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 March 31, 2022 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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 | 94-2708455 | | --- | --- | | (State ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) White Mountains reported a **$361.9 million** net loss for the nine months ended September 30, 2021, primarily due to unrealized investment losses from MediaAlpha Consolidated Balance Sheet Summary (in millions) | Balance Sheet Item | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Investments** | $4,203.9 | $2,939.1 | | **Total Assets** | $7,113.6 | $4,831.4 | | **Total Liabilities** | $3,459.3 | $1,013.5 | | **Total Equity** | $3,654.3 | $3,817.9 | Consolidated Statement of Operations Summary (in millions) | Income Statement Item | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Total Revenues** | $594.8 | $659.9 | | **Total Expenses** | $933.5 | $372.0 | | **Pre-tax (Loss) Income** | $(338.7) | $287.9 | | **Net (Loss) Income** | $(361.9) | $190.0 | | **Net (Loss) Income Attributable to White Mountains** | $(308.2) | $219.5 | Consolidated Earnings Per Share (Loss) | EPS Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Basic (Loss) Earnings Per Share** | $(99.45) | $70.14 | | **Diluted (Loss) Earnings Per Share** | $(99.45) | $70.14 | Consolidated Cash Flow Summary (in millions) | Cash Flow Item | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net Cash from Operations** | $46.0 | $12.2 | | **Net Cash (Used to) Provided from Investing** | $(169.4) | $28.0 | | **Net Cash from Financing** | $222.3 | $13.8 | | **Net Change in Cash** | $99.5 | $53.8 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Book value per share decreased **9%** in Q3 2021 and **8%** year-to-date, primarily due to a **$397 million** unrealized loss from MediaAlpha - Book value per share was **$1,162** as of September 30, 2021, a decrease of **9%** in the third quarter and **8%** year-to-date, driven by net realized and unrealized investment losses of **$326 million** from MediaAlpha, whose share price fell from **$39.07** at year-end 2020 to **$18.68** at the end of Q3 2021[248](index=248&type=chunk)[249](index=249&type=chunk) - Excluding MediaAlpha, operating segments showed solid performance: Ark reported a Q3 adjusted combined ratio of **89%**, NSM's adjusted EBITDA grew **24%** year-over-year to **$19 million**, and Kudu deployed **$131 million** in new investments[250](index=250&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) Book Value Per Share Reconciliation | Metric | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **GAAP Book Value Per Share** | $1,162.44 | $1,259.18 | | **Adjusted Book Value Per Share** | $1,175.86 | $1,263.64 | [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Consolidated pre-tax loss for Q3 2021 was **$362.3 million**, a reversal from Q3 2020 income, primarily due to a **$396.8 million** unrealized loss on the MediaAlpha investment in Other Operations Pre-tax Income (Loss) by Segment (in millions) | Segment | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | Financial Guarantee (HG Global/BAM) | $(8.0) | $(1.1) | $(31.1) | $11.3 | | P&C Insurance (Ark) | $10.9 | — | $(3.8) | — | | Specialty Insurance Distribution (NSM) | $(1.6) | $(1.2) | $(33.8) | $(6.3) | | Asset Management (Kudu) | $23.3 | $12.6 | $70.4 | $8.9 | | Other Operations | $(386.9) | $310.9 | $(340.4) | $274.0 | | **Total Pre-tax (Loss) Income** | **$(362.3)** | **$321.2** | **$(338.7)** | **$287.9** | - The Ark segment, acquired in January 2021, reported a Q3 GAAP combined ratio of **92%** and an adjusted combined ratio of **89%**, including **21 points** of catastrophe losses offset by **6 points** of favorable prior year reserve development[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - The NSM segment's Q3 adjusted EBITDA increased to **$19.1 million** from **$15.4 million** in Q3 2020, driven by growth in Pet and Social Services verticals, with a YTD pre-tax loss of **$33.8 million** including a **$28.7 million** loss on the Fresh Insurance motor business sale[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) - The Kudu segment's Q3 pre-tax income grew to **$23.3 million** from **$12.6 million** year-over-year, largely due to **$18.9 million** in unrealized investment gains on participation contracts and increased investment income from new deployments[324](index=324&type=chunk)[325](index=325&type=chunk) [Liquidity and Capital Resources](index=82&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity with **$507 million** in net unrestricted cash and liquid investments, while total debt increased to **$710.4 million**, raising the debt-to-adjusted capital ratio to **15.7%** - Management believes cash balances and operating cash flows are adequate to meet expected cash