# White Mountains Insurance Group Ltd: Form 10-Q for the period ended Mar 31, 2024

- Company: [White Mountains Insurance Group Ltd](/companies/wtm.md) (CIK 776867)
- Form: 10-Q
- Filed: 2024-05-09
- Accepted by EDGAR: May 9, 2024, 16:17 ET
- Period: 2024-03-31
- Accession: 0000776867-24-000010
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/776867/000077686724000010/wtm-20240331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/776867/000077686724000010/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $647.3m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2024-01-01 to 2024-03-31 | $7.6m | us-gaap:CostOfGoodsAndServicesSold |
| Interest expense | 3 months, 2024-01-01 to 2024-03-31 | $15.2m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-01-01 to 2024-03-31 | $10.8m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | $236.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | $92.33 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | $92.33 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 2,531,100 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | $36.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2024-01-01 to 2024-03-31 | $2.5m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 3 months, 2024-01-01 to 2024-03-31 | $8.1m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Total assets | at 2024-03-31 | $9.59bn | us-gaap:Assets |
| Total liabilities | at 2024-03-31 | $4.70bn | us-gaap:Liabilities |
| Long-term debt | at 2024-03-31 | $532.1m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-03-31 | $4.47bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 95,644 characters.

*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 72 for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.*

*The following discussion also includes nine 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) Bamboo’s MGA net income (loss), (v) Bamboo’s MGA pre-tax income (loss), (vi) Bamboo’s MGA EBITDA, (vii) Bamboo’s MGA adjusted EBITDA, (viii) total consolidated portfolio returns excluding MediaAlpha and (ix) adjusted capital, that have been reconciled from their most comparable GAAP financial measures on page 70. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.*

### RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2024 and 2023

### Overview

White Mountains reported book value per share of $1,742 and adjusted book value per share of $1,797 as of March 31, 2024. Book value per share and adjusted book value per share increased 5% and 6% in the first quarter of 2024, including dividends. The increases in book value per share and adjusted book value per share in the first quarter of 2024 were driven primarily by our position in MediaAlpha as well as solid operating and investment results. As of March 31, 2024, White Mountains’s undeployed capital was approximately $600 million.

White Mountains reported book value per share of $1,522 and adjusted book value per share of $1,567 as of March 31, 2023. Book value per share and adjusted book value per share both increased 5% in the first quarter of 2023, including dividends. The increases in book value per share and adjusted book value per share were driven primarily by investment returns, including MediaAlpha, and solid operating results at the operating companies.

The Ark/WM Outrigger segment’s combined ratio was 91% in the first quarter of 2024 compared to 92% in the first quarter of 2023. Ark/WM Outrigger reported gross written premiums of $872 million, net written premiums of $598 million and net earned premiums of $303 million in the first quarter of 2024 compared to gross written premiums of $809 million, net written premiums of $614 million and net earned premiums of $255 million in the first quarter of 2023. Ark/WM Outrigger reported pre-tax income of $43 million in the first quarter of 2024 compared to $42 million in the first quarter of 2023.

Ark’s combined ratio was 94% in both the first quarter of 2024 and 2023. Ark’s combined ratio in the first quarter of 2024 included slight net favorable prior year development compared to three points of net unfavorable prior year development in the first quarter of 2023, primarily due to Winter Storm Elliott. Ark’s combined ratio in the first quarter of 2024 and 2023 both included minimal catastrophe losses. Non-catastrophe losses in the first quarter of 2024 included $15 million on a net basis related to the collapse of the Francis Scott Key Bridge in Baltimore and $16 million on a net basis related to a satellite loss. Ark reported gross written premiums of $872 million, net written premiums of $564 million and net earned premiums of $293 million in the first quarter of 2024 compared to gross written premiums of $809 million, net written premiums of $570 million and net earned premiums of $250 million in the first quarter of 2023. Ark reported pre-tax income of $33 million in the first quarter of 2024 compared to $36 million in the first quarter of 2023. Ark’s results included net realized and unrealized investment gains of $11 million in the first quarter of 2024 compared to $25 million in the first quarter of 2023.

WM Outrigger Re’s combined ratio was 32% in the first quarter of 2024 compared to 21% in the first quarter of 2023. Catastrophe losses were minimal in both periods. In the first quarter of 2024, WM Outrigger Re’s combined ratio was 26% for underwriting year 2024 and 42% for underwriting year 2023. WM Outrigger Re reported gross and net written premiums of $34 million and net earned premiums of $10 million in the first quarter of 2024 compared to gross and net written premiums of $44 million and net earned premiums of $5 million in the first quarter of 2023. Gross and net written premiums decreased due to White Mountains’s lower capital commitment to WM Outrigger Re in 2024. WM Outrigger Re reported pre-tax income of $10 million in the first quarter of 2024, of which $7 million was attributable to the 2024 underwriting year and $3 million to the 2023 underwriting year, compared to $6 million in the first quarter of 2023.

HG Global/BAM reported gross written premiums and MSC collected of $22 million in the first quarter of 2024 compared to $21 million in the first quarter of 2023. Total pricing was 61 basis points in the first quarter of 2024 compared to 73 basis points in the first quarter of 2023. BAM insured municipal bonds with par value of $3.6 billion in the first quarter of 2024 compared to $2.9 billion in the first quarter of 2023. BAM’s total claims paying resources were $1,508 million as of March 31, 2024 compared to $1,501 million as of December 31, 2023 and $1,433 million as of March 31, 2023.

Kudu reported total revenues of $11 million, pre-tax income of $2 million and adjusted EBITDA of $14 million in the first quarter of 2024 compared to total revenues of $44 million, pre-tax income of $35 million and adjusted EBITDA of $11 million in the first quarter of 2023. Kudu’s revenues, pre-tax income and adjusted EBITDA included $17 million of net investment income in the first quarter of 2024 compared to $14 million in the first quarter of 2023. Kudu’s revenues and pre-tax income in the first quarter of 2024 also included $(7) million of net realized and unrealized gains (losses) compared to $30 million in the first quarter of 2023.

On January 2, 2024, White Mountains closed its transaction with Bamboo. Bamboo reported commission and fee revenues of $22 million and pre-tax income of $1 million for the first quarter of 2024. Commission and fee revenues were more than triple Bamboo’s commission and fee revenues for the first quarter of 2023 (prior to White Mountains’s ownership of Bamboo), driven primarily by higher managed premiums. Bamboo reported MGA pre-tax income of $2 million and MGA adjusted EBITDA of $6 million for the first quarter of 2024. Managed premiums, which represents the total premium placed by Bamboo, were $90 million for the first quarter of 2024 compared to $28 million for the first quarter of 2023 (prior to White Mountains’s ownership of Bamboo). The increase in managed premiums was driven primarily by growth in new business volumes and a growing renewal book.

In April 2024, White Mountains committed up to $30 million in a Bermuda special purpose reinsurance vehicle that will participate in Bamboo’s 2024 treaty year quota share reinsurance program alongside third-party reinsurers.

As of March 31, 2024, White Mountains owned 22.9 million shares of MediaAlpha, representing a 35% basic ownership interest (32% on a fully-diluted/fully-converted basis). At March 28, 2024, MediaAlpha’s closing price was $20.37 per share, which increased from $11.15 per share as of December 31, 2023. The carrying value of White Mountains’s investment in MediaAlpha was $466 million as of March 31, 2024, which increased from $255 million as of December 31, 2023. At White Mountains’s March 31, 2024 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 and adjusted book value per share.

White Mountains’s total consolidated portfolio return on invested assets was 4.6% in the first quarter of 2024, which included $211 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 1.2% in the first quarter of 2024, driven primarily by net investment income from the fixed income and other long-term investments portfolios and net unrealized investment gains from common equity securities, partially offset by net realized and unrealized investment losses in the fixed income portfolio due to an increase in interest rates. White Mountains’s total consolidated portfolio return on invested assets was 4.5% in the first quarter of 2023, which included $85 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.0% in the first quarter of 2023, driven primarily by net unrealized investment gains from other long-term investments and common equity securities, as well as net unrealized investment gains in the fixed income portfolio due to a decline in interest rates.

During the first quarter of 2024, White Mountains repurchased and retired 5,269 of its common shares for $8 million at an average share price of $1,505.01, or 86% of White Mountains’s March 31, 2024 book value per share and 84% of White Mountains’s March 31, 2024 adjusted book value per share.

