# White Mountains Insurance Group Ltd: Form 10-Q for the period ended Sep 30, 2024

- Company: [White Mountains Insurance Group Ltd](/companies/wtm.md) (CIK 776867)
- Form: 10-Q
- Filed: 2024-11-06
- Accepted by EDGAR: Nov 6, 2024, 08:17 ET
- Period: 2024-09-30
- Accession: 0000776867-24-000019
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/776867/000077686724000019/wtm-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/776867/000077686724000019/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $839.1m | us-gaap:Revenues |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $1.88bn | us-gaap:Revenues |
| Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $7.6m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $22.2m | us-gaap:CostOfGoodsAndServicesSold |
| Interest expense | 3 months, 2024-07-01 to 2024-09-30 | $16.7m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2024-01-01 to 2024-09-30 | $46.7m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $11.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $28.9m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $179.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $360.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $69.68 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $140.66 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $69.68 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $140.66 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 2,532,700 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 2,531,900 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $522.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 9 months, 2024-01-01 to 2024-09-30 | $2.5m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2024-01-01 to 2024-09-30 | $8.1m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Total assets | at 2024-09-30 | $10.34bn | us-gaap:Assets |
| Total liabilities | at 2024-09-30 | $5.08bn | us-gaap:Liabilities |
| Long-term debt | at 2024-09-30 | $544.9m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-09-30 | $4.61bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 136,905 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 90 for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.*

*The following discussion also includes 11 non-GAAP financial measures: (i) adjusted book value per share, (ii) value of BAM Surplus Notes for adjusted book value purposes, (iii) Kudu’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), (iv) Kudu’s adjusted EBITDA, (v) Bamboo’s MGA pre-tax income (loss), (vi) Bamboo’s MGA net income (loss), (vii) Bamboo’s MGA EBITDA, (viii) Bamboo’s MGA adjusted EBITDA, (ix) total consolidated portfolio returns excluding MediaAlpha, (x) adjusted capital and (xi) debt to total adjusted capital, that have been reconciled from their most comparable GAAP financial measures on page 86. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.*

### RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023

### Overview

White Mountains reported book value per share of $1,795 and adjusted book value per share of $1,883 as of September 30, 2024. Book value per share and adjusted book value per share increased 4% and 6% in the third quarter of 2024 and 9% and 11% in the first nine months of 2024, including dividends. The increases in book value per share and adjusted book value per share in the third quarter and first nine months of 2024 were driven primarily by mark-to-market gains from the increase in MediaAlpha’s share price as well as solid operating results and good investment returns. White Mountains’s undeployed capital was approximately $650 million as of September 30, 2024.

As of July 1, 2024, White Mountains no longer consolidates BAM. As of September 30, 2024, the BAM Surplus Notes were fair valued in accordance with GAAP at $411 million, which resulted in a pre-tax unrealized loss to book value of $99 million in the third quarter. As of June 30, 2024, for adjusted book value purposes, the BAM Surplus Notes were valued at $415 million, including an $87 million time value discount.

White Mountains reported book value per share of $1,542 and adjusted book value per share of $1,588 as of September 30, 2023. Book value per share and adjusted book value per share both increased 1% in the third quarter of 2023 and 6% in the first nine months of 2023, including dividends. The increases in book value per share and adjusted book value per share in the third quarter of 2023 were driven primarily by solid operating results and positive returns from other long-term investments, partially offset by the impact of mark-to-market losses from the decline in MediaAlpha’s share price. The increases in book value per share and adjusted book value per share in the first nine months of 2023 were driven primarily

by solid operating results and positive returns across the investments portfolio excluding MediaAlpha,

partially offset by the impact of mark-to-market losses from the decline in MediaAlpha’s share price.

The Ark/WM Outrigger segment’s combined ratio was 77% and 84% in the third quarter and first nine months of 2024 compared to 77% and 83% in the third quarter and first nine months of 2023. Ark/WM Outrigger reported gross written premiums of $374 million and $1,943 million, net written premiums of $339 million and $1,440 million and net earned premiums of $552 million and $1,173 million in the third quarter and first nine months of 2024 compared to gross written premiums of $251 million and $1,667 million, net written premiums of $231 million and $1,306 million and net earned premiums of $499 million and $1,047 million in the third quarter and first nine months of 2023. Ark/WM Outrigger reported pre-tax income of $141 million and $242 million in the third quarter and first nine months of 2024 compared to $99 million and $193 million in the third quarter and first nine months of 2023.

Ark’s combined ratio was 79% and 85% in the third quarter and first nine months of 2024 compared to 81% and 87% in the third quarter and first nine months of 2023. Ark’s combined ratio included 17 points and eight points of catastrophe losses in the third quarter and first nine months of 2024, driven primarily by Hurricanes Helene, Debby and Beryl as well as Calgary hailstorms, compared to 11 points and seven points of catastrophe losses in the third quarter and first nine months of 2023, driven primarily by Hurricane Idalia, the Maui wildfires and various smaller events. Ark’s combined ratio in the third quarter and first nine months of 2024 included five points and three points of net favorable prior year loss reserve development, primarily from property lines of business, compared to less than one point of net favorable prior year loss reserve development and two points of net unfavorable prior year loss reserve development in the third quarter and first nine months of 2023.

Ark reported gross written premiums of $374 million and $1,943 million, net written premiums of $331 million and $1,358 million and net earned premiums of $507 million and $1,111 million in the third quarter and first nine months of 2024 compared to gross written premiums of $251 million and $1,667 million, net written premiums of $225 million and $1,198 million and net earned premiums of $438 million and $972 million in the third quarter and first nine months of 2023. Ark reported pre-tax income of $119 million and $202 million in the third quarter and first nine months of 2024 compared to $62 million and $140 million in the third quarter and first nine months of 2023. Ark’s results included net realized and unrealized investment gains (losses) of $53 million and $84 million in the third quarter and first nine months of 2024 compared to $(7) million and $36 million in the third quarter and first nine months of 2023.

WM Outrigger Re’s combined ratio was 58% and 50% in the third quarter and first nine months of 2024 compared to 44% and 40% in the third quarter and first nine months of 2023. Catastrophe losses in 2024 included Hurricanes Helene, Debby and Beryl as well as Calgary hailstorms. Major catastrophe losses affecting WM Outrigger Re in 2023 were minimal. WM Outrigger Re reported gross and net written premiums of $9 million and $82 million and net earned premiums of $45 million and $63 million in the third quarter and first nine months of 2024 compared to gross and net written premiums of $6 million and $108 million and net earned premiums of $61 million and $75 million in the third quarter and first nine months of 2023. Net earned premiums decreased due to White Mountains’s lower capital commitment to WM Outrigger Re in 2024 compared to 2023. WM Outrigger Re reported pre-tax income of $22 million and $40 million in the third quarter and first nine months of 2024 compared to $37 million and $53 million in the third quarter and first nine months of 2023.

Hurricane Milton represents a significant industry loss event in the fourth quarter. Industry estimates are preliminary and range widely. Ark does not currently expect that Milton losses will cause full year 2024 actual catastrophe losses for Ark/WM Outrigger to diverge materially from full year 2024 planned catastrophe losses.

HG Global reported gross written premiums of $14 million and $35 million and earned premiums of $8 million and $22 million in the third quarter and first nine months of 2024 compared to gross written premiums of $14 million and $32 million and earned premiums of $7 million and $19 million in the third quarter and first nine months of 2023. HG Global reported gross written premiums net of ceding commission paid of $10 million and $24 million in the third quarter and first nine months of 2024 compared to $10 million and $22 million in the third quarter and first nine months of 2023. HG Global’s total par value of policies assumed, which represents its first loss exposure on policies assumed from BAM, was $688 million and $2,012 million in the third quarter and first nine months of 2024 compared to $644 million and $1,594 million in the third quarter and first nine months of 2023. HG Global’s total gross pricing was 203 and 171 basis points in the third quarter and first nine months of 2024, compared to 220 and 200 basis points in the third quarter and first nine months of 2023.