requirements for the foreseeable future at both holding company and subsidiary levels[364](index=364&type=chunk) Capital Structure (in millions) | Component | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Debt | $710.4 | $376.4 | | Total White Mountains's common shareholders' equity | $3,521.7 | $3,906.0 | | **Total Adjusted Capital** | **$4,510.7** | **$4,312.7** | | **Total Debt to Total Adjusted Capital** | **15.7%** | **8.7%** | - In Q3 2021, the company repurchased **79,294** common shares for **$87 million** at an average price of **$1,099** per share, with **86,512** shares repurchased for **$95 million** year-to-date[382](index=382&type=chunk) [Non-GAAP Financial Measures](index=87&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like adjusted book value per share, adjusted combined ratio, and adjusted EBITDA to provide a clearer view of intrinsic value and underlying segment performance - Adjusted book value per share is calculated by adjusting GAAP book value for the time value of money on BAM Surplus Notes and the unearned premium reserve at HG Global[397](index=397&type=chunk)[398](index=398&type=chunk) - Ark's adjusted combined ratio adds back amounts ceded to third-party capital providers to evaluate results on a fully aligned basis[403](index=403&type=chunk) - NSM's and Kudu's adjusted EBITDA measures exclude items such as changes in contingent consideration, non-cash compensation, acquisition expenses, and unrealized investment gains to better reflect core operational profitability[405](index=405&type=chunk)[407](index=407&type=chunk) [Critical Accounting Estimates](index=89&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates focus on fair value measurements for investments and liabilities, with a substantial portion relying on unobservable inputs (Level 3) requiring significant management judgment - As of September 30, 2021, **69%** of the investment portfolio was priced using observable inputs (Level 1 or 2), with the remainder relying on unobservable inputs (Level 3) or Net Asset Value as a practical expedient[414](index=414&type=chunk) - The fair value of Kudu's Participation Contracts (**$605 million**) is determined using discounted cash flow models with key unobservable inputs including pre-tax discount rates (**18%-23%**) and terminal cash flow exit multiples (**7x-13x**)[424](index=424&type=chunk)[425](index=425&type=chunk) - The fair value of the investment in PassportCard/DavidShield (**$105 million**) is determined via a discounted cash flow model, using an after-tax discount rate of **23%** and a terminal revenue growth rate of **4%**[427](index=427&type=chunk)[429](index=429&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=93&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company refers to its 2020 Annual Report on Form 10-K for market risk disclosures, indicating no material changes during the quarter - The report refers to the company's 2020 Form 10-K for quantitative and qualitative disclosures about market risk, implying no material updates for the current reporting period[437](index=437&type=chunk) [Controls and Procedures](index=94&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of the reporting period, with no significant changes to internal control over financial reporting during the quarter - The PEO and PFO have evaluated and concluded that the company's disclosure controls and procedures are effective as of September 30, 2021[438](index=438&type=chunk) - No significant changes were made to the company's internal control over financial reporting during the third quarter of 2021[439](index=439&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=94&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no new legal proceedings for the period - There are no legal proceedings to report for the quarter[440](index=440&type=chunk) [Risk Factors](index=94&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K were reported - No material changes to risk factors from the 2020 Form 10-K were reported[441](index=441&type=chunk) [Issuer Purchases of Equity Securities](index=94&type=section&id=Item%202.%20Issuer%20Purchases%20of%20Equity%20Securities) During Q3 2021, the company repurchased **79,351** common shares for **$1,098.82** average price per share, with **463,223** shares remaining authorized for repurchase Share Repurchases for Q3 2021 | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2021 | 2,841 | $1,122.87 | | August 2021 | 16,878 | $1,123.41 | | September 2021 | 59,632 | $1,090.72 | | **Total** | **79,351** | **$1,098.82** | - As of the end of the quarter, the company has authorization to repurchase an additional **463,223** common shares[442](index=442&type=chunk)

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 June 30, 2021 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 ...

