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 JuneSeptember 30, 2023
 
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
WTM.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 August 3,November 2, 2023, 2,560,452 common shares with a par value of $1.00 per share were outstanding (which includes 37,595 restricted common shares that were not vested at such date).




WHITE MOUNTAINS INSURANCE GROUP, LTD.

Table of Contents
 
  Page No.
   
 
   
 
   
 
Consolidated Balance Sheets, JuneSeptember 30, 2023 and December 31, 2022
  
 
      Three and SixNine Months Ended JuneSeptember 30, 2023 and 2022
 
      Three and SixNine Months Ended JuneSeptember 30, 2023 and 2022
 
Consolidated Statements of Cash Flows, SixNine Months Ended JuneSeptember 30, 2023 and 2022
  
 
  
  
 
Results of Operations for the Three and SixNine Months Ended JuneSeptember 30, 2023 and 2022
  
 
  
 
 
  
 
  
  
  
  
  





Part I.FINANCIAL INFORMATION.
Item 1.Financial Statements
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2023December 31, 2022
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$932.9 $909.9 Fixed maturity investments, at fair value$932.2 $909.9 
Short-term investments, at fair valueShort-term investments, at fair value67.5 65.9 Short-term investments, at fair value80.1 65.9 
Total investmentsTotal investments1,000.4 975.8 Total investments1,012.3 975.8 
CashCash2.9 18.2 Cash4.9 18.2 
Insurance premiums receivableInsurance premiums receivable6.4 6.6 Insurance premiums receivable5.5 6.6 
Deferred acquisition costsDeferred acquisition costs37.4 36.0 Deferred acquisition costs38.5 36.0 
Other assetsOther assets25.3 21.9 Other assets22.2 21.9 
Total Financial Guarantee assetsTotal Financial Guarantee assets1,072.4 1,058.5 Total Financial Guarantee assets1,083.4 1,058.5 
P&C Insurance and Reinsurance (Ark/WM Outrigger)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 value755.8 772.8 Fixed maturity investments, at fair value775.0 772.8 
Common equity securities, at fair valueCommon equity securities, at fair value382.6 334.6 Common equity securities, at fair value384.9 334.6 
Short-term investments, at fair valueShort-term investments, at fair value640.3 484.6 Short-term investments, at fair value850.0 484.6 
Other long-term investmentsOther long-term investments410.7 373.6 Other long-term investments416.6 373.6 
Total investmentsTotal investments2,189.4 1,965.6 Total investments2,426.5 1,965.6 
CashCash101.7 101.5 Cash129.6 101.5 
Reinsurance recoverablesReinsurance recoverables669.7 595.3 Reinsurance recoverables538.4 595.3 
Insurance premiums receivableInsurance premiums receivable1,077.2 544.1 Insurance premiums receivable781.6 544.1 
Deferred acquisition costsDeferred acquisition costs232.1 127.2 Deferred 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 assets69.4 65.2 Other assets66.9 65.2 
Total P&C Insurance and Reinsurance assetsTotal P&C Insurance and Reinsurance assets4,632.0 3,691.4 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 value4.1 —  Short-term investments, at fair value17.3 — 
Other long-term investments Other long-term investments737.1 695.9  Other long-term investments780.7 695.9 
Total investmentsTotal investments741.2 695.9 Total investments798.0 695.9 
Cash (restricted $13.4 and $12.2)25.0 101.4 
Cash (restricted $0.0 and $12.2) Cash (restricted $0.0 and $12.2)5.4 101.4 
Accrued investment income Accrued investment income13.1 12.4  Accrued investment income15.8 12.4 
Goodwill and other intangible assets Goodwill and other intangible assets8.4 8.6  Goodwill and other intangible assets8.4 8.6 
Other assets Other assets10.0 7.6  Other assets8.3 7.6 
Total Asset Management assetsTotal Asset Management assets797.7 825.9 Total Asset Management assets835.9 825.9 
Other OperationsOther OperationsOther Operations
Fixed maturity investments, at fair value Fixed maturity investments, at fair value252.0 238.2  Fixed maturity investments, at fair value270.7 238.2 
Common equity securities, at fair value Common equity securities, at fair value272.5 333.8  Common equity securities, at fair value252.1 333.8 
Investment in MediaAlpha, at fair valueInvestment in MediaAlpha, at fair value235.7 168.6 Investment in MediaAlpha, at fair value188.8 168.6 
Short-term investments, at fair value Short-term investments, at fair value274.2 373.6  Short-term investments, at fair value215.5 373.6 
Other long-term investments Other long-term investments667.2 418.5  Other long-term investments698.5 418.5 
Total investments Total investments1,701.6 1,532.7  Total investments1,625.6 1,532.7 
Cash Cash24.9 33.9  Cash22.9 33.9 
Goodwill and other intangible assets Goodwill and other intangible assets72.7 91.3  Goodwill and other intangible assets71.2 91.3 
Other assets Other assets75.0 155.6  Other assets89.6 155.6 
Total Other Operations assets Total Other Operations assets1,874.2 1,813.5  Total Other Operations assets1,809.3 1,813.5 
Total assetsTotal assets$8,376.3 $7,389.3 Total assets$8,142.8 $7,389.3 
See Notes to Consolidated Financial Statements
1





CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Unaudited)
June 30, 2023December 31, 2022
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$303.7 $298.3 Unearned insurance premiums$312.3 $298.3 
DebtDebt146.7 146.5 Debt146.8 146.5 
Accrued incentive compensationAccrued incentive compensation14.7 28.0 Accrued incentive compensation19.9 28.0 
Other liabilitiesOther liabilities34.6 29.0 Other liabilities40.0 29.0 
Total Financial Guarantee liabilitiesTotal Financial Guarantee liabilities499.7 501.8 Total Financial Guarantee liabilities519.0 501.8 
P&C Insurance and Reinsurance (Ark/WM Outrigger)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 reserves1,421.0 1,296.5 Loss and loss adjustment expense reserves1,571.8 1,296.5 
Unearned insurance premiumsUnearned insurance premiums1,376.5 623.2 Unearned insurance premiums984.6 623.2 
DebtDebt185.1 183.7 Debt184.6 183.7 
Reinsurance payableReinsurance payable247.0 251.1 Reinsurance payable146.3 251.1 
Contingent considerationContingent consideration45.1 45.3 Contingent consideration62.1 45.3 
Other liabilitiesOther liabilities116.6 122.3 Other liabilities132.0 122.3 
Total P&C Insurance and Reinsurance liabilitiesTotal P&C Insurance and Reinsurance liabilities3,391.3 2,522.1 Total P&C Insurance and Reinsurance liabilities3,081.4 2,522.1 
Asset Management (Kudu)Asset Management (Kudu)Asset Management (Kudu)
DebtDebt203.7 208.3 Debt203.7 208.3 
Other liabilities Other liabilities51.0 65.0 Other liabilities53.6 65.0 
Total Asset Management liabilities Total Asset Management liabilities254.7 273.3 Total Asset Management liabilities257.3 273.3 
Other OperationsOther OperationsOther Operations
DebtDebt30.6 36.7 Debt29.6 36.7 
Accrued incentive compensationAccrued incentive compensation51.0 86.1 Accrued incentive compensation64.0 86.1 
Other liabilitiesOther liabilities23.1 34.3 Other liabilities27.3 34.3 
Total Other Operations liabilitiesTotal Other Operations liabilities104.7 157.1 Total Other Operations liabilities120.9 157.1 
Total liabilitiesTotal liabilities4,250.4 3,454.3 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 2,560,452 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 
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 surplus540.6536.0Paid-in surplus544.9536.0
Retained earningsRetained earnings3,380.7 3,211.8 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
(1.7)(3.5)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’ equity3,922.2 3,746.9 Total White Mountains’s common shareholders’ equity3,949.1 3,746.9 
Noncontrolling interestsNoncontrolling interests203.7 188.1 Noncontrolling interests215.1 188.1 
Total equityTotal equity4,125.9 3,935.0 Total equity4,164.2 3,935.0 
Total liabilities and equityTotal liabilities and equity$8,376.3 $7,389.3 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 June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Revenues:Revenues:Revenues:
Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)
Earned insurance premiumsEarned insurance premiums$7.7 $10.5 $15.4 $18.9 Earned insurance premiums$7.9 $7.1 $23.3 $26.0 
Net investment incomeNet investment income7.6 4.8 14.8 9.4 Net investment income8.1 5.7 22.9 15.1 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(9.9)(30.1)7.1 (75.2)Net realized and unrealized investment gains (losses)(24.1)(38.8)(17.0)(114.0)
Other revenuesOther revenues.5 1.6 1.3 2.4 Other revenues.7 1.3 2.0 3.7 
Total Financial Guarantee revenuesTotal Financial Guarantee revenues5.9 (13.2)38.6 (44.5)Total Financial Guarantee revenues(7.4)(24.7)31.2 (69.2)
P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)
Earned insurance premiumsEarned insurance premiums293.3 217.3 548.4 411.7 Earned insurance premiums498.9 346.1 1,047.3 757.8 
Net investment incomeNet investment income13.7 3.2 24.3 4.8 Net investment income16.9 4.9 41.2 9.7 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)18.0 (44.6)42.5 (62.1)Net realized and unrealized investment gains (losses)(6.6)(14.4)35.9 (76.5)
Other revenuesOther revenues(2.0)6.3 (4.7)3.5 Other revenues3.6 6.6 (1.1)10.1 
Total P&C Insurance and Reinsurance revenuesTotal P&C Insurance and Reinsurance revenues323.0 182.2 610.5 357.9 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 income14.7 13.8 28.9 26.4 Net investment income15.1 14.8 44.0 41.2 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)4.6 (17.6)34.2 4.7 Net realized and unrealized investment gains (losses)11.2 41.1 45.4 45.8 
Total Asset Management revenuesTotal Asset Management revenues19.3 (3.8)63.1 31.1 Total Asset Management revenues26.3 55.9 89.4 87.0 
Other OperationsOther OperationsOther Operations
Net investment income Net investment income7.0 3.3 14.0 5.1  Net investment income8.0 8.5 22.0 13.6 
Net realized and unrealized investment gains (losses) Net realized and unrealized investment gains (losses)76.0 (11.8)117.8 20.1  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
(77.3)(113.5)7.9 (94.7) Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(46.8)(18.6)(38.9)(113.3)
Commission revenues Commission revenues3.2 2.6 6.5 5.5  Commission revenues3.5 3.2 10.0 8.7 
Other revenues Other revenues21.3 30.9 51.9 56.6  Other revenues15.2 33.0 67.1 89.6 
Total Other Operations revenuesTotal Other Operations revenues30.2 (88.5)198.1 (7.4)Total Other Operations revenues(12.1)8.8 186.0 1.4 
Total revenuesTotal revenues$378.4 $76.7 $910.3 $337.1 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 June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Expenses:Expenses:Expenses:
Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)Financial Guarantee (HG Global/BAM)
Acquisition expensesAcquisition expenses$1.5 $4.8 $4.2 $7.8 Acquisition expenses$2.1 $1.7 $6.3 $9.5 
General and administrative expensesGeneral and administrative expenses14.9 17.4 32.2 33.7 General and administrative expenses17.5 15.8 49.7 49.5 
Interest expenseInterest expense2.5 3.4 7.0 3.4 Interest expense3.8 2.0 10.8 5.4 
Total Financial Guarantee expensesTotal Financial Guarantee expenses18.9 25.6 43.4 44.9 Total Financial Guarantee expenses23.4 19.5 66.8 64.4 
P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)P&C Insurance and Reinsurance (Ark/WM Outrigger)
Loss and loss adjustment expensesLoss and loss adjustment expenses167.5 120.5 315.3 242.5 Loss and loss adjustment expenses265.8 213.7 581.1 456.2 
Acquisition expensesAcquisition expenses61.4 50.2 121.2 100.1 Acquisition expenses90.3 74.8 211.5 174.9 
General and administrative expensesGeneral and administrative expenses34.9 29.7 70.1 50.7 General and administrative expenses35.4 24.2 105.5 74.9 
Change in fair value of contingent considerationChange in fair value of contingent consideration2.2 .1(.2)2.2 Change in fair value of contingent consideration17.0 2.716.8 4.9 
Interest expenseInterest expense5.2 3.1 10.2 6.9 Interest expense5.5 3.7 15.7 10.6 
Total P&C Insurance and Reinsurance expensesTotal P&C Insurance and Reinsurance expenses271.2 203.6 516.6 402.4 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 expenses4.0 3.1 7.8 5.9 General and administrative expenses4.5 4.5 12.3 10.4 
Interest expenseInterest expense5.3 3.3 10.0 6.1 Interest expense5.5 4.2 15.5 10.3 
Total Asset Management expensesTotal Asset Management expenses9.3 6.4 17.8 12.0 Total Asset Management expenses10.0 8.7 27.8 20.7 
Other OperationsOther OperationsOther Operations
Cost of sales Cost of sales11.6 22.4 25.5 43.8  Cost of sales8.0 25.0 33.5 68.8 
General and administrative expenses General and administrative expenses48.8 51.0 88.5 80.8  General and administrative expenses42.2 41.3 130.7 122.1 
Interest expense Interest expense1.2 .3 2.0 .6  Interest expense.9 .6 2.9 1.2 
Total Other Operations expensesTotal Other Operations expenses61.6 73.7 116.0 125.2 Total Other Operations expenses51.1 66.9 167.1 192.1 
Total expensesTotal expenses361.0 309.3 693.8 584.5 Total expenses498.5 414.2 1,192.3 998.7 
Pre-tax income (loss) from continuing operationsPre-tax income (loss) from continuing operations17.4 (232.6)216.5 (247.4)Pre-tax income (loss) from continuing operations21.1 (31.0)237.6 (278.4)
Income tax (expense) benefit Income tax (expense) benefit(.2)16.0 (12.1)18.7  Income tax (expense) benefit(7.3)7.4 (19.4)26.1 
Net income (loss) from continuing operationsNet income (loss) from continuing operations17.2 (216.6)204.4 (228.7)Net income (loss) from continuing operations13.8 (23.6)218.2 (252.3)
Net income (loss) from discontinued operations, net of tax - NSM GroupNet income (loss) from discontinued operations, net of tax - NSM Group 6.4  10.1 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 income (loss)Net income (loss)17.2 (210.2)204.4 (218.6)Net income (loss)13.8 869.5 218.2 650.9 
Net (income) loss attributable to noncontrolling interests Net (income) loss attributable to noncontrolling interests2.4 41.0 (5.3)82.8  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
$19.6 $(169.2)$199.1 $(135.8)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 June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Net income (loss) attributable to White Mountains’s
common shareholders
Net income (loss) attributable to White Mountains’s
common shareholders
$19.6 $(169.2)$199.1 $(135.8)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, net of tax:
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax1.4 (1.1)2.6 (1.5)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
— (4.0) (5.9)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 
Comprehensive income (loss)Comprehensive income (loss)21.0 (174.3)201.7 (143.2)Comprehensive income (loss)21.9 890.4 223.6 747.1 
Other comprehensive (income) loss attributable to
noncontrolling interests
Other comprehensive (income) loss attributable to
noncontrolling interests
(.4).5 (.8).7 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
$20.6 $(173.8)$200.9 $(142.5)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$7.65 $(58.78)$77.57 $(48.57)Continuing operations$9.19 $(1.66)$86.82 $(50.73)
Discontinued operationsDiscontinued operations 1.98  3.17 Discontinued operations 308.59  304.97 
Total consolidated operationsTotal consolidated operations$7.65 $(56.80)$77.57 $(45.40)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$7.65 $(58.78)$77.57 $(48.57)Continuing operations$9.19 $(1.66)$86.82 $(50.73)
Discontinued operationsDiscontinued operations 1.98  3.17 Discontinued operations 308.59  304.97 
Total consolidated operationsTotal consolidated operations$7.65 $(56.80)$77.57 $(45.40)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  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 March 31, 2023$537.8 $3,367.3 $(2.7)$3,902.4 $190.4 $4,092.8 
Balance at June 30, 2023Balance at June 30, 2023$543.2 $3,380.7 $(1.7)$3,922.2 $203.7 $4,125.9 
Net income (loss)Net income (loss) 19.6  19.6 (2.4)17.2 Net income (loss) 23.6  23.6 (9.8)13.8 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax  1.0 1.0 .4 1.4 Other comprehensive income (loss), net of tax  (1.0)(1.0)(.7)(1.7)
Total comprehensive income (loss)Total comprehensive income (loss) 19.6 1.0 20.6 (2.0)18.6 Total comprehensive income (loss) 23.6 (1.0)22.6 (10.5)12.1 
Dividends to noncontrolling interestsDividends to noncontrolling interests    (.6)(.6)Dividends to noncontrolling interests    (.5)(.5)
Issuances of common sharesIssuances of common shares2.0   2.0  2.0 Issuances of common shares      
Repurchases and retirements of common sharesRepurchases and retirements of common shares(1.2)(6.2) (7.4) (7.4)Repurchases and retirements of common shares      
BAM member surplus contribution, net of taxBAM member surplus contribution, net of tax    14.7 14.7 BAM member surplus contribution, net of tax    19.9 19.9 
Amortization of restricted share awardsAmortization of restricted share awards4.1   4.1  4.1 Amortization of restricted share awards4.0   4.0  4.0 
Recognition of equity-based compensation expense
of subsidiaries
Recognition of equity-based compensation expense
of subsidiaries
.5   .5 .1 .6 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
    1.1 1.1 Net contributions and dilution from other
noncontrolling interests
(.1)  (.1)2.3 2.2 
Balance at June 30, 2023$543.2 $3,380.7 $(1.7)$3,922.2 $203.7 $4,125.9 
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 March 31, 2022$586.3 $2,956.2 $(.4)$3,542.1 $127.2 $3,669.3 
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)— (169.2)— (169.2)(41.0)(210.2)Net income (loss)— 888.2 — 888.2 (18.7)869.5 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax— — (.6)(.6)(.5)(1.1)Other 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
— — (4.0)(4.0)— (4.0)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)— (169.2)(4.6)(173.8)(41.5)(215.3)Total comprehensive income (loss)— 888.2 1.8 890.0 (18.4)871.6 
Dividends to noncontrolling interestsDividends to noncontrolling interests— — — — (6.4)(6.4)Dividends to noncontrolling interests— — — — (.5)(.5)
Issuances of common shares2.2 — — 2.2 — 2.2 
Issuance of shares of non-controlling interests— — — — 74.6 74.6 
Repurchases and retirements of common sharesRepurchases and retirements of common shares(10.4)(52.2)— (62.6)— (62.6)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— — — — 24.0 24.0 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 subsidiaries
Recognition of equity-based compensation expense
of subsidiaries
6.5 — — 6.5 .4 6.9 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
15.0 (9.7)— 5.3 (9.6)(4.3)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 June 30, 2022$603.2 $2,725.1 $(5.0)$3,323.3 $168.7 $3,492.0 
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, 2023Balance at January 1, 2023$538.6 $3,211.8 $(3.5)$3,746.9 $188.1 $3,935.0 Balance 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) 199.1  199.1 5.3 204.4 Net income (loss) 222.7  222.7 (4.5)218.2 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax  1.8 1.8 .8 2.6 Other comprehensive income (loss), net of tax  .8 .8 .1 .9 
Total comprehensive income (loss)Total comprehensive income (loss) 199.1 1.8 200.9 6.1 207.0 Total comprehensive income (loss) 222.7 .8 223.5 (4.4)219.1 
Dividends declared on common sharesDividends declared on common shares (2.6) (2.6) (2.6)Dividends declared on common shares (2.6) (2.6) (2.6)
Dividends to noncontrolling interestsDividends to noncontrolling interests    (7.8)(7.8)Dividends to noncontrolling interests    (8.3)(8.3)
Issuances of common sharesIssuances of common shares2.1   2.1  2.1 Issuances of common shares2.1   2.1  2.1 
Repurchases and retirements of common sharesRepurchases and retirements of common shares(5.1)(27.6) (32.7) (32.7)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    26.5 26.5 BAM member surplus contributions, net of tax    46.4 46.4 
Amortization of restricted share awardsAmortization of restricted share awards7.2   7.2  7.2 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
.9   .9 .3 1.2 Recognition of equity-based compensation expense
of subsidiaries
1.3   1.3 .5 1.8 
Net contributions (distributions) and dilution from
other noncontrolling interests
Net contributions (distributions) and dilution from
other noncontrolling interests
(.5)  (.5)(.1)(.6)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)Disposition of noncontrolling interests    (9.4)(9.4)
Balance at June 30, 2023$543.2 $3,380.7 $(1.7)$3,922.2 $203.7 $4,125.9 
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, 2022Balance at January 1, 2022$588.9 $2,957.5 $1.7 $3,548.1 $156.6 $3,704.7 Balance 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)— (135.8)— (135.8)(82.8)(218.6)Net income (loss)— 752.4 — 752.4 (101.5)650.9 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax— — (.8)(.8)(.7)(1.5)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
— — (5.9)(5.9)— (5.9)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)— (135.8)(6.7)(142.5)(83.5)(226.0)Total comprehensive income (loss)— 752.4 (4.9)747.5 (101.9)645.6 
Dividends declared on common sharesDividends declared on common shares— (3.0)— (3.0)— (3.0)Dividends declared on common shares— (3.0)— (3.0)— (3.0)
Dividends to noncontrolling interestsDividends to noncontrolling interests— — — — (7.0)(7.0)Dividends to noncontrolling interests— — — — (7.5)(7.5)
Issuances of common sharesIssuances of common shares3.0 — — 3.0 — 3.0 Issuances of common shares3.0 — — 3.0 — 3.0 
Issuance of shares of non-controlling interests— — — — 74.6 74.6 
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(17.7)(83.9)— (101.6)— (101.6)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— — — — 36.3 36.3 BAM member surplus contributions, net of tax— — — — 62.3 62.3 
Amortization of restricted share awardsAmortization of restricted share awards6.5 — — 6.5 — 6.5 Amortization of restricted share awards10.3 — — 10.3 — 10.3 
Recognition of equity-based compensation expense
of subsidiaries
Recognition of equity-based compensation expense
of subsidiaries
7.7 — — 7.7 .6 8.3 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
14.8 (9.7)— 5.1 (8.9)(3.8)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 June 30, 2022$603.2 $2,725.1 $(5.0)$3,323.3 $168.7 $3,492.0 
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)
Six Months Ended June 30,Nine Months Ended September 30,
MillionsMillions20232022Millions20232022
Cash flows from operations:Cash flows from operations:Cash flows from operations:
Net income (loss)Net income (loss)$204.4 $(218.6)Net income (loss)$218.2 $650.9 
Adjustments to reconcile net income to net cash provided from (used for) operations:Adjustments to reconcile net income to net cash provided from (used for) operations:  Adjustments to reconcile net income to net cash provided from (used for) operations:  
Net realized and unrealized investment (gains) lossesNet realized and unrealized investment (gains) losses(201.6)112.5 Net realized and unrealized investment (gains) losses(190.1)141.9 
Net realized and unrealized investment (gains) losses from investment in MediaAlphaNet realized and unrealized investment (gains) losses from investment in MediaAlpha(7.9)94.7 Net realized and unrealized investment (gains) losses from investment in MediaAlpha38.9 113.3 
Deferred income tax expense (benefit)Deferred income tax expense (benefit)(4.5)4.0 Deferred income tax expense (benefit)1.9 22.1 
Amortization of restricted share awardsAmortization of restricted share awards7.2 6.5 Amortization of restricted share awards11.2 10.3 
Amortization (accretion) and depreciationAmortization (accretion) and depreciation(5.0)8.4 Amortization (accretion) and depreciation(10.3)7.0 
Net (income) loss from discontinued operation, net of tax - NSM GroupNet (income) loss from discontinued operation, net of tax - NSM Group (10.1)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 GroupNet (gain) loss from sale of discontinued operations, net of tax - NSM Group (886.8)
Other operating items:Other operating items: Other operating items: 
Net change in reinsurance recoverablesNet change in reinsurance recoverables(74.4)11.4 Net change in reinsurance recoverables56.9 (95.1)
Net change in insurance premiums receivableNet change in insurance premiums receivable(532.9)(478.8)Net change in insurance premiums receivable(236.4)(282.3)
Net change in deferred acquisition costsNet change in deferred acquisition costs(106.3)(85.0)Net change in deferred acquisition costs(54.0)(45.0)
Net change in loss and loss adjustment expense reservesNet change in loss and loss adjustment expense reserves124.5 127.4 Net change in loss and loss adjustment expense reserves275.3 434.7 
Net change in unearned insurance premiumsNet change in unearned insurance premiums758.7 532.4 Net change in unearned insurance premiums375.4 305.8 
Net change in reinsurance payableNet change in reinsurance payable(4.1)(5.3)Net change in reinsurance payable(104.8)(111.4)
Net change in restricted cashNet change in restricted cash1.2 2.8 Net change in restricted cash(12.2)4.4 
Contributions to Kudu’s Participation ContractsContributions to Kudu’s Participation Contracts(108.3)(97.9)
Proceeds from Kudu’s Participation Contracts soldProceeds from Kudu’s Participation Contracts sold74.6 (52.8)Proceeds from Kudu’s Participation Contracts sold74.6 — 
Contributions to Kudu’s Participation Contracts(81.6)— 
Net other operating activitiesNet other operating activities4.4 (46.3)Net other operating activities43.3 (37.3)
Net cash provided from (used for) operations - continuing operationsNet cash provided from (used for) operations - continuing operations156.7 3.2 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)
Net cash provided from (used for) operations - NSM Group discontinued operations (Note 19)
 36.7 
Net cash provided from (used for) operations - NSM Group discontinued operations (Note 19)
 38.7 
Net cash provided from (used for) operationsNet cash provided from (used for) operations156.7 39.9 Net cash provided from (used for) operations379.6 156.9 
Cash flows from investing activities:Cash flows from investing activities:  Cash flows from investing activities:  
Net change in short-term investmentsNet change in short-term investments(42.6)212.6 Net change in short-term investments(194.9)(735.4)
Sales of fixed maturity investmentsSales of fixed maturity investments90.5 153.4 Sales of fixed maturity investments107.9 212.4 
Maturities, calls and paydowns of fixed maturity investmentsMaturities, calls and paydowns of fixed maturity investments146.3 75.6 Maturities, calls and paydowns of fixed maturity investments212.6 107.3 
Sales of common equity securitiesSales of common equity securities119.2 — Sales of common equity securities129.9 — 
Distributions and redemptions of other long-term investmentsDistributions and redemptions of other long-term investments18.7 46.5 Distributions and redemptions of other long-term investments26.8 55.0 
Proceeds from the sale of other businesses, net of cash sold of $0.8 and $0.017.3 19.5 
Proceeds from the sale of NSM Group and Other Operating Businesses, net of cash sold of $0.8 and $144.4Proceeds 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 $0.3Purchases of consolidated subsidiaries, net of cash acquired of $0.0 and $0.3 (67.9)Purchases of consolidated subsidiaries, net of cash acquired of $0.0 and $0.3 (67.9)
Purchases of fixed maturity investmentsPurchases of fixed maturity investments(240.5)(330.8)Purchases of fixed maturity investments(392.9)(474.1)
Purchases of common equity securities and investment in MediaAlphaPurchases of common equity securities and investment in MediaAlpha(104.2)(38.1)Purchases of common equity securities and investment in MediaAlpha(114.2)(88.0)
Purchases of other long-term investmentsPurchases of other long-term investments(215.9)(50.4)Purchases of other long-term investments(237.7)(136.9)
Net other investing activitiesNet other investing activities(11.6)5.7 Net other investing activities(9.8)3.7 
Net cash provided from (used for) investing activities - continuing operationsNet cash provided from (used for) investing activities - continuing operations(222.8)26.1 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)
Net cash provided from (used for) investing activities - NSM Group discontinued operations (Note 19)
 7.1 
Net cash provided from (used for) investing activities - NSM Group discontinued operations (Note 19)
 7.1 
Net cash provided from (used for) investing activitiesNet cash provided from (used for) investing activities(222.8)33.2 Net cash provided from (used for) investing activities(455.0)267.5 
Cash flows from financing activities:Cash flows from financing activities:  Cash flows from financing activities:  
Draw down of debt and revolving line of credit12.0 203.0 
Repayment of debt and revolving line of credit(23.1)(2.4)
Draw down of debt and revolving lines of creditDraw down of debt and revolving lines of credit12.2 211.8 
Repayment of debt and revolving lines of creditRepayment of debt and revolving lines of credit(24.3)(10.5)
Cash dividends paid to common shareholdersCash dividends paid to common shareholders(2.6)(3.0)Cash dividends paid to common shareholders(2.6)(3.0)
Common shares repurchased(32.7)(101.6)
Repurchases and retirements of common sharesRepurchases and retirements of common shares(32.7)(610.5)
Net contributions from (distributions to) other noncontrolling interestsNet contributions from (distributions to) other noncontrolling interests(7.5)(6.5)Net contributions from (distributions to) other noncontrolling interests(5.3)(9.2)
Net (contributions to) distributions from discontinued operationsNet (contributions to) distributions from discontinued operations 11.6 Net (contributions to) distributions from discontinued operations 11.6 
Acquisition of subsidiary shares from non-controlling interest shareholders 74.6 
Issuances of shares to noncontrolling interestsIssuances of shares to noncontrolling interests 74.6 
BAM member surplus contributionsBAM member surplus contributions26.5 36.3 BAM member surplus contributions46.4 62.3 
Fidus Re premium paymentsFidus Re premium payments(6.9)(3.8)Fidus Re premium payments(10.3)(5.6)
Net other financing activitiesNet other financing activities(.1)(1.8)Net other financing activities(.2)(2.1)
Net cash provided from (used for) financing activities - continuing operationsNet cash provided from (used for) financing activities - continuing operations(34.4)206.4 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)
Net cash provided from (used for) financing activities - NSM Group discontinued operations (Note 19)
 (16.9)
Net cash provided from (used for) financing activities - NSM Group discontinued operations (Note 19)
 (17.5)
Net cash provided from (used for) financing activitiesNet cash provided from (used for) financing activities(34.4)189.5 Net cash provided from (used for) financing activities(16.8)(298.1)
Net change in cash during the period - continuing operationsNet change in cash during the period - continuing operations(100.5)235.7 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)
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 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 $13.4 and $7.3 and excludes
discontinued operations cash balances of $0.0 and $142.7)
$154.5 $383.4 
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)
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 $245.7 
Supplemental cash flows information:Supplemental cash flows information: Supplemental cash flows information: 
Interest paidInterest paid$(11.6)$(6.3)Interest paid$(18.0)$(10.9)
Net income tax paymentsNet income tax payments(27.8)(3.8)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 2022 Annual Report on Form 10-K.

