securities. The following table presents the changes in White Mountains’s fair value measurements for Level 3 investments for the nine months ended September 30, 20222023 and 2021:2022:
Level 3 Investments
MillionsOther Long-term
Investments
Other Long-term
Investments
Balance at December 31, 2021$890.6 Balance at December 31, 2020$614.2 
Net realized and unrealized gains57.3 Net realized and unrealized gains79.0 
Amortization/accretion Amortization/accretion— 
Purchases127.9 Purchases143.6 
Sales(31.7)Sales(31.9)
Effect of Ark Transaction Effect of Ark Transaction9.6 
Transfers in Transfers in— 
Transfers out Transfers out— 
Balance at September 30, 2022$1,044.1 Balance at September 30, 2021$814.5 
Level 3 Investments
MillionsOther Long-term
Investments
Other Long-term
Investments
Balance at December 31, 2022$911.6 Balance at December 31, 2021$890.6 
Net realized and unrealized gains74.0 Net realized and unrealized gains57.3 
Purchases and contributions200.1 Purchases and contributions127.9 
Sales and distributions(110.4)Sales and distributions(31.7)
Transfers in Transfers in— 
Transfers out Transfers out— 
Balance at September 30, 2023$1,075.3 Balance at September 30, 2022$1,044.1 

Fair Value Measurements — Transfers Between Levels - Nine months ended September 30, 20222023 and 20212022
Transfers between levels are recorded using the fair value measurement as of the end of the quarterly period in which the event or change in circumstance giving rise to the transfer occurred.
During the nine months ended September 30, 20222023 and 2021,2022, there were no fixed maturity investments or other long-term investments classified as Level 3 measurements in the prior period that were transferred to Level 2 measurements.
During the nine months ended September 30, 20222023 and 2021,2022, there were no fixed maturity investments or other long-term investments classified as Level 2 measurements in the prior period that were transferred to Level 3 measurements.


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Significant Unobservable Inputs

The following tables present significant unobservable inputs used in estimating the fair value of White Mountains’s other long-term investments, classified within Level 3 as of September 30, 20222023 and December 31, 2021.2022. The tables below exclude $42.9$41.7 million and $46.7$41.1 million of Level 3 other long-term investments generally valued based on recent or expected transaction prices. The fair value of investments in private equity funds and hedge funds, bank loan funds, Lloyd’s trust deposits and ILS funds are generally estimated using the NAV of the funds.

$ in Millions$ in MillionsSeptember 30, 2022$ in MillionsSeptember 30, 2023
DescriptionDescription
Valuation Technique(s) (1)
Fair Value (2)
Unobservable InputsDescription
Valuation Technique(s) (1)
Fair Value (2)
Unobservable Inputs
Discount Rate (6)
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (6)
Discount Rate (5)
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (5)
Kudu’s Participation Contracts (5)(4)
Kudu’s Participation Contracts (5)(4)
Discounted cash flow
$813.217% - 24%7x - 16x
Kudu’s Participation Contracts (5)(4)
Discounted cash flow
$775.319% - 26%7x - 22x
PassportCard/DavidShieldPassportCard/DavidShieldDiscounted cash flow$132.024%4%PassportCard/DavidShieldDiscounted cash flow$150.025%4%
Elementum Holdings, L.P.Elementum Holdings, L.P.Discounted cash flow$45.018%4%Elementum Holdings, L.P.Discounted cash flow$35.025%4%
Private debt investmentsDiscounted cash flow$11.010%N/A
Mandatorily redeemable preferred
securities
Mandatorily redeemable preferred
securities
Discounted cash flow$58.515%N/A
Private debt instrumentsPrivate debt instrumentsDiscounted cash flow$14.812% - 13%N/A
(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates.
(2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs.
(3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts is 20%was 21% and 9.7x.13x.
(4) As of September 30, 2022, three of Kudu’s Participation Contracts with a total fair value of $312.4 were valued using a probability weighted expected return method, which was based on a discounted cash flow analysis and an expected sale transaction.
(5) In 2022,the first nine months of 2023, Kudu deployed a total of $97.9$108.3 into new and existing Kudu Participation Contracts, including Gramercy Funds Management, GenTrust, EC Management Services, and TK Partners.Contracts.
(6)(5) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.

$ in Millions$ in MillionsDecember 31, 2021$ in MillionsDecember 31, 2022
DescriptionDescription
Valuation Technique(s) (1)
Fair Value (2)
Unobservable InputsDescription
Valuation Technique(s) (1)
Fair Value (2)
Unobservable Inputs
Discount Rate (6)
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (6)
Discount Rate (6)
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (6)
Kudu’s Participation Contracts (3)(4)(5)
Kudu’s Participation Contracts (3)(4)(5)
Discounted cash flow
$669.518% - 23%7x - 13x
Kudu’s Participation Contracts (3)(4)(5)
Discounted cash flow
$695.918% - 25%7x - 16x
PassportCard/DavidShieldPassportCard/DavidShieldDiscounted cash flow$120.023%4%PassportCard/DavidShieldDiscounted cash flow$135.024%4%
Elementum Holdings, L.P.Elementum Holdings, L.P.Discounted cash flow$45.017%4%Elementum Holdings, L.P.Discounted cash flow$30.021%4%
Private debt investmentsDiscounted cash flow$9.48%N/A
Private debt instrumentsPrivate debt instrumentsDiscounted cash flow$9.611%N/A
(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates.
(2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs.
(3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts is 20%was 21% and 10x.12x.
(4) In 2021,2022, Kudu deployed a total of $223.4$99.8 into new and existing Kudu Participation Contracts, including TIG Advisors, TK Partners, Third Eye Capital Management, Douglass Winthrop Advisors, Granahan Investment Management and Radcliffe Capital Management.Contracts.
(5) As of December 31, 2021, one2022, two of Kudu’s Participation Contracts with a total fair value of $78.8 was$189.0 were valued using a probability weighted expected return method, which was based ontakes into account factors such as a discounted cash flow analysis, the expected value to be received in a pending sale transaction and an expected sale transaction.the likelihood that a sales transaction will take place.
(6) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.


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Note 4. Goodwill and Other Intangible Assets

    White Mountains accounts for purchases of businessesbusiness combinations using the acquisition method. Under the acquisition method, White Mountains recognizes and measures the assets acquired, liabilities assumed and any non-controllingnoncontrolling interest in the acquired entities at their acquisition date fair values. Goodwill represents the excess of the amount paid to acquire businesses over the fair value of identifiable net assets at the date of acquisition. The estimated acquisition date fair values, generally consisting of intangible assets and liabilities for contingent consideration, may be recorded at provisional amounts in circumstances where the information necessary to complete the acquisition accounting is not available at the reporting date. Any such provisional amounts are finalized as measurement period adjustments within one year of the acquisition date.
The following table presents the economic lives, acquisition date fair values, accumulated amortization and net carrying values for other intangible assets and goodwill by reportable segment as of September 30, 20222023 and December 31, 2021:2022:
$ in Millions$ in MillionsWeighted Average Economic
 Life
(in years)
September 30, 2022December 31, 2021$ in MillionsWeighted Average Economic
 Life
(in years)
September 30, 2023December 31, 2022
Acquisition Date Fair ValueAccumulated AmortizationNet Carrying ValueAcquisition Date Fair ValueAccumulated AmortizationNet Carrying Value$ in MillionsWeighted Average Economic
 Life
(in years)
Acquisition Date Fair ValueAccumulated AmortizationNet Carrying ValueAcquisition Date Fair ValueAccumulated AmortizationNet Carrying Value
Goodwill:Goodwill:
ArkArkN/A$116.8 $ $116.8 $116.8 $— $116.8 ArkN/A$116.8 $ $116.8 $116.8 $— $116.8 
KuduKuduN/A7.6  7.6 7.6 7.6 KuduN/A7.6  7.6 7.6 — 7.6 
Other OperationsOther OperationsN/A51.1  51.1 17.9 — 17.9 Other OperationsN/A44.4  44.4 52.1 — 52.1 
Total goodwillTotal goodwill175.5  175.5 142.3 — 142.3 Total goodwill168.8  168.8 176.5 — 176.5 
Other intangible assets:Other intangible assets:Other intangible assets:
ArkArkArk
Underwriting capacityUnderwriting capacityN/A175.7  175.7 175.7 — 175.7 Underwriting capacityN/A175.7  175.7 175.7 — 175.7 
KuduKuduKudu
Trade names Trade names72.2 1.1 1.1 2.2 .9 1.3 Trade names72.2 1.4 .8 2.2 1.2 1.0 
Other OperationsOther OperationsOther Operations
Trade names Trade names15.917.9 2.4 15.5 8.2 1.5 6.7 Trade names13.313.3 3.7 9.6 17.9 3.0 14.9 
Customer relationshipsCustomer relationships12.429.5 6.6 22.9 18.8 4.5 14.3 Customer relationships10.924.8 9.4 15.4 29.5 7.5 22.0 
OtherOther12.12.8 .3 2.5 .3 .1 .2 Other12.12.8 1.0 1.8 2.8 .5 2.3 
Subtotal Subtotal50.2 9.3 40.9 27.3 6.1 21.2 Subtotal40.9 14.1 26.8 50.2 11.0 39.2 
Total other intangible assetsTotal other intangible assets228.1 10.4 217.7 205.2 7.0 198.2 Total other intangible assets218.8 15.5 203.3 228.1 12.2 215.9 
Total goodwill and other intangible assets
Total goodwill and other intangible assets
$403.6 $10.4 393.2 $347.5 $7.0 340.5 
Total goodwill and other intangible assets
$387.6 $15.5 $372.1 $404.6 $12.2 $392.4 
Goodwill and other intangible assets attributed to
non-controlling interests
(103.1)(91.8)
Goodwill and other intangible assets included in White Mountains’s
common shareholders’ equity
$290.1 $248.7 

Intangible Assets Valuation Methods

The goodwill recognized for the entities shown above is attributed to expected future cash flows. The acquisition date fair values of other intangible assets with finite lives are estimated using income approach techniques, which use future expected cash flows to develop a discounted present value amount.
The multi-period-excess-earnings method estimates fair value using the present value of the incremental after-tax cash flows attributable solely to the other intangible asset over its remaining life. This approach was used to estimate the fair value of other intangible assets associated with the underwriting capacity trade names,and customer relationships and contracts and information technology.relationships.
The relief-from-royalty method was used to estimate fair value for other intangible assets that relate to rights that could be obtained via a license from a third-party owner. Under this method, the fair value is estimated using the present value of license fees avoided by owning rather than leasing the asset. This technique was used to estimate the fair value of domaintrade names certain trademarks and brand names.

24


other intangible assets.
The with-or-without method estimates the fair value of other intangible assets that provide an incremental benefit. Under this method, the fair value of the other intangible asset is calculated by comparing the value of the entity with and without the other intangible asset. This approach was used to estimate the fair value of favorable lease terms.
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On at least an annual basis beginning no later than the interim period included in the one-year anniversary of an acquisition, White Mountains evaluates goodwill and other intangible assets for potential impairment. Between annual evaluations, White Mountains considers changes in circumstances or events subsequent to the most recent evaluation that may indicate that an impairment may exist and, if necessary will perform an interim review for potential impairment.
The following table presents a summary ofDuring the acquisition date fair values ofthree and nine months ended September 30, 2023 and 2022, White Mountains did not recognize any impairments to goodwill and other intangible assets for acquisitions completed from January 1, 2021 through September 30, 2022:
$ in Millions
Goodwill and
Other intangible asset (1)assets.
Acquisition Date
Acquisition of subsidiary/ asset
Ark$292.5January 1, 2021
Other Operations$86.6Various
(1)
Acquisition date fair values include the effect
Rollforward of adjustments during the measurement periodGoodwill and exclude the effect of foreign currency translation subsequent to the acquisition date.Other Intangible Assets

The following tables presenttable presents the change in goodwill and other intangible assets for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Three Months Ended September 30,
2022202120232022
MillionsMillionsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible AssetsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible AssetsMillionsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible AssetsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible Assets
Beginning balanceBeginning balance$201.8 $196.2 $398.0 $151.5 $201.1 $352.6 Beginning balance$168.8 $204.8 $373.6 $201.8 $196.2 $398.0 
Attribution of acquisition date fair value estimates
between goodwill and other intangible assets (1)
Attribution of acquisition date fair value estimates
between goodwill and other intangible assets (1)
(22.9)22.9  (9.3)9.3 — 
Attribution of acquisition date fair
value estimates between goodwill
and other intangible assets (1)
 —  (22.9)22.9 — 
Measurement period adjustments (2)
Measurement period adjustments (2)
(3.4) (3.4)(.4)— (.4)
Measurement period adjustments (2)
—   (3.4)— (3.4)
AmortizationAmortization (1.4)(1.4)— (2.0)(2.0)Amortization (1.5)(1.5)— (1.4)(1.4)
Ending balanceEnding balance$175.5 $217.7 $393.2 $141.8 $208.4 $350.2 Ending balance$168.8 $203.3 $372.1 $175.5 $217.7 $393.2 
(1) Relates to acquisitions within Other Operations. The relative fair values of goodwill and other intangible assets recognized in connection with acquisitions during 2022 had not yet been finalized as of the end of the period.
(2)Measurement period adjustments relate to updated information about acquisition date fair values of assets acquired and liabilities assumed. During the three months ended September 30, 2022, and 2021, adjustments relate to acquisitions within Other Operations.

Nine Months Ended September 30,Nine Months Ended September 30,
2022202120232022
MillionsMillionsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible AssetsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible AssetsMillionsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible AssetsGoodwillOther Intangible AssetsTotal Goodwill and Other Intangible Assets
Beginning balanceBeginning balance$142.3 $198.2 $340.5 $19.2 $26.4 $45.6 Beginning balance$176.5 $215.9 $392.4 $142.3 $198.2 $340.5 
Ark Transaction   116.8 175.7 292.5 
Acquisition of businesses (1)
Acquisition of businesses (1)
59.5  59.5 15.8 — 15.8 
Acquisition of businesses (1)
   59.5 — 59.5 
Dispositions (2)
Dispositions (2)
(6.7)(6.9)(13.6)— — — 
Attribution of acquisition date fair value estimates
between goodwill and other intangible assets (1)
Attribution of acquisition date fair value estimates
between goodwill and other intangible assets (1)
(22.9)22.9  (9.3)9.3 — 
Attribution of acquisition date fair
value estimates between goodwill
and other intangible assets (1)
   (22.9)22.9 — 
Measurement period adjustments (2)(3)
Measurement period adjustments (2)(3)
(3.4)(3.4)(.7).1 (.6)
Measurement period adjustments (2)(3)
(1.0) (1.0)(3.4)— (3.4)
AmortizationAmortization (3.4)(3.4)— (3.1)(3.1)Amortization (5.7)(5.7)— (3.4)(3.4)
Ending balanceEnding balance$175.5 $217.7 $393.2 $141.8 $208.4 $350.2 Ending balance$168.8 $203.3 $372.1 $175.5 $217.7 $393.2 
(1) Relates to acquisitions within Other Operations.The relative fair values of goodwill and other intangible assets recognized in connection with acquisitions during 2022 had not yet been finalized as of the end of the period.
(2) Relates to a disposition within Other Operations.
(3)Measurement period adjustments relate to updated information about acquisition date fair values of assets acquired and liabilities assumed. During the nine
months ended September 30, 2022, and 2021, adjustments relate to acquisitions within Other Operations.
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Note 5.  Loss and Loss Adjustment Expense Reserves

P&C Insurance and Reinsurance

The following table summarizes the loss and LAEloss adjustment expense (“LAE”) reserve activity of Ark’s insurance and reinsurance subsidiaries the Ark/WM Outrigger segmentfor the three and nine months ended September 30, 20222023 and 2021:2022:

Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Gross beginning balanceGross beginning balance$1,022.1 $760.0 $894.7 $696.0 Gross beginning balance$1,421.0 $1,022.1 $1,296.5 $894.7 
Less: beginning reinsurance recoverable on unpaid losses (1)
Less: beginning reinsurance recoverable on unpaid losses (1)
(375.5)(425.3)(428.9)(433.4)
Less: beginning reinsurance recoverable on unpaid losses (1)
(362.7)(375.5)(505.0)(428.9)
Net loss and LAE reservesNet loss and LAE reserves646.6 334.7 465.8 262.6 Net loss and LAE reserves1,058.3 646.6 791.5 465.8 
Loss and LAE incurred relating to:Loss and LAE incurred relating to:Loss and LAE incurred relating to:
Current year lossesCurrent year losses222.9 141.9 491.8 269.0 Current year losses266.4 222.9 562.1 491.8 
Prior year lossesPrior year losses(9.2)(12.7)(35.6)(21.2)Prior year losses(.6)(9.2)19.0 (35.6)
Net incurred losses and LAENet incurred losses and LAE213.7 129.2 456.2 247.8 Net incurred losses and LAE265.8 213.7 581.1 456.2 
Loss and LAE paid relating to:Loss and LAE paid relating to:Loss and LAE paid relating to:
Current year lossesCurrent year losses(6.1)(9.0)(20.8)(11.5)Current year losses(8.8)(6.1)(18.4)(20.8)
Prior year lossesPrior year losses(37.0)(20.3)(130.8)(62.1)Prior year losses(90.4)(37.0)(281.1)(130.8)
Net paid loss and LAENet paid loss and LAE(43.1)(29.3)(151.6)(73.6)Net paid loss and LAE(99.2)(43.1)(299.5)(151.6)
Change in TPC Providers’ participation (2)
Change in TPC Providers’ participation (2)
 — 57.5 (2.2)
Change in TPC Providers’ participation (2)
 — 145.4 57.5 
Foreign currency translation and other adjustments
to loss and LAE reserves
Foreign currency translation and other adjustments
to loss and LAE reserves
(9.2)(1.2)(19.9)(1.2)Foreign currency translation and other adjustments to loss
and LAE reserves
(5.5)(9.2).9 (19.9)
Net ending balanceNet ending balance808.0 433.4 808.0 433.4 Net ending balance1,219.4 808.0 1,219.4 808.0 
Plus: ending reinsurance recoverable on unpaid losses (3)
Plus: ending reinsurance recoverable on unpaid losses (3)
521.4 457.5 521.4 457.5 
Plus: ending reinsurance recoverable on unpaid losses (3)
352.4 521.4 352.4 521.4 
Gross ending balanceGross ending balance$1,329.4 $890.9 $1,329.4 $890.9 Gross ending balance$1,571.8 $1,329.4 $1,571.8 $1,329.4 
(1) The beginning reinsurance recoverable on unpaid losses includes amounts attributable to TPC Providers of $182.4$0.0 and $314.6$182.4 for the three months ended September 30, 2023 and 2022 and 2021$145.4 and $276.8 and $319.2 for the nine months ended September 30, 20222023 and 2021.2022.
(2) Amount represents the impact to net loss and LAE reserves due to a change in the TPC Providers’ participation related to the annual reinsurance to close (“RITC”) process.
(3) The ending reinsurance recoverable on unpaid losses includes amounts attributable to TPC Providers of $168.0$0.0 and $299.9$168.0 as of September 30, 20222023 and 2021.2022.

For the three and nine months ended September 30, 2023, the Ark/WM Outrigger segment recognized $0.6 million of net favorable prior year loss reserve development and $19.0 million of net unfavorable prior year loss reserve development. The net unfavorable prior year loss reserve development for the nine months ended September 30, 2023 was driven primarily by Winter Storm Elliot and three large claims in the property and marine & energy lines of business. For the three and nine months ended September 30, 2022, Arkthe Ark/WM Outrigger segment recognized $9.2 million and $35.6 million of net favorable prior year loss reserve development. Ark’s net favorable prior year loss reserve development, in 2022 was driven primarily by good claims experience across most classes including the property and accident & health and specialty reserving lines of business, predominantly from business underwritten in London. For the three and nine months ended September 30, 2021, Ark recognized $12.7 million and $21.2 million of net favorable prior year loss reserve development. Ark’s net favorable prior year loss reserve development in 2021 was driven primarily by the property and accident & health reserving line of business.

TPC Providers’ Participation

Impact of Third-Party Capital
For the years of account prior to the Ark Transaction, a significant proportion of the Syndicates’ underwriting capital was provided by TPC Providers using whole account reinsurance contracts with Ark’s corporate member. The TPC Providers’ participation in the Syndicates for the 2020 open year of account is 42.8% of the total net result of the Syndicates. For the years of account subsequent to the Ark Transaction, Ark is no longer using TPC Providers to provide underwriting capital for the Syndicates.
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An RITCA reinsurance to close (“RITC”) agreement is generally put in place after the third year of operations for a year of account such that the outstanding loss and LAE reserves, including future development thereon, are reinsured into the next year of account. As a result, and in combination with the changing participation provided by TPC Providers, Ark’s participation on outstanding loss and LAE reserves reinsured into the next year of account may change, perhaps significantly. During the first quarter of 2023, an RITC agreement was executed such that the outstanding loss and LAE reserves for claims arising out of the 2020 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 42.8%, were reinsured into the 2021 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 0.0%. During the first quarter of 2022, an RITC agreement was executed such that the outstanding loss and LAE reserves for claims arising out of the 2019 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 58.3%, were reinsured into the 2020 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates iswas 42.8%. During the first quarter of 2021, an RITC was executed such that the outstanding loss and LAE reserves for claims arising out of the 2018 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 57.6%, were reinsured into the 2019 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 58.3%.

Municipal Bond Guarantee Insurance

HG Re and BAM do not have any outstanding loss and LAE reserves related to BAM’s municipal bond guarantee insurance business.

Note 6.  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 losses and LAE for Arkthe Ark/WM Outrigger segment for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021MillionsThree Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Written premiums:Written premiums:Written premiums:
Gross$215.5 $162.4 $1,252.5 $895.0 
DirectDirect$189.4 $118.6 $727.1 $563.8 
AssumedAssumed61.8 96.9 939.6 688.7 
Gross written premiumsGross written premiums251.2 215.5 1,666.7 1,252.5 
CededCeded(22.9)(41.5)(246.0)(169.5)Ceded(20.2)(1)(22.9)(360.3)(1)(246.0)
Net written premiumsNet written premiums$192.6 $120.9 $1,006.5 $725.5 Net written premiums$231.0 $192.6 $1,306.4 $1,006.5 
Earned premiums:Earned premiums:Earned premiums:
Gross$454.9 $284.5 $966.6 $622.0 
DirectDirect$273.1 $193.5 $624.1 $492.9 
AssumedAssumed370.0 261.4 684.6 473.7 
Gross earned premiumsGross earned premiums643.1 454.9 1,308.7 966.6 
CededCeded(108.8)(71.1)(208.8)(186.2)Ceded(144.2)(2)(108.8)(261.4)(2)(208.8)
Net earned premiumsNet earned premiums$346.1 $213.4 $757.8 $435.8 Net earned premiums$498.9 $346.1 $1,047.3 $757.8 
Losses and loss adjustment expenses:
Losses and LAE:Losses and LAE:
GrossGross$391.4 $193.5 $712.9 $372.7 Gross$269.3 $391.4 $627.5 $712.9 
CededCeded(177.7)(64.3)(256.7)(124.9)Ceded(3.5)(3)(177.7)(46.4)(3)(256.7)
Net losses and loss adjustment expenses$213.7 $129.2 $456.2 $247.8 
Net losses and LAENet losses and LAE$265.8 $213.7 $581.1 $456.2 
(1) The ceded written premiums exclude $6.0 and $108.4 ceded by Ark to WM Outrigger Re for the three and nine months ended September 30, 2023, which eliminate in White Mountains’s consolidated financial statements.
(2) The ceded earned premiums exclude $60.6 and $75.4 ceded by Ark to WM Outrigger Re for the three and nine months ended September 30, 2023, which eliminate in White Mountains’s consolidated financial statements.
(3) The ceded loss and LAE exclude $7.3 and $7.9 ceded by Ark to WM Outrigger Re for the three and nine months ended September 30, 2023, which eliminate in White Mountains’s consolidated financial statements.

As
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The following table presents the Ark/WM Outrigger segment’s reinsurance recoverables as of September 30, 2022, Ark had $521.4 million2023 and $29.5 million ofDecember 31, 2022:
MillionsSeptember 30, 2023December 31, 2022
Reinsurance recoverables on unpaid losses$352.4 (1)$505.0 (3)
Reinsurance recoverables on paid losses26.3 31.1 
Ceded unearned premiums159.7 (2)59.2 
Reinsurance recoverables$538.4 $595.3 
(1) The reinsurance recoverables on unpaid and paid losses. Aslosses exclude $7.9 ceded by Ark to WM Outrigger Re as of September 30, 2021,2023, which eliminate in White Mountains’s consolidated financial statements.
(2) The ceded unearned premiums exclude $33.0 ceded by Ark had $457.5 million and $8.1 millionto WM Outrigger Re as of September 30, 2023, which eliminate in White Mountains’s consolidated financial statements.
(3) The reinsurance recoverables on unpaid and paid losses. losses include $145.4 attributable to TPC Providers as of December 31, 2022, which are collateralized.

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.
As of September 30, 2022, Ark’s reinsurance recoverables of $550.9 million included $168.0 million attributable to TPC Providers, which are collateralized. As of September 30, 2021, Ark’s reinsurance recoverables of $465.6 million included $299.9 million related to TPC Providers, which are collateralized.

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The following table provides a listing of Ark’s remainingpresents the Ark/WM Outrigger segment’s gross and net reinsurance recoverables excluding amounts attributable to TPC Providers, by the reinsurer’s A.M. Best Company, Inc (“A.M. Best”) rating and the percentage of total recoverablesratings as of September 30, 2022:2023:

$ in Millions$ in MillionsAs of September 30, 2022$ in MillionsAs of September 30, 2023
A.M. Best Rating(1)
A.M. Best Rating(1)
GrossCollateralNet% of Total
A.M. Best Rating(1)
GrossCollateralNet% of Total
A+ or betterA+ or better$178.3 $— $178.3 67.7 %A+ or better$203.7 $— $203.7 69.6 %
A- to AA- to A78.9— 78.929.9 A- to A78.8— 78.826.9 
B++ or lower and not ratedB++ or lower and not rated125.7119.46.3 2.4 B++ or lower and not rated96.2(2)85.9(2)10.3 3.5 
TotalTotal$382.9 $119.4 $263.5 100.0 %Total$378.7 $85.9 $292.8 100.0 %
(1) A.M. Best ratings as detailed above are: “A+ or better” (Superior) “A- to A” (Excellent), “B++” (Good).

See (2)Note 10 — “Municipal Bond Guarantee Insurance” for third-party reinsurance balances related Excludes $7.9 ceded by Ark to WM Outrigger Re as of September 30, 2023, which eliminates in White Mountains’s consolidated financial guarantee business.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. During the fourth quarter of 2021, Ark negotiated a reduction of $31.7 million, including accrued interest, to the aggregate excess of loss contract with SiriusPoint. As of September 30, 2023 and December 31, 2022, the carrying value of Ark’s deposit in SiriusPoint, including accrued interest, was $20.3 million and $20.4 million.

Municipal Bond Guarantee Insurance

See Note 10 — “Municipal Bond Guarantee Insurance” for third-party reinsurance balances and reinsurance contracts accounted for as deposits related to White Mountains’s financial guarantee business.

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Note 7.  Debt

The following table presents White Mountains’s debt outstanding as of September 30, 20222023 and December 31, 2021:2022:
$ in MillionsSeptember 30,
2022
Effective
  Rate
 (1)December 31,
2021
Effective
  Rate
 (1)
HG Global Senior Notes$150.0 8.6%$— N/A
Unamortized discount and issuance cost(3.6)— 
HG Global Senior Notes, carrying value146.4 — 
Ark 2007 Subordinated Notes, carrying value30.0 30.0 
Ark 2021 Notes Tranche 137.6 44.2 
Ark 2021 Notes Tranche 247.0 47.0 
Ark 2021 Notes Tranche 370.0 70.0 
Unamortized issuance cost(4.6)(5.3)
Ark 2021 Subordinated Notes, carrying value150.0 155.9 
    Total Ark Subordinated Notes, carrying value180.0 7.3%185.9 6.9%
Kudu Credit Facility260.4 5.6%225.4 4.3%
Unamortized issuance cost(6.9)(7.2)
Kudu Credit Facility, carrying value253.5 218.2 
Other Operations debt36.4 7.1%17.1 7.5%
Unamortized issuance cost(.8)(.3)
Other Operations debt, carrying value35.6 16.8 
Total debt$615.5 $420.9 
$ in MillionsSeptember 30, 2023Effective
  Rate
 (1)December 31, 2022Effective
  Rate
 (1)
HG Global Senior Notes$150.0 11.8%$150.0 8.9%
Unamortized discount and issuance cost(3.2)(3.5)
HG Global Senior Notes, carrying value146.8 146.5 
Ark 2007 Subordinated Notes, carrying value30.0 30.0 
Ark 2021 Subordinated Notes Tranche 141.9 41.3 
Ark 2021 Subordinated Notes Tranche 247.0 47.0 
Ark 2021 Subordinated Notes Tranche 370.0 70.0 
Unamortized issuance cost(4.3)(4.6)
Ark 2021 Subordinated Notes, carrying value154.6 153.7 
    Total Ark Subordinated Notes, carrying value184.6 10.8%183.7 7.6%
Kudu Credit Facility210.3 9.9%215.2 6.1%
Unamortized issuance cost(6.6)(6.9)
Kudu Credit Facility, carrying value203.7 208.3 
Other Operations debt30.1 10.3%37.4 6.6%
Unamortized issuance cost(.5)(.7)
Other Operations debt, carrying value29.6 36.7 
Total debt$564.7 $575.2 
 (1) Effective rate includes the effect of the amortization of debt issuance costs.costs and, where applicable, the original issue discount.

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HG Global Senior Notes

On April 29, 2022, HG Global received the proceeds from the issuance of its $150.0 million face value floating rate secured senior notes (the “HG Global Senior Notes”). The HG Global Senior Notes, which mature in April 2032, accrue interest at a floating rate equal to the three-month Secured Overnight Financing Rate (“SOFR”) plus 6.3% per annum. Subsequent to the five-year anniversary of the funding date, absent the occurrence of an early amortization trigger event, HG Global will be required to make payments of principal on a quarterly basis totaling $15.0 million annually. Upon the occurrence of an early amortization trigger event, HG Global is required to use all available cash flow to repay the notes. Early amortization trigger events include scenarios in which HG Re is effectively in run off.runoff. HG Global has the option to redeem, in whole or in part, the HG Global Senior Notes after the five-year anniversary of the funding date at the outstanding principal amountsamount plus accrued interest.
On June 16, 2022, HG entered into an interest rate cap agreement, effective on July 25, 2022, to limit its exposure to the risk of interest rate increases on the HG Global Senior Notes. The notional amount of the interest rate cap is $150.0 million and the termination date is July 25, 2025. See Note 9 “Derivatives.”
The HG Global Senior Notes require HG Global to maintain an interest reserve account of eight times the interest accrued for the most recent quarterly interest period,period. While the interest rate cap is in force, the interest reserve account is subject to a maximum required balance of $29.2 million. As of September 30, 2023, the fair value of the interest reserve account, which is included in short-term investments. As of September 30, 2022, the interest reserve account is $26.4investments, was $29.9 million.
The HG Global Senior Notes are secured by the capital stock and other equity interests of HG Global’s subsidiaries, the interest reserve account, and all cash and non-cash proceeds from the foregoingsuch collateral. The HG Global Senior Notes contain various affirmative and negative covenants that White Mountains considers to be customary for such borrowings.
If the paymentspayment of principal and interest under the HG Global Senior Notes becomebecomes subject to tax withholding on behalf of a relevant governmental authority for certain indemnified taxes, the HG Global Senior Notes require the payment of additional amounts such that the amount received by the noteholders is the same as would have been received absent the tax withholding being imposed. The HG Global Senior Notes require the payment of additional interest of 1.0% per annum if the HG Global Senior Notes receive a non-investment grade rating or are no longer rated. As of September 30, 2023, the HG Global Senior Notes had an investment grade rating.
As of September 30, 2022,2023, the HG Global Senior Notes had an outstanding principal balance of $150.0 million.