Kudu reported total revenues of $47 million and $128 million, pre-tax income of $38 million and $101 million and adjusted EBITDA of $14 million and $41 million in the third quarter and first nine months of 2024 compared to total revenues of $26 million and $89 million, pre-tax income of $16 million and $62 million and adjusted EBITDA of $12 million and $34 million in the third quarter and first nine months of 2023. Kudu’s revenues, pre-tax income and adjusted EBITDA included $17 million and $50 million of net investment income in the third quarter and first nine months of 2024 compared to $15 million and $44 million in the third quarter and first nine months of 2023. Kudu’s revenues and pre-tax income also included $30 million and $78 million of net realized and unrealized gains in the third quarter and first nine months of 2024 compared to $11 million and $45 million of net realized and unrealized gains in the third quarter and first nine months of 2023.

Bamboo reported commission and fee revenues of $43 million and $97 million and pre-tax income of $16 million and $23 million for the third quarter and first nine months of 2024. Bamboo reported MGA pre-tax income of $14 million and $21 million and MGA adjusted EBITDA of $19 million and $37 million for the third quarter and first nine months of 2024. Managed premiums, which represent the total premium placed by Bamboo, were $148 million and $358 million for the third quarter and first nine months of 2024 compared to $71 million and $140 million for the third quarter and first nine months of 2023 (prior to White Mountains’s ownership of Bamboo). The increase in managed premiums was driven primarily by growth in new business volume as well as a growing renewal book.

As of September 30, 2024, White Mountains owned 17.9 million shares of MediaAlpha, representing a 27% basic ownership interest (25% on a fully-diluted/fully-converted basis). As of September 30, 2024, MediaAlpha’s share price was $18.11 per share, which increased from $13.17 per share as of June 30, 2024. The carrying value of White Mountains’s investment in MediaAlpha was $323 million as of September 30, 2024 compared to $235 million at June 30, 2024. At White Mountains’s current level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $7.00 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 third quarter of 2024, which included $88 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.3% in the third quarter of 2024, driven primarily by net unrealized investment gains and net investment income from the fixed income and other long-term investments portfolios. White Mountains’s total consolidated portfolio return on invested assets was -0.2% in the third quarter of 2023, which included $47 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 0.6% in the third quarter of 2023, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net unrealized investment losses on common equity securities.

White Mountains’s total consolidated portfolio return on invested assets was 9.4% in the first nine months of 2024, which included $160 million of net realized and unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.9% in the first nine months of 2024, driven primarily by net realized and unrealized gains and net investment income from the fixed income and other-long term investments portfolios as well as unrealized investment gains from common equity securities. White Mountains’s total consolidated portfolio return on invested assets was 5.3% in the first nine months of 2023, which included $39 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.3% in the first nine months of 2023, driven primarily by net realized and unrealized investment gains and net investment income from other long-term investments, net investment income from the fixed income portfolio and net realized and unrealized investment gains from common equity securities.

### Adjusted Book Value Per Share

The following table presents White Mountains’s book value per share and reconciles it to adjusted book value per share, a non-GAAP measure as of September 30, 2024, June 30, 2024, December 31, 2023 and September 30, 2023. See **NON-GAAP FINANCIAL MEASURES** on page 86.

| Book value per share numerators (in millions): | September 30, 2024 | June 30, 2024 | December 31, 2023 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| White Mountains’s common shareholders’ equity - GAAP book value per share numerator | **$4,610.6** | $4,422.6 | $4,240.5 | $3,949.1 |
| HG Global’s unearned premium reserve (1) | **278.1** | 271.7 | 265.4 | 254.2 |
| HG Global’s net deferred acquisition costs (1) | **(80.6)** | (78.5) | (76.5) | (73.1) |
| Time value of money discount on expected future payments on the BAM Surplus Notes (1) (2) | **—** | (84.7) | (87.9) | (90.2) |
| Adjusted book value per share numerator | **$4,808.1** | $4,531.1 | $4,341.5 | $4,040.0 |
| **Book value per share denominators (in thousands of shares):** |  |  |  |  |
| Common shares outstanding - GAAP book value per share denominator | **2,568.1** | 2,568.3 | 2,560.5 | 2,560.5 |
| Unearned restricted common shares | **(15.0)** | (18.3) | (12.4) | (15.7) |
| Adjusted book value per share denominator | **2,553.1** | 2,550.0 | 2,548.1 | 2,544.8 |
| GAAP book value per share | **$1,795.31** | $1,722.02 | $1,656.14 | $1,542.36 |
| Adjusted book value per share | **$1,883.24** | $1,776.89 | $1,703.82 | $1,587.59 |
| Year-to-date dividends paid per share | **$1.00** | $1.00 | $1.00 | $1.00 |

(1) Amount reflects White Mountains’s preferred share ownership in HG Global of 96.9%.

(2) For periods subsequent to July 1, 2024, White Mountains carries the BAM Surplus Notes under GAAP at fair value, which incorporates time value into its estimate.

### 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 September 30, 2024, June 30, 2024, December 31, 2023 and September 30, 2023:

| Millions Goodwill: | September 30, 2024 | June 30, 2024 | December 31, 2023 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Ark | **$116.8** | $116.8 | $116.8 | $116.8 |
| Kudu | **7.6** | 7.6 | 7.6 | 7.6 |
| Bamboo (1) | **270.4** | 270.4 | — | — |
| Other Operations | **44.4** | 44.4 | 44.4 | 44.4 |
| Total goodwill | **439.2** | 439.2 | 168.8 | 168.8 |
| **Other intangible assets:** |  |  |  |  |
| Ark | **175.7** | 175.7 | 175.7 | 175.7 |
| Kudu | **.4** | .5 | .7 | .8 |
| Bamboo (1) | **88.6** | 92.6 | — | — |
| Other Operations | **21.8** | 23.0 | 25.4 | 26.8 |
| Total other intangible assets | **286.5** | 291.8 | 201.8 | 203.3 |
| Total goodwill and other intangible assets (2) | **725.7** | 731.0 | 370.6 | 372.1 |
| Goodwill and other intangible assets attributed to noncontrolling interests | **(191.9)** | (193.2) | (94.9) | (95.2) |
| **Goodwill and other intangible assets included in White Mountains’s common shareholders’ equity** | **$533.8** | $537.8 | $275.7 | $276.9 |

(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 September 30, 2024. See “**Bamboo Transaction”** in **Note 2 — “Significant Transactions”** on page 11.

(2) See **Note 4 — “Goodwill and Other Intangible Assets”** on page 26 for details of other intangible assets.

### Summary of Consolidated Results

The following table presents White Mountains’s consolidated financial results for the three and nine months ended September 30, 2024 and 2023:

| Millions Revenues | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| P&C Insurance and Reinsurance revenues | **$633.4** | $512.8 | **$1,333.5** | $1,123.3 |
| Financial Guarantee revenues | **(54.8)** | (7.4) | **(31.2)** | 31.2 |
| Asset Management revenues | **47.2** | 26.3 | **128.1** | 89.4 |
| P&C Insurance Distribution revenues | **55.7** | — | **128.8** | — |
| Other Operations revenues | **157.6** | (12.1) | **322.6** | 186.0 |
| Total revenues | **839.1** | 519.6 | **1,881.8** | 1,429.9 |
| **Expenses** |  |  |  |  |
| P&C Insurance and Reinsurance expenses | **492.6** | 414.0 | **1,091.3** | 930.6 |
| Financial Guarantee expenses | **8.0** | 23.4 | **54.5** | 66.8 |
| Asset Management expenses | **9.3** | 10.0 | **27.2** | 27.8 |
| P&C Insurance Distribution expenses | **40.2** | — | **106.0** | — |
| Other Operations expenses | **49.5** | 51.1 | **165.4** | 167.1 |
| Total expenses | **599.6** | 498.5 | **1,444.4** | 1,192.3 |
| **Pre-tax income (loss)** |  |  |  |  |
| P&C Insurance and Reinsurance pre-tax income (loss) | **140.8** | 98.8 | **242.2** | 192.7 |
| Financial Guarantee pre-tax income (loss) | **(62.8)** | (30.8) | **(85.7)** | (35.6) |
| Asset Management pre-tax income (loss) | **37.9** | 16.3 | **100.9** | 61.6 |
| P&C Insurance Distribution pre-tax income (loss) | **15.5** | — | **22.8** | — |
| Other Operations pre-tax income (loss) | **108.1** | (63.2) | **157.2** | 18.9 |
| **Pre-tax income (loss)** | **239.5** | 21.1 | **437.4** | 237.6 |
| Income tax (expense) benefit | **(11.6)** | (7.3) | **(28.9)** | (19.4) |
| **Net income (loss)** | **227.9** | 13.8 | **408.5** | 218.2 |
| Net (income) loss attributable to noncontrolling interests | **(48.9)** | 9.8 | **(47.7)** | 4.5 |
| **Net income (loss) attributable to White Mountains’s common shareholders** | **179.0** | 23.6 | **360.8** | 222.7 |
| Other comprehensive income (loss), net of tax | **1.3** | (1.7) | **1.1** | .9 |
| **Comprehensive income (loss)** | **180.3** | 21.9 | **361.9** | 223.6 |
| Other comprehensive (income) loss attributable to noncontrolling interests | **(.5)** | .7 | **(.5)** | (.1) |
| **Comprehensive income (loss) attributable to White Mountains’s common shareholders** | **$179.8** | $22.6 | **$361.4** | $223.5 |