Reportable Segments
As of JuneSeptember 30, 2023, White Mountains conducted its operations through three reportable segments: (1) HG Global/BAM, (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 (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 JuneSeptember 30, 2023 and December 31, 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 noncontrolling interests.
9


The Ark/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, casualty and accident & 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”). As of JuneSeptember 30, 2023 and December 31, 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 sixnine months ended JuneSeptember 30, 2022 are shown net of amounts relating to the TPC Providers’ 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 Note 2 — “Significant Transactions.” As of JuneSeptember 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 generally are structured as minority preferred equity stakes with distribution rights, typically tied to gross revenues and designed to generate immediate cash yields. As of JuneSeptember 30, 2023 and December 31, 2022, White Mountains owned 89.2% and 89.3% of Kudu’s basic units outstanding (76.1% and 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”), 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 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 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 2022 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s significant accounting policies.

10


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 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 (“Participation Contracts”). The go-forward portfolio of Kudu’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%.

11


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 JuneSeptember 30, 2023 and December 31, 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 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 sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Fixed maturity investmentsFixed maturity investments$15.5 $9.4 $30.0 $17.6 Fixed maturity investments$16.6 $11.1 $46.6 $28.6 
Short-term investmentsShort-term investments11.3 .4 21.0 .5 Short-term investments13.8 6.7 34.8 7.2 
Common equity securitiesCommon equity securities1.3 .1 2.6 .1 Common equity securities1.0 .1 3.6 .2 
Other long-term investmentsOther long-term investments15.3 15.6 29.4 28.8 Other long-term investments17.4 17.1 46.8 45.9 
Amount attributable to TPC ProvidersAmount attributable to TPC Providers —  (.5)Amount attributable to TPC Providers (.3) (.8)
Total investment incomeTotal investment income43.4 25.5 83.0 46.5 Total investment income48.8 34.7 131.8 81.1 
Third-party investment expensesThird-party investment expenses(.4)(.4)(1.0)(.8)Third-party investment expenses(.7)(.8)(1.7)(1.5)
Net investment income, pre-taxNet investment income, pre-tax$43.0 $25.1 $82.0 $45.7 Net investment income, pre-tax$48.1 $33.9 $130.1 $79.6 














12


Net Realized and Unrealized Investment Gains (Losses)
The following table presents net realized and unrealized investment gains (losses) for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Realized investment gains (losses)Realized investment gains (losses)Realized investment gains (losses)
Fixed maturity investmentsFixed maturity investments$(1.3)$(4.8)$(1.4)$(5.9)Fixed maturity investments$(.3)$(4.9)$(1.7)$(10.8)
Short-term investmentsShort-term investments.2 (.1)(.1)(.3)Short-term investments(.2)(.1)(.3)(.4)
Common equity securitiesCommon equity securities12.6 — 12.6 — Common equity securities1.2 — 13.8 — 
Other long-term investmentsOther long-term investments1.1 2.0 48.3 20.7 Other long-term investments.6 3.4 48.9 24.1 
Net realized investment gains (losses)Net realized investment gains (losses)12.6 (2.9)59.4 14.5 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(11.5)(54.6)18.2 (134.1)Fixed maturity investments(27.9)(58.8)(9.7)(192.9)
Short-term investmentsShort-term investments.2 (.7)1.3 (.5)Short-term investments(.6)(2.1).7 (2.6)
Common equity securitiesCommon equity securities18.9 (11.6)48.3 (10.6)Common equity securities(18.5)4.3 29.8 (6.3)
Investment in MediaAlphaInvestment in MediaAlpha(77.3)(113.5)7.9 (94.7)Investment in MediaAlpha(46.8)(18.6)(38.9)(113.3)
Other long-term investmentsOther long-term investments68.5 (37.0)74.4 13.4 Other long-term investments34.2 27.5 108.6 40.8 
Net unrealized investment gains (losses)Net unrealized investment gains (losses)(1.2)(217.4)150.1 (226.5)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)
11.4 (220.3)209.5 (212.0)
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 Providers 2.7  4.8 Amount attributable to TPC Providers 1.3  6.2 
Net realized and unrealized investment gains (losses)
Net realized and unrealized investment gains (losses)
$11.4 $(217.6)$209.5 $(207.2)
Net realized and unrealized investment gains (losses)
$(58.3)$(48.0)$151.2 $(255.2)
Fixed maturity and short-term investmentsFixed maturity and short-term investmentsFixed maturity and short-term investments
Net realized and unrealized investment gains (losses) Net realized and unrealized investment gains (losses)$(12.4)$(60.2)$18.0 $(140.8) Net realized and unrealized investment gains (losses)$(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
.4 (2.1)2.2 (3.1)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) 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
$(12.8)$(58.1)$15.8 $(137.7)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
$31.5 $(11.6)$60.9 $(10.6)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
(77.3)(113.5)7.9 (94.7)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)(45.8)(125.1)68.8 (105.3)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
3.8 — 3.8 — Less: net realized and unrealized gains (losses) on investment
securities sold during the period
(.1)— 3.7 — 
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
$(49.6)$(125.1)$65.0 $(105.3)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 JuneSeptember 30, 2023 and 2022, includes $5.5$(12.8) and $(24.5)$(22.6) of net realized and unrealized investment gains (losses) related to foreign currency exchange. For the sixnine months ending JuneSeptember 30, 2023 and 2022, includes $10.9$(1.9) and $(21.8)$(44.4) of net realized and unrealized investment gains (losses) related to foreign currency exchange.

The following table presents total net unrealized gains (losses) attributable to Level 3 investments for the three and sixnine months ended JuneSeptember 30, 2023 and 2022 for investments still held at the end of the period:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Total net unrealized investment gains on other long-term
investments held at the end of the period, pre-tax
Total net unrealized investment gains on other long-term
investments held at the end of the period, pre-tax
$14.4 $(10.2)$51.4 $17.0 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 
13


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 JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023 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$227.6 $— $(9.4)$— $218.2 U.S. Government and agency obligations$270.1 $— $(9.0)$— $261.1 
Debt securities issued by corporationsDebt securities issued by corporations1,061.8 .3 (67.9)(1.7)992.5 Debt securities issued by corporations1,038.8 .1 (74.6)(2.7)961.6 
Municipal obligationsMunicipal obligations273.6 — (19.4)— 254.2 Municipal obligations264.6 — (26.4)— 238.2 
Mortgage and asset-backed securitiesMortgage and asset-backed securities321.9 — (33.9)— 288.0 Mortgage and asset-backed securities372.6 — (47.2)— 325.4 
Collateralized loan obligationsCollateralized loan obligations192.4 .2 (3.6)(1.2)187.8 Collateralized loan obligations196.5 .3 (3.1)(2.1)191.6 
Total fixed maturity investmentsTotal fixed maturity investments$2,077.3 $.5 $(134.2)$(2.9)$1,940.7 Total fixed maturity investments$2,142.6 $.4 $(160.3)$(4.8)$1,977.9 

 December 31, 2022
MillionsCost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Net Foreign
Currency
Gains (Losses)
Carrying
Value
U.S. Government and agency obligations$216.6 $— $(10.2)$— $206.4 
Debt securities issued by corporations1,098.3 .6 (78.3)(1.8)1,018.8 
Municipal obligations281.6 .4 (23.4)— 258.6 
Mortgage and asset-backed securities288.7 — (34.5)— 254.2 
Collateralized loan obligations190.8 .1 (6.0)(2.0)182.9 
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 JuneSeptember 30, 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.
June 30, 2023September 30, 2023
MillionsMillionsCost or Amortized CostCarrying ValueMillionsCost or Amortized CostCarrying Value
Due in one year or lessDue in one year or less$276.3 $269.7 Due in one year or less$307.6 $301.2 
Due after one year through five yearsDue after one year through five years876.2 819.9 Due after one year through five years870.9 813.4 
Due after five years through ten yearsDue after five years through ten years311.7 285.0 Due after five years through ten years302.7 267.6 
Due after ten yearsDue after ten years98.8 90.3 Due after ten years92.3 78.7 
Mortgage and asset-backed securities and collateralized loan obligationsMortgage and asset-backed securities and collateralized loan obligations514.3 475.8 Mortgage and asset-backed securities and collateralized loan obligations569.1 517.0 
Total fixed maturity investmentsTotal fixed maturity investments$2,077.3 $1,940.7 Total fixed maturity investments$2,142.6 $1,977.9 


14


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 JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023 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$599.0 $64.1 $(1.8)$(6.2)$655.1 Common equity securities$599.5 $51.6 $(4.8)$(9.3)$637.0 
Investment in MediaAlphaInvestment in MediaAlpha$59.2 $176.5 $ $ $235.7 Investment in MediaAlpha$59.2 $139.9 $(10.3)$ $188.8 
Other long-term investmentsOther long-term investments$1,593.3 $337.5 $(104.7)$(11.1)$1,815.0 Other long-term investments$1,639.9 $390.9 $(116.6)$(18.4)$1,895.8 

 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 JuneSeptember 30, 2023 and December 31, 2022, White Mountains used quoted market prices or other observable inputs to determine fair value for approximately 68% and 72% of the investment portfolio.

Fair Value Measurements by Level

The following tables present White Mountains’s fair value measurements for investments as of JuneSeptember 30, 2023 and December 31, 2022 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.
15


June 30, 2023 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$218.2 $218.2 $ $ 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:
FinancialsFinancials289.8  289.8  Financials290.1  290.1  
ConsumerConsumer193.1  193.1  Consumer188.3  188.3  
HealthcareHealthcare122.7  122.7  Healthcare109.1  109.1  
IndustrialIndustrial107.8  107.8  
TechnologyTechnology116.2  116.2  Technology107.5  107.5  
Industrial111.7  111.7  
UtilitiesUtilities66.2  66.2  Utilities66.6  66.6  
CommunicationsCommunications42.7  42.7  Communications42.4  42.4  
EnergyEnergy29.1  29.1  Energy29.1  29.1  
MaterialsMaterials21.0  21.0  Materials20.7  20.7  
Total debt securities issued by corporationsTotal debt securities issued by corporations992.5  992.5  Total debt securities issued by corporations961.6  961.6  
Municipal obligationsMunicipal obligations254.2  254.2  Municipal obligations238.2  238.2  
Mortgage and asset-backed securitiesMortgage and asset-backed securities288.0  288.0  Mortgage and asset-backed securities325.4  325.4  
Collateralized loan obligationsCollateralized loan obligations187.8  187.8  Collateralized loan obligations191.6  191.6  
Total fixed maturity investmentsTotal fixed maturity investments1,940.7 218.2 1,722.5  Total fixed maturity investments1,977.9 261.1 1,716.8  
Short-term investmentsShort-term investments986.1 982.2 3.9  Short-term investments1,162.9 1,149.7 13.2  
Common equity securities:Common equity securities:Common equity securities:
Exchange-traded fundsExchange-traded funds272.5 272.5   Exchange-traded funds252.1 252.1   
Other (1)
Other (1)
382.6  382.6  
Other (1)
384.9  384.9  
Total common equity securitiesTotal common equity securities655.1 272.5 382.6  Total common equity securities637.0 252.1 384.9  
Investment in MediaAlphaInvestment in MediaAlpha235.7 235.7   Investment in MediaAlpha188.8 188.8   
Other long-term investmentsOther long-term investments1,033.3  14.9 1,018.4 Other long-term investments1,090.7  15.4 1,075.3 
Other long-term investments NAV (2)
Other long-term investments NAV (2)
781.7    
Other long-term investments NAV (2)
805.1    
Total other long-term investmentsTotal other long-term investments1,815.0  14.9 1,018.4 Total other long-term investments1,895.8  15.4 1,075.3 
Total investmentsTotal investments$5,632.6 $1,708.6 $2,123.9 $1,018.4 Total investments$5,862.4 $1,851.7 $2,130.3 $1,075.3 
(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.


16


December 31, 2022December 31, 2022
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$206.4 $206.4 $— $— U.S. Government and agency obligations$206.4 $206.4 $— $— 
Debt securities issued by corporations:Debt securities issued by corporations:    Debt securities issued by corporations:
FinancialsFinancials291.2 — 291.2 — Financials291.2 — 291.2 — 
ConsumerConsumer191.9 — 191.9 — Consumer191.9 — 191.9 — 
HealthcareHealthcare121.3 — 121.3 — Healthcare121.3 — 121.3 — 
IndustrialIndustrial115.4 — 115.4 — 
TechnologyTechnology123.7 — 123.7 — Technology123.7 — 123.7 — 
Industrial115.4 — 115.4 — 
UtilitiesUtilities73.8 — 73.8 — Utilities73.8 — 73.8 — 
CommunicationsCommunications47.9 — 47.9 — Communications47.9 — 47.9 — 
EnergyEnergy33.9 — 33.9 — Energy33.9 — 33.9 — 
MaterialsMaterials19.7 — 19.7 — Materials19.7 — 19.7 — 
Total debt securities issued by corporationsTotal debt securities issued by corporations1,018.8 — 1,018.8 — Total debt securities issued by corporations1,018.8 — 1,018.8 — 
Municipal obligationsMunicipal obligations258.6 — 258.6 — Municipal obligations258.6 — 258.6 — 
Mortgage and asset-backed securitiesMortgage and asset-backed securities254.2 — 254.2 — Mortgage and asset-backed securities254.2 — 254.2 — 
Collateralized loan obligationsCollateralized loan obligations182.9 — 182.9 — Collateralized loan obligations182.9 — 182.9 — 
Total fixed maturity investmentsTotal fixed maturity investments1,920.9 206.4 1,714.5 — Total fixed maturity investments1,920.9 206.4 1,714.5 — 
Short-term investmentsShort-term investments924.1 924.1 — — Short-term investments924.1 924.1 — — 
Common equity securities:Common equity securities:Common equity securities:
Exchange-traded fundsExchange-traded funds333.8 333.8 — — Exchange-traded funds333.8 333.8 — — 
Other (1)
Other (1)
334.6 — 334.6 — 
Other (1)
334.6 — 334.6 — 
Total common equity securitiesTotal common equity securities668.4 333.8 334.6 — Total common equity securities668.4 333.8 334.6 — 
Investment in MediaAlphaInvestment in MediaAlpha168.6 168.6 — — Investment in MediaAlpha168.6 168.6 — — 
Other long-term investmentsOther long-term investments926.4 — 14.8 911.6 Other long-term investments926.4 — 14.8 911.6 
Other long-term investments NAV (2)
Other long-term investments NAV (2)
561.6 — — — 
Other long-term investments NAV (2)
561.6 — — — 
Total other long-term investmentsTotal other long-term investments1,488.0 — 14.8 911.6 Total other long-term investments1,488.0 — 14.8 911.6 
Total investmentsTotal investments$5,170.0 $1,632.9 $2,063.9 $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 JuneSeptember 30, 2023 and December 31, 2022, investments of $524.0$531.8 million and $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 JuneSeptember 30, 2023 and December 31, 2022, the fair value of the interest reserve account, which wasis included in short-term investments, was $29.7$29.9 million and $31.2 million. SeeNote 7 - “Debt.”
BAM is required to maintain deposits with certain insurance regulatory agencies in order to maintain its insurance licenses. The fair value of such deposits, which represent state deposits and are included within the investment portfolio, totaled $4.6 million as of both JuneSeptember 30, 2023 and December 31, 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 JuneSeptember 30, 2023 and December 31, 2022, Ark held Lloyd’s trust deposits with a fair value of $152.3$150.3 million and $137.4 million.

17


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 whether each member has sufficient assets to meet its underwriting liabilities plus a required solvency margin. As of JuneSeptember 30, 2023 and December 31, 2022, the fair value of Ark’s Funds at Lloyd’s investment deposits totaled $335.3$335.2 million and $319.2 million.
As of JuneSeptember 30, 2023 and December 31, 2022, Ark held additional investments on deposit or as collateral for insurance regulators and reinsurance counterparties of $244.9$232.4 million and $257.0 million.
As of JuneSeptember 30, 2023 and December 31, 2022, Ark had $145.5$147.2 million and $90.3 million of short-term investments pledged as collateral under uncommitted standby letters of credit. See Note 7 — “Debt.”
As of JuneSeptember 30, 2023 and December 31, 2022, short-term investments of $211.4$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.”

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 JuneSeptember 30, 2023 and December 31, 2022:
Fair Value atFair Value at
MillionsMillionsJune 30, 2023December 31, 2022MillionsSeptember 30, 2023December 31, 2022
AAAAAA$12.7 $11.3 AAA$12.6 $11.3 
AAAA87.7 96.0 AA84.3 96.0 
AA552.4 567.9 A509.6 567.9 
BBBBBB333.4 337.7 BBB349.1 337.7 
OtherOther6.3 5.9 Other6.0 5.9 
Debt securities issued by corporations (1)
Debt securities issued by corporations (1)
$992.5 $1,018.8 
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 JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022 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$155.6 $155.6 $ $124.5 $124.5 $— FNMA$162.5 $162.5 $ $124.5 $124.5 $— 
FHLMCFHLMC86.2 86.2  78.8 78.8 — FHLMC114.3 114.3  78.8 78.8 — 
GNMAGNMA31.6 31.6  28.3 28.3 — GNMA29.2 29.2  28.3 28.3 — 
Total agency (1)
Total agency (1)
273.4 273.4 — 231.6 231.6  
Total agency (1)
306.0 306.0 — 231.6 231.6  
Non-agency: ResidentialNon-agency: Residential.2 .2  .3 .3 — Non-agency: Residential.2 .2  .3 .3 — 
Total non-agency Total non-agency.2 .2  .3 .3 —  Total non-agency.2 .2  .3 .3 — 
Total mortgage-backed securities Total mortgage-backed securities273.6 273.6 — 231.9 231.9 —  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 receivables3.2 3.2  11.9 11.9 — Credit card receivables3.2 3.2  11.9 11.9 — 
Vehicle receivablesVehicle receivables11.2 11.2  10.4 10.4 — Vehicle receivables13.5 13.5  10.4 10.4 — 
OtherOther2.5 2.5 — — — — 
Total other asset-backed securitiesTotal other asset-backed securities14.4 14.4  22.3 22.3 — Total other asset-backed securities19.2 19.2  22.3 22.3 — 
Total mortgage and asset-backed securitiesTotal mortgage and asset-backed securities288.0288.0 254.2254.2 Total mortgage and asset-backed securities325.4325.4 254.2254.2 
Collateralized loan obligationsCollateralized loan obligations187.8 187.8  182.9 182.9 — Collateralized loan obligations191.6 191.6  182.9 182.9 — 
Total mortgage and asset-backed securities
and collateralized loan obligations
Total mortgage and asset-backed securities
and collateralized loan obligations
$475.8 $475.8 $— $437.1 $437.1 $— 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).

18


As of JuneSeptember 30, 2023 and December 31, 2022, White Mountains’s investment portfolio included $187.8$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 JuneSeptember 30, 2023.2023 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 JuneSeptember 30, 2023, White Mountains owned 22.9 million shares, representing a 35.7%35.3% basic ownership interest (33.0% on a fully diluted, fully converted basis). See Note 16 — “Equity Method Eligible Investments.” At thisWhite 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 JuneSeptember 30, 2023 closing price of $10.31$8.26 per share, the fair value of White Mountains’s investment in MediaAlpha was $235.7$188.8 million.

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 JuneSeptember 30, 2023 and December 31, 2022:
Fair Value at June 30, 2023Fair Value at September 30, 2023
MillionsMillionsArk/ WM OutriggerKuduOtherTotalMillionsArk/ WM OutriggerKuduOtherTotal
Kudu’s Participation ContractsKudu’s Participation Contracts$ $737.1 $ 737.1 Kudu’s Participation Contracts$ $775.3 $ $775.3 
PassportCard/DavidShield
PassportCard/DavidShield
  150.0 150.0 
PassportCard/DavidShield
  150.0 150.0 
Elementum Holdings, L.P.Elementum Holdings, L.P.  30.0 30.0 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)
  87.5 87.5 
Other unconsolidated entities (1)
  41.8 41.8 
Total unconsolidated entitiesTotal unconsolidated entities 737.1 267.5 1,004.6 Total unconsolidated entities 775.3 285.3 1,060.6 
Private equity funds and hedge fundsPrivate equity funds and hedge funds52.8  236.5 289.3 Private equity funds and hedge funds55.4  243.9 299.3 
Bank loan fundBank loan fund184.3   184.3 Bank loan fund189.3   189.3 
ILS fundsILS funds  153.3 153.3 ILS funds  159.5 159.5 
Lloyd’s trust depositsLloyd’s trust deposits152.3   152.3 Lloyd’s trust deposits150.3   150.3 
Private debt instrumentsPrivate debt instruments  9.9 9.9 Private debt instruments 5.4 9.4 14.8 
OtherOther21.3   21.3 Other21.6  .4 22.0 
Total other long-term investmentsTotal other long-term investments$410.7 $737.1 $667.2 $1,815.0 Total other long-term investments$416.6 $780.7 $698.5 $1,895.8 
(1) Includes White Mountains’s noncontrolling equity interests in certain preferred securities, private common equity securities, preferred securities, limited liability company units and Simple Agreement for Future Equity (“SAFE”) investments.
Fair Value at December 31, 2022
MillionsArk/ WM OutriggerKuduOtherTotal
Kudu’s Participation Contracts$— $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, preferred securities, limited liability company units and Simple Agreement for Future Equity (“SAFE”) investments.