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Ark Subordinated Notes

In March 2007, GAIL issued $30.0 million face value of floating rate unsecured junior subordinated deferrable interest notes to Alesco Preferred Funding XII Ltd., Alesco Preferred Funding XIII Ltd. and Alesco Preferred Funding XIV Ltd (the “Ark 2007 Subordinated Notes”). The Ark 2007 Subordinated Notes, which mature in June 2037, accrue interest at a floating rate equal to the three-month U.S. London Inter-Bank Offered Rate (“LIBOR”) plus 4.6% per annum. As of September 30, 2022,2023, the Ark 2007 Subordinated Notes had an outstanding principal balance of $30.0 million.
In the third quarter of 2021, GAIL issued $163.3 million face value floating rate unsecured subordinated notes at par in three separate transactions for proceeds of $157.8 million, net of debt issuance costs. The unsecured subordinated notes (thecosts (collectively, the “Ark 2021 Subordinated Notes”). The Ark 2021 Subordinated Notes were issued in private placement offerings that were exempt from the registration requirements of the Securities Act of 1933. On July 13, 2021, Ark issued €39.1 million ($46.3 million based upon the foreign exchange spot rate as of the date of the transaction) face value floating rate unsecured subordinated notes (“Ark 2021 Subordinated Notes Tranche 1”). The Ark 2021 Subordinated Notes Tranche 1, which mature in July 2041, accrue interest at a floating rate equal to the three-month EURIBOREuro Interbank Offered Rate (“EURIBOR”) plus 5.75% per annum. On August 11, 2021, Ark issued $47.0 million face value floating rate unsecured subordinated notes (“Ark 2021 Subordinated Notes Tranche 2”). The Ark 2021 Subordinated Notes Tranche 2, which mature in August 2041, accrue interest at a floating rate equal to the three-month U.S. LIBOR plus 5.75% per annum. On September 8, 2021, Ark issued $70.0 million face value floating rate unsecured subordinated notes (“Ark 2021 Subordinated Notes Tranche 3”). The Ark 2021 Subordinated Notes Tranche 3, which mature in September 2041, accrue interest at a floating rate equal to the three-month U.S. LIBOR plus 6.1% per annum. On the ten-year anniversary of the issue dates, the interest rate for the Ark 2021 Subordinated Notes will increase by 1.0% per annum. Ark has the option to redeem, in whole or in part, the Ark 2021 Subordinated Notes ahead of contractual maturity at the outstanding principal amounts plus accrued interest at the ten-year anniversary or any subsequent interest payment date.
All payments of principal and interest under the Ark 2021 Subordinated Notes are conditional upon GAIL’s solvency and compliance with the enhanced capital requirements of the Bermuda Monetary Authority (“BMA”). The deferral of payments of principal and interest under these conditions does not constitute a default by Ark and does not give the noteholders any rights to accelerate repayment of the Ark 2021 Subordinated Notes or take any enforcement action under the Ark 2021 Subordinated Notes.

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If the payments of principal and interest under the Ark 2021 Subordinated Notes become subject to tax withholding on behalf of Bermuda or any political subdivision there, the Ark 2021 Subordinated Notes require the payment of additional amounts such that the amount received by the noteholders is the same as would have been received absent the tax withholding being imposed. The Ark 2021 Subordinated Notes Tranche 3 require the payment of additional interest of 1.0% per annum upon the occurrence of a premium load event until such event is remedied. Premium load events include the failure to meet payment obligations of the Ark 2021 Subordinated Notes Tranche 3 when due, failure of GAIL to maintain an investment grade credit rating, failure to maintain 120% of GAIL’s Bermuda solvency capital requirement, failure of GAIL to maintain a debt to capital ratio below 40%, late filing of GAIL’s or Ark’s financial information, and making a restricted payment or distribution on GAIL’s common stock or other securities that rank junior or pari passu with the Ark 2021 Subordinated Notes Tranche 3 when a different premium load event exists or will be caused by the restricted payment. As of September 30, 2023, there were no premium load events.
As of September 30, 2022,2023, the Ark 2021 Subordinated Notes Tranche 1 had an outstanding principal balance of €39.1 million ($37.641.9 million based upon the foreign exchange spot rate as of September 30, 2022)2023), the Ark 2021 Subordinated Notes Tranche 2 had an outstanding principal balance of $47.0 million, and the Ark 2021 Subordinated Notes Tranche 3 had an outstanding principal balance of $70.0 million.
The Ark Subordinated Notes contain various affirmative and negative covenants that White Mountains considers to be customary for such borrowings.

Ark Standby Letter of Credit Facilities

In December 2021, Ark entered into two uncommitted secured standby letter of credit facility agreements to support the continued growth and expansion of its GAIL insurance and reinsurance operations. The standby letter of credit facility agreements were executed with ING Bank N.V., London Branch (the “ING LOC Facility”) with capacity of $50.0 million on an uncollateralized basis and with Citibank Europe Plc (the “Citibank LOC Facility”) with capacity of $100.0 million on a collateralized basis. In September 2022, Ark entered anotherinto an additional uncommitted standby letter of credit facility agreement with Lloyds Bank Corporate Markets PLC (the “Lloyds LOC Facility”) with capacity of $50.0 million on a collateralized basis.
As of September 30, 2022,2023, the ING LOC Facility and Lloyds LOC Facility werewas undrawn. As of September 30, 2022,2023, the Citibank LOC Facility had an outstanding principal balance of $36.2$93.2 million and short-term investments pledged as collateral of $108.6 million. As of September 30, 2022, $49.82023, the Lloyds LOC Facility had an outstanding balance of $25.9 million ofand short-term investments were pledged as collateral under the Citibank LOC Facility.of $38.6 million. Ark’s uncommitted secured standby letter of credit facility agreements contain various representations, warranties and covenants that White Mountains considers to be customary for such borrowings.
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Kudu Credit Facility and Kudu Bank Facility

On December 23, 2019, Kudu entered into a secured credit facility with Monroe Capital Management Advisors, LLC (the “Kudu Bank Facility”). On March 23, 2021, Kudu replaced the Kudu Bank Facility and entered into a secured revolving credit facility (the “Kudu Credit Facility”) with Mass Mutual to repay the Kudu Bank Facility,its prior credit facility and to fund new investments and related transaction expenses. The maximum borrowing capacity of the Kudu Credit Facility is $300.0 million. The Kudu Credit Facility matures on March 23, 2036. In connection with
Through June 30, 2023, interest on the replacementKudu Credit Facility accrued at a floating interest rate equal to the greater of the three-month LIBOR or 0.25% plus, in each case, 4.30%. Effective July 1, 2023, the Kudu BankCredit Facility Kudu recognizedwas amended such that the interest rate is equal to the three month Secured Overnight Financing Rate (“SOFR”) plus a total losscredit adjustment spread of $4.1 million, representing debt issuance costs0.26% and prepayment fees, which are included within interest expense for the year to date period ended September 30, 2021.
a stated margin of 4.30%. The Kudu Credit Facility requires Kudu to maintain an interest reserve account, which is included in restricted cash.account. As of September 30, 2023, the interest reserve account of $14.1 million was held in short term investments. As of December 31, 2022, the interest reserve account is $8.9 million.of $12.2 million was held in restricted cash. The Kudu Credit Facility requires Kudu to maintain a ratio of the outstanding balance to the sum of the fair market value of the participation contractsKudu’s Participation Contracts and cash held in certain accounts (the “LTV Percentage”) of less than 50% in years 0-3, 40% in years 4-6, 25% in years 7-8, 15% in years 9-10, and 0% thereafter. As of September 30, 2022,2023, Kudu hashad a 35%27.9% LTV Percentage.
Kudu may borrow undrawn balances within the initial three-year availability period, subject to customary terms and conditions, to the extent the amount borrowed under the Kudu Credit Facility does not exceed the borrowing base, which is equal to 35% of the fair value of Kudu’s qualifying Kudu Participation Contracts. AsWhen considering the fair value of Kudu’s qualifying Participation Contracts as of September 30, 2022,2023, the available undrawn balance was $39.6$74.1 million.

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The following table presents the change in debt under the Kudu Bank Facility and Kudu Credit Facility for the three and nine months ended September 30, 20222023 and 2021:2022:

Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Kudu Bank Facility
Beginning balance$ $— $— $89.2 
Term loans
Borrowings — — 3.0 
Repayments — — (92.2)
Ending balance$ $ $— $— 
Kudu Credit FacilityKudu Credit FacilityKudu Credit Facility
Beginning balanceBeginning balance$260.4 $203.0 $225.4 $— Beginning balance$210.3 $260.4 $215.2 $225.4 
Term loansTerm loansTerm loans
BorrowingsBorrowings — 35.0 203.0 Borrowings — 12.0 35.0 
RepaymentsRepayments —  — Repayments — (16.9)— 
Ending balanceEnding balance$260.4 $203.0 $260.4 $203.0 Ending balance$210.3 $260.4 $210.3 $260.4 

The Kudu Credit Facility is secured by all property of the loan parties and contains various affirmative and negative covenants that White Mountains considers to be customary for such borrowings.

Other Operations Debt

As of September 30, 2022,2023, White Mountains’s Other Operations had debt with an outstanding principal balance of $36.4$30.1 million, which consisted of fivefour secured credit facilities (collectively, “Other Operations debt”).

Compliance

At September 30, 2022,2023, White Mountains was in compliance, in all material respects, with all of the covenants under all of its debt instruments.

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Note 8.  Income Taxes
 
The Company and its Bermuda domiciled subsidiaries are not subject to Bermuda income tax under current Bermuda law. In the event there is a change in the current law such that taxes are imposed, the Bermuda Exempted Undertakings Tax Protection Act of 1966 states that the Company and its Bermuda domiciled subsidiaries would be exempt from such tax until March 31, 2035. The Company has subsidiaries and branches that operate in various other jurisdictions around the world and are subject to tax in the jurisdictions in which they operate.  As of September 30, 2022,2023, the primary jurisdictions in which the Company’s subsidiaries and branches were subject to tax wereinclude Ireland, Israel, Luxembourg, the United Kingdom and the United States.
White Mountains’s income tax expense related to pre-tax income from continuing operations for the three months ended September 30, 2023 represented an effective tax rate of 34.6%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by an increase in the valuation allowance at BAM, as well as withholding taxes and state income taxes, partially offset by full year forecasted income in jurisdictions with lower tax rates than the United States.
White Mountains’s income tax expense related to pre-tax income from continuing operations for the nine months ended September 30, 2023 represented an effective tax rate of 8.2%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States.
White Mountains’s income tax benefit related to pre-tax loss from continuing operations for the three and nine months ended September 30, 2022 represented an effective tax rate of 23.9% and 9.4%. The effective tax rate for the nine months ended September 30, 2022 was different from the U.S. statutory rate of 21.0%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States, partially offset by a fullan increase in the valuation allowance on net deferred tax assets in certain U.S. operations consisting of the WM Adams, Inc. consolidated tax group within Other Operations, andan increase in the valuation allowance at BAM, andas well as state income taxes.

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White Mountains’s income tax expense related to pre-tax loss from continuing operations forOn April 1, 2023, the three and nine months ended September 30, 2021 represented an effective tax rate of (7.9)% and (17.1)%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by losses in jurisdictions with lower tax rates than the United States, a full valuation allowance on net deferred tax assets in certain U.S. operations, consisting of the WM Adams, Inc. consolidated tax group within Other Operations and BAM, and state income taxes. For the nine months ended September 30, 2021, the effective rate was also different from the U.S. statutory rate of 21.0% due to additional tax expense related to the revaluation of U.K. deferred tax assets and liabilities.
On June 10, 2021, the U.K. enacted an increase in its corporate tax rate increased from 19.0% to 25.0% for periods after April 1, 2023. On June 30, 2021, White Mountains increased its net U.K. deferred tax liability to reflect the higher tax rate on temporary differences projected to reverse after the new rate becomes effective..
On August 16, 2022, the U.S. enacted the Inflation Reduction Act (the “IRA”). White Mountains has evaluated the tax provisions of the IRA, the most significant of which relate to the corporate alternative minimum tax and the tax on share repurchases, and does not expect the legislation to have a material impact on itsthe results of its operations.
In arriving at the effective tax rate for the three and nine months ended September 30, 20222023 and 2021,2022, White Mountains forecasted all income and expense items including the change in net unrealized investment gains (losses) and net realized investment gains (losses) for the years ending December 31, 20222023 and 2021.2022.
White Mountains records a valuation allowance against deferred tax assets if it becomes more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in income tax expense in the period of change. In determining whether or not a valuation allowance, or change therein, is warranted, White Mountains considers factors such as prior earnings history, expected future earnings, carryback and carryforward periods and strategies that if executed would result in the realization of a deferred tax asset.
With few exceptions, White Mountains is no longer subject to U.S. federal, state, or non-U.S. income tax examinations by tax authorities for years before 2016.2017.

Note 9. Derivatives

HG Global Interest Rate Cap

On June 16, 2022, HG entered into an interest rate cap agreement, effective on July 25, 2022, to limit its exposure to the risk of interest rate increases on the HG Global Senior Notes. The notional amount of the interest rate cap is $150.0 million and the termination date is July 25, 2025.
HG paid initial premiums of $3.3 million for the interest rate cap. Under the terms of the interest rate cap agreement, if the current three-month SOFR rate at the measurement date exceeds 3.5%, HG will receive payments from the counterparty equal to the difference between the three-month SOFR rate on the determination date and 3.5%, multiplied by the notional amount of the cap based on the number of days in the quarter and a year equal to 360 days.quarter. As of September 30, 2022,2023, the three-month SOFR rate was 3.6%5.4%.
HG accounts for the interest rate cap as a derivative at fair value, with changes in fair value recognized in current period earnings within interest expense. For the three and nine months ended September 30, 2023, White Mountains recognized a gain of $0.0 million and $0.7 million related to the change in fair value on the interest rate cap within interest expense. For the three and nine months ended September 30, 2022, White Mountains recognized a gain of $2.1 million and $0.6 million related to the change in fair value on the interest rate cap withincap. For the three and nine months ended September 30, 2023, White Mountains received a payment of $0.6 million and $1.2 million related to the periodic settlement of the interest expense.rate cap. As of September 30, 2023 and December 31, 2022, the estimated fair value of the interest rate cap recorded in other assets was $3.9$4.8 million and $4.1 million. White Mountains classifies the interest rate cap as a Level 2 measurement.

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Note 10. Municipal Bond Guarantee Insurance

HG Global was established to fund the startup of BAM, a mutual municipal bond insurer. HG Global, together with its subsidiaries, provided the initial capitalization of BAM through the purchase of $503.0 million of the BAM Surplus Notes.

Reinsurance Treaties

FLRT
BAM is a party to a first loss reinsurance treaty (“FLRT”) with HG Re under which HG Re provides first loss protection up to 15%-of-par outstanding on each municipal bond insured by BAM. For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds. In return, BAM cedes up toapproximately 60% of the risk premium charged for insuring the municipal bond, which is net of a ceding commission. The FLRT is a perpetual agreement with terms that can be renegotiated after a specified period of time. During 2021, BAM and HG Re agreed that the terms may be renegotiated at the end of 2024, and each subsequent five-year period thereafter.

Fidus Re
BAM is party to a collateralized financial guarantee excess of loss reinsurance agreement that serves to increase BAM’s claims paying resources and is provided by Fidus Re Ltd. (“Fidus Re”).
In 2018, Fidus Re was initially capitalized by the issuance of $100.0 million of insurance-linked securities (the “Fidus Re 2018 Agreement”)., which have an initial term of 12 years and are callable five years after the date of issuance. The proceeds from issuance were placed in a collateral trust supporting Fidus Re’s obligations to BAM. The insurance-linked securities were issued by Fidus Re with an initial term of 12 years and are callable five years after the date of issuance. Under the Fidus Re 2018 Agreement, Fidus Re reinsures 90% of aggregate losses exceeding $165.0 million on a portion of BAM’s financial guarantee portfolio (the “2018 Covered Portfolio”) up to a total reimbursement of $100.0 million. The Fidus Re 2018 Agreement does not provide coverage for losses in excess of $276.1 million. The 2018 Covered Portfolio consists of approximately 28%24% of BAM’s portfoliogross par outstanding as of financial guaranty policies issued through September 30, 2022.2023.
In the first quarter of 2021, Fidus Re issued an additional $150.0 million of insurance-linked securities (the “Fidus Re 2021 Agreement”) with, which have an initial term of 12 years and are callable five years after the date of issuance. The proceeds from issuance were placed in a collateral trust supporting Fidus Re’s obligations to BAM. Under the Fidus Re 2021 Agreement, Fidus Re reinsures 90% of aggregate losses exceeding $135.0 million on a portion of BAM’s financial guarantee portfolio (the “2021 Covered Portfolio”) up to a total reimbursement of $150.0 million. The Fidus Re 2021 Agreement does not provide coverage for losses in excess of $301.7 million. The 2021 Covered Portfolio consists of approximately 33%29% of BAM’s portfoliogross par outstanding as of financial guaranty policies issued through September 30, 2022.2023.
In 2022, Fidus Re issued an additional $150.0 million of insurance linked securities (the “Fidus Re 2022 Agreement”), which have an initial term of 12 years and are callable seven years after the date of issuance. The proceeds from issuance were placed in a collateral trust supporting Fidus Re’s obligations to BAM. Under the Fidus Re 2022 Agreement, Fidus Re reinsures 90% of aggregate losses exceeding $110.0 million on a portion of BAM’s financial guarantee portfolio (the “2022 Covered Portfolio”) up to a total reimbursement of $150.0 million. The Fidus Re 2022 Agreement does not provide coverage for losses in excess of $276.7 million. The 2022 Covered Portfolio consists of approximately 30% of BAM’s gross par outstanding as of September 30, 2023.
The Fidus Re agreements are accounted for using deposit accounting and any related financing expenses are recorded in general and administrative expenses as they do not meet the risk transfer requirements necessary to be accounted for as reinsurance.

XOLT
In January 2020, BAM entered into an excess of loss reinsurance agreement (the “XOLT”) with HG Re. Under the XOLT, HG Re provides last dollar protection for exposures on municipal bonds insured by BAM in excess of the New York State Department of Financial Services (“NYDFS”) single issuer limits. As of September 30, 2022,2023, the XOLT is subject to an aggregate limit equal to the lesser of $125.0 million or the assets held in the supplemental collateral trust (the “Supplemental Trust”) at any point in time. The agreement is accounted for using deposit accounting and any related financing expenses are recorded in general and administrative expenses as the agreement does not meet the risk transfer requirements necessary to be accounted for as reinsurance.

33


Collateral Trusts

HG Re’s obligations under the FLRT are limited to the assets in two collateral trusts: the Supplemental Trust and a Regulation 114 Trust (together, the “Collateral Trusts”). Losses required to be reimbursed under the FLRT are subject to an aggregate limit equal to the assets held in two collateral trusts, the Collateral TrustsSupplemental Trust and the Regulation 114 Trust (together, the “Collateral Trusts”), at any point in time.
On a monthly basis, BAM deposits cash equal to ceded premiums, net of ceding commissions, due to HG Re under the FLRT directly into the Regulation 114 Trust. The Regulation 114 Trust target balance is equal to gross cededHG Re’s unearned premiums and unpaid ceded loss and LAE reserves, if any. If, at the end of any quarter, the Regulation 114 Trust balance is below the target balance, funds will be withdrawn from the Supplemental Trust and deposited into the Regulation 114 Trust in an amount equal to the shortfall. If, at the end of any quarter, the Regulation 114 Trust balance is above 102% of the target balance, funds will be withdrawn from the Regulation 114 Trust and deposited into the Supplemental Trust. The Regulation 114 Trust balance as of September 30, 20222023 and December 31, 20212022 was $259.4$311.2 million and $250.2$288.6 million.
The Supplemental Trust target balance is $603.0 million, less the amount of cash and securities in the Regulation 114 Trust in excess of its target balance (the “Supplemental Trust Target Balance”). If, at the end of any quarter, the Supplemental Trust balance exceeds the Supplemental Trust Target Balance, such excess may be distributed to HG Re. The distribution will be made first as an assignment of accrued interest on the BAM Surplus Notes and second in cash and/or fixed income securities.
As the BAM Surplus Notes are repaid over time, the BAM Surplus Notes will be replaced in the Supplemental Trust by cash and fixed income securities. The Supplemental Trust balance as of September 30, 20222023 and December 31, 20212022 was $574.5$588.5 million and $601.8$568.3 million.
As of September 30, 20222023 and December 31, 2021,2022, the Collateral Trusts held assets of $833.9$899.7 million and $852.0$856.9 million, which included $457.7$526.5 million and $481.7$503.3 million of cash and investments, $364.6$340.0 million and $364.6$340.0 million of BAM Surplus Notes and $11.6$33.2 million and $5.7$13.6 million of interest receivable on the BAM Surplus Notes.

BAM Surplus Notes

Through 2024, the interest rate on the BAM Surplus Notes is a variable rate equal to the one-year U.S. Treasury rate plus 300 basis points, set annually. During 2022,2023, the interest rate on the BAM Surplus Notes is 3.2%7.7%. Beginning in 2025, the interest rate will be fixed at the higher of the then current variable rate or 8.0%. Under its agreements with HG Global, BAM is required to seek regulatory approval to pay interestprincipal and principalinterest on the BAM Surplus Notes only to the extent that its remaining qualified statutory capital and other capital resources continue to support its outstanding obligations, its business plan and its “AA/stable” rating from Standard & Poor’s. No payment of principal or interest on the BAM Surplus Notes may be made without the approval of the NYDFS.
In December 2021,2022, BAM made a $33.8$36.0 million cash payment of principal and interest on the BAM Surplus Notes held by HG Global. Of this payment, $23.6$24.6 million was a repayment of principal held in the Supplemental Trust, $0.4$1.0 million was a payment of accrued interest held insidein the Supplemental Trust and $9.8$10.4 million was a payment of accrued interest held outside the Supplemental Trust.
During the three and nine months ended September 30, 20222023 and 2021,2022, BAM made no repayments of the BAM Surplus Notes or accrued interest.
As of September 30, 20222023 and December 31, 2021,2022, the principal balance on the BAM Surplus Notes was $364.6$340.0 million and $364.6 millionfor both periods, and total interest receivable on the BAM Surplus Notes was $166.4$177.6 million and $157.6$157.9 million.

Insured Obligations and Premiums

The following table presents a schedule of BAM’s insured obligations as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
Contracts outstandingContracts outstanding13,094 12,350 Contracts outstanding14,084 13,382 
Remaining weighted average contract period outstanding (in years)10.810.8
Remaining weighted average contract period (in years)Remaining weighted average contract period (in years)11.010.8
Contractual debt service outstanding (in millions):Contractual debt service outstanding (in millions):Contractual debt service outstanding (in millions):
PrincipalPrincipal$98,619.0 $89,196.5 Principal$105,918.1 $99,996.9 
InterestInterest47,595.0 41,486.5 Interest52,628.8 48,880.6 
Total debt service outstandingTotal debt service outstanding$146,214.0 $130,683.0 Total debt service outstanding$158,546.9 $148,877.5 
Gross unearned insurance premiums (in millions)Gross unearned insurance premiums (in millions)$286.7 $266.3 Gross unearned insurance premiums (in millions)$312.3 $298.3 

34


The following table presents a schedule of BAM’s future premium revenues as of September 30, 2022:2023:
MillionsSeptember 30, 2022
October 1, 2022 - December 31, 2022$6.9 
January 1, 2023 - March 31, 20236.8 
April 1, 2023 - June 30, 20236.7 
July 1, 2023 - September 30, 20236.6 
October 1, 2023 - December 31, 20236.4 
Total 202326.5 
202424.9 
202523.2 
202621.6 
202720.1 
2028 and thereafter163.5 
Total gross unearned insurance premiums$286.7 
MillionsSeptember 30, 2023
October 1, 2023 - December 31, 2023$7.3 
January 1, 2024 - March 31, 20247.2 
April 1, 2024 - June 30, 20247.1 
July 1, 2024 - September 30, 20247.0 
October 1, 2024 - December 31, 20246.9 
Total 202428.2 
202526.4 
202624.8 
202723.2 
202821.4 
2029 and thereafter181.0 
Total gross unearned insurance premiums$312.3 

The following table presents a schedule of written premiums and earned premiums included in White Mountains’sthe HG Global/BAM segment for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Written premiums:Written premiums:Written premiums:
DirectDirect$18.4 $12.8 $44.9 $34.5 Direct$16.5 $18.4 $37.3 $44.9 
AssumedAssumed1.3 — 1.3 4.5 Assumed 1.3  1.3 
Gross written premiums (1)
Gross written premiums (1)
$19.7 $12.8 $46.2 $39.0 
Gross written premiums (1)
$16.5 $19.7 $37.3 $46.2 
Earned premiums:Earned premiums:Earned premiums:
DirectDirect$6.5 $5.9 $22.0 $16.8 Direct$7.4 $6.5 $21.4 $22.0 
AssumedAssumed.6 .8 4.0 2.8 Assumed.5 .6 1.9 4.0 
Gross earned premiums (1)
Gross earned premiums (1)
$7.1 $6.7 $26.0 $19.6 
Gross earned premiums (1)
$7.9 $7.1 $23.3 $26.0 
(1) There are no ceded premium amounts in the periods presented, and gross earned premiums are equivalent to net written premiums and net earned premiums.

In January 2021, BAM entered into a 100% facultative quota share reinsurance agreement under which it assumed a portfolio of municipal bond guarantee contracts with a par value of $805.5 million.
In September 2022, BAM entered into a 100% facultative quota share reinsurance agreement under which it assumed a portfolio of municipal bond guarantee contracts with a par value of $42.5 million.
None of During 2023, the contracts associated with this assumed under these reinsurance agreementstransaction were non-performing, and no loss reserves have been established for any of the contracts, either as of the transaction date or as of September 30, 2022. The agreements, which cover future claims exposure only, meet the risk transfer criteria under ASC 944-20, Insurance Activities and accordingly have been accounted for as reinsurance.novated.
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Note 11. Earnings Per Share
 
White Mountains calculates earnings per share using the two-class method, which allocates earnings between common shares and unvested restricted common shares. Both classes of shares participate equally in dividends and earnings on a per share basis. Basic earnings per share amounts are based on the weighted average number of common shares outstanding adjusted for unvested restricted common shares.
The following table presents the Company’s computation of earnings per share from continuing operations for the three and nine months ended September 30, 20222023 and 2021.2022. See Note 19 — “Held for Sale and Discontinued Operations.”
Three Months EndedNine Months Ended
September 30,September 30,Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021 2023202220232022
Basic and diluted earnings per share numerators (in millions):Basic and diluted earnings per share numerators (in millions): Basic and diluted earnings per share numerators (in millions): 
Net income (loss) attributable to White Mountains’s
common shareholders
Net income (loss) attributable to White Mountains’s
common shareholders
$888.2 $(371.4)$752.4 $(308.2)Net income (loss) attributable to White Mountains’s common
shareholders
$23.6 $888.2 $222.7 $752.4 
Less: total income (loss) from discontinued operations, net of tax (1)
Less: total income (loss) from discontinued operations, net of tax (1)
893.1 5.3 903.2 (5.1)
Less: total income (loss) from discontinued operations,
net of tax (1)
 893.1  903.2 
Less: net (income) loss from discontinued operations attributable
to non-controlling interests
$(.1)$— $(.7)$1.1 
Less: net (income) loss from discontinued operations
attributable to noncontrolling interests
Less: net (income) loss from discontinued operations
attributable to noncontrolling interests
 (.1) (.7)
Net income (loss) from continuing operations attributable to
White Mountains’s common shareholders
Net income (loss) from continuing operations attributable to
White Mountains’s common shareholders
$(4.8)$(376.7)$(150.1)$(304.2)Net income (loss) from continuing operations attributable to
White Mountains’s common shareholders
23.6 (4.8)222.7 (150.1)
Allocation of (earnings) losses to participating restricted
common shares (2)
Allocation of (earnings) losses to participating restricted
common shares (2)
.1 4.6 1.8 3.5 
Allocation of (earnings) losses to participating restricted
common shares (2)
(.3).1 (3.1)1.8 
Basic and diluted earnings (losses) per share numeratorsBasic and diluted earnings (losses) per share numerators$(4.7)$(372.1)$(148.3)$(300.7)Basic and diluted earnings (losses) per share numerators$23.3 $(4.7)$219.6 $(148.3)
Basic earnings per share denominators (in thousands):Basic earnings per share denominators (in thousands):Basic earnings per share denominators (in thousands):
Total average common shares outstanding during the periodTotal average common shares outstanding during the period2,893.8 3,090.3 2,959.3 3,099.4 Total average common shares outstanding during the period2,560.5 2,893.8 2,564.2 2,959.3 
Average unvested restricted common shares (3)
Average unvested restricted common shares (3)
(38.3)(37.8)(35.5)(36.0)
Average unvested restricted common shares (3)
(37.6)(38.3)(35.5)(35.5)
Basic earnings (losses) per share denominatorBasic earnings (losses) per share denominator2,855.5 3,052.5 2,923.8 3,063.4 Basic earnings (losses) per share denominator2,522.9 2,855.5 2,528.7 2,923.8 
Diluted earnings per share denominator (in thousands):Diluted earnings per share denominator (in thousands):Diluted earnings per share denominator (in thousands):
Total average common shares outstanding during the periodTotal average common shares outstanding during the period2,893.8 3,090.3 2,959.3 3,099.4 Total average common shares outstanding during the period2,560.5 2,893.8 2,564.2 2,959.3 
Average unvested restricted common shares (3)
Average unvested restricted common shares (3)
(38.3)(37.8)(35.5)(36.0)
Average unvested restricted common shares (3)
(37.6)(38.3)(35.5)(35.5)
Diluted earnings (losses) per share denominatorDiluted earnings (losses) per share denominator2,855.5 3,052.5 2,923.8 3,063.4 Diluted earnings (losses) per share denominator2,522.9 2,855.5 2,528.7 2,923.8 
Basic and diluted earnings per share (in dollars) - continuing
operations:
Basic and diluted earnings per share (in dollars) - continuing
operations:
Basic and diluted earnings per share (in dollars) - continuing
operations:
Distributed earnings - dividends declared and paidDistributed earnings - dividends declared and paid$ $— $1.00 $1.00 Distributed earnings - dividends declared and paid$ $— $1.00 $1.00 
Undistributed earnings (losses)Undistributed earnings (losses)(1.66)(121.90)(51.73)(99.16)Undistributed earnings (losses)9.19 (1.66)85.82 (51.73)
Basic and diluted earnings (losses) per shareBasic and diluted earnings (losses) per share$(1.66)$(121.90)$(50.73)$(98.16)Basic and diluted earnings (losses) per share$9.19 $(1.66)$86.82 $(50.73)
(1) Includes net income (loss) from discontinued operations, net of tax - NSM Group, net gain (loss) from sale of discontinued operations, net of tax - NSM Group and net gain (loss)(income) loss from sale of discontinued operations net of tax - Sirius Group.attributable to non-controlling interests. See Note 19 — “Held for Sale and Discontinued Operations.
(2) Restricted shares issued by White Mountains receive dividends, and therefore, are therefore considered participating securities.
(3) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.”


The following table presents the undistributed net earnings (losses) from continuing operations for the three and nine months ended September 30, 20222023 and 2021.2022. See Note 19 — “Held for Sale and Discontinued Operations.”
Three Months EndedNine Months Ended
September 30,September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Undistributed net earnings (losses) - continuing operations:
Net income (losses) attributable to White Mountains’s common
shareholders, net of restricted common share amounts
$(4.7)$(372.1)$(148.3)$(300.7)
Undistributed net earnings - continuing operations:Undistributed net earnings - continuing operations:
Net income (loss) attributable to White Mountains’s common
shareholders, net of restricted common share amounts
Net income (loss) attributable to White Mountains’s common
shareholders, net of restricted common share amounts
$23.3 $(4.7)$219.6 $(148.3)
Dividends declared, net of restricted common share amounts (1)
Dividends declared, net of restricted common share amounts (1)
 — (3.0)(3.1)
Dividends declared, net of restricted common share amounts (1)
 — (2.5)(3.0)
Total undistributed net earnings (losses), net of restricted
common share amounts
Total undistributed net earnings (losses), net of restricted
common share amounts
$(4.7)$(372.1)$(151.3)$(303.8)Total undistributed net earnings (losses), net of restricted
common share amounts
$23.3 $(4.7)$217.1 $(151.3)
(1) Restricted shares issued by White Mountains receive dividends, and therefore, are therefore considered participating securities.

36


Note 12. Employee Share-Based Incentive Compensation Plans
 
White Mountains’s share-based incentive compensation plans are designed to incentivize key employees to maximize shareholder value over long periods of time. White Mountains believes that this is best pursued by utilizing a pay-for-performance program that closely aligns the financial interests of management with those of its shareholders while rewarding appropriate risk taking. White Mountains accomplishes this by emphasizing variable long-term compensation that is contingent on performance over a number of years rather than fixed entitlements. White Mountains expenses all of its share-based compensation. As a result, White Mountains’s calculation of its owners’ returns includes the expense of all outstanding share-based compensation awards.
White Mountains’s Long-Term Incentive Plan (the “WTM Incentive Plan”) provides for grants of various types of share-based and non-share-based incentive awards to key employees and directors of White Mountains. As of September 30, 20222023 and 2021,2022, White Mountains’s share-based incentive compensation incentive awards consist of performance shares and restricted shares.