55

### I. SUMMARY OF OPERATIONS BY SEGMENT

As of September 30, 2024, White Mountains conducted its operations through four segments: (1) Ark/WM Outrigger, (2) HG Global, (3) Kudu and (4) Bamboo, with its 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. Effective July 1, 2024, White Mountains no longer consolidates BAM. Through June 30, 2024, BAM’s assets, liabilities and noncontrolling interests, as well as its results of operations, are presented within the HG Global segment. See **Note 2 - “Significant Transactions”.**

### Ark/WM Outrigger

The following tables present the components of pre-tax income (loss) included in the Ark/WM Outrigger segment for the three and nine months ended September 30, 2024 and 2023:

| Millions | Three Months Ended September 30, 2024 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | **$239.0** | **$—** | **$—** | **$239.0** |
| Assumed written premiums | **134.6** | **8.8** | **(8.8)** | **134.6** |
| Gross written premiums | **373.6** | **8.8** | **(8.8)** | **373.6** |
| Ceded written premiums | **(43.0)** | **—** | **8.8** | **(34.2)** |
| Net written premiums | **$330.6** | **$8.8** | **$—** | **$339.4** |
| Earned insurance premiums | **$507.2** | **$45.0** | **$—** | **$552.2** |
| Net investment income | **21.3** | **3.0** | **—** | **24.3** |
| Net realized and unrealized investment gains (losses) | **53.2** | **—** | **—** | **53.2** |
| Other revenues | **3.7** | **—** | **—** | **3.7** |
| Total revenues | **585.4** | **48.0** | **—** | **633.4** |
| Loss and loss adjustment expenses | **275.1** | **13.2** | **—** | **288.3** |
| Acquisition expenses | **83.3** | **13.0** | **—** | **96.3** |
| General and administrative expenses - other underwriting | **40.3** | **—** | **—** | **40.3** |
| General and administrative expenses - all other | **28.6** | **—** | **—** | **28.6** |
| Change in fair value of contingent consideration | **34.2** | **—** | **—** | **34.2** |
| Interest expense | **4.9** | **—** | **—** | **4.9** |
| Total expenses | **466.4** | **26.2** | **—** | **492.6** |
| **Pre-tax income (loss)** | **$119.0** | **$21.8** | **$—** | **$140.8** |

56

| Millions | Three Months Ended September 30, 2023 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | $189.4 | $— | $— | $189.4 |
| Assumed written premiums | 61.8 | 6.0 | (6.0) | 61.8 |
| Gross written premiums | 251.2 | 6.0 | (6.0) | 251.2 |
| Ceded written premiums | (26.2) | — | 6.0 | (20.2) |
| Net written premiums | $225.0 | $6.0 | $— | $231.0 |
| Earned insurance premiums | $438.3 | $60.6 | $— | $498.9 |
| Net investment income | 13.9 | 3.0 | — | 16.9 |
| Net realized and unrealized investment gains (losses) | (6.6) | — | — | (6.6) |
| Other revenues | 3.6 | — | — | 3.6 |
| Total revenues | 449.2 | 63.6 | — | 512.8 |
| Loss and loss adjustment expenses | 258.5 | 7.3 | — | 265.8 |
| Acquisition expenses | 71.0 | 19.3 | — | 90.3 |
| General and administrative expenses - other underwriting | 25.5 | — | — | 25.5 |
| General and administrative expenses - all other | 9.8 | .1 | — | 9.9 |
| Change in fair value of contingent consideration | 17.0 | — | — | 17.0 |
| Interest expense | 5.5 | — | — | 5.5 |
| Total expenses | 387.3 | 26.7 | — | 414.0 |
| **Pre-tax income (loss)** | $61.9 | $36.9 | $— | $98.8 |

| Millions | Nine Months Ended September 30, 2024 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | **$863.4** | **$—** | **$—** | **$863.4** |
| Assumed written premiums | **1,079.3** | **82.0** | **(82.0)** | **1,079.3** |
| Gross written premiums | **1,942.7** | **82.0** | **(82.0)** | **1,942.7** |
| Ceded written premiums | **(584.5)** | **—** | **82.0** | **(502.5)** |
| Net written premiums | **$1,358.2** | **$82.0** | **$—** | **$1,440.2** |
| Earned insurance premiums | **$1,110.5** | **$62.8** | **$—** | **$1,173.3** |
| Net investment income | **57.6** | **8.9** | **—** | **66.5** |
| Net realized and unrealized investment gains (losses) | **84.1** | **—** | **—** | **84.1** |
| Other revenues | **9.6** | **—** | **—** | **9.6** |
| Total revenues | **1,261.8** | **71.7** | **—** | **1,333.5** |
| Loss and loss adjustment expenses | **630.4** | **13.6** | **—** | **644.0** |
| Acquisition expenses | **212.9** | **17.9** | **—** | **230.8** |
| General and administrative expenses - other underwriting | **103.9** | **—** | **—** | **103.9** |
| General and administrative expenses - all other | **50.0** | **.1** | **—** | **50.1** |
| Change in fair value of contingent consideration | **47.5** | **—** | **—** | **47.5** |
| Interest expense | **15.0** | **—** | **—** | **15.0** |
| Total expenses | **1,059.7** | **31.6** | **—** | **1,091.3** |
| **Pre-tax income (loss)** | **$202.1** | **$40.1** | **$—** | **$242.2** |

57

| Millions | Nine Months Ended September 30, 2023 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | $727.1 | $— | $— | $727.1 |
| Assumed written premiums | 939.6 | 108.4 | (108.4) | 939.6 |
| Gross written premiums | 1,666.7 | 108.4 | (108.4) | 1,666.7 |
| Ceded written premiums | (468.7) | — | 108.4 | (360.3) |
| Net written premiums | $1,198.0 | $108.4 | $— | $1,306.4 |
| Earned insurance premiums | $971.9 | $75.4 | $— | $1,047.3 |
| Net investment income | 33.5 | 7.7 | — | 41.2 |
| Net realized and unrealized investment gains (losses) | 35.9 | — | — | 35.9 |
| Other revenues | (1.1) | — | — | (1.1) |
| Total revenues | 1,040.2 | 83.1 | — | 1,123.3 |
| Loss and loss adjustment expenses | 573.2 | 7.9 | — | 581.1 |
| Acquisition expenses | 189.3 | 22.2 | — | 211.5 |
| General and administrative expenses - other underwriting | 78.5 | — | — | 78.5 |
| General and administrative expenses - all other | 26.8 | .2 | — | 27.0 |
| Change in fair value of contingent consideration | 16.8 | — | — | 16.8 |
| Interest expense | 15.7 | — | — | 15.7 |
| Total expenses | 900.3 | 30.3 | — | 930.6 |
| **Pre-tax income (loss)** | $139.9 | $52.8 | $— | $192.7 |

### Ark/WM Outrigger Results—Three Months Ended September 30, 2024 versus Three Months Ended September 30, 2023

The Ark/WM Outrigger segment’s combined ratio was 77% in the third quarter of both 2024 and 2023. The Ark/WM Outrigger segment reported gross written premiums of $374 million, net written premiums of $339 million and net earned premiums of $552 million in the third quarter of 2024 compared to gross written premiums of $251 million, net written premiums of $231 million and net earned premiums of $499 million in the third quarter of 2023. The Ark/WM Outrigger segment reported pre-tax income of $141 million in the third quarter of 2024 compared to $99 million in the third quarter of 2023.