PART I. FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's analysis of financial condition and operations, market risk disclosures, and internal controls [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The unaudited consolidated financial statements for Q1 2021 reflect increased assets due to the Ark acquisition and a reduced net loss, impacted by investment losses and transaction costs Consolidated Balance Sheet Summary (in millions) | Balance Sheet Item | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$6,900.7** | **$4,831.4** | | Total P&C Insurance and Reinsurance (Ark) assets | $2,840.2 | $— | | **Total Liabilities** | **$2,964.8** | **$1,013.5** | | Total P&C Insurance and Reinsurance (Ark) liabilities | $2,006.8 | $— | | **Total Equity** | **$3,935.9** | **$3,817.9** | | White Mountains's common shareholders' equity | $3,825.9 | $3,906.0 | Consolidated Statement of Operations Summary (in millions) | Income Statement Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | **Total Revenues** | **$178.2** | **$(59.2)** | | P&C Insurance and Reinsurance (Ark) revenues | $109.1 | $— | | Net realized/unrealized investment (losses) gains from MediaAlpha | $(41.7) | $30.0 | | **Total Expenses** | **$316.9** | **$106.8** | | P&C Insurance and Reinsurance (Ark) expenses | $141.6 | $— | | **Net Loss Attributable to White Mountains's Common Shareholders** | **$(75.3)** | **$(128.8)** | Earnings Per Share (EPS) Summary | EPS Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Basic (loss) per share - Continuing operations | $(30.33) | $(40.82) | | Basic earnings per share - Discontinued operations | $6.03 | $0.28 | | **Total consolidated basic (loss) per share** | **$(24.30)** | **$(40.54)** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies and transactions, including the Ark acquisition, MediaAlpha share offering, and new accounting standard adoptions, highlighting their financial impact - On January 1, 2021, White Mountains completed its acquisition of Ark, contributing **$605.4 million** in equity capital and purchasing **$40.9 million** in shares, resulting in the recognition of **$2.5 billion** in assets and **$1.7 billion** in liabilities, including **$292.5 million** in goodwill and other intangibles[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - In a secondary offering on March 23, 2021, White Mountains sold **3.6 million** MediaAlpha shares for net proceeds of **$160.3 million**, reducing its ownership to **28.5%**, with the fair value of the remaining stake at **$600.2 million** at quarter-end[57](index=57&type=chunk) - NSM sold its Fresh Insurance motor business on April 12, 2021, with assets classified as held for sale as of March 31, 2021, resulting in a recognized loss of **$28.7 million** in Q1 2021[68](index=68&type=chunk) - As of March 31, 2021, the company's reportable segments are HG Global/BAM, Ark, NSM, Kudu, and Other Operations, with Ark being a new segment following the acquisition[30](index=30&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes a **2%** decrease in adjusted book value per share to MediaAlpha's stock decline, Ark acquisition costs, and an NSM asset sale loss, while detailing segment performance and liquidity - Book value per share and adjusted book value per share decreased by **2%** in Q1 2021, primarily driven by a decrease in the market price of the company's investment in MediaAlpha, a loss on assets held for sale for NSM's Fresh Insurance motor business, and transaction expenses at Ark[229](index=229&type=chunk) Adjusted Book Value Per Share | Metric | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | GAAP book value per share | $1,231.27 | $1,259.18 | | Adjusted book value per share (Non-GAAP) | $1,241.71 | $1,263.64 | - The total investment portfolio returned **-0.3%** in Q1 2021, but excluding the investment in MediaAlpha, the portfolio returned **0.7%**, driven by favorable results in other long-term investments, partially offset by the impact of rising interest rates on the fixed income portfolio[235](index=235&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202021%20and%202020) Consolidated pre-tax loss improved to **$138.7 million**, with Ark contributing a **$32.5 million** loss, NSM's loss widening to **$33.3 million**, and Kudu achieving **$15.7 million** in pre-tax income Pre-tax (Loss) Income by Segment (in millions) | Segment | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | HG Global/BAM | $(25.0) | $1.1 | | P&C Insurance and Reinsurance (Ark) | $(32.5) | — | | Specialty Insurance Distribution (NSM) | $(33.3) | $(1.4) | | Asset Management (Kudu) | $15.7 | $(21.4) | | Other Operations | $(63.6) | $(144.3) | | **Total Pre-tax Loss** | **$(138.7)** | **$(166.0)** | - Ark reported a GAAP combined