### 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 March 31, 2024, December 31, 2023 and March 31, 2023. See **NON-GAAP FINANCIAL MEASURES** on page 70.

| Millions Book value per share numerators (in millions): | March 31, 2024 | December 31, 2023 | March 31, 2023 |
| --- | ---: | ---: | ---: |
| White Mountains’s common shareholders’ equity - GAAP book value per share numerator | **$4,470.4** | $4,240.5 | $3,902.4 |
| HG Global’s unearned premium reserve (1) | **267.7** | 265.4 | 243.3 |
| HG Global’s net deferred acquisition costs (1) | **(77.3)** | (76.5) | (69.4) |
| Time value of money discount on expected future payments on the BAM Surplus Notes (1) | **(86.3)** | (87.9) | (93.4) |
| Adjusted book value per share numerator | **$4,574.5** | $4,341.5 | $3,982.9 |
| **Book value per share denominators (in thousands of shares):** |  |  |  |
| Common shares outstanding - GAAP book value per share denominator | **2,565.7** | 2,560.5 | 2,564.5 |
| Unearned restricted common shares | **(20.3)** | (12.4) | (22.3) |
| Adjusted book value per share denominator | **2,545.4** | 2,548.1 | 2,542.2 |
| GAAP book value per share | **$1,742.33** | $1,656.14 | $1,521.73 |
| Adjusted book value per share | **$1,797.17** | $1,703.82 | $1,566.73 |
| Year-to-date dividends paid per share | **$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 March 31, 2024, December 31, 2023, and March 31, 2023:

| Millions Goodwill: | March 31, 2024 | December 31, 2023 | March 31, 2023 |
| --- | ---: | ---: | ---: |
| Ark | **$116.8** | $116.8 | $116.8 |
| Kudu | **7.6** | 7.6 | 7.6 |
| Bamboo (1) | **270.4** | — | — |
| Other Operations | **44.4** | 44.4 | 44.4 |
| Total goodwill | **439.2** | 168.8 | 168.8 |
| **Other intangible assets:** |  |  |  |
| Ark | **175.7** | 175.7 | 175.7 |
| Kudu | **.6** | .7 | .9 |
| Bamboo (1) | **96.8** | — | — |
| Other Operations | **24.3** | 25.4 | 30.8 |
| Total other intangible assets | **297.4** | 201.8 | 207.4 |
| Total goodwill and other intangible assets (1) | **736.6** | 370.6 | 376.2 |
| Goodwill and other intangible assets attributed to noncontrolling interests | **(194.9)** | (94.9) | (95.7) |
| **Goodwill and other intangible assets included in White Mountains’s common shareholders’ equity** | **$541.7** | $275.7 | $280.5 |

(1) The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisition of Bamboo had not yet been finalized at

March 31, 2024. See “**Bamboo Transaction”** in **Note 2 — “Significant Transactions”** on page 10.

(2) See **Note 4 — “Goodwill and Other Intangible Assets”** on page 24 for details of other intangible assets.

### Summary of Consolidated Results

The following table presents White Mountains’s consolidated financial results for the three months ended March 31, 2024 and 2023:

| Millions Revenues | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| P&C Insurance and Reinsurance revenues | **$336.8** | $287.5 |
| Financial Guarantee revenues | **7.9** | 32.7 |
| Asset Management revenues | **10.7** | 43.8 |
| P&C Insurance Distribution revenues | **31.1** | — |
| Other Operations revenues | **260.8** | 167.9 |
| Total revenues | **647.3** | 531.9 |
| **Expenses** |  |  |
| P&C Insurance and Reinsurance expenses | **293.9** | 245.4 |
| Financial Guarantee expenses | **23.0** | 24.5 |
| Asset Management expenses | **9.0** | 8.5 |
| P&C Insurance Distribution expenses | **30.2** | — |
| Other Operations expenses | **58.6** | 54.4 |
| Total expenses | **414.7** | 332.8 |
| **Pre-tax income (loss)** |  |  |
| P&C Insurance and Reinsurance pre-tax income (loss) | **42.9** | 42.1 |
| Financial Guarantee pre-tax income (loss) | **(15.1)** | 8.2 |
| Asset Management pre-tax income (loss) | **1.7** | 35.3 |
| P&C Insurance Distribution pre-tax income (loss) | **.9** | — |
| Other Operations pre-tax income (loss) | **202.2** | 113.5 |
| **Total pre-tax income (loss) from continuing operations** | **232.6** | 199.1 |
| Income tax (expense) benefit | **(10.8)** | (11.9) |
| **Net income (loss)** | **221.8** | 187.2 |
| Net (income) loss attributable to noncontrolling interests | **14.6** | (7.7) |
| **Net income (loss) attributable to White Mountains’s common shareholders** | **236.4** | 179.5 |
| Other comprehensive income (loss), net of tax | **(.3)** | 1.2 |
| **Comprehensive income (loss)** | **236.1** | 180.7 |
| Other comprehensive (income) loss attributable to noncontrolling interests | **.1** | (.4) |
| **Comprehensive income (loss) attributable to White Mountains’s common shareholders** | **$236.2** | $180.3 |

47

### I. SUMMARY OF OPERATIONS BY SEGMENT

As of March 31, 2024, White Mountains conducted its operations through four segments: (1) Ark/WM Outrigger, (2) HG Global/BAM, (3) Kudu and (4) Bamboo, 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.

As a result of the Bamboo Transaction, White Mountains began consolidating Bamboo in its financial statements as of January 2, 2024. See **Note 2 - “Significant Transaction”.**

### Ark/WM Outrigger

The following table presents the components of pre-tax income (loss) included in the Ark/WM Outrigger segment for the three months ended March 31, 2024 and 2023:

| Millions | Three Months Ended March 31, 2024 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | **$285.0** | **$—** | **$—** | **$285.0** |
| Assumed written premiums | **587.1** | **34.3** | **(34.3)** | **587.1** |
| Gross written premiums | **872.1** | **34.3** | **(34.3)** | **872.1** |
| Ceded written premiums | **(308.4)** | **—** | **34.3** | **(274.1)** |
| Net written premiums | **$563.7** | **$34.3** | **$—** | **$598.0** |
| Earned insurance premiums | **$292.5** | **$10.3** | **$—** | **$302.8** |
| Net investment income | **17.0** | **2.9** | **—** | **19.9** |
| Net realized and unrealized investment gains (losses) | **10.6** | **—** | **—** | **10.6** |
| Other revenues | **3.5** | **—** | **—** | **3.5** |
| Total revenues | **323.6** | **13.2** | **—** | **336.8** |
| Loss and loss adjustment expenses | **179.3** | **.7** | **—** | **180.0** |
| Acquisition expenses | **63.7** | **2.6** | **—** | **66.3** |
| General and administrative expenses - other underwriting | **30.5** | **—** | **—** | **30.5** |
| General and administrative expenses - all other | **11.7** | **—** | **—** | **11.7** |
| Change in fair value of contingent consideration | **—** | **—** | **—** | **—** |
| Interest expense | **5.4** | **—** | **—** | **5.4** |
| Total expenses | **290.6** | **3.3** | **—** | **293.9** |
| **Pre-tax income (loss)** | **$33.0** | **$9.9** | **$—** | **$42.9** |

48

| Millions | Three Months Ended March 31, 2023 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | $246.2 | $— | $— | $246.2 |
| Assumed written premiums | 563.2 | 44.1 | (44.1) | 563.2 |
| Gross written premiums | 809.4 | 44.1 | (44.1) | 809.4 |
| Ceded written premiums | (239.3) | — | 44.1 | (195.2) |
| Net written premiums | $570.1 | $44.1 | $— | $614.2 |
| Earned insurance premiums | $249.9 | $5.2 | $— | $255.1 |
| Net investment income | 8.4 | 2.2 | — | 10.6 |
| Net realized and unrealized investment gains (losses) | 24.5 | — | — | 24.5 |
| Other revenues | (2.7) | — | — | (2.7) |
| Total revenues | 280.1 | 7.4 | — | 287.5 |
| Loss and loss adjustment expenses | 147.6 | .2 | — | 147.8 |
| Acquisition expenses | 58.9 | .9 | — | 59.8 |
| General and administrative expenses - other underwriting | 27.5 | — | — | 27.5 |
| General and administrative expenses - all other | 7.6 | .1 | — | 7.7 |
| Change in fair value of contingent consideration | (2.4) | — | — | (2.4) |
| Interest expense | 5.0 | — | — | 5.0 |
| Total expenses | 244.2 | 1.2 | — | 245.4 |
| **Pre-tax income (loss)** | $35.9 | $6.2 | $— | $42.1 |

### Ark/WM Outrigger Results— Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

The Ark/WM Outrigger segment’s combined ratio was 91% in the first quarter of 2024 compared to 92% in the first quarter of 2023. The Ark/WM Outrigger segment reported gross written premiums of $872 million, net written premiums of $598 million and net earned premiums of $303 million in the first quarter of 2024 compared to gross written premiums of $809 million, net written premiums of $614 million and net earned premiums of $255 million in the first quarter of 2023. The Ark/WM Outrigger segment reported pre-tax income of $43 million in the first quarter of 2024 compared to $42 million in the first quarter of 2023.