Ark’s combined ratio was 79% and 81% in the third quarter of 2024 and 2023. Ark’s combined ratio in the third quarter of 2024 included 17 points of catastrophe losses, driven primarily by Hurricanes Helene, Debby and Beryl as well as Calgary hailstorms, compared to 11 points of catastrophe losses in the third quarter of 2023, which included losses from Hurricane Idalia, the Maui wildfires and various smaller events. Ark’s combined ratio in the third quarter of 2024 included five points of net favorable prior year loss reserve development, primarily due to property lines of business, compared to less than one point of net favorable prior year loss reserve development in the third quarter of 2023.

Ark reported gross written premiums of $374 million, net written premiums of $331 million and net earned premiums of $507 million in the third quarter of 2024 compared to gross written premiums of $251 million, net written premiums of $225 million and net earned premiums of $438 million in the third quarter of 2023. Ark reported pre-tax income of $119 million in the third quarter of 2024 compared to $62 million in the third quarter of 2023. Ark’s results included net realized and unrealized investment gains of $53 million in the third quarter of 2024, driven primarily by net unrealized investment gains from fixed maturity securities due to the decrease in interest rates, compared to net realized and unrealized investment losses $7 million in the third quarter of 2023, driven primarily by the impact of foreign currency on its investment portfolio. Ark’s results also included $34 million for an increase in the fair value of its contingent consideration liability in the third quarter of 2024 compared to $17 million in the third quarter of 2023.

WM Outrigger Re’s combined ratio was 58% in the third quarter of 2024 compared to 44% in the third quarter of 2023. Catastrophe losses in 2024 included Hurricanes Helene, Debby and Beryl as well as Calgary hailstorms. Major catastrophe losses affecting WM Outrigger Re in 2023 were minimal. WM Outrigger Re reported gross and net written premiums of $9 million and net earned premiums of $45 million in the third quarter of 2024 compared to $6 million and $61 million in the third quarter of 2023. Net earned premiums decreased due to White Mountains’s lower capital commitment to WM Outrigger Re in 2024 compared to 2023. WM Outrigger Re reported pre-tax income of $22 million in the third quarter of 2024, compared to $37 million in the third quarter of 2023.

*$ in Millions*

| Insurance premiums: | Three Months Ended September 30, 2024 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | **$373.6** | **$8.8** | **$(8.8)** | **$373.6** |
| Net written premiums | **$330.6** | **$8.8** | **$—** | **$339.4** |
| Net earned premiums | **$507.2** | **$45.0** | **$—** | **$552.2** |
| Insurance expenses: |  |  |  |  |
| Loss and loss adjustment expenses | **$275.1** | **$13.2** | **$—** | **$288.3** |
| Acquisition expenses | **83.3** | **13.0** | **—** | **96.3** |
| Other underwriting expenses (1) | **40.3** | **—** | **—** | **40.3** |
| Total insurance expenses | **$398.7** | **$26.2** | **$—** | **$424.9** |
| Insurance ratios: |  |  |  |  |
| Loss and loss adjustment expense | **54.2%** | **29.3%** | **—%** | **52.2%** |
| Acquisition expense | **16.4** | **28.9** | **—** | **17.4** |
| Other underwriting expense | **7.9** | **—** | **—** | **7.3** |
| Combined Ratio | **78.5%** | **58.2%** | **—%** | **76.9%** |

(1) Included within general and administrative expenses in the consolidated statement of operations.

*$ in Millions*

| Insurance premiums: | Three Months Ended September 30, 2023 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | $251.2 | $6.0 | $(6.0) | $251.2 |
| Net written premiums | $225.0 | $6.0 | $— | $231.0 |
| Net earned premiums | $438.3 | $60.6 | $— | $498.9 |
| Insurance expenses: |  |  |  |  |
| Loss and loss adjustment expenses | $258.5 | $7.3 | $— | $265.8 |
| Acquisition expenses | 71.0 | 19.3 | — | 90.3 |
| Other underwriting expenses (1) | 25.5 | — | — | 25.5 |
| Total insurance expenses | $355.0 | $26.6 | $— | $381.6 |
| Insurance ratios: |  |  |  |  |
| Loss and loss adjustment expense | 59.0% | 12.0% | —% | 53.3% |
| Acquisition expense | 16.2 | 31.8 | — | 18.1 |
| Other underwriting expense | 5.8 | — | — | 5.1 |
| Combined Ratio | 81.0% | 43.8% | —% | 76.5% |

(1) Included within general and administrative expenses in the consolidated statement of operations.

The following table presents WM Outrigger Re’s insurance premiums, combined ratio and pre-tax income by underwriting year for the three months ended September 30, 2024 and 2023:

*$ in Millions*

| Insurance premiums: | Three Months Ended September 30, 2024 2024 Underwriting Year | 2023 Underwriting Year | Total | 2023 2023 Underwriting Year |
| --- | ---: | --- | ---: | ---: |
| Gross written premiums | **$8.6** | **$.2** | **$8.8** | $6.0 |
| Net written premiums | **$8.6** | **$.2** | **$8.8** | $6.0 |
| Net earned premiums | **$44.7** | **$.3** | **$45.0** | $60.6 |
| Combined Ratio | **58.2%** | **61.3%** | **58.2%** | 43.8% |
| Pre-tax income | **$21.7** | **$0.1** | **$21.8** | $36.9 |

#### Gross Written Premiums

Gross written premiums increased 49% to $374 million in the third quarter of 2024 compared to $251 million in the third quarter of 2023. The increase in gross written premiums was driven primarily by the property, specialty and casualty lines of business, aided by the addition of new underwriters and product lines. Risk adjusted rate change decreased less than 1% in the quarter. The following table presents the Ark/WM Outrigger segment’s gross written premiums by line of business for the three months ended September 30, 2024 and 2023:

| Millions | Three Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Property | **$186.9** | $123.9 |
| Specialty | **69.6** | 39.1 |
| Marine & Energy | **57.8** | 49.0 |
| Casualty | **43.4** | 27.3 |
| Accident & Health | **15.9** | 11.9 |
| Total Gross Written Premiums | **$373.6** | $251.2 |

### Ark/WM Outrigger Results—Nine Months Ended September 30, 2024 versus Nine Months Ended September 30, 2023

The Ark/WM Outrigger segment’s combined ratio was 84% and 83% in the first nine months of 2024 and 2023. The Ark/WM Outrigger segment reported gross written premiums of $1,943 million, net written premiums of $1,440 million and net earned premiums of $1,173 million in the first nine months of 2024 compared to gross written premiums of $1,667 million, net written premiums of $1,306 million and net earned premiums of $1,047 million in the first nine months of 2023. The Ark/WM Outrigger segment reported pre-tax income of $242 million in the first nine months of 2024 compared to $193 million in the first nine months of 2023.

Ark’s combined ratio was 85% and 87% in the first nine months of 2024 and 2023. Ark’s combined ratio in the first nine months of 2024 included eight points of catastrophe losses, driven primarily by Hurricanes Helene, Debby and Beryl as well as Calgary hailstorms, compared to seven points of catastrophe losses in the first nine months of 2023, driven primarily by Hurricane Idalia, the Maui wildfires and various smaller events. Non-catastrophe large losses in the first nine months of 2024 included $30 million related to three satellite losses, $19 million related to a political risk claim, $15 million related to the collapse of the Francis Scott Key Bridge in Baltimore and $14 million related to tornado damage in Oklahoma, all on a net basis. Ark’s combined ratio in the first nine months of 2024 included three points of net favorable prior year loss reserve development, primarily due to property lines of business, compared to two points of net unfavorable prior year loss reserve development in the first nine months of 2023, driven primarily by Winter Storm Elliott and three large claims in the property and marine & energy lines of business.

Ark reported gross written premiums of $1,943 million, net written premiums of $1,358 million and net earned premiums of $1,111 million in the first nine months of 2024 compared to gross written premiums of $1,667 million, net written premiums of $1,198 million and net earned premiums of $972 million in the first nine months of 2023.

Ark reported pre-tax income of $202 million in the first nine months of 2024 compared to $140 million in the first nine months of 2023. Ark’s results included net realized and unrealized investment gains of $84 million in the first nine months of 2024, driven primarily by net unrealized investment gains from common equity securities and net unrealized investment gains from fixed maturity securities due to the decrease in interest rates, compared to $36 million in the first nine months of 2023, driven primarily by net unrealized investment gains from other long-term investments. Ark’s results also included $48 million for an increase in the fair value of its contingent consideration liability in the first nine months of 2024 compared to $17 million in the first nine months of 2023.