ratio of **109%** and an adjusted combined ratio of **108%**, including **17 points** of catastrophe losses, with **14 points** related to Winter Storm Uri[232](index=232&type=chunk)[264](index=264&type=chunk) - NSM's adjusted EBITDA grew to **$14.4 million** from **$10.5 million** year-over-year, driven by the acquisition of Kingsbridge and organic growth in the pet and social services verticals[233](index=233&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) - Kudu's pre-tax income of **$16 million** was driven by **$16 million** in unrealized gains on its Participation Contracts, and Kudu deployed an additional **$11 million** in an existing portfolio company during the quarter[234](index=234&type=chunk)[284](index=284&type=chunk) [Liquidity and Capital Resources](index=73&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$600 million** in unrestricted cash and investments, a **9.5%** debt-to-adjusted-capital ratio, and key financing activities including Kudu's new **$300 million** credit facility - At the holding company level, White Mountains had **$600 million** of net unrestricted cash, short-term investments, and fixed maturity investments, in addition to its **$600 million** stake in MediaAlpha and other private equity funds[324](index=324&type=chunk)[344](index=344&type=chunk) Capital Structure (in millions) | Component | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total debt | $429.7 | $376.4 | | Total White Mountains's common shareholders' equity | $3,825.9 | $3,906.0 | | Total adjusted capital (Non-GAAP) | $4,501.9 | $4,312.7 | | **Total debt to total adjusted capital** | **9.5%** | **8.7%** | - Kudu replaced its existing bank facility with a new secured revolving credit facility with a maximum capacity of **$300 million**, maturing in 2036, with an initial draw of **$102 million**[336](index=336&type=chunk) - During Q1 2021, White Mountains repurchased **7,161** common shares for **$7 million**, primarily to satisfy employee tax withholding obligations[342](index=342&type=chunk) [Non-GAAP Financial Measures](index=79&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like adjusted book value per share, adjusted EBITDA for NSM and Kudu, and adjusted combined ratio for Ark to provide deeper insights into financial performance - Adjusted book value per share is used to analyze the intrinsic value of HG Global, including the value of BAM Surplus Notes and in-force business at HG Re[354](index=354&type=chunk)[357](index=357&type=chunk) - Ark's adjusted combined ratio adds back amounts ceded to TPC Providers to evaluate results on a fully aligned basis, as these arrangements relate to periods before the White Mountains transaction[360](index=360&type=chunk) - NSM's and Kudu's adjusted EBITDA measures exclude items like changes in fair value of contingent consideration, non-cash compensation, acquisition costs, and restructuring expenses to better reflect core operating performance[361](index=361&type=chunk)[364](index=364&type=chunk) [Critical Accounting Estimates](index=81&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates primarily involve fair value measurements for Level 3 assets, which constitute **27%** of the investment portfolio and rely on significant management judgment and valuation models - Approximately **73%** of the investment portfolio was priced using Level 1 or Level 2 inputs (quoted market prices or other observable data)[372](index=372&type=chunk) - Level 3 investments, valued using unobservable inputs, include Kudu's Participation Contracts and the investment in PassportCard/DavidShield, with their valuation relying on discounted cash flow models and significant management judgment on inputs like discount rates and growth projections[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk) Valuation Sensitivity for Kudu's Participation Contracts (in millions) | Scenario | Estimated Fair Value | | :--- | :--- | | **Base Case (18%-23% discount rate, 7x-12x exit multiple)** | **$427** | | +2% discount rate | $385 | | -2% discount rate | $476 | | +2x exit multiple | $456 | | -2x exit multiple | $400 | [Forward-Looking Statements](index=85&type=section&id=Forward-Looking%20Statements) This section cautions that forward-looking statements on business strategy and financial targets are subject to risks including catastrophic events, loss reserves, MediaAlpha's value, and COVID-19 impacts - The company identifies forward-looking statements related to its business strategy, financial targets, loss reserves, and growth projections[394](index=394&type=chunk) - Key risks that could cause actual results to differ from projections include catastrophic events, inadequate loss reserves, the market value of its MediaAlpha investment, COVID-19 uncertainties, and