Ark’s combined ratio was 94% in both the first quarter of 2024 and 2023. Ark’s combined ratio in the first quarter of 2024 included slight net favorable prior year development compared to three points of net unfavorable prior year development in the first quarter of 2023, primarily due to Winter Storm Elliott. Ark’s combined ratio in the first quarter of 2024 and 2023 both included minimal catastrophe losses. Non-catastrophe losses in the first quarter of 2024 included $15 million on a net basis related to the collapse of the Francis Scott Key Bridge in Baltimore and $16 million on a net basis related to a satellite loss.

Ark reported gross written premiums of $872 million, net written premiums of $564 million and net earned premiums of $293 million in the first quarter of 2024 compared to gross written premiums of $809 million, net written premiums of $570 million and net earned premiums of $250 million in the first quarter of 2023.

Ark reported pre-tax income of $33 million in the first quarter of 2024 compared to $36 million in the first quarter of 2023. Ark’s results included net realized and unrealized investment gains of $11 million in the first quarter of 2024, driven primarily by net unrealized investment gains on common equity securities, compared to $25 million in the first quarter of 2023, driven primarily by net unrealized investment gains on fixed income securities and other long-term investments. Ark’s results for the first quarter of 2023 also included $2 million for a decrease in the fair value of its contingent consideration liabilities.

WM Outrigger Re’s combined ratio was 32% in the first quarter of 2024 compared to 21% in the first quarter of 2023. Catastrophe losses were minimal in both periods. In the first quarter of 2024, WM Outrigger Re’s combined ratio was 26% for underwriting year 2024 and 42% for underwriting year 2023. WM Outrigger Re reported gross and net written premiums of $34 million and net earned premiums of $10 million in the first quarter of 2024 compared to gross and net written premiums of $44 million and net earned premiums of $5 million in the first quarter of 2023. Gross and net written premiums decreased due to White Mountains’s lower capital commitment to WM Outrigger Re in 2024. WM Outrigger Re reported pre-tax income of $10 million in the first quarter of 2024, of which $7 million was attributable to the 2024 underwriting year and $3 million to the 2023 underwriting year, compared to $6 million in the first quarter of 2023.

The following table presents the Ark/WM Outrigger segment’s insurance premiums, insurance expenses and insurance ratios for the three months ended March 31, 2024 and 2023:

*$ in Millions*

| Insurance premiums: | Three Months Ended March 31, 2024 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | **$872.1** | **$34.3** | **$(34.3)** | **$872.1** |
| Net written premiums | **$563.7** | **$34.3** | **$—** | **$598.0** |
| Net earned premiums | **$292.5** | **$10.3** | **$—** | **$302.8** |
| Insurance expenses: |  |  |  |  |
| Loss and loss adjustment expenses | **$179.3** | **$.7** | **$—** | **$180.0** |
| Acquisition expenses | **63.7** | **2.6** | **—** | **66.3** |
| Other underwriting expenses (1) | **30.5** | **—** | **—** | **30.5** |
| Total insurance expenses | **$273.5** | **$3.3** | **$—** | **$276.8** |
| Insurance ratios: |  |  |  |  |
| Loss and loss adjustment expense | **61.3%** | **6.8%** | **—%** | **59.4%** |
| Acquisition expense | **21.8** | **25.2** | **—** | **21.9%** |
| Other underwriting expense | **10.4** | **—** | **—** | **10.1%** |
| Combined Ratio | **93.5%** | **32.0%** | **—%** | **91.4%** |

(1) Included within general and administrative expenses.

*$ in Millions*

| Insurance premiums: | Three Months Ended March 31, 2023 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | $809.4 | $44.1 | $(44.1) | $809.4 |
| Net written premiums | $570.1 | $44.1 | $— | $614.2 |
| Net earned premiums | $249.9 | $5.2 | $— | $255.1 |
| Insurance expenses: |  |  |  |  |
| Loss and loss adjustment expenses | $147.6 | $.2 | $— | $147.8 |
| Acquisition expenses | 58.9 | .9 | — | 59.8 |
| Other underwriting expenses (1) | 27.5 | — | — | 27.5 |
| Total insurance expenses | $234.0 | $1.1 | $— | $235.1 |
| Insurance ratios: |  |  |  |  |
| Loss and loss adjustment expense | 59.0% | 3.9% | —% | 58.0% |
| Acquisition expense | 23.6 | 17.3 | — | 23.4% |
| Other underwriting expense | 11.0 | — | — | 10.8% |
| Combined Ratio | 93.6% | 21.2% | —% | 92.2% |

(1) Included within general and administrative expenses.

The following table presents WM Outrigger Re’s insurance premiums and combined ratio by underwriting year for the three months ended March 31, 2024 and 2023:

*$ in Millions*

| Insurance premiums: | Three Months Ended March 31, 2024 2024 Underwriting Year | 2023 Underwriting Year | Total | 2023 2023 Underwriting Year |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | $34.1 | $.2 | $34.3 | $44.1 |
| Net written premiums | $34.1 | $.2 | $34.3 | $44.1 |
| Net earned premiums | $6.0 | $4.3 | $10.3 | $5.2 |
| Combined Ratio | 26.1% | 42.2% | 32.0% | 21.2% |

#### Gross Written Premiums

Gross written premiums increased 8% to $872 million in the first quarter of 2024 compared to the first quarter of 2023, with risk adjusted rate change up approximately 3% year-over-year. The increase in gross written premiums was driven primarily by the property, marine & energy and accident & health lines of business, partially offset by a decrease in certain specialty lines. The risk adjusted rate change on the Outrigger Re Ltd. portfolio of global property reinsurance was 1% in the first quarter of 2024. The following table presents the Ark/WM Outrigger segment’s gross written premiums by line of business for the three months ended March 31, 2024 and 2023:

| Millions | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Property | **$326.8** | $279.7 |
| Specialty | **234.1** | 268.5 |
| Marine & Energy | **229.0** | 194.9 |
| Accident & Health | **47.7** | 36.1 |
| Casualty | **34.5** | 30.2 |
| Total Gross Written Premium | **$872.1** | $809.4 |

51

### 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 March 31, 2024 and December 31, 2023:

| Millions Assets | March 31, 2024 Ark | WM Outrigger Re | Eliminations and Segment Adjustments | Total |
| --- | ---: | ---: | ---: | ---: |
| Fixed maturity investments, at fair value | **$946.9** | **$—** | **$—** | **$946.9** |
| Common equity securities, at fair value | **409.9** | **—** | **—** | **409.9** |
| Short-term investments, at fair value | **612.9** | **222.4** | **—** | **835.3** |
| Other long-term investments | **485.0** | **—** | **—** | **485.0** |
| Total investments | **2,454.7** | **222.4** | **—** | **2,677.1** |
| Cash | **128.9** | **.2** | **—** | **129.1** |
| Reinsurance recoverables | **734.8** | **—** | **(39.8)** | **695.0** |
| Insurance premiums receivable | **1,001.5** | **31.7** | **(31.7)** | **1,001.5** |
| Deferred acquisition costs | **207.5** | **5.8** | **—** | **213.3** |
| Goodwill and other intangible assets | **292.5** | **—** | **—** | **292.5** |
| Other assets | **140.8** | **.1** | **—** | **140.9** |
| Total assets | **$4,960.7** | **$260.2** | **$(71.5)** | **$5,149.4** |
| **Liabilities** |  |  |  |  |
| Loss and loss adjustment expense reserves | **$1,744.5** | **$15.8** | **$(15.8)** | **$1,744.5** |
| Unearned insurance premiums | **1,229.0** | **29.7** | **(24.0)** | **1,234.7** |
| Debt | **155.4** | **—** | **—** | **155.4** |
| Reinsurance payable | **294.2** | **—** | **(31.7)** | **262.5** |
| Contingent consideration | **94.0** | **—** | **—** | **94.0** |
| Other liabilities | **214.0** | **—** | **—** | **214.0** |
| Total liabilities | **3,731.1** | **45.5** | **(71.5)** | **3,705.1** |
| **Equity** |  |  |  |  |
| White Mountains’s common shareholders’ equity | **894.9** | **214.7** | **—** | **1,109.6** |
| Noncontrolling interests | **334.7** | **—** | **—** | **334.7** |
| **Total equity** | **1,229.6** | **214.7** | **—** | **1,444.3** |
| **Total liabilities and equity** | **$4,960.7** | **$260.2** | **$(71.5)** | **$5,149.4** |