19


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 JuneSeptember 30, 2023, White Mountains held investments in eighteen private equity funds and two hedge funds. The largest investment in a single private equity fund or hedge fund was $54.3$53.4 million as of JuneSeptember 30, 2023 and $49.0 million andas of December 31, 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 JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022 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$139.8 $32.3 $59.4 $37.5 Aerospace/Defense/Government$146.4 $25.5 $59.4 $37.5 
Financial servicesFinancial services85.7 44.9 77.1 54.3 Financial services88.6 41.8 77.1 54.3 
Real estateReal estate4.2 2.5 4.1 2.5 Real estate4.2 2.5 4.1 2.5 
Total private equity fundsTotal private equity funds229.7 79.7 140.6 94.3 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 services49.8  49.0 — Long/short equity financials and business services51.1  49.0 — 
European small/mid capEuropean small/mid cap9.8  8.2 — European small/mid cap9.0  8.2 — 
Total hedge fundsTotal hedge funds59.6  57.2 — 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
$289.3 $79.7 $197.8 $94.3 
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.
The following table presents investments in private equity funds that were subject to lock-up periods as of JuneSeptember 30, 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$4.3$73.4$141.9$10.1$229.7Private 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 JuneSeptember 30, 2023 and December 31, 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 fund 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 $184.3$189.3 million and $174.8 million as of JuneSeptember 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.

2021


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 JuneSeptember 30, 2023 and December 31, 2022, White Mountains held Lloyd’s trust deposits with a fair value of $152.3$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 JuneSeptember 30, 2023 and December 31, 2022, White Mountains held investments in ILS funds with a fair value of $153.3$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.
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, or until the underlying investment has fully matured or been commuted.

Rollforward of Level 3 Investments

Level 3 measurements as of JuneSeptember 30, 2023 and 2022 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 sixnine months ended JuneSeptember 30, 2023 and 2022:
Level 3 InvestmentsLevel 3 InvestmentsLevel 3 Investments
MillionsMillionsOther Long-term
Investments
Other Long-term
Investments
MillionsOther Long-term
Investments
Other Long-term
Investments
Balance at December 31, 2022Balance at December 31, 2022$911.6 Balance at December 31, 2021$890.6 Balance at December 31, 2022$911.6 Balance at December 31, 2021$890.6 
Net realized and unrealized gainsNet realized and unrealized gains49.5 Net realized and unrealized gains16.6 Net realized and unrealized gains74.0 Net realized and unrealized gains57.3 
Amortization/accretion Amortization/accretion— 
Purchases and contributionsPurchases and contributions167.7 Purchases and contributions57.8 Purchases and contributions200.1 Purchases and contributions127.9 
Sales and distributionsSales and distributions(110.4)Sales and distributions(31.7)Sales and distributions(110.4)Sales and distributions(31.7)
Transfers inTransfers in Transfers in— Transfers in Transfers in— 
Transfers outTransfers out Transfers out— Transfers out Transfers out— 
Balance at June 30, 2023$1,018.4 Balance at June 30, 2022$933.3 
Balance at September 30, 2023Balance at September 30, 2023$1,075.3 Balance at September 30, 2022$1,044.1 

Fair Value Measurements — Transfers Between Levels - SixNine months ended JuneSeptember 30, 2023 and 2022
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 sixnine months ended JuneSeptember 30, 2023 and 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 sixnine months ended JuneSeptember 30, 2023 and 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.

2122


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 JuneSeptember 30, 2023 and December 31, 2022. The tables below exclude $91.8$41.7 million and $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 MillionsJune 30, 2023$ 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 (5)
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (5)
Discount Rate (5)
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (5)
Kudu’s Participation Contracts (3)(4)
Kudu’s Participation Contracts (3)(4)
Discounted cash flow
$737.117% - 25%7x - 22x
Kudu’s Participation Contracts (3)(4)
Discounted cash flow
$775.319% - 26%7x - 22x
PassportCard/DavidShieldPassportCard/DavidShieldDiscounted cash flow$150.024%4%PassportCard/DavidShieldDiscounted cash flow$150.025%4%
Elementum Holdings, L.P.Elementum Holdings, L.P.Discounted cash flow$30.024%4%Elementum Holdings, L.P.Discounted cash flow$35.025%4%
Mandatorily redeemable preferred
securities
Mandatorily redeemable preferred
securities
Discounted cash flow$58.515%N/A
Private debt instrumentsPrivate debt instrumentsDiscounted cash flow$9.511%N/APrivate 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 was 20%21% and 13.0x.13x.
(4) In the first sixnine months of 2023, Kudu deployed a total of $81.6$108.3 into new and existing Participation Contracts.
(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 MillionsDecember 31, 2022
Description
Valuation Technique(s) (1)
Fair Value (2)
Unobservable Inputs
Discount Rate (6)
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (6)
Kudu’s Participation Contracts (3)(4)(5)
Discounted cash flow
$695.918% - 25%7x - 16x
PassportCard/DavidShieldDiscounted cash flow$135.024%4%
Elementum Holdings, L.P.Discounted cash flow$30.021%4%
Private 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 was 21% and 11.8x.12x.
(4) In 2022, Kudu deployed a total of $99.8 into new and existing Participation Contracts.
(5) As of December 31, 2022, two of Kudu’s Participation Contracts with a total fair value of $189.0 were valued using a probability weighted expected return method, which takes into account factors such as a discounted cash flow analysis, the expected value to be received in a pending sale transaction and 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.


2223


Note 4. Goodwill and Other Intangible Assets

    White Mountains accounts for business combinations using the acquisition method. Under the acquisition method, White Mountains recognizes and measures the assets acquired, liabilities assumed and any noncontrolling 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 as of JuneSeptember 30, 2023 and December 31, 2022:
$ in Millions$ in MillionsWeighted Average Economic
 Life
(in years)
June 30, 2023December 31, 2022$ in MillionsWeighted Average Economic
 Life
(in years)
September 30, 2023December 31, 2022
Acquisition Date Fair ValueAccumulated AmortizationNet Carrying ValueAcquisition Date Fair ValueAccumulated AmortizationWeighted Average Economic
 Life
(in years)
Acquisition Date Fair ValueAccumulated AmortizationNet Carrying ValueAcquisition Date Fair ValueAccumulated AmortizationNet Carrying Value
Goodwill: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/A44.4  44.4 52.1 — 52.1 Other OperationsN/A44.4  44.4 52.1 — 52.1 
Total goodwillTotal goodwill168.8  168.8 176.5 — 176.5 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 namesTrade names72.2 1.4 .8 2.2 1.2 1.0 Trade names72.2 1.4 .8 2.2 1.2 1.0 
Other OperationsOther OperationsOther Operations
Trade namesTrade names13.313.3 3.3 10.0 17.9 3.0 14.9 Trade names13.313.3 3.7 9.6 17.9 3.0 14.9 
Customer relationshipsCustomer relationships11.024.8 8.5 16.3 29.5 7.5 22.0 Customer relationships10.924.8 9.4 15.4 29.5 7.5 22.0 
OtherOther12.12.8 .8 2.0 2.8 .5 2.3 Other12.12.8 1.0 1.8 2.8 .5 2.3 
SubtotalSubtotal40.9 12.6 28.3 50.2 11.0 39.2 Subtotal40.9 14.1 26.8 50.2 11.0 39.2 
Total other intangible assetsTotal other intangible assets218.8 14.0 204.8 228.1 12.2 215.9 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
$387.6 $14.0 $373.6 $404.6 $12.2 $392.4 
Total goodwill and other intangible assets
$387.6 $15.5 $372.1 $404.6 $12.2 $392.4 


23


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 and customer 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 trade names and 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.
24


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 an impairment may exist and, if necessary will perform an interim review for potential impairment.
During the three and sixnine months ended JuneSeptember 30, 2023 and 2022, White Mountains did not recognize any impairments to goodwill and other intangible assets.

Rollforward of Goodwill and Other Intangible Assets

The following table presents the change in goodwill and other intangible assets for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Three Months Ended September 30,
2023202220232022
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$168.8 $207.4 $376.2 $142.3 $197.2 $339.5 Beginning balance$168.8 $204.8 $373.6 $201.8 $196.2 $398.0 
Acquisition of businesses   59.5 (1)— 59.5 
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 — 
Measurement period adjustments (2)
Measurement period adjustments (2)
—   (3.4)— (3.4)
AmortizationAmortization (2.6)(2.6)— (1.0)(1.0)Amortization (1.5)(1.5)— (1.4)(1.4)
Ending balanceEnding balance$168.8 $204.8 $373.6 $201.8 $196.2 $398.0 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 recentacquisitions 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, adjustments relate to acquisitions within Other Operations had not yet beenOperations.
finalized.

Six Months Ended June 30,Nine Months Ended September 30,
2023202220232022
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$176.5 $215.9 $392.4 $142.3 $198.2 $340.5 Beginning balance$176.5 $215.9 $392.4 $142.3 $198.2 $340.5 
Acquisition of businesses(1)Acquisition of businesses(1)   59.5 (1)— 59.5 Acquisition of businesses(1)   59.5 — 59.5 
Dispositions (2)
Dispositions (2)
(6.7)(6.9)(13.6)— — — 
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 — 
Measurement period adjustments (3)
Measurement period adjustments (3)
(1.0) (1.0)— — — 
Measurement period adjustments (3)
(1.0) (1.0)(3.4)— (3.4)
AmortizationAmortization (4.2)(4.2)— (2.0)(2.0)Amortization (5.7)(5.7)— (3.4)(3.4)
Ending balanceEnding balance$168.8 $204.8 $373.6 $201.8 $196.2 $398.0 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 recent acquisitions within Other Operationsduring 2022 had not yet been finalized as of the end of the period.
finalized.
(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 sixnine months ended JuneSeptember 30, 2023,2022, adjustments relate to an acquisitionacquisitions within Other Operations.
2425


Note 5.  Loss and Loss Adjustment Expense Reserves

P&C Insurance and Reinsurance

The following table summarizes the loss and loss adjustment expense (“LAE”) reserve activity of the Ark/WM Outrigger segment for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:

Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Gross beginning balanceGross beginning balance$1,345.6 $999.6 $1,296.5 $894.7 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)
(348.9)(396.0)(505.0)(428.9)
Less: beginning reinsurance recoverable on unpaid losses (1)
(362.7)(375.5)(505.0)(428.9)
Net loss and LAE reservesNet loss and LAE reserves996.7 603.6 791.5 465.8 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 losses156.5 143.2 295.7 268.9 Current year losses266.4 222.9 562.1 491.8 
Prior year lossesPrior year losses11.0 (22.7)19.6 (26.4)Prior year losses(.6)(9.2)19.0 (35.6)
Net incurred losses and LAENet incurred losses and LAE167.5 120.5 315.3 242.5 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(5.6)(14.1)(9.6)(14.7)Current year losses(8.8)(6.1)(18.4)(20.8)
Prior year lossesPrior year losses(103.0)(54.4)(190.7)(93.8)Prior year losses(90.4)(37.0)(281.1)(130.8)
Net paid loss and LAENet paid loss and LAE(108.6)(68.5)(200.3)(108.5)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)
 — 145.4 57.5 
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
2.7 (9.0)6.4 (10.7)Foreign currency translation and other adjustments to loss
and LAE reserves
(5.5)(9.2).9 (19.9)
Net ending balanceNet ending balance1,058.3 646.6 1,058.3 646.6 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)
362.7 375.5 362.7 375.5 
Plus: ending reinsurance recoverable on unpaid losses (3)
352.4 521.4 352.4 521.4 
Gross ending balanceGross ending balance$1,421.0 $1,022.1 $1,421.0 $1,022.1 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 $0.0 and $207.3$182.4 for the three months ended JuneSeptember 30, 2023 and 2022 and $145.4 and $276.8 for the sixnine months ended JuneSeptember 30, 2023 and 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 process.
(3) The ending reinsurance recoverable on unpaid losses includes amounts attributable to TPC Providers of $0.0 and $182.4$168.0 as of JuneSeptember 30, 2023 and 2022.

For the three and sixnine months ended JuneSeptember 30, 2023, the Ark/WM Outrigger segment recognized $11.0$0.6 million of net favorable prior year loss reserve development and $19.6$19.0 million of net unfavorable prior year loss reserve development. The net unfavorable prior year loss reserve development at Ark,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 sixnine months ended JuneSeptember 30, 2022, the Ark/WM Outrigger segment recognized $22.7$9.2 million and $26.4$35.6 million of net favorable prior year loss reserve development, at Ark, driven primarily by good claims experience across most classes including the property and specialty lines of business, including favorable claims experience on prior year catastrophe eventspredominantly from business underwritten in the second quarter.London.

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. For the years of account subsequent to the Ark Transaction, Ark is no longer using TPC Providers to provide underwriting capital for the Syndicates.
2526


A 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 was 42.8%.

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 the Ark/WM Outrigger segment for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
MillionsMillionsThree Months Ended June 30,Six Months Ended June 30,MillionsThree Months Ended September 30,Nine Months Ended September 30,
20232022202320222023202220232022
Written premiums:Written premiums:Written premiums:
DirectDirect$291.5 $214.3 $537.7 $445.2 Direct$189.4 $118.6 $727.1 $563.8 
AssumedAssumed314.6 189.6 877.8 591.8 Assumed61.8 96.9 939.6 688.7 
Gross written premiumsGross written premiums606.1 403.9 1,415.5 1,037.0 Gross written premiums251.2 215.5 1,666.7 1,252.5 
CededCeded(144.9)(1)(133.7)(340.1)(1)(223.0)Ceded(20.2)(1)(22.9)(360.3)(1)(246.0)
Net written premiumsNet written premiums$461.2 $270.2 $1,075.4 $814.0 Net written premiums$231.0 $192.6 $1,306.4 $1,006.5 
Earned premiums:Earned premiums:Earned premiums:
DirectDirect$200.6 $160.7 $351.0 $299.4 Direct$273.1 $193.5 $624.1 $492.9 
AssumedAssumed152.5 105.7 314.6 212.3 Assumed370.0 261.4 684.6 473.7 
Gross earned premiumsGross earned premiums353.1 266.4 665.6 511.7 Gross earned premiums643.1 454.9 1,308.7 966.6 
CededCeded(59.8)(2)(49.1)(117.2)(2)(100.0)Ceded(144.2)(2)(108.8)(261.4)(2)(208.8)
Net earned premiumsNet earned premiums$293.3 $217.3 $548.4 $411.7 Net earned premiums$498.9 $346.1 $1,047.3 $757.8 
Losses and LAE:Losses and LAE:Losses and LAE:
GrossGross$195.8 $138.4 $358.2 $321.5 Gross$269.3 $391.4 $627.5 $712.9 
CededCeded(28.3)(3)(17.9)(42.9)(3)(79.0)Ceded(3.5)(3)(177.7)(46.4)(3)(256.7)
Net losses and LAENet losses and LAE$167.5 $120.5 $315.3 $242.5 Net losses and LAE$265.8 $213.7 $581.1 $456.2 
(1) The ceded written premiums exclude $58.3$6.0 and $102.4$108.4 ceded by Ark to WM Outrigger Re for the three and sixnine months ended JuneSeptember 30, 2023, which eliminate in White Mountains’s consolidated financial statements.
(2) The ceded earned premiums exclude $9.6$60.6 and $14.8$75.4 ceded by Ark to WM Outrigger Re for the three and nine months and six ended JuneSeptember 30, 2023, which eliminate in White Mountains’s consolidated financial statements.
(3) The ceded loss and LAE exclude $0.4$7.3 and $0.6$7.9 ceded by Ark to WM Outrigger Re for the three and nine months and six ended JuneSeptember 30, 2023, which eliminate in White Mountains’s consolidated financial statements.

2627


The following table presents the Ark/WM Outrigger segment’s reinsurance recoverables as of JuneSeptember 30, 2023 and December 31, 2022:
MillionsMillionsJune 30, 2023December 31, 2022MillionsSeptember 30, 2023December 31, 2022
Reinsurance recoverables on unpaid lossesReinsurance recoverables on unpaid losses$362.7 (1)$505.0 (3)Reinsurance recoverables on unpaid losses$352.4 (1)$505.0 (3)
Reinsurance recoverables on paid lossesReinsurance recoverables on paid losses23.3 31.1 Reinsurance recoverables on paid losses26.3 31.1 
Ceded unearned premiumsCeded unearned premiums283.7 (2)59.2 Ceded unearned premiums159.7 (2)59.2 
Reinsurance recoverablesReinsurance recoverables$669.7 $595.3 Reinsurance recoverables$538.4 $595.3 
(1) The reinsurance recoverables on unpaid losses exclude $0.6$7.9 ceded by Ark to WM Outrigger Re as of JuneSeptember 30, 2023, which eliminate in White Mountains’s consolidated financial statements.
(2) The ceded unearned premiums exclude $87.6$33.0 ceded by Ark to WM Outrigger Re as of JuneSeptember 30, 2023, which eliminate in White Mountains’s consolidated financial statements.
(3) The reinsurance recoverables on unpaid 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.
The following table presents the Ark/WM Outrigger segment’s gross and net reinsurance recoverables by the reinsurer’s A.M. Best Company, Inc (“A.M. Best”) ratings as of JuneSeptember 30, 2023:
$ in Millions$ in MillionsAs of June 30, 2023$ 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$197.5 $— $197.5 69.2 %A+ or better$203.7 $— $203.7 69.6 %
A- to AA- to A78.3— 78.327.4 A- to A78.8— 78.826.9 
B++ or lower and not ratedB++ or lower and not rated110.2(2)100.5(2)9.7 3.4 B++ or lower and not rated96.2(2)85.9(2)10.3 3.5 
TotalTotal$386.0 $100.5 $285.5 100.0 %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).
(2) Excludes $0.6$7.9 ceded by Ark to WM Outrigger Re as of JuneSeptember 30, 2023, which eliminates in White Mountains’s consolidated financial statements.

Reinsurance Contracts Accounted for as Deposits
Ark has an aggregate excess of loss contract with SiriusPoint Ltd. (“SiriusPoint”), which is accounted for using the deposit method and recorded within other assets. Ark earns an annual crediting rate of 3.0%, which is recorded within other revenue. As of JuneSeptember 30, 2023 and December 31, 2022, the carrying value of Ark’s deposit in SiriusPoint, including accrued interest, was $20.1$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.

2728


Note 7.  Debt

The following table presents White Mountains’s debt outstanding as of JuneSeptember 30, 2023 and December 31, 2022:
$ in MillionsJune 30, 2023Effective
  Rate
 (1)December 31, 2022Effective
  Rate
 (1)
HG Global Senior Notes$150.0 11.5%$150.0 8.9%
Unamortized discount and issuance cost(3.3)(3.5)
HG Global Senior Notes, carrying value146.7 146.5 
Ark 2007 Subordinated Notes, carrying value30.0 30.0 
Ark 2021 Subordinated Notes Tranche 142.6 41.3 
Ark 2021 Subordinated Notes Tranche 247.0 47.0 
Ark 2021 Subordinated Notes Tranche 370.0 70.0 
Unamortized issuance cost(4.5)(4.6)
Ark 2021 Subordinated Notes, carrying value155.1 153.7 
    Total Ark Subordinated Notes, carrying value185.1 10.5%183.7 7.6%
Kudu Credit Facility210.3 9.6%215.2 6.1%
Unamortized issuance cost(6.6)(6.9)
Kudu Credit Facility, carrying value203.7 208.3 
Other Operations debt31.2 9.1%37.4 6.6%
Unamortized issuance cost(.6)(.7)
Other Operations debt, carrying value30.6 36.7 
Total debt$566.1 $575.2 
$ 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 and, where applicable, the original issue discount.

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 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 amount 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 upperiod. 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 JuneSeptember 30, 2023, the fair value of the interest reserve account, which is included in short-term investments, was $29.7$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 such collateral. The HG Global Senior Notes contain various affirmative and negative covenants that White Mountains considers to be customary for such borrowings.
If the payment of principal and interest under the HG Global Senior Notes becomes 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 JuneSeptember 30, 2023, the HG Global Senior Notes had an investment grade rating.
As of JuneSeptember 30, 2023, the HG Global Senior Notes had an outstanding 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 JuneSeptember 30, 2023, the Ark 2007 Subordinated Notes had an outstanding 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 (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 Euro 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.
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 JuneSeptember 30, 2023, there were no premium load events.
As of JuneSeptember 30, 2023, the Ark 2021 Subordinated Notes Tranche 1 had an outstanding balance of €39.1 million ($42.641.9 million based upon the foreign exchange spot rate as of JuneSeptember 30, 2023), the Ark 2021 Subordinated Notes Tranche 2 had an outstanding balance of $47.0 million, and the Ark 2021 Subordinated Notes Tranche 3 had an outstanding 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 into 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 JuneSeptember 30, 2023, the ING LOC Facility was undrawn. As of JuneSeptember 30, 2023, the Citibank LOC Facility had an outstanding balance of $93.7$93.2 million and short-term investments pledged as collateral of $107.4$108.6 million. As of JuneSeptember 30, 2023, the Lloyds LOC Facility had an outstanding balance of $35.0$25.9 million and short-term investments pledged as collateral of $38.1$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

On March 23, 2021, Kudu entered into a secured revolving credit facility (the “Kudu Credit Facility”) with Mass Mutual to repay 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.
Through June 30, 2023, interest on the Kudu Credit Facility accrued at a floating interest rate equal to the greater of the three monththree-month LIBOR or 0.25% plus, in each case, 4.30%. Effective July 1, 2023, the Kudu Credit Facility was amended such that the interest rate is equal to the three month Secured Overnight Financing Rate (“SOFR”) plus a credit adjustment spread of 0.26% and 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 JuneSeptember 30, 2023, the interest reserve account had a balance of $13.4 million.$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. The Kudu Credit Facility requires Kudu to maintain a ratio of the outstanding balance to the sum of the fair market value of Kudu’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 JuneSeptember 30, 2023, Kudu had a 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 Participation Contracts. When considering the fair value of Kudu’s qualifying Participation Contracts as of JuneSeptember 30, 2023, the available undrawn balance was $59.7$74.1 million.
The following table presents the change in debt under the Kudu Credit Facility for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:

Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Kudu Credit FacilityKudu Credit FacilityKudu Credit Facility
Beginning balanceBeginning balance$198.3 $225.4 $215.2 $225.4 Beginning balance$210.3 $260.4 $215.2 $225.4 
Term loansTerm loansTerm loans
BorrowingsBorrowings12.0 35.0 12.0 35.0 Borrowings — 12.0 35.0 
RepaymentsRepayments — (16.9)— Repayments — (16.9)— 
Ending balanceEnding balance$210.3 $260.4 $210.3 $260.4 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 JuneSeptember 30, 2023, White Mountains’s Other Operations had debt with an outstanding balance of $31.2$30.1 million, which consisted of four secured credit facilities (collectively, “Other Operations debt”).

Compliance

At JuneSeptember 30, 2023, White Mountains was in compliance, in all material respects, with all of the covenants under 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 JuneSeptember 30, 2023, the primary jurisdictions in which the Company’s subsidiaries and branches were subject to tax include 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 and six months ended JuneSeptember 30, 2023 represented an effective tax rate of 1.1%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 5.6%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 sixnine months ended JuneSeptember 30, 2022 represented an effective tax rate of 6.9%23.9% and 7.6%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 an increase in the full valuation allowance on net deferred tax assets in certain U.S. operations within Other Operations, an increase in the full valuation allowance at BAM, as well as state income taxes.
On April 1, 2023, the U.K. corporate tax rate increased from 19.0% to 25.0%.
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 the results of its operations.
In arriving at the effective tax rate for the three and sixnine months ended JuneSeptember 30, 2023 and 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, 2023 and 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 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. As of JuneSeptember 30, 2023, the three-month SOFR rate was 5.3%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 sixnine months ended JuneSeptember 30, 2023, White Mountains recognized a gain of $1.4$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 sixnine months ended JuneSeptember 30, 2022, White Mountains recognized a lossgain of $1.5$2.1 million and $0.6 million related to the change in fair value on the interest rate cap. For the three and sixnine months ended JuneSeptember 30, 2023, White Mountains received a payment of $0.4$0.6 million and $0.6$1.2 million related to the periodic settlement of the interest rate cap. As of JuneSeptember 30, 2023 and December 31, 2022, the estimated fair value of the interest rate cap recorded in other assets was $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 approximately 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. 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 26%24% of BAM’s gross par outstanding as of JuneSeptember 30, 2023.
In 2021, Fidus Re issued an additional $150.0 million of insurance-linked securities (the “Fidus Re 2021 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. 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 30%29% of BAM’s gross par outstanding as of JuneSeptember 30, 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 31%30% of BAM’s gross par outstanding as of JuneSeptember 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 JuneSeptember 30, 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.