rating agency actions[397](index=397&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=85&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the 2020 Annual Report on Form 10-K for market risk disclosures, indicating no material changes - The report references the 2020 Annual Report on Form 10-K for quantitative and qualitative disclosures about market risk, implying no material updates for the current quarter[397](index=397&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no significant changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures are effective as of March 31, 2021[398](index=398&type=chunk) - There were no significant changes in internal control over financial reporting during the first quarter of 2021[399](index=399&type=chunk) PART II. OTHER INFORMATION This section covers other information including legal proceedings, risk factors, defaults, equity security repurchases, and exhibits [Other Information Items](index=86&type=section&id=Items%201%20through%206.) The company reported no new material legal proceedings or risk factor changes, detailed the repurchase of **7,161** shares for **$7.2 million**, and listed filed exhibits - The company reported no new material legal proceedings or material changes to its risk factors since the 2020 Annual Report on Form 10-K[400](index=400&type=chunk)[401](index=401&type=chunk) Issuer Purchases of Equity Securities (Q1 2021) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2021 | 5,418 | $1,000.66 | | February 2021 | 181 | $1,096.81 | | March 2021 | 1,562 | $1,165.12 | | **Total** | **7,161** | **$1,038.96** | - As of March 31, 2021, the company has authorization to repurchase an additional **542,517** common shares[402](index=402&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 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 94-2708455 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended September 30, 2020 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 jur ...

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 June 30, 2020 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 jurisdic ...

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 March 31, 2020 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 i ...

PART I [Business](index=3&type=section&id=Item%201.%20Business) The company is a holding company focused on opportunistic acquisitions and dispositions in insurance and financial services, operating through four main segments - The company's business model is centered on making **opportunistic and value-oriented acquisitions** in the insurance and financial services sectors, operating them, and disposing of them when attractive valuations are available[13](index=13&type=chunk) - As of December 31, 2019, White Mountains's **four reportable segments** are HG Global/BAM, NSM, Kudu, and Other Operations[14](index=14&type=chunk) [HG Global/BAM](index=3&type=section&id=HG%20Global%2FBAM) This segment provides municipal bond insurance through BAM, which grew its insured portfolio to $62.3 billion in 2019 with no watchlist credits - BAM is the **first and only mutual municipal bond insurance company** in the U.S., owned by its policyholders (the municipalities) White Mountains consolidates BAM's results because it is the primary beneficiary of BAM, a Variable Interest Entity (VIE)[15](index=15&type=chunk) - HG Global provides up to **15%-of-par, first-loss reinsurance protection** to BAM through its subsidiary HG Re In return, BAM cedes **60% of the risk premium**[16](index=16&type=chunk)[22](index=22&type=chunk) BAM Insured Portfolio by Asset Class (Gross Par Outstanding) | Sector | Dec 31, 2019 ($M) | Dec 31, 2018 ($M) | | :--- | :--- | :--- | | General Obligation | $36,173.8 | $30,627.0 | | Utility | $7,344.0 | $6,451.0 | | Dedicated Tax | $7,024.4 | $6,263.8 | | General Fund | $5,550.2 | $4,858.5 | | Public Higher Education | $3,788.3 | $2,406.6 | | Transportation | $1,935.0 | $1,293.6 | | Other Public Finance | $434.8 | $301.1 | | **Total** | **$62,250.5** | **$52,201.6** | - As of December 31, 2019, BAM's insured credit watchlist had **no credits assigned to surveillance category 3 or category 4** (loss expected or paid)[48](index=48&type=chunk) [NSM](index=9&type=section&id=NSM) NSM is a specialty P&C MGU that places insurance in niche sectors, growing significantly in 2019 through acquisitions and organic growth - NSM is a **full-service MGU** that places specialty P&C insurance, earning commissions based on volume and profitability without taking direct insurance risk[50](index=50&type=chunk) - NSM has **grown through acquisitions** under White Mountains's ownership, including Fresh Insurance (UK personal lines), KBK Insurance Group (towing/transportation), and Embrace Pet