52

| Millions Assets | December 31, 2023 Ark | WM Outrigger Re | Eliminations and Segment Adjustments | Total |
| --- | ---: | ---: | ---: | ---: |
| Fixed maturity investments, at fair value | $866.8 | $— | $— | $866.8 |
| Common equity securities, at fair value | 400.6 | — | — | 400.6 |
| Short-term investments, at fair value | 697.5 | 265.3 | — | 962.8 |
| Other long-term investments | 440.9 | — | — | 440.9 |
| Total investments | 2,405.8 | 265.3 | — | 2,671.1 |
| Cash | 90.2 | .3 | — | 90.5 |
| Reinsurance recoverables | 463.3 | — | (21.3) | 442.0 |
| Insurance premiums receivable | 612.2 | 27.7 | (27.7) | 612.2 |
| Deferred acquisition costs | 144.3 | 1.0 | — | 145.3 |
| Goodwill and other intangible assets | 292.5 | — | — | 292.5 |
| Other assets | 125.0 | — | — | 125.0 |
| Total assets | $4,133.3 | $294.3 | $(49.0) | $4,378.6 |
| **Liabilities** |  |  |  |  |
| Loss and loss adjustment expense reserves | $1,605.1 | $15.6 | $(15.6) | $1,605.1 |
| Unearned insurance premiums | 743.6 | 5.7 | (5.7) | 743.6 |
| Debt | 185.5 | — | — | 185.5 |
| Reinsurance payable | 108.8 | — | (27.7) | 81.1 |
| Contingent consideration | 94.0 | — | — | 94.0 |
| Other liabilities | 166.8 | — | — | 166.8 |
| Total liabilities | 2,903.8 | 21.3 | (49.0) | 2,876.1 |
| **Equity** |  |  |  |  |
| White Mountains’s common shareholders’ equity | 892.6 | 273.0 | — | 1,165.6 |
| Noncontrolling interests | 336.9 | — | — | 336.9 |
| **Total equity** | 1,229.5 | 273.0 | — | 1,502.5 |
| **Total liabilities and equity** | $4,133.3 | $294.3 | $(49.0) | $4,378.6 |

53

### 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 months ended March 31, 2024 and 2023:

| Millions | Three Months Ended March 31, 2024 HG Global | BAM | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | **$—** | **$10.5** | **$—** | **$10.5** |
| Assumed written premiums | **8.9** | **—** | **(8.9)** | **—** |
| Gross written premiums | **8.9** | **10.5** | **(8.9)** | **10.5** |
| Ceded written premiums | **—** | **(8.9)** | **8.9** | **—** |
| Net written premiums | **$8.9** | **$1.6** | **$—** | **$10.5** |
| Earned insurance premiums | **$6.5** | **$1.3** | **$—** | **$7.8** |
| Net investment income | **5.4** | **4.3** | **—** | **9.7** |
| Net investment income - BAM Surplus Notes | **6.6** | **—** | **(6.6)** | **—** |
| Net realized and unrealized investment gains (losses) | **(7.3)** | **(2.8)** | **—** | **(10.1)** |
| Other revenues | **—** | **.5** | **—** | **.5** |
| Total revenues | **11.2** | **3.3** | **(6.6)** | **7.9** |
| Acquisition expenses | **1.8** | **.4** | **—** | **2.2** |
| General and administrative expenses | **.4** | **16.9** | **—** | **17.3** |
| Interest expense (1) | **3.7** | **—** | **—** | **3.7** |
| Interest expense - BAM Surplus Notes | **—** | **6.6** | **(6.6)** | **—** |
| Total expenses | **5.9** | **23.9** | **(6.6)** | **23.2** |
| **Pre-tax income (loss)** | **$5.3** | **$(20.6)** | **$—** | **$(15.3)** |
| **Supplemental information:** |  |  |  |  |
| MSC collected (2) | **$—** | **$11.4** | **$—** | **$11.4** |

(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.

| Millions | Three Months Ended March 31, 2023 HG Global | BAM | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | $— | $9.2 | $— | $9.2 |
| Assumed written premiums | 7.7 | — | (7.7) | — |
| Gross written premiums | 7.7 | 9.2 | (7.7) | 9.2 |
| Ceded written premiums | — | (7.7) | 7.7 | — |
| Net written premiums | $7.7 | $1.5 | $— | $9.2 |
| Earned insurance premiums | $6.4 | $1.3 | $— | $7.7 |
| Net investment income | 4.0 | 3.2 | — | 7.2 |
| Net investment income - BAM Surplus Notes | 6.6 | — | (6.6) | — |
| Net realized and unrealized investment gains (losses) | 7.9 | 9.1 | — | 17.0 |
| Other revenues | — | .8 | — | .8 |
| Total revenues | 24.9 | 14.4 | (6.6) | 32.7 |
| Acquisition expenses | 1.8 | .9 | — | 2.7 |
| General and administrative expenses | 1.1 | 16.2 | — | 17.3 |
| Interest expense | 4.5 | — | — | 4.5 |
| Interest expense - BAM Surplus Notes | — | 6.6 | (6.6) | — |
| Total expenses | 7.4 | 23.7 | (6.6) | 24.5 |
| **Pre-tax income (loss)** | $17.5 | $(9.3) | $— | $8.2 |
| **Supplemental information:** |  |  |  |  |
| MSC collected (1) | $— | $11.8 | $— | $11.8 |

(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 March 31, 2024 versus Three Months Ended March 31, 2023

Gross written premiums and MSC collected in the HG Global/BAM segment totaled $22 million in the first quarter of 2024 compared to $21 million in the first quarter of 2023. BAM insured $3.6 billion of municipal bonds, $3.2 billion of which were in the primary market, in the first quarter of 2024 compared to $2.9 billion of municipal bonds, $2.2 billion of which were in the primary market, in the first quarter of 2023.

Insured penetration in the primary market decreased slightly to 7.3% in the first quarter of 2024, primarily as a result of a reduction in par insured for smaller deals, compared to 7.7% in the first quarter of 2023.

Total pricing, which reflects both gross written premiums and MSC, decreased to 61 basis points in the first quarter of 2024 compared to 73 basis points in the first quarter of 2023. The decrease in total pricing was driven primarily by an increase in par insured in the primary market and a decrease in par insured in the secondary market. Pricing in the primary market was 51 basis points in the first quarter of 2024 compared to 52 basis points in the first quarter of 2023. Pricing in the secondary and assumed reinsurance markets, which is more transaction specific than pricing in the primary market, increased to 149 basis points in the first quarter of 2024 compared to 137 basis points in the first quarter of 2023.

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 March 31, 2024 and 2023:

*$ in Millions*

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Gross par value of primary market policies issued | **$3,209.3** | $2,185.4 |
| Gross par value of secondary market policies issued | **363.0** | 704.2 |
| Total gross par value of market policies issued | **$3,572.3** | $2,889.6 |
| Gross written premiums | **10.5** | 9.2 |
| MSC collected | **11.4** | 11.8 |
| Total gross written premiums and MSC collected | **$21.9** | $21.0 |
| Total pricing | **61 bps** | 73 bps |

55

HG Global reported pre-tax income of $6 million in the first quarter of 2024 compared to $18 million in the first quarter of 2023. HG Global’s results in the first quarter of 2024 included net realized and unrealized investment gains (losses) on its fixed income portfolio of $(7) million, as interest rates increased, compared to $8 million in the first quarter of 2023, as interest rates decreased. HG Global’s results in both the first quarter of 2024 and 2023 also included interest income on the BAM Surplus Notes of $7 million.

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 $21 million of GAAP pre-tax loss from BAM in the first quarter of 2024 compared to $9 million in the first quarter of 2023. BAM’s results included net realized and unrealized investment gains (losses) on its fixed income portfolio of $(3) million in the first quarter of 2024, as interest rates increased, compared to $9 million in the first quarter of 2023, as interest rates decreased. BAM’s results in both the first quarter of 2024 and 2023 also included interest expense on the BAM Surplus Notes of $7 million.

### Claims Paying Resources

BAM’s claims paying resources represent the capital and other financial resources BAM has available to pay claims and, as such, are a key indication of BAM’s financial strength.

BAM’s claims paying resources were $1,508 million as of March 31, 2024 compared to $1,501 million as of December 31, 2023 and $1,433 million as of March 31, 2023. The increase in claims paying resources as of March 31, 2024 compared to December 31, 2023 was driven primarily by an increase in the statutory value of the collateral trusts resulting from positive cash flow from operations.