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Collateral Trusts

HG Re’s obligations under the FLRT are subject to an aggregate limit equal to the assets in two collateral trusts, the Supplemental 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 HG Re’s unearned premiums and unpaid 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 JuneSeptember 30, 2023 and December 31, 2022 was $306.8$311.2 million and $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 JuneSeptember 30, 2023 and December 31, 2022 was $585.6$588.5 million and $568.3 million.
As of JuneSeptember 30, 2023 and December 31, 2022, the Collateral Trusts held assets of $892.4$899.7 million and $856.9 million, which included $525.7$526.5 million and $503.3 million of cash and investments, $340.0 million and $340.0 million of BAM Surplus Notes and $26.7$33.2 million and $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 2023, the interest rate on the BAM Surplus Notes is 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 principal and interest 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 2022, BAM made a $36.0 million cash payment of principal and interest on the BAM Surplus Notes held by HG Global. Of this payment, $24.6 million was a repayment of principal held in the Supplemental Trust, $1.0 million was a payment of accrued interest held in the Supplemental Trust and $10.4 million was a payment of accrued interest held outside the Supplemental Trust.
During the three and sixnine months ended JuneSeptember 30, 2023 and 2022, BAM made no repayments of the BAM Surplus Notes or accrued interest.
As of JuneSeptember 30, 2023 and December 31, 2022, the principal balance on the BAM Surplus Notes was $340.0 million for both periods, and total interest receivable on the BAM Surplus Notes was $171.0$177.6 million and $157.9 million.

Insured Obligations and Premiums

The following table presents a schedule of BAM’s insured obligations as of JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022September 30, 2023December 31, 2022
Contracts outstandingContracts outstanding13,835 13,382 Contracts outstanding14,084 13,382 
Remaining weighted average contract period (in years)Remaining weighted average contract period (in years)10.810.8Remaining 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$103,962.3 $99,996.9 Principal$105,918.1 $99,996.9 
InterestInterest51,414.9 48,880.6 Interest52,628.8 48,880.6 
Total debt service outstandingTotal debt service outstanding$155,377.2 $148,877.5 Total debt service outstanding$158,546.9 $148,877.5 
Gross unearned insurance premiums (in millions)Gross unearned insurance premiums (in millions)$303.7 $298.3 Gross unearned insurance premiums (in millions)$312.3 $298.3 

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The following table presents a schedule of BAM’s future premium revenues as of JuneSeptember 30, 2023:
MillionsMillionsJune 30, 2023MillionsSeptember 30, 2023
July 1, 2023 - December 31, 2023$14.2 
October 1, 2023 - December 31, 2023October 1, 2023 - December 31, 2023$7.3 
January 1, 2024 - March 31, 2024January 1, 2024 - March 31, 20246.9 January 1, 2024 - March 31, 20247.2 
April 1, 2024 - June 30, 2024April 1, 2024 - June 30, 20246.9 April 1, 2024 - June 30, 20247.1 
July 1, 2024 - September 30, 2024July 1, 2024 - September 30, 20246.7 July 1, 2024 - September 30, 20247.0 
October 1, 2024 - December 31, 2024October 1, 2024 - December 31, 20246.6 October 1, 2024 - December 31, 20246.9 
Total 2024Total 202427.1 Total 202428.2 
2025202525.4 202526.4 
2026202623.7 202624.8 
2027202722.1 202723.2 
2028202820.4 202821.4 
2029 and thereafter2029 and thereafter170.8 2029 and thereafter181.0 
Total gross unearned insurance premiumsTotal gross unearned insurance premiums$303.7 Total gross unearned insurance premiums$312.3 

The following table presents a schedule of written premiums and earned premiums included in the HG Global/BAM segment for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Written premiums:Written premiums:Written premiums:
DirectDirect$11.6 $17.1 $20.8 $26.5 Direct$16.5 $18.4 $37.3 $44.9 
AssumedAssumed —  — Assumed 1.3  1.3 
Gross written premiums (1)
Gross written premiums (1)
$11.6 $17.1 $20.8 $26.5 
Gross written premiums (1)
$16.5 $19.7 $37.3 $46.2 
Earned premiums:Earned premiums:Earned premiums:
DirectDirect$7.0 $7.9 $14.0 $15.5 Direct$7.4 $6.5 $21.4 $22.0 
AssumedAssumed.7 2.6 1.4 3.4 Assumed.5 .6 1.9 4.0 
Gross earned premiums (1)
Gross earned premiums (1)
$7.7 $10.5 $15.4 $18.9 
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 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. During 2023, the contracts associated with this assumed reinsurance transaction were 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 sixnine months ended JuneSeptember 30, 2023 and 2022. See Note 19 — “Held for Sale and Discontinued Operations.”
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022 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
$19.6 $(169.2)$199.1 $(135.8)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)
 6.4  10.1 
Less: total income (loss) from discontinued operations,
net of tax (1)
 893.1  903.2 
Less: net (income) loss from discontinued operations
attributable to noncontrolling interests
Less: net (income) loss from discontinued operations
attributable to noncontrolling interests
 (.5) (.6)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
19.6 (175.1)199.1 (145.3)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)
(.3)2.2 (2.7)1.6 
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$19.3 $(172.9)$196.4 $(143.7)Basic and diluted earnings (losses) per share numerators$23.3 $(4.7)$219.6 $(148.3)
Basic earnings per share denominators (in thousands):Basic earnings per share denominators (in thousands):Basic earnings per share denominators (in thousands):
Total average common shares outstanding during the periodTotal average common shares outstanding during the period2,562.4 2,979.0 2,566.1 2,992.5 Total average common shares outstanding during the period2,560.5 2,893.8 2,564.2 2,959.3 
Average unvested restricted common shares (3)
Average unvested restricted common shares (3)
(37.6)(38.3)(34.4)(33.9)
Average unvested restricted common shares (3)
(37.6)(38.3)(35.5)(35.5)
Basic earnings (losses) per share denominatorBasic earnings (losses) per share denominator2,524.8 2,940.7 2,531.7 2,958.6 Basic earnings (losses) per share denominator2,522.9 2,855.5 2,528.7 2,923.8 
Diluted earnings per share denominator (in thousands):Diluted earnings per share denominator (in thousands):Diluted earnings per share denominator (in thousands):
Total average common shares outstanding during the periodTotal average common shares outstanding during the period2,562.4 2,979.0 2,566.1 2,992.5 Total average common shares outstanding during the period2,560.5 2,893.8 2,564.2 2,959.3 
Average unvested restricted common shares (3)
Average unvested restricted common shares (3)
(37.6)(38.3)(34.4)(33.9)
Average unvested restricted common shares (3)
(37.6)(38.3)(35.5)(35.5)
Diluted earnings (losses) per share denominatorDiluted earnings (losses) per share denominator2,524.8 2,940.7 2,531.7 2,958.6 Diluted earnings (losses) per share denominator2,522.9 2,855.5 2,528.7 2,923.8 
Basic and diluted earnings per share (in dollars) - continuing
operations:
Basic and diluted earnings per share (in dollars) - continuing
operations:
Basic and diluted earnings per share (in dollars) - continuing
operations:
Distributed earnings - dividends declared and paidDistributed earnings - dividends declared and paid$ $— $1.00 $1.00 Distributed earnings - dividends declared and paid$ $— $1.00 $1.00 
Undistributed earnings (losses)Undistributed earnings (losses)7.65 (58.78)76.57 (49.57)Undistributed earnings (losses)9.19 (1.66)85.82 (51.73)
Basic and diluted earnings (losses) per shareBasic and diluted earnings (losses) per share$7.65 $(58.78)$77.57 $(48.57)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.Group, net gain (loss) from sale of discontinued operations, net of tax - NSM Group and net (income) loss from discontinued operations 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 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 sixnine months ended JuneSeptember 30, 2023 and 2022. See Note 19 — “Held for Sale and Discontinued Operations.”
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Undistributed net earnings - continuing operations: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
$19.3 $(172.9)$196.4 $(143.7)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)
 — (2.5)(3.0)
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
$19.3 $(172.9)$193.9 $(146.7)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 considered participating securities.

3536


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 JuneSeptember 30, 2023 and 2022, White Mountains’s share-based incentive compensation 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 three 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 sixnine months ended JuneSeptember 30, 2023 and 2022 for performance shares granted under the WTM Incentive Plan:
Three Months Ended June 30,Six Months Ended June 30, Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022 2023202220232022
$ 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
$ 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 period37,031 $36.4 39,302 $21.9 39,449 $67.5 40,828 $42.2 Beginning of period37,031 $44.6 39,449 $41.2 39,449 $67.5 40,828 $42.2 
Shares paid (1)
Shares paid (1)
  — — (13,350)(40.8)(14,625)(26.4)
Shares paid (1)
  — — (13,350)(40.8)(14,625)(26.4)
New grantsNew grants  150 — 10,895  13,225 — New grants  — — 10,895  13,225 — 
Forfeitures and cancellations (2)
Forfeitures and cancellations (2)
 (.2)(3)(.4)37 .2 21 (.1)
Forfeitures and cancellations (2)
  — (.1)37 .2 21 (.2)
Expense recognizedExpense recognized 8.4 — 19.7  17.7 — 25.5 Expense recognized 10.5 — 11.9  28.2 — 37.4 
End of periodEnd of period37,031 $44.6 39,449 $41.2 37,031 $44.6 39,449 $41.2 End of period37,031 $55.1 39,449 $53.0 37,031 $55.1 39,449 $53.0 
(1) WTM 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. 
(2) Amounts include changes in assumed forfeitures, as required under GAAP.

During the sixnine months ended JuneSeptember 30, 2023, White Mountains granted 10,895 performance shares for the 2023-2025 performance cycle. During the three and sixnine months ended JuneSeptember 30, 2022, White Mountains granted 150 and 13,225 performance shares for the 2022-2024 performance cycle.
For the 2020-2022 performance cycle, all performance shares 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. If the outstanding performance shares had vested on JuneSeptember 30, 2023, the total additional compensation cost to be recognized would have been $37.8$32.9 million, based on accrual factors as of JuneSeptember 30, 2023 (common share price and payout assumptions).

3637


The following table presents performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan as of JuneSeptember 30, 2023 for each performance cycle:
June 30, 2023September 30, 2023
$ in Millions$ in MillionsTarget Performance
Shares Outstanding
Accrued
Expense
$ in MillionsTarget Performance
Shares Outstanding
Accrued
Expense
Performance cycle:Performance cycle:  Performance cycle:  
2021 – 20232021 – 202313,475 $26.3 2021 – 202313,475 $30.4 
2022 – 20242022 – 202413,225 17.3 2022 – 202413,225 22.1 
2023 – 20252023 – 202510,895 1.8 2023 – 202510,895 3.4 
Sub-totalSub-total37,595 45.4 Sub-total37,595 55.9 
Assumed forfeituresAssumed forfeitures(564)(.8)Assumed forfeitures(564)(.8)
TotalTotal37,031 $44.6 Total37,031 $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 sixnine months ended JuneSeptember 30, 2023 and 2022:

Three Months Ended June 30,Six Months Ended June 30, Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022 2023202220232022
$ in Millions$ 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
$ 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,Non-vested,    Non-vested,    
Beginning of periodBeginning of period37,595 $28.3 38,200 $26.5 38,350 $15.5 37,850 $15.9 Beginning of period37,595 $24.3 38,350 $23.0 38,350 $15.5 37,850 $15.9 
IssuedIssued  150 .2 10,895 16.0 13,225 13.8 Issued  — — 10,895 16.0 13,225 13.8 
VestedVested  — — (11,650) (12,725)— Vested  — — (11,650) (12,725)— 
ForfeitedForfeited  — —   — — Forfeited  — —   — — 
Expense recognizedExpense recognized (4.0)— (3.7) (7.2)— (6.7)Expense recognized (4.1)— (3.8) (11.3)— (10.5)
End of periodEnd of period37,595 $24.3 38,350 $23.0 37,595 $24.3 38,350 $23.0 End of period37,595 $20.2 38,350 $19.2 37,595 $20.2 38,350 $19.2 

During the sixnine months ended JuneSeptember 30, 2023, White Mountains issued 10,895 restricted shares that vest on January 1, 2026. During the three and sixnine months ended JuneSeptember 30, 2022, White Mountains issued 150 and 13,225 restricted shares that vest on January 1, 2025. The unamortized issue date fair value as of JuneSeptember 30, 2023 is expected to be recognized ratably over the remaining vesting periods. 


3738


Note 13. Noncontrolling Interests

Noncontrolling interests consist of the ownership interests of noncontrolling shareholders in consolidated entities and are presented separately on the balance sheet.
The following table presents the balance of noncontrolling interests included in White Mountains’s total equity and the related percentage of each consolidated entity’s total equity owned by noncontrolling shareholders as of JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022 September 30, 2023December 31, 2022
$ in Millions$ in Millions
Noncontrolling Percentage (1)
Noncontrolling Equity
Noncontrolling Percentage (1)
Noncontrolling Equity$ in Millions
Noncontrolling Percentage (1)
Noncontrolling Equity
Noncontrolling Percentage (1)
Noncontrolling Equity
Noncontrolling interests, excluding BAMNoncontrolling interests, excluding BAMNoncontrolling interests, excluding BAM
HG GlobalHG Global3.1 %$(1.3)3.1 %$(.6)HG Global3.1 %$(3.3)3.1 %$(.6)
ArkArk28.0 %263.3 28.0 %247.9 Ark28.0 %279.8 28.0 %247.9 
KuduKudu10.8 %88.8 10.8 %75.1 Kudu10.8 %94.5 10.8 %75.1 
OtherOthervarious10.1 various20.4 Othervarious10.0 various20.4 
Total, excluding BAMTotal, excluding BAM360.9 342.8 Total, excluding BAM381.0 342.8 
BAMBAM100.0 %(157.2)100.0 %(154.7)BAM100.0 %(165.9)100.0 %(154.7)
Total noncontrolling interestsTotal noncontrolling interests$203.7 $188.1 Total noncontrolling interests$215.1 $188.1 
(1) The noncontrolling percentage represents the basic ownership interests held by noncontrolling shareholders with the exception of HG Global, for which the noncontrolling percentage represents the preferred share ownership held by noncontrolling shareholders.

Note 14. Segment Information
 
As of JuneSeptember 30, 2023, White Mountains conducted its operations through three reportable segments: (1) HG Global/BAM, (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 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.

3839


The following tables present the financial information for White Mountains’s segments for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
HG Global/BAMArk/WM OutriggerOther OperationsTotalHG Global/BAMArk/WM OutriggerOther OperationsTotal
MillionsMillionsHG Global
BAM (1)
ArkWM Outrigger Re
Kudu
MillionsHG Global
BAM (1)
ArkWM Outrigger Re
Kudu
Three Months Ended June 30, 2023
Three Months Ended September 30, 2023Three Months Ended September 30, 2023
Earned insurance premiumsEarned insurance premiums$6.4 $1.3 $283.7 $9.6 $— $— $301.0 Earned insurance premiums$6.6 $1.3 $438.3 $60.6 $— $— $506.8 
Net investment incomeNet investment income4.1 3.5 11.2 2.5 14.7 7.0 43.0 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
6.5 (6.5)— — — —  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)(5.7)(4.2)18.0 — 4.6 76.0 88.7 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
— — — — — (77.3)(77.3)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 revenues— .5 (2.0)— — 21.3 19.8 Other revenues— .7 3.6 — — 15.2 19.5 
Total revenues Total revenues11.3 (5.4)310.9 12.1 19.3 30.2 378.4  Total revenues3.9 (11.3)449.2 63.6 26.3 (12.1)519.6 
Loss and loss adjustment expensesLoss and loss adjustment expenses— — 167.1 .4 — — 167.5 Loss and loss adjustment expenses— — 258.5 7.3 — — 265.8 
Acquisition expensesAcquisition expenses1.8 (.3)59.4 2.0 — — 62.9 Acquisition expenses2.0 .1 71.0 19.3 — — 92.4 
Cost of salesCost of sales— — — — — 11.6 11.6 Cost of sales— — — — — 8.0 8.0 
General and administrative expensesGeneral and administrative expenses.3 14.6 34.9 — 4.0 48.8 102.6 General and administrative expenses.5 17.0 35.3 .1 4.5 42.2 99.6 
Change in fair value of contingent considerationChange in fair value of contingent consideration— — 2.2 — — — 2.2 Change in fair value of contingent consideration— — 17.0 — — — 17.0 
Interest expenseInterest expense2.5 — 5.2 — 5.3 1.2 14.2 Interest expense3.8 — 5.5 — 5.5 .9 15.7 
Total expenses Total expenses4.6 14.3 268.8 2.4 9.3 61.6 361.0  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$6.7 $(19.7)$42.1 $9.7 $10.0 $(31.4)$17.4 Pre-tax income (loss) from continuing operations$(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 June 30, 2022
Earned insurance premiums$8.7 $1.8 $217.3 $— $— $227.8 
Net investment income2.2 2.6 3.2 13.8 3.3 25.1 
Net investment income (expense) - BAM
   Surplus Note interest
3.0 (3.0)— — — — 
Net realized and unrealized investment gains (losses)(14.7)(15.4)(44.6)(17.6)(11.8)(104.1)
Net realized and unrealized investment gains
  (losses) from investment in MediaAlpha
— — — — (113.5)(113.5)
Commission revenues— — — — 2.6 2.6 
Other revenues.1 1.5 6.3 — 30.9 38.8 
     Total revenues(.7)(12.5)182.2 (3.8)(88.5)76.7 
Losses and loss adjustment expenses— — 120.5 — — 120.5 
Acquisition expenses3.4 1.4 50.2 — — 55.0 
Cost of sales— — — — 22.4 22.4 
General and administrative expenses.8 16.6 29.7 3.1 51.0 101.2 
Change in fair value of contingent consideration— — .1 — — .1 
Interest expense3.4 — 3.1 3.3 .3 10.1 
     Total expenses7.6 18.0 203.6 6.4 73.7 309.3 
Pre-tax income (loss) from continuing operations$(8.3)$(30.5)$(21.4)$(10.2)$(162.2)$(232.6)
(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.
39



HG Global/BAMArk/WM OutriggerOther Operations
MillionsHG Global
BAM (1)
ArkWM Outrigger Re
Kudu
Total
Six Months Ended June 30, 2023
Earned insurance premiums$12.8 $2.6 $533.6 $14.8 $— $— $563.8 
Net investment income8.1 6.7 19.6 4.7 28.9 14.0 82.0 
Net investment income (expense) -
  BAM Surplus Note interest
13.1 (13.1)— — — —  
Net realized and unrealized investment
   gains (losses)
2.2 4.9 42.5 — 34.2 117.8 201.6 
Net realized and unrealized investment gains
   (losses) from investment in MediaAlpha
— — — — — 7.9 7.9 
Commission revenues— — — — — 6.5 6.5 
Other revenues— 1.3 (4.7)— — 51.9 48.5 
     Total revenues36.2 2.4 591.0 19.5 63.1 198.1 910.3 
Loss and loss adjustment expenses— — 314.7 .6 — — 315.3 
Acquisition expenses3.6 .6 118.3 2.9 — — 125.4 
Cost of sales— — — — — 25.5 25.5 
General and administrative expenses1.4 30.8 70.0 .1 7.8 88.5 198.6 
Change in fair value of contingent consideration— — (.2)— — — (.2)
Interest expense7.0 — 10.2 — 10.0 2.0 29.2 
     Total expenses12.0 31.4 513.0 3.6 17.8 116.0 693.8 
Pre-tax income (loss) from continuing operations$24.2 $(29.0)$78.0 $15.9 $45.3 $82.1 $216.5 
(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 OperationsHG Global/BAMArk/WM OutriggerOther Operations
MillionsMillionsHG Global
BAM (1)
Ark
Kudu
TotalMillionsHG Global
BAM (1)
ArkKuduOther OperationsTotal
Six Months Ended June 30, 2022
Three Months Ended September 30, 2022Three Months Ended September 30, 2022
Earned insurance premiumsEarned insurance premiums$15.6 $3.3 411.7 $— $— $430.6 Earned insurance premiums$5.9 $1.2 $346.1 $— $— $353.2 
Net investment incomeNet investment income4.3 5.1 4.8 26.4 5.1 45.7 Net investment income2.8 2.9 4.9 14.8 8.5 33.9 
Net investment income (expense) -
BAM Surplus Note interest
Net investment income (expense) -
BAM Surplus Note interest
5.9 (5.9)— — — — Net investment income (expense) - BAM
Surplus Note interest
2.9 (2.9)   — 
Net realized and unrealized investment
gains (losses)
Net realized and unrealized investment
gains (losses)
(38.2)(37.0)(62.1)4.7 20.1 (112.5)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
Net realized and unrealized investment gains
(losses) from investment in MediaAlpha
— — — — (94.7)(94.7)Net realized and unrealized investment gains
(losses) from investment in MediaAlpha
    (18.6)(18.6)
Commission revenuesCommission revenues— — — — 5.5 5.5 Commission revenues    3.2 3.2 
Other revenuesOther revenues.2 2.2 3.5 — 56.6 62.5 Other revenues.1 1.2 6.6  33.0 40.9 
Total revenues Total revenues(12.2)(32.3)357.9 31.1 (7.4)337.1  Total revenues(7.9)(16.8)343.2 55.9 8.8 383.2 
Losses and loss adjustment expensesLosses and loss adjustment expenses— — 242.5 — — 242.5 Losses and loss adjustment expenses  213.7   213.7 
Acquisition expensesAcquisition expenses6.0 1.8 100.1 — — 107.9 Acquisition expenses1.6 .1 74.8   76.5 
Cost of salesCost of sales— — — — 43.8 43.8 Cost of sales    25.0 25.0 
General and administrative expensesGeneral and administrative expenses1.5 32.2 50.7 5.9 80.8 171.1 General and administrative expenses.6 15.2 24.2 4.5 41.3 85.8 
Change in fair value of contingent considerationChange in fair value of contingent consideration— — 2.2 — — 2.2 Change in fair value of contingent consideration  2.7  — 2.7 
Interest expenseInterest expense3.4 — 6.9 6.1 .6 17.0 Interest expense2.0 — 3.7 4.2 .6 10.5 
Total expenses Total expenses10.9 34.0 402.4 12.0 125.2 584.5  Total expenses4.2 15.3 319.1 8.7 66.9 414.2 
Pre-tax income (loss) from continuing operationsPre-tax income (loss) from continuing operations$(23.1)$(66.3)$(44.5)$19.1 $(132.6)$(247.4)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.

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


Note 15. Variable Interest Entities

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 JuneSeptember 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 JuneSeptember 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 $159.5$159.4 million.

Elementum

As of JuneSeptember 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 JuneSeptember 30, 2023, White Mountains’s maximum exposure to loss on its limited partnership interest in Elementum is the carrying value of $30.0$35.0 million.

4142


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 JuneSeptember 30, 2023, White Mountains’s maximum exposure to loss on its investments in limited partnerships is the carrying value of $229.7$239.2 million.

Note 16. Equity 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, 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 JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022September 30, 2023December 31, 2022
$ in Millions$ in Millions
Ownership Interest (1)
Carrying Value
Ownership Interest (1)
Carrying Value$ in Millions
Ownership Interest (1)
Carrying Value
Ownership Interest (1)
Carrying Value
Kudu’s Participation Contracts (1)
Kudu’s Participation Contracts (1)
4.1% - 30.0%$737.1 4.1% - 30.0%$695.9 
Kudu’s Participation Contracts (1)
4.1% - 30.0%$775.3 4.1% - 30.0%$695.9 
Investment in MediaAlphaInvestment in MediaAlpha35.7%235.727.1%168.6 Investment in MediaAlpha35.3%188.8 27.1%168.6 
PassportCard/DavidShieldPassportCard/DavidShield53.8%150.053.8%135.0 PassportCard/DavidShield53.8%150.0 53.8%135.0 
Elementum Holdings, L.P.Elementum Holdings, L.P.26.6%30.029.7%30.0 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%263.4 Under 50.0%84.4 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 over24.9 50.0% and over— 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 noncontrolling equity interests in the form of revenue and earnings participation contracts.

For the three and sixnine months ended JuneSeptember 30, 2023, White Mountains received dividend and income distributions from equity method eligible investments of $22.1$13.2 million and $28.5$42.1 million, which were recorded within net investment income in the consolidated statements of operations. For the three and sixnine months ended JuneSeptember 30, 2022, White Mountains received dividend and income distributions from equity method eligible investments of $15.6$16.1 million and $28.7$42.9 million.
For the six months ended June 30, 2022, MediaAlpha was considered a significant subsidiary.
The following tables present summarized financial information for MediaAlpha as of June 30, 2023 and December 31, 2022 and for the three and six months ended June 30, 2023 and 2022:

MillionsJune 30, 2023December 31, 2022
Balance sheet data:
Total assets$140.2 $170.1 
Total liabilities$234.6 $256.2 
Three Months Ended June 30,Six Months Ended June 30,
Millions2023202220232022
Income statement data:
Total revenues$84.8 $103.4 $196.4 $246.0 
Total expenses$104.8 $116.4 $231.0 $268.9 
Net income (loss)$(20.0)$(13.0)$(34.6)$(22.9)

4243


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 table presents the fair value and carrying value of these financial instruments as of JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022 September 30, 2023December 31, 2022
MillionsMillionsFair ValueCarrying ValueFair ValueCarrying ValueMillionsFair ValueCarrying ValueFair ValueCarrying Value
HG Global Senior NotesHG Global Senior Notes$159.5 $146.7 $155.7 $146.5 HG Global Senior Notes$157.6 $146.8 $155.7 $146.5 
Ark 2007 Subordinated NotesArk 2007 Subordinated Notes$29.2 $30.0 $28.4 $30.0 Ark 2007 Subordinated Notes$29.1 $30.0 $28.4 $30.0 
Ark 2021 Subordinated NotesArk 2021 Subordinated Notes$166.1 $155.1 $163.1 $153.7 Ark 2021 Subordinated Notes$164.5 $154.6 $163.1 $153.7 
Kudu Credit FacilityKudu Credit Facility$224.9 $203.7 $223.9 $208.3 Kudu Credit Facility$223.0 $203.7 $223.9 $208.3 
Other Operations debtOther Operations debt$33.0 $30.6 $38.2 $36.7 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 see Note 3 — “Investment Securities.” For the fair value level measurements associated with White Mountains’s derivative instruments 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.