Performance Shares

Performance shares are designed to reward employees for meeting company-wide performance targets. Performance shares are conditional grants of a specified maximum number of common shares or an equivalent amount of cash. Awards generally vest at the end of a three-year service period, are subject to the attainment of pre-specified performance goals, and are valued based on the market value of common shares at the time awards are paid. Performance shares earned under the WTM Incentive Plan are typically paid in cash but may be paid in common shares. Compensation expense is recognized for the vested portion of the awards over the related service periods. The level of payout ranges from zero to two times the number of shares initially granted, depending on White Mountains’s financial performance. Performance shares become payable at the conclusion of a performance cycle (typically 3three years) if pre-defined financial targets are met. The performance measures used for determining performance share payouts are growth in White Mountains’s adjusted book value per share and intrinsic value per share. Intrinsic value per share is generally calculated by adjusting adjusted book value per share for differences between the adjusted book value of certain assets and liabilities and White Mountains’s estimate of their underlying intrinsic values.
The following table presents the performance share activity for the three and nine months ended September 30, 20222023 and 20212022 for performance shares granted under the WTM Incentive Plan:
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021 2023202220232022
Millions, except share amountsTarget Performance
Shares Outstanding
Accrued
Expense
Target Performance
Shares Outstanding
Accrued
Expense
Target Performance
Shares Outstanding
Accrued
Expense
Target Performance
Shares Outstanding
Accrued
Expense
$ in Millions$ in MillionsTarget Performance
Shares Outstanding
Accrued
Expense
Target Performance
Shares Outstanding
Accrued
Expense
Target Performance
Shares Outstanding
Accrued
Expense
Target Performance
Shares Outstanding
Accrued
Expense
Beginning of periodBeginning of period39,449 $41.2 41,252 $45.7 40,828 $42.2 42,458 $56.3 Beginning of period37,031 $44.6 39,449 $41.2 39,449 $67.5 40,828 $42.2 
Shares paid (1)
Shares paid (1)
  (219)(.6)(14,625)(26.4)(14,336)(35.2)
Shares paid (1)
  — — (13,350)(40.8)(14,625)(26.4)
New grantsNew grants  — — 13,225  13,475 — New grants  — — 10,895  13,225 — 
Forfeitures and
cancellations (2)
Forfeitures and
cancellations (2)
 (.1)(205).2 21 (.2)(769).4 
Forfeitures and cancellations (2)
  — (.1)37 .2 21 (.2)
Expense recognizedExpense recognized 11.9 — (6.5) 37.4 — 17.3 Expense recognized 10.5 — 11.9  28.2 — 37.4 
End of periodEnd of period39,449 $53.0 40,828 $38.8 39,449 $53.0 40,828 $38.8 End of period37,031 $55.1 39,449 $53.0 37,031 $55.1 39,449 $53.0 
(1) IncludesWTM performance share payments in 2023 for the 2020-2022 performance cycle, which were paid in March 2023 at 200% of target. WTM performance share payments in 2022 for the 2019-2021 performance cycle, which were paid in March 2022 at 172% of target and WTM performance share payments in 2021 for the 2018-2020 performance cycle, which were paid in March 2021 at 200% of target. 
(2) Amounts include changes in assumed forfeitures, as required under GAAP.

During the nine months ended September 30, 2023, White Mountains granted 10,895 performance shares for the 2023-2025 performance cycle. During the nine months ended September 30, 2022, White Mountains granted 13,225 performance shares for the 2022-2024 performance cycle. During
For the nine months ended September 30, 2021, White Mountains granted 13,4752020-2022 performance cycle, all performance shares for the 2021-2023 performance cycle.
earned were settled in cash. For the 2019-2021 performance cycle, the Company issued common shares for 750 performance shares earned, and all other performance shares earned were settled in cash. ForIf the 2018-2020 performance cycle, all performance shares earned were settled in cash. If all the outstanding WTM performance shares had vested on September 30, 2022,2023, the total additional compensation cost to be recognized would have been $41.2$32.9 million, based on accrual factors as of September 30, 2023 (common share price and payout assumptions) as of September 30, 2022..

37


The following table presents performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan as of September 30, 20222023 for each performance cycle:
Nine Months Ended September 30, 2022September 30, 2023
Millions, except share amountsTarget Performance
Shares Outstanding
Accrued
Expense
$ in Millions$ in MillionsTarget Performance
Shares Outstanding
Accrued
Expense
Performance cycle:Performance cycle:  Performance cycle:  
2020 – 202213,350 $31.9 
2021 – 20232021 – 202313,475 14.7 2021 – 202313,475 $30.4 
2022 – 20242022 – 202413,225 7.2 2022 – 202413,225 22.1 
2023 – 20252023 – 202510,895 3.4 
Sub-totalSub-total40,050 53.8 Sub-total37,595 55.9 
Assumed forfeituresAssumed forfeitures(601)(.8)Assumed forfeitures(564)(.8)
September 30, 202239,449 $53.0 
TotalTotal37,031 $55.1 

Restricted Shares

Restricted shares are grants of a specified number of common shares that generally vest at the end of a 34-month service period. The following table presents the unrecognized compensation cost associated with the outstanding restricted share awards under the WTM Incentive Plan for the three and nine months ended September 30, 20222023 and 2021:
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Millions, 
except share amounts
Restricted
Shares
Unamortized
Issue Date
Fair Value
Restricted
Shares
Unamortized
Issue Date
Fair Value
Restricted
Shares
Unamortized Issue Date
Fair Value
Restricted
Shares
Unamortized Issue Date
Fair Value
Non-vested,    
Beginning of period38,350 $23.0 38,280 $23.2 37,850 $15.9 43,105 $15.2 
Issued  — — 13,225 13.8 13,475 16.1 
Vested  (219)— (12,725) (17,936)— 
Forfeited  (211)(.2)  (794)(.8)
Expense recognized (3.8)— (3.6) (10.5)— (11.1)
End of period38,350 $19.2 37,850 $19.4 38,350 $19.2 37,850 $19.4 
2022:

 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
$ in MillionsRestricted
Shares
Unamortized
Issue Date
Fair Value
Restricted
Shares
Unamortized
Issue Date
Fair Value
Restricted
Shares
Unamortized Issue Date
Fair Value
Restricted
Shares
Unamortized Issue Date
Fair Value
Non-vested,    
Beginning of period37,595 $24.3 38,350 $23.0 38,350 $15.5 37,850 $15.9 
Issued  — — 10,895 16.0 13,225 13.8 
Vested  — — (11,650) (12,725)— 
Forfeited  — —   — — 
Expense recognized (4.1)— (3.8) (11.3)— (10.5)
End of period37,595 $20.2 38,350 $19.2 37,595 $20.2 38,350 $19.2 

During the nine months ended September 30, 2023, White Mountains issued 10,895 restricted shares that vest on January 1, 2026. During the nine months ended September 30, 2022, White Mountains issued 13,225 restricted shares that vest on January 1, 2025. During the nine months ended September 30, 2021, White Mountains issued 13,475 restricted shares that vest on January 1, 2024. The unamortized issue date fair value as of September 30, 20222023 is expected to be recognized ratably over the remaining vesting periods. 
38


Note 13. Leases

White Mountains has entered into lease agreements, primarily for office space. These leases are classified as operating leases, with lease expense recognized on a straight-line basis over the term of the lease. Lease incentives, such as free rent or landlord reimbursements for leasehold improvements, are recognized at lease inception and amortized on a straight-line basis over the term of the lease. Lease expense and the amortization of leasehold improvements are recognized within general and administrative expenses. Lease payments related to options to extend or renew the lease term are excluded from the calculation of lease liabilities unless White Mountains is reasonably certain of exercising those options.
As of September 30, 2022 and December 31, 2021, the right of use (“ROU”) lease assets were $24.5 million and $28.1 million and lease liabilities were $26.5 million and $30.0 million.
The following table summarizes net lease expense recognized in White Mountains’s consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021:
MillionsThree Months Ended September 30,Nine Months Ended September 30,
Lease Cost2022202120222021
Lease cost$1.9 $1.9 $5.9 $4.8 
Less: sublease income.2 .1 .5 .3 
Net lease cost$1.7 $1.8 $5.4 $4.5 

The following table presents the contractual maturities of the lease liabilities associated with White Mountains’s operating lease agreements as of September 30, 2022:
MillionsAs of September 30, 2022
Remainder of 2022$1.7 
20238.1 
20247.1 
20254.9 
20262.6 
Thereafter5.0 
Total undiscounted lease payments29.4 
Less: present value adjustment2.9 
Operating lease liabilities$26.5 

The following tables present lease related assets and liabilities by reportable segment as of September 30, 2022 and December 31, 2021:
As of September 30, 2022
MillionsHG/BAMArkKuduOther OperationsTotal
Weighted Average Incremental Borrowing Rate (1)
ROU lease assets$6.2 $6.6 $5.9 $5.8 $24.5 4.1%
Lease liabilities$6.7 $6.6 $6.8 $6.4 $26.5 
(1) The present value of the remaining lease payments was determined by discounting the lease payments using the incremental borrowing rate.
As of December 31, 2021
MillionsHG/BAMArkKuduOther OperationsTotal
Weighted Average Incremental Borrowing Rate (1)
ROU lease assets$7.6 $7.0 $6.4 $7.1 $28.1 4.0%
Lease liabilities$8.1 $7.0 $7.1 $7.8 $30.0 
(1) The present value of the remaining lease payments was determined by discounting the lease payments using the incremental borrowing rate.


3938


Note 14. Non-controlling13. Noncontrolling Interests

Non-controllingNoncontrolling interests consist of the ownership interests of non-controllingnoncontrolling shareholders in consolidated entities and are presented separately on the balance sheet.
The following table presents the balance of non-controllingnoncontrolling interests included in White Mountains’s total equity and the ownership interests heldrelated percentage of each consolidated entity’s total equity owned by non-controllingnoncontrolling shareholders as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022December 31, 2021 September 30, 2023December 31, 2022
$ in Millions$ in Millions
Non-controlling Percentage (1)
Non-controlling Equity
Non-controlling Percentage (1)
Non-controlling Equity$ in Millions
Noncontrolling Percentage (1)
Noncontrolling Equity
Noncontrolling Percentage (1)
Noncontrolling Equity
Non-controlling interests, excluding BAM
Noncontrolling interests, excluding BAMNoncontrolling interests, excluding BAM
HG GlobalHG Global3.1 %$(.3)3.1 %$8.9 HG Global3.1 %$(3.3)3.1 %$(.6)
ArkArk28.0 %217.1 28.0 %230.7 Ark28.0 %279.8 28.0 %247.9 
KuduKudu10.7 %80.8 .7 %12.4 Kudu10.8 %94.5 10.8 %75.1 
NSM (2)
 % 3.5 %16.7 
OtherOthervarious20.8 various11.9 Othervarious10.0 various20.4 
Total, excluding BAMTotal, excluding BAM318.4 280.6 Total, excluding BAM381.0 342.8 
BAMBAM100.0 %(160.1)100.0 %(124.0)BAM100.0 %(165.9)100.0 %(154.7)
Total non-controlling interests$158.3 $156.6 
Total noncontrolling interestsTotal noncontrolling interests$215.1 $188.1 
(1) The non-controllingnoncontrolling percentage represents the basic ownership interests held by non-controllingnoncontrolling shareholders with the exception of HG Global, for which the non-controllingnoncontrolling percentage represents the preferred share ownership held by non-controllingnoncontrolling shareholders.
(2) As a result of the NSM Transaction, NSM has been classified as discontinued operations through the closing of the transaction. See Note 19 — “Held for Sale and Discontinued Operations.”

Note 15.14. Segment Information
 
As of September 30, 2022,2023, White Mountains conducted its operations through fourthree reportable segments: (1) HG Global/BAM, (2) Ark,Ark/WM Outrigger, and (3) Kudu, with our remaining operating businesses, holding companies and (4)other assets included in Other Operations. As a result of the NSM Transaction, the results of operations for NSM, previously reported as a segment, have been classified as discontinued operations in the statements of operations and comprehensive income through the closing of the transaction. Prior period amounts have been reclassified to conform to the current period’s presentation. See Note 19 — “Held for Sale and Discontinued Operations.”
White Mountains has made its segment determination based on consideration of the following criteria: (i) the nature of the business activities of each of the Company’s subsidiaries and affiliates; (ii) the manner in which the Company’s subsidiaries and affiliates are organized; (iii) the existence of primary managers responsible for specific subsidiaries and affiliates; and (iv) the organization of information provided to the chief operating decision makers and the Board of Directors. Significant intercompany transactions among White Mountains’s segments have been eliminated herein.
During the fourth quarter of 2022, Ark sponsored the formation of Outrigger Re Ltd. to provide reinsurance protection on Ark’s Bermuda global property catastrophe excess of loss portfolio written in calendar year 2023. White Mountains consolidates its segregated account of Outrigger Re Ltd., WM Outrigger Re, in its financial statements. WM Outrigger Re’s quota share reinsurance agreement with GAIL eliminates in White Mountains’s consolidated financial statements. WM Outrigger Re exclusively provides reinsurance protection to Ark. As a result, WM Outrigger Re was aggregated with Ark within the Ark/WM Outrigger segment starting in 2023. See Note 2 — “Significant Transactions.”
As a result of the NSM Transaction, the results of operations for NSM, previously reported as a segment, have been classified as discontinued operations in the statements of operations and comprehensive income through the closing of the transaction. See Note 19 — “Held for Sale and Discontinued Operations.”
Prior period amounts have been reclassified to conform to the current period’s presentation.

4039


The following tables present the financial information for White Mountains’s segments:segments for the three and nine months ended September 30, 2023 and 2022:
HG Global/BAMArk/WM OutriggerOther OperationsTotal
MillionsMillionsHG Global/ BAMArk
Kudu
Other OperationsTotalMillionsHG Global
BAM (1)
ArkWM Outrigger Re
Kudu
Three Months Ended September 30, 2022
Three Months Ended September 30, 2023Three Months Ended September 30, 2023
Earned insurance premiumsEarned insurance premiums$7.1 $346.1 $— $— $353.2 Earned insurance premiums$6.6 $1.3 $438.3 $60.6 $— $— $506.8 
Net investment incomeNet investment income5.7 4.9 14.8 8.5 33.9 Net investment income4.3 3.8 13.9 3.0 15.1 8.0 48.1 
Net investment income (expense) - BAM
Surplus Note interest
Net investment income (expense) - BAM
Surplus Note interest
6.6 (6.6)— — — —  
Net realized and unrealized investment
gains (losses)
Net realized and unrealized investment
gains (losses)
(38.8)(14.4)41.1 (17.3)(29.4)Net realized and unrealized investment gains (losses)(13.6)(10.5)(6.6)— 11.2 8.0 (11.5)
Net realized and unrealized investment gains
(losses) from investment in MediaAlpha
Net realized and unrealized investment gains
(losses) from investment in MediaAlpha
— — — (18.6)(18.6)Net realized and unrealized investment gains
(losses) from investment in MediaAlpha
— — — — — (46.8)(46.8)
Commission revenuesCommission revenues— — — 3.2 3.2 Commission revenues— — — — — 3.5 3.5 
Other revenuesOther revenues1.3 6.6 — 33.0 40.9 Other revenues— .7 3.6 — — 15.2 19.5 
Total revenues Total revenues(24.7)343.2 55.9 8.8 383.2  Total revenues3.9 (11.3)449.2 63.6 26.3 (12.1)519.6 
Loss and loss adjustment expensesLoss and loss adjustment expenses— 213.7 — — 213.7 Loss and loss adjustment expenses— — 258.5 7.3 — — 265.8 
Insurance and reinsurance acquisition expenses1.7 74.8 — — 76.5 
Acquisition expensesAcquisition expenses2.0 .1 71.0 19.3 — — 92.4 
Cost of salesCost of sales— — — 25.0 25.0 Cost of sales— — — — — 8.0 8.0 
General and administrative expensesGeneral and administrative expenses15.8 26.9 4.5 39.9 87.1 General and administrative expenses.5 17.0 35.3 .1 4.5 42.2 99.6 
Amortization of other intangible assets— — — 1.4 1.4 
Change in fair value of contingent considerationChange in fair value of contingent consideration— — 17.0 — — — 17.0 
Interest expenseInterest expense2.0 3.7 4.2 .6 10.5 Interest expense3.8 — 5.5 — 5.5 .9 15.7 
Total expenses Total expenses19.5 319.1 8.7 66.9 414.2  Total expenses6.3 17.1 387.3 26.7 10.0 51.1 498.5 
Pre-tax income (loss) from continuing operationsPre-tax income (loss) from continuing operations$(44.2)$24.1 $47.2 $(58.1)$(31.0)Pre-tax income (loss) from continuing operations$(2.4)$(28.4)$61.9 $36.9 $16.3 $(63.2)$21.1 
(1) BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes the BAM Surplus Notes and is not reduced by accruals of interest expense on the BAM Surplus Notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the NYDFS.
HG Global/BAMArk/WM OutriggerOther Operations
MillionsHG Global
BAM (1)
ArkKuduTotal
Three Months Ended September 30, 2022
Earned insurance premiums$5.9 $1.2 $346.1 $— $— $353.2 
Net investment income2.8 2.9 4.9 14.8 8.5 33.9 
Net investment income (expense) - BAM
   Surplus Note interest
2.9 (2.9)   — 
Net realized and unrealized investment gains (losses)(19.6)(19.2)(14.4)41.1 (17.3)(29.4)
Net realized and unrealized investment gains
  (losses) from investment in MediaAlpha
    (18.6)(18.6)
Commission revenues    3.2 3.2 
Other revenues.1 1.2 6.6  33.0 40.9 
     Total revenues(7.9)(16.8)343.2 55.9 8.8 383.2 
Losses and loss adjustment expenses  213.7   213.7 
Acquisition expenses1.6 .1 74.8   76.5 
Cost of sales    25.0 25.0 
General and administrative expenses.6 15.2 24.2 4.5 41.3 85.8 
Change in fair value of contingent consideration  2.7  — 2.7 
Interest expense2.0 — 3.7 4.2 .6 10.5 
     Total expenses4.2 15.3 319.1 8.7 66.9 414.2 
Pre-tax income (loss) from continuing operations$(12.1)$(32.1)$24.1 $47.2 $(58.1)$(31.0)
(1) BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes the BAM Surplus Notes and is not reduced by accruals of interest expense on the BAM Surplus Notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the NYDFS.

MillionsHG Global/ BAMArkKuduOther OperationsTotal
Three Months Ended September 30, 2021
Earned insurance premiums$6.7 $213.4 $— $— $220.1 
Net investment income4.4 .6 9.5 5.0 19.5 
Net realized and unrealized investment
   gains (losses)
(4.0).3 18.9 15.3 30.5 
Net realized and unrealized investment gains
   (losses) from investment in MediaAlpha
— — — (396.8)(396.8)
Commission revenues— — — 2.4 2.4 
Other revenues.3 3.4 .1 28.1 31.9 
     Total revenues7.4 217.7 28.5 (346.0)(92.4)
Losses and loss adjustment expenses— 129.2 — — 129.2 
Insurance and reinsurance acquisition expenses3.0 53.7 — — 56.7 
Cost of sales— — — 24.0 24.0 
General and administrative expenses12.4 21.8 3.3 14.4 51.9 
Amortization of other intangible assets— — — 2.0 2.0 
Interest expense— 2.1 1.9 .4 4.4 
     Total expenses15.4 206.8 5.2 40.8 268.2 
Pre-tax income (loss) from continuing operations$(8.0)$10.9 $23.3 $(386.8)$(360.6)
40


HG Global/BAMArk/WM OutriggerOther Operations
MillionsHG Global
BAM (1)
ArkWM Outrigger Re
Kudu
Total
Nine Months Ended September 30, 2023
Earned insurance premiums$19.4 $3.9 $971.9 $75.4 $— $— $1,070.6 
Net investment income12.4 10.5 33.5 7.7 44.0 22.0 130.1 
Net investment income (expense) -
  BAM Surplus Note interest
19.7 (19.7)— — — —  
Net realized and unrealized investment
   gains (losses)
(11.4)(5.6)35.9 — 45.4 125.8 190.1 
Net realized and unrealized investment gains
   (losses) from investment in MediaAlpha
— — — — — (38.9)(38.9)
Commission revenues— — — — — 10.0 10.0 
Other revenues— 2.0 (1.1)— — 67.1 68.0 
     Total revenues40.1 (8.9)1,040.2 83.1 89.4 186.0 1,429.9 
Loss and loss adjustment expenses— — 573.2 7.9 — — 581.1 
Acquisition expenses5.6 .7 189.3 22.2 — — 217.8 
Cost of sales— — — — — 33.5 33.5 
General and administrative expenses1.9 47.8 105.3 .2 12.3 130.7 298.2 
Change in fair value of contingent consideration— — 16.8 — — — 16.8 
Interest expense10.8 — 15.7 — 15.5 2.9 44.9 
     Total expenses18.3 48.5 900.3 30.3 27.8 167.1 1,192.3 
Pre-tax income (loss) from continuing
     operations
$21.8 $(57.4)$139.9 $52.8 $61.6 $18.9 $237.6 
(1) BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes the BAM Surplus Notes and is not reduced by accruals of interest expense on the BAM Surplus Notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the NYDFS.
HG Global/BAMArk/WM OutriggerOther Operations
MillionsHG Global
BAM (1)
Ark
Kudu
Total
Nine Months Ended September 30, 2022
Earned insurance premiums$21.5 $4.5 $757.8 $— $— $783.8 
Net investment income7.1 8.0 9.7 41.2 13.6 79.6 
Net investment income (expense) -
   BAM Surplus Note interest
8.8 (8.8)—   — 
Net realized and unrealized investment
   gains (losses)
(57.8)(56.2)(76.5)45.8 2.8 (141.9)
Net realized and unrealized investment gains
   (losses) from investment in MediaAlpha
    (113.3)(113.3)
Commission revenues    8.7 8.7 
Other revenues.3 3.4 10.1  89.6 103.4 
     Total revenues(20.1)(49.1)701.1 87.0 1.4 720.3 
Losses and loss adjustment expenses  456.2   456.2 
Acquisition expenses7.6 1.9 174.9   184.4 
Cost of sales    68.8 68.8 
General and administrative expenses2.1 47.4 74.9 10.4 122.1 256.9 
Change in fair value of contingent consideration  4.9   4.9 
Interest expense5.4  10.6 10.3 1.2 27.5 
     Total expenses15.1 49.3 721.5 20.7 192.1 998.7 
Pre-tax income (loss) from continuing operations$(35.2)$(98.4)$(20.4)$66.3 $(190.7)$(278.4)
(1) BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes the BAM Surplus Notes and is not reduced by accruals of interest expense on the BAM Surplus Notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the NYDFS.

41


MillionsHG Global/ BAMArk
Kudu
Other OperationsTotal
Nine Months Ended September 30, 2022
Earned insurance premiums$26.0 $757.8 $— $— $783.8 
Net investment income15.1 9.7 41.2 13.6 79.6 
Net realized and unrealized investment
   gains (losses)
(114.0)(76.5)45.8 2.8 (141.9)
Net realized and unrealized investment gains
   (losses) from investment in MediaAlpha
— — — (113.3)(113.3)
Commission revenues— — — 8.7 8.7 
Other revenues3.7 10.1 — 89.6 103.4 
     Total revenues(69.2)701.1 87.0 1.4 720.3 
Loss and loss adjustment expenses— 456.2 — — 456.2 
Insurance and reinsurance acquisition expenses9.5 174.9 — — 184.4 
Cost of sales— — — 68.8 68.8 
General and administrative expenses49.5 79.8 10.2 118.9 258.4 
Amortization of other intangible assets— — .2 3.2 3.4 
Interest expense5.4 10.6 10.3 1.2 27.5 
     Total expenses64.4 721.5 20.7 192.1 998.7 
Pre-tax income (loss) from continuing operations$(133.6)$(20.4)$66.3 $(190.7)$(278.4)
Note 15. Variable Interest Entities

MillionsHG Global/ BAMArk
Kudu
Other OperationsTotal
Nine Months Ended September 30, 2021
Earned insurance premiums$19.6 $435.8 $— $— $455.4 
Net investment income13.2 1.8 26.1 16.1 57.2 
Net realized and unrealized investment
   gains (losses)
(15.6)10.3 62.5 34.0 91.2 
Net realized and unrealized investment gains
   (losses) from investment in MediaAlpha
— — — (325.5)(325.5)
Commission revenues— — — 7.0 7.0 
Other revenues.9 9.4 .2 57.6 68.1 
     Total revenues18.1 457.3 88.8 (210.8)353.4 
Losses and loss adjustment expenses— 247.8 — — 247.8 
Insurance and reinsurance acquisition expenses6.5 124.4 — — 130.9 
Cost of sales— — — 45.9 45.9 
General and administrative expenses42.7 84.4 9.0 79.4 215.5 
Amortization of other intangible assets— — .2 2.9 3.1 
Interest expense— 4.5 9.2 1.1 14.8 
     Total expenses49.2 461.1 18.4 129.3 658.0 
Pre-tax income (loss) from continuing operations$(31.1)$(3.8)$70.4 $(340.1)$(304.6)
BAM

BAM is owned by and operated for the benefit of its members, the municipalities that purchase BAM’s insurance for their debt issuances. However, the equity at risk funded by BAM’s members is not sufficient to fund its operations without the additional financial support provided by the BAM Surplus Notes and, accordingly, White Mountains has determined that BAM is a VIE.
Pursuant to the FLRT, BAM’s underwriting guidelines may only be amended with the consent of HG Re. In addition, HG Holdings Ltd, a subsidiary of HG Global, has the right to designate two directors for election to BAM’s Board of Directors. As a result, we have determined that White Mountains is the primary beneficiary and is required to consolidate BAM’s results in its financial statements. Since BAM is owned by its members, its equity and results of operations are included in noncontrolling interests.
HG Re’s obligations under the FLRT are subject to an aggregate limit equal to the assets in the Collateral Trusts at any point in time.

WM Outrigger Re

White Mountains has determined that Outrigger Re Ltd. and WM Outrigger Re are VIEs. White Mountains is not the primary beneficiary of Outrigger Re Ltd. or the other segregated accounts. White Mountains is the primary beneficiary of WM Outrigger Re, as it has both the power to direct the activities that most significantly impact WM Outrigger Re’s economic performance and the obligation to absorb losses, or the right to receive returns, that could potentially be significant to WM Outrigger Re. As a result, White Mountains consolidates WM Outrigger Re’s results in its financial statements. The assets of WM Outrigger Re can only be used to settle the liabilities of WM Outrigger Re, and there is no recourse to the Company for any creditors of WM Outrigger Re.

PassportCard/DavidShield

As of September 30, 2023, White Mountains’s ownership interest in PassportCard/DavidShield was 53.8%. White Mountains has determined that both PassportCard and DavidShield are VIEs but that White Mountains is not the primary beneficiary and therefore does not consolidate either PassportCard or DavidShield. The governance structures for both PassportCard and DavidShield were designed to give White Mountains and its co-investor equal power to make the decisions that most significantly impact operations. White Mountains does not have the unilateral power to direct the operations of PassportCard or DavidShield and does not hold a controlling financial interest. White Mountains’s ownership interest gives White Mountains the ability to exert significant influence over the significant financial and operating activities of PassportCard/DavidShield. Accordingly, White Mountains’s investment in PassportCard/DavidShield meets the criteria to be accounted for under the equity method. White Mountains has taken the fair value option for its investment in PassportCard/DavidShield. Changes in the fair value of PassportCard/DavidShield are recorded in net realized and unrealized investment gains (losses). As of September 30, 2023, White Mountains’s maximum exposure to loss on its equity investment in PassportCard/DavidShield and the non-interest-bearing loan to its partner is the total carrying value of $159.4 million.

Elementum

As of September 30, 2023, White Mountains’s ownership interest in Elementum was 26.6%. White Mountains has determined that Elementum is a VIE but that White Mountains is not the primary beneficiary and therefore does not consolidate Elementum. White Mountains’s ownership interest gives White Mountains the ability to exert significant influence over the significant financial and operating activities of Elementum. Accordingly, Elementum meets the criteria to be accounted for under the equity method. White Mountains has taken the fair value option for its investment in Elementum. Changes in the fair value of Elementum are recorded in net realized and unrealized investment gains (losses). As of September 30, 2023, White Mountains’s maximum exposure to loss on its limited partnership interest in Elementum is the carrying value of $35.0 million.

42


Limited Partnerships

White Mountains’s investments in limited partnerships are generally considered VIEs because the limited partnership interests do not have substantive kick-out rights or participating rights. White Mountains does not have the unilateral power to direct the operations of these limited partnerships, and therefore White Mountains is not the primary beneficiary and does not consolidate the limited partnerships. White Mountains has taken the fair value option for its investments in limited partnerships, which are generally measured at NAV as a practical expedient. As of September 30, 2023, White Mountains’s maximum exposure to loss on its investments in limited partnerships is the carrying value of $239.2 million.

Note 16. Equity-MethodEquity Method Eligible Investments

White Mountains’s equity method eligible investments include Kudu’s Participation Contracts, White Mountains’s investment in MediaAlpha, PassportCard/DavidShield, Elementum Holdings, L.P. and certain other unconsolidated entities, including Kudu’s Participation Contracts, private equity funds and hedge funds in which White Mountains has the ability to exert significant influence over the investee’s operating and financial policies.
The following table presents the ownership interests and carrying values of White Mountains’s equity method eligible investments as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
MillionsOwnership InterestCarrying ValueOwnership InterestCarrying Value
Kudu Participation Contracts (1)
4.1 - 33.0%$813.2 3.2 - 32.0%$669.5 
$ in Millions$ in Millions
Ownership Interest (1)
Carrying Value
Ownership Interest (1)
Carrying Value
Kudu’s Participation ContractsKudu’s Participation Contracts4.1% - 30.0%$775.3 4.1% - 30.0%$695.9 
Investment in MediaAlphaInvestment in MediaAlpha27.4 %148.2 28.0 %261.6 Investment in MediaAlpha35.3%188.8 27.1%168.6 
PassportCard/DavidShieldPassportCard/DavidShield53.8 %132.0 53.8 %120.0 PassportCard/DavidShield53.8%150.0 53.8%135.0 
Elementum Holdings, L.P.Elementum Holdings, L.P.29.7 %45.0 29.7 %45.0 Elementum Holdings, L.P.26.6%35.0 29.7%30.0 
Other equity method eligible investments, at fair valueOther equity method eligible investments, at fair valueUnder 50.0%102.7 Under 50.0%109.3 Other equity method eligible investments, at fair valueUnder 50.0%279.0 Under 50.0%84.4 
Other equity method eligible investments, at fair valueOther equity method eligible investments, at fair value50.0% and over27.7 50.0% and over17.8 Other equity method eligible investments, at fair value50.0% and over25.2 50.0% and over— 
(1) Ownership interest generally references basic ownership interest with the exception of Kudu’s Participation Contracts, which are non-controllingnoncontrolling equity interests in the form of revenue and earnings participation contracts.

For the three and nine months ended September 30, 2023, White Mountains received dividend and income distributions from equity method eligible investments of $13.2 million and $42.1 million, which were recorded within net investment income in the consolidated statements of operations. For the three and nine months ended September 30, 2022, White Mountains received dividend and income distributions from equity method eligible investments of $16.1 million and $42.9 million, which were recorded within net investment income in the consolidated statements of operations. For the three and nine months ended September 30, 2021, White Mountains received dividend and income distributions from equity method eligible investments of $13.0 million, and $37.7 million, which were recorded within net investment income in the consolidated statements of operations.
Subsequent to the MediaAlpha IPO, White Mountains’s investment in MediaAlpha is accounted for at fair value based on the publicly traded share price of MediaAlpha’s common stock, and White Mountains presents its investment in MediaAlpha as a separate line item on the balance sheet. See Note 2 — “Significant Transactions.” For the nine months ended September 30, 2021, MediaAlpha was considered a significant subsidiary.
The following tables present summarized financial information for MediaAlpha as of September 30, 2022 and December 31, 2021 and for the three and nine months ended September 30, 2022 and 2021:
MillionsSeptember 30, 2022December 31, 2021
Balance sheet data:
Total assets$265.2 $289.8 
Total liabilities$333.6 $351.4 
Three Months Ended September 30,Nine Months Ended September 30,
Millions2022202120222021
Income statement data:
Total revenues$89.0 $152.7 $335.1 $483.7 
Total expenses$110.2 $157.0 $379.2 $488.2 
Net income (loss)$(21.2)$(4.3)$(44.1)$(4.5)
million.

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Note 17. Fair Value of Financial Instruments

    White Mountains records its financial instruments at fair value with the exception of debt obligations, which are recorded as debt at face value less unamortized original issue discount. See Note 7 — “Debt.”
    The following tablestable presents the fair value and carrying value of these financial instruments as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022December 31, 2021 September 30, 2023December 31, 2022
MillionsMillionsFair
Value
Carrying
Value
Fair
Value
Carrying
Value
MillionsFair ValueCarrying ValueFair ValueCarrying Value
HG Global Senior NotesHG Global Senior Notes$146.1 $146.4 $— $— HG Global Senior Notes$157.6 $146.8 $155.7 $146.5 
Ark 2007 Subordinated NotesArk 2007 Subordinated Notes$26.2 $30.0 $27.6 $30.0 Ark 2007 Subordinated Notes$29.1 $30.0 $28.4 $30.0 
Ark 2021 Subordinated NotesArk 2021 Subordinated Notes$149.4 $150.0 $162.8 $155.9 Ark 2021 Subordinated Notes$164.5 $154.6 $163.1 $153.7 
Kudu Credit FacilityKudu Credit Facility$265.5 $253.5 $246.8 $218.2 Kudu Credit Facility$223.0 $203.7 $223.9 $208.3 
Other Operations debtOther Operations debt$36.8 $35.6 $17.7 $16.8 Other Operations debt$31.1 $29.6 $38.2 $36.7 

The fair value estimates for the HG Global Senior Notes, Ark 2007 Subordinated Notes, Ark 2021 Subordinated Notes, Kudu Credit Facility and Other Operations debt have been determined based on a discounted cash flow approach and are considered to be Level 3 measurements.
For the fair value level measurements associated with White Mountains’s investment securities. Seesecurities see Note 3 — “Investment Securities.” For the fair value level measurements associated with White Mountains’s derivative instruments. Seeinstruments see Note 9 — “Derivatives.”