The following table presents BAM’s total claims paying resources on a statutory basis as of March 31, 2024, December 31, 2023 and March 31, 2023:

| Millions | March 31, 2024 | December 31, 2023 | March 31, 2023 |
| --- | ---: | ---: | ---: |
| Policyholders’ surplus | **$261.4** | $269.3 | $279.9 |
| Contingency reserve | **140.9** | 136.2 | 122.5 |
| Qualified statutory capital | **402.3** | 405.5 | 402.4 |
| Statutory net unearned premiums | **61.3** | 60.7 | 56.1 |
| Present value of future installment premiums and MSC | **11.4** | 10.9 | 12.4 |
| HG Re Collateral Trusts at statutory value | **632.6** | 623.5 | 562.5 |
| Fidus Re collateral trusts at statutory value | **400.0** | 400.0 | 400.0 |
| Claims paying resources | **$1,507.6** | $1,500.6 | $1,433.4 |

56

### 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 March 31, 2024 and December 31, 2023:

| Millions Assets | March 31, 2024 HG Global | BAM | Eliminations and Segment Adjustments | Total |
| --- | ---: | ---: | ---: | ---: |
| Fixed maturity investments, at fair value | **$580.0** | **$435.7** | **$—** | **$1,015.7** |
| Short-term investments, at fair value | **40.2** | **14.5** | **—** | **54.7** |
| Total investments | **620.2** | **450.2** | **—** | **1,070.4** |
| Cash | **1.5** | **3.2** | **—** | **4.7** |
| BAM Surplus Notes | **322.2** | **—** | **(322.2)** | **—** |
| Accrued interest receivable on BAM Surplus Notes | **181.1** | **—** | **(181.1)** | **—** |
| Insurance premiums receivable | **3.5** | **5.8** | **(3.5)** | **5.8** |
| Deferred acquisition costs | **79.7** | **40.9** | **(79.7)** | **40.9** |
| Other assets | **23.4** | **13.6** | **(.2)** | **36.8** |
| Total assets | **$1,231.6** | **$513.7** | **$(586.7)** | **$1,158.6** |
| **Liabilities** |  |  |  |  |
| BAM Surplus Notes (1) | **$—** | **$322.2** | **$(322.2)** | **$—** |
| Accrued interest payable on BAM Surplus Notes (2) | **—** | **181.1** | **(181.1)** | **—** |
| Preferred dividends payable to White Mountains (3) | **414.9** | **—** | **—** | **414.9** |
| Preferred dividends payable to noncontrolling interests | **15.3** | **—** | **—** | **15.3** |
| Unearned insurance premiums | **276.3** | **52.2** | **—** | **328.5** |
| Debt | **147.0** | **—** | — | **147.0** |
| Intercompany debt (4) | **7.8** | **—** | — | **7.8** |
| Accrued incentive compensation | **.8** | **11.1** | — | **11.9** |
| Other liabilities | **3.8** | **96.2** | **(83.4)** | **16.6** |
| Total liabilities | **865.9** | **662.8** | **(586.7)** | **942.0** |
| **Equity** |  |  |  |  |
| White Mountains’s common shareholders’ equity (3)(4) | **366.1** | **—** | **—** | **366.1** |
| Noncontrolling interests | **(.4)** | **(149.1)** | **—** | **(149.5)** |
| **Total equity** | **365.7** | **(149.1)** | **—** | **216.6** |
| **Total liabilities and equity** | **$1,231.6** | **$513.7** | **$(586.7)** | **$1,158.6** |

(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.

| Millions Assets | December 31, 2023 HG Global | BAM | Eliminations and Segment Adjustments | Total Segment |
| --- | ---: | ---: | ---: | ---: |
| Fixed maturity investments, at fair value | $573.3 | $439.0 | $— | $1,012.3 |
| Short-term investments, at fair value | 42.7 | 27.9 | — | 70.6 |
| Total investments | 616.0 | 466.9 | — | 1,082.9 |
| Cash | 3.2 | 3.5 | — | 6.7 |
| BAM Surplus Notes | 322.2 | — | (322.2) | — |
| Accrued interest receivable on BAM Surplus Notes | 174.5 | — | (174.5) | — |
| Insurance premiums receivable | 3.4 | 5.5 | (3.4) | 5.5 |
| Deferred acquisition costs | 79.0 | 40.1 | (79.0) | 40.1 |
| Other assets | 23.0 | 14.0 | (.2) | 36.8 |
| Total assets | $1,221.3 | $530.0 | $(579.3) | $1,172.0 |
| **Liabilities** |  |  |  |  |
| BAM Surplus Notes (1) | $— | $322.2 | $(322.2) | $— |
| Accrued interest payable on BAM Surplus Notes (2) | — | 174.5 | (174.5) | — |
| Preferred dividends payable to White Mountains (3) | 399.8 | — | — | 399.8 |
| Preferred dividends payable to noncontrolling interests | 14.7 | — | — | 14.7 |
| Unearned insurance premiums | 273.9 | 51.9 | — | 325.8 |
| Debt | 146.9 | — | — | 146.9 |
| Intercompany debt (4) | 4.0 | — | — | 4.0 |
| Accrued incentive compensation | 1.6 | 25.6 | — | 27.2 |
| Other liabilities | 4.1 | 95.6 | (82.6) | 17.1 |
| Total liabilities | 845.0 | 669.8 | (579.3) | 935.5 |
| **Equity** |  |  |  |  |
| White Mountains’s common shareholders’ equity (3)(4) | 375.5 | — | — | 375.5 |
| Noncontrolling interests | .8 | (139.8) | — | (139.0) |
| **Total equity** | 376.3 | (139.8) | — | 236.5 |
| **Total liabilities and equity** | $1,221.3 | $530.0 | $(579.3) | $1,172.0 |

(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.

### Kudu

As of March 31, 2024, Kudu had deployed a total of $885 million, including transaction costs, into 25 asset and wealth management firms globally, including three that have been exited. As of March 31, 2024, the asset and wealth management firms had combined assets under management of approximately $109 billion, spanning a range of asset classes, including real estate, wealth management, hedge funds, private equity and alternative credit strategies. Kudu’s capital was deployed at an average gross cash yield at inception of 9.9%.

The following table presents the components of GAAP net income, EBITDA and adjusted EBITDA included in the Kudu segment for the three months ended March 31, 2024 and 2023:

| Millions | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net investment income (1) | **$17.2** | $14.2 |
| Net realized and unrealized investment gains (losses) | **(6.5)** | 29.6 |
| Total revenues | **10.7** | 43.8 |
| General and administrative expenses | **3.4** | 3.8 |
| Interest expense | **5.6** | 4.7 |
| Total expenses | **9.0** | 8.5 |
| **GAAP pre-tax income (loss)** | **1.7** | 35.3 |
| Income tax (expense) benefit | **.8** | (7.5) |
| **GAAP net income (loss)** | **2.5** | 27.8 |
| Add back: |  |  |
| Interest expense | **5.6** | 4.7 |
| Income tax expense (benefit) | **(.8)** | 7.5 |
| Depreciation expense | **—** | — |
| Amortization of other intangible assets | **.1** | — |
| **EBITDA (2)** | **7.4** | 40.0 |
| Exclude: |  |  |
| Net realized and unrealized investment (gains) losses | **6.5** | (29.6) |
| Transaction expenses | **—** | .5 |
| **Adjusted EBITDA (2)** | **$13.9** | $10.9 |

(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 70.

The following table presents the changes in the fair value of Kudu’s Participation Contracts:

| Millions | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Beginning balance of Kudu’s Participation Contracts (1) | **$890.5** | $695.9 |
| Contributions to Participation Contracts (2) | **—** | 66.7 |
| Proceeds from Participation Contracts sold (2)(3) | **—** | (109.0) |
| Net realized and unrealized investment gains (losses) on Participation Contracts sold and pending sale (4) | **(3.1)** | (2.1) |
| Net unrealized investment gains (losses) on Participation Contracts - all other (5) | **(3.2)** | 31.7 |
| Ending balance of Kudu’s Participation Contracts (1) | **$884.2** | $683.2 |

(1) As of January 1, 2024 and March 31, 2024, Kudu’s other long-term investments also includes $5.8 and $5.7 related to a private debt instrument.

(2) Includes $35.8 of non-cash contributions to (proceeds from) Participation Contracts for the three months ended March 31, 2023.

(3) Includes $10.3 of proceeds receivable from Participation Contracts sold during the three months ended March 31, 2023.

(4) Includes net realized and unrealized investment gains (losses) recognized from Participation Contracts beginning in the quarter a contract is classified as pending sale.

(5) Includes net unrealized investment gains (losses) recognized from (i) ongoing Participation Contracts and (ii) Participation Contracts prior to classification as pending sale.

### Kudu Results—Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

Kudu reported total revenues of $11 million, pre-tax income of $2 million and adjusted EBITDA of $14 million in the first quarter of 2024 compared to total revenues of $44 million, pre-tax income of $35 million and adjusted EBITDA of $11 million in the first quarter of 2023. Total revenues, pre-tax income and adjusted EBITDA included $17 million of net investment income in the first quarter of 2024 compared to $14 million in the first quarter of 2023. The increase in net investment income in the first quarter of 2024 compared to the first quarter of 2023 was driven primarily by amounts earned from $140 million in new deployments that Kudu made subsequent to March 31, 2023, as well as growth in assets under management across the portfolio. Total revenues and pre-tax income also included $(7) million of net realized and unrealized investment gains (losses) in the first quarter of 2024, driven primarily by unrealized currency losses, higher discount rates and a decline in share price for one holding that is publicly traded, compared to $30 million in the first quarter of 2023, driven primarily by growth in assets under management at several managers.