WM Outrigger Re’s combined ratio was 50% and 40% in the first nine months of 2024 and 2023. Catastrophe losses in 2024 included Hurricanes Helene, Debby and Beryl as well as Calgary hailstorms. Major catastrophe losses affecting WM Outrigger Re in 2023 were minimal. In the first nine months of 2024, WM Outrigger Re’s combined ratio was 52% for underwriting year 2024 and 30% for underwriting year 2023. WM Outrigger Re reported gross and net written premiums of $82 million and net earned premiums of $63 million in the first nine months of 2024 compared to gross and net written premiums of $108 million and net earned premiums of $75 million in the first nine months of 2023. Net earned premiums decreased due to White Mountains’s lower capital commitment to WM Outrigger Re in 2024 compared to 2023. WM Outrigger Re reported pre-tax income of $40 million in the first nine months of 2024, of which $36 million was attributable to underwriting year 2024 and $4 million to underwriting year 2023, compared to $53 million in the first nine months of 2023.

The following tables present the Ark/WM Outrigger segment’s insurance premiums, insurance expenses and insurance ratios for the nine months ended September 30, 2024 and 2023:

*$ in Millions*

| Insurance premiums: | Nine Months Ended September 30, 2024 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | **$1,942.7** | **$82.0** | **$(82.0)** | **$1,942.7** |
| Net written premiums | **$1,358.2** | **$82.0** | **$—** | **$1,440.2** |
| Net earned premiums | **$1,110.5** | **$62.8** | **$—** | **$1,173.3** |
| Insurance expenses: |  |  |  |  |
| Loss and loss adjustment expenses | **$630.4** | **$13.6** | **$—** | **$644.0** |
| Acquisition expenses | **212.9** | **17.9** | **—** | **230.8** |
| Other underwriting expenses (1) | **103.9** | **—** | **—** | **103.9** |
| Total insurance expenses | **$947.2** | **$31.5** | **$—** | **$978.7** |
| Insurance ratios: |  |  |  |  |
| Loss and loss adjustment expense | **56.8%** | **21.7%** | **—%** | **54.9%** |
| Acquisition expense | **19.2** | **28.5** | **—** | **19.7** |
| Other underwriting expense | **9.4** | **—** | **—** | **8.9** |
| Combined Ratio | **85.4%** | **50.2%** | **—%** | **83.5%** |

(1) Included within general and administrative expenses in the consolidated statement of operations.

*$ in Millions*

| Insurance premiums: | Nine Months Ended September 30, 2023 Ark | WM Outrigger Re | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | $1,666.7 | $108.4 | $(108.4) | $1,666.7 |
| Net written premiums | $1,198.0 | $108.4 | $— | $1,306.4 |
| Net earned premiums | $971.9 | $75.4 | $— | $1,047.3 |
| Insurance expenses: |  |  |  |  |
| Loss and loss adjustment expenses | $573.2 | $7.9 | $— | $581.1 |
| Acquisition expenses | 189.3 | 22.2 | — | 211.5 |
| Other underwriting expenses (1) | 78.5 | — | — | 78.5 |
| Total insurance expenses | $841.0 | $30.1 | $— | $871.1 |
| Insurance ratios: |  |  |  |  |
| Loss and loss adjustment expense | 59.0% | 10.5% | —% | 55.5% |
| Acquisition expense | 19.5 | 29.4 | — | 20.2 |
| Other underwriting expense | 8.1 | — | — | 7.5 |
| Combined Ratio | 86.6% | 39.9% | —% | 83.2% |

(1) Included within general and administrative expenses in the consolidated statement of operations.

The following table presents WM Outrigger Re’s insurance premiums, combined ratio and pre-tax income by underwriting year for the nine months ended September 30, 2024 and 2023:

*$ in Millions*

| Insurance premiums: | Nine Months Ended September 30, 2024 2024 Underwriting Year | 2023 Underwriting Year | Total | 2023 2023 Underwriting Year |
| --- | ---: | ---: | ---: | ---: |
| Gross written premiums | **$81.8** | **$.2** | **$82.0** | $108.4 |
| Net written premiums | **$81.8** | **$.2** | **$82.0** | $108.4 |
| Net earned premiums | **$56.9** | **$5.9** | **$62.8** | $75.4 |
| Combined Ratio | **52.3%** | **30.1%** | **50.2%** | 39.9% |
| Pre-tax income | **$36.0** | **$4.1** | **$40.1** | $52.8 |

62

#### Gross Written Premiums

Gross written premiums increased 17% to $1,943 million in the first nine months of 2024 compared to $1,667 million in the first nine months of 2023. The increase in gross written premiums was driven primarily by the property, marine & energy and accident & health lines of business, aided by the addition of new underwriters and product lines. Risk adjusted rate change was flat year-over-year. Growth in the marine & energy and accident & health lines of business was aided by the addition of new teams in London. The risk adjusted rate change on the Outrigger Re Ltd. portfolio of global property reinsurance was down 3% in the first nine months of 2024. The following table presents the Ark/WM Outrigger segment’s gross written premiums by line of business for the nine months ended September 30, 2024 and 2023:

| Millions | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Property | **$943.6** | $809.4 |
| Specialty | **401.8** | 381.9 |
| Marine & Energy | **398.3** | 332.3 |
| Casualty | **108.5** | 84.2 |
| Accident & Health | **90.5** | 58.9 |
| Total Gross Written Premiums | **$1,942.7** | $1,666.7 |

### 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 September 30, 2024 and December 31, 2023:

| Millions Assets | September 30, 2024 Ark | WM Outrigger Re | Eliminations and Segment Adjustments | Total |
| --- | ---: | ---: | ---: | ---: |
| Fixed maturity investments, at fair value | **$1,461.2** | **$—** | **$—** | **$1,461.2** |
| Common equity securities, at fair value | **435.6** | **—** | **—** | **435.6** |
| Short-term investments, at fair value | **379.2** | **199.9** | **—** | **579.1** |
| Other long-term investments | **544.8** | **—** | **—** | **544.8** |
| Total investments | **2,820.8** | **199.9** | **—** | **3,020.7** |
| Cash | **148.7** | **.1** | **—** | **148.8** |
| Reinsurance recoverables | **801.0** | **—** | **(53.0)** | **748.0** |
| Insurance premiums receivable | **993.0** | **28.3** | **(28.3)** | **993.0** |
| Deferred acquisition costs | **195.0** | **4.7** | **—** | **199.7** |
| Goodwill and other intangible assets | **292.5** | **—** | **—** | **292.5** |
| Other assets | **175.8** | **—** | **—** | **175.8** |
| Total assets | **$5,426.8** | **$233.0** | **$(81.3)** | **$5,578.5** |
| **Liabilities** |  |  |  |  |
| Loss and loss adjustment expense reserves | **$2,133.0** | **$28.0** | **$(28.0)** | **$2,133.0** |
| Unearned insurance premiums | **1,149.8** | **25.0** | **(25.0)** | **1,149.8** |
| Debt | **156.8** | **—** | **—** | **156.8** |
| Reinsurance payable | **258.5** | **—** | **(28.3)** | **230.2** |
| Contingent consideration | **141.5** | **—** | **—** | **141.5** |
| Other liabilities | **188.9** | **—** | **—** | **188.9** |
| Total liabilities | **4,028.5** | **53.0** | **(81.3)** | **4,000.2** |
| **Equity** |  |  |  |  |
| White Mountains’s common shareholders’ equity | **1,000.4** | **180.0** | **—** | **1,180.4** |
| Noncontrolling interests | **397.9** | **—** | **—** | **397.9** |
| **Total equity** | **1,398.3** | **180.0** | **—** | **1,578.3** |
| **Total liabilities and equity** | **$5,426.8** | **$233.0** | **$(81.3)** | **$5,578.5** |

63

| 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 |

64

### HG Global

The following tables present the components of pre-tax income (loss) included in the HG Global segment for the three and nine months ended September 30, 2024 and 2023. The HG Global segment consists of HG Global, which includes HG Re and its other wholly-owned subsidiaries, and, prior to its deconsolidation on July 1, 2024, BAM. Through June 30, 2024, BAM’s results of operations are presented within the HG Global segment.