Insurance[54](index=54&type=chunk) NSM Controlled Premium and Revenue by Vertical | Vertical | Controlled Premium 2019 ($M) | Commission & Other Revenue 2019 ($M) | Controlled Premium 2018 ($M) | Commission & Other Revenue 2018 ($M) | | :--- | :--- | :--- | :--- | :--- | | Specialty Transportation | $290.2 | $77.6 | $136.8 | $43.0 | | Real Estate | $157.2 | $34.7 | $135.7 | $30.3 | | Social Services | $102.7 | $25.9 | $94.0 | $23.8 | | Pet | $67.6 | $30.0 | — | — | | United Kingdom | $155.5 | $45.9 | $108.8 | $34.9 | | Other | $124.5 | $19.0 | $119.4 | $19.8 | | **Total** | **$897.7** | **$233.1** | **$594.7** | **$151.8** | [Kudu](index=11&type=section&id=Kudu) Kudu provides capital solutions to asset managers, with White Mountains increasing its stake to 99.1% and deploying $266 million across nine firms - White Mountains increased its ownership of Kudu to **99.1%** in April 2019, leading to its consolidation as a new reportable segment[67](index=67&type=chunk) - Kudu's capital solutions are structured as **minority preferred equity stakes** with distribution rights tied to gross revenues, designed to generate **stable cash yields**[68](index=68&type=chunk) Kudu Portfolio Snapshot (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Capital Deployed | $266 million | | Number of Firms | 9 | | Combined AUM | > $33 billion | | Average Inception Cash Yield | 10.6% | | White Mountains Total Capital Commitment | $350 million | [Other Operations](index=12&type=section&id=Other%20Operations) This segment holds strategic investments in unconsolidated entities like MediaAlpha and PassportCard/DavidShield, with MediaAlpha deconsolidated in 2019 - In February 2019, MediaAlpha completed a recapitalization, reducing White Mountains's ownership to **48.3%** This led to the **deconsolidation** of MediaAlpha and its reclassification as a long-term investment accounted for at fair value[76](index=76&type=chunk)[78](index=78&type=chunk) Fair Value of Key Strategic Investments (as of Dec 31, 2019) | Investment | Fair Value ($M) | | :--- | :--- | | MediaAlpha | $180 | | PassportCard/DavidShield | $90 | | Elementum | $55 | | Tuckerman Capital | $58 | | Enlightenment Capital | $34 | - In May 2019, White Mountains acquired a **30% interest** in Elementum, an ILS investment adviser, for **$55 million** and committed to invest an additional **$50 million** in its funds[84](index=84&type=chunk) [Discontinued Operations](index=14&type=section&id=Discontinued%20Operations) The company has completed major dispositions of operating businesses, including OneBeacon and Sirius Group, generating significant cash proceeds and gains - The company completed the sale of OneBeacon Insurance Group in 2017, receiving **$1.3 billion** in cash and recording a **$557 million** comprehensive gain[96](index=96&type=chunk) - The sale of Sirius Group was completed in 2016 for approximately **$2.6 billion** in cash proceeds, resulting in a **$477 million** comprehensive gain[100](index=100&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including investment volatility, BAM rating downgrades, NSM/Kudu business concentration, adverse tax implications, and operational challenges - **Investment Risk**: The investment portfolio is subject to losses from adverse changes in equity markets, interest rates, and credit markets A significant portion of the portfolio (**$654 million**) consists of **Level 3 assets** without readily observable market prices, requiring subjective valuation[134](index=134&type=chunk)[136](index=136&type=chunk) - **BAM-Related Risks**: A **downgrade of BAM's "AA" financial strength rating** could severely limit its ability to write new business Additionally, there is a risk that BAM may not pay the principal and interest due on the **$458 million** in BAM Surplus Notes owned by White Mountains, as payments require NYDFS approval and depend on BAM's financial health[139](index=139&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - **NSM & Kudu Risks**: A substantial portion of NSM's business is placed with a small number of insurance carriers (**56% with the top five**), creating concentration risk Kudu's financial performance is dependent on the asset- and performance-based fees of its clients, which are subject to market volatility and competition[150](index=150&type=chunk)[152](index=152&type=chunk) - **Tax Risks**: The company may be treated as a **Passive Foreign Investment Company (PFIC)**, which could subject U.S. shareholders to disadvantageous tax rules Its non-U.S. subsidiaries are also treated as **Controlled Foreign Corporations (CFCs)**, which has tax implications for U.S. 10% shareholders[154](index=154&type=chunk)[163](index=163&type=chunk) - **Operational & Regulatory Risks**: The company is exposed