Note 18. Commitments and Contingencies

Legal Contingencies

White Mountains, and the insurance industry in general, is routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, nor are directly related to, claims activity. White Mountains’s estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. See Note 5 — “Losses and Loss Adjustment Expense Reserves.”
White Mountains considers the requirements of ASC 450 when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or if there is a reasonable possibility that a loss may have been incurred. White Mountains does not have any current non-claims related litigation that may have a material adverse effect on White Mountains’s financial condition, results of operations or cash flows.

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Note 19. Held for Sale and Discontinued Operations

NSM

On August 1, 2022, White Mountains closed the NSM Transaction. See Note 2 — “Significant Transactions.” As a result of the NSM Transaction, the assets and liabilities of NSM Group have been presented in the balance sheet as held for sale for periods prior to the closing of the transaction, and the results of operations for NSM Group have been classified as discontinued operations in the statements of operations and comprehensive income through the closing of the transaction. Prior period amounts have been reclassified to conform to the current period’s presentation.

Sirius Group

On April 18, 2016, White Mountains completed the sale of Sirius International Insurance Group, Ltd. (“Sirius Group”) to CM International Pte. Ltd. and CM Bermuda Limited (collectively “CMI”). In connection with the sale, White Mountains indemnified Sirius Group against the loss of certain interest deductions claimed by Sirius Group related to periods prior to the sale of Sirius Group to CMI that had been disputed by the Swedish Tax Agency. In late October 2018, the Swedish Administrative Court ruled against Sirius Group on its appeal of the Swedish Tax Agency’s denial of these interest deductions. As a result, in 2018 White Mountains recorded a loss of $17.3 million within net gain (loss) on sale of discontinued operations reflecting the value of these interest deductions.
As of December 31, 2020, White Mountains’s liability related to the tax indemnification provided in connection with the sale of Sirius Group in 2016 was $18.7 million. In April 2021, the Swedish Tax Agency informed the Swedish Administrative Court of Appeal that Sirius Group should prevail in its appeal and that the interest deductions should not be disallowed. In June 2021, the Swedish Administrative Court of Appeal ruled in Sirius Group’s favor. For the nine months ended September 30, 2021, White Mountains recorded a gain of $17.6 million in discontinued operations to reverse the liability accrued as of December 31, 2020 and $1.1 million gain related to foreign currency translation.

Summary of Reclassified Balances and Related Items

Net Assets Held for Sale
The following summarizes the assets and liabilities associated with NSM Group classified as held for sale. As of December 31, 2021, the amounts presented exclude $16.1 million of insurance licenses, investments and cash classified as assets held for sale related to one of the Other Operating Businesses.
MillionsDecember 31, 2021
Assets held for sale
Short-term investments, at fair value$7.8 
Cash (restricted $89.2)111.6 
Premiums and commissions receivable85.0 
Goodwill and other intangible assets725.4 
Other assets59.2 
Total assets held for sale$989.0 
Liabilities held for sale
Debt$272.1 
Premiums payable135.9 
Contingent consideration6.8 
Other liabilities80.5 
Total liabilities held for sale495.3 
Net assets held for sale$493.7 

4544


Net Income (Loss) from Discontinued Operations

The following table summarizes the results of operations, including related income taxes associated with the businesses classified as discontinued operations for the three and nine months ended September 30, 2022 and 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,
Millions
2022 (1)
2021
2022 (1)
2021
Revenues 
Commission revenues$26.6 $67.0 $176.9 $194.6 
Other revenues7.0 15.3 48.1 46.8 
Total revenues - NSM Group33.6 82.3 225.0 241.4 
Expenses
General and administrative expenses15.7 48.9 126.8 142.4 
Broker commission expenses8.2 20.4 52.9 60.9 
Change in fair value of contingent consideration .6 .1 .8 
Amortization of other intangible assets 8.2 9.1 25.0 
Loss on assets held for sale —  28.7 
Interest expense1.6 5.9 12.1 17.7 
Total expenses - NSM Group25.5 84.0 201.0 275.5 
Pre-tax income (loss) from discontinued operations -
   NSM Group
8.1 (1.7)24.0 (34.1)
Income tax (expense) benefit(1.8)7.0 (7.6)10.3 
Net income (loss) from discontinued operations, net of
   tax - NSM Group
6.3 5.3 16.4 (23.8)
Net gain (loss) from sale of discontinued operations, net of
   tax - NSM Group
886.8 — 886.8 — 
Net gain (loss) from sale of discontinued operations, net of
   tax - Sirius Group
 —  18.7 
Total income (loss) from discontinued operations,
   net of tax
893.1 5.3 903.2 (5.1)
Net (income) loss from discontinued operations
   attributable to non-controlling interests
(.2)— (.8)1.1 
Total income (loss) from discontinued operations
   attributable to White Mountains’s common
   shareholders
892.9 5.3 902.4 (4.0)
Other comprehensive income (loss) from discontinued
   operations, net of tax - NSM Group
.7 (1.7)(5.2).9 
Net gain (loss) from foreign currency translation from sale
   of discontinued operations, net of tax - NSM Group
2.9 — 2.9 — 
Comprehensive income (loss) from discontinued
   operations
896.5 3.6 900.1 (3.1)
Other comprehensive income (loss) from discontinued
   operations attributable to non-controlling interests
(.1)— .2 (.1)
Comprehensive income (loss) from discontinued
   operations attributable to White Mountains’s common
   shareholders
$896.4 $3.6 $900.3 $(3.2)
Millions
Three Months Ended September 30, 2022 (1)
Nine Months Ended September 30, 2022 (1)
Revenues
Commission revenues$26.6 $176.9 
Other revenues7.0 48.1 
Total revenues33.6 225.0 
Expenses
General and administrative expenses15.7 126.8 
Broker commission expenses8.2 52.9 
Change in fair value of contingent consideration— .1 
Amortization of other intangible assets— 9.1 
Interest expense1.6 12.1 
Total expenses25.5 201.0 
Pre-tax income (loss) from discontinued operations8.1 24.0 
Income tax (expense) benefit(1.8)(7.6)
Net income (loss) from discontinued operations, net of tax - NSM Group6.3 16.4 
Net gain (loss) from sale of discontinued operations, net of tax - NSM Group886.8 886.8 
Total income (loss) from discontinued operations, net of tax893.1 903.2 
Net (income) loss from discontinued operations attributable to noncontrolling
   interests
(.2)(.8)
Total income (loss) from discontinued operations attributable to White
   Mountains’s common shareholders
892.9 902.4 
Other comprehensive income (loss) from discontinued operations, net of tax -
   NSM Group
.7 (5.2)
Net gain (loss) from foreign currency translation from sale of discontinued
   operations, net of tax - NSM Group
2.9 2.9 
Comprehensive income (loss) from discontinued operations896.5 900.1 
Other comprehensive (income) loss from discontinued operations attributable to
   noncontrolling interests
(.1).2 
Comprehensive income (loss) from discontinued operations attributable to
   White Mountains’s common shareholders
$896.4 $900.3 
(1) As a result of the NSM Transaction, the results of operations for NSM Group are presented for the periods from July 1, 2022 to August 1, 2022 and January 1, 2022 to August 1, 2022.

46


Net Change in Cash from Discontinued Operations
The following table summarizes the net change in cash associated with the businesses classified as discontinued operations for the ninesix months ended September 30, 2022 and 2021:2022:
Nine Months Ended September 30,
Millions20222021
Net cash provided from (used for) operations$38.7 $40.3 
Net cash provided from (used for) investing activities7.1 (54.6)
Net cash used from (used for) financing activities(17.5)13.8 
Effect of exchange rate changes on cash4.0 .6 
Net change in cash during the period32.3 .1 
Cash balances at beginning of period (includes restricted cash of $89.2 and $78.4)111.6 126.6 
Cash sold as part of the sale of NSM Group (includes restricted cash of $105.1 and $0.0)(143.9)— 
Cash balances at end of period (includes restricted cash of $0.0 and $92.2) 126.7 
Supplemental cash flows information:
Interest paid$(12.0)$(16.6)
Net income tax payments$ $— 
MillionsNine Months Ended September 30, 2022
Net cash provided from (used for) operations$38.7 
Net cash provided from (used for) investing activities7.1 
Net cash used from (used for) financing activities(17.5)
Effect of exchange rate changes on cash4.0 
Net change in cash during the period32.3 
Cash balances at beginning of period (includes restricted cash of $89.2)111.6 
Cash sold as part of the sale of NSM Group(143.9)
Cash balances at end of period$— 
Supplemental cash flows information:
Interest paid$(12.0)
Net income tax payments$— 

45


Earnings Per Share from Discontinued Operations

White Mountains calculates earnings per share using the two-class method, which allocates earnings between common and unvested restricted common shares. Both classes of shares participate equally in earnings on a per share basis. Basic earnings per share amounts are based on the weighted average number of common shares outstanding adjusted for unvested restricted common shares. Diluted earnings per share amounts are also impacted by the net effect of potentially dilutive common shares outstanding. The following table presents the Company’s computation of earnings per share for discontinued operations for the three and nine months ended September 30, 2022 and 2021:2022:
Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Basic and diluted earnings per share numerators (in millions):Basic and diluted earnings per share numerators (in millions):Basic and diluted earnings per share numerators (in millions):
Net income (loss) attributable to White Mountains’s
common shareholders
Net income (loss) attributable to White Mountains’s
common shareholders
$888.2 $(371.4)$752.4 $(308.2)Net income (loss) attributable to White Mountains’s common shareholders$888.2 $752.4 
Less: net income (loss) from continuing operationsLess: net income (loss) from continuing operations$(23.6)$(389.2)$(252.3)$(356.8)Less: net income (loss) from continuing operations(23.6)(252.3)
Less: net (income) loss from continuing operations attributable to
non-controlling interests
$18.8 $12.5 $102.2 $52.6 
Total gain (loss) from discontinued operations attributable to White
Mountains’s common shareholders (1)
$893.0 $5.3 $902.5 $(4.0)
Less: net (income) loss from continuing operations attributable to noncontrolling
interests
Less: net (income) loss from continuing operations attributable to noncontrolling
interests
18.8 102.2 
Total income (loss) from discontinued operations attributable to White Mountains’s
common shareholders (1)
Total income (loss) from discontinued operations attributable to White Mountains’s
common shareholders (1)
893.0 902.5 
Allocation of earnings to participating restricted common shares (2)
Allocation of earnings to participating restricted common shares (2)
(11.8)(.1)(10.8)— 
Allocation of earnings to participating restricted common shares (2)
(11.8)(10.8)
Basic and diluted earnings per share numerators (3)
Basic and diluted earnings per share numerators (3)
$881.2 $5.2 $891.7 $(4.0)
Basic and diluted earnings per share numerators (3)
$881.2 $891.7 
Basic earnings per share denominators (in thousands):Basic earnings per share denominators (in thousands): Basic earnings per share denominators (in thousands): 
Total average common shares outstanding during the periodTotal average common shares outstanding during the period2,893.8 3,090.3 2,959.3 3,099.4 Total average common shares outstanding during the period2,893.8 2,959.3 
Average unvested restricted common shares (4)
Average unvested restricted common shares (4)
(38.3)(37.8)(35.5)(36.0)
Average unvested restricted common shares (4)
(38.3)(35.5)
Basic earnings per share denominatorBasic earnings per share denominator2,855.5 3,052.5 2,923.8 3,063.4 Basic earnings per share denominator2,855.5 2,923.8 
Diluted earnings per share denominator (in thousands):Diluted earnings per share denominator (in thousands): Diluted earnings per share denominator (in thousands): 
Total average common shares outstanding during the periodTotal average common shares outstanding during the period2,893.8 3,090.3 2,959.3 3,099.4 Total average common shares outstanding during the period2,893.8 2,959.3 
Average unvested restricted common shares (4)
Average unvested restricted common shares (4)
(38.3)(37.8)(35.5)(36.0)
Average unvested restricted common shares (4)
(38.3)(35.5)
Diluted earnings per share denominatorDiluted earnings per share denominator2,855.5 3,052.5 2,923.8 3,063.4 Diluted earnings per share denominator2,855.5 2,923.8 
Basic and diluted earnings (losses) per share (in dollars) -
discontinued operations:
$308.59 $1.72 $304.97 $(1.29)
Basic and diluted earnings (losses) per share (in dollars) - discontinued operationsBasic and diluted earnings (losses) per share (in dollars) - discontinued operations$308.59 $304.97 
(1) Includes net income (loss) from discontinued operations, net of tax - NSM Group, net gain (loss) from sale of discontinued operations, net of tax - NSM Group net gain (loss) from sale of discontinued operations, net of tax - Sirius Group and net (income) loss from discontinued operations attributable to non-controlling interests.
(2) Restricted shares issued by White Mountains receive dividends, and therefore, are therefore considered participating securities.
(3) Net earnings attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the three and nine months ended September 30, 2022 and 2021.2022.
(4) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.”

Note 20. Subsequent Events

Agreement to Acquire Bamboo

On October 19, 2023, White Mountains entered into an agreement and plan of merger (the “Bamboo Merger Agreement”) with Bamboo IDE8 Insurance Services, LLC (“Bamboo”) and John Chu, as the unitholders’ representative. Bamboo is a capital-light, tech- and data-enabled insurance distribution platform providing insurance offerings to the residential property market in California. Bamboo operates primarily through its full-service MGA business, where the company manages all aspects of the placement process on behalf of its fronting and reinsurance partners, including product development, marketing, underwriting, policy issuance and claims oversight, and earns commissions based on the volume and profitability of the insurance that it places.
Immediately following the merger, White Mountains will make a primary investment in Bamboo (together with the merger and the rollover transactions described below, the “Bamboo Transaction”). As a result of the Bamboo Transaction, White Mountains expects to acquire approximately 70% of the issued and outstanding equity interests of Bamboo for approximately $285 million in cash. The precise size of White Mountains’s ownership interest and equity investment will vary based on rollover elections by certain unitholders prior to closing.
The Bamboo Transaction is expected to close in the first quarter of 2024. Completion of the Bamboo Transaction is subject to receipt of certain regulatory approvals and other customary closing conditions. The Bamboo Transaction is not subject to a financing condition.


47
46


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following discussion contains “forward-looking statements.” White Mountains intends statements that are not historical in nature, which are hereby identified as forward-looking statements, to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. White Mountains cannot promise that its expectations in such forward-looking statements will turn out to be correct. White Mountains’s actual results could be materially different from and worse than its expectations. See “FORWARD-LOOKING STATEMENTS” on page 76 for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.
The following discussion also includes ninefive non-GAAP financial measures: (i) adjusted book value per share, (ii) Ark’s adjusted loss and LAE ratio, (iii) Ark’s adjusted insurance acquisition expense ratio, (iv) Ark’s adjusted other underwriting expense ratio, (v) Ark’s adjusted combined ratio (vi) Kudu’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), (vii)(iii) Kudu’s adjusted EBITDA, (viii)(iv) total consolidated portfolio returns excluding MediaAlpha, and (ix)(v) adjusted capital, that have been reconciled from their most comparable GAAP financial measures on page 74.74. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 20222023 AND 20212022

Overview

White Mountains reported book value per share of $1,542 and adjusted book value per share of $1,588 as of September 30, 2023. Book value per share and adjusted book value per share both increased 1% in the third quarter of 2023 and increased 6% in the first nine months of 2023, including dividends. The increases in book value per share and adjusted book value per share in the third quarter of 2023 were driven primarily by solid results at the operating companies and positive returns from other long-term investments, partially offset by the impact of mark-to-market losses from the decline in MediaAlpha’s share price. The increases in book value per share and adjusted book value per share in the first nine months of 2023 were driven primarily by good results at the operating companies and positive returns across the investments portfolio excluding MediaAlpha, partially offset by the impact of mark-to-market losses from the decline in MediaAlpha’s share price.
White Mountains reported book value per share of $1,439 and adjusted book value per share of $1,471 as of September 30, 2022. Book value per share and adjusted book value per share both increased 28% in the third quarter of 2022. For the first nine months of 2022, book value per share increased 23% and adjusted book value per share increased 24%, including dividends. The increases in book value per share and adjusted book value per share were driven primarily by the net gain from the sale of NSM of approximately $300 per share (based on 2.9 million shares outstanding at August 1, 2022). In addition, the growth in White Mountains’s book value per share and adjusted book value per share reflectreflected good operating results at its businesses,the operating companies, partially offset by net realized and unrealized losses in itsnegative returns from the fixed income portfolio and investmentthe impact of mark-to-market losses from the decline in MediaAlpha.MediaAlpha’s share price.
On October 20, 2023, White Mountains reported book value per shareannounced that it entered into an agreement to acquire a majority stake in Bamboo Ide8 Insurance Services, LLC (“Bamboo”), an MGA focused on the California homeowners insurance market. White Mountains expects to invest approximately $285 million, including primary capital to support Bamboo’s growth, and to acquire approximately 70% of $1,162Bamboo basic shares outstanding. The precise size of White Mountains’s ownership interest and adjusted book value per shareequity investment will vary based on rollover elections by certain unitholders prior to closing. The transaction is expected to close in the first quarter of $1,1762024. Including the Bamboo acquisition, White Mountains’s undeployed capital is roughly $400 million as of September 30, 2021. Book value per share2023.
On October 25, 2023 White Mountains announced the launch of White Mountains Partners (“WM Partners”), which will invest in non-insurance sectors including essential services, light industrial, and adjusted book value per share both decreased 9% in the third quarterspecialty consumer. White Mountains expects to deploy $500 million of 2021. Book value per share decreased 8%equity capital through WM Partners over time.
HG Global/BAM reported gross written premiums and adjusted book value per share decreased 7% in the first nine monthsMSC collected of 2021, including dividends. Results$36 million and $84 million in the third quarter and first nine months of 2021 were driven primarily by $397 million and $326 million of net realized and unrealized investment losses from White Mountains’s investment in MediaAlpha, resulting from decreases in the MediaAlpha share price.
On August 1, 2022, White Mountains closed the NSM Transaction. White Mountains received $1.4 billion in net cash proceeds at closing and recognized a net gain of $876 million, which was comprised of $887 million of net gain from sale of discontinued operations and $3 million of comprehensive income related2023 compared to the recognition of foreign currency translation gains (losses) from the sale, partially offset by $14 million of compensation and other costs related to the transaction recorded in Other Operations.
During the third quarter of 2022, White Mountains repurchased and retired 366,645 of its common shares for $509 million at an average share price of $1,388.24, or 96% of White Mountains’s September 30, 2022 book value per share and 94% of White Mountains’s September 30, 2022 adjusted book value per share. As of September 30, 2022, White Mountains’s undeployed capital was approximately $1.1 billion.
In the HG Global/BAM segment, gross written premiums and MSC collected totaled $46 million and $109 million in the third quarter and first nine months of 2022 compared to $28 million2022. Total pricing was 87 and $84 million80 basis points in the third quarter and first nine months of 2021. Total pricing was2023 compared to 110 and 81 basis points in the third quarter and first nine months of 2022 compared to 692022. BAM insured municipal bonds with par value of $4.2 billion and 66 basis points$10.5 billion in the third quarter and first nine months of 2021. BAM insured municipal bonds with par value of2023 compared to $4.1 billion and $13.5 billion in the third quarter and first nine months of 20222022. BAM’s total claims paying resources were $1,474 million as of September 30, 2023 compared to $4.0 billion$1,423 million as of December 31, 2022 and $12.6 billion$1,260 million as of September 30, 2022.
The Ark/WM Outrigger segment’s combined ratio was 77% and 83% in the third quarter and first nine months of 2021. BAM’s total claims paying resources were $1,2602023. Ark/WM Outrigger reported gross written premiums of $251 million asand $1,667 million, net written premiums of September 30, 2022 compared to $1,192$231 million asand $1,306 million and net earned premiums of December 31, 2021$499 million and $1,181$1,047 million asin the third quarter and first nine months of September 30, 2021.2023. Ark/WM Outrigger reported pre-tax income of $99 million and $193 million in the third quarter and first nine months of 2023.
4847


Ark reported a GAAPArk’s combined ratio was 81% and 87% in the third quarter and first nine months of 2023 compared to 87% and 90% in the third quarter and first nine months of 2022 compared to 92% and 95%2022. Ark’s combined ratio in the third quarter of 2023 included 11 points of catastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to 21 points of catastrophe losses in the third quarter of 2022, driven primarily by losses from Hurricane Ian. Ark’s combined ratio in the first nine months of 2021. Ark’s adjusted combined ratio,2023 included seven points of catastrophe losses, which adds back amounts attributableincluded losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to TPC providers, was 86% and 90%17 points of catastrophe losses in the third quarter and first nine months of 2022, compared to 89% and 93% in the third quarter and first nine months of 2021. The adjusted combined ratio for the third quarter and first nine months of 2022 included 21 points and 17 points of catastrophedriven primarily by losses compared to 21 points and 16 points in the third quarter and first nine months of 2021. Catastrophe losses for the third quarter and first nine months of 2022 included $51 million related tofrom Hurricane Ian on a net basis after reinstatement premiums. The adjustedand the conflict in Ukraine. Ark’s combined ratio in the third quarter and first nine months of 2022 also2023 included fourless than one point of net favorable prior year development and two points of net unfavorable prior year development compared to three points and five points of net favorable prior year development compared to six points and five points in the third quarter and first nine months of 2021, principally2022. Ark reported gross written premiums of $251 million and $1,667 million, net written premiums of $225 million and $1,198 million and net earned premiums of $438 million and $972 million in property lines. Ark reportedthe third quarter and first nine months of 2023 compared to gross written premiums of $216 million and $1,253 million, net written premiums of $193 million and $1,007 million and net earned premiums of $346 million and $758 million in the third quarter and first nine months of 2022 compared to gross written premiums2022. Ark reported pre-tax income (loss) of $162$62 million and $895$140 million net written premiums of $121 million and $726 million and net earned premiums of $213 million and $436 million and in the third quarter and first nine months of 2021. Ark reported pre-tax income (loss) of2023 compared to $24 million and $(20) million in the third quarter and first nine months of 2022 compared to $11 million and $(4) million in third quarter and first nine months of 2021.2022. Ark’s results included net realized and unrealized investment gains (losses) of $(7) million and $36 million in the third quarter and first nine months of 2023 compared to $(14) million and $(77) million in the third quarter and first nine months of 2022 compared to $0.32022.
WM Outrigger Re’s combined ratio was 44% and 40% in the third quarter and first nine months of 2023. WM Outrigger Re reported gross and net written premiums of $6 million and $10$108 million and net earned premiums of $61 million and $75 million in the third quarter and first nine months of 2021. Ark’s2023. WM Outrigger Re reported pre-tax loss forincome of $37 million and $53 million in the third quarter and first nine months of 2021 also included $25 million of transaction expenses related to White Mountains’s transaction with Ark2023.
Kudu reported total revenuerevenues of $26 million, pre-tax income of $16 million and adjusted EBITDA of $12 million in the third quarter of 2023 compared to total revenues of $56 million, pre-tax income of $47 million and adjusted EBITDA of $12 million in the third quarter of 2022 compared to total revenue of $29 million,2022. Kudu’s revenues, pre-tax income of $23 million and adjusted EBITDA included $15 million of $7 millionnet investment income in both the third quarter of 2021. Total2023 and 2022. Kudu’s revenues and pre-tax income in the third quarter of 2022also included $41$11 million of net realized and unrealized investment gains on Kudu’s participation contracts compared to $19 million of net realized and unrealized investment gains on Kudu’s participation contracts in the third quarter of 2021.2023 compared to $41 million in the third quarter of 2022. Kudu reported total revenuerevenues of $89 million, pre-tax income of $62 million and adjusted EBITDA of $34 million in the first nine months of 2023 compared to total revenues of $87 million, pre-tax income of $66 million and adjusted EBITDA of $33 million in the first nine months of 2022 compared to total revenue of $89 million,2022. Kudu’s revenues, pre-tax income of $70 million and adjusted EBITDA included $44 million of $19net investment income in the first nine months of 2023 compared to $41 million in the first nine months of 2021. Total2022. Kudu’s revenues and pre-tax income in the first nine months of 20222023 also included $46$45 million of net realized and unrealized investment gains on Kudu’s participation contracts compared to $63$46 million of net realized and unrealized investment gains on Kudu’s participation contracts in the first nine months of 2021.2022.
As of September 30, 2022, the market2023, White Mountains owned 22.9 million shares of MediaAlpha, representing a 35% basic ownership interest (33% on a fully-diluted/fully-converted basis). As of September 30, 2023, MediaAlpha’s closing price was $8.26 per share, which decreased from $10.31 per share as of June 30, 2023. The carrying value of White Mountains’s investment in MediaAlpha was $148$189 million as of September 30, 2023, which was downdecreased from $167$236 million as of June 30, 2022. As of September 30, 2022, the closing price was $8.75 per share, which decreased from $9.85 as of June 30, 2022. Based on2023. At White Mountains’s ownershipcurrent level of 16.9 million shares of MediaAlpha as of September 30, 2022,ownership, each $1.00 per share increase or decrease in the stockshare price of MediaAlpha will result in an approximate $6.60$9.00 per share increase or decrease in White Mountains’s book value per share and adjusted book value per share.
White Mountains’s pre-taxtotal consolidated portfolio return on invested assets was -0.2% in the third quarter of 2023, which included $47 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 0.6% in the third quarter of 2023, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net unrealized investment losses on common equity securities. White Mountains’s total consolidated portfolio return on invested assets was 0.4% in the third quarter of 2022. This return2022, which included $19 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 0.5% in the third quarter of 2022. Excluding MediaAlpha, investment returns in the third quarter of 2022, were driven primarily by favorablenet unrealized investment gains and net investment income from other long-term investment results, which more thaninvestments, partially offset by net realized and unrealized investment losses in the fixed income portfolio due to rising interest rates.
White Mountains’s pre-tax total consolidated portfolio return on invested assets was -8.0%5.3% in the third quarterfirst nine months of 2021. This return2023, which included $397$39 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 1.4%6.3% in the third quarterfirst nine months of 2021. Excluding MediaAlpha, investment returns in the third quarter of 2021 were2023, driven primarily by favorablenet realized and unrealized investment gains and net investment income from other long-term investments, results.
net investment income from the fixed income portfolio and net realized and unrealized investment gains from common equity securities. White Mountains’s pre-tax total consolidated portfolio return on invested assets was -3.6% in the first nine months of 2022. This return2022, which included $113 million of net unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was -1.4% in the first nine months of 2022. Excluding MediaAlpha, investment returns in the first nine months of 2022, were driven primarily by net unrealized investment losses in the fixed income portfolio due to rising interest rates, partially offset by favorable other long-term investment results. White Mountains’s pre-tax total consolidated portfolio return on invested assets was -3.7% in the first nine months of 2021. This return included $326 million of net realized and unrealized gains and net investment lossesincome from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 4.6% in the first nine months of 2021. Excluding MediaAlpha, investment returns in the first nine months of 2021 were driven primarily by favorable other long-term investment results.


investments.
4948


Adjusted Book Value Per Share

The following table presents White Mountains’s book value per share and reconciles it to adjusted book value per share, a non-GAAP measure as of September 30, 2022,2023, June 30, 2022,2023, December 31, 2021,2022, and September 30, 2021.2022. See NON-GAAP FINANCIAL MEASURES on page 74.74.
September 30, 2022June 30,
2022
December 31,
2021
September 30, 2021
MillionsMillionsSeptember 30, 2023June 30, 2023December 31, 2022September 30, 2022
Book value per share numerators (in millions):Book value per share numerators (in millions):Book value per share numerators (in millions):
White Mountains’s common shareholders’ equity -
GAAP book value per share numerator
White Mountains’s common shareholders’ equity -
GAAP book value per share numerator
$3,708.0 $3,323.3 $3,548.1 $3,521.7 White Mountains’s common shareholders’ equity -
GAAP book value per share numerator
$3,949.1 $3,922.2 $3,746.9 $3,708.0 
Time value of money discount on expected future
payments on the BAM Surplus Notes (1)
(110.8)(115.9)(125.9)(128.0)
HG Global’s unearned premium reserve (1)
HG Global’s unearned premium reserve (1)
232.2 221.6 214.6 206.8 
HG Global’s unearned premium reserve (1)
254.2 246.8 242.1 232.2 
HG Global’s net deferred acquisition costs (1)
HG Global’s net deferred acquisition costs (1)
(65.9)(62.6)(60.8)(58.1)
HG Global’s net deferred acquisition costs (1)
(73.1)(70.7)(69.0)(65.9)
Time value of money discount on expected future
payments on the BAM Surplus Notes (1)
Time value of money discount on expected future
payments on the BAM Surplus Notes (1)
(90.2)(91.8)(95.1)(110.8)
Adjusted book value per share numeratorAdjusted book value per share numerator$3,763.5 $3,366.4 $3,576.0 $3,542.4 Adjusted book value per share numerator$4,040.0 $4,006.5 $3,824.9 $3,763.5 
Book value per share denominators (in thousands of shares):Book value per share denominators (in thousands of shares): Book value per share denominators (in thousands of shares): 
Common shares outstanding - GAAP book value
per share denominator
Common shares outstanding - GAAP book value
per share denominator
2,576.2 2,942.9 3,017.8 3,029.6 Common shares outstanding - GAAP book value per
share denominator
2,560.5 2,560.5 2,572.1 2,576.2 
Unearned restricted common sharesUnearned restricted common shares(17.5)(20.9)(13.7)(17.0)Unearned restricted common shares(15.7)(19.1)(14.1)(17.5)
Adjusted book value per share denominatorAdjusted book value per share denominator2,558.7 2,922.0 3,004.1 3,012.6 Adjusted book value per share denominator2,544.8 2,541.4 2,558.0 2,558.7 
GAAP book value per shareGAAP book value per share$1,439.31 $1,129.27 $1,175.73 $1,162.44 GAAP book value per share$1,542.36 $1,531.84 $1,456.74 $1,439.31 
Adjusted book value per shareAdjusted book value per share$1,470.84 $1,152.12 $1,190.39 $1,175.86 Adjusted book value per share$1,587.59 $1,576.46 $1,495.28 $1,470.84 
Year-to-date dividends paid per shareYear-to-date dividends paid per share$1.00 $1.00 $1.00 $1.00 Year-to-date dividends paid per share$1.00 $1.00 $1.00 $1.00 
(1) Amount reflects White Mountains’s preferred share ownership in HG Global of 96.9%.