| Millions | Three Months Ended September 30, 2024 HG Global |
| --- | ---: |
| Direct written premiums | **$—** |
| Assumed written premiums | **14.0** |
| Gross written premiums | **14.0** |
| Ceded written premiums | **—** |
| Net written premiums | **$14.0** |
| Earned insurance premiums | **$7.5** |
| Net investment income | **6.0** |
| Net realized and unrealized investment gains (losses) | **22.5** |
| Interest income from BAM Surplus Notes | **7.9** |
| Change in fair value of BAM Surplus Notes | **15.8** |
| Unrealized loss on deconsolidation of BAM | **(114.5)** |
| Other revenues | **—** |
| Total revenues | **(54.8)** |
| Acquisition expenses | **1.9** |
| General and administrative expenses | **.3** |
| Interest expense (1) | **6.1** |
| Total expenses | **8.3** |
| **Pre-tax income (loss)** | **$(63.1)** |

(1) Amount includes $0.3 of intercompany interest expense that is eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany interest expense included within the HG Global segment is eliminated against the offsetting intercompany interest income included within Other Operations.

| Millions | Three Months Ended September 30, 2023 HG Global | BAM | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | $— | $16.5 | $— | $16.5 |
| Assumed written premiums | 14.2 | — | (14.2) | — |
| Gross written premiums | 14.2 | 16.5 | (14.2) | 16.5 |
| Ceded written premiums | — | (14.2) | 14.2 | — |
| Net written premiums | $14.2 | $2.3 | $— | $16.5 |
| Earned insurance premiums | $6.6 | $1.3 | $— | $7.9 |
| Net investment income | 4.3 | 3.8 | — | 8.1 |
| Net realized and unrealized investment gains (losses) | (13.6) | (10.5) | — | (24.1) |
| Interest income from BAM Surplus Notes | 6.6 | — | (6.6) | — |
| Other revenues | — | .7 | — | .7 |
| Total revenues | 3.9 | (4.7) | (6.6) | (7.4) |
| Acquisition expenses | 2.0 | .1 | — | 2.1 |
| General and administrative expenses | .5 | 17.0 | — | 17.5 |
| Interest expense (1) | 3.9 | — | — | 3.9 |
| Interest expense from BAM Surplus Notes | — | 6.6 | (6.6) | — |
| Total expenses | 6.4 | 23.7 | (6.6) | 23.5 |
| **Pre-tax income (loss)** | $(2.5) | $(28.4) | $— | $(30.9) |
| **Supplemental information:** |  |  |  |  |
| MSC collected (2) | $— | $19.9 | $— | $19.9 |

(1) Amount includes $0.1 of intercompany interest expense that is eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany interest expense included within the HG Global segment is eliminated against the offsetting intercompany interest income included within Other Operations.

(2) MSC collected are recorded directly to BAM’s equity, which was recorded as noncontrolling interest on White Mountains’s balance sheet through June 30, 2024.

| Millions | Nine Months Ended September 30, 2024 HG Global | BAM (1) | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | **$—** | **$24.1** | **$—** | **$24.1** |
| Assumed written premiums | **34.5** | **—** | **(20.5)** | **14.0** |
| Gross written premiums | **34.5** | **24.1** | **(20.5)** | **38.1** |
| Ceded written premiums | **—** | **(20.5)** | **20.5** | **—** |
| Net written premiums | **$34.5** | **$3.6** | **$—** | **$38.1** |
| Earned insurance premiums | **$21.5** | **$2.8** | **$—** | **$24.3** |
| Net investment income | **17.3** | **8.8** | **—** | **26.1** |
| Net realized and unrealized investment gains (losses) | **13.2** | **(5.1)** | **—** | **8.1** |
| Interest income from BAM Surplus Notes | **21.1** | **—** | **(13.2)** | **7.9** |
| Change in fair value of BAM Surplus Notes | **15.8** | **—** | **—** | **15.8** |
| Unrealized loss on deconsolidation of BAM | **(114.5)** | **—** | **—** | **(114.5)** |
| Other revenues | **—** | **1.1** | **—** | **1.1** |
| Total revenues | **(25.6)** | **7.6** | **(13.2)** | **(31.2)** |
| Acquisition expenses | **5.9** | **.4** | **—** | **6.3** |
| General and administrative expenses (2) | **1.0** | **33.5** | **—** | **34.5** |
| Interest expense (3) | **14.2** | **—** | **—** | **14.2** |
| Interest expense from BAM Surplus Notes | **—** | **13.2** | **(13.2)** | **—** |
| Total expenses | **21.1** | **47.1** | **(13.2)** | **55.0** |
| **Pre-tax income (loss)** | **$(46.7)** | **$(39.5)** | **$—** | **$(86.2)** |
| **Supplemental information:** |  |  |  |  |
| MSC collected (4) | **$—** | **$26.0** | **$—** | **$26.0** |

(1) Effective July 1, 2024, White Mountains no longer consolidates BAM. For the period from January 1, 2024 through June 30, 2024, BAM’s results of operations are presented within the HG Global segment.

(2) Amount includes $(0.3) of intercompany general and administrative expenses that are eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany general and administrative expenses included within the HG Global segment are eliminated against the offsetting intercompany general and administrative expenses included within Other Operations.

(3) Amount includes $0.8 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 segment is eliminated against the offsetting intercompany interest income included within Other Operations.

(4) MSC collected are recorded directly to BAM’s equity, which was recorded as noncontrolling interest on White Mountains’s balance sheet through June 30, 2024.

| Millions | Nine Months Ended September 30, 2023 HG Global | BAM | Eliminations | Total |
| --- | ---: | ---: | ---: | ---: |
| Direct written premiums | $— | $37.3 | $— | $37.3 |
| Assumed written premiums | 31.9 | — | (31.9) | — |
| Gross written premiums | 31.9 | 37.3 | (31.9) | 37.3 |
| Ceded written premiums | — | (31.9) | 31.9 | — |
| Net written premiums | $31.9 | $5.4 | $— | $37.3 |
| Earned insurance premiums | $19.4 | $3.9 | $— | $23.3 |
| Net investment income | 12.4 | 10.5 | — | 22.9 |
| Net realized and unrealized investment gains (losses) | (11.4) | (5.6) | — | (17.0) |
| Interest income from BAM Surplus Notes | 19.7 | — | (19.7) | — |
| Other revenues | — | 2.0 | — | 2.0 |
| Total revenues | 40.1 | 10.8 | (19.7) | 31.2 |
| Acquisition expenses | 5.6 | .7 | — | 6.3 |
| General and administrative expenses | 1.9 | 47.8 | — | 49.7 |
| Interest expense (3) | 11.1 | — | — | 11.1 |
| Interest expense from BAM Surplus Notes | — | 19.7 | (19.7) | — |
| Total expenses | 18.6 | 68.2 | (19.7) | 67.1 |
| **Pre-tax income (loss)** | $21.5 | $(57.4) | $— | $(35.9) |
| **Supplemental information:** |  |  |  |  |
| MSC collected (2) | $— | $46.4 | $— | $46.4 |

(1) Amount includes $0.3 of intercompany interest expense that is eliminated in White Mountains’s consolidated financial statements. For segment reporting, HG Global’s intercompany interest expense included within the HG Global segment is eliminated against the offsetting intercompany interest income included within Other Operations.

(2) MSC collected are recorded directly to BAM’s equity, which was recorded as noncontrolling interest on White Mountains’s balance sheet through June 30, 2024.

### HG Global Results—Three Months Ended September 30, 2024 versus Three Months Ended September 30, 2023

Effective July 1, 2024, White Mountains no longer consolidates BAM. Upon deconsolidation, the BAM Surplus Notes, including accrued interest receivable, were fair valued in accordance with GAAP at $387 million, which resulted in an unrealized loss on deconsolidation of $115 million. As of September 30, 2024, the BAM Surplus Notes were fair valued at $411 million, which included accrued interest of $8 million and an increase in fair value of $16 million, driven by lower interest rates, during the third quarter of 2024. As of June 30, 2024, for adjusted book value purposes, the BAM Surplus Notes were valued at $415 million, including an $87 million time value discount.