to **cybersecurity risks** that could compromise data and disrupt operations It also depends on **key personnel** who may be difficult to replace **Changes in insurance regulations** could restrict operations or increase capital requirements[170](index=170&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk) [Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the SEC staff regarding its periodic or current reports - The Company reports **no unresolved comments** from the SEC staff[182](index=182&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) The company's main offices are in Bermuda and New Hampshire, with most facilities leased and deemed adequate for operations - The company's **principal executive office is in Hanover, New Hampshire**, with other key offices in Bermuda, Connecticut, and Massachusetts **Most properties are leased**[183](index=183&type=chunk)[185](index=185&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material legal proceedings - **None**[186](index=186&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **None**[187](index=187&type=chunk) PART II [Market for the Company's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20the%20Company%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) White Mountains's common shares are listed on NYSE and BSX, with no repurchases in Q4 2019, and a stock performance graph is included - The company's common shares trade on the **NYSE** under the symbol "**WTM**"[194](index=194&type=chunk) - **No common shares were repurchased** by the company during the fourth quarter of 2019[196](index=196&type=chunk) [Selected Financial Data](index=29&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five-year consolidated financial data, highlighting 2019 revenues of $893 million, net income of $415 million, and increased book value per share Selected Financial Data (2017-2019) | ($ in Millions, Except Per Share) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Revenues** | **$893** | **$369** | **$374** | | Pre-tax income (loss) | $405 | $(178) | $8 | | Net income (loss) attributable to common shareholders | $415 | $(141) | $627 | | Total diluted income (loss) per share | $130.27 | $(41.76) | $146.06 | | **Total assets** | **$3,983** | **$3,363** | **$3,659** | | Debt | $284 | $193 | $24 | | White Mountains's common shareholders' equity | $3,262 | $2,843 | $3,493 | | **Book value per share** | **$1,023.91** | **$896.00** | **$931.30** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results, highlighting 2019's strong investment performance and MediaAlpha gain, which drove a 14.8% adjusted book value per share increase [Results of Operations](index=31&type=section&id=Results%20of%20Operations) In 2019, adjusted book value per share grew 14.8% to $1,018, driven by strong investment returns and a $182 million MediaAlpha gain, contrasting with 2018's decline Book Value Per Share Performance | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Book Value Per Share | $1,024 | $896 | | Adjusted Book Value Per Share | $1,018 | $888 | | Growth in Adjusted BVPS (incl. dividends) | 14.8% | (2.8)% | - The 2019 results were primarily driven by strong investment results and a **$182 million** gain from the MediaAlpha Transaction[207](index=207&type=chunk)[208](index=208&type=chunk) - The 2018 results were primarily driven by investment results, which were **adversely impacted by the sharp decline in equity markets** in the fourth quarter of 2018[207](index=207&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity with $603 million in cash and liquid investments, while total debt increased to $284 million, and share repurchases significantly decreased in 2019 - **Primary sources of cash** are distributions from subsidiaries, investment income, and proceeds from asset sales **Primary uses** include operating expenses, investments, debt service, dividends, and share repurchases[335](index=335&type=chunk)[336](index=336&type=chunk) Capital Structure Summary | ($ in Millions) | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total debt | $283.5 | $192.7 | | Total White Mountains's common shareholders' equity | $3,261.5 | $2,843.1 | | Total adjusted capital (Non-GAAP) | $3,538.5 | $3,042.6 | | **Total debt to total adjusted capital** | **8.0%** | **6.3%** | - The company has future binding commitments to fund other long-term investments totaling approximately **$183 million** as of December 31, 2019[371](index=371&type=chunk) Share Repurchases | Year Ended | Shares Repurchased | Cost ($M) | | :--- | :--- | :--- | | Dec 31, 2019 | 5,679 | $4.9 | | Dec 31, 2018 | 592,458 | $519.4 | | Dec 31, 2017 | 832,725 | $723.9 | [Critical Accounting Estimates](index=63&type=section&id=Critical%20Accounting%20Estimates) Management's critical