Goodwill and Other Intangible Assets

The following table presents a summary of goodwill and other intangible assets that are included in White Mountains’s adjusted book value as of September 30, 2022,2023, June 30, 2022,2023, December 31, 2021,2022, and September 30, 2021:2022:
MillionsMillionsSeptember 30, 2022June 30,
2022
December 31, 2021September 30, 2021MillionsSeptember 30, 2023June 30, 2023December 31, 2022September 30, 2022
Goodwill:Goodwill:Goodwill:
ArkArk$116.8 $116.8 $116.8 $116.8 Ark$116.8 $116.8 $116.8 $116.8 
KuduKudu7.6 7.6 7.6 7.6 Kudu7.6 7.6 7.6 7.6
Other Operations51.1 (1)77.4 (1)17.9 17.4 
Other Operations (1)
Other Operations (1)
44.4 44.4 52.1 51.1
Total goodwillTotal goodwill175.5 201.8 142.3 141.8 Total goodwill168.8168.8176.5175.5
Other intangible assets:Other intangible assets:Other intangible assets:
ArkArk175.7 175.7 175.7 175.7 Ark175.7 175.7 175.7 175.7
KuduKudu1.1 1.1 1.3 1.4 Kudu.8 .8 1.0 1.1
Other Operations40.9 19.4 21.2 31.3 
Other Operations (1)
Other Operations (1)
26.8 28.3 39.2 40.9
Total other intangible assetsTotal other intangible assets217.7 196.2 198.2 208.4 Total other intangible assets203.3204.8215.9217.7
Total goodwill and other intangible assets (2)
Total goodwill and other intangible assets (2)
393.2 398 340.5 350.2 
Total goodwill and other intangible assets (2)
$372.1 $373.6 $392.4 $393.2 
Goodwill and other intangible assets attributed to
non-controlling interests
Goodwill and other intangible assets attributed to
non-controlling interests
(103.1)(103.4)(91.8)(92.0)Goodwill and other intangible assets attributed to
non-controlling interests
$(95.2)$(95.4)$(102.7)$(103.1)
Goodwill and other intangible assets included in
White Mountains’s common shareholders’
equity
Goodwill and other intangible assets included in
White Mountains’s common shareholders’
equity
$290.1 $294.6 $248.7 $258.2 Goodwill and other intangible assets included in
White Mountains’s common shareholders’
equity
$276.9 $278.2 $289.7 $290.1 
(1)The relative fair values of goodwill and other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized as of September 30, 2022 andat June 30, 2022.
(2) See Note 4 — “Goodwill and Other Intangible Assets” on page 24for details of goodwill and other intangible assets.
5049


Summary of Consolidated Results

The following table presents White Mountains’s consolidated financial results for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months EndedNine Months Ended
September 30,September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
RevenuesRevenues  Revenues  
Financial Guarantee revenuesFinancial Guarantee revenues$(24.7)$7.4 $(69.2)$18.1 Financial Guarantee revenues$(7.4)$(24.7)$31.2 $(69.2)
P&C Insurance and Reinsurance revenuesP&C Insurance and Reinsurance revenues343.2 217.7 701.1 457.3 P&C Insurance and Reinsurance revenues512.8 343.2 1,123.3 701.1 
Asset Management revenuesAsset Management revenues55.9 28.5 87.0 88.8 Asset Management revenues26.3 55.9 89.4 87.0 
Other Operations revenuesOther Operations revenues8.8 (346.0)1.4 (210.8)Other Operations revenues(12.1)8.8 186.0 1.4 
Total revenuesTotal revenues383.2 (92.4)720.3 353.4 Total revenues519.6 383.2 1,429.9 720.3 
ExpensesExpensesExpenses
Financial Guarantee expensesFinancial Guarantee expenses19.5 15.4 64.4 49.2 Financial Guarantee expenses23.4 19.5 66.8 64.4 
P&C Insurance and Reinsurance expensesP&C Insurance and Reinsurance expenses319.1 206.8 721.5 461.1 P&C Insurance and Reinsurance expenses414.0 319.1 930.6 721.5 
Asset Management expensesAsset Management expenses8.7 5.2 20.7 18.4 Asset Management expenses10.0 8.7 27.8 20.7 
Other Operations expensesOther Operations expenses66.9 40.8 192.1 129.3 Other Operations expenses51.1 66.9 167.1 192.1 
Total expensesTotal expenses414.2 268.2 998.7 658.0 Total expenses498.5 414.2 1,192.3 998.7 
Pre-tax income (loss)Pre-tax income (loss)Pre-tax income (loss)
Financial Guarantee pre-tax income (loss)Financial Guarantee pre-tax income (loss)(44.2)(8.0)(133.6)(31.1)Financial Guarantee pre-tax income (loss)(30.8)(44.2)(35.6)(133.6)
P&C Insurance and Reinsurance pre-tax income (loss)P&C Insurance and Reinsurance pre-tax income (loss)24.1 10.9 (20.4)(3.8)P&C Insurance and Reinsurance pre-tax income (loss)98.8 24.1 192.7 (20.4)
Asset Management pre-tax income (loss)Asset Management pre-tax income (loss)47.2 23.3 66.3 70.4 Asset Management pre-tax income (loss)16.3 47.2 61.6 66.3 
Other Operations pre-tax income (loss)Other Operations pre-tax income (loss)(58.1)(386.8)(190.7)(340.1)Other Operations pre-tax income (loss)(63.2)(58.1)18.9 (190.7)
Total pre-tax income (loss) from continuing operationsTotal pre-tax income (loss) from continuing operations(31.0)(360.6)(278.4)(304.6)Total pre-tax income (loss) from continuing operations21.1 (31.0)237.6 (278.4)
Income tax (expense) benefitIncome tax (expense) benefit7.4 (28.6)26.1 (52.2)Income tax (expense) benefit(7.3)7.4 (19.4)26.1 
Net income (loss) from continuing operationsNet income (loss) from continuing operations(23.6)(389.2)(252.3)(356.8)Net income (loss) from continuing operations13.8 (23.6)218.2 (252.3)
Net income (loss) from discontinued operations, net of tax -
NSM Group
Net income (loss) from discontinued operations, net of tax -
NSM Group
6.3 5.3 16.4 (23.8)Net income (loss) from discontinued operations, net of
tax - NSM Group
 6.3  16.4 
Net gain (loss) from sale of discontinued operations, net of
tax - NSM Group
Net gain (loss) from sale of discontinued operations, net of
tax - NSM Group
886.8 — 886.8 — Net gain (loss) from sale of discontinued operations, net of
tax - NSM Group
 886.8  886.8 
Net gain (loss) from sale of discontinued operations, net of
tax - Sirius Group
 —  18.7 
Net income (loss)Net income (loss)869.5 (383.9)650.9 (361.9)Net income (loss)13.8 869.5 218.2 650.9 
Net (income) loss attributable to non-controlling interests18.7 12.5 101.5 53.7 
Net (income) loss attributable to noncontrolling interestsNet (income) loss attributable to noncontrolling interests9.8 18.7 4.5 101.5 
Net income (loss) attributable to White Mountains’s
common shareholders
Net income (loss) attributable to White Mountains’s
common shareholders
888.2 (371.4)752.4 (308.2)Net income (loss) attributable to White Mountains’s
common shareholders
23.6 888.2 222.7 752.4 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax(1.4)— (3.0)(.3)Other comprehensive income (loss), net of tax(1.7)(1.4).9 (3.0)
Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
.7 (2.2)(5.2).9 Other comprehensive income (loss) from discontinued
operations, net of tax - NSM Group
 .7  (5.2)
Recognition of foreign currency translation from sale of
NSM Group, net of tax
2.9 — 2.9 — 
Net gain (loss) from foreign currency translation from sale of
discontinued operations, net of tax - NSM Group
Net gain (loss) from foreign currency translation from sale of
discontinued operations, net of tax - NSM Group
 2.9  2.9 
Comprehensive income (loss)Comprehensive income (loss)890.4 (373.6)747.1 (307.6)Comprehensive income (loss)21.9 890.4 223.6 747.1 
Other comprehensive (income) loss attributable to
non-controlling interests
(.3).2 .4 — 
Other comprehensive (income) loss attributable to
noncontrolling interests
Other comprehensive (income) loss attributable to
noncontrolling interests
.7 (.3)(.1).4 
Comprehensive income (loss) attributable to White
Mountains’s common shareholders
Comprehensive income (loss) attributable to White
Mountains’s common shareholders
$890.1 $(373.4)$747.5 $(307.6)Comprehensive income (loss) attributable to White
Mountains’s common shareholders
$22.6 $890.1 $223.5 $747.5 




5150


I. Summary of Operations By SegmentSUMMARY OF OPERATIONS BY SEGMENT
 
As of September 30, 2022,2023, White Mountains conducted its operations through fourthree segments: (1) HG Global/BAM, (2) Ark,Ark/WM Outrigger, and (3) Kudu, with our remaining operating businesses, holding companies and (4)other assets included in Other Operations. A discussionWhite Mountains has made its segment determination based on consideration of the following criteria: (i) the nature of the business activities of each of the Company’s subsidiaries and affiliates; (ii) the manner in which the Company’s subsidiaries and affiliates are organized; (iii) the existence of primary managers responsible for specific subsidiaries and affiliates; and (iv) the organization of information provided to the Company’s chief operating decision makers and its Board of Directors. Significant intercompany transactions among White Mountains’s consolidated investment operations is included after the discussion of operations by segment.segments have been eliminated herein. White Mountains’s segment information is presented in Note 1514 — “Segment Information”to the Consolidated Financial Statements.
During the fourth quarter of 2022, Ark sponsored the formation of Outrigger Re Ltd. to provide reinsurance protection on Ark’s Bermuda global property catastrophe excess of loss portfolio written in calendar year 2023. White Mountains consolidates its segregated account of Outrigger Re Ltd., WM Outrigger Re, in its financial statements. WM Outrigger Re’s quota share reinsurance agreement with GAIL eliminates in White Mountains’s consolidated financial statements. WM Outrigger Re exclusively provides reinsurance protection to Ark. As a result, WM Outrigger Re was aggregated with Ark within the Ark/WM Outrigger segment starting in 2023. See Note 2 — “Significant Transactions.”
As a result of the NSM Transaction, the results of operations for NSM, Grouppreviously reported as a segment, have been classified as discontinued operations and are presented separately, net of related income taxes, in the statementstatements of operations and comprehensive income through the closing of the transaction. Prior year amounts have been reclassified to conform to the current period’s presentation. See Note 19 — “Held for Sale and Discontinued Operations.”
Prior period amounts have been reclassified to conform to the current period’s presentation.

HG Global/BAM

HG Global/BAM consists of the consolidated results of HG Global, HG Re and BAM. BAM is the first and only mutual municipal bond insurance company in the United States. By insuring the timely payment of principal and interest, BAM provides market access to, and lowers interest expense for, issuers of municipal bonds used to finance essential public purpose projects, such as schools, utilities and transportation facilities. BAM is owned by and operated for the benefit of its members, the municipalities that purchase BAM’s insurance for their debt issuances. HG Global was established to fund the startup of BAM and, through HG Re, to provide up to 15%-of-par, first loss reinsurance protection for policies underwritten by BAM.
The following tables present the components of pre-tax income (loss) included in White Mountains’sthe HG Global/BAM segment related to the consolidation of HG Global, which includes HG Re and its other wholly-owned subsidiaries, and BAM for the three and nine months ended September 30, 20222023 and 2021:2022:

Three Months Ended September 30, 2022 Three Months Ended September 30, 2023
MillionsMillionsHG GlobalBAMEliminationsTotalMillionsHG GlobalBAMEliminationsTotal
Direct written premiumsDirect written premiums$ $18.4 $ $18.4 Direct written premiums$ $16.5 $ $16.5 
Assumed written premiumsAssumed written premiums16.8 1.3 (16.8)1.3 Assumed written premiums14.2  (14.2) 
Gross written premiumsGross written premiums16.8 19.7 (16.8)19.7 Gross written premiums14.2 16.5 (14.2)16.5 
Ceded written premiumsCeded written premiums (16.8)16.8  Ceded written premiums (14.2)14.2  
Net written premiumsNet written premiums$16.8 $2.9 $ $19.7 Net written premiums$14.2 $2.3 $ $16.5 
Earned insurance premiumsEarned insurance premiums$5.9 $1.2 $ $7.1 Earned insurance premiums$6.6 $1.3 $ $7.9 
Net investment incomeNet investment income2.8 2.9  5.7 Net investment income4.3 3.8  8.1 
Net investment income - BAM Surplus NotesNet investment income - BAM Surplus Notes2.9  (2.9) Net investment income - BAM Surplus Notes6.6  (6.6) 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(19.6)(19.2) (38.8)Net realized and unrealized investment gains (losses)(13.6)(10.5) (24.1)
Other revenuesOther revenues.1 1.2  1.3 Other revenues .7  .7 
Total revenuesTotal revenues(7.9)(13.9)(2.9)(24.7)Total revenues3.9 (4.7)(6.6)(7.4)
Insurance acquisition expenses1.6 .1  1.7 
Acquisition expensesAcquisition expenses2.0 .1  2.1 
General and administrative expensesGeneral and administrative expenses.6 15.2  15.8 General and administrative expenses.5 17.0  17.5 
Interest expense - HG Global Senior Notes2.0   2.0 
Interest expense (1)
Interest expense (1)
3.9   3.9 
Interest expense - BAM Surplus NotesInterest expense - BAM Surplus Notes 2.9 (2.9) Interest expense - BAM Surplus Notes 6.6 (6.6) 
Total expensesTotal expenses4.2 18.2 (2.9)19.5 Total expenses6.4 23.7 (6.6)23.5 
Pre-tax income (loss)Pre-tax income (loss)$(12.1)$(32.1)$ $(44.2)Pre-tax income (loss)$(2.5)$(28.4)$ $(30.9)
Supplemental information:Supplemental information:Supplemental information:
MSC collected (1)
$ $26.0 $ $26.0 
MSC collected (2)
MSC collected (2)
$ $19.9 $ $19.9 
(1) Amount includes $0.1 of intercompany interest expense that is eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany interest expense included within the HG Global/BAM segment is eliminated against the offsetting intercompany interest income included within Other Operations.
(2) MSC collected are recorded directly to BAM’s equity, which is recorded as noncontrolling interest on White Mountains’s balance sheet.

51


 Three Months Ended September 30, 2022
MillionsHG GlobalBAMEliminationsTotal
Direct written premiums$— $18.4 $— $18.4 
Assumed written premiums16.8 1.3 (16.8)1.3 
Gross written premiums16.8 19.7 (16.8)19.7 
Ceded written premiums— (16.8)16.8 — 
Net written premiums$16.8 $2.9 $— $19.7 
Earned insurance premiums$5.9 $1.2 $— $7.1 
Net investment income2.8 2.9 — 5.7 
Net investment income - BAM Surplus Notes2.9 — (2.9)— 
Net realized and unrealized investment gains(19.6)(19.2)— (38.8)
Other revenues.1 1.2 — 1.3 
Total revenues(7.9)(13.9)(2.9)(24.7)
Acquisition expenses1.6 .1 — 1.7 
General and administrative expenses.6 15.2 — 15.8 
Interest expense2.0 — — 2.0 
Interest expense - BAM Surplus Notes— 2.9 (2.9)— 
Total expenses4.2 18.2 (2.9)19.5 
Pre-tax income (loss)$(12.1)$(32.1)$— $(44.2)
Supplemental information:
     MSC collected (1)
$— $26.0 $— $26.0 
(1) MSC collected are recorded directly to BAM’s equity, which is recorded as non-controllingnoncontrolling interest on White Mountains’s balance sheet.
 Nine Months Ended September 30, 2023
MillionsHG GlobalBAMEliminationsTotal
Direct written premiums$ $37.3 $ $37.3 
Assumed written premiums31.9  (31.9) 
Gross written premiums31.9 37.3 (31.9)37.3 
Ceded written premiums (31.9)31.9  
Net written premiums$31.9 $5.4 $ $37.3 
Earned insurance premiums$19.4 $3.9 $ $23.3 
Net investment income12.4 10.5  22.9 
Net investment income - BAM Surplus Notes19.7  (19.7) 
Net realized and unrealized investment gains (losses)(11.4)(5.6) (17.0)
Other revenues 2.0  2.0 
Total revenues40.1 10.8 (19.7)31.2 
Acquisition expenses5.6 .7  6.3 
General and administrative expenses1.9 47.8  49.7 
Interest expense (1)
11.1   11.1 
Interest expense - BAM Surplus Notes 19.7 (19.7) 
Total expenses18.6 68.2 (19.7)67.1 
Pre-tax income (loss)$21.5 $(57.4)$ $(35.9)
Supplemental information:
     MSC collected (2)
$ $46.4 $ $46.4 
(1) Amount includes $0.3 of intercompany interest expense that is eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany interest expense included within the HG Global/BAM segment is eliminated against the offsetting intercompany interest income included within Other Operations.
(2) MSC collected are recorded directly to BAM’s equity, which is recorded as noncontrolling interest on White Mountains’s balance sheet.

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Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022
MillionsMillionsHG GlobalBAMEliminationsTotalMillionsHG GlobalBAMEliminationsTotal
Direct written premiumsDirect written premiums$— $12.8 $— $12.8 Direct written premiums$— $44.9 $— $44.9 
Assumed written premiumsAssumed written premiums10.9 — (10.9)— Assumed written premiums39.6 1.3 (39.6)1.3 
Gross written premiumsGross written premiums10.9 12.8 (10.9)12.8 Gross written premiums39.6 46.2 (39.6)46.2 
Ceded written premiumsCeded written premiums— (10.9)10.9 — Ceded written premiums— (39.6)39.6 — 
Net written premiumsNet written premiums$10.9 $1.9 $— $12.8 Net written premiums$39.6 $6.6 $— $46.2 
Earned insurance premiumsEarned insurance premiums$5.5 $1.2 $— $6.7 Earned insurance premiums$21.5 $4.5 $— $26.0 
Net investment incomeNet investment income1.9 2.5 — 4.4 Net investment income7.1 8.0 — 15.1 
Net investment income - BAM Surplus NotesNet investment income - BAM Surplus Notes3.1 — (3.1)— Net investment income - BAM Surplus Notes8.8 — (8.8)— 
Net realized and unrealized investment gains(2.0)(2.0)— (4.0)
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(57.8)(56.2)— (114.0)
Other revenuesOther revenues.1 .2 — .3 Other revenues.3 3.4 — 3.7 
Total revenuesTotal revenues8.6 1.9 (3.1)7.4 Total revenues(20.1)(40.3)(8.8)(69.2)
Insurance acquisition expenses1.5 1.5 — 3.0 
Acquisition expensesAcquisition expenses7.6 1.9 — 9.5 
General and administrative expensesGeneral and administrative expenses.2 12.2 — 12.4 General and administrative expenses2.1 47.4 — 49.5 
Interest expenseInterest expense5.4 — — 5.4 
Interest expense - BAM Surplus NotesInterest expense - BAM Surplus Notes— 3.1 (3.1)— Interest expense - BAM Surplus Notes— 8.8 (8.8)— 
Total expensesTotal expenses1.7 16.8 (3.1)15.4 Total expenses15.1 58.1 (8.8)64.4 
Pre-tax income (loss)Pre-tax income (loss)$6.9 $(14.9)$— $(8.0)Pre-tax income (loss)$(35.2)$(98.4)$— $(133.6)
Supplemental information:Supplemental information:Supplemental information:
MSC collected (1)
MSC collected (1)
$— $14.7 $— $14.7 
MSC collected (1)
$— 62.3 $— $62.3 
(1) MSC collected are recorded directly to BAM’s equity, which is recorded as non-controlling interest on White Mountains’s balance sheet.

 Nine Months Ended September 30, 2022
MillionsHG GlobalBAMEliminationsTotal
Direct written premiums$ $44.9 $ $44.9 
Assumed written premiums39.6 1.3 (39.6)1.3 
Gross written premiums39.6 46.2 (39.6)46.2 
Ceded written premiums (39.6)39.6  
Net written premiums$39.6 $6.6 $ $46.2 
Earned insurance premiums$21.5 $4.5 $ $26.0 
Net investment income7.1 8.0  15.1 
Net investment income - BAM Surplus Notes8.8  (8.8) 
Net realized and unrealized investment gains (losses)(57.8)(56.2) (114.0)
Other revenues.3 3.4  3.7 
Total revenues(20.1)(40.3)(8.8)(69.2)
Insurance acquisition expenses7.6 1.9  9.5 
General and administrative expenses2.1 47.4  49.5 
Interest expense - HG Global Senior Notes5.4   5.4 
Interest expense - BAM Surplus Notes 8.8 (8.8) 
Total expenses15.1 58.1 (8.8)64.4 
Pre-tax income (loss)$(35.2)$(98.4)$ $(133.6)
Supplemental information:
     MSC collected (1)
$ $62.3 $ $62.3 
(1) MSC collected are recorded directly to BAM’s equity, which is recorded as non-controlling interest on White Mountains’s balance sheet.

53


 Nine Months Ended September 30, 2021
MillionsHG GlobalBAMEliminationsTotal
Direct written premiums$— $34.5 $— $34.5 
Assumed written premiums33.4 4.5 (33.4)4.5 
Gross written premiums33.4 39.0 (33.4)39.0 
Ceded written premiums— (33.4)33.4 — 
Net written premiums$33.4 $5.6 $— $39.0 
Earned insurance premiums$16.1 $3.5 $— $19.6 
Net investment income5.4 7.8 — 13.2 
Net investment income - BAM Surplus Notes9.1 — (9.1)— 
Net realized and unrealized investment losses(9.5)(6.1)— (15.6)
Other revenues.3 .6 — .9 
Total revenues21.4 5.8 (9.1)18.1 
Insurance acquisition expenses4.3 2.2 — 6.5 
General and administrative expenses1.3 41.4 — 42.7 
Interest expense - BAM Surplus Notes— 9.1 (9.1)— 
Total expenses5.6 52.7 (9.1)49.2 
Pre-tax income (loss)$15.8 $(46.9)$— $(31.1)
Supplemental information:
     MSC collected (1)
$— 44.8 $— $44.8 
(1) MSC are recorded directly to BAM’s equity, which is recorded as non-controllingnoncontrolling interest on White Mountains’s balance sheet.

HG Global/BAM Results—Three Months Ended September 30, 20222023 versus Three Months Ended September 30, 2021
BAM is required to prepare its financial statements on a statutory accounting basis for the NYDFS and does not report stand-alone GAAP financial results. BAM charges an insurance premium on each municipal bond insurance policy it writes. A portion of the premium is MSC and the remainder is a risk premium. In the event of a municipal bond refunding, a portion of the MSC from original issuance can be reutilized, in effect serving as a credit against the total insurance premium on the refunding of the municipal bond.2022
Gross written premiums and MSC collected in the HG Global/BAM segment totaled $36 million in the third quarter of 2023 compared to $46 million in the third quarter of 2022 compared to $28 million2022. BAM insured $4.2 billion of municipal bonds, $3.7 billion of which were in the primary market, in the third quarter of 2021. BAM insured2023 compared to $4.1 billion of municipal bonds, $3.3 billion of which were in the primary market, in the third quarter of 2022. In the third quarter of 2022, BAM completed an assumed reinsurance transaction to reinsure municipal bonds with a par value of $43 million.
Insured penetration in the primary market increased to 7.8% in the third quarter of 2023, driven by demand from both large and small deals, compared to $4.06.2% in the third quarter of 2022.
Total pricing, which reflects both gross written premiums and MSC, decreased to 87 basis points in the third quarter of 2023 compared to 110 basis points in the third quarter of 2022. The decrease in total pricing was driven by lower pricing in the primary market and a decrease in the percentage of par insured in the secondary market, which was partially offset by higher pricing in the secondary market. Pricing in the primary market decreased to 61 basis points in the third quarter of 2023 compared to 79 basis points in the third quarter of 2022. Pricing in the combined secondary and assumed reinsurance markets, which is more transaction specific than pricing in the primary market, increased to 259 basis points in the third quarter of 2023 compared to 229 basis points in the third quarter of 2022.
The following table presents the gross par value of primary and secondary market policies issued, the gross written premiums and MSC collected and total pricing for the three months ended September 30, 2023 and 2022:
Three Months Ended September 30,
$ in Millions20232022
Gross par value of primary market policies issued$3,659.9 $3,269.0 
Gross par value of secondary market policies issued542.4 826.5 
Gross par value of assumed reinsurance 42.5 
Total gross par value of market policies issued$4,202.3 $4,138.0 
Gross written premiums$16.5 $19.7 
MSC collected19.9 26.0 
Total gross written premiums and MSC collected$36.4 $45.7 
Total pricing87 bps110 bps
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HG Global reported pre-tax loss of $3 million in the third quarter of 2023 compared to $12 million in the third quarter of 2022. HG Global’s results in the third quarter of 2023 included net realized and unrealized investment losses on its fixed income portfolio of $14 million compared to $20 million in the third quarter of 2022, driven by increasing interest rates in each period. HG Global’s results in the third quarter of 2023 also included interest income on the BAM Surplus Notes of $7 million compared to $3 million in the third quarter of 2022, as the interest rate increased to 8% in 2023 from 3% in 2022.
BAM is a mutual insurance company that is owned by its members. BAM’s results are consolidated into White Mountain’s GAAP financial statements and attributed to noncontrolling interests. White Mountains reported $28 million of GAAP pre-tax loss from BAM in the third quarter of 2023 compared to $32 million in the third quarter of 2022. BAM’s results included net realized and unrealized investment losses on its fixed income portfolio of $11 million in the third quarter of 2023 compared to $19 million in the third quarter of 2022, driven by increasing interest rates in each period. BAM’s results in the third quarter of 2023 also included of interest expense on the BAM Surplus Notes of $7 million compared to $3 million in the third quarter of 2022.

HG Global/BAM Results—Nine Months Ended September 30, 2023 versus Nine Months Ended September 30, 2022
Gross written premiums and MSC collected in the HG Global/BAM segment totaled $84 million in the first nine months of 2023 compared to $109 million in the first nine months of 2022. BAM insured $10.5 billion of municipal bonds, $3.8$8.7 billion of which were in the primary market, in the third quarterfirst nine months of 2021.2023 compared to $13.5 billion of municipal bonds, $10.1 billion of which were in the primary market, in the first nine months of 2022. In the third quarter of 2022, BAM completed an assumed reinsurance transaction to reinsure municipal bonds with a par value of $43 million.
Insured penetration in the primary market decreased to 6.2% in the third quarter of 2022 comparedincreased to 8.6% in the third quarterfirst nine months of 2021,2023, driven primarily as a result of a decrease inby demand from large transactions insureddeals in the third quarter of 2022period, compared to 7.8% in the third quarterfirst nine months of 2021.2022.
Total pricing, which reflects both gross written premiums and MSC, increased to 110 basis points in the third quarter of 2022 compared to 69 basis points in the third quarter of 2021. The increase in total pricing was driven primarily by increased secondary market activity, higher pricing in the primary market and an assumed reinsurance transaction in the third quarter of 2022. Pricing in the primary market increased to 79 basis points in the third quarter of 2022 compared to 59 basis points in the third quarter of 2021. Pricing in the combined secondary and assumed reinsurance markets, which is more transaction specific than pricing in the primary market, decreased to 22980 basis points in the third quarter of 2022 compared to 309 basis points in the third quarter of 2021.
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The following table presents the gross par value of primary and secondary market policies issued, the gross par value of assumed reinsurance, the gross written premiums and MSC collected and total pricing for the three months ended September 30, 2022 and 2021:
Three Months Ended September 30,
$ in Millions20222021
Gross par value of primary market policies issued$3,269.0 $3,813.7 
Gross par value of secondary market policies issued826.5 157.4 
Gross par value of assumed reinsurance42.5 — 
Total gross par value of market policies issued$4,138.0 $3,971.1 
Gross written premiums$19.7 $12.8 
MSC collected26.0 14.7 
Total gross written premiums and MSC collected$45.7 $27.5 
Total pricing110 bps69 bps

HG Global reported pre-tax income (loss) of $(12) million in the third quarter of 2022 compared to $7 million in the third quarter of 2021. The change in pre-tax income (loss) was driven primarily by $20 million of net unrealized investment losses on the HG Global fixed income portfolio, as interest rates increased in the third quarter of 2022. Results in the third quarter of 2022 and 2021 both included $3 million of interest income on the BAM Surplus Notes.
BAM is a mutual insurance company that is owned by its members. BAM’s results are consolidated into White Mountains’s GAAP financial statements and attributed to non-controlling interests. White Mountains reported $32 million of GAAP pre-tax loss from BAM in the third quarter of 2022 compared to $15 million in the third quarter of 2021. The change in pre-tax loss was driven primarily by $19 million of net unrealized investment losses on the BAM fixed income portfolio, as interest rates increased in the third quarter of 2022. Results in the third quarter of 2022 included $3 million of interest expense on the BAM Surplus Notes and $15 million of general and administrative expenses, compared to $3 million of interest expense and $12 million of general and administrative expenses in the third quarter of 2021.

HG Global/BAM Results—Nine Months Ended September 30, 2022 versus Nine Months Ended September 30, 2021
Gross written premiums and MSC collected in the HG Global/BAM segment totaled $109 million in the first nine months of 20222023, compared to $84 million in the first nine months of 2021. BAM insured $13.5 billion of municipal bonds, $10.1 billion of which were in the primary market, in the first nine months of 2022 compared to $12.6 billion of municipal bonds, $11.2 billion of which were in the primary market, in the first nine months of 2021. In the first nine months of 2022 and 2021, BAM completed assumed reinsurance transactions to reinsure municipal bonds with par values of $43 million and $806 million.
Total pricing, which reflects both gross written premiums and MSC, increased to 81 basis points in the first nine months of 2022 compared to 66 basis points in the first nine months of 2021.2022. The increasedecrease in total pricing was driven primarily by increaseda decrease in the percentage of par insured in the secondary market, activitywhich was partially offset by higher pricing in the first nine months of 2022 compared to the first nine months of 2021.secondary market. Pricing in the primary market increased towas 57 basis points in the first nine months of 2022, compared to 56 basis points in the first nine months of 2021.2023 and 2022. Pricing in the secondary and assumed reinsurance markets, which is more transaction specific than pricing in the primary market, increased to 193 basis points in the first nine months of 2023 compared to 152 basis points in the first nine months of 2022, compared to 150 basis points in the first nine months of 2021.
55


2022.
The following table presents the gross par value of primary and secondary market policies issued, the gross par value of assumed reinsurance, the gross written premiums and MSC collected and total pricing for the nine months ended September 30, 20222023 and 2021:2022:
Nine Months Ended September 30,
$ in Millions20232022
Gross par value of primary market policies issued$8,735.5 $10,147.8 
Gross par value of secondary market policies issued1,746.9 3,269.4 
Gross par value of assumed reinsurance 42.5 
Total gross par value of market policies issued$10,482.4 $13,459.7 
Gross written premiums$37.3 $46.2 
MSC collected46.4 62.3 
Total gross written premiums and MSC collected$83.7 $108.5 
Total pricing80 bps81 bps

Nine Months Ended September 30,
$ in Millions20222021
Gross par value of primary market policies issued$10,147.8 $11,171.2 
Gross par value of secondary market policies issued3,269.4 646.6 
Gross par value of assumed reinsurance42.5 805.5 
Total gross par value of market policies issued$13,459.7 $12,623.3 
Gross written premiums46.2 39.0 
MSC collected62.3 44.8 
Total gross written premiums and MSC collected$108.5 $83.8 
Total pricing81 bps66 bps
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HG Global reported pre-tax income (loss) of $22 million in the first nine months of 2023 compared to $(35) million in the first nine months of 20222022. HG Global’s results in the first nine months of 2023 included net realized and unrealized investment losses on its fixed income portfolio of $11 million, as interest rates increased, compared to $16$58 million in the first nine months of 2021. The change in pre-tax income (loss) was driven primarily by $58 million of net unrealized investment losses on the HG Global fixed income portfolio,2022, as interest rates increased significantly. HG Global’s results in the first nine months of 2022. Results2023 also included interest income on the BAM Surplus Notes of $20 million compared to $9 million in the first nine months of 2022, and 2021 both included $9 million ofas the interest income on the BAM Surplus Notes.rate increased to 8% in 2023 from 3% in 2022.
On April 29, 2022, HG Global received the proceeds of its newa $150 million, 10-year term loan credit facility. In turn, on May 2, 2022, HG Global paid a $120 million cash dividend to shareholders, of which $116 million was paid to White Mountains.
BAM is a mutual insurance company that is owned by its members. BAM’s results are consolidated into White MountainsMountains’s GAAP financial statements and attributed to noncontrolling interests. White Mountains reported $98$57 millionof GAAP pre-tax loss from BAM in the first nine months of 20222023, compared to $47$98 million in the first nine months of 2021. The increase in pre-tax loss was driven primarily by $56 million of2022. BAM’s results included net realized and unrealized investment losses on the BAMits fixed income portfolio as interest rates increasedof $6 million in the first nine months of 2022. Results2023, as interest rates increased, compared to $56 million in the first nine months of 2022, as interest rates increased significantly. BAM’s results in the first nine months of 2023 also included $9 million of interest expense on the BAM Surplus Notes and $47of $20 million of general and administrative expenses, compared to $9 million of interest expense and $41 million of general and administrative expenses in the first nine months of 2021.2022.