### Bamboo

On January 2, 2024, White Mountains closed the Bamboo Transaction in accordance with the terms of the Bamboo Merger Agreement, investing $297 million of equity into Bamboo, which included the contribution of $36 million to retire Bamboo’s legacy credit facility and the contribution of $20 million of primary capital. The consideration is subject to customary purchase price adjustments. At closing, White Mountains owned 72.8% of Bamboo on a basic shares outstanding basis (63.7% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives), while Bamboo management owned 16.1% of basic shares outstanding (26.6% on a fully-diluted/fully-converted basis). See **Note 2 — “Significant Transactions”.**

Bamboo is a capital-light, tech- and data-enabled insurance distribution platform providing homeowners’ insurance and related products to the residential property market in California. Bamboo operates primarily through Bamboo MGA, 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 it earns commissions based on the volume and profitability of the insurance that it places. It offers both admitted and non-admitted products. Bamboo also operates two separate but integrated businesses: (i) a retail agency, within Bamboo MGA, offering ancillary products on behalf of third parties and (ii) Bamboo Captive, a Bermuda-domiciled captive reinsurer that participates in the underwriting risk of Bamboo’s MGA programs to align interests with reinsurance partners.

In April 2024, White Mountains committed up to $30 million in a Bermuda special purpose reinsurance vehicle that will participate in Bamboo’s 2024 treaty year quota share reinsurance program alongside third-party reinsurers.

The following table presents the components of GAAP net income (loss), MGA net income (loss), MGA EBITDA and MGA Adjusted EBITDA included in White Mountains’s Bamboo segment for the three months ended March 31, 2024.

| Millions | Three Months Ended March 31, 2024 |
| --- | ---: |
| Commission and fee revenues | **$21.9** |
| Earned insurance premiums | **8.4** |
| Other revenues | **.8** |
| Total revenues | **31.1** |
| Broker commission expenses | **9.3** |
| Loss and loss adjustment expenses | **5.8** |
| Acquisition expenses | **3.1** |
| General and administrative expenses | **12.0** |
| Total expenses | **30.2** |
| GAAP pre-tax income (loss) | **.9** |
| Income tax (expense) benefit | **.7** |
| GAAP net income (loss) | **1.6** |
| Exclude: |  |
| Net (income) loss, Bamboo Captive | **.4** |
| MGA net income (loss) (1) | **2.0** |
| Add back: |  |
| Income tax expense (benefit) | **(.7)** |
| Amortization of other intangible assets | **4.2** |
| MGA EBITDA (1) | **5.5** |
| Exclude: |  |
| Non-cash equity-based compensation expense | **.3** |
| Software implementation expenses | **.5** |
| Restructuring expenses | **.1** |
| MGA adjusted EBITDA (1) | **$6.4** |

(1) See “**NON-GAAP FINANCIAL MEASURES”** on page 70.

### Bamboo Results— Three Months Ended March 31, 2024

Bamboo reported commission and fee revenues of $22 million and pre-tax income of $1 million for the first quarter of 2024. Commission and fee revenues were more than triple Bamboo’s commission and fee revenues for the first quarter of 2023 (prior to White Mountains’s ownership of Bamboo), driven primarily by higher managed premiums. Bamboo reported MGA pre-tax income of $2 million and MGA adjusted EBITDA of $6 million for the first quarter of 2024.

### Managed premiums

Managed premiums represent the total premium placed by Bamboo during the period. Managed premiums more than tripled to $90 million for the first quarter of 2024 compared to $28 million for the first quarter of 2023 (prior to White Mountains’s ownership of Bamboo), driven primarily by growth in new business volumes and a growing renewal book. The following table presents Bamboo’s managed premiums for the three months ended March 31, 2024 and 2023, which includes the period prior to White Mountains’s ownership of Bamboo. White Mountains believes this information is useful in understanding the overall growth in Bamboo’s premium base.

| Millions | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| New | **$65.8** | $13.3 |
| Renewal | **23.7** | 14.9 |
| **Total** | **$89.5** | $28.2 |

61

### Other Operations

The following table presents the components of pre-tax income (loss) included in White Mountains’s Other Operations for the three months ended March 31, 2024 and 2023:

| Millions | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net investment income | **$9.9** | $7.0 |
| Net realized and unrealized investment gains (losses) | **22.2** | 41.8 |
| Net realized and unrealized investment gains (losses) from investment in MediaAlpha | **210.7** | 85.2 |
| Commission revenues | **3.6** | 3.3 |
| Other revenues | **14.4** | 30.6 |
| Total revenues | **260.8** | 167.9 |
| Cost of sales | **7.6** | 13.9 |
| General and administrative expenses | **50.3** | 39.7 |
| Interest expense | **.7** | .8 |
| Total expenses | **58.6** | 54.4 |
| **Pre-tax income (loss)** | **$202.2** | $113.5 |

### Other Operations Results—Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

White Mountains’s Other Operations reported pre-tax income of $202 million in the first quarter of 2024 compared to $114 million in the first quarter of 2023. White Mountains’s Other Operations results included unrealized investment gains from its investment in MediaAlpha of $211 million in the first quarter of 2024 compared to $85 million in the first quarter of 2023. Excluding MediaAlpha, White Mountains’s Other Operations results included net realized and unrealized investment gains of $22 million in the first quarter of 2024 compared to $42 million in the first quarter of 2023. The net realized and unrealized investment gains for the first quarter of 2024 and 2023 were driven primarily by net unrealized investment gains from common equity securities and other long-term investments. White Mountains’s Other Operations results included net investment income of $10 million in the first quarter of 2024 compared to $7 million in the first quarter of 2023. See **Summary of Investment Results** on page 63.

White Mountains’s Other Operations reported $14 million of other revenues in the first quarter of 2024 compared to $31 million in the first quarter of 2023. Other revenues in the first quarter of 2023 included a transaction gain from a 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 $8 million of cost of sales in the first quarter of 2024 compared to $14 million in the first quarter of 2023. The decrease in cost of sales was driven primarily by the sale within Other Operations.

White Mountains’s Other Operations reported general and administrative expenses of $50 million in the first quarter of 2024 compared to $40 million in the first quarter of 2023. Other Operations general and administrative expenses in the first quarter of 2024 included $31 million of parent company compensation and benefits compared to $20 million in the first quarter of 2023. The increase in parent company compensation and benefits was driven primarily by higher long-term incentive compensation costs due to the increase in White Mountains’s share price during the first quarter of 2024.

### 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.

### Gross Investment Returns and Benchmark Returns

The following table presents the pre-tax investment returns for White Mountains’s consolidated portfolio for the three months ended March 31, 2024 and 2023:

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Fixed income investments | **0.7%** | 1.9% |
| Bloomberg Barclays U.S. Intermediate Aggregate Index | **(0.4)%** | 2.4% |
| Common equity securities | **4.4%** | 4.5% |
| Investment in MediaAlpha | **82.7%** | 50.6% |
| Other long-term investments | **1.4%** | 4.2% |
| Total common equity securities, investment in MediaAlpha and other long-term investments | **9.5%** | 7.6% |
| Total common equity securities and other long-term investments | **2.0%** | 4.4% |
| S&P 500 Index (total return) | **10.6%** | 7.5% |
| Total consolidated portfolio | **4.6%** | 4.5% |
| Total consolidated portfolio - excluding MediaAlpha | **1.2%** | 3.0% |

### Investment Returns—Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

White Mountains’s total consolidated portfolio return on invested assets was 4.6% in the first quarter of 2024, which included $211 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 1.2% in the first quarter of 2024, driven primarily by net investment income from the fixed income and other long-term investments portfolios and net unrealized investment gains from common equity securities, partially offset by net realized and unrealized investment losses in the fixed income portfolio due to an increase in interest rates.

White Mountains’s total consolidated portfolio return on invested assets was 4.5% in the first quarter of 2023, which included $85 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.0% in the first quarter of 2023, driven primarily by net unrealized investment gains from other long-term investments and common equity securities, as well as net unrealized investment gains in the fixed income portfolio due to a decline in interest rates.

#### Fixed Income Results

White Mountains’s fixed income portfolio, including short-term investments, was $3.3 billion and $3.6 billion as of March 31, 2024 and December 31, 2023, which represented 52% and 56% of total invested assets. The decrease was driven primarily by the deployment of capital relating to the Bamboo Transaction. The duration of White Mountains’s fixed income portfolio, including short-term investments, was 2.3 years and 1.9 years as of March 31, 2024 and December 31, 2023. 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 0.7% in the first quarter of 2024 compared to 1.9% in the first quarter of 2023, outperforming and underperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of -0.4% and 2.4% for the comparable periods. The results in both the first quarter of 2024 and 2023 were driven primarily by the short duration positioning of White Mountains’s fixed income portfolio as interest rates fluctuated in each respective period.