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.

43
44


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 sixnine months ended JuneSeptember 30, 2022:
MillionsMillionsThree Months Ended
June 30, 2022
Six Months Ended
June 30, 2022
Millions
Three Months Ended September 30, 2022 (1)
Nine Months Ended September 30, 2022 (1)
RevenuesRevenuesRevenues
Commission revenuesCommission revenues$80.2 $150.3 Commission revenues$26.6 $176.9 
Other revenuesOther revenues22.7 41.1 Other revenues7.0 48.1 
Total revenuesTotal revenues102.9 191.4 Total revenues33.6 225.0 
ExpensesExpensesExpenses
General and administrative expensesGeneral and administrative expenses57.1 111.1 General and administrative expenses15.7 126.8 
Broker commission expensesBroker commission expenses24.1 44.7 Broker commission expenses8.2 52.9 
Change in fair value of contingent considerationChange in fair value of contingent consideration— .1 Change in fair value of contingent consideration— .1 
Amortization of other intangible assetsAmortization of other intangible assets— 9.1 Amortization of other intangible assets— 9.1 
Interest expenseInterest expense8.4 10.5 Interest expense1.6 12.1 
Total expensesTotal expenses89.6 175.5 Total expenses25.5 201.0 
Pre-tax income (loss) from discontinued operationsPre-tax income (loss) from discontinued operations13.3 15.9 Pre-tax income (loss) from discontinued operations8.1 24.0 
Income tax (expense) benefitIncome tax (expense) benefit(6.9)(5.8)Income tax (expense) benefit(1.8)(7.6)
Net income (loss) from discontinued operations, net of tax6.4 10.1 
Net income (loss) from discontinued operations, net of tax - NSM GroupNet 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 GroupNet gain (loss) from sale of discontinued operations, net of tax - NSM Group886.8 886.8 
Total income (loss) from discontinued operations, net of taxTotal income (loss) from discontinued operations, net of tax893.1 903.2 
Net (income) loss from discontinued operations attributable to noncontrolling interestsNet (income) loss from discontinued operations attributable to noncontrolling interests(.5)(.6)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
Total income (loss) from discontinued operations attributable to White
Mountains’s common shareholders
5.9 9.5 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(4.0)(5.9)
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 (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 
Comprehensive income (loss) from discontinued operationsComprehensive income (loss) from discontinued operations1.9 3.6 Comprehensive income (loss) from discontinued operations896.5 900.1 
Other comprehensive (income) loss from discontinued operations attributable to
noncontrolling interests
Other comprehensive (income) loss from discontinued operations attributable to
noncontrolling interests
.2 .3 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
Comprehensive income (loss) from discontinued operations attributable to
White Mountains’s common shareholders
$2.1 $3.9 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.

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 six months ended JuneSeptember 30, 2022:
MillionsSixNine Months Ended
June
September 30, 2022
Net cash provided from (used for) operations$36.738.7 
Net cash provided from (used for) investing activities7.1 
Net cash used from (used for) financing activities(16.9)(17.5)
Effect of exchange rate changes on cash4.24.0 
Net change in cash during the period31.132.3 
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 (includes restricted cash of $108.9)142.7$ 
Supplemental cash flows information:
Interest paid$10.4 (12.0)
Net income tax payments$— 

4445


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 sixnine months ended JuneSeptember 30, 2022:
Three Months Ended
June 30, 2022
Six Months Ended
June 30, 2022
Three 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 shareholdersNet income (loss) attributable to White Mountains’s common shareholders$(169.2)$(135.8)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(216.6)(228.7)Less: net income (loss) from continuing operations(23.6)(252.3)
Less: net (income) loss from continuing operations attributable to noncontrolling
interests
Less: net (income) loss from continuing operations attributable to noncontrolling
interests
41.5 83.4 Less: net (income) loss from continuing operations attributable to noncontrolling
interests
18.8 102.2 
Total gain (loss) from discontinued operations attributable to White Mountains’s
common shareholders (1)
5.9 9.5 
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)
(.1)(.1)
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)
$5.8 $9.4 
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 period2,979.0 2,992.5 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)(33.9)
Average unvested restricted common shares (4)
(38.3)(35.5)
Basic earnings per share denominatorBasic earnings per share denominator2,940.7 2,958.6 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 period2,979.0 2,992.5 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)(33.9)
Average unvested restricted common shares (4)
(38.3)(35.5)
Diluted earnings per share denominatorDiluted earnings per share denominator2,940.7 2,958.6 Diluted earnings per share denominator2,855.5 2,923.8 
Basic and diluted earnings (losses) per share (in dollars) - discontinued operationsBasic and diluted earnings (losses) per share (in dollars) - discontinued operations$1.98 $3.17 Basic 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 and net (income) loss from discontinued operations attributable to non-controlling interests.
(2) Restricted shares issued by White Mountains receive dividends, and therefore, are 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 sixnine months ended JuneSeptember 30, 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.


45
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 7476 for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.
The following discussion also includes five non-GAAP financial measures: (i) adjusted book value per share, (ii) Kudu’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), (iii) Kudu’s adjusted EBITDA, (iv) total consolidated portfolio returns excluding MediaAlpha, and (v) adjusted capital, that have been reconciled from their most comparable GAAP financial measures on page 7274. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.

RESULTS OF OPERATIONS FOR THE THREE AND SIXNINE MONTHS ENDED JUNESEPTEMBER 30, 2023 AND 2022

Overview

White Mountains reported book value per share of $1,532$1,542 and adjusted book value per share of $1,576$1,588 as of JuneSeptember 30, 2023. Book value per share and adjusted book value per share both increased 1% in the secondthird quarter of 2023 and increased 5% and 6% in the first sixnine 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 investment returns. Resultsreturns 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 second quarterfirst 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 $1,129$1,439 and adjusted book value per share of $1,152$1,471 as of JuneSeptember 30, 2022. Book value per share decreased 5% and adjusted book value per share decreased 4%both increased 28% in the secondthird quarter of 2022. For the first sixnine months of 2022, book value decreased 4% and adjusted book value decreased 3%, including dividends. Results were driven primarily by mark-to-market losses in White Mountains’s fixed income investment portfolio and the decline in MediaAlpha’s share price, partially offset by positive results at the operating companies. As of June 30, 2022, book value per share would have been $1,429increased 23% and adjusted book value per share would have been $1,452increased 24%, including dividends. The increases in book value per share and adjusted book value per share were driven primarily by the estimated net gain from the sale of NSM of approximately $300 per share from(based on 2.9 million shares outstanding at August 1, 2022). In addition, the NSM Transaction.
In the first six months of 2023,growth in White Mountains repurchased and retired 24,165 of its common shares for $33 million at an average share price of $1,354.88, 88% of White Mountains’s June 30, 2023 book value per share and 86% of White Mountains’s June 30, 2023 adjusted book value per share. Asshare reflected good results at the operating companies, partially offset by negative returns from the fixed income portfolio and the impact of June 30,mark-to-market losses from the decline in MediaAlpha’s share price.
On October 20, 2023, White Mountains announced 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 Bamboo basic shares outstanding. 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 transaction is expected to close in the first quarter of 2024. Including the Bamboo acquisition, White Mountains’s undeployed capital was approximately $680 million.is roughly $400 million as of September 30, 2023.
InOn 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 specialty consumer. White Mountains expects to deploy $500 million of equity capital through WM Partners over time.
HG Global/BAM segment,reported gross written premiums and MSC collected totaled $26of $36 million and $47$84 million in the secondthird quarter and first sixnine months of 2023 compared to $41$46 million and $63$109 million in the secondthird quarter and first sixnine months of 2022. Total pricing was 7787 and 7580 basis points in the secondthird quarter and first sixnine months of 2023 compared to 70110 and 6781 basis points in the secondthird quarter and first sixnine months of 2022. BAM insured municipal bonds with par value of $3.4$4.2 billion and $6.3$10.5 billion in the secondthird quarter and first sixnine months of 2023 compared to $5.9$4.1 billion and $9.3$13.5 billion in the secondthird quarter and first sixnine months of 2022. BAM’s total claims paying resources were $1,451$1,474 million as of JuneSeptember 30, 2023 compared to $1,423 million as of December 31, 2022 and $1,228$1,260 million as of JuneSeptember 30, 2022. In July 2023, S&P Global Ratings affirmed BAM’s AA rating and Stable outlook.
The Ark/WM Outrigger segment’s combined ratio was 87%77% and 89%83% in the secondthird quarter and first sixnine months of 2023. Ark/WM Outrigger reported gross written premiums of $606$251 million and $1,416$1,667 million, net written premiums of $461$231 million and $1,075$1,306 million and net earned premiums of $293$499 million and $548$1,047 million in the secondthird quarter and first sixnine months of 2023. Ark/WM Outrigger reported pre-tax income of $52$99 million and $94$193 million in the secondthird quarter and first sixnine months of 2023.
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Ark’s combined ratio was 89%81% and 91%87% in the secondthird quarter and first sixnine months of 2023 compared to 87% and 93%90% in the secondthird quarter and first sixnine months of 2022. Ark’s combined ratio in the secondthird quarter and first six months of 2023 included four11 points of unfavorable prior year loss reserve development, primarily duecatastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to Winter Storm Elliott and three large claims21 points of catastrophe losses in the property and marine & energy linesthird quarter of business, compared to ten points and six points of favorable prior year loss reserve development in the second quarter and first six months of 2022.2022, driven primarily by losses from Hurricane Ian. Ark’s combined ratio in the second quarter and first sixnine months of 2023 included five points and threeseven points of catastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to 11 points and 1417 points of catastrophe losses in the first nine months of 2022, driven primarily by losses from Hurricane Ian and the conflict in Ukraine,Ukraine. Ark’s combined ratio in the secondthird quarter and first sixnine months of 2023 included less 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 in the third quarter and first nine months of 2022. Ark reported gross written premiums of $606$251 million and $1,416$1,667 million, net written premiums of $403$225 million and $973$1,198 million and net earned premiums of $284$438 million and $534$972 million in the secondthird quarter and first sixnine months of 2023 compared to gross written premiums of $404$216 million and $1,037$1,253 million, net written premiums of $270$193 million and $814$1,007 million and net earned premiums of $217$346 million and $412$758 million in the secondthird quarter and first sixnine months of 2022. Ark reported pre-tax income (loss) of $42$62 million and $78$140 million in the secondthird quarter and first sixnine months of 2023 compared to $(21)$24 million and $(45)$(20) million in the secondthird quarter and first sixnine months of 2022. Ark’s results included net realized and unrealized investment gains (losses) of $18$(7) million and $43$36 million in the secondthird quarter and first sixnine months of 2023 compared to $(45)$(14) million and $(62)$(77) million in the secondthird quarter and first sixnine months of 2022.
WM Outrigger Re’s combined ratio was 25%44% and 24%40% in the secondthird quarter and first sixnine months of 2023. WM Outrigger Re reported gross and net written premiums of $58$6 million and $102$108 million and net earned premiums of $10$61 million and $15$75 million in the secondthird quarter and first sixnine months of 2023. WM Outrigger Re reported pre-tax income of $37 million and $53 million in the third quarter and first nine months of 2023.
Kudu reported total revenues of $19$26 million, pre-tax income of $10$16 million and adjusted EBITDA of $12 million in the secondthird quarter of 2023 compared to total revenues of $(4)$56 million, pre-tax lossincome of $10$47 million and adjusted EBITDA of $11$12 million in the secondthird quarter of 2022. Kudu’s revenues, pre-tax income and adjusted EBITDA included $15 million of net investment income in both the third quarter of 2023 and 2022. Kudu’s revenues and pre-tax income (loss)also included $5$11 million of net realized and unrealized investment gains in the secondthird quarter of 2023 compared to $18$41 million of net realized and unrealized investment losses in the secondthird quarter of 2022.
Kudu reported total revenues of $63$89 million, pre-tax income of $45$62 million and adjusted EBITDA of $23$34 million in the first sixnine months of 2023 compared to total revenues of $31$87 million, pre-tax income of $19$66 million and adjusted EBITDA of $21$33 million in the first sixnine months of 2022. Kudu’s revenues, pre-tax income and adjusted EBITDA included $44 million of net investment income in the first nine months of 2023 compared to $41 million in the first nine months of 2022. Kudu’s revenues and pre-tax income in the first sixnine months of 2023 also included $34$45 million of net realized and unrealized gains compared to $5$46 million in the first sixnine months of 2022.
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 JuneSeptember 30, 2023, White Mountains ownsowned 22.9 million shares of MediaAlpha, representing a 36%35% basic ownership interest (33% on a fully-diluted/fully-converted basis). As of JuneSeptember 30, 2023, MediaAlpha’s closing price was $10.31$8.26 per share, which decreased from $14.98$10.31 per share as of March 31, 2022.June 30, 2023. The carrying value of White Mountains’s investment in MediaAlpha was $189 million as of September 30, 2023, which decreased from $236 million as of June 30, 2023 compared to $254 million as of March 31, 2023. The $18 million decline in MediaAlpha’s carrying value included $79 million of unrealized investment losses attributable to the 16.9 million shares of MediaAlpha owned by White Mountains as of March 31, 2023, partially offset by a $59 million increase in the carrying value attributable to the shares acquired in the tender offer and $2 million of unrealized investment gains attributable to the newly acquired shares. Based onAt White Mountains’s ownershipcurrent level of MediaAlpha as of June 30, 2023,ownership, each $1.00 per share increase or decrease in the stockshare price of MediaAlpha will result in an approximate $9.00 per share increase or decrease in White Mountains’s book value per share and adjusted book value per share.
White Mountains’s total consolidated portfolio return on invested assets was 0.9%-0.2% in the secondthird quarter of 2023, which included $77$47 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.0%0.6% in the secondthird quarter of 2023, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net realized and unrealized investment gains fromlosses on common equity securities and net investment income in the fixed income portfolio.securities. White Mountains’s total consolidated portfolio return on invested assets was -4.7%0.4% in the secondthird quarter of 2022, which included $114$19 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was -2.1%0.5% in the secondthird quarter of 2022, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net unrealized investment losses in the fixed income portfolio due to rising interest rates.
White Mountains’s total consolidated portfolio return on invested assets was 5.5%5.3% in the first sixnine months of 2023, which included $8 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.1% in the first six months of 2023, driven primarily by net realized and unrealized investment gains from other long-term investments and common equity securities, as well as net investment income in the fixed income portfolio. White Mountains’s total consolidated portfolio return on invested assets was -4.0% in the first six months of 2022, which included $95$39 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was -1.9%6.3% in the first sixnine months of 2023, driven primarily by net realized and unrealized investment gains and net investment income from other long-term investments, net investment income from the fixed income portfolio and net realized and unrealized investment gains from common equity securities. White Mountains’s total consolidated portfolio return on invested assets was -3.6% in the first nine months of 2022, which included $113 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% in the first nine months of 2022, driven primarily by net unrealized investment losses in the fixed income portfolio due to rising interest rates, partially offset by favorablenet realized and unrealized gains and net investment income from other long-term investment results.

investments.
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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 JuneSeptember 30, 2023, March 31,June 30, 2023, December 31, 2022, and JuneSeptember 30, 2022. See NON-GAAP FINANCIAL MEASURES on page 7274.
MillionsMillionsJune 30, 2023March 31, 2023December 31, 2022June 30, 2022MillionsSeptember 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 numeratorWhite Mountains’s common shareholders’ equity - GAAP book value per share numerator$3,922.2 $3,902.4 $3,746.9 $3,323.3 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)
(91.8)(93.4)(95.1)(115.9)
HG Global’s unearned premium reserve (1)
HG Global’s unearned premium reserve (1)
246.8 243.3 242.1 221.6 
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)
(70.7)(69.4)(69.0)(62.6)
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$4,006.5 $3,982.9 $3,824.9 $3,366.4 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
2,560.4 2,564.5 2,572.1 2,942.9 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(19.0)(22.3)(14.1)(20.9)Unearned restricted common shares(15.7)(19.1)(14.1)(17.5)
Adjusted book value per share denominatorAdjusted book value per share denominator2,541.4 2,542.2 2,558.0 2,922.0 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$1,531.84 $1,521.73 $1,456.74 $1,129.27 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$1,576.46 $1,566.73 $1,495.28 $1,152.12 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 goodwill and other intangible assets that are included in White Mountains’s adjusted book value as of JuneSeptember 30, 2023, March 31,June 30, 2023, December 31, 2022, and JuneSeptember 30, 2022:
MillionsMillionsJune 30, 2023March 31, 2023December 31, 2022June 30, 2022MillionsSeptember 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 7.6Kudu7.6 7.6 7.6 7.6
Other Operations (1)
Other Operations (1)
44.4 44.4 52.1 77.4
Other Operations (1)
44.4 44.4 52.1 51.1
Total goodwillTotal goodwill168.8168.8176.5201.8Total goodwill168.8168.8176.5175.5
Other intangible assets:Other intangible assets:Other intangible assets:
ArkArk175.7 175.7 175.7 175.7Ark175.7 175.7 175.7 175.7
KuduKudu.8 .9 1.0 1.1Kudu.8 .8 1.0 1.1
Other Operations (1)
Other Operations (1)
28.3 30.8 39.2 19.4
Other Operations (1)
26.8 28.3 39.2 40.9
Total other intangible assetsTotal other intangible assets204.8207.4215.9196.2Total other intangible assets203.3204.8215.9217.7
Total goodwill and other intangible assets (2)
Total goodwill and other intangible assets (2)
$373.6 $376.2 $392.4 $398.0 
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
$(95.4)$(95.7)$(102.7)$(103.4)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
$278.2 $280.5 $289.7 $294.6 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 at June 30, 2022.
(2) See Note 4 — “Goodwill and Other Intangible Assets” on page 2324 for details of other intangible assets.
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Summary of Consolidated Results

The following table presents White Mountains’s consolidated financial results for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
RevenuesRevenues  Revenues  
Financial Guarantee revenuesFinancial Guarantee revenues$5.9 $(13.2)$38.6 $(44.5)Financial Guarantee revenues$(7.4)$(24.7)$31.2 $(69.2)
P&C Insurance and Reinsurance revenuesP&C Insurance and Reinsurance revenues323.0 182.2 610.5 357.9 P&C Insurance and Reinsurance revenues512.8 343.2 1,123.3 701.1 
Asset Management revenuesAsset Management revenues19.3 (3.8)63.1 31.1 Asset Management revenues26.3 55.9 89.4 87.0 
Other Operations revenuesOther Operations revenues30.2 (88.5)198.1 (7.4)Other Operations revenues(12.1)8.8 186.0 1.4 
Total revenuesTotal revenues378.4 76.7 910.3 337.1 Total revenues519.6 383.2 1,429.9 720.3 
ExpensesExpensesExpenses
Financial Guarantee expensesFinancial Guarantee expenses18.9 25.6 43.4 44.9 Financial Guarantee expenses23.4 19.5 66.8 64.4 
P&C Insurance and Reinsurance expensesP&C Insurance and Reinsurance expenses271.2 203.6 516.6 402.4 P&C Insurance and Reinsurance expenses414.0 319.1 930.6 721.5 
Asset Management expensesAsset Management expenses9.3 6.4 17.8 12.0 Asset Management expenses10.0 8.7 27.8 20.7 
Other Operations expensesOther Operations expenses61.6 73.7 116.0 125.2 Other Operations expenses51.1 66.9 167.1 192.1 
Total expensesTotal expenses361.0 309.3 693.8 584.5 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)(13.0)(38.8)(4.8)(89.4)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)51.8 (21.4)93.9 (44.5)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)10.0 (10.2)45.3 19.1 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)(31.4)(162.2)82.1 (132.6)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 operations17.4 (232.6)216.5 (247.4)Total pre-tax income (loss) from continuing operations21.1 (31.0)237.6 (278.4)
Income tax (expense) benefitIncome tax (expense) benefit(.2)16.0 (12.1)18.7 Income tax (expense) benefit(7.3)7.4 (19.4)26.1 
Net income (loss) from continuing operationsNet income (loss) from continuing operations17.2 (216.6)204.4 (228.7)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
 6.4  10.1 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 income (loss)Net income (loss)17.2 (210.2)204.4 (218.6)Net income (loss)13.8 869.5 218.2 650.9 
Net (income) loss attributable to noncontrolling interestsNet (income) loss attributable to noncontrolling interests2.4 41.0 (5.3)82.8 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
19.6 (169.2)199.1 (135.8)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 tax1.4 (1.1)2.6 (1.5)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
 (4.0) (5.9)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 
Comprehensive income (loss)Comprehensive income (loss)21.0 (174.3)201.7 (143.2)Comprehensive income (loss)21.9 890.4 223.6 747.1 
Other comprehensive (income) loss attributable to noncontrolling
interests
Other comprehensive (income) loss attributable to noncontrolling
interests
(.4).5 (.8).7 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
$20.6 $(173.8)$200.9 $(142.5)Comprehensive income (loss) attributable to White
Mountains’s common shareholders
$22.6 $890.1 $223.5 $747.5 




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I. SUMMARY OF OPERATIONS BY SEGMENT
 
As of JuneSeptember 30, 2023, White Mountains conducted its operations through three segments: (1) HG Global/BAM, (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. Significant intercompany transactions among White Mountains’s segments have been eliminated herein. White Mountains’s segment information is presented in Note 14 — “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, 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.

HG Global/BAM

The following tables present the components of pre-tax income (loss) included in the 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 sixnine months ended JuneSeptember 30, 2023 and 2022:

Three Months Ended June 30, 2023 Three Months Ended September 30, 2023
MillionsMillionsHG GlobalBAMEliminationsTotalMillionsHG GlobalBAMEliminationsTotal
Direct written premiumsDirect written premiums$ $11.6 $ $11.6 Direct written premiums$ $16.5 $ $16.5 
Assumed written premiumsAssumed written premiums10.0  (10.0) Assumed written premiums14.2  (14.2) 
Gross written premiumsGross written premiums10.0 11.6 (10.0)11.6 Gross written premiums14.2 16.5 (14.2)16.5 
Ceded written premiumsCeded written premiums (10.0)10.0  Ceded written premiums (14.2)14.2  
Net written premiumsNet written premiums$10.0 $1.6 $ $11.6 Net written premiums$14.2 $2.3 $ $16.5 
Earned insurance premiumsEarned insurance premiums$6.4 $1.3 $ $7.7 Earned insurance premiums$6.6 $1.3 $ $7.9 
Net investment incomeNet investment income4.1 3.5  7.6 Net investment income4.3 3.8  8.1 
Net investment income - BAM Surplus NotesNet investment income - BAM Surplus Notes6.5  (6.5) Net investment income - BAM Surplus Notes6.6  (6.6) 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)(5.7)(4.2) (9.9)Net realized and unrealized investment gains (losses)(13.6)(10.5) (24.1)
Other revenuesOther revenues .5  .5 Other revenues .7  .7 
Total revenuesTotal revenues11.3 1.1 (6.5)5.9 Total revenues3.9 (4.7)(6.6)(7.4)
Acquisition expensesAcquisition expenses1.8 (.3) 1.5 Acquisition expenses2.0 .1  2.1 
General and administrative expensesGeneral and administrative expenses.3 14.6  14.9 General and administrative expenses.5 17.0  17.5 
Interest expense (1)
Interest expense (1)
2.7   2.7 
Interest expense (1)
3.9   3.9 
Interest expense - BAM Surplus NotesInterest expense - BAM Surplus Notes 6.5 (6.5) Interest expense - BAM Surplus Notes 6.6 (6.6) 
Total expensesTotal expenses4.8 20.8 (6.5)19.1 Total expenses6.4 23.7 (6.6)23.5 
Pre-tax income (loss)Pre-tax income (loss)$6.5 $(19.7)$ $(13.2)Pre-tax income (loss)$(2.5)$(28.4)$ $(30.9)
Supplemental information:Supplemental information:Supplemental information:
MSC collected (2)
MSC collected (2)
$ $14.7 $ $14.7 
MSC collected (2)
$ $19.9 $ $19.9 
(1) Amount includes $0.2 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.