Claims Paying Resources
BAM’s claims paying resources represent the capital and other financial resources BAM has available to pay claims and, as such, is a key indication of BAM’s financial strength.
BAM’s claims paying resources were $1,474 million as of September 30, 2023 compared to $1,423 million as of December 31, 2022 and $1,260 million as of September 30, 2022 compared to $1,192 million as of December 31, 2021 and $1,181 million as of September 30, 2021.2022. The increase in claims paying resources as of September 30, 20222023 compared to December 31, 20212022 was driven primarily by increasesan increase in the statutory value of the collateral trustsHG Re Collateral Trusts resulting from deposits of ceded premiums and an increase in BAM’s qualified statutory capital resulting from business operationscontingency reserves for the first nine months ended September 30, 2022.of 2023. In the fourth quarter of 2022, BAM completed a reinsurance agreement with Fidus Re that increased BAM’s claims paying resources by $150 million.
The following table presents BAM’s total claims paying resources as of September 30, 2022,2023, December 31, 20212022 and September 30, 2021:2022:
MillionsMillionsSeptember 30, 2022December 31, 2021September 30, 2021MillionsSeptember 30, 2023December 31, 2022September 30, 2022
Policyholders’ surplusPolicyholders’ surplus$316.9 $298.1 $322.8 Policyholders’ surplus$285.8 $283.4 $316.9 
Contingency reserveContingency reserve113.9 101.8 102.7 Contingency reserve131.5 118.2 113.9 
Qualified statutory capital Qualified statutory capital430.8 399.9 425.5  Qualified statutory capital417.3 401.6 430.8 
Net unearned premiums53.3 49.5 48.3 
Statutory net unearned premiumsStatutory net unearned premiums58.3 55.3 53.3 
Present value of future installment premiums and MSCPresent value of future installment premiums and MSC13.3 13.8 13.9 Present value of future installment premiums and MSC10.9 13.3 13.3 
HG Re Collateral trusts at statutory value512.7 478.9 442.8 
Fidus Re Collateral trust at statutory value250.0 250.0 250.0 
HG Re Collateral Trusts at statutory valueHG Re Collateral Trusts at statutory value587.5 553.1 512.7 
Fidus Re collateral trusts at statutory valueFidus Re collateral trusts at statutory value400.0 400.0 250.0 
Claims paying resources Claims paying resources$1,260.1 $1,192.1 $1,180.5  Claims paying resources$1,474.0 $1,423.3 $1,260.1 

5655


HG Global/BAM Balance Sheets
The following tables present amounts from HG Global, which includes HG Re and its other wholly-owned subsidiaries, and BAM that are contained within White Mountains’s consolidated balance sheet as of September 30, 20222023 and December 31, 2021:2022:
September 30, 2022September 30, 2023
MillionsMillionsHG GlobalBAMEliminations and Segment AdjustmentTotalMillionsHG GlobalBAMEliminations and Segment AdjustmentsTotal
AssetsAssetsAssets
Fixed maturity investments, at fair valueFixed maturity investments, at fair value$443.6 $430.8 $ $874.4 Fixed maturity investments, at fair value$521.7 $410.5 $ $932.2 
Short-term investments, at fair valueShort-term investments, at fair value38.0 24.3  62.3 Short-term investments, at fair value40.0 40.1  80.1 
Total investmentsTotal investments481.6 455.1  936.7 Total investments561.7 450.6  1,012.3 
CashCash5.2 12.1  17.3 Cash1.1 3.8  4.9 
BAM Surplus NotesBAM Surplus Notes364.6  (364.6) BAM Surplus Notes340.0  (340.0) 
Accrued interest receivable on BAM Surplus NotesAccrued interest receivable on BAM Surplus Notes166.4  (166.4) Accrued interest receivable on BAM Surplus Notes177.6  (177.6) 
Insurance premiums receivableInsurance premiums receivable4.7 6.6 (4.7)6.6 Insurance premiums receivable3.9 5.5 (3.9)5.5 
Deferred acquisition costsDeferred acquisition costs68.0 34.9 (68.0)34.9 Deferred acquisition costs75.4 38.5 (75.4)38.5 
Other assetsOther assets6.5 16.1 (.3)22.3 Other assets7.8 14.7 (.3)22.2 
Total assetsTotal assets$1,097.0 $524.8 $(604.0)$1,017.8 Total assets$1,167.5 $513.1 $(597.2)$1,083.4 
LiabilitiesLiabilitiesLiabilities
BAM Surplus Notes(1)
BAM Surplus Notes(1)
$ $364.6 $(364.6)$ 
BAM Surplus Notes (1)
$ $340.0 $(340.0)$ 
Accrued interest payable on BAM Surplus Notes(2)
Accrued interest payable on BAM Surplus Notes(2)
 166.4 (166.4) 
Accrued interest payable on BAM Surplus Notes (2)
 177.6 (177.6) 
Preferred dividends payable to White Mountains(3)
Preferred dividends payable to White Mountains(3)
327.2   327.2 
Preferred dividends payable to White Mountains (3)
384.7   384.7 
Preferred dividends payable to non-controlling interests12.1   12.1 
Preferred dividends payable to noncontrolling interestsPreferred dividends payable to noncontrolling interests14.2   14.2 
Unearned insurance premiumsUnearned insurance premiums239.7 47.0  286.7 Unearned insurance premiums262.3 50.0  312.3 
Debt - HG Global Senior Notes146.4  — 146.4 
DebtDebt146.8  — 146.8 
Intercompany debt (4)
Intercompany debt (4)
5.3  — 5.3 
Accrued incentive compensationAccrued incentive compensation1.0 20.6 — 21.6 Accrued incentive compensation1.1 18.8 — 19.9 
Other liabilitiesOther liabilities4.1 86.3 (73.0)17.4 Other liabilities12.8 92.6 (79.6)25.8 
Total liabilitiesTotal liabilities730.5 684.9 (604.0)811.4 Total liabilities827.2 679.0 (597.2)909.0 
EquityEquityEquity
White Mountains’s common shareholders’ equity366.8   366.8 
Non-controlling interests(0.3)(160.1) (160.4)
White Mountains’s common shareholders’ equity (3)(4)
White Mountains’s common shareholders’ equity (3)(4)
343.6   343.6 
Noncontrolling interestsNoncontrolling interests(3.3)(165.9) (169.2)
Total equityTotal equity366.5 (160.1) 206.4 Total equity340.3 (165.9) 174.4 
Total liabilities and equityTotal liabilities and equity$1,097.0 $524.8 $(604.0)$1,017.8 Total liabilities and equity$1,167.5 $513.1 $(597.2)$1,083.4 
(1)    Under GAAP, the BAM Surplus Notes are classified as debt by the issuer.debt. Under U.S. Statutory accounting, they are classified as policyholders’ surplus.
(2)    Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S. Statutory accounting, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
(3)    HG GlobalGlobal’s preferred dividends payable to White Mountains are eliminated in White Mountains’s consolidated financial statements. For segment reporting, the HG GlobalGlobal’s preferred dividends payable to White Mountains included within the HG Global/BAM segment are eliminated against the offsetting receivable included within Other Operations, and therefore are added back toOperations.
(4)    HG Global’s intercompany debt is eliminated in White Mountains’s common shareholders’ equityconsolidated financial statements. For segment reporting, HG Global’s intercompany debt included within the HG Global/BAM segment.segment is eliminated against the offsetting receivable included within Other Operations.
5756


December 31, 2021December 31, 2022
MillionsMillionsHG GlobalBAMEliminations and Segment AdjustmentTotal SegmentMillionsHG GlobalBAMEliminations and Segment AdjustmentsTotal Segment
AssetsAssetsAssets
Fixed maturity investments, at fair valueFixed maturity investments, at fair value$461.7 $472.4 $— $934.1 Fixed maturity investments, at fair value$489.6 $420.3 $— $909.9 
Short-term investments, at fair valueShort-term investments, at fair value17.8 14.6 — 32.4 Short-term investments, at fair value42.0 23.9 — 65.9 
Total investmentsTotal investments479.5 487.0 — 966.5 Total investments531.6 444.2 — 975.8 
CashCash13.4 6.4 — 19.8 Cash13.2 5.0 — 18.2 
BAM Surplus NotesBAM Surplus Notes364.6 — (364.6)— BAM Surplus Notes340.0 — (340.0)— 
Accrued interest receivable on BAM Surplus NotesAccrued interest receivable on BAM Surplus Notes157.6 — (157.6)— Accrued interest receivable on BAM Surplus Notes157.9 — (157.9)— 
Insurance premiums receivableInsurance premiums receivable4.3 6.9 (4.3)6.9 Insurance premiums receivable4.3 6.6 (4.3)6.6 
Deferred acquisition costsDeferred acquisition costs62.7 33.1 (62.7)33.1 Deferred acquisition costs71.2 36.0 (71.2)36.0 
Other assetsOther assets2.1 16.6 (.2)18.5 Other assets7.0 15.1 (.2)21.9 
Total assetsTotal assets$1,084.2 $550.0 $(589.4)$1,044.8 Total assets$1,125.2 $506.9 $(573.6)$1,058.5 
LiabilitiesLiabilitiesLiabilities
BAM Surplus Notes(1)
BAM Surplus Notes(1)
$— $364.6 $(364.6)$— 
BAM Surplus Notes (1)
$— $340.0 $(340.0)$— 
Accrued interest payable on BAM Surplus Notes(2)
Accrued interest payable on BAM Surplus Notes(2)
— 157.6 (157.6)— 
Accrued interest payable on BAM Surplus Notes (2)
— 157.9 (157.9)— 
Preferred dividends payable to White Mountains(3)
Preferred dividends payable to White Mountains(3)
400.5 — — 400.5 
Preferred dividends payable to White Mountains (3)
341.4 — — 341.4 
Preferred dividends payable to non-controlling interests14.2 — — 14.2 
Preferred dividends payable to noncontrolling interestsPreferred dividends payable to noncontrolling interests12.5 — — 12.5 
Unearned insurance premiumsUnearned insurance premiums221.5 44.8 — 266.3 Unearned insurance premiums249.8 48.5 — 298.3 
DebtDebt146.5 — — 146.5 
Intercompany debt (4)
Intercompany debt (4)
6.0 — — 6.0 
Accrued incentive compensationAccrued incentive compensation1.1 23.6 — 24.7 Accrued incentive compensation1.3 26.7 — 28.0 
Other liabilitiesOther liabilities.5 83.4 (67.2)16.7 Other liabilities3.7 88.5 (75.7)16.5 
Total liabilitiesTotal liabilities637.8 674.0 (589.4)722.4 Total liabilities761.2 661.6 (573.6)849.2 
EquityEquityEquity
White Mountains’s common shareholders’ equity(4)White Mountains’s common shareholders’ equity(4)437.5 — — 437.5 White Mountains’s common shareholders’ equity(4)364.6 — — 364.6 
Non-controlling interests8.9 (124.0)— (115.1)
Noncontrolling interestsNoncontrolling interests(.6)(154.7)— (155.3)
Total equityTotal equity446.4 (124.0)— 322.4 Total equity364.0 (154.7)— 209.3 
Total liabilities and equityTotal liabilities and equity$1,084.2 $550.0 $(589.4)$1,044.8 Total liabilities and equity$1,125.2 $506.9 $(573.6)$1,058.5 
(1)    Under GAAP, the BAM Surplus Notes are classified as debt by the issuer.debt. Under U.S. Statutory accounting, they are classified as policyholders’ surplus.
(2)    Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S. Statutory accounting, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
(3)    HG GlobalGlobal’s preferred dividends payable to White Mountains are eliminated in White Mountains’s consolidated financial statements. For segment reporting, the HG GlobalGlobal’s preferred dividends payable to White Mountains included within the HG Global/BAM segment are eliminated against the offsetting receivable included within Other Operations, and therefore are added back toOperations.
(4)    HG Global’s intercompany debt is eliminated in White Mountains’s common shareholders’ equityconsolidated financial statements. For segment reporting, HG Global’s intercompany debt included within the HG Global/BAM segment.segment is eliminated against the offsetting receivable included within Other Operations.




5857


ArkArk/WM Outrigger
Ark is a specialty property and casualty insurance and reinsurance company that offers a wide range of niche insurance and reinsurance products, including property, marine & energy, specialty, accident & health and casualty. Ark underwrites select coverages through its two major subsidiaries in the United Kingdom and Bermuda.
The following table presents the components of pre-tax income (loss) included in White Mountains’s Arkthe Ark/WM Outrigger segment for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,
20232022
MillionsArkWM
Outrigger Re
EliminationsTotalArk
Direct written premiums$189.4 $ $ $189.4 $118.6 
Assumed written premiums61.8 6.0 (6.0)61.8 96.9 
Gross written premiums251.2 6.0 (6.0)251.2 215.5 
Ceded written premiums(26.2) 6.0 (20.2)(22.9)
Net written premiums$225.0 $6.0 $ $231.0 $192.6 
Earned insurance premiums$438.3 $60.6 $ $498.9 $346.1 
Net investment income13.9 3.0  16.9 4.9 
Net realized and unrealized investment gains (losses)(6.6)  (6.6)(14.4)
Other revenues3.6   3.6 6.6 
Total revenues449.2 63.6  512.8 343.2 
Losses and LAE258.5 7.3  265.8 213.7 
Acquisition expenses71.0 19.3  90.3 74.8 
General and administrative expenses -
   other underwriting
25.5   25.5 13.2 
General and administrative expenses - all other9.8 .1  9.9 11.0 
Change in fair value of contingent consideration17.0   17.0 2.7 
Interest expense5.5   5.5 3.7 
Total expenses387.3 26.7  414.0 319.1 
Pre-tax income (loss)$61.9 $36.9 $ $98.8 $24.1 
Nine Months Ended September 30,
Three Months Ended September 30,Nine Months Ended September 30,20232022
MillionsMillions2022202120222021MillionsArkWM
Outrigger Re
EliminationsTotalArk
Direct written premiumsDirect written premiums$727.1 $ $ $727.1 $563.8 
Assumed written premiumsAssumed written premiums939.6 108.4 (108.4)939.6 688.7 
Gross written premiumsGross written premiums1,666.7 108.4 (108.4)1,666.7 1,252.5 
Ceded written premiumsCeded written premiums(468.7) 108.4 (360.3)(246.0)
Net written premiumsNet written premiums$1,198.0 $108.4 $ $1,306.4 $1,006.5 
Earned insurance premiumsEarned insurance premiums$346.1 $213.4 $757.8 $435.8 Earned insurance premiums$971.9 $75.4 $ $1,047.3 $757.8 
Net investment incomeNet investment income4.9 .6 9.7 1.8 Net investment income33.5 7.7  41.2 9.7 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(14.4).3 (76.5)10.3 Net realized and unrealized investment gains (losses)35.9   35.9 (76.5)
Other revenuesOther revenues6.6 3.4 10.1 9.4 Other revenues(1.1)  (1.1)10.1 
Total revenuesTotal revenues343.2 217.7 701.1 457.3 Total revenues1,040.2 83.1  1,123.3 701.1 
Losses and LAELosses and LAE213.7 129.2 456.2 247.8 Losses and LAE573.2 7.9  581.1 456.2 
Insurance and reinsurance acquisition expenses74.8 53.7 174.9 124.4 
Acquisition expensesAcquisition expenses189.3 22.2  211.5 174.9 
General and administrative expenses - other underwritingGeneral and administrative expenses - other underwriting13.2 13.3 53.9 43.6 General and administrative expenses -
other underwriting
78.5   78.5 53.9 
General and administrative expenses - all otherGeneral and administrative expenses - all other13.7 8.5 25.9 40.8 General and administrative expenses - all other26.8 .2  27.0 21.0 
Change in fair value of contingent considerationChange in fair value of contingent consideration16.8   16.8 4.9 
Interest expenseInterest expense3.7 2.1 10.6 4.5 Interest expense15.7   15.7 10.6 
Total expensesTotal expenses319.1 206.8721.5461.1Total expenses900.330.3 930.6 721.5 
Pre-tax income (loss)Pre-tax income (loss)$24.1 $10.9 $(20.4)$(3.8)Pre-tax income (loss)$139.9 $52.8 $ $192.7 $(20.4)
58


For the years of account prior to the Ark Transaction, a significant proportion of the Syndicates’ underwriting capital was provided by TPC Providers using whole account reinsurance contracts with Ark’s corporate member. The TPC Providers’ participation in the Syndicates for the 2020 open year of account is 43% of the total net result of the Syndicates. For the years of account subsequent to the Ark Transaction, Ark is no longer using TPC Providers to provide underwriting capital for the Syndicates. During the first quarter of 2023, an RITC agreement was executed such that the outstanding loss and LAE reserves for claims arising out of the 2020 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 43%, were reinsured into the 2021 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 0%. Captions within Ark’s results of operations for the three and nine months ended September 30, 2022 are shown net of amounts relating to the TPC Providers’ share of the Syndicates’ results, including investment results.

ArkArk/WM Outrigger Results—Three Months Ended September 30, 20222023 versus Three Months Ended September 30, 20212022
The Ark/WM Outrigger segment’s combined ratio was 77% in the third quarter of 2023. The Ark/WM Outrigger segment reported gross written premiums of $251 million, net written premiums of $231 million and net earned premiums of $499 million in the third quarter of 2023. The Ark/WM Outrigger segment reported pre-tax income of $99 million in the third quarter of 2023.
Ark’s combined ratio was 81% in the third quarter of 2023 compared to 87% in the third quarter of 2022. Ark’s combined ratio in the third quarter of 2023 included 11 points of catastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to 21 points of catastrophe losses in the third quarter of 2022, driven primarily by losses from Hurricane Ian. Ark’s combined ratio in the third quarter 2023 included less than one point of net favorable prior year development. This compared to three points of net favorable prior year development in the third quarter of 2022, driven primarily by good claims experience across most classes including the property and specialty lines of business, predominantly from business underwritten in London.
Ark reported gross written premiums of $251 million, net written premiums of $225 million and net earned premiums of $438 million in the third quarter of 2023 compared to gross written premiums of $216 million, net written premiums of $193 million and net earned premiums of $346 million in the third quarter of 2022 compared to gross written premiums2022. Ark reported pre-tax income of $162 million, net written premiums of $121 million and net earned premiums of $213$62 million in the third quarter of 2021. Premium growth at Ark has been supported by favorable market conditions across most classes with general inflationary concerns, capacity withdrawal in catastrophe lines, and the ongoing conflict in Ukraine driving positive rate momentum.
Ark reported pre-tax income of2023 compared to $24 million in the third quarter of 2022 compared to $112022. Ark’s results included net realized and unrealized investment losses of $7 million in the third quarter of 2021. Ark’s pre-tax income for the third quarter of 2022 included $14 million of net realized and unrealized investment losses,2023, driven primarily by unrealized losses on fixed income securities and the impact of foreign currency on its investment portfolio, compared to $0.3$14 million of net realized and unrealized investment gains in the third quarter of 2021.
Ark’s GAAP combined ratio was 87% in the third quarter of 2022, driven primarily by net unrealized investment losses on its fixed income portfolio and the impact of foreign currency on its investment portfolio. Ark’s results also included $17 million for the increase in the fair value of its contingent consideration liabilities compared to 92%$3 million in the third quarter of 2021. The GAAP2022.
Ark has exposure to the ongoing conflict within the geographical area of Israel and Gaza, primarily through its specialty (political risk/violence), marine and accident & health lines of business. At this time, Ark does not expect losses from the conflict to have a material impact on its results of operations or financial condition. However, losses could increase depending upon the scope and duration of the conflict.
WM Outrigger Re’s combined ratio for the third quarter of 2022 included 21 points of natural catastrophe losses, driven primarily by Hurricane Ian, compared to 23 points of natural catastrophe losseswas 44% in the third quarter of 2021, driven primarily by Hurricane Ida2023. WM Outrigger Re reported gross and European floods. Catastrophe losses for the third quarternet written premiums of 2022 included $51$6 million related to Hurricane Ian on aand net basis after reinstatement premiums. The GAAP combined ratio for the third quarterearned premiums of 2022 included three points of favorable prior year development, driven primarily by the property and accident & health and specialty reserving lines of business, predominantly from business underwritten in London. This compared to six points of favorable prior year development$61 million in the third quarter of 2021, driven primarily by2023. WM Outrigger Re’s catastrophe premiums are earned in proportion to the property and accident & health reserving line of business.
Ark’s adjusted combined ratio, which adds back amounts attributable to TPC Providers, was 86%insurance protection provided.WM Outrigger Re reported pre-tax income $37 million in the third quarter of 2022 compared to 89% in the third quarter of 2021. The adjusted combined ratio for the third quarter of 2022 and 2021 both included 21 points of natural catastrophe losses. The adjusted combined ratio for the third quarter of 2022 included four points of favorable prior year development compared to six points of favorable prior year development in the third quarter of 2021. The underlying drivers of year-over-year changes were the same as those impacting the GAAP combined ratio.2023.

59


The following table presents Ark’s lossthe Ark/WM Outrigger segment’s insurance premiums, insurance expenses and LAE, insurance acquisition expense, other underwriting expense and combined ratios on both a GAAP-basis and an adjusted basis, which adds back amounts attributable to TPC Providers, for the three and nine months ended September 30, 20222023 and 2021:2022:

Three Months Ended September 30,
Three Months Ended September 30, 202220232022
$ in Millions$ in MillionsGAAPTPC Providers’ Share
Adjusted (1)
$ in MillionsArkWM Outrigger ReEliminationsTotalArk
Insurance premiums:Insurance premiums:Insurance premiums:
Gross written premiumsGross written premiums$215.5 $ $215.5 Gross written premiums$251.2 $6.0 $(6.0)$251.2 $215.5 
Net written premiumsNet written premiums$192.6 $2.1 $194.7 Net written premiums$225.0 $6.0 $ $231.0 $192.6 
Net earned premiumsNet earned premiums$346.1 $3.3 $349.4 Net earned premiums$438.3 $60.6 $ $498.9 $346.1 
Insurance expenses:Insurance expenses:Insurance expenses:
Loss and loss adjustment expensesLoss and loss adjustment expenses$213.7 $(1.5)$212.2 Loss and loss adjustment expenses$258.5 $7.3 $ $265.8 $213.7 
Insurance and reinsurance acquisition expenses74.8  74.8 
Other underwriting expenses13.2 .9 14.1 
Acquisition expensesAcquisition expenses71.0 19.3  90.3 74.8 
Other underwriting expenses (1)
Other underwriting expenses (1)
25.5   25.5 13.2 
Total insurance expensesTotal insurance expenses$301.7 $(.6)$301.1 Total insurance expenses$355.0 $26.6 $ $381.6 $301.7 
Ratios:
Insurance ratios:Insurance ratios:
Loss and loss adjustment expenseLoss and loss adjustment expense61.7 %60.7 %Loss and loss adjustment expense59.0 %12.0 % %53.3 %61.7 %
Insurance and reinsurance acquisition expense21.6 21.4 
Acquisition expenseAcquisition expense16.2 31.8  18.1 21.6 
Other underwriting expenseOther underwriting expense3.8 4.0 Other underwriting expense5.8   5.1 3.8 
Combined RatioCombined Ratio87.1 %86.1 % Combined Ratio81.0 %43.8 % %76.5 %87.1 %
(1)See “NON-GAAP FINANCIAL MEASURES” on page 74.Included within general and administrative expenses

Three Months Ended September 30, 2021
$ in MillionsGAAPTPC Providers’ Share
Adjusted (1)
Insurance premiums:
Gross written premiums$162.4 $— $162.4 
Net written premiums$120.9 $2.0 $122.9 
Net earned premiums$213.4 $18.2 $231.6 
Insurance expenses:
Loss and loss adjustment expenses$129.2 $9.0 $138.2 
Insurance and reinsurance acquisition expenses53.7 — 53.7 
Other underwriting expenses13.3 .4 13.7 
Total insurance expenses$196.2 $9.4 $205.6 
Ratios:
Loss and loss adjustment expense60.5 %59.7 %
Insurance and reinsurance acquisition expense25.2 23.2 
Other underwriting expense6.2 5.9 
Combined Ratio91.9 %88.8 %
(1) See “NON-GAAP FINANCIAL MEASURES” on page 74.


60


Gross Written Premiums
Gross written premiums increased 33%17% to $216$251 million in the third quarter of 20222023 compared to the third quarter of 2021,2022, with risk adjusted rate change up approximately 6%11% year over year. The increase in gross written premiums was driven primarily by the property line of business for both insurance and reinsurance across London and Bermuda, resulting from favorable market conditions,reflecting the rate environment and additional capacity provided by Outrigger Re Ltd., as well as increased writingsthe marine & energy line of business. The risk adjusted rate change on the Outrigger Re Ltd. portfolio of global property reinsurance was 17% in specialty lines, predominantly in cyber.the third quarter of 2023. The following table presents Ark’sthe Ark/WM Outrigger segment’s gross written premiums by line of business for the three months ended September 30, 20222023 and 2021:2022:

Three Months Ended September 30,Three Months Ended September 30,
MillionsMillions20222021Millions20232022
PropertyProperty$102.6 $74.7 Property$123.9 $102.6 
Marine & EnergyMarine & Energy49.0 36.0 
SpecialtySpecialty43.5 32.0 Specialty39.1 43.5 
Marine & Energy36.0 29.5 
CasualtyCasualty21.4 17.3 Casualty27.3 21.4 
Accident & HealthAccident & Health12.0 8.9 Accident & Health11.9 12.0 
Total Gross Written Premium Total Gross Written Premium$215.5 $162.4  Total Gross Written Premium$251.2 $215.5 

Ark
60


Ark/WM Outrigger Results— Nine Months Ended September 30, 20222023 versus Nine Months Ended September 30, 20212022
The Ark/WM Outrigger segment’s combined ratio was 83% in the first nine months of 2023.The Ark/WM Outrigger segment reported gross written premiums of $1,667 million, net written premiums of $1,306 million and net earned premiums of $1,047 million in the first nine months of 2023. The Ark/WM Outrigger segment reported pre-tax income of $193 million in the first nine months of 2023.
Ark’s combined ratio was 87% in the first nine months of 2023, compared to 90% in the first nine months of 2022. Ark’s combined ratio in the first nine months of 2023 included seven points of catastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to 17 points of catastrophe losses in the first nine months of 2022, driven primarily by losses from Hurricane Ian and the conflict in Ukraine. Ark’s combined ratio in the first nine months of 2023 also included two points of net unfavorable prior year development, driven primarily by Winter Storm Elliot and three large claims in the property and marine & energy lines of business, compared to five points of net favorable prior year development in the first nine months of 2022, driven primarily by good claims experience across most classes including the property and specialty lines of business, predominantly from business underwritten in London.
Ark reported gross written premiums of $1,667 million, net written premiums of $1,198 million and net earned premiums of $972 million in the first nine months of 2023, compared to gross written premiums of $1,253 million, net written premiums of $1,007 million and net earned premiums of $758 million in the first nine months of 2022 compared to gross written premiums2022. Ark reported pre-tax income (loss) of $895 million, net written premiums of $726 million and net earned premiums of $436$140 million in the first nine months of 2021. Premium growth at Ark has been supported2023 compared to $(20) million in the first nine months of 2022. Ark’s results included net realized and unrealized investment gains (losses) of $36 million in the first nine months of 2023, driven primarily by favorable market conditions across most classes with inflationary concerns, capacity withdrawal in catastrophe lines, and the ongoing conflict in Ukraine driving positive rate momentum.
Ark reported pre-tax loss of $20net unrealized investment gains on other long-term investments, compared to $(77) million in the first nine months of 2022, compared to $4 million in the first nine months of 2021. Ark’s pre-tax loss for the first nine months of 2022 included $77 million ofdriven primarily by net realized and unrealized investment losses driven primarily by unrealized losses on its fixed income securitiesportfolio and the impact of foreign currency on its investment portfolio,portfolio. Ark’s results also included $17 million for the increase in the fair value of its contingent consideration liabilities compared to $10$5 million of net realized and unrealized investment gains in the third quarter of 2021. Ark’s pre-tax loss for the first nine months of 2021 also reflected $25 million of transaction expenses related to the Ark Transaction.
Ark’s GAAP combined ratio was 90% in the first nine months of 2022 compared to 95%2022.
WM Outrigger Re’s combined ratio was 40% in the first nine months of 2021. The GAAP combined ratio for the first nine months2023. WM Outrigger Re reported gross and net written premiums of 2022 included 13 points$108 million and net earned premiums of natural catastrophe losses, driven primarily by Hurricane Ian. This compared to 16 points of natural catastrophe losses$75 million in the first nine months of 2021, driven primarily by Hurricane Ida, Winter Storm Uri and European floods. Catastrophe losses for the first nine months of 2022 included $512023. WM Outrigger Re reported pre-tax income $53 million related to Hurricane Ian on a net basis after reinstatement premiums. The GAAP combined ratio for the first nine months of 2022 also included four points related to the ongoing conflict in Ukraine within the specialty and marine & energy lines of business. The GAAP combined ratio for the first nine months of 2022 included five points of favorable prior year development, driven primarily by the property and accident & health and specialty reserving lines of business, predominantly from business underwritten in London. This compared to five points of prior year favorable development in the first nine months to 2021, driven primarily by the property and accident & health reserving line of business.
Ark’s adjusted combined ratio, which adds back amounts attributable to TPC Providers, was 90% in the first nine months of 2022 compared to 93% in the first nine months of 2021. The adjusted combined ratio for the first nine months of 2022 included 13 points of natural catastrophe losses compared to 16 points of natural catastrophe losses in the first nine months of 2021. The adjusted combined ratio for the first nine months of 2022 also included four points related to the ongoing conflict in Ukraine. The adjusted combined ratio for the first nine months of 2022 and 2021 both included five points of favorable prior year development. The underlying drivers of year-over-year changes were the same as those impacting the GAAP combined ratio.


61


2023.
The following table presents Ark’s lossthe Ark/WM Outrigger segment’s insurance premiums, insurance expenses and loss adjustment expense, insurance acquisition expense, other underwriting expense and combined ratios on both a GAAP-basis and an adjusted basis, which adds back amounts ceded to TPC Providers, for the nine months ended September 30, 20222023 and 2021:2022:

Nine Months Ended September 30,
Nine Months Ended September 30, 202220232022
$ in Millions$ in MillionsGAAPTPC Providers’ Share
Adjusted (1)
$ in MillionsArkWM Outrigger ReEliminationsTotalArk
Insurance premiums:Insurance premiums:Insurance premiums:
Gross written premiumsGross written premiums$1,252.5 $ $1,252.5 Gross written premiums$1,666.7 $108.4 $(108.4)$1,666.7 $1,252.5 
Net written premiumsNet written premiums$1,006.5 $3.4 $1,009.9 Net written premiums$1,198.0 $108.4 $ $1,306.4 $1,006.5 
Net earned premiumsNet earned premiums$757.8 $9.2 $767.0 Net earned premiums$971.9 $75.4 $ $1,047.3 $757.8 
Insurance expenses:Insurance expenses:Insurance expenses:
Loss and loss adjustment expensesLoss and loss adjustment expenses$456.2 $1.9 $458.1 Loss and loss adjustment expenses$573.2 $7.9 $ $581.1 $456.2 
Insurance and reinsurance acquisition expenses174.9  174.9 
Other underwriting expenses53.9 2.7 56.6 
Acquisition expensesAcquisition expenses189.3 22.2  211.5 174.9 
Other underwriting expenses (1)
Other underwriting expenses (1)
78.5   78.5 53.9 
Total insurance expensesTotal insurance expenses$685.0 $4.6 $689.6 Total insurance expenses$841.0 $30.1 $ $871.1 $685.0 
Ratios:
Insurance ratios:Insurance ratios:
Loss and loss adjustment expenseLoss and loss adjustment expense60.2 %59.7 %Loss and loss adjustment expense59.0 %10.5 % %55.5 %60.2 %
Insurance and reinsurance acquisition expense23.1 22.8 
Acquisition expenseAcquisition expense19.5 29.4  20.2 %23.1 
Other underwriting expenseOther underwriting expense7.1 7.4 Other underwriting expense8.1   7.5 %7.1 
Combined RatioCombined Ratio90.4 %89.9 % Combined Ratio86.6 %39.9 % %83.2 %90.4 %
(1) See “NON-GAAP FINANCIAL MEASURES” on page 74.

Nine Months Ended September 30, 2021
$ in MillionsGAAPTPC Providers’ Share
Adjusted (1)
Insurance premiums:
Gross written premiums$895.0 $— $895.0 
Net written premiums$725.5 $(5.9)$719.6 
Net earned premiums$435.8 $65.0 $500.8 
Insurance expenses:
Loss and loss adjustment expenses$247.8 $47.2 $295.0 
Insurance and reinsurance acquisition expenses124.4 — 124.4 
Other underwriting expenses43.6 1.6 45.2 
Total insurance expenses$415.8 $48.8 $464.6 
Ratios:
Loss and loss adjustment expense56.9 %58.9 %
Insurance and reinsurance acquisition expense28.5 24.8 
Other underwriting expense10.0 9.0 
Combined Ratio95.4 %92.7 %
(1) See “NON-GAAP FINANCIAL MEASURES” on page 74.