#### 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 $3.0 billion and $2.8 billion as of March 31, 2024 and December 31, 2023, which represented 48% and 44% 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 9.5% in the first quarter of 2024, which included $211 million of unrealized investment gains from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 2.0% in the first quarter of 2024. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 7.6% in the first quarter of 2023, which included $85 million of unrealized investment gains from MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 4.4% in the first quarter of 2023.

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 $562 million and $538 million as of March 31, 2024 and December 31, 2023.

White Mountains’s portfolio of common equity securities returned 4.4% in the first quarter of 2024 compared to 4.5% in the first quarter of 2023, underperforming the S&P 500 Index returns of 10.6% and 7.5% for the comparable periods. The results in the first quarter of 2024 and 2023 were driven primarily by relatively lower returns from 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 $2.0 billion as of both March 31, 2024 and December 31, 2023.

White Mountains’s portfolio of other long-term investments returned 1.4% in the first quarter of 2024 compared to 4.2% in the first quarter of 2023. Investment returns for the first quarter of 2024 were driven primarily by net investment income from Kudu’s Participation Contracts and net unrealized investment gains from certain private equity and hedge funds. Investment returns for the first quarter of 2023 were driven primarily by net investment income and net realized and unrealized investment gains from Kudu’s Participation Contracts.

### Foreign Currency Exposure

As of March 31, 2024, White Mountains had foreign currency exposure on $269 million of net assets primarily related to Ark/WM Outrigger’s non-U.S. contracts, 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 March 31, 2024:

*$ in Millions Currency*

|  | Ark/WM Outrigger | Kudu | Other Operations | Total Fair Value | % of Total Shareholders’ Equity |
| --- | ---: | ---: | ---: | ---: | ---: |
| CAD | $87.6 | $78.1 | $— | $165.7 | 3.4% |
| AUD | 28.5 | 59.3 | — | 87.8 | 1.8% |
| GBP | 37.2 | — | — | 37.2 | 0.8% |
| EUR | (48.7) | 18.3 | 8.1 | (22.3) | (0.5)% |
| All other | — | — | .6 | .6 | —% |
| Total | **$104.6** | **$155.7** | **$8.7** | **$269.0** | 5.5% |

64

### III. Income Taxes

On December 27, 2023, Bermuda enacted a corporate income tax that will generally become effective on January 1, 2025. The Bermuda legislation defers the effective date until January 1, 2030, for Bermuda companies in consolidated groups that meet certain requirements. To qualify for the deferral, the group must (i) have permanent establishments in six or fewer countries, (ii) have less than €50 million of net tangible assets outside of the country where the group has the largest amount of net tangible assets and (iii) not have a Bermuda company directly or indirectly owned by a parent entity that is subject to the Income Inclusion Rule of Pillar Two in any jurisdiction. White Mountains expects to meet the requirements to be exempt from the Bermuda corporate income tax until January 1, 2030. The Bermuda legislation also provides for an economic transition adjustment that will reduce future years’ taxable income. Under GAAP, this economic transition adjustment was required to be recognized as a net deferred tax asset as of December 31, 2023. Accordingly, White Mountains’s net income for 2023 included a net deferred tax benefit of $68 million, of which $51 million was recorded at Ark and $17 million was recorded at HG Global. The deferred tax assets remain unchanged as of March 31, 2024.

On December 15, 2022, European Union Member States voted to adopt the EU Minimum Tax Directive in conformity with the OECD’s Pillar Two initiative. The EU Minimum Tax Directive required European Union Member States to enact conforming law by December 31, 2023. The main rule of the EU Minimum Tax Directive, the IIR will become effective for fiscal years beginning on or after December 31, 2023, while the UTPR will become effective for fiscal years beginning on or after December 31, 2024. On December 20, 2023, Luxemburg enacted conforming Pillar Two legislation including the IIR, UTPR and the associated Qualified Domestic Minimum Top-Up Tax (“QDMTT”). The Luxembourg legislation defers the effective date of the UTPR until fiscal years beginning on or after December 31, 2029 for Luxembourg companies in consolidated groups with a non-EU parent company that meet certain requirements. To qualify for the deferral, the group must (i) have permanent establishments in six or fewer countries and (ii) have less than €50 million of net tangible assets outside of the country where the group has the largest amount of net tangible assets. White Mountains expects to meet the requirements to be exempt from the Luxembourg UTPR until January 1, 2030. On July 11, 2023, the U.K. enacted conforming legislation adopting the Pillar Two IIR and the associated QDMTT which will become effective for fiscal years beginning on or after December 31, 2023. The U.K. has proposed legislation to adopt the Pillar Two UTPR effective for fiscal years beginning on or after December 31, 2024; however, this legislation has not yet been enacted.

As of March 31, 2024, the primary jurisdictions in which the Company’s subsidiaries and branches operate and were subject to tax are Israel, Luxembourg, the United Kingdom and the United States.

White Mountains’s income tax expense related to pre-tax income from continuing operations for the three months ended March 31, 2024 and 2023 represented an effective tax rate of 5% and 6%. 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.

On April 1, 2023, the U.K. corporate tax rate increased from 19% to 25%.

### 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.

### Dividend Capacity

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

### 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 reported in the previous year’s statutory financial statements, or (ii) make dividend payments of up to 25% of its total statutory capital and surplus reported in the previous year’s statutory financial statements, without prior approval of Bermuda regulatory authorities. Accordingly, GAIL will have the ability to pay a dividend of up to $272 million during 2024, which is equal to 25% of its December 31, 2023 statutory capital and surplus of $1,088 million, subject to meeting all appropriate liquidity and solvency requirements. During the three months ended March 31, 2024, GAIL did not pay any dividends to its immediate parent.

During the three months ended March 31, 2024, Ark declared a $33 million dividend to its shareholders, including $24 million that was paid to White Mountains in April 2024. As of March 31, 2024, Ark and its intermediate holding companies had $33 million of net unrestricted cash and short-term investments outside of its regulated and unregulated insurance and reinsurance operating subsidiaries.

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 March 31, 2024, WM Outrigger Re had less than $1 million of net unrestricted cash and investments held outside the collateral trust. As of March 31, 2024, WM Outrigger Re had $215 million of statutory capital and surplus and $222 million of assets held in the collateral trusts pursuant to the reinsurance agreement with GAIL.

During January 2024, White Mountains received an initial return of capital of $68 million from WM Outrigger Re for business written in the 2023 underwriting year. White Mountains expects to receive any additional return of capital and associated profits from business written in the 2023 underwriting year beginning in the third quarter of 2024.

### HG Global/BAM

As of March 31, 2024, 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 March 31, 2024, HG Global has accrued $430 million of dividends payable to holders of its preferred shares, $415 million of which is payable to White Mountains and is eliminated in consolidation. As of March 31, 2024, 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 March 31, 2024, HG Re had $1 million of net unrestricted cash and investments. As of March 31, 2024, HG Re had $132 million of accrued interest on the BAM Surplus Notes held outside the Collateral Trusts. As of March 31, 2024, HG Re had $792 million of statutory capital and surplus and $933 million of assets held in the Collateral Trusts.

On a monthly basis, BAM deposits cash equal to ceded premiums, net of ceding commissions, due to HG Re under the FLRT directly into the Regulation 114 Trust. The Regulation 114 Trust target balance is equal to 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 March 31, 2024 was $602 million.

As of March 31, 2024, the Collateral Trusts held assets of $933 million, which included $593 million of cash and investments, $322 million of BAM Surplus Notes and $18 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 2024, the interest rate on the BAM Surplus Notes is 8.2%. Beginning in 2025, the interest rate will be fixed at 8.2%, the higher of the rate set in 2024 and 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 three months ended March 31, 2024, BAM made no repayments of the BAM Surplus Notes or accrued interest. See **Note 10 — “Municipal Bond Guarantee Insurance.”**

### Kudu

During the three months ended March 31, 2024, Kudu distributed $2 million to unitholders, substantially all of which was paid to White Mountains. As of March 31, 2024, Kudu had $11 million of net unrestricted cash and short-term investments.

### Bamboo

During any 12-month period, Bamboo Captive, a class 2 licensed Bermuda insurer, has the ability to make capital distributions of up to 15% of its total statutory capital reported in the previous year’s statutory financial statements without prior approval of Bermuda regulatory authorities. Accordingly, Bamboo Captive will have the ability to pay a dividend of up to $1 million during 2024, which is equal to 15% of its December 31, 2023 statutory capital surplus of $5 million, subject to meeting all appropriate liquidity and solvency requirements. During the three months ended March 31, 2024, Bamboo Captive did not pay any dividends to its immediate parent. As of March 31, 2024, Bamboo Captive had $2 million of net unrestricted cash and short-term investments.