50


 Three Months Ended June 30, 2022
MillionsHG GlobalBAMEliminationsTotal
Direct written premiums$— $17.1 $— $17.1 
Assumed written premiums14.7 — (14.7)— 
Gross written premiums14.7 17.1 (14.7)17.1 
Ceded written premiums— (14.7)14.7 — 
Net written premiums$14.7 $2.4 $— $17.1 
Earned insurance premiums$8.7 $1.8 $— $10.5 
Net investment income2.2 2.6 — 4.8 
Net investment income - BAM Surplus Notes3.0 — (3.0)— 
Net realized and unrealized investment gains(14.7)(15.4)— (30.1)
Other revenues.1 1.5 — 1.6 
Total revenues(.7)(9.5)(3.0)(13.2)
Acquisition expenses3.4 1.4 — 4.8 
General and administrative expenses.8 16.6 — 17.4 
Interest expense3.4 — — 3.4 
Interest expense - BAM Surplus Notes— 3.0 (3.0)— 
Total expenses7.6 21.0 (3.0)25.6 
Pre-tax income (loss)$(8.3)$(30.5)$— $(38.8)
Supplemental information:
     MSC collected (1)
$— $24.0 $— $24.0 
(1) MSC collected are recorded directly to BAM’s equity, which is recorded as noncontrolling interest on White Mountains’s balance sheet.
 Six Months Ended June 30, 2023
MillionsHG GlobalBAMEliminationsTotal
Direct written premiums$ $20.8 $ $20.8 
Assumed written premiums17.7  (17.7) 
Gross written premiums17.7 20.8 (17.7)20.8 
Ceded written premiums (17.7)17.7  
Net written premiums$17.7 $3.1 $ $20.8 
Earned insurance premiums$12.8 $2.6 $ $15.4 
Net investment income8.1 6.7  14.8 
Net investment income - BAM Surplus Notes13.1  (13.1) 
Net realized and unrealized investment gains (losses)2.2 4.9  7.1 
Other revenues 1.3  1.3 
Total revenues36.2 15.5 (13.1)38.6 
Acquisition expenses3.6 .6  4.2 
General and administrative expenses1.4 30.8  32.2 
Interest expense (1)
7.2   7.2 
Interest expense - BAM Surplus Notes 13.1 (13.1) 
Total expenses12.2 44.5 (13.1)43.6 
Pre-tax income (loss)$24.0 $(29.0)$ $(5.0)
Supplemental information:
     MSC collected (2)
$ $26.5 $ $26.5 
(1) Amount includes $0.2$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


Six Months Ended June 30, 2022 Three Months Ended September 30, 2022
MillionsMillionsHG GlobalBAMEliminationsTotalMillionsHG GlobalBAMEliminationsTotal
Direct written premiumsDirect written premiums$— $26.5 $— $26.5 Direct written premiums$— $18.4 $— $18.4 
Assumed written premiumsAssumed written premiums22.8 — (22.8)— Assumed written premiums16.8 1.3 (16.8)1.3 
Gross written premiumsGross written premiums22.8 26.5 (22.8)26.5 Gross written premiums16.8 19.7 (16.8)19.7 
Ceded written premiumsCeded written premiums— (22.8)22.8 — Ceded written premiums— (16.8)16.8 — 
Net written premiumsNet written premiums$22.8 $3.7 $— $26.5 Net written premiums$16.8 $2.9 $— $19.7 
Earned insurance premiumsEarned insurance premiums$15.6 $3.3 $— $18.9 Earned insurance premiums$5.9 $1.2 $— $7.1 
Net investment incomeNet investment income4.3 5.1 — 9.4 Net investment income2.8 2.9 — 5.7 
Net investment income - BAM Surplus NotesNet investment income - BAM Surplus Notes5.9 — (5.9)— Net investment income - BAM Surplus Notes2.9 — (2.9)— 
Net realized and unrealized investment gains (losses)(38.2)(37.0)— (75.2)
Net realized and unrealized investment gainsNet realized and unrealized investment gains(19.6)(19.2)— (38.8)
Other revenuesOther revenues.2 2.2 — 2.4 Other revenues.1 1.2 — 1.3 
Total revenuesTotal revenues(12.2)(26.4)(5.9)(44.5)Total revenues(7.9)(13.9)(2.9)(24.7)
Acquisition expensesAcquisition expenses6.0 1.8 — 7.8 Acquisition expenses1.6 .1 — 1.7 
General and administrative expensesGeneral and administrative expenses1.5 32.2 — 33.7 General and administrative expenses.6 15.2 — 15.8 
Interest expenseInterest expense3.4 — — 3.4 Interest expense2.0 — — 2.0 
Interest expense - BAM Surplus NotesInterest expense - BAM Surplus Notes— 5.9 (5.9)— Interest expense - BAM Surplus Notes— 2.9 (2.9)— 
Total expensesTotal expenses10.9 39.9 (5.9)44.9 Total expenses4.2 18.2 (2.9)19.5 
Pre-tax income (loss)Pre-tax income (loss)$(23.1)$(66.3)$— $(89.4)Pre-tax income (loss)$(12.1)$(32.1)$— $(44.2)
Supplemental information:Supplemental information:Supplemental information:
MSC collected (1)
MSC collected (1)
$— 36.3 $— $36.3 
MSC collected (1)
$— $26.0 $— $26.0 
(1) MSC collected are recorded directly to BAM’s equity, which is recorded as noncontrolling interest on White Mountains’s balance sheet.
 Nine Months Ended September 30, 2023
MillionsHG GlobalBAMEliminationsTotal
Direct written premiums$ $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.

52


 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 $— $26.0 
Net investment income7.1 8.0 — 15.1 
Net investment income - BAM Surplus Notes8.8 — (8.8)— 
Net realized and unrealized investment gains (losses)(57.8)(56.2)— (114.0)
Other revenues.3 3.4 — 3.7 
Total revenues(20.1)(40.3)(8.8)(69.2)
Acquisition expenses7.6 1.9 — 9.5 
General and administrative expenses2.1 47.4 — 49.5 
Interest expense5.4 — — 5.4 
Interest expense - BAM Surplus Notes— 8.8 (8.8)— 
Total expenses15.1 58.1 (8.8)64.4 
Pre-tax income (loss)$(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 noncontrolling interest on White Mountains’s balance sheet.

HG Global/BAM Results—Three Months Ended JuneSeptember 30, 2023 versus Three Months Ended JuneSeptember 30, 2022
Gross written premiums and MSC collected in the HG Global/BAM segment totaled $26$36 million in the secondthird quarter of 2023 compared to $41$46 million in the secondthird quarter of 2022. BAM insured $3.4$4.2 billion of municipal bonds, $2.9$3.7 billion of which were in the primary market, in the secondthird quarter of 2023 compared to $5.9$4.1 billion of municipal bonds, $4.1$3.3 billion of which were in the primary market, in the secondthird 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 10.1%7.8% in the secondthird quarter of 2023, driven primarily by demand from both large and small deals, compared to 6.2% in the period, compared to 9.1% in the secondthird quarter of 2022.
Total pricing, which reflects both gross written premiums and MSC, increaseddecreased to 7787 basis points in the secondthird quarter of 2023 compared to 70110 basis points in the secondthird quarter of 2022. The increasedecrease 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 both the primary and secondary markets.market. Pricing in the primary market increaseddecreased to 5661 basis points in the secondthird quarter of 2023 compared to 4979 basis points in the secondthird quarter of 2022. Pricing in the combined secondary market,and assumed reinsurance markets, which is more transaction specific than pricing in the primary market, increased to 200259 basis points in the secondthird quarter of 2023 compared to 121229 basis points in the secondthird 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 JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Three Months Ended September 30,
$ in Millions$ in Millions20232022$ in Millions20232022
Gross par value of primary market policies issuedGross par value of primary market policies issued$2,890.2 $4,123.7 Gross par value of primary market policies issued$3,659.9 $3,269.0 
Gross par value of secondary market policies issuedGross par value of secondary market policies issued500.3 1,743.8 Gross par value of secondary market policies issued542.4 826.5 
Gross par value of assumed reinsuranceGross par value of assumed reinsurance 42.5 
Total gross par value of market policies issuedTotal gross par value of market policies issued$3,390.5 $5,867.5 Total gross par value of market policies issued$4,202.3 $4,138.0 
Gross written premiumsGross written premiums$11.6 $17.1 Gross written premiums$16.5 $19.7 
MSC collectedMSC collected14.7 24.0 MSC collected19.9 26.0 
Total gross written premiums and MSC collectedTotal gross written premiums and MSC collected$26.3 $41.1 Total gross written premiums and MSC collected$36.4 $45.7 
Total pricingTotal pricing77 bps70 bpsTotal pricing87 bps110 bps
5253


HG Global reported pre-tax income (loss)loss of $7$3 million in the secondthird quarter of 2023 compared to $(8)$12 million in the secondthird quarter of 2022. HG Global’s results in the third quarter of 2023 included net realized and unrealized investment gains (losses)losses on its fixed income portfolio of $(6)$14 million compared to $20 million in the second quarter of 2023 compared to $(15) million in the secondthird quarter of 2022, asdriven by increasing interest rates increased to a lesser extent in the second quarter of 2023 versus the second quarter of 2022.each period. HG Global’s resultsresults in the secondthird quarter of 2023 also included $7 million of interest income on the BAM Surplus Notes of $7 millioncompared to $3 million in the secondthird 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, $8.7 billion of which were in the primary market, in the first nine months of 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 increased to 8.6% in the first nine months of 2023, driven primarily by demand from large deals in the period, compared to 7.8% in the first nine months of 2022.
Total pricing, which reflects both gross written premiums and MSC, decreased to 80 basis points in the first nine months of 2023, compared to 81 basis points in the first nine months of 2022. The decrease in total pricing was driven primarily by 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 was 57 basis points in the first nine months of 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.
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 nine months ended September 30, 2023 and 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

54


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 2022. 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 $58 million in the first nine months of 2022, as interest rates increased significantly. HG Global’s results in the first nine months of 2023 also included interest income on the BAM Surplus Notes of $20 million compared to $9 million in the first nine months of 2022, as the interest rate increased to 8% in 2023 from 3% in 2022.
On April 29, 2022, HG Global received the proceeds of a $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 Mountain’sMountains’s GAAP financial statements and attributed to noncontrolling interests. White MountainsMountains reported $20$57 millionof GAAP pre-tax loss from BAM in the second quarterfirst nine months of 2023, compared to $31$98 million in the second quarterfirst nine months of 2022.2022. BAM’s results included net realized and unrealized investment losses on its fixed income portfolio of $4 million in the second quarter of 2023 compared to $15 million in the second quarter of 2022 as interest rates increased to a lesser extent in the second quarter of 2023 versus the second quarter of 2022. BAM’s results in the second quarter of 2023 also included $7 million of interest expense on the BAM Surplus Notes compared to $3 million in the second quarter of 2022.

HG Global/BAM Results—Six Months Ended June 30, 2023 versus Six Months Ended June 30, 2022
Gross written premiums and MSC collected in the HG Global/BAM segment totaled $47 million in the first six months of 2023 compared to $63 million in the first six months of 2022. BAM insured $6.3 billion of municipal bonds, $5.1 billion of which were in the primary market, in the first six months of 2023 compared to $9.3 billion of municipal bonds, $6.9 billion of which were in the primary market, in the first six months of 2022.
Insured penetration in the primary market increased to 9.1% in the first six months of 2023, driven primarily by demand from large deals in the period, compared to 8.6% in the first six months of 2022.
Total pricing, which reflects both gross written premiums and MSC, increased to 75 basis points in the first six months of 2023, compared to 67 basis points in the first six months of 2022. The increase in total pricing was driven by higher pricing in both the primary and secondary markets. Pricing in the primary market increased to 54 basis points in the first six months of 2023 compared to 47 basis points in first six months of 2022. Pricing in the secondary market, which is more transaction specific than pricing in the primary market, increased to 163 basis points in the first six months of 2023 compared to 124 basis points in the first six months 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 six months ended June 30, 2023 and 2022:
Six Months Ended June 30,
$ in Millions20232022
Gross par value of primary market policies issued$5,075.6 $6,878.8 
Gross par value of secondary market policies issued1,204.5 2,442.9 
Total gross par value of market policies issued$6,280.1 $9,321.7 
Gross written premiums$20.8 $26.5 
MSC collected26.5 36.3 
Total gross written premiums and MSC collected$47.3 $62.8 
Total pricing75 bps67 bps

53


HG Global reported pre-tax income (loss) of $24 million in the first six months of 2023 compared to $(23) million in the first six months of 2022. HG Global’s results included net realized and unrealized investment gains (losses) on its fixed income portfolio of $2 million as interest rates increased and spreads tightened modestly in the first six months of 2023 compared to $(38) million in the first six months of 2022 as interest rates increased significantly. HG Global’s results in the first six months of 2023 also included $13 million of interest income on the BAM Surplus Notes compared to $6 million in the first six months 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 Mountains’s GAAP financial statements and attributed to noncontrolling interests. White Mountains reported $29 million of GAAP pre-tax loss from BAM in the first six months of 2023, compared to $66 million in the first six months of 2022. BAM’s results included net realized and unrealized investment gains (losses) on its fixed income portfolio of $5 million in the first sixnine months of 2023, as interest rates increased, and spreads tightened modestly compared to $(37)$56 million in the first sixnine months of 2022, as interest rates increased significantly. BAM’s results in the first sixnine months of 2023 also included $13 million of interest expense on the BAM Surplus Notes of $20 million compared to $6$9 million in the first sixnine months of 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 $1,451$1,474 million as of JuneSeptember 30, 2023 compared to $1,423 million as of December 31, 2022 and $1,228$1,260 million as of JuneSeptember 30, 2022. The increase in claims paying resources as of JuneSeptember 30, 2023 compared to December 31, 2022 was driven primarily by an increase in the HG Re Collateral Trusts resulting from deposits of ceded premiums and an increase in contingency reserves for the first sixnine months 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 JuneSeptember 30, 2023, December 31, 2022 and JuneSeptember 30, 2022:
MillionsMillionsJune 30, 2023December 31, 2022June 30, 2022MillionsSeptember 30, 2023December 31, 2022September 30, 2022
Policyholders’ surplusPolicyholders’ surplus$281.5 $283.4 $303.4 Policyholders’ surplus$285.8 $283.4 $316.9 
Contingency reserveContingency reserve126.9 118.2 109.8 Contingency reserve131.5 118.2 113.9 
Qualified statutory capital Qualified statutory capital408.4 401.6 413.2  Qualified statutory capital417.3 401.6 430.8 
Statutory net unearned premiumsStatutory net unearned premiums56.9 55.3 51.1 Statutory net unearned premiums58.3 55.3 53.3 
Present value of future installment premiums and MSCPresent value of future installment premiums and MSC12.5 13.3 13.9 Present value of future installment premiums and MSC10.9 13.3 13.3 
HG Re Collateral Trusts at statutory valueHG Re Collateral Trusts at statutory value573.4 553.1 499.4 HG 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 Fidus Re collateral trusts at statutory value400.0 400.0 250.0 
Claims paying resources Claims paying resources$1,451.2 $1,423.3 $1,227.6  Claims paying resources$1,474.0 $1,423.3 $1,260.1 

5455


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 JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023September 30, 2023
MillionsMillionsHG GlobalBAMEliminations and Segment AdjustmentsTotalMillionsHG GlobalBAMEliminations and Segment AdjustmentsTotal
AssetsAssetsAssets
Fixed maturity investments, at fair valueFixed maturity investments, at fair value$512.5 $420.4 $ $932.9 Fixed maturity investments, at fair value$521.7 $410.5 $ $932.2 
Short-term investments, at fair valueShort-term investments, at fair value41.2 26.3  67.5 Short-term investments, at fair value40.0 40.1  80.1 
Total investmentsTotal investments553.7 446.7  1,000.4 Total investments561.7 450.6  1,012.3 
CashCash1.4 1.5  2.9 Cash1.1 3.8  4.9 
BAM Surplus NotesBAM Surplus Notes340.0  (340.0) BAM Surplus Notes340.0  (340.0) 
Accrued interest receivable on BAM Surplus NotesAccrued interest receivable on BAM Surplus Notes171.0  (171.0) Accrued interest receivable on BAM Surplus Notes177.6  (177.6) 
Insurance premiums receivableInsurance premiums receivable4.0 6.4 (4.0)6.4 Insurance premiums receivable3.9 5.5 (3.9)5.5 
Deferred acquisition costsDeferred acquisition costs72.9 37.4 (72.9)37.4 Deferred acquisition costs75.4 38.5 (75.4)38.5 
Other assetsOther assets11.0 14.6 (.3)25.3 Other assets7.8 14.7 (.3)22.2 
Total assetsTotal assets$1,154.0 $506.6 $(588.2)$1,072.4 Total assets$1,167.5 $513.1 $(597.2)$1,083.4 
LiabilitiesLiabilitiesLiabilities
BAM Surplus Notes (1)
BAM Surplus Notes (1)
$ $340.0 $(340.0)$ 
BAM Surplus Notes (1)
$ $340.0 $(340.0)$ 
Accrued interest payable on BAM Surplus Notes (2)
Accrued interest payable on BAM Surplus Notes (2)
 171.0 (171.0) 
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)
369.9   369.9 
Preferred dividends payable to White Mountains (3)
384.7   384.7 
Preferred dividends payable to noncontrolling interestsPreferred dividends payable to noncontrolling interests13.6   13.6 Preferred dividends payable to noncontrolling interests14.2   14.2 
Unearned insurance premiumsUnearned insurance premiums254.7 49.0  303.7 Unearned insurance premiums262.3 50.0  312.3 
DebtDebt146.7  — 146.7 Debt146.8  — 146.8 
Intercompany debt (4)
Intercompany debt (4)
1.5  — 1.5 
Intercompany debt (4)
5.3  — 5.3 
Accrued incentive compensationAccrued incentive compensation.9 13.8 — 14.7 Accrued incentive compensation1.1 18.8 — 19.9 
Other liabilitiesOther liabilities8.2 90.0 (77.2)21.0 Other liabilities12.8 92.6 (79.6)25.8 
Total liabilitiesTotal liabilities795.5 663.8 (588.2)871.1 Total liabilities827.2 679.0 (597.2)909.0 
EquityEquityEquity
White Mountains’s common shareholders’ equity (3) (4)
359.8   359.8 
White Mountains’s common shareholders’ equity (3)(4)
White Mountains’s common shareholders’ equity (3)(4)
343.6   343.6 
Noncontrolling interestsNoncontrolling interests(1.3)(157.2) (158.5)Noncontrolling interests(3.3)(165.9) (169.2)
Total equityTotal equity358.5 (157.2) 201.3 Total equity340.3 (165.9) 174.4 
Total liabilities and equityTotal liabilities and equity$1,154.0 $506.6 $(588.2)$1,072.4 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. 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 Global’s preferred dividends payable to White Mountains are eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s preferred dividends payable to White Mountains included within the HG Global/BAM segment are eliminated against the offsetting receivable included within Other Operations.
(4)    HG Global’s intercompany debt is eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany debt included within the HG Global/BAM segment is eliminated against the offsetting receivable included within Other Operations.
5556


December 31, 2022December 31, 2022
MillionsMillionsHG GlobalBAMEliminations and Segment AdjustmentsTotal SegmentMillionsHG GlobalBAMEliminations and Segment AdjustmentsTotal Segment
AssetsAssetsAssets
Fixed maturity investments, at fair valueFixed maturity investments, at fair value$489.6 $420.3 $— $909.9 Fixed maturity investments, at fair value$489.6 $420.3 $— $909.9 
Short-term investments, at fair valueShort-term investments, at fair value42.0 23.9 — 65.9 Short-term investments, at fair value42.0 23.9 — 65.9 
Total investmentsTotal investments531.6 444.2 — 975.8 Total investments531.6 444.2 — 975.8 
CashCash13.2 5.0 — 18.2 Cash13.2 5.0 — 18.2 
BAM Surplus NotesBAM Surplus Notes340.0 — (340.0)— BAM Surplus Notes340.0 — (340.0)— 
Accrued interest receivable on BAM Surplus NotesAccrued interest receivable on BAM Surplus Notes157.9 — (157.9)— Accrued interest receivable on BAM Surplus Notes157.9 — (157.9)— 
Insurance premiums receivableInsurance premiums receivable4.3 6.6 (4.3)6.6 Insurance premiums receivable4.3 6.6 (4.3)6.6 
Deferred acquisition costsDeferred acquisition costs71.2 36.0 (71.2)36.0 Deferred acquisition costs71.2 36.0 (71.2)36.0 
Other assetsOther assets7.0 15.1 (.2)21.9 Other assets7.0 15.1 (.2)21.9 
Total assetsTotal assets$1,125.2 $506.9 $(573.6)$1,058.5 Total assets$1,125.2 $506.9 $(573.6)$1,058.5 
LiabilitiesLiabilitiesLiabilities
BAM Surplus Notes (1)
BAM Surplus Notes (1)
$— $340.0 $(340.0)$— 
BAM Surplus Notes (1)
$— $340.0 $(340.0)$— 
Accrued interest payable on BAM Surplus Notes (2)
Accrued interest payable on BAM Surplus Notes (2)
— 157.9 (157.9)— 
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)
341.4 — — 341.4 
Preferred dividends payable to White Mountains (3)
341.4 — — 341.4 
Preferred dividends payable to noncontrolling interestsPreferred dividends payable to noncontrolling interests12.5 — — 12.5 Preferred dividends payable to noncontrolling interests12.5 — — 12.5 
Unearned insurance premiumsUnearned insurance premiums249.8 48.5 — 298.3 Unearned insurance premiums249.8 48.5 — 298.3 
DebtDebt146.5 — — 146.5 Debt146.5 — — 146.5 
Intercompany debt (4)
Intercompany debt (4)
6.0 — — 6.0 
Intercompany debt (4)
6.0 — — 6.0 
Accrued incentive compensationAccrued incentive compensation1.3 26.7 — 28.0 Accrued incentive compensation1.3 26.7 — 28.0 
Other liabilitiesOther liabilities3.7 88.5 (75.7)16.5 Other liabilities3.7 88.5 (75.7)16.5 
Total liabilitiesTotal liabilities761.2 661.6 (573.6)849.2 Total liabilities761.2 661.6 (573.6)849.2 
EquityEquityEquity
White Mountains’s common shareholders’ equity (3) (4)
364.6 — — 364.6 
White Mountains’s common shareholders’ equity (3)(4)
White Mountains’s common shareholders’ equity (3)(4)
364.6 — — 364.6 
Noncontrolling interestsNoncontrolling interests(.6)(154.7)— (155.3)Noncontrolling interests(.6)(154.7)— (155.3)
Total equityTotal equity364.0 (154.7)— 209.3 Total equity364.0 (154.7)— 209.3 
Total liabilities and equityTotal liabilities and equity$1,125.2 $506.9 $(573.6)$1,058.5 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. 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 Global’s preferred dividends payable to White Mountains are eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s preferred dividends payable to White Mountains included within the HG Global/BAM segment are eliminated against the offsetting receivable included within Other Operations.
(4)    HG Global’s intercompany debt is eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany debt included within the HG Global/BAM segment is eliminated against the offsetting receivable included within Other Operations.




5657


Ark/WM Outrigger

The following table presents the components of pre-tax income (loss) included in the Ark/WM Outrigger segment for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Three Months Ended September 30,
2023202220232022
MillionsMillionsArkWM
Outrigger Re
EliminationsTotalArkMillionsArkWM
Outrigger Re
EliminationsTotalArk
Direct written premiumsDirect written premiums$291.5 $ $ $291.5 $214.3 Direct written premiums$189.4 $ $ $189.4 $118.6 
Assumed written premiumsAssumed written premiums314.6 58.3 (58.3)314.6 189.6 Assumed written premiums61.8 6.0 (6.0)61.8 96.9 
Gross written premiumsGross written premiums606.1 58.3 (58.3)606.1 403.9 Gross written premiums251.2 6.0 (6.0)251.2 215.5 
Ceded written premiumsCeded written premiums(203.2) 58.3 (144.9)(133.7)Ceded written premiums(26.2) 6.0 (20.2)(22.9)
Net written premiumsNet written premiums$402.9 $58.3 $ $461.2 $270.2 Net written premiums$225.0 $6.0 $ $231.0 $192.6 
Earned insurance premiumsEarned insurance premiums$283.7 $9.6 $ $293.3 $217.3 Earned insurance premiums$438.3 $60.6 $ $498.9 $346.1 
Net investment incomeNet investment income11.2 2.5  13.7 3.2 Net investment income13.9 3.0  16.9 4.9 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)18.0   18.0 (44.6)Net realized and unrealized investment gains (losses)(6.6)  (6.6)(14.4)
Other revenuesOther revenues(2.0)  (2.0)6.3 Other revenues3.6   3.6 6.6 
Total revenuesTotal revenues310.9 12.1  323.0 182.2 Total revenues449.2 63.6  512.8 343.2 
Losses and LAELosses and LAE167.1 .4  167.5 120.5 Losses and LAE258.5 7.3  265.8 213.7 
Acquisition expensesAcquisition expenses59.4 2.0  61.4 50.2 Acquisition expenses71.0 19.3  90.3 74.8 
General and administrative expenses -
other underwriting
General and administrative expenses -
other underwriting
25.5   25.5 18.6 General and administrative expenses -
other underwriting
25.5   25.5 13.2 
General and administrative expenses - all otherGeneral and administrative expenses - all other9.4   9.4 11.1 General and administrative expenses - all other9.8 .1  9.9 11.0 
Change in fair value of contingent considerationChange in fair value of contingent consideration2.2   2.2 .1 Change in fair value of contingent consideration17.0   17.0 2.7 
Interest expenseInterest expense5.2   5.2 3.1 Interest expense5.5   5.5 3.7 
Total expensesTotal expenses268.8 2.4  271.2 203.6 Total expenses387.3 26.7  414.0 319.1 
Pre-tax income (loss)Pre-tax income (loss)$42.1 $9.7 $ $51.8 $(21.4)Pre-tax income (loss)$61.9 $36.9 $ $98.8 $24.1 
Six Months Ended June 30,Nine Months Ended September 30,
2023202220232022
MillionsMillionsArkWM
Outrigger Re
EliminationsTotalArkMillionsArkWM
Outrigger Re
EliminationsTotalArk
Direct written premiumsDirect written premiums$537.7 $ $ $537.7 $445.2 Direct written premiums$727.1 $ $ $727.1 $563.8 
Assumed written premiumsAssumed written premiums877.8 102.4 (102.4)877.8 591.8 Assumed written premiums939.6 108.4 (108.4)939.6 688.7 
Gross written premiumsGross written premiums1,415.5 102.4 (102.4)1,415.5 1,037.0 Gross written premiums1,666.7 108.4 (108.4)1,666.7 1,252.5 
Ceded written premiumsCeded written premiums(442.5) 102.4 (340.1)(223.0)Ceded written premiums(468.7) 108.4 (360.3)(246.0)
Net written premiumsNet written premiums$973.0 $102.4 $ $1,075.4 $814.0 Net written premiums$1,198.0 $108.4 $ $1,306.4 $1,006.5 
Earned insurance premiumsEarned insurance premiums$533.6 $14.8 $ $548.4 $411.7 Earned insurance premiums$971.9 $75.4 $ $1,047.3 $757.8 
Net investment incomeNet investment income19.6 4.7  24.3 4.8 Net investment income33.5 7.7  41.2 9.7 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)42.5   42.5 (62.1)Net realized and unrealized investment gains (losses)35.9   35.9 (76.5)
Other revenuesOther revenues(4.7)  (4.7)3.5 Other revenues(1.1)  (1.1)10.1 
Total revenuesTotal revenues591.0 19.5  610.5 357.9 Total revenues1,040.2 83.1  1,123.3 701.1 
Losses and LAELosses and LAE314.7 .6  315.3 242.5 Losses and LAE573.2 7.9  581.1 456.2 
Acquisition expensesAcquisition expenses118.3 2.9  121.2 100.1 Acquisition expenses189.3 22.2  211.5 174.9 
General and administrative expenses -
other underwriting
General and administrative expenses -
other underwriting
53.0   53.0 40.7 General and administrative expenses -
other underwriting
78.5   78.5 53.9 
General and administrative expenses - all otherGeneral and administrative expenses - all other17.0 .1  17.1 10.0 General and administrative expenses - all other26.8 .2  27.0 21.0 
Change in fair value of contingent considerationChange in fair value of contingent consideration(.2)  (.2)2.2 Change in fair value of contingent consideration16.8   16.8 4.9 
Interest expenseInterest expense10.2   10.2 6.9 Interest expense15.7   15.7 10.6 
Total expensesTotal expenses513.03.6 516.6 402.4 Total expenses900.330.3 930.6 721.5 
Pre-tax income (loss)Pre-tax income (loss)$78.0 $15.9 $ $93.9 $(44.5)Pre-tax income (loss)$139.9 $52.8 $ $192.7 $(20.4)
5758


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 sixnine months ended JuneSeptember 30, 2022 are shown net of amounts relating to TPC Providers’ share of the Syndicates’ results, including investment results.