6261


Gross Written Premiums
Gross written premiums increased 40%33% to $1,253$1,667 million in the first nine months of 2022,2023 compared to the first nine monthsthird quarter of 2021,2022, with risk adjusted rate change up approximately 9%. Ark’s premium growth has impacted almost all lines16% year over year. The increase in gross written premiums was driven primarily by the property line of business supportedfor both insurance and reinsurance across London and Bermuda, reflecting the rate environment and additional capacity provided by Outrigger Re Ltd., as well as the build out of the Bermuda platform launched in 2021specialty and favorable market conditions, notably within the property and specialtymarine & energy lines of business. The risk adjusted rate change on the Outrigger Re Ltd. portfolio of global property reinsurance was 36% in the first nine months of 2023. The following table presents Ark’sthe Ark/WM Outrigger segment’s gross written premiums by line of business for the first nine months ended September 30, 20222023 and 2021:2022:

For the Nine Months EndedNine Months Ended September 30,
MillionsMillionsSeptember 30, 2022September 30, 2021Millions20232022
PropertyProperty$521.7 $355.0 Property$809.4 $521.7 
SpecialtySpecialty327.2 210.5 Specialty381.9 327.2 
Marine & EnergyMarine & Energy271.2 219.7 Marine & Energy332.3 271.2 
CasualtyCasualty72.2 48.1 Casualty84.2 72.2 
Accident & HealthAccident & Health60.2 61.7 Accident & Health58.9 60.2 
Total Gross Written Premium Total Gross Written Premium$1,252.5 $895.0  Total Gross Written Premium$1,666.7 $1,252.5 

Catastrophe Risk ManagementArk/WM Outrigger Balance Sheets
The following tables present amounts from Ark has exposure to losses caused by unpredictable catastrophic events including natural and other disasters suchWM Outrigger Re that are contained within White Mountains’s consolidated balance sheet as hurricanes, windstorms, earthquakes, floods, wildfires, tornadoes, tsunamis,of September 30, 2023 and severe winter weather all over the world. Catastrophes can also include large losses driven by public health crises, terrorist attacks, explosions, infrastructure failures, cyber-attacks and armed conflicts. The extentDecember 31, 2022:
September 30, 2023
MillionsArkWM Outrigger ReEliminations and Segment AdjustmentsTotal
Assets
Fixed maturity investments, at fair value$775.0 $ $ $775.0 
Common equity securities, at fair value384.9   384.9 
Short-term investments, at fair value616.7 233.3  850.0 
Other long-term investments416.6   416.6 
Total investments2,193.2 233.3  2,426.5 
Cash129.5 .1  129.6 
Reinsurance recoverables579.4  (41.0)538.4 
Insurance premiums receivable781.6 58.3 (58.3)781.6 
Deferred acquisition costs172.8 5.9  178.7 
Goodwill and other intangible assets292.5   292.5 
Other assets66.9   66.9 
Total assets$4,215.9 $297.6 $(99.3)$4,414.2 
Liabilities
Loss and loss adjustment expense reserves$1,571.8 $8.0 $(8.0)$1,571.8 
Unearned insurance premiums984.6 33.0 (33.0)984.6 
Debt184.6   184.6 
Reinsurance payable204.6  (58.3)146.3 
Contingent consideration62.1   62.1 
Other liabilities132.0   132.0 
Total liabilities3,139.7 41.0 (99.3)3,081.4 
Equity
White Mountains’s common shareholders’ equity796.4 256.6  1,053.0 
Noncontrolling interests279.8   279.8 
Total equity1,076.2 256.6  1,332.8 
Total liabilities and equity$4,215.9 $297.6 $(99.3)$4,414.2 
62


December 31, 2022
MillionsArk
WM Outrigger Re (1)
Eliminations and Segment AdjustmentsTotal
Assets
Fixed maturity investments, at fair value$772.8 $— $— $772.8 
Common equity securities, at fair value334.6 — — 334.6 
Short-term investments, at fair value280.9 203.7 — 484.6 
Other long-term investments373.6 — — 373.6 
Total investments1,761.9 203.7 — 1,965.6 
Cash100.0 1.5 — 101.5 
Reinsurance recoverables595.3 — — 595.3 
Insurance premiums receivable544.1 — — 544.1 
Deferred acquisition costs127.2 — — 127.2 
Goodwill and other intangible assets292.5 — — 292.5 
Other assets65.2 — — 65.2 
Total assets$3,486.2 $205.2 $— $3,691.4 
Liabilities
Loss and loss adjustment expense reserves$1,296.5 $— $— $1,296.5 
Unearned insurance premiums623.2 — — 623.2 
Debt183.7 — — 183.7 
Reinsurance payable251.1 — — 251.1 
Contingent consideration45.3 — — 45.3 
Other liabilities121.1 1.2 — 122.3 
Total liabilities2,520.9 1.2 — 2,522.1 
Equity
White Mountains’s common shareholders’ equity717.4 204.0 — 921.4 
Noncontrolling interests247.9 — — 247.9 
Total equity965.3 204.0 — 1,169.3 
Total liabilities and equity$3,486.2 $205.2 $— $3,691.4 
(1) Amounts as of a catastrophe loss is a function of both the severity of the event and total amount of insured exposureDecember 31, 2022 for WM Outrigger Re have been reclassified from Other Operations to the event,Ark/WM Outrigger segment to conform to the presentation as well as the coverage provided to customers.
Ark seeks to manage its exposure to catastrophic losses by limiting and monitoring the aggregate insured value of policies in geographic areas with exposure to catastrophic events and by buying reinsurance. To manage, monitor and analyze insured values and potential losses, Ark utilizes proprietary and third-party catastrophe management software to estimate potential losses for many different catastrophe scenarios.
With peak U.S. windstorm season substantially over, Ark’s near-term largest probable maximum loss natural catastrophe scenario on a per occurrence basis at a 1-in-250-year return period is U.S. earthquake. The October 2022 net after-tax estimated impact of a 1-in-250-year return period U.S. earthquake loss represents roughly 25% of Ark’s total tangible capital (shareholders equity and subordinated debt). This net impact is after income taxes, reinstatement premiums, amounts ceded to third-party reinsurers and amounts attributable to TPC Providers.
In addition, Ark also has loss exposures to other global events including, but not limited to, Japanese earthquakes, Japanese windstorms, European windstorms, Southeast U.S. windstorms and U.S. wildfires. Outside of natural catastrophe losses, Ark has exposure to non-natural or man-made large losses. The current largest exposures are cyber, offshore energy production platforms, terrorism events and political risk.September 30, 2023.


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Kudu

Kudu provides capital solutions for boutique asset and wealth managers for a variety of purposes including generational ownership transfers, management buyouts, acquisition and growth finance, and legacy partner liquidity. Kudu also provides strategic assistance to investees from time to time.
As of September 30, 2022,2023, Kudu had deployed a total of $711$828 million, including transaction costs, in 2023 asset and wealth management firms globally, including onethree that washave been exited. As of September 30, 2022,2023, the asset and wealth management firms had combined assets under management of approximately $67$75 billion, spanning a range of asset classes, including real estate, wealth management, hedge funds, private equity and alternative credit strategies.
As a resultDuring 2023, White Mountains committed an incremental $150 million of equity capital to Kudu for the purposes of future deployments. Kudu Transaction, White Mountains’s basic ownershipexpects to begin drawing on this commitment in the fourth quarter of Kudu decreased from 99.1% to 89.3%. See 2023.
Note 2 — “Significant Transactions.”
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The following table presents the components of GAAP net income, EBITDA and adjusted EBITDA included in White Mountains’sthe Kudu segment for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Net investment incomeNet investment income$14.8 $9.5 $41.2 $26.1 Net investment income$15.1 $14.8 $44.0 $41.2 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)41.1 18.9 45.8 62.5 Net realized and unrealized investment gains (losses)11.2 41.1 45.4 45.8 
Other revenues .1  .2 
Total revenuesTotal revenues55.9 28.5 87.0 88.8 Total revenues26.3 55.9 89.4 87.0 
General and administrative expensesGeneral and administrative expenses4.5 3.3 10.2 9.0 General and administrative expenses4.5 4.5 12.3 10.4 
Amortization of other intangible assets — .2 .2 
Interest expenseInterest expense4.2 1.9 10.3 9.2 Interest expense5.5 4.2 15.5 10.3 
Total expensesTotal expenses8.7 5.2 20.7 18.4 Total expenses10.0 8.7 27.8 20.7 
GAAP pre-tax income (loss)GAAP pre-tax income (loss)47.2 23.3 66.3 70.4 GAAP pre-tax income (loss)16.3 47.2 61.6 66.3 
Income tax (expense) benefitIncome tax (expense) benefit(16.6)(7.9)(21.1)(25.4)Income tax (expense) benefit(4.6)(16.6)(13.9)(21.1)
GAAP net income (loss)GAAP net income (loss)30.6 15.4 45.2 45.0 GAAP net income (loss)11.7 30.6 47.7 45.2 
Add back:Add back:Add back:
Interest expenseInterest expense4.2 1.9 10.3 9.2 Interest expense5.5 4.2 15.5 10.3 
Income tax expense (benefit)Income tax expense (benefit)16.6 7.9 21.1 25.4 Income tax expense (benefit)4.6 16.6 13.9 21.1 
General and administrative expenses - depreciationGeneral and administrative expenses - depreciation —  — General and administrative expenses - depreciation.1 — .1 — 
Amortization of other intangible assetsAmortization of other intangible assets — .2 .2 Amortization of other intangible assets — .2 .2 
EBITDA (1)(2)
EBITDA (1)(2)
51.4 25.2 76.8 79.8 
EBITDA (1)(2)
21.9 51.4 77.4 76.8 
Exclude:Exclude:Exclude:
Net realized and unrealized investment (gains) lossesNet realized and unrealized investment (gains) losses(41.1)(18.9)(45.8)(62.5)Net realized and unrealized investment (gains) losses(11.2)(41.1)(45.4)(45.8)
Non-cash equity-based compensation expenseNon-cash equity-based compensation expense .2 .1 .4 Non-cash equity-based compensation expense —  .1 
Transaction expensesTransaction expenses1.2 .9 1.4 .9 Transaction expenses1.1 1.2 2.4 1.4 
Adjusted EBITDA (1)(2)
Adjusted EBITDA (1)(2)
$11.5 $7.4 $32.5 $18.6 
Adjusted EBITDA (1)(2)
$11.8 $11.5 $34.4 $32.5 
(1)Net investment income includes revenues from participation contracts and income from short-term and other long-term investments.
(2) See “NON-GAAP FINANCIAL MEASURES” on page 74.74.

The following table presents the changes in the fair value of Kudu’s Participation Contracts:
Three Months Ended September 30,Nine Months Ended September 30,
Millions2023202220232022
Beginning balance of Kudu’s Participation Contracts$737.1 $727.0 $695.9 $669.5 
Contributions to Participation Contracts26.7 45.1 144.1 (1)97.9 
Proceeds from Participation Contracts sold — (110.4)(1)— 
Net realized and unrealized investment gains (losses) on Participation Contracts sold and pending sale (2)
(.6)16.3 (1.8)40.7 
Net unrealized investment gains (losses) on Participation Contracts - all other (3)
12.1 24.8 47.5 5.1 
Ending balance of Kudu’s Participation Contracts (4)
$775.3 $813.2 $775.3 $813.2 
(1) Includes $35.8 of non-cash contributions to (proceeds from) Participation Contracts.
(2) Includes net realized and unrealized investment gains (losses) recognized from Participation Contracts beginning in the quarter a contract is classified as pending sale.
(3) Includes net unrealized investment gains (losses) recognized from (i) ongoing Participation Contracts and (ii) Participation Contracts prior to classification as pending sale.
(4) As of September 30, 2023, Kudu’s other long-term investments also include $5.4 related to a private debt instrument.
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Kudu Results—Three Months Ended September 30, 20222023 versus Three Months Ended September 30, 20212022
Kudu reported total revenues of $26 million, pre-tax income of $16 million and adjusted EBITDA of $12 million in the third quarter of 2023 compared to total revenues of $56 million, pre-tax income of $47 million and adjusted EBITDA of $12 million in the third quarter of 2022 compared to total2022. Total revenues, of $29 million, pre-tax income of $23 million and adjusted EBITDA included $15 million of $7net investment income in both the third quarter of 2023 and 2022. Net investment income in the third quarter of 2023 compared to the third quarter of 2022 included higher dividends from existing Participation Contracts, due to growth in assets under management, as well as the impact of new deployments made subsequent to September 30, 2022, offset by a decrease in dividends due to sale transactions. Total revenues and pre-tax income also included $11 million of net realized and unrealized investment gains in the third quarter of 2023 compared to $41 million in the third quarter of 2021. Total revenues and pre-tax income in the third quarter of 2022 included $41 million of net realized and unrealized gains on Kudu’s Participation Contracts compared to $19 million in the third quarter of 2021.2022. Net realized and unrealized investment gains on Kudu’s Participation Contracts in the third quarter of 2022 were driven primarilypositively impacted by $59 million of increases in the fair value of two Participation Contracts resulting from pending sale transactions, partially offset by declines in assets under management at several managers with public equity exposure and unrealized foreign currency losses. However, Kudu’s Participation Contracts performed well relative to market benchmarks in a volatile quarter. Total revenues, pre-tax income and adjusted EBITDA in the third quarter of 2022 also included $15 million of net investment income compared to $10 million in the third quarter of 2021. The increase in net investment income was driven primarily by amounts earned from the $182 million in new deployments, including $2 million of transaction costs, that Kudu made subsequent to September 30, 2021.sale.

Kudu Results—Nine Months Ended September 30, 20222023 versus Nine Months Ended September 30, 20212022
Kudu reported total revenues of $89 million, pre-tax income of $62 million and adjusted EBITDA of $34 million in the first nine months of 2023, compared to total revenues of $87 million, pre-tax income of $66 million and adjusted EBITDA of $33 million in the first nine months of 2022 compared to total2022. Total revenues, of $89 million, pre-tax income of $70 million and adjusted EBITDA included $44 million of $19net investment income in the first nine months of 2023 compared to $41 million in the first nine months of 2021. Total revenues and pre-tax2022. The increase in net investment income in the first nine months of 2023 compared to the first nine months of 2022 was driven primarily by amounts earned from new deployments that Kudu made during 2022 and 2023, partially offset by a decrease in dividends due to sale transactions. Total revenues and pre-tax income also included $46$45 million of net realized and unrealized investment gains in the first nine months of 2023, driven by positive returns on Kudu’sexisting Participation Contracts, compared to $63$46 million in the first nine months of 2021. Net realized and unrealized gains on Kudu’s Participation Contracts in2022, driven by the first nine months of 2022 were driven primarily by $92 million of increases in the fair value ofpositive impact from two Participation Contracts resulting from pending sale transactions, partially offset by declines in assets under management at several managers with public equity exposure and unrealized foreign currency losses. Total revenues, pre-tax income and adjusted EBITDA in the first nine months of 2022 also included $41 million of net investment income compared to $26 million in the first nine months of 2021. The increase in net investment income was driven primarily by amounts earned from $324 million in new deployments, including $3 million of transaction costs, that Kudu made in 2022 and 2021.sale.

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Other Operations

The following table presents the components of pre-tax income (loss) included in White Mountains’s Other Operations for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2022202120222021Millions2023202220232022
Net investment incomeNet investment income$8.5 $5.0 $13.6 $16.1 Net investment income$8.0 $8.5 $22.0 $13.6 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(17.3)15.3 2.8 34.0 Net realized and unrealized investment gains (losses)8.0 (17.3)125.8 2.8 
Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(18.6)(396.8)(113.3)(325.5)Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(46.8)(18.6)(38.9)(113.3)
Commission revenuesCommission revenues3.2 2.4 8.7 7.0 Commission revenues3.5 3.2 10.0 8.7 
Other revenuesOther revenues33.0 28.1 89.6 57.6 Other revenues15.2 33.0 67.1 89.6 
Total revenuesTotal revenues8.8 (346.0)1.4 (210.8)Total revenues(12.1)8.8 186.0 1.4 
Cost of salesCost of sales25.0 24.0 68.8 45.9 Cost of sales8.0 25.0 33.5 68.8 
General and administrative expensesGeneral and administrative expenses39.9 14.4 118.9 79.4 General and administrative expenses42.2 41.3 130.7 122.1 
Amortization of other intangible assets1.4 2.0 3.2 2.9 
Interest expenseInterest expense.6 .4 1.2 1.1 Interest expense.9 .6 2.9 1.2 
Total expensesTotal expenses66.9 40.8 192.1 129.3 Total expenses51.1 66.9 167.1 192.1 
Pre-tax income (loss)Pre-tax income (loss)$(58.1)$(386.8)$(190.7)$(340.1)Pre-tax income (loss)$(63.2)$(58.1)$18.9 $(190.7)
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Other Operations Results—Three Months Ended September 30, 20222023 versus Three Months Ended September 30, 20212022
White Mountains’s Other Operations reported pre-tax loss of $63 million in the third quarter of 2023 compared to $58 million in the third quarter of 2022 compared to $387 million in the third quarter of 2021.2022. White Mountains’s Other Operations reported net unrealized investment losses from its investment in MediaAlpha of $47 million in the third quarter of 2023 compared to $19 million in the third quarter of 2022 compared to $397 million in the third quarter of 2021.2022. Excluding MediaAlpha, White Mountains’s Other Operations reported net realized and unrealized investment gains (losses) of $8 million in the third quarter of 2023 compared to $(17) million in the third quarter of 2022 compared to $15 million2022. The net realized and unrealized investment gains in the third quarter of 2021,2023 were driven primarilyby gains from other long-term investments, substantially offset by losses from common equity securities and the fixed income portfolio, while the results in the third quarter of 2022 were driven by losses in the fixed income portfolio, due to rising interest rates in the third quarter of 2022common equity securities and gains on other long-term investments in the third quarter of 2021.investments. White Mountains’s Other Operations reported net investment income of $8 million in the third quarter of 2023 compared to $9 million in the third quarter of 2022 compared to $5 million in the third quarter of 2021, driven primarily by higher yields and an increase in the asset base of short-term investments and fixed maturity investments within Other Operations in the third quarter of 2022 compared to the third quarter of 2021.2022. See Summary of Investment Results on page 66.67.
White Mountains’s Other Operations reported $33$15 million of other revenues in the third quarter of 20222023 compared to $28$33 million in the third quarter of 2021.2022. White Mountains’s Other Operations reported $25$8 million of cost of sales in the third quarter of 20222023 compared to $24$25 million in the third quarter of 2021.2022. The increasedecreases in other revenues wasand cost of sales were driven primarily by a recent acquisitionssale within Other Operations.
White Mountains’s Other Operations reported general and administrative expenses of $40$42 million in the third quarter of 20222023 compared to $14$41 million in the third quarter of 2021. The increase2022.
White Mountains’s Other Operations includes its investment in general and administrative expensesPassportCard/DavidShield, which has operations, including its principal executive office, in Israel. White Mountains is monitoring the third quarterongoing conflict in Israel but does not expect that any effect on PassportCard/DavidShield will have a material impact on White Mountains’s results of 2022 compared to the third quarter of 2021 was driven by higher incentive compensation costs, primarily in connection with the NSM Transaction and a higher share price.operations or financial condition.

Other Operations Results—Nine Months Ended September 30, 20222023 versus Nine Months Ended September 30, 20212022
White Mountains’s Other Operations reported pre-tax lossincome (loss) of $191$19 million in the first nine months of 20222023, compared to $340$(191) million in the first nine months of 2021.2022. White Mountains’s Other Operations reported net realized andresults included unrealized investment losses from its investment in MediaAlpha of $39 million in the first nine months of 2023 compared to $113 million in the first nine months of 2022 compared to $3262022. Excluding MediaAlpha, White Mountains’s Other Operations results included net realized and unrealized investment gains of $126 million in the first nine months of 2021. Excluding MediaAlpha, White Mountains’s Other Operations reported net realized and unrealized investment gains of2023 compared to $3 million in the first nine months of 2022. The net realized and unrealized investment gains for the first nine months of 2023 were driven by gains from other long-term investments and common equity securities, partially offset by losses from the fixed income portfolio, while the results for the first nine months of 2022 compared to $34were driven by gains from other long-term investments, partially offset by losses in the fixed income portfolio and common equity securities. White Mountains’s Other Operations results included net investment income of $22 million in the first nine months of 2021. White Mountains’s Other Operations reported net investment income of2023 compared to $14 million in the first nine months of 2022 compared to $16 million in the first nine months of 2021, driven primarily by lower distributions from private equity funds in the first nine months of 2022 compared to the first nine months of 2021.2022. See Summary of Investment Results on page 66.67.
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White Mountains’s Other Operations reported $90$67 million of other revenues in the first nine months of 20222023 compared to $58$90 million in the first nine months of 2021.2022. Other revenues in the first nine months of 2023 included a transaction gain from a recent sale within Other Operations, which was more than offset by a reduction in operating revenues for the sold entity. White Mountains’s Other Operations reported $69$34 million of cost of sales in the first nine months of 20222023 compared to $46$69 million in the first nine months of 2021.2022. The increasesdecrease in other revenues and cost of sales werewas driven primarily by the recent acquisitionssale within Other Operations.
White Mountains’s Other Operations reported general and administrative expenses of $119$131 million in the first nine months of 20222023 compared to $79$122 million in the first nine months of 2021.2022. The increase in general and administrative expenses in the first nine months of 20222023 compared to the first nine months of 20212022 was driven primarily by higher incentive compensation costs, primarilytwo acquisitions within Other Operations in connection with the NSM Transaction andsecond half of 2022, partially offset by a higher share price.decrease due to the recent sale within Other Operations.
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II. Summary of Investment Results
 
White Mountains’s total investment results include results from all segments. For purposes of discussing rates of return, all percentages are presented gross of management fees and trading expenses andexpenses. For 2022 returns, percentages are calculated before any adjustments for TPC Providers in order to produce a better comparison to benchmark returns.

Gross Investment Returns and Benchmark Returns

The following table presents the pre-tax investment returns for White Mountains’s consolidated portfolio for the three and nine months ended September 30, 20222023 and 2021:2022:

Three Months EndedNine Months Ended
September 30,September 30,Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021 2023202220232022
Fixed income investmentsFixed income investments(0.8)%— %(6.3)%(0.1)%Fixed income investments %(0.8)%2.5 %(6.3)%
Bloomberg Barclays U.S. Intermediate Aggregate IndexBloomberg Barclays U.S. Intermediate Aggregate Index(3.8)%— %(11.0)%(0.8)%Bloomberg Barclays U.S. Intermediate Aggregate Index(1.9)%(3.8)%(0.3)%(11.0)%
Common equity securitiesCommon equity securities1.8 %1.2 %(2.0)%7.0 %Common equity securities(2.5)%1.8 %6.8 %(2.0)%
Investment in MediaAlphaInvestment in MediaAlpha(11.2)%(55.6)%(43.3)%(51.8)%Investment in MediaAlpha(19.9)%(11.2)%(17.2)%(43.3)%
Other long-term investmentsOther long-term investments3.0 %4.0 %7.7 %14.5 %Other long-term investments2.8 %3.0 %12.4 %7.7 %
Total common equity securities, investment in MediaAlpha and other long-term investmentsTotal common equity securities, investment in MediaAlpha and other long-term investments1.6 %(17.2)%(0.7)%(8.2)%Total common equity securities, investment in MediaAlpha and other
long-term investments
(0.4)%1.6 %8.6 %(0.7)%
Total common equity securities and other long-term investmentsTotal common equity securities and other long-term investments2.8 %3.7 %6.0 %13.5 %Total common equity securities and other long-term investments1.4 %2.8 %11.1 %6.0 %
S&P 500 Index (total return)S&P 500 Index (total return)(4.9)%0.6 %(23.9)%15.9 %S&P 500 Index (total return)(3.3)%(4.9)%13.1 %(23.9)%
Total consolidated portfolioTotal consolidated portfolio0.4 %(8.0)%(3.6)%(3.7)%Total consolidated portfolio(0.2)%0.4 %5.3 %(3.6)%
Total consolidated portfolio - excluding MediaAlphaTotal consolidated portfolio - excluding MediaAlpha0.5 %1.4 %(1.4)%4.6 %Total consolidated portfolio - excluding MediaAlpha0.6 %0.5 %6.3 %(1.4)%

Investment Returns—Three and Nine Months Ended September 30, 20222023 versus Three and Nine Months Ended September 30, 2021

2022
White Mountains’s pre-taxtotal consolidated portfolio return on invested assets was -0.2% in the third quarter of 2023, which included $47 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 0.6% in the third quarter of 2023, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net unrealized investment losses on common equity securities. White Mountains’s total consolidated portfolio return on invested assets was 0.4% in the third quarter of 2022. This return2022, which included $19 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 0.5% in the third quarter of 2022. Excluding MediaAlpha, investment returns in the third quarter of 2022, were driven primarily by favorablenet unrealized investment gains and net investment income from other long-term investment results, which more thaninvestments, partially offset by net unrealized investment losses in the fixed income portfolio due to rising interest rates.
White Mountains’s pre-tax total consolidated portfolio return on invested assets was -8.0%5.3% in the third quarterfirst nine months of 2021. This return2023, which included $397$39 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 1.4%6.3% in the third quarterfirst nine months of 2021. Excluding MediaAlpha, investment returns in the third quarter of 2021 were2023, driven primarily by favorablenet realized and unrealized investment gains and net investment income from other long-term investments, results.

66


net investment income from the fixed income portfolio and net realized and unrealized investment gains from common equity securities. White Mountains’s pre-tax total consolidated portfolio return on invested assets was -3.6% in the first nine months of 2022. This return2022, which included $113 million of net unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was -1.4% in first nine months of 2022. Excluding MediaAlpha, investment returns in the first nine months of 2022, were driven primarily by net unrealized investment losses in the fixed income portfolio due to rising interest rates, partially offset by favorable other long-term investment results. White Mountains’s pre-tax total consolidated portfolio return on invested assets was -3.7% in the first nine months of 2021. This return included $326 million of net realized and unrealized gains and net investment lossesincome from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 4.6% in the first nine months of 2021. Excluding MediaAlpha, investment returns in the first nine months of 2021 were driven primarily by favorable other long-term investment results.investments.

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Fixed Income Results
White Mountains’s fixed income portfolio, including short-term investments, was $3.1 billion and $2.4$2.8 billion as of September 30, 20222023 and December 31, 2021,2022, which represented 59%54% and 56%55% of total invested assets. The increase was driven primarily by the receipt of cash proceeds from the NSM Transaction, partially offset by cash outflows relating to White Mountains’s self-tender offer in the third quarter of 2022. The duration of White Mountains’s fixed income portfolio, including short-term investments, was 2.22.1 years and 2.62.3 years as of September 30, 20222023 and December 31, 2021.2022. White Mountains’s fixed income portfolio includes fixed maturity investments and short-term investments in the HG Re Collateral Trusts of $455 million and $480 millionheld on deposit or as of September 30, 2022 and December 31, 2021.collateral. See Note 3 — “Investment Securities.”
White Mountains’s fixed income portfolio return was flat in the third quarter of 2023, compared to -0.8% in the third quarter of 2022, compared to a flat return in the third quarter of 2021, outperforming and in line with the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of -3.8% and 0.0% for the comparable periods. White Mountains’s fixed income portfolio returned -6.3% in the first nine months of 2022, compared to -0.1% in the first nine months of 2021, outperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of -11.0%-1.9% and -0.8%-3.8% for the comparable periods.
The results in the third quarter of 2023 were driven primarily by net investment income, offset by net unrealized investment losses due to the increase in interest rates on White Mountains’s short duration portfolio. The results in the third quarter of 2022 were driven primarily by net unrealized investment losses due to the increase in interest rates on White Mountains’s short duration portfolio.
White Mountains’s fixed income portfolio returned 2.5% in the first nine months of 2023, compared to -6.3% in the first nine months of 2022, outperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of -0.3% and -11.0% for the comparable periods. The results in the first nine months of 2023 were driven primarily by net investment income due to the increase in shorter-term interest rates. The results in the first nine months of 2022 were driven primarily by net unrealized investment losses due to the impact ofincrease in interest rates on White Mountains’s short duration positioning as interest rates increased in both periods. The results in the third quarter and first nine months of 2021 were driven primarily by the short duration positioning of White Mountains’s fixed income portfolio as interest rates increased in both periods.portfolio.

Common Equity Securities, Investment in MediaAlpha and Other Long-Term Investments Results
White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments was $2.1$2.7 billion and $1.9$2.3 billion as of September 30, 20222023 and December 31, 2021,2022, which represented 41%46% and 44%45% of total invested assets. SeeSee Note 3 — “Investment Securities.”
White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -0.4% in the third quarter of 2023, which included $47 million of unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 1.4% in the third quarter of 2023. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 1.6% in the third quarter of 2022, which included $19 million of unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 2.8% in the third quarter of 2022.
White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -17.2%8.6% in the third quarterfirst nine months of 2021,2023, which included $397$39 million of unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 3.7%11.1% in the third quarterfirst nine months of 2021.
2023. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -0.7% in the first nine months of 2022, which included $113 million of net unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 6.0% in the first nine months of 2022. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -8.2% in the first nine months of 2021, which included $326 million of net realized and unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 13.5% in the first nine months of 2021.
White Mountains’s portfolio of common equity securities consists of international listed equity funds, as well as passive ETFs that seek to provide investment results that generally correspondcorresponding to the performance of the S&P 500 Index and international listed equity funds.Index. White Mountains’s portfolio of common equity securities was $333$637 million and $251$668 million as of September 30, 20222023 and December 31, 2021.2022.
White Mountains’s portfolio of common equity securities returned -2.5% in the third quarter of 2023 compared to 1.8% in the third quarter of 2022, compared to 1.2% in the third quarter of 2021, outperforming the S&P 500 Index returns of -4.9%-3.3% and 0.6% for the comparable periods. White Mountains’s portfolio of common equity securities returned -2.0% in the first nine months of 2022 compared to 7.0% in the first nine months of 2021, outperforming and underperforming the S&P 500 Index returns of -23.9% and 15.9%-4.9% for the comparable periods. The results in the third quarter of 2023 and first nine months of 2022 and 2021 were driven primarily by relative outperformance and underperformance in White Mountains’s international listed equity funds as compared to the S&P 500 Index.

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White Mountains’s portfolio of common equity securities returned 6.8% in the first nine months of 2023, compared to -2.0% in the first nine months of 2022, underperforming and outperforming the S&P 500 Index returns of 13.1% and -23.9% for the comparable periods. The results in the first nine months of 2023 and 2022 were driven primarily by relative underperformance and outperformance in White Mountains’s international listed equity funds as compared to the S&P 500 Index.
White Mountains maintains a portfolio of other long-term investments that consists primarily of unconsolidated entities, including Kudu’s Participation Contracts, private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits, ILS funds and private debt investments.instruments. White Mountains’s portfolio of other long-term investments was $1.6$1.9 billion and $1.4$1.5 billion as of September 30, 20222023 and December 31, 2021.2022.

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White Mountains’s other long-term investments portfolio returned 2.8% in the third quarter of 2023 compared to 3.0% in the third quarter of 2022 compared to 4.0% in2022. Investment returns for the third quarter of 2021.2023 were driven primarily by net investment income and net unrealized investment gains from Kudu’s Participation Contracts, as well as net unrealized investment gains from certain unconsolidated entities and ILS funds. Investment returns for the third quarter of 2022 were driven primarily by net investment income, net unrealized investment gains and unrealized foreign currency losses from Kudu’s Participation Contracts, partially offset by net unrealizedrealized and realizedunrealized investment losses from private equity funds and hedge funds and unrealized losses from foreign currency on Lloyd’s trust deposits.
White Mountains’s other long-term investments portfolio returned 12.4% in the first nine months of 2023 compared to 7.7% in the first nine months of 2022. Investment returns for the third quarterfirst nine months of 20212023 were driven primarily by net investment income and net realized and unrealized investment gains from Kudu’s Participation Contracts, an increase in the fair value of White Mountains’s investment in PassportCard/DavidShield and net investment income and realized and unrealized investment gains from private equity funds and hedge funds and net unrealized investment gains from unconsolidated entities and ILS funds.
White Mountains’s other long-term investments portfolio returned 7.7% in the first nine months of 2022 compared to 14.5% in the first nine months of 2021. Investment returns for the first nine months of 2022 were driven primarily by net investment income, net realized and unrealized investment gains and unrealized foreign currency losses from Kudu’s Participation Contracts, net investment income and net realized and unrealized investment gains from private equity funds and hedge funds and unrealized losses from foreign currency on Lloyd’s trust deposits. Investment returns in the first nine months of 2021 were driven primarily by net investment income and unrealized investment gains from Kudu’s Participation Contracts, an increase in the fair value of White Mountain’s investment in PassportCard/DavidShield and realized and unrealized investment gains from private equity funds.

Foreign Currency Exposure

As of September 30, 2022,2023, White Mountains had foreign currency exposure on $168$183 million of net assets from continuing operations primarily related to Ark’sArk/WM Outrigger’s non-U.S. business, Kudu’s non-U.S. Participation Contracts, and certain other foreign consolidated and unconsolidated entities within Other Operations.entities.
The following table presents the fair value of White Mountains’s foreign denominated net assets (net liabilities)(liabilities) by segment as of September 30, 2022:2023:
Currency
$ in Millions
ArkKuduOther OperationsTotal Fair Value
% of Total Shareholders Equity
$ in Millions

Currency
$ in Millions

Currency
Ark/WM OutriggerKuduOther OperationsTotal Fair Value
% of Total Shareholders Equity
CADCAD$57.4 $72.7 $— $130.1 3.4 %CAD$73.6 $72.2 $— $145.8 3.5 %
AUDAUD18.1 35.7 — 53.8 1.4 AUD24.8 41.6 — 66.4 1.6 %
GBPGBP16.3 — — 16.3 .4 GBP(7.3)— — (7.3)(.2)%
EUREUR(46.4)— 11.2 (35.2)(.9)EUR(54.3)18.0 13.3 (23.0)(.5)%
All otherAll other— — 3.0 3.0 .1 All other— — 1.4 1.4 — %
TotalTotal$45.4 $108.4 $14.2 $168.0 4.4 %Total$36.8 $131.8 $14.7 $183.3 4.4 %

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III. Income Taxes

The Company and its Bermuda domiciled subsidiaries are not subject to Bermuda income tax under current Bermuda law. In the event there is a change in the current law such that taxes are imposed, the Bermuda Exempted Undertakings Tax Protection Act of 1966 states that the Company and its Bermuda domiciled subsidiaries would be exempt from such tax until March 31, 2035. The Company has subsidiaries and branches that operate in various other jurisdictions around the world andthat are subject to tax in the jurisdictions in which they operate.  As of September 30, 2022,2023, the primary jurisdictions in which the Company’s subsidiaries and branches were subject to tax wereinclude Ireland, Israel, Luxembourg, the United Kingdom and the United States.
White Mountains’s income tax expense related to pre-tax income from continuing operations for the three months ended September 30, 2023 represented an effective tax rate of 35%. The effective tax rate was different from the U.S. statutory rate of 21%, driven primarily by an increase in the valuation allowance at BAM, as well as withholding taxes and state income taxes, partially offset by full year forecasted income in jurisdictions with lower tax rates than the United States.
White Mountains’s income tax expense related to pre-tax income from continuing operations for the nine months ended September 30, 2023 represented an effective tax rate of 8%. The effective tax rate was different from the U.S. statutory rate of 21%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States.
White Mountains’s income tax benefit related to pre-tax loss from continuing operations for the three and nine months ended September 30, 2022 represented an effective tax rate of 24% and 9%. The effective tax rate for the nine months ended September 30, 2022 was different from the U.S. statutory rate of 21%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States, partially offset by a fullan increase in the valuation allowance on net deferred tax assets in certain U.S. operations consisting of the WM Adams, Inc. consolidated tax group within Other Operations, andan increase in the valuation allowance at BAM, andas well as state income taxes.
White Mountains’s income tax expense related to pre-tax loss from continuing operations forOn April 1, 2023, the three and nine months ended September 30, 2021 represented an effective tax rate of (8)% and (17)%. The effective tax rate was different from the U.S. statutory rate of 21%, driven primarily by losses in jurisdictions with lower tax rates than the United States, a full valuation allowance on net deferred tax assets in certain U.S. operations, consisting of the WM Adams, Inc. consolidated tax group within Other Operations and BAM, and state income taxes. For the nine months ended September 30, 2021, the effective rate was also different from the U.S. statutory rate of 21.0% due to additional tax expense related to the revaluation of U.K. deferred tax assets and liabilities. On June 10, 2021, the U.K. enacted an increase in its corporate tax rate increased from 19% to 25% for periods after April 1, 2023. On June 30, 2021, White Mountains increased its net U.K. deferred tax liability to reflect the higher tax rate on temporary differences projected to reverse after the new rate becomes effective..