accounting estimates include fair value measurements for Level 3 investments, valuation of BAM Surplus Notes, and impairment testing for goodwill and other intangible assets - **Fair Value Measurements**: A significant portion of the investment portfolio (**$654 million** of other long-term investments) is classified as **Level 3**, requiring valuation based on unobservable inputs and management judgment Key Level 3 assets include **Kudu's Participation Contracts**, **MediaAlpha**, and **PassportCard/DavidShield**, which are valued using discounted cash flow models[409](index=409&type=chunk)[422](index=422&type=chunk)[424](index=424&type=chunk) - **BAM Surplus Notes Valuation**: The company believes the **$458 million principal** and **$163 million accrued interest** on the BAM Surplus Notes are fully recoverable This assessment is based on a debt service model that forecasts BAM's operating results through 2042 and is sensitive to assumptions about the municipal bond market[439](index=439&type=chunk)[442](index=442&type=chunk) - **Goodwill and Intangible Assets**: The company holds **$655 million** in goodwill and other intangibles, with **$623 million** related to NSM and its acquisitions These assets are tested for **impairment annually**, requiring management to estimate the fair value of reporting units, which involves significant judgment[447](index=447&type=chunk)[449](index=449&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from its investment portfolio, including interest rate, credit spread, and equity price risks, with sensitivity analyses showing potential impacts on fair value Interest Rate Risk Sensitivity on Fixed Maturity Investments | Assumed Change in Interest Rate | Pre-Tax (Decrease) in Fair Value ($M) | | :--- | :--- | | 50 bps increase | $(20.3) | | 100 bps increase | $(41.5) | - A hypothetical **10%** increase or decrease in the value of common equity securities and other long-term investments would change their carrying value by approximately **$154 million** pre-tax[460](index=460&type=chunk) - As of December 31, 2019, the company had foreign currency exposure on **$191 million** of net assets, primarily in GBP, EUR, and JPY[464](index=464&type=chunk) [Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's consolidated financial statements and supplementary data are filed as part of the Annual Report on Form 10-K - The financial statements and supplementary data are **filed as part of this report**[466](index=466&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=73&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - **None**[467](index=467&type=chunk) [Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2019 - Management concluded that both disclosure controls and procedures, and internal control over financial reporting, were **effective** as of December 31, 2019[468](index=468&type=chunk)[469](index=469&type=chunk) [Other Information](index=73&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - **None**[471](index=471&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=74&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement - This section **incorporates information by reference** from the Company's 2020 Proxy Statement[473](index=473&type=chunk) [Executive Compensation](index=74&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2020 Proxy Statement - This section **incorporates information by reference** from the Company's 2020 Proxy Statement[476](index=476&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=74&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the 2020 Proxy Statement - This section **incorporates information by reference** from the Company's 2020 Proxy Statement[477](index=477&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=74&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the 2020 Proxy Statement - This section **incorporates information by reference** from the Company's 2020 Proxy Statement[478](index=478&type=chunk) [Principal Accountant Fees and Services](index=74&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2020 Proxy Statement - This section **incorporates information by reference** from the Company's 2020 Proxy Statement[479](index=479&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=75&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, noting MediaAlpha's statements will be amended - This section **lists all exhibits and financial statement schedules** filed with the 10-K[481](index=481&type=chunk) - The financial statements for MediaAlpha, required under SEC Rule 3-09, will be **filed via an amendment** to the 10-K[485](index=485&type=chunk) [Form 10-K Summary](index=76&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary for this item - **None**[486](index=486&type=chunk)