Ark/WM Outrigger Results—Three Months Ended JuneSeptember 30, 2023 versus Three Months Ended JuneSeptember 30, 2022
The Ark/WM Outrigger segment’s combined ratio was 87%77% in the secondthird quarter of 2023. The Ark/WM Outrigger segment reported gross written premiums of $606$251 million, net written premiums of $461$231 million and net earned premiums of $293$499 million in the secondthird quarter of 2023. The Ark/WM Outrigger segment reported pre-tax income of $52$99 million in the secondthird quarter of 2023.
Ark’s combined ratio was 89%81% in the secondthird quarter of 2023 compared to 87% in the secondthird quarter of 2022. Ark’s combined ratio in the secondthird quarter of 2023 included four11 points of unfavorable prior year loss reserve development, primarily duecatastrophe losses, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events, compared to three large claims21 points of catastrophe losses in the property and marine & energy lines of business. This compared to ten points of favorable prior year loss reserve development in the secondthird 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, including favorable claims experience on prior year catastrophe events. Ark’s combined ratiopredominantly from business underwritten in the second quarter of 2023 included five points of catastrophe losses compared to 11 points of catastrophe losses, driven primarily by losses from the conflict in Ukraine, in the second quarter of 2022.London.
Ark reported gross written premiums of $606$251 million, net written premiums of $403$225 million and net earned premiums of $284$438 million in the secondthird quarter of 2023 compared to gross written premiums of $404$216 million, net written premiums of $270$193 million and net earned premiums of $217$346 million in the secondthird quarter of 2022. Ark reported pre-tax income (loss) of $42$62 million in the secondthird quarter of 2023 compared to $(21)$24 million in secondthe third quarter of 2022. Ark’s results included net realized and unrealized investment gains (losses)losses of $18$7 million in the secondthird quarter of 2023, driven primarily by the impact of foreign currency on its investment portfolio, compared to $(45)$14 million in the secondthird 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 $3 million in the third quarter of 2022.
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 was 25%44% in the secondthird quarter of 2023. WM Outrigger Re reported gross and net written premiums of $58$6 million and net earned premiums of $10$61 million in the secondthird quarter of 2023. WM Outrigger Re’s catastrophe premiums are earned in proportion to the insurance protection provided.WM Outrigger Re reported pre-tax income $37 million in the third quarter of 2023.

59


The following table presents the Ark/WM Outrigger segment’s insurance premiums, insurance expenses and insurance ratios for the three months ended JuneSeptember 30, 2023 and 2022:

Three Months Ended June 30,Three Months Ended September 30,
2023202220232022
$ in Millions$ in MillionsArkWM Outrigger ReEliminationsTotalArk$ in MillionsArkWM Outrigger ReEliminationsTotalArk
Insurance premiums:Insurance premiums:Insurance premiums:
Gross written premiumsGross written premiums$606.1 $58.3 $(58.3)$606.1 $403.9 Gross written premiums$251.2 $6.0 $(6.0)$251.2 $215.5 
Net written premiumsNet written premiums$402.9 $58.3 $ $461.2 $270.2 Net written premiums$225.0 $6.0 $ $231.0 $192.6 
Net earned premiumsNet earned premiums$283.7 $9.6 $ $293.3 $217.3 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$167.1 $.4 $ $167.5 $120.5 Loss and loss adjustment expenses$258.5 $7.3 $ $265.8 $213.7 
Acquisition expensesAcquisition expenses59.4 2.0  61.4 50.2 Acquisition expenses71.0 19.3  90.3 74.8 
Other underwriting expenses (1)
Other underwriting expenses (1)
25.5   25.5 18.6 
Other underwriting expenses (1)
25.5   25.5 13.2 
Total insurance expensesTotal insurance expenses$252.0 $2.4 $ $254.4 $189.3 Total insurance expenses$355.0 $26.6 $ $381.6 $301.7 
Insurance ratios:Insurance ratios:Insurance ratios:
Loss and loss adjustment expenseLoss and loss adjustment expense58.9 %4.2 % %57.1 %55.5 %Loss and loss adjustment expense59.0 %12.0 % %53.3 %61.7 %
Acquisition expenseAcquisition expense20.9 20.8  20.9 23.1 Acquisition expense16.2 31.8  18.1 21.6 
Other underwriting expenseOther underwriting expense9.0   8.7 8.6 Other underwriting expense5.8   5.1 3.8 
Combined Ratio Combined Ratio88.8 %25.0 % %86.7 %87.2 % Combined Ratio81.0 %43.8 % %76.5 %87.1 %
(1) Included within general and administrative expenses

58


Gross Written Premiums
Gross written premiums increased 50%17% to $606$251 million in the secondthird quarter of 2023 compared to the secondthird quarter of 2022, with risk adjusted rate change up approximately 21%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, reflecting the rate environment and additional capacity provided by Outrigger Re Ltd., as well as the marine & energy line of business. The risk adjusted rate change on the Outrigger Re Ltd. portfolio of global property reinsurance was 35%17% in the secondthird quarter of 2023. The following table presents the Ark/WM Outrigger segment’s gross written premiums by line of business for the three months ended JuneSeptember 30, 2023 and 2022:

Three Months Ended June 30,Three Months Ended September 30,
MillionsMillions20232022Millions20232022
PropertyProperty$405.8 $245.6 Property$123.9 $102.6 
Marine & EnergyMarine & Energy88.5 57.2 Marine & Energy49.0 36.0 
SpecialtySpecialty74.2 66.5 Specialty39.1 43.5 
CasualtyCasualty26.7 25.9 Casualty27.3 21.4 
Accident & HealthAccident & Health10.9 8.7 Accident & Health11.9 12.0 
Total Gross Written Premium Total Gross Written Premium$606.1 $403.9  Total Gross Written Premium$251.2 $215.5 

Ark
60


Ark/WM Outrigger Results— SixNine Months Ended JuneSeptember 30, 2023 versus SixNine Months Ended JuneSeptember 30, 2022
The Ark/WM Outrigger segment’s combined ratio was 89%83% in the first sixnine months of 2023. The Ark/WM Outrigger segment reported gross written premiums of $1,416,$1,667 million, net written premiums of $1,075$1,306 million and net earned premiums of $548$1,047 million in the first sixnine months of 2023. The Ark/WM Outrigger segment reported pre-tax income of $94$193 million in the first sixnine months of 2023.
Ark’s combined ratio was 91%87% in the first sixnine months of 2023, compared to 93%90% in the first sixnine months of 2022. Ark’s combined ratio in the first sixnine months of 2023 included fourseven 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 loss reserve development, driven primarily due toby Winter Storm ElliottElliot and three large claims in the property and marine & energy lines of business. Thisbusiness, compared to sixfive points of net favorable prior year loss reserve development in the first sixnine months of 2022, driven primarily by good claims experience across most classes including the property and specialty lines of business, including favorable claims experience on prior year catastrophe eventspredominantly from business underwritten in the second quarter. Ark’s combined ratio in the first six months of 2023 included three points of catastrophe losses compared to 14 points of catastrophe losses, driven primarily by losses from the conflict in Ukraine, in the first six months of 2022.London.
Ark reported gross written premiums of $1,416$1,667 million, net written premiums of $973$1,198 million and net earned premiums of $534$972 million in the first sixnine months of 2023, compared to gross written premiums of $1,037$1,253 million, net written premiums of $814$1,007 million and net earned premiums of $412$758 million in the first sixnine months of 2022. Ark reported pre-tax income (loss) of $78$140 million in the first sixnine months of 2023 compared to $(45)$(20) million in the first sixnine months of 2022. Ark’s results included net realized and unrealized investment gains (losses) of $43$36 million in the first sixnine months of 2023, driven primarily by net unrealized investment gains on other long-term investments, compared to $(62)$(77) million in the first sixnine months 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 $5 million in the first nine months of 2022.
WM Outrigger Re’s combined ratio was 24%40% in the first sixnine months of 2023. WM Outrigger Re reported gross and net written premiums of $102$108 million and net earned premiums of $15$75 million in the first sixnine months of 2023.
59


WM Outrigger Re reported pre-tax income $53 million in the first nine months of 2023.
The following table presents the Ark/WM Outrigger segment’s insurance premiums, insurance expenses and insurance ratios for the sixnine months ended JuneSeptember 30, 2023 and 2022:

Six Months Ended June 30,Nine Months Ended September 30,
2023202220232022
$ in Millions$ in MillionsArkWM Outrigger ReEliminationsTotalArk$ in MillionsArkWM Outrigger ReEliminationsTotalArk
Insurance premiums:Insurance premiums:Insurance premiums:
Gross written premiumsGross written premiums$1,415.5 $102.4 $(102.4)$1,415.5 $1,037.0 Gross written premiums$1,666.7 $108.4 $(108.4)$1,666.7 $1,252.5 
Net written premiumsNet written premiums$973.0 $102.4 $ $1,075.4 $814.0 Net written premiums$1,198.0 $108.4 $ $1,306.4 $1,006.5 
Net earned premiumsNet earned premiums$533.6 $14.8 $ $548.4 $411.7 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$314.7 $.6 $ $315.3 $242.5 Loss and loss adjustment expenses$573.2 $7.9 $ $581.1 $456.2 
Acquisition expensesAcquisition expenses118.3 2.9  121.2 100.1 Acquisition expenses189.3 22.2  211.5 174.9 
Other underwriting expenses (1)
Other underwriting expenses (1)
53.0   53.0 40.7 
Other underwriting expenses (1)
78.5   78.5 53.9 
Total insurance expensesTotal insurance expenses$486.0 $3.5 $ $489.5 $383.3 Total insurance expenses$841.0 $30.1 $ $871.1 $685.0 
Insurance ratios:Insurance ratios:Insurance ratios:
Loss and loss adjustment expenseLoss and loss adjustment expense59.0 %4.1 % %57.5 %58.9 %Loss and loss adjustment expense59.0 %10.5 % %55.5 %60.2 %
Acquisition expenseAcquisition expense22.2 19.6  22.1 %24.3 Acquisition expense19.5 29.4  20.2 %23.1 
Other underwriting expenseOther underwriting expense9.9   9.7 %9.9 Other underwriting expense8.1   7.5 %7.1 
Combined Ratio Combined Ratio91.1 %23.7 % %89.3 %93.1 % Combined Ratio86.6 %39.9 % %83.2 %90.4 %

61


Gross Written Premiums
Gross written premiums increased 36%33% to $1,416$1,667 million in the first sixnine months of 2023 compared to the first six monthsthird quarter of 2022, with risk adjusted rate change up approximately 15%16% 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, reflecting the rate environment and additional capacity provided by Outrigger Re Ltd., as well as the specialty and marine & energy lines of business. The risk adjusted rate change on the Outrigger Re Ltd. portfolio of global property reinsurance was 37%36% in the first sixnine months of 2023. The following table presents the Ark/WM Outrigger segment’s gross written premiums by line of business for the sixnine months ended JuneSeptember 30, 2023 and 2022:

Six Months Ended June 30,Nine Months Ended September 30,
MillionsMillions20232022Millions20232022
PropertyProperty$685.6 $419.1 Property$809.4 $521.7 
SpecialtySpecialty342.7 283.7 Specialty381.9 327.2 
Marine & EnergyMarine & Energy283.3 235.2 Marine & Energy332.3 271.2 
CasualtyCasualty56.9 50.8 Casualty84.2 72.2 
Accident & HealthAccident & Health47.0 48.3 Accident & Health58.9 60.2 
Total Gross Written Premium Total Gross Written Premium$1,415.5 $1,037.1  Total Gross Written Premium$1,666.7 $1,252.5 

60


Ark/WM Outrigger Balance Sheets
The following tables present amounts from Ark and WM Outrigger Re that are contained within White Mountains’s consolidated balance sheet as of JuneSeptember 30, 2023 and December 31, 2022:
June 30, 2023September 30, 2023
MillionsMillionsArkWM Outrigger ReEliminations and Segment AdjustmentsTotalMillionsArkWM Outrigger ReEliminations and Segment AdjustmentsTotal
AssetsAssetsAssets
Fixed maturity investments, at fair valueFixed maturity investments, at fair value$755.8 $ $ $755.8 Fixed maturity investments, at fair value$775.0 $ $ $775.0 
Common equity securities, at fair valueCommon equity securities, at fair value382.6   382.6 Common equity securities, at fair value384.9   384.9 
Short-term investments, at fair valueShort-term investments, at fair value428.9 211.4  640.3 Short-term investments, at fair value616.7 233.3  850.0 
Other long-term investmentsOther long-term investments410.7   410.7 Other long-term investments416.6   416.6 
Total investmentsTotal investments1,978.0 211.4  2,189.4 Total investments2,193.2 233.3  2,426.5 
CashCash101.5 .2  101.7 Cash129.5 .1  129.6 
Reinsurance recoverablesReinsurance recoverables757.9  (88.2)669.7 Reinsurance recoverables579.4  (41.0)538.4 
Insurance premiums receivableInsurance premiums receivable1,077.2 80.8 (80.8)1,077.2 Insurance premiums receivable781.6 58.3 (58.3)781.6 
Deferred acquisition costsDeferred acquisition costs216.3 15.8  232.1 Deferred acquisition costs172.8 5.9  178.7 
Goodwill and other intangible assetsGoodwill and other intangible assets292.5   292.5 Goodwill and other intangible assets292.5   292.5 
Other assetsOther assets69.4   69.4 Other assets66.9   66.9 
Total assetsTotal assets$4,492.8 $308.2 $(169.0)$4,632.0 Total assets$4,215.9 $297.6 $(99.3)$4,414.2 
LiabilitiesLiabilitiesLiabilities
Loss and loss adjustment expense reservesLoss and loss adjustment expense reserves$1,421.0 $.6 $(.6)$1,421.0 Loss and loss adjustment expense reserves$1,571.8 $8.0 $(8.0)$1,571.8 
Unearned insurance premiumsUnearned insurance premiums1,376.5 87.6 (87.6)1,376.5 Unearned insurance premiums984.6 33.0 (33.0)984.6 
DebtDebt185.1   185.1 Debt184.6   184.6 
Reinsurance payableReinsurance payable327.8  (80.8)247.0 Reinsurance payable204.6  (58.3)146.3 
Contingent considerationContingent consideration45.1   45.1 Contingent consideration62.1   62.1 
Other liabilitiesOther liabilities116.6   116.6 Other liabilities132.0   132.0 
Total liabilitiesTotal liabilities3,472.1 88.2 (169.0)3,391.3 Total liabilities3,139.7 41.0 (99.3)3,081.4 
EquityEquityEquity
White Mountains’s common shareholders’ equityWhite Mountains’s common shareholders’ equity757.4 220.0  977.4 White Mountains’s common shareholders’ equity796.4 256.6  1,053.0 
Noncontrolling interestsNoncontrolling interests263.3   263.3 Noncontrolling interests279.8   279.8 
Total equityTotal equity1,020.7 220.0  1,240.7 Total equity1,076.2 256.6  1,332.8 
Total liabilities and equityTotal liabilities and equity$4,492.8 $308.2 $(169.0)$4,632.0 Total liabilities and equity$4,215.9 $297.6 $(99.3)$4,414.2 
6162


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 December 31, 2022 for WM Outrigger Re have been reclassified from Other Operations to the Ark/WM Outrigger segment to conform to the presentation as of JuneSeptember 30, 2023.


6263


Kudu

As of JuneSeptember 30, 2023, Kudu had deployed a total of $795$828 million, including transaction costs, in 2223 asset and wealth management firms globally, including three that have been exited. As of JuneSeptember 30, 2023, the asset and wealth management firms had combined assets under management of approximately $75 billion, spanning a range of asset classes, including real estate, wealth management, hedge funds, private equity and alternative credit strategies.
During 2023, White Mountains committed an incremental $150 million of equity capital to Kudu for the purposes of future deployments. Kudu expects to begin drawing on this commitment in the fourth quarter of 2023.
The following table presents the components of GAAP net income, EBITDA and adjusted EBITDA included in the Kudu segment for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Net investment incomeNet investment income$14.7 $13.8 $28.9 $26.4 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)4.6 (17.6)34.2 4.7 Net realized and unrealized investment gains (losses)11.2 41.1 45.4 45.8 
Total revenuesTotal revenues19.3 (3.8)63.1 31.1 Total revenues26.3 55.9 89.4 87.0 
General and administrative expensesGeneral and administrative expenses4.0 3.1 7.8 5.9 General and administrative expenses4.5 4.5 12.3 10.4 
Interest expenseInterest expense5.3 3.3 10.0 6.1 Interest expense5.5 4.2 15.5 10.3 
Total expensesTotal expenses9.3 6.4 17.8 12.0 Total expenses10.0 8.7 27.8 20.7 
GAAP pre-tax income (loss)GAAP pre-tax income (loss)10.0 (10.2)45.3 19.1 GAAP pre-tax income (loss)16.3 47.2 61.6 66.3 
Income tax (expense) benefitIncome tax (expense) benefit(1.8)1.6 (9.3)(4.5)Income tax (expense) benefit(4.6)(16.6)(13.9)(21.1)
GAAP net income (loss)GAAP net income (loss)8.2 (8.6)36.0 14.6 GAAP net income (loss)11.7 30.6 47.7 45.2 
Add back:Add back:Add back:
Interest expenseInterest expense5.3 3.3 10.0 6.1 Interest expense5.5 4.2 15.5 10.3 
Income tax expense (benefit)Income tax expense (benefit)1.8 (1.6)9.3 4.5 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 .1 .2 .2 Amortization of other intangible assets — .2 .2 
EBITDA (2)
EBITDA (2)
15.5 (6.8)55.5 25.4 
EBITDA (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(4.6)17.6 (34.2)(4.7)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 —  .1 Non-cash equity-based compensation expense —  .1 
Transaction expensesTransaction expenses.8 .2 1.3 .2 Transaction expenses1.1 1.2 2.4 1.4 
Adjusted EBITDA (2)
Adjusted EBITDA (2)
$11.7 $11.0 $22.6 $21.0 
Adjusted EBITDA (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 7274.

The following table presents the changes in the fair value of Kudu’s Participation Contracts:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Beginning balance of Kudu’s Participation ContractsBeginning balance of Kudu’s Participation Contracts$683.2 $691.8 $695.9 $669.5 Beginning balance of Kudu’s Participation Contracts$737.1 $727.0 $695.9 $669.5 
Contributions to Participation ContractsContributions to Participation Contracts50.7 52.8 117.4 (1)52.8 Contributions to Participation Contracts26.7 45.1 144.1 (1)97.9 
Proceeds from Participation Contracts soldProceeds from Participation Contracts sold(1.4)— (110.4)(1)— Proceeds from Participation Contracts sold — (110.4)(1)— 
Net realized and unrealized investment gains (losses) on Participation Contracts sold and pending sale (2)
Net realized and unrealized investment gains (losses) on Participation Contracts sold and pending sale (2)
.9 20.9 (1.2)24.4 
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)
Net unrealized investment gains (losses) on Participation Contracts - all other (3)
3.7 (38.5)35.4 (19.7)
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)Ending balance of Kudu’s Participation Contracts(4)$737.1 $727.0 $737.1 $727.0 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.
6364


Kudu Results—Three Months Ended JuneSeptember 30, 2023 versus Three Months Ended JuneSeptember 30, 2022
Kudu reported total revenues of $19$26 million, pre-tax income of $10$16 million and adjusted EBITDA of $12 million in the secondthird quarter of 2023 compared to total revenues of $(4)$56 million, pre-tax lossincome of $10$47 million and adjusted EBITDA of $11$12 million in the secondthird quarter of 2022. Total revenues, pre-tax income (loss) and adjusted EBITDA included $15 million of net investment income in both the secondthird quarter of 2023 compared to $14 million in the second quarter ofand 2022. The increase in netNet investment income in the secondthird quarter of 2023 compared to the secondthird quarter of 2022 was driven primarily byincluded higher dividends from existing Participation Contracts, due to growth in assets under management, as well as the impact of new deployments made subsequent to JuneSeptember 30, 2022, partially offset by a decrease in dividends as a result of recentdue to sale transactions. Total revenues and pre-tax income (loss) also included $5$11 million of net realized and unrealized investment gains (losses) in the secondthird quarter of 2023 compared to $(18)$41 million in the secondthird quarter of 2022. The increase in netNet realized and unrealized investment gains (losses) in the second quarter of 2023 compared to the secondthird quarter of 2022 was driven primarilywere positively impacted by good market performance from severaltwo Participation Contracts partially offset by an unrealized loss from a publicly listed security, which was received by Kudu in a prior sale transaction.pending sale.

Kudu Results—SixNine Months Ended JuneSeptember 30, 2023 versus SixNine Months Ended JuneSeptember 30, 2022
Kudu reported total revenues of $63$89 million, pre-tax income of $45$62 million and adjusted EBITDA of $23$34 million in the first sixnine months of 2023, compared to total revenues of $31$87 million, pre-tax income of $19$66 million and adjusted EBITDA of $21$33 million in the first sixnine months of 2022. Total revenues, pre-tax income and adjusted EBITDA included $29$44 million of net investment income in the first sixnine months of 2023 compared to $26$41 million in the first sixnine months of 2022. The increase in net investment income in the first sixnine months of 2023 compared to the first sixnine 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 as a result of recentdue to sale transactions. Total revenues and pre-tax income also included $34$45 million of net realized and unrealized investment gains in the first sixnine months of 2023, driven by positive returns on existing Participation Contracts, compared to $5$46 million in the first sixnine months of 2022. Net realized and unrealized gains in2022, driven by the first six months of 2023 were positively impacted bypositive impact from two recent sale transactions.Participation Contracts pending sale.