HG Global reported gross written premiums of $14 million and earned premiums of $8 million in the third quarter of 2024 compared to gross written premiums of $14 million and earned premiums of $7 million in the third quarter of 2023. HG Global reported gross written premiums net of ceding commission paid of $10 million in the third quarter of 2024 compared to $10 million in the third quarter of 2023. HG Global’s total par value of policies assumed, which represents its first loss exposure on policies assumed from BAM, was $688 million in the third quarter of 2024, of which $582 million was in the primary market, compared to $644 million in the third quarter of 2023, of which $553 million was in the primary market.

HG Global’s total gross pricing was 203 basis points in the third quarter of 2024, compared to 220 basis points in the third quarter of 2023. Pricing in the primary market increased to 168 basis points in the third quarter of 2024 compared to 156 basis points in the third quarter of 2023. Pricing in the secondary market, which is more transaction specific than pricing in the primary market, decreased to 396 basis points in the third quarter of 2024 compared to 611 basis points in the third quarter of 2023. Total pricing net of ceding commission paid decreased to 144 basis points in the third quarter of 2024 compared to 152 basis points in the third quarter of 2023.

The following table presents HG Global’s par value assumed, reinsurance premiums and pricing for the three months ended September 30, 2024 and 2023:

| HG Global Par value assumed: | Three Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Par value of primary market policies assumed (1) | **$582.3** | $552.7 |
| Par value of secondary market policies assumed (1) | **106.1** | 91.6 |
| Total par value of policies assumed | **$688.4** | $644.3 |
| Reinsurance premiums: |  |  |
| Gross written premiums from primary market | **$9.8** | $8.6 |
| Gross written premiums from secondary market | **4.2** | 5.6 |
| Total gross written premiums | **14.0** | 14.2 |
| Ceding commission paid | **4.1** | 4.4 |
| Total gross written premiums net of ceding commission paid | **$9.9** | $9.8 |
| Earned premiums | **$7.5** | $6.6 |
| Pricing: |  |  |
| Gross pricing from primary market | **168 bps** | 156 bps |
| Gross pricing from secondary market | **396 bps** | 611 bps |
| Total gross pricing | **203 bps** | 220 bps |
| Total pricing net of ceding commission paid | **144 bps** | 152 bps |

(1) For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds.

HG Global reported pre-tax loss of $63 million in the third quarter of 2024 compared to $3 million in the third quarter of 2023. HG Global’s results in the third quarter of 2024 included the loss on deconsolidation of $115 million, partially offset by the increase in fair value of the BAM Surplus Notes of $16 million. HG Global’s results in the third quarter of 2024 included net realized and unrealized investment gains (losses) on its fixed income portfolio of $23 million, compared to $(14) million in the third quarter of 2023, driven by the movement of interest rates in each period. HG Global’s results in the third quarter of 2024 and 2023 included interest income on the BAM Surplus Notes of $8 million and $7 million.

### HG Global Results—Nine Months Ended September 30, 2024 versus Nine Months Ended September 30, 2023

HG Global reported gross written premiums of $35 million and earned premiums of $22 million in the first nine months of 2024 compared to gross written premiums of $32 million and earned premiums of $19 million in the first nine months of 2023. HG Global reported gross written premiums net of ceding commission paid of $24 million in the first nine months of 2024 compared to $22 million in the first nine months of 2023. HG Global’s total par value of policies assumed, which represents its first loss exposure on policies assumed from BAM, was $2,012 million in the first nine months of 2024, of which $1,760 million was in the primary market, compared to $1,594 million in the first nine months of 2023, of which $1,311 million was in the primary market.

HG Global’s total gross pricing was 171 basis points in the first nine months of 2024, compared to 200 basis points in the first nine months of 2023. Pricing in the primary market decreased to 133 basis points in the first nine months of 2024 compared to 148 basis points in the first nine months of 2023, due to tighter municipal bond spreads and the volume of large higher-credit issuances that BAM insured. Pricing in the secondary market, which is more transaction specific than pricing in the primary market, decreased to 437 basis points in the first nine months of 2024 compared to 442 basis points in the first nine months of 2023. Total pricing net of ceding commission paid decreased to 121 basis points in the first nine months of 2024 compared to 139 basis points in the first nine months of 2023.

The following table presents HG Global’s par value assumed, reinsurance premiums and pricing for the nine months ended September 30, 2024 and 2023:

| HG Global Par value assumed: | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Par value of primary market policies assumed (1) | **$1,760.3** | $1,310.8 |
| Par value of secondary market policies assumed (1) | **252.0** | 283.1 |
| Total par value of policies assumed | **$2,012.3** | $1,593.9 |
| Reinsurance premiums: |  |  |
| Gross written premiums from primary market | **$23.5** | $19.4 |
| Gross written premiums from secondary market | **11.0** | 12.5 |
| Total gross written premiums | **34.5** | 31.9 |
| Ceding commission paid | **10.1** | 9.7 |
| Total gross written premiums net of ceding commission paid | **$24.4** | $22.2 |
| Earned premiums | **$21.5** | $19.4 |
| Pricing: |  |  |
| Gross pricing from primary market | **133 bps** | 148 bps |
| Gross pricing from secondary market | **437 bps** | 442 bps |
| Total gross pricing | **171 bps** | 200 bps |
| Total pricing net of ceding commission paid | **121 bps** | 139 bps |

(1) For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds.

HG Global reported pre-tax income (loss) of $(47) million in the nine months of 2024 compared to $22 million in the first nine months of 2023. HG Global’s results in the first nine months of 2024 included the loss on deconsolidation of $115 million, partially offset by the increase in fair value of the BAM Surplus Notes of $16 million. HG Global’s results in the first nine months of 2024 included net realized and unrealized investment gains (losses) on its fixed income portfolio of $13 million compared to $(11) million in the first nine months of 2023, driven by the movement of interest rates in each period. HG Global’s results in the first nine months of 2024 included interest income on the BAM Surplus Notes of $21 million compared to $20 million in the first nine months of 2023.

### HG Global Balance Sheets

The following tables present amounts for the HG Global segment that are presented within White Mountains’s consolidated balance sheet as of September 30, 2024 and December 31, 2023. The HG Global segment consists of HG Global, which includes HG Re and its other wholly-owned subsidiaries, and, prior to its deconsolidation on July 1, 2024, BAM. Effective July 1, 2024, White Mountains no longer consolidates BAM. Through June 30, 2024, BAM’s assets, liabilities, and noncontrolling interests are presented within the HG Global segment.

| Millions Assets | September 30, 2024 HG Global |
| --- | ---: |
| Fixed maturity investments, at fair value | **$636.1** |
| Short-term investments, at fair value | **34.6** |
| Total investments | **670.7** |
| Cash | **1.2** |
| BAM Surplus Notes, at fair value (1) | **411.1** |
| Insurance premiums receivable | **7.9** |
| Deferred acquisition costs | **83.2** |
| Other assets | **27.8** |
| Total assets | **$1,201.9** |
| **Liabilities** |  |
| Preferred dividends payable to White Mountains (2) | **446.4** |
| Preferred dividends payable to noncontrolling interests | **13.7** |
| Unearned insurance premiums | **287.0** |
| Debt | **147.3** |
| Intercompany debt (2) | **12.6** |
| Accrued incentive compensation | **1.1** |
| Other liabilities | **4.8** |
| Total liabilities | **912.9** |
| **Equity** |  |
| White Mountains’s common shareholders’ equity (2) | **298.3** |
| Noncontrolling interests | **(9.3)** |
| **Total equity** | **289.0** |
| **Total liabilities and equity** | **$1,201.9** |

(1) The fair value of the BAM Surplus Notes includes accrued interest receivable.

(2) HG Global’s preferred dividends payable to White Mountains of $446.4 and intercompany debt of $12.6 are eliminated in White Mountains’s consolidated financial statements. For segment reporting, these amounts are included within the HG Global segment and are eliminated against the offsetting receivables included within Other Operations. After intercompany eliminations, HG Global’s total equity attributable to White Mountains’s common shareholders is $757.3.

| 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, at nominal value | 322.2 | — | (322.2) | — |
| Accrued interest receivable on BAM Surplus Notes, at nominal value | 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, at nominal value (1) | $— | $322.2 | $(322.2) | $— |
| Accrued interest payable on BAM Surplus Notes, at nominal value (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 (3) | 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) | 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 were classified as debt prior to the deconsolidation of BAM on July 1, 2024. 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 of $399.8 and intercompany debt of $4.0 are eliminated in White Mountains’s consolidated financial statements. For segment reporting, these amounts are included within the HG Global segment and are eliminated against the offsetting receivables included within Other Operations. After intercompany eliminations, HG Global’s total equity attributable to White Mountains’s common shareholders is $779.3.