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IV. Discontinued Operations

NSM

On August 1, 2022, White Mountains closed the NSM Transaction. White Mountains received $1.4 billion in net cash proceeds at closing and recognized a net gain of $876 million, which was comprised of $887 million of net gain from sale of discontinued operations and $3 million of comprehensive income related to the recognition of foreign currency translation gains (losses) from the sale, partially offset by $14 million of compensation and other costs related to the transaction recorded in Other Operations. See Note 2 — “Significant Transactions.”
White Mountains reported net income from discontinued operations, net of tax, for NSM Group of $6 million for the period from July 1, 2022 to August 1, 2022 and $16 million for the period from January 1, 2022 to August 1, 2022. White Mountains reported net income (losses) from discontinued operations, net of tax, for NSM Group of $5 million and $(24) million for the third quarter and first nine months of 2021. The net income (losses) from discontinued operations, net of tax, for NSM Group in the first nine months of 2021 included a loss of $29 million related to the sale of a subsidiary. See Note 19 — “Held for Sale and Discontinued Operations.”

Sirius Group

In the first quarter of 2021, White Mountains recorded an $18 million gain within discontinued operations as a result of reversing a liability arising from the tax indemnification provided in connection with the sale of Sirius Group in 2016 and a $1 million gain related to foreign currency translation. The liability related to certain interest deductions claimed by Sirius Group that had been disputed by the Swedish Tax Agency. In April 2021, the Swedish Tax Agency informed the Swedish Administrative Court of Appeal that Sirius Group should prevail in its appeal (and that the interest deductions should not be disallowed). In June 2021, the Swedish Administrative Court of Appeal ruled in Sirius Group’s favor. See Note 19 — “Held for Sale and Discontinued Operations.”

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LIQUIDITY AND CAPITAL RESOURCES
 
Operating Cash and Short-term Investments

Holding Company Level 
The primary sources of cash for the Company and certain of its intermediate holding companies are expected to be distributions from its insurance, reinsurance and other operating subsidiaries, net investment income, proceeds from sales, repayments and maturities of investments, capital raising activities and, from time to time, proceeds from sales of operating subsidiaries. The primary uses of cash are expected to be general and administrative expenses, purchases of investments, payments to tax authorities, payments on and repurchases/retirements of debt obligations, dividend payments to holders of the Company’s common shares, distributions to non-controllingnoncontrolling interest holders of consolidated subsidiaries, contributions to operating subsidiaries and, from time to time, purchases of operating subsidiaries and repurchases of the Company’s common shares.

Operating Subsidiary Level 
The primary sources of cash for White Mountains’s insurance, reinsurance and other operating subsidiaries are expected to be premiums,premium and fee revenues,collections, commissions, net investment income, proceeds from sales, repayments and maturities of investments, contributions from holding companies and capital raising activities. The primary uses of cash are expected to be claim payments, policy acquisition costs, general and administrative expenses, broker commission expenses, cost of sales, purchases of investments, payments to tax authorities, payments on and repurchases/retirements of debt obligations, distributions made to holding companies, distributions to non-controllingnoncontrolling interest holders and, from time to time, purchases of operating subsidiaries.
Both internal and external forces influence White Mountains’s financial condition, results of operations and cash flows. Premiums,Premium and fee revenues,collections, investment returns, claimsclaim payments and cost of sales may be impacted by changing rates of inflation and other economic conditions. Some time may lapse between the occurrence of an insured loss, the reporting of the loss to White Mountains’s insurance and reinsurance operating subsidiaries and the settlement of the liability for that loss. The exact timing of the payment of losses cannot be predicted with certainty. White Mountains’s insurance and reinsurance operating subsidiaries maintain portfolios of invested assets with varying maturities and a substantial amount of cash and short-term investments to provide adequate liquidity for the payment of claims.
Management believes that White Mountains’s cash balances, cash flows from operations and routine sales and maturities of investments are adequate to meet expected cash requirements for the foreseeable future onat both a holding company and insurance, reinsurance and other operating subsidiary level.


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Dividend Capacity

Following is a description of the dividend capacity of White Mountains’s insurance and reinsurance and other operating subsidiaries:

HG Global/BAM
As of September 30, 2022,2023, HG Global had $619 million face value of preferred shares outstanding, of which White Mountains owned 96.9%. Holders of the HG Global preferred shares are entitled to receive cumulative dividends at a fixed annual rate of 6.0% on a quarterly basis, when and if declared by HG Global. As of September 30, 2022,2023, HG Global has accrued $339$399 million of dividends payable to holders of its preferred shares, $327$385 million of which is payable to White Mountains and is eliminated in consolidation.
On April 29, 2022, HG Global received the proceeds of its new $150 million, 10-year term loan credit facility. In turn, on May 2, 2022, HG Global paid a $120 million cash dividend to shareholders, of which $116 million was paid to White Mountains.
As of September 30, 2022,2023, HG Global and its subsidiaries had $3less than $1 million of net unrestricted cash outside of HG Re.
HG Re is a Special Purpose Insurerspecial purpose insurer subject to regulation and supervision by the BMA, but itBMA. HG Re does not require regulatory approval to pay dividends. However, HG Re’sdividends, however, its dividend capacity is limited to amounts held outside of the Collateral Trusts pursuant to the FLRT with BAM. As of September 30, 2022,2023, HG Re had less than $1 million of net unrestricted cash and investments and $120investments. As of September 30, 2023, HG Re had $112 million of accrued interest on the BAM Surplus Notes held outside the Collateral Trusts. As of September 30, 2022,2023, HG Re had $718$751 million of statutory capital and surplus and $834$900 million of assets held in the Collateral Trusts pursuant to the FLRT with BAM.
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Trusts.
On a monthly basis, BAM deposits cash equal to ceded premiums, net of ceding commissions, due to HG Re under the FLRT directly into the Regulation 114 Trust.  The Regulation 114 Trust target balance is equal to gross cededHG Re’s unearned premiums and unpaid ceded loss and LAE expenses,reserves, if any.  If, at the end of any quarter, the Regulation 114 Trust balance is below the target balance, funds will be withdrawn from the Supplemental Trust and deposited into the Regulation 114 Trust in an amount equal to the shortfall.  If, at the end of any quarter, the Regulation 114 Trust balance is above 102% of the target balance, funds will be withdrawn from the Regulation 114 Trust and deposited into the Supplemental Trust. 
The Supplemental Trust Target Balance is $603 million, less the amount of cash and securities in the Regulation 114 Trust in excess of its target balance.  If, at the end of any quarter, the Supplemental Trust balance exceeds the Supplemental Trust Target Balance, such excess may be distributed to HG Re.  The distribution will be made first as an assignment of accrued interest on the BAM Surplus Notes and second in cash and/or fixed income securities.  As the BAM Surplus Notes are repaid over time, the BAM Surplus Notes will be replaced in the Supplemental Trust by cash and fixed income securities. The Supplemental Trust balance as of September 30, 2023 was $589 million.
As of September 30, 2022,2023, the Collateral Trusts held assets of $834$900 million, which included $458$527 million of cash and investments, $365$340 million of BAM Surplus Notes and $11$33 million of interest receivable on the BAM Surplus Notes.
Through 2024, the interest rate on the BAM Surplus Notes is a variable rate equal to the one-year U.S. Treasury rate plus 300 basis points, set annually. During 2022,2023, the interest rate on the BAM Surplus Notes is 3.2%7.7%. Beginning in 2025, the interest rate will be fixed at the higher of the then current variable rate or 8.0%. Under its agreements with HG Global, BAM is required to seek regulatory approval to pay interestprincipal and principalinterest on the BAM Surplus Notes only to the extent that its remaining qualified statutory capital and other capital resources continue to support its outstanding obligations, its business plan and its “AA/stable” rating from Standard & Poor’s. No payment of principal or interest on the BAM Surplus Notes may be made without the approval of the NYDFS.
During the three and nine months ended September 30, 2022,2023, BAM made no repayments of the BAM Surplus Notes or accrued interest. See Note 10 — “Municipal Bond Guarantee Insurance.”

ArkArk/WM Outrigger
During any 12-month period, GAIL, a class 4 licensed Bermuda insurer, has the ability to (i) make capital distributions based onof up to 15% of its total statutory capital per the previous year’s statutory financial statements, or (ii) make dividend payments based onof up to 25% of its total statutory capital and surplus per the previous year’s statutory financial statements, without prior approval of Bermuda regulatory authorities. Accordingly, White Mountains expects GAIL will have the ability to make capital distributions of $114up to $113 million during 2022,2023, which is equal to 15% of its December 31, 20212022 statutory capital of $758$755 million, subject to meeting all appropriate liquidity and solvency requirements. During the nine months ended September 30, 2022,2023, GAIL did not paypaid a $15 million dividend to its immediate parent.
During the nine months ended September 30, 2022,2023, Ark paid $11a $24 million of dividend to its shareholders, $8including $17 million of which was paid to White Mountains. As of September 30, 2022,2023, Ark and its intermediate holding companies had $21$1 million of net unrestricted cash short-term investments and fixed maturityshort-term investments outside of its regulated and unregulated insurance and reinsurance operating subsidiaries.
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WM Outrigger Re is a special purpose insurer subject to regulation and supervision by the BMA. WM Outrigger Re does not require regulatory approval to pay dividends, however, its dividend capacity is limited to amounts held outside of the collateral trust pursuant to the reinsurance agreement with GAIL. As of September 30, 2023, WM Outrigger Re had less than $1 million of net unrestricted cash and investments held outside the collateral trust. As of September 30, 2023, WM Outrigger Re had $257 million of statutory capital and surplus and $233.3 million of assets held in the collateral trusts pursuant to the reinsurance agreement with GAIL.

Kudu
During the nine months ended September 30, 2022,2023, Kudu distributed $19$73 million to unitholders, substantially all of which was paid to White Mountains. As of September 30, 2022,2023, Kudu had $68$9 million of net unrestricted cash.cash and short-term investments.

Other Operations
During the nine months ended September 30, 2022,2023, White Mountains paid a $3 million common share dividend. As of September 30, 2022,2023, the Company and its intermediate holding companies had $1,076$512 million of net unrestricted cash, short-term investments and fixed maturity investments, $148$189 million of MediaAlpha common stock, $46$252 million of common equity securities and $292$410 million of private equity and hedge funds, ILS funds and certain unconsolidated entities.


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Financing
Financing

The following table presents White Mountains’s capital structure as of September 30, 20222023 and December 31, 2021:2022:
$ in Millions$ in MillionsSeptember 30,
2022
December 31,
2021
$ in MillionsSeptember 30, 2023December 31, 2022
HG Global Senior Notes (1)
$146.4 $— 
HG Global Senior Notes (1)(2)
HG Global Senior Notes (1)(2)
$146.8 $146.5 
Ark 2007 Subordinated Notes (1)
Ark 2007 Subordinated Notes (1)
30.0 30.0 
Ark 2007 Subordinated Notes (1)
30.0 30.0 
Ark 2021 Subordinated Notes (1)(2)
Ark 2021 Subordinated Notes (1)(2)
150.0 155.9 
Ark 2021 Subordinated Notes (1)(2)
154.6 153.7 
Kudu Credit Facility (1)(2)
Kudu Credit Facility (1)(2)
253.5 218.2 
Kudu Credit Facility (1)(2)
203.7 208.3 
Other Operations debt (1)(2)
Other Operations debt (1)(2)
35.6 16.8 
Other Operations debt (1)(2)
29.6 36.7 
Total debt from continuing operations615.5 420.9 
Debt from discontinued operations (2)(3)
 272.1 
Total debt Total debt615.5 693.0 Total debt564.7 575.2 
Non-controlling interests—excluding BAM318.4 280.6 
Noncontrolling interests—excluding BAMNoncontrolling interests—excluding BAM381.0 342.8 
Total White Mountains’s common shareholders’ equityTotal White Mountains’s common shareholders’ equity3,708.0 3,548.1 Total White Mountains’s common shareholders’ equity3,949.1 3,746.9 
Total capitalTotal capital4,641.9 4,521.7 Total capital4,894.8 4,664.9 
Time-value discount on expected future payments on the BAM Surplus Notes (4)
(110.8)(125.9)
HG Global’s unearned premium reserve (4)
232.2 214.6 
HG Global’s net deferred acquisition costs (4)
(65.9)(60.8)
HG Global’s unearned premium reserve (3)
HG Global’s unearned premium reserve (3)
254.2 242.1 
HG Global’s net deferred acquisition costs (3)
HG Global’s net deferred acquisition costs (3)
(73.1)(69.0)
Time-value discount on expected future payments on the BAM Surplus Notes (3)
Time-value discount on expected future payments on the BAM Surplus Notes (3)
(90.2)(95.1)
Total adjusted capitalTotal adjusted capital$4,697.4 $4,549.6 Total adjusted capital$4,985.7 $4,742.9 
Total debt to total adjusted capitalTotal debt to total adjusted capital13.1 %15.2 %Total debt to total adjusted capital11.3 %12.1 %
(1) See Note 7 — “Debt” for details of debt arrangements from continuing operations.arrangements.
(2) Net of unamortized issuance costs.costs and, where applicable, the original issue discount.
(3) The NSM bank facility with Ares Capital Corporation and the other NSM debt was settled in conjunction with the closing of the NSM Transaction and has been classified as held for sale as of December 31, 2021.
(4) Amount reflects White Mountains’s preferred share ownership in HG Global of 96.9%.

Management believes that White Mountains has the flexibility and capacity to obtain funds externally through debt or equity financing on both a short-term and long-term basis. However, White Mountains can provide no assurance that, if needed, it would be able to obtain additional debt or equity financing on satisfactory terms, if at all.
It is possible that, in the future, one or more of the rating agencies may lower White Mountains’s existing ratings. If one or more of its ratings were lowered, White Mountains could incur higher borrowing costs on future borrowings and its ability to access the capital markets could be impacted.

Covenant Compliance
As of September 30, 2022,2023, White Mountains was in compliance in all material respects with all of the covenants under its debt instruments.

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Share RepurchasesRepurchase Programs

White Mountains’s boardBoard of directorsDirectors has authorized the Company to repurchase its common shares from time to time, subject to market conditions. The repurchase authorizations do not have a stated expiration date. As of September 30, 2022,2023, White Mountains may repurchase an additional 324,626301,014 shares under these boardBoard authorizations. In addition, from time to time, White Mountains has also repurchased its common shares through self-tender offers that were separately approved by its boardBoard of directors.Directors.
During the nine months ended September 30, 2023, White Mountains repurchased and retired 24,165 of its common shares for $33 million at an average share price of $1,355, which was approximately 85% of White Mountains’s adjusted book value per share as of September 30, 2023. Of the shares White Mountains repurchased in the first nine months of 2023, 4,629 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the amount available under the Board repurchase authorizations.
During the nine months ended September 30, 2022, White Mountains repurchased and retired 457,180 of its common shares for $611 million at an average share price of $1,335, which was approximately 91% of White Mountains’s adjusted book value per share as of September 30, 2022. The majority of these shares were repurchased through a “modified Dutch auction” self-tender offer that White Mountains completed on September 26, 2022, through which it repurchased 327,795 of its common shares at a purchase price of $1,400 per share for a total cost of approximately $461 million, including expenses. Of the shares White Mountains repurchased in the first nine months of 2022, 4,011 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the board authorizations.
During the nine months ended September 30, 2021, White Mountains repurchased and retired 86,512 of its common shares for $95 million, at an average share price of $1,094, which was approximately 93% of White Mountains’s September 30, 2021 adjusted book value per share. Of the shares White Mountains repurchased in the first nine months of 2021, 7,218 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the board authorizations.
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Cash Flows

Detailed information concerning White Mountains’s cash flows from continuing operations during the nine months ended September 30, 20222023 and 20212022 follows:
 
Cash flows from operations for the nine months ended September 30, 20222023 and September 30, 20212022

Net cash provided from (used for) operations was $380 million for the nine months ended September 30, 2023 compared to $118 million for the nine months ended September 30, 2022 compared to $6 million for the nine months ended September 30, 2021.2022. The increase in cash provided from operations was driven primarily by cash provided from Ark’s operations in 2022 compared to cash used for Ark’s operations in 2021, which included expenses from the Ark Transaction. This increase in cash provided from operations was partially offset by the increase in investments in Kudu Participation Contracts in 2022.2023. As of September 30, 2022,2023, the Company and its intermediate holding companies had $1,076$512 million of net unrestricted cash, short-term investments and fixed maturity investments, $148$189 million of MediaAlpha common stock, $46$252 million of common equity securities and $292$410 million of private equity funds, hedge funds, ILS funds and unconsolidated entities.

Cash flows from investing and financing activities for the nine months ended September 30, 2023

Financing and Other Capital Activities
During the nine months ended September 30, 2023, the Company declared and paid a $3 million cash dividend to its common shareholders.
During the nine months ended September 30, 2023, White Mountains repurchased and retired 24,165 of its common shares for $33 million. Of the shares White Mountains repurchased in the first three months of 2023, 4,629 were to satisfy employee income tax withholding pursuant to employee benefit plans.
During the nine months ended September 30, 2023, BAM received $46 million in MSC.
During the nine months ended September 30, 2023, Kudu borrowed $12 million in term loans under the Kudu Credit Facility.
During the nine months ended September 30, 2023, Kudu repaid $17 million in term loans under the Kudu Credit Facility.
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Cash flows from investing and financing activities for the nine months ended September 30, 2022

Financing and Other Capital Activities
During the nine months ended September 30, 2022, the Company declared and paid a $3 million cash dividend to its common shareholders.
During the nine months ended September 30, 2022, White Mountains repurchased and retired 457,180 of its common shares for $611 million.million at an average share price of $1,355. The majority of these shares were repurchased through a “modified Dutch auction” self-tender offer that White Mountains completed on September 26, 2022, through which it repurchased 327,795 of its common shares at a purchase price of $1,400 per share for a total cost of approximately $461 million, including expenses. Of the shares White Mountains repurchased in the first nine months of 2022, 4,011 were to satisfy employee income tax withholding pursuant to employee benefit plans.plans, which do not reduce the board authorizations.
During the nine months ended September 30, 2022, HG Global received net proceeds of $147 million from the issuance of the HG Global Senior Notes.
During the nine months ended September 30, 2022, BAM received $62 million in MSC.
During the nine months ended September 30, 2022, Kudu borrowed $35 million in term loans under the Kudu Credit Facility.

Acquisitions and Dispositions
On May 26, 2022, Kudu raised $115 million of equity capital from the Kudu Transaction. Mass Mutual, White Mountains and Kudu management contributed $64 million, $50 million and $1 million in the Kudu Transaction, respectively.Transaction.
On August 1, 2022, White Mountains closed the previously announced NSM Transaction. White Mountains received $1.4 billion in net cash proceeds at closing.

Cash flows from investing and financing activities for the nine months ended September 30, 2021

Financing and Other Capital Activities
During the nine months ended September 30, 2021, the Company declared and paid a $3 million cash dividend to its common shareholders.
During the nine months ended September 30, 2021, White Mountains repurchased and retired 86,512 of its common shares for $95 million, 7,218 of which were repurchased under employee benefit plans for statutory withholding tax payments.
During the nine months ended September 30, 2021, BAM received $45 million in MSC.
During the nine months ended September 30, 2021, HG Global declared and paid $22 million of preferred dividends, of which $21 million was paid to White Mountains.
During the third quarter of 2021, Ark issued $163 million face value floating rate unsecured subordinated notes at par in three transactions for proceeds of $158 million, net of debt issuance costs.
During the nine months ended September 30, 2021, Kudu borrowed $3 million in term loans under the Kudu Bank Facility.
On March 23, 2021, Kudu entered into the Kudu Credit Facility with an initial draw of $102 million, of which $92 million was used to repay the outstanding principal balance on its term loans under the Kudu Bank Facility.

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Acquisitions and Dispositions
On January 1, 2021 White Mountains completed the Ark Transaction, which included contributing $605 million of equity capital to Ark, at a pre-money valuation of $300 million, and purchasing $41 million of shares from certain selling shareholders. In the fourth quarter of 2020, White Mountains prefunded/placed in escrow a total of $646 million in preparation for closing the Ark Transaction.
On March 23, 2021, MediaAlpha completed a secondary offering of 8.05 million shares. In the secondary offering, White Mountains sold 3.6 million shares at $46.00 per share ($44.62 per share net of underwriting fees) for net proceeds of $160 million.

NON-GAAP FINANCIAL MEASURES

This report includes ninefive non-GAAP financial measures that have been reconciled with from their most comparable GAAP financial measures.

Adjusted book value per share
Adjusted book value per share is a non-GAAP financial measure, which is derived by adjusting (i) the GAAP book value per share numerator and (ii) the common shares outstanding denominator, as described below.
The GAAP book value per share numerator is adjusted (i) to add back the unearned premium reserve, net of deferred acquisition costs, at HG Global and (ii) to include a discount for the time value of money arising from the modeled timing of cash payments of principal and interest on the BAM Surplus Notes and (ii) to add back theNotes.
The value of HG Global’s unearned premium reserve, net of deferred acquisition costs, at HG Global.was $187 million, $182 million, $179 million and $172 million as of September 30, 2023, June 30, 2023, December 31, 2022 and September 30, 2022, respectively.
Under GAAP, White Mountains is required to carry the BAM Surplus Notes, including accrued interest, at nominal value with no consideration for time value of money. Based on a debt service model that forecasts operating results for BAM through maturity of the BAM Surplus Notes, the present value of the BAM Surplus Notes, including accrued interest and using an 8% discount rate, was estimated to be $114$93 million, $120$95 million, $130$98 million and $132$114 million less than the nominal GAAP carrying values as of September 30, 2022,2023, June 30, 2022,2023, December 31, 20212022 and September 30, 2021, respectively.
The value of HG Global’s unearned premium reserve, net of deferred acquisition costs, was $172 million, $164 million, $159 million and $154 million as of September 30, 2022, June 30, 2022, December 31, 2021 and September 30, 2021, respectively.
White Mountains believes these adjustments are useful to management and investors in analyzing the intrinsic value of HG Global, including the value of the BAM Surplus Notes and the value of the in-force business at HG Re, HG Global’s reinsurance subsidiary.subsidiary, and the value of the BAM Surplus Notes.
The denominator used in the calculation of adjusted book value per share equals the number of common shares outstanding, adjusted to exclude unearned restricted common shares, the compensation cost of which, at the date of calculation, has yet to be amortized. Restricted common shares are earned on a straight-line basis over their vesting periods. The reconciliation of GAAP book value per share to adjusted book value per share is included on page 50.

Ark’s adjusted loss and LAE, adjusted insurance acquisition expense, adjusted other underwriting expense and adjusted combined ratios
Ark’s adjusted loss and LAE ratio, adjusted insurance acquisition expense ratio, adjusted other underwriting expense ratio and adjusted combined ratio are non-GAAP financial measures, which are derived by adjusting the GAAP ratios to add back the impact of whole-account quota-share reinsurance arrangements attributable to TPC Providers for the Syndicates. The impact of these reinsurance arrangements relates to years of account prior to the Ark Transaction. White Mountains believes these adjustments are useful to management and investors in evaluating Ark’s results on a fully aligned basis (i.e., 100% of the Syndicates’ results)49. The reconciliation from the GAAP ratios to the adjusted ratios is included on page 60.


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Kudu’s EBITDA and Kudu’s adjusted EBITDA
Kudu's EBITDA and adjusted EBITDA are non-GAAP financial measures. EBITDA is a non-GAAP financial measure that excludes interest expense on debt, income tax (expense) benefit, depreciation and amortization of other intangible assets from GAAP net income (loss). Adjusted EBITDA is a non-GAAP financial measure that excludes certain other items in GAAP net income (loss) in addition to those excluded from EBITDA. The adjustments relate to (i) net realized and unrealized investment gains (losses) on Kudu's Participation Contracts, (ii) non-cash equity-based compensation expense and (iii) transaction expenses. A description of each adjustment follows:
Net realized and unrealized investment gains (losses) - Represents net unrealized investment gains and losses on Kudu’s Participation Contracts, which are recorded at fair value under GAAP, and realized investment gains and losses on Kudu’s Participation Contracts sold during the period.
Non-cash equity-based compensation expense - Represents non-cash expenses related to Kudu’s management compensation that are settled with equity units in Kudu.
Transaction expenses - Represents costs directly related to Kudu’s mergers and acquisitions activity, such as external lawyer, banker, consulting and placement agent fees, which are not capitalized and are expensed under GAAP.
White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating Kudu’s performance. The reconciliation of Kudu’s GAAP net income (loss) to EBITDA and adjusted EBITDA is included on page 64.64.

Total consolidated portfolio return excluding MediaAlpha
Total consolidated portfolio return excluding MediaAlpha is a non-GAAP financial measure that removes the net investment income and net realized and unrealized investment gains (losses) from White Mountains’s investment in MediaAlpha. White Mountains believes this measure to be useful to management and investors by showing the underlying performance of White Mountains’s investment portfolio without regard to MediaAlpha.
The following tables present reconciliations from GAAP to the reported percentages for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30, 2022Three Months Ended September 30, 2021
GAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlphaGAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlpha
Total consolidated portfolio
   return
0.4 %0.1 %0.5 %(8.0)%9.4 %1.4 %
Three Months Ended September 30, 2023Three Months Ended September 30, 2022
GAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlphaGAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlpha
Total consolidated portfolio
   return
(0.2)%0.8 %0.6 %0.4 %0.1 %0.5 %
Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
GAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlphaGAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlpha
Total consolidated portfolio
   return
(3.6)%2.2 %(1.4)%(3.7)%8.3 %4.6 %
Nine Months Ended September 30, 2023Nine Months Ended September 30, 2022
GAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlphaGAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlpha
Total consolidated portfolio
   return
5.3 %1.0 %6.3 %(3.6)%2.2 %(1.4)%

AdjustedTotal adjusted capital
Total capital at White Mountains is comprised of White Mountains’s common shareholders’ equity, debt and non-controllingnoncontrolling interests other than non-controllingnoncontrolling interests attributable to BAM. Total adjusted capital is a non-GAAP financial measure, which is derived by adjusting total capital (i) to include a discount for the time value of money arising from the expected timing of cash payments of principal and interest on the BAM Surplus Notes and (ii) to add back the unearned premium reserve, net of deferred acquisition costs, at HG Global. The reconciliation of total capital to total adjusted capital is included on page 72.72.

CRITICAL ACCOUNTING ESTIMATES

Refer to the Company’s 20212022 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s critical accounting estimates.

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FORWARD-LOOKING STATEMENTS
 
This report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this report which address activities, events or developments which White Mountains expects or anticipates will or may occur in the future are forward-looking statements. The words “could”, “will”, “believe”, “intend”, “expect”, “anticipate”, “project”, “estimate”, “predict” and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to White Mountains’s:

change in book value per share, adjusted book value per share or return on equity;
business strategy;
financial and operating targets or plans;
incurred loss and LAE and the adequacy of its loss and LAE reserves and related reinsurance;
projections of revenues, income (or loss), earnings (or loss) per share, EBITDA, adjusted EBITDA, dividends, market share or other financial forecasts of White Mountains or its businesses;
expansion and growth of its business and operations; and
future capital expenditures.

These statements are based on certain assumptions and analyses made by White Mountains in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to its expectations and predictions is subject to risks and uncertainties that could cause actual results to differ materially from expectations, including:

the risks that are described from time to time in White Mountains’s filings with the Securities and Exchange Commission, including but not limited to White Mountains’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021;2022;
claims arising from catastrophic events, such as hurricanes, windstorms, earthquakes, floods, fires,wildfires, tornadoes, tsunamis, severe winter weather, public health crises, terrorist attacks, war and war-like actions, explosions, infrastructure failures cyber-attacks or armed conflicts;cyber attacks;
recorded loss reserves subsequently proving to have been inadequate;
the market value of White Mountains’s investment in MediaAlpha;
the trends and uncertainties from the COVID-19 pandemic, including judicial interpretations on the extent of insurance coverage provided by insurers for COVID-19 pandemic related claims;
business opportunities (or lack thereof) that may be presented to it and pursued;
actions taken by rating agencies, such as financial strength or credit ratings downgrades or placing ratings on negative watch;
the continued availability of capital and financing;
deterioration of general economic, market or business conditions, including due to outbreaks of contagious disease (including the COVID-19 pandemic) and corresponding mitigation efforts;
competitive forces, including the conduct of other insurers;
changes in domestic or foreign laws or regulations, or their interpretation, applicable to White Mountains, its competitors or its customers; and
other factors, most of which are beyond White Mountains’s control.

Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by White Mountains will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, White Mountains or its business or operations. White Mountains assumes no obligation to publicly update any such forward-looking statements, whether as a result of new information, future events or otherwise.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk.

Refer to White Mountains’s 20212022 Annual Report on Form 10-K and in particular Item 7A. - “Quantitative and Qualitative Disclosures About Market Risk.” 

Item 4.Controls and Procedures.
 
The Principal Executive Officer (“PEO”) and the Principal Financial Officer (“PFO”) of White Mountains have evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.September 30, 2023. Based on that evaluation, the PEO and PFO have concluded that White Mountains’s disclosure controls and procedures are adequate and effective.
There were no significant changes with respect to the Company’sWhite Mountains’s internal control over financial reporting or in other factors that occurred during the third quarter of 2023 that have materially affected, or are reasonably likely to materially affect White Mountains’s internal control over financial reporting during the quarter ended September 30, 2022.reporting.

Part II.OTHER INFORMATION
 
Item 1.Legal Proceedings.
 
None.

Item 1A. Risk Factors.

There have been no material changes to any of the risk factors previously disclosed in the Registrant’s 20212022 Annual Report
on Form 10-K.

Item 2.Issuer Purchases of Equity Securities.

MonthsTotal Number of
Shares Purchased
Average Price
Paid per Share
Total Number of Shares 
Purchased as Part of 
Publicly Announced Plans (1)
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans (1)
July 1 - July 30, 202233,926 $1,238.15 33,926 329,550 
August 1 - August 31, 20224,924 $1,247.63 4,924 324,626 
September 1 - September 30, 2022(2)
327,795 $1,405.89  324,626 
Total366,645 $1,388.24 38,850 324,626 
MonthsTotal Number of
Shares Purchased
Average Price
Paid per Share
Total Number of Shares 
Purchased as Part of 
Publicly Announced Plans (1)
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans (1)
July 1 - July 31, 2023— $— — 301,014 
August 1 - August 31, 2023— $— — 301,014 
September 1 - September 30, 2023— $— — 301,014 
Total$301,014
(1) White Mountains’s boardBoard of directorsDirectors has authorized the Company to repurchase its common shares, from time to time, subject to market conditions. The repurchase authorizations do not have a stated expiration date.
(2) On September 26, 2022, White Mountains completed a “modified Dutch auction” self-tender offer, through which it repurchased 327,795 of its common shares at a purchase price of $1,400 per share ($1,406 including expenses).

Item 3. Defaults Upon Senior Securities.
 
None.
 
Item 4.Mine Safety Disclosures.

None.
 
Item 5.Other Information.
 
None.
 
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Item 6.Exhibits.
(a)Exhibit numberName
 2.1 — 
 3.1 — 
 3.2 — 
10.1 — 
 31.1 — 
 31.2 — 
 32.1 — 
 32.2 — 
 101 — XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
(*)Included herein

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 WHITE MOUNTAINS INSURANCE GROUP, LTD.
 (Registrant)
  
Date:November 7, 20226, 2023 
By: /s/ Michaela J. Hildreth
  Michaela J. Hildreth
  Managing Director and Chief Accounting Officer

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