Other Operations

The following table presents the components of pre-tax income (loss) included in White Mountains’s Other Operations for the three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
MillionsMillions2023202220232022Millions2023202220232022
Net investment incomeNet investment income$7.0 $3.3 $14.0 $5.1 Net investment income$8.0 $8.5 $22.0 $13.6 
Net realized and unrealized investment gains (losses)Net realized and unrealized investment gains (losses)76.0 (11.8)117.8 20.1 Net realized and unrealized investment gains (losses)8.0 (17.3)125.8 2.8 
Net realized and unrealized investment gains (losses) from investment in MediaAlphaNet realized and unrealized investment gains (losses) from investment in MediaAlpha(77.3)(113.5)7.9 (94.7)Net realized and unrealized investment gains (losses) from
investment in MediaAlpha
(46.8)(18.6)(38.9)(113.3)
Commission revenuesCommission revenues3.2 2.6 6.5 5.5 Commission revenues3.5 3.2 10.0 8.7 
Other revenuesOther revenues21.3 30.9 51.9 56.6 Other revenues15.2 33.0 67.1 89.6 
Total revenuesTotal revenues30.2 (88.5)198.1 (7.4)Total revenues(12.1)8.8 186.0 1.4 
Cost of salesCost of sales11.6 22.4 25.5 43.8 Cost of sales8.0 25.0 33.5 68.8 
General and administrative expensesGeneral and administrative expenses48.8 51.0 88.5 80.8 General and administrative expenses42.2 41.3 130.7 122.1 
Interest expenseInterest expense1.2 .3 2.0 .6 Interest expense.9 .6 2.9 1.2 
Total expensesTotal expenses61.6 73.7 116.0 125.2 Total expenses51.1 66.9 167.1 192.1 
Pre-tax income (loss)Pre-tax income (loss)$(31.4)$(162.2)$82.1 $(132.6)Pre-tax income (loss)$(63.2)$(58.1)$18.9 $(190.7)
6465


Other Operations Results—Three Months Ended JuneSeptember 30, 2023 versus Three Months Ended JuneSeptember 30, 2022
White Mountains’s Other Operations reported pre-tax loss of $31$63 million in the secondthird quarter of 2023 compared to $162$58 million in the secondthird quarter of 2022. White Mountains’s Other Operations reported net unrealized investment losses from its investment in MediaAlpha of $77$47 million in the secondthird quarter of 2023 compared to $114$19 million in the secondthird quarter of 2022. Excluding MediaAlpha, White Mountains’s Other Operations reported net realized and unrealized investment gains (losses) of $76$8 million in the secondthird quarter of 2023 compared to $(12)$(17) million in the secondthird quarter of 2022. The resultsnet realized and unrealized investment gains in the secondthird quarter of 2023 were driven primarily by gains from other long-term investments, andsubstantially offset by losses from common equity securities and the fixed income portfolio, while the results in the secondthird quarter of 2022 were driven primarily by unfavorable returns fromlosses in the fixed income portfolio, common equity securities and other long-term investments. White Mountains’s Other Operations reported net investment income of $7$8 million in the secondthird quarter of 2023 compared to $3$9 million in the second quarter of 2022, driven primarily by the increase in invested assets resulting from the sale of NSM in the third quarter of 2022. See Summary of Investment Results on page 6667.
White Mountains’s Other Operations reported $21$15 million of other revenues in the secondthird quarter of 2023 compared to $31$33 million in the secondthird quarter of 2022. White Mountains’s Other Operations reported $12$8 million of cost of sales in the secondthird quarter of 2023 compared to $22$25 million in the secondthird quarter of 2022. The decreases in other revenues and cost of sales waswere driven primarily by a recent sale within Other Operations.
White Mountains’s Other Operations reported general and administrative expenses of $49$42 million in the secondthird quarter of 2023 compared to $51$41 million in the secondthird quarter of 2022.
White Mountains’s Other Operations includes its investment in PassportCard/DavidShield, which has operations, including its principal executive office, in Israel. White Mountains is monitoring the ongoing conflict in Israel but does not expect that any effect on PassportCard/DavidShield will have a material impact on White Mountains’s results of operations or financial condition.

Other Operations Results—SixNine Months Ended JuneSeptember 30, 2023 versus SixNine Months Ended JuneSeptember 30, 2022
White Mountains’s Other Operations reported pre-tax income (loss) of $82$19 million in the first sixnine months of 2023, compared to $(133)$(191) million in the first sixnine months of 2022. White Mountains’s Other Operations results included unrealized investment gains (losses)losses from its investment in MediaAlpha of $8$39 million in the first sixnine months of 2023 compared to $(95)$113 million in the first sixnine months of 2022. Excluding MediaAlpha, White Mountains’s Other Operations results included net realized and unrealized investment gains of $118$126 million in the first sixnine months of 2023 compared to $20$3 million in the first sixnine months of 2022. The resultsnet realized and unrealized investment gains for the first sixnine months of 2023 were driven primarily 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 six monthnine months of 2022 were driven primarily by favorable returnsgains from other long-term investments, partially offset by losses in the fixed income portfolio due to rising interest rates.and common equity securities. White Mountains’s Other Operations results included net investment income of $22 million in the first nine months of 2023 compared to $14 million in the first sixnine months of 2023 compared to $5 million in the first six months of 2022, driven primarily by the increase in invested assets resulting from the sale of NSM in the third quarter of 2022. See Summary of Investment Results on page 6667.
White Mountains’s Other Operations reported $52$67 million of other revenues in the first sixnine months of 2023 compared to $57$90 million in the first sixnine months of 2022. Other revenues in the first sixnine 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 $26$34 million of cost of sales in the first sixnine months of 2023 compared to $44$69 million in the first sixnine months of 2022. The decrease in cost of sales was driven primarily by the recent sale within Other Operations.
White Mountains’s Other Operations reported general and administrative expenses of $89$131 million in the first sixnine months of 2023 compared to $81$122 million in the first sixnine months of 2022. The increase in general and administrative expenses in the first sixnine months of 2023 compared to the first sixnine months of 2022 was driven primarily by two acquisitions within Other Operations in the second half of 2022, partially offset by a decrease due to the recent sale within Other Operations.
6566


II. Summary of Investment Results
 
White Mountains’s total investment results include results from all segments. For purposes of discussing rates of return, percentages are presented gross of management fees and trading expenses. 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 sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022 2023202220232022
Fixed income investmentsFixed income investments0.5 %(2.4)%2.4 %(5.5)%Fixed income investments %(0.8)%2.5 %(6.3)%
Bloomberg Barclays U.S. Intermediate Aggregate IndexBloomberg Barclays U.S. Intermediate Aggregate Index(0.7)%(2.9)%1.6 %(7.5)%Bloomberg Barclays U.S. Intermediate Aggregate Index(1.9)%(3.8)%(0.3)%(11.0)%
Common equity securitiesCommon equity securities4.8 %(4.0)%9.6 %(3.8)%Common equity securities(2.5)%1.8 %6.8 %(2.0)%
Investment in MediaAlphaInvestment in MediaAlpha(31.3)%(40.5)%3.4 %(36.2)%Investment in MediaAlpha(19.9)%(11.2)%(17.2)%(43.3)%
Other long-term investmentsOther long-term investments4.9 %(1.3)%9.3 %4.6 %Other long-term investments2.8 %3.0 %12.4 %7.7 %
Total common equity securities, investment in MediaAlpha and other
long-term investments
Total common equity securities, investment in MediaAlpha and other
long-term investments
1.4 %(7.2)%9.1 %(2.2)%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 investments4.9 %(1.8)%9.5 %3.1 %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)8.7 %(16.1)%16.9 %(20.0)%S&P 500 Index (total return)(3.3)%(4.9)%13.1 %(23.9)%
Total consolidated portfolioTotal consolidated portfolio0.9 %(4.7)%5.5 %(4.0)%Total consolidated portfolio(0.2)%0.4 %5.3 %(3.6)%
Total consolidated portfolio - excluding MediaAlphaTotal consolidated portfolio - excluding MediaAlpha3.0 %(2.1)%6.1 %(1.9)%Total consolidated portfolio - excluding MediaAlpha0.6 %0.5 %6.3 %(1.4)%

Investment Returns—Three and SixNine Months Ended JuneSeptember 30, 2023 versus Three and SixNine Months Ended JuneSeptember 30, 2022

White Mountains’s total consolidated portfolio return on invested assets was 0.9%-0.2% in the secondthird quarter of 2023, which included $77$47 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.0%0.6% in the secondthird quarter of 2023, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net realized and unrealized investment gains fromlosses on common equity securities and net investment income in the fixed income portfolio.securities. White Mountains’s total consolidated portfolio return on invested assets was -4.7%0.4% in the secondthird quarter of 2022, which included $114$19 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was -2.1%0.5% in the secondthird quarter of 2022, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net unrealized investment losses in the fixed income portfolio due to rising interest rates.
White Mountains’s total consolidated portfolio return on invested assets was 5.5%5.3% in the first sixnine months of 2023, which included $8 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.1% in the first six months of 2023, driven primarily by net realized and unrealized investment gains from other long-term investments and common equity securities, as well as net investment income in the fixed income portfolio. White Mountains’s total consolidated portfolio return on invested assets was -4.0% in the first six months of 2022, which included $95$39 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was -1.9%6.3% in the first sixnine months of 2023, driven primarily by net realized and unrealized investment gains and net investment income from other long-term investments, net investment income from the fixed income portfolio and net realized and unrealized investment gains from common equity securities. White Mountains’s total consolidated portfolio return on invested assets was -3.6% in the first nine months of 2022, which included $113 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% in the first nine months of 2022, driven primarily by net unrealized investment losses in the fixed income portfolio due to rising interest rates, partially offset by favorablenet realized and unrealized gains and net investment income from other long-term investment results.investments.

67


Fixed Income Results
White Mountains’s fixed income portfolio, including short-term investments, was $2.9$3.1 billion and $2.8 billion as of JuneSeptember 30, 2023 and December 31, 2022, which represented 52%54% and 55% of total invested assets. The duration of White Mountains’s fixed income portfolio, including short-term investments, was 2.22.1 years and 2.3 years as of JuneSeptember 30, 2023 and December 31, 2022. White Mountains’s fixed income portfolio includes fixed maturity and short-term investments held on deposit or as collateral. See Note 3 — “Investment Securities.”
White Mountains’s fixed income portfolio returned 0.5%return was flat in the secondthird quarter of 2023, compared to -2.4%-0.8% in the secondthird quarter of 2022, outperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of -0.7%-1.9% and -2.9%-3.8% for the comparable periods. The results in the secondthird quarter of 2023 were driven primarily by higher net investment income, partially offset by net unrealized investment losses due to the increase in interest rates on White Mountains’s short duration portfolio. The results in the secondthird quarter of 2022 were driven primarily by net unrealized investment losses fromdue to the increase in interest rates on White Mountains’s short duration positioning as interest rates increased in the period.
66


portfolio.
White Mountains’s fixed income portfolio returned 2.4%2.5% in the first sixnine months of 2023, compared to -5.5%-6.3% in the first sixnine months of 2022, outperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of 1.6%-0.3% and -7.5%-11.0% for the comparable periods. The results in the first sixnine months of 2023 were driven primarily by net investment income asdue to the increase in shorter-term interest rates moved higher in the period.rates. The results in the first sixnine months of 2022 were driven primarily by net unrealized investment losses fromdue to the increase in interest rates on White Mountains’s short duration positioning as interest rates increased significantly in the period.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 $2.7 billion and $2.3 billion as of JuneSeptember 30, 2023 and December 31, 2022, which represented 48%46% and 45% of total invested assets. See Note 3 — “Investment Securities.”
White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 1.4%-0.4% in the secondthird quarter of 2023, which included $77$47 million of unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 4.9%1.4% in the secondthird quarter of 2023. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -7.2%1.6% in the secondthird quarter of 2022, which included $114$19 million of unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned -1.8%2.8% in the secondthird quarter of 2022.
White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 9.1%8.6% in the first sixnine months of 2023, which included $8$39 million of unrealized investment gainslosses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 9.5%11.1% in the first sixnine months of 2023. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -2.2%-0.7% in the first sixnine months of 2022, which included $95$113 million of unrealized investment losses from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 3.1%6.0% in the first sixnine months of 2022.
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 generally corresponding to the performance of the S&P 500 Index. White Mountains’s portfolio of common equity securities was $655$637 million and $668 million as of JuneSeptember 30, 2023 and December 31, 2022.
White Mountains’s portfolio of common equity securities returned 4.8%-2.5% in the secondthird quarter of 2023 compared to -4.0%1.8% in the secondthird quarter of 2022, underperforming and outperforming the S&P 500 Index returns of 8.7%-3.3% and -16.1%-4.9% for the comparable periods. The results in the third quarter of 2023 and 2022 were driven primarily by relative outperformance in White Mountains’s international listed equity funds as compared to the S&P 500 Index. White Mountains’s portfolio of common equity securities returned 9.6%6.8% in the first sixnine months of 2023, compared to -3.8%-2.0% in the first sixnine months of 2022, underperforming and outperforming the S&P 500 Index returns of 16.9%13.1% and -20.0%-23.9% for the comparable periods. The results in the second quarter and first sixnine 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 instruments. White Mountains’s portfolio of other long-term investments was $1.8$1.9 billion and $1.5 billion as of JuneSeptember 30, 2023 and December 31, 2022.

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White Mountains’s other long-term investments portfolio returned 4.9%2.8% in the secondthird quarter of 2023 compared to -1.3%3.0% in the secondthird quarter of 2022. Investment returns for the secondthird quarter of 2023 were driven primarily by net investment income and net unrealized investment gains from private equity funds and net investment income from Kudu’s Participation Contracts.Contracts, as well as net unrealized investment gains from certain unconsolidated entities and ILS funds. Investment returns for the secondthird 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 realized and unrealized investment losses from private equity funds and hedge funds as well as netand unrealized losses from foreign currency.currency on Lloyd’s trust deposits.
White Mountains’s other long-term investments portfolio returned 9.3%12.4% in the first sixnine months of 2023 compared to 4.6%7.7% in the first sixnine months of 2022. Investment returns for the first sixnine months of 2023 were driven primarily by net investment income and net realized and unrealized investment gains from Kudu’s Participation Contracts, as well as net realized and unrealized investment gains from private equity funds and hedge funds and net unrealized investment gains from unconsolidated entities and ILS funds. Investment returns for the first sixnine 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, as well as net investment income and net unrealized investment gainslosses from Kudu’s Participation Contracts.foreign currency on Lloyd’s trust deposits.

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Foreign Currency Exposure

As of JuneSeptember 30, 2023, White Mountains had foreign currency exposure on $216$183 million of net assets primarily related to Ark/WM Outrigger’s non-U.S. business, Kudu’s non-U.S. Participation Contracts, and certain other foreign consolidated and unconsolidated entities.
The following table presents the fair value of White Mountains’s foreign denominated net assets (liabilities) by segment as of JuneSeptember 30, 2023:
$ in Millions

Currency
$ in Millions

Currency
Ark/WM OutriggerKuduOther OperationsTotal Fair Value
% of Total Shareholders Equity
$ in Millions

Currency
Ark/WM OutriggerKuduOther OperationsTotal Fair Value
% of Total Shareholders Equity
CADCAD$72.4 $76.1 $— $148.5 3.6 %CAD$73.6 $72.2 $— $145.8 3.5 %
AUDAUD21.2 36.1 — 57.3 1.4 %AUD24.8 41.6 — 66.4 1.6 %
GBPGBP41.0 — — 41.0 1.0 %GBP(7.3)— — (7.3)(.2)%
EUREUR(46.4)— 13.2 (33.2)(.8)%EUR(54.3)18.0 13.3 (23.0)(.5)%
All otherAll other— — 2.0 2.0 — %All other— — 1.4 1.4 — %
TotalTotal$88.2 $112.2 $15.2 $215.6 5.2 %Total$36.8 $131.8 $14.7 $183.3 4.4 %

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 and 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 that are subject to tax in the jurisdictions in which they operate.  As of JuneSeptember 30, 2023, the primary jurisdictions in which the Company’s subsidiaries and branches were subject to tax include 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 and six months ended JuneSeptember 30, 2023 represented an effective tax rate of 1%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 6%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 sixnine months ended JuneSeptember 30, 2022 represented an effective tax rate of 7%24% and 8%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 an increase in the full valuation allowance on net deferred tax assets in certain U.S. operations within Other Operations, an increase in the full valuation allowance at BAM, andas well as state income taxes.
On April 1, 2023, the U.K. corporate tax rate increased from 19% to 25%.

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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 $10$16 million for the three and six months ended June 30,period from January 1, 2022 to August 1, 2022. 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 noncontrolling 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 premium and fee 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 to holding companies, distributions to noncontrolling 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. Premium and fee collections, investment returns, claim 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 at 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 JuneSeptember 30, 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 JuneSeptember 30, 2023, HG Global has accrued $384$399 million of dividends payable to holders of its preferred shares, $370$385 million of which is payable to White Mountains and is eliminated in consolidation. As of JuneSeptember 30, 2023, HG Global and its subsidiaries had less than $1 million of net unrestricted cash outside of HG Re.
HG Re is a special purpose insurer subject to regulation and supervision by the BMA. HG Re does not require regulatory approval to pay dividends, however, its dividend capacity is limited to amounts held outside of the Collateral Trusts pursuant to the FLRT with BAM. As of JuneSeptember 30, 2023, HG Re had less than $1 million of net unrestricted cash and investments andinvestments. 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 JuneSeptember 30, 2023, HG Re had $753$751 million of statutory capital and surplus and $892$900 million of assets held in the Collateral Trusts.
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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 HG Re’s unearned premiums and unpaid 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 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 JuneSeptember 30, 2023 was $586$589 million.
As of JuneSeptember 30, 2023, the Collateral Trusts held assets of $892$900 million, which included $526$527 million of cash and investments, $340 million of BAM Surplus Notes and $26$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 2023, the interest rate on the BAM Surplus Notes is 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 principal and interest 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 sixnine months ended JuneSeptember 30, 2023, BAM made no repayments of the BAM Surplus Notes or accrued interest. See Note 10 — “Municipal Bond Guarantee Insurance.”

Ark/WM Outrigger
During any 12-month period, GAIL, a class 4 licensed Bermuda insurer, has the ability to (i) make capital distributions of up to 15% of its total statutory capital per the previous year’s statutory financial statements, or (ii) make dividend payments of 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, GAIL will have the ability to make capital distributions of up to $113 million during 2023, which is equal to 15% of its December 31, 2022 statutory capital of $755 million, subject to meeting all appropriate liquidity and solvency requirements. During the sixnine months ended JuneSeptember 30, 2023, GAIL paid a $15 million dividend to its immediate parent.
During the sixnine months ended JuneSeptember 30, 2023, Ark paid a $24 million dividend to its shareholders, including $17 million to White Mountains. As of JuneSeptember 30, 2023, Ark and its intermediate holding companies had $1 million of net unrestricted cash and short-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 JuneSeptember 30, 2023, WM Outrigger Re had less than $1 million of net unrestricted cash and investments held outside the collateral trust. As of JuneSeptember 30, 2023, WM Outrigger Re had $220$257 million of statutory capital and surplus and $211$233.3 million of assets held in the collateral trusts pursuant to the reinsurance agreement with GAIL.

Kudu
During the sixnine months ended JuneSeptember 30, 2023, Kudu distributed $69$73 million to unitholders, substantially all of which was paid to White Mountains. As of JuneSeptember 30, 2023, Kudu had $16$9 million of net unrestricted cash and short-term investments.

Other Operations
During the sixnine months ended JuneSeptember 30, 2023, White Mountains paid a $3 million common share dividend. As of JuneSeptember 30, 2023, the Company and its intermediate holding companies had $546$512 million of net unrestricted cash, short-term investments and fixed maturity investments, $236$189 million of MediaAlpha common stock, $273$252 million of common equity securities and $393$410 million of private equity and hedge funds, ILS funds and certain unconsolidated entities.

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Financing

The following table presents White Mountains’s capital structure as of JuneSeptember 30, 2023 and December 31, 2022:
$ in Millions$ in MillionsJune 30, 2023December 31, 2022$ in MillionsSeptember 30, 2023December 31, 2022
HG Global Senior Notes (1)
$146.7 $146.5 
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)
155.1 153.7 
Ark 2021 Subordinated Notes (1)(2)
154.6 153.7 
Kudu Credit Facility (1)(2)
Kudu Credit Facility (1)(2)
203.7 208.3 
Kudu Credit Facility (1)(2)
203.7 208.3 
Other Operations debt (1)(2)
Other Operations debt (1)(2)
30.6 36.7 
Other Operations debt (1)(2)
29.6 36.7 
Total debtTotal debt566.1 575.2 Total debt564.7 575.2 
Noncontrolling interests—excluding BAMNoncontrolling interests—excluding BAM360.9 342.8 Noncontrolling interests—excluding BAM381.0 342.8 
Total White Mountains’s common shareholders’ equityTotal White Mountains’s common shareholders’ equity3,922.2 3,746.9 Total White Mountains’s common shareholders’ equity3,949.1 3,746.9 
Total capitalTotal capital4,849.2 4,664.9 Total capital4,894.8 4,664.9 
Time-value discount on expected future payments on the BAM Surplus Notes (3)
(91.8)(95.1)
HG Global’s unearned premium reserve (3)
HG Global’s unearned premium reserve (3)
246.8 242.1 
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)
(70.7)(69.0)
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$4,933.5 $4,742.9 Total adjusted capital$4,985.7 $4,742.9 
Total debt to total adjusted capitalTotal debt to total adjusted capital11.5 %12.1 %Total debt to total adjusted capital11.3 %12.1 %
(1) See Note 7 — “Debt” for details of debt arrangements.
(2) Net of unamortized issuance costs.costs and, where applicable, the original issue discount.
(3) 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 JuneSeptember 30, 2023, White Mountains was in compliance in all material respects with all of the covenants under its debt instruments.

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Share Repurchase Programs

White Mountains’s Board of Directors 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 JuneSeptember 30, 2023, White Mountains may repurchase an additional 301,014 shares under these Board 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 Board of Directors.
During the sixnine months ended JuneSeptember 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 86%85% of White Mountains’s adjusted book value per share as of JuneSeptember 30, 2023. Of the shares White Mountains repurchased in the first threenine 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 sixnine months ended JuneSeptember 30, 2022, White Mountains repurchased and retired 90,535457,180 of its common shares for $102$611 million at an average share price of $1,122,$1,335, which was approximately 97%91% of White Mountains’s adjusted book value per share as of JuneSeptember 30, 2022. The average sharemajority 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 was approximately 77% of White Mountains’s adjusted book value$1,400 per share asfor a total cost of June 30, 2022approximately $461 million, including the estimated net gain from the NSM Transaction.expenses. Of the shares White Mountains repurchased in the first sixnine months of 2022, 4,011 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 sixnine months ended JuneSeptember 30, 2023 and 2022 follows:
 
Cash flows from operations for the sixnine months ended JuneSeptember 30, 2023 and JuneSeptember 30, 2022

Net cash provided from (used for) operations was $157$380 million for the sixnine months ended JuneSeptember 30, 2023 compared to $3$118 million for the sixnine months ended JuneSeptember 30, 2022. The increase in cash provided from operations was driven primarily by cash provided from Ark’s operations in 2023. As of JuneSeptember 30, 2023, the Company and its intermediate holding companies had $546$512 million of net unrestricted cash, short-term investments and fixed maturity investments, $236$189 million of MediaAlpha common stock, $273$252 million of common equity securities and $393$410 million of private equity funds, hedge funds, ILS funds and unconsolidated entities.

Cash flows from investing and financing activities for the sixnine months ended JuneSeptember 30, 2023

Financing and Other Capital Activities
During the sixnine months ended JuneSeptember 30, 2023, the Company declared and paid a $3 million cash dividend to its common shareholders.
During the sixnine months ended JuneSeptember 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 sixnine months ended JuneSeptember 30, 2023, BAM received $27$46 million in MSC.
During the sixnine months ended JuneSeptember 30, 2023, Kudu borrowed $12 million in term loans under the Kudu Credit Facility.
During the sixnine months ended JuneSeptember 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 sixnine months ended JuneSeptember 30, 2022

Financing and Other Capital Activities
During the sixnine months ended JuneSeptember 30, 2022, the Company declared and paid a $3 million cash dividend to its common shareholders.
During the sixnine months ended JuneSeptember 30, 2022, White Mountains repurchased and retired 90,535457,180 of its common shares for $102$611 million 4,011at an average share price of which$1,355. The majority of these shares were repurchased and retiredthrough 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 sixnine months ended JuneSeptember 30, 2022, HG Global received net proceeds of $147 million from the issuance of the HG Global Senior Notes.
During the sixnine months ended JuneSeptember 30, 2022, BAM received $36$62 million in MSC.
During the sixnine months ended JuneSeptember 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.
On August 1, 2022, White Mountains closed the previously announced NSM Transaction. White Mountains received $1.4 billion in net cash proceeds at closing.

NON-GAAP FINANCIAL MEASURES

This report includes five 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 $95$93 million, $96$95 million, $98 million and $120$114 million less than the nominal GAAP carrying values as of JuneSeptember 30, 2023, March 31,June 30, 2023, December 31, 2022 and June 30, 2022, respectively.
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The value of HG Global’s unearned premium reserve, net of deferred acquisition costs, was $182 million, $179 million, $179 million and $164 million as of June 30, 2023, March 31, 2023, December 31, 2022 and JuneSeptember 30, 2022, 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 4849.

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Kudu’s EBITDA and 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 6364.

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 three and sixnine months ended JuneSeptember 30, 2023 and 2022:
Three Months Ended June 30, 2023Three Months Ended June 30, 2022
GAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlphaGAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlpha
Total consolidated portfolio
   return
0.9 %2.1 %3.0 %(4.7)%2.6 %(2.1)%
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 %
Six Months Ended June 30, 2023Six Months Ended June 30, 2022
GAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlphaGAAP ReturnRemove MediaAlphaReturn - Excluding MediaAlpha
Total consolidated portfolio
   return
5.5 %0.6 %6.1 %(4.0)%2.1 %(1.9)%
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)%

Total adjusted capital
Total capital at White Mountains is comprised of White Mountains’s common shareholders’ equity, debt and noncontrolling interests other than noncontrolling 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 7172.

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CRITICAL ACCOUNTING ESTIMATES

Refer to the Company’s 2022 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s critical accounting estimates.

75


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, 2022;
claims arising from catastrophic events, such as hurricanes, windstorms, earthquakes, floods, wildfires, tornadoes, tsunamis, severe winter weather, public health crises, terrorist attacks, war and war-like actions, explosions, infrastructure failures or 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 2022 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) of the Exchange Act) as of JuneSeptember 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 changes to White Mountains’s internal control over financial reporting that occurred during the secondthird quarter of 2023 that have materially affected, or are reasonably likely to materially affect White Mountains’s internal control over financial 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 2022 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)
April 1 - April 30, 2023994 $1,349.61 994 305,562 
May 1 - May 31, 20234,548 $1,333.85 4,548 301,014 
June 1 - June 30, 2023— $— — 301,014 
Total5,542 $1,336.68 5,542 301,014 
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 Board of Directors 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.

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 — 
10.2 — 
10.3 — 
 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
(**)Portions of this exhibit are redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
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:August 7,November 6, 2023 
By: /s/ Michaela J. Hildreth
  Michaela J. Hildreth
  Managing Director and Chief Accounting Officer

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