As of March 31, 2024, Bamboo had $15 million of net unrestricted cash and short-term investments outside of Bamboo Captive.

### Other Operations

During the three months ended March 31, 2024, White Mountains paid a $3 million common share dividend. As of March 31, 2024, the Company and its intermediate holding companies had $427 million of net unrestricted cash, short-term investments and fixed maturity investments, $466 million of MediaAlpha common stock, $152 million of common equity securities and $383 million of private equity and hedge funds, ILS funds and certain unconsolidated entities.

### Financing

The following table presents White Mountains’s capital structure as of March 31, 2024 and December 31, 2023:

*$ in Millions*

|  | March 31, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Ark 2007 Subordinated Notes (1) | **$—** | $30.0 |
| Ark 2021 Subordinated Notes (1)(2) | **155.4** | 155.5 |
| HG Global Senior Notes (1)(2) | **147.0** | 146.9 |
| Kudu Credit Facility (1)(2) | **203.8** | 203.8 |
| Other Operations debt (1)(2) | **25.9** | 28.4 |
| Total debt | **532.1** | 564.6 |
| Noncontrolling interests—excluding BAM | **569.3** | 460.9 |
| Total White Mountains’s common shareholders’ equity | **4,470.4** | 4,240.5 |
| Total capital | **5,571.8** | 5,266.0 |
| HG Global’s unearned premium reserve (3) | **267.7** | 265.4 |
| HG Global’s net deferred acquisition costs (3) | **(77.3)** | (76.5) |
| Time-value discount on expected future payments on the BAM Surplus Notes (3) | **(86.3)** | (87.9) |
| Total adjusted capital | **$5,675.9** | $5,367.0 |
| Total debt to total adjusted capital | **9.4%** | 10.5% |

(1) See **Note 7 — “Debt”** for details of debt arrangements.

(2) Net of unamortized issuance 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 March 31, 2024, White Mountains was in compliance in all material respects with all of the covenants under its debt instruments.

### 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 March 31, 2024, 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 three months ended March 31, 2024, White Mountains repurchased and retired 5,269 of its common shares for $8 million at an average share price of $1,505, which was approximately 84% of White Mountains’s adjusted book value per share as of March 31, 2024. All of the shares White Mountains repurchased in the first three months of 2024 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 three months ended March 31, 2023, White Mountains repurchased and retired 18,623 of its common shares for $25 million at an average share price of $1,360, which was approximately 87% of White Mountains’s adjusted book value per share as of March 31, 2023. 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, which do not reduce the amount available under the Board repurchase authorizations.

### Cash Flows

Detailed information concerning White Mountains’s cash flows from continuing operations during the three months ended March 31, 2024 and 2023 follows:

### Cash flows from operations for the three months ended March 31, 2024 and March 31, 2023

Net cash provided from operations was $37 million for the three months ended March 31, 2024 compared to $86 million for the three months ended March 31, 2023. For the three months ended March 31, 2024, there were no contributions to or proceeds from Kudu’s Participation Contracts, compared to $31 million of contributions and $63 million of proceeds in the three months ended March 31, 2023. As of March 31, 2024, the Company and its intermediate holding companies had $427 million of net unrestricted cash, short-term investments and fixed maturity investments, $466 million of MediaAlpha common stock, $152 million of common equity securities and $383 million of private equity funds, hedge funds, ILS funds and unconsolidated entities.

### Cash flows from investing and financing activities for the three months ended March 31, 2024

#### Financing and Other Capital Activities

During the three months ended March 31, 2024, the Company declared and paid a $3 million cash dividend to its common shareholders.

During the three months ended March 31, 2024, White Mountains repurchased and retired 5,269 of its common shares for $8 million, all of which were to satisfy employee income tax withholding pursuant to employee benefit plans.

During the three months ended March 31, 2024, Ark repaid the outstanding balance of $30 million and extinguished the Ark 2007 Subordinated Notes.

During the three months ended March 31, 2024, BAM received $11 million in MSC.

#### Acquisitions and Dispositions

On January 2, 2024, White Mountains closed the Bamboo Transaction in accordance with the terms of the Bamboo Merger Agreement, investing $297 million of equity into Bamboo, which included the contribution of $36 million to retire Bamboo’s legacy credit facility and the contribution of $20 million of primary capital.

### Cash flows from investing and financing activities for the three months ended March 31, 2023

#### Financing and Other Capital Activities

During the three months ended March 31, 2023, the Company declared and paid a $3 million cash dividend to its common shareholders.

During the three months ended March 31, 2023, White Mountains repurchased and retired 18,623 of its common shares for $25 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 three months ended March 31, 2023, BAM received $12 million in MSC.

During the three months ended March 31, 2023, Kudu repaid $17 million in term loans under the Kudu Credit Facility.

### NON-GAAP FINANCIAL MEASURES

This report includes nine non-GAAP financial measures that have been reconciled 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.

The value of HG Global’s unearned premium reserve, net of deferred acquisition costs, was $196 million, $195 million, and $179 million as of March 31, 2024, December 31, 2023 and March 31, 2023, 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 $89 million, $91 million and $96 million less than the nominal GAAP carrying values as of March 31, 2024, December 31, 2023 and March 31, 2023, 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 in-force business at HG Re, HG Global’s reinsurance 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 46.

### 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 adds back interest expense on debt, income tax (expense) benefit, depreciation and amortization of other intangible assets to 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 added back to calculate EBITDA. The items 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 item 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 59.

### Bamboo’s MGA pre-tax income (loss), MGA net income (loss), MGA EBITDA and MGA adjusted EBITDA

Bamboo’s MGA pre-tax income (loss), MGA net income (loss), MGA EBITDA and MGA adjusted EBITDA are non-GAAP financial measures.

MGA pre-tax income (loss) and MGA net income (loss) are non-GAAP financial measures that exclude the results of the Bamboo Captive, which is consolidated under GAAP, from Bamboo’s consolidated GAAP pre-tax income (loss) and net income (loss). The following table presents the reconciliation from Bamboo’s consolidated GAAP pre-tax income (loss) to MGA pre-tax income (loss):

| Millions Bamboo’s consolidated GAAP pre-tax income (loss) Remove pre-tax (income) loss, Bamboo Captive | Three Months Ended March 31, 2024 $.9 .6 |
| --- | ---: |
| MGA pre-tax income (loss) | **$1.5** |

MGA EBITDA is a non-GAAP financial measure that adds back interest expense on debt, income tax (expense) benefit, depreciation and amortization of other intangible assets to MGA net income (loss). MGA adjusted EBITDA is a non-GAAP financial measure that excludes certain other items in GAAP net income (loss) in addition to those added back to calculate MGA EBITDA. The items relate to (i) non-cash equity-based compensation expense, (ii) software implementation expenses and (iii) restructuring expenses. A description of each item follows:

- *Non-cash equity-based compensation expense* - Represents non-cash expenses related to Bamboo’s management compensation that are settled with equity units in Bamboo.
- *Software implementation expenses* - Represents costs directly related to Bamboo’s implementation of new software.
- *Restructuring expenses* - Represents costs directly related to Bamboo’s corporate restructuring.

White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating Bamboo’s performance. See page 61 for the reconciliation of Bamboo’s consolidated GAAP net income (loss) to MGA net income (loss), MGA EBITDA and MGA adjusted EBITDA.

### 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 months ended March 31, 2024 and 2023:

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Total consolidated portfolio return | **4.6%** | 4.5% |
| Remove MediaAlpha | **(3.4)%** | (1.5)% |
| Total consolidated portfolio return excluding MediaAlpha | **1.2%** | 3.0% |

### 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 68.

### CRITICAL ACCOUNTING ESTIMATES

Refer to the Company’s 2023 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s critical accounting estimates.

### 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, 2023;
- claims arising from catastrophic events, such as hurricanes, windstorms, earthquakes, floods, wildfires, tornadoes, tsunamis, severe 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;
- the continued availability of fronting and reinsurance capacity;
- 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.

## Market risk

As filed, 153 characters.

Refer to White Mountains’s 2023 Annual Report on Form 10-K and in particular **Item 7A. - “Quantitative and Qualitative Disclosures About Market Risk.”**

## Controls and procedures

As filed, 665 characters.

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 March 31, 2024. 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 first quarter of 2024 that have materially affected, or are reasonably likely to materially affect, White Mountains’s internal control over financial reporting.

## Risk factors

As filed, 137 characters.

There have been no material changes to any of the risk factors previously disclosed in the Registrant’s 2023 Annual Report

on Form 10-K.

Filed May 9, 2024.
Source: SEC EDGAR, the filing index for accession 0000776867-24-000010. Last ingested by Listed: Nov 6, 2026, 02:06 ET. No prices; not investment advice.