### Kudu

As of September 30, 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 September 30, 2024, the asset and wealth management firms had combined assets under management (“AUM”) of approximately $117 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 approximately 10% based on expected cash flows in the first year following deployment.

The following table presents the components of GAAP net income (loss), EBITDA and adjusted EBITDA included in the Kudu segment for the three and nine months ended September 30, 2024 and 2023:

| Millions | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net investment income (1) | **$17.2** | $15.1 | **$50.1** | $44.0 |
| Net realized and unrealized investment gains (losses) | **29.5** | 11.2 | **77.5** | 45.4 |
| Other revenues | **.5** | — | **.5** | — |
| Total revenues | **47.2** | 26.3 | **128.1** | 89.4 |
| General and administrative expenses | **3.6** | 4.5 | **10.5** | 12.3 |
| Interest expense | **5.7** | 5.5 | **16.7** | 15.5 |
| Total expenses | **9.3** | 10.0 | **27.2** | 27.8 |
| GAAP pre-tax income (loss) | **37.9** | 16.3 | **100.9** | 61.6 |
| Income tax (expense) benefit | **(9.2)** | (4.6) | **(18.3)** | (13.9) |
| GAAP net income (loss) | **28.7** | 11.7 | **82.6** | 47.7 |
| Add back: |  |  |  |  |
| Interest expense | **5.7** | 5.5 | **16.7** | 15.5 |
| Income tax expense (benefit) | **9.2** | 4.6 | **18.3** | 13.9 |
| Depreciation expense | **.1** | .1 | **.1** | .1 |
| Amortization of other intangible assets | **—** | — | **.2** | .2 |
| EBITDA (2) | **43.7** | 21.9 | **117.9** | 77.4 |
| Exclude: |  |  |  |  |
| Net realized and unrealized investment (gains) losses | **(29.5)** | (11.2) | **(77.5)** | (45.4) |
| Transaction expenses | **.2** | 1.1 | **.3** | 2.4 |
| Adjusted EBITDA (2) | **$14.4** | $11.8 | **$40.7** | $34.4 |

(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 86.

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

| Millions | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Beginning balance of Kudu’s Participation Contracts (1) | **$901.3** | $737.1 | **$890.5** | $695.9 |
| Contributions to Participation Contracts (2) | **—** | 26.7 | **.2** | 144.1 |
| Proceeds from Participation Contracts sold (2) (3) | **—** | — | **(37.5)** | (110.4) |
| Net realized and unrealized investment gains (losses) on Participation Contracts sold and pending sale (4) | **—** | (.6) | **(6.3)** | (1.8) |
| Net unrealized investment gains (losses) on Participation Contracts - all other (5) | **29.3** | 12.1 | **83.7** | 47.5 |
| Ending balance of Kudu’s Participation Contracts (1) | **$930.6** | $775.3 | **$930.6** | $775.3 |

(1) As of September 30, 2023, January 1, 2024 and September 30, 2024, Kudu’s other long-term investments also include $5.4, $5.8 and $6.2 related to a private debt instrument.

(2) Includes $35.8 of non-cash contributions to (proceeds from) Participation Contracts for the nine months ended September 30, 2023.

(3) Includes $28.6 of proceeds receivable from Participation Contracts sold during the three and nine months ended September 30, 2024.

(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 September 30, 2024 versus Three Months Ended September 30, 2023

Kudu reported total revenues of $47 million, pre-tax income of $38 million and adjusted EBITDA of $14 million in the third quarter of 2024 compared to total revenues of $26 million, pre-tax income of $16 million and adjusted EBITDA of $12 million in the third quarter of 2023. Total revenues, pre-tax income and adjusted EBITDA included $17 million of net investment income in the third quarter of 2024 compared to $15 million in the third quarter of 2023. The increase in net investment income was driven primarily by amounts earned from new deployments that Kudu made subsequent to September 30, 2023 along with higher dividends from existing Participation Contracts due to growth in assets under management, partially offset by lower distributions from several underlying asset managers. Total revenues and pre-tax income also included $30 million of net realized and unrealized investment gains in the third quarter of 2024 compared to $11 million in the third quarter of 2023. Investment gains for the third quarter of 2024 were driven primarily by increases in the fair value of Kudu’s Participation Contracts as a result of lower discount rates. Investment gains for the third quarter of 2023 were driven primarily by increases in the fair value of Kudu’s Participation Contracts as a result of increased expected growth from certain underlying asset managers, partially offset by higher discount rates.

### Kudu Results—Nine Months Ended September 30, 2024 versus Nine Months Ended September 30, 2023

Kudu reported total revenues of $128 million, pre-tax income of $101 million and adjusted EBITDA of $41 million in the first nine months of 2024 compared to total revenues of $89 million, pre-tax income of $62 million and adjusted EBITDA of $34 million in the first nine months of 2023. Total revenues, pre-tax income and adjusted EBITDA included $50 million of net investment income in the first nine months of 2024 compared to $44 million in the first nine months of 2023. The increase in net investment income was driven primarily by amounts earned from new deployments that Kudu made subsequent to September 30, 2023 along with higher dividends from existing Participation Contracts due to growth in assets under management, partially offset by lower distributions from several underlying asset managers. Total revenues and pre-tax income also included $78 million of net realized and unrealized investment gains in the first nine months of 2024 compared to $45 million in the first nine months of 2023. Investment gains for the first nine months of 2024 were driven primarily by increases in the fair value of Kudu’s Participation Contracts as a result of lower discount rates and increased growth at several underlying asset managers, partially offset by an unrealized loss from a publicly listed security received by Kudu in a prior sales transaction. Investment gains for the first nine months of 2023 were driven primarily by increases in the fair value of Kudu’s Participation Contracts as a result of increased growth at several underlying asset managers, partially offset by an unrealized loss from a publicly listed security received by Kudu in a prior sales transaction.

### 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.

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 and nine months ended September 30, 2024:

| Millions | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
| --- | ---: | ---: |
| Commission and fee revenues | **$42.7** | **$97.3** |
| Earned insurance premiums | **10.6** | **27.0** |
| Other revenues | **2.4** | **4.5** |
| Total revenues | **55.7** | **128.8** |
| Broker commission expenses | **15.9** | **37.9** |
| Loss and loss adjustment expenses | **4.4** | **14.5** |
| Acquisition expenses | **3.7** | **9.7** |
| General and administrative expenses | **16.2** | **43.9** |
| Total expenses | **40.2** | **106.0** |
| GAAP pre-tax income (loss) | **15.5** | **22.8** |
| Income tax (expense) benefit | **(2.7)** | **(4.2)** |
| GAAP net income (loss) | **12.8** | **18.6** |
| Exclude: |  |  |
| Net (income) loss, Bamboo Captive | **(1.9)** | **(1.9)** |
| MGA net income (loss) (1) | **10.9** | **16.7** |
| Add back: |  |  |
| Income tax expense (benefit) | **2.7** | **4.2** |
| Depreciation expense | **.1** | **.1** |
| Amortization of other intangible assets | **3.9** | **12.4** |
| MGA EBITDA (1) | **17.6** | **33.4** |
| Exclude: |  |  |
| Non-cash equity-based compensation expense | **.4** | **1.0** |
| Software implementation expenses | **.5** | **1.4** |
| Restructuring expenses | **.1** | **.7** |
| MGA adjusted EBITDA (1) | **$18.6** | **$36.5** |

(1) See “**NON-GAAP FINANCIAL MEASURES”** on page 86.

### Bamboo Results—Three and Nine Months Ended September 30, 2024

Bamboo reported commission and fee revenues of $43 million and $97 million and pre-tax income of $16 million and $23 million for the third quarter and first nine months of 2024. Commission and fee revenues were more than double Bamboo’s commissions and fee revenues for the third quarter and first nine months of 2023 (prior to White Mountains’s ownership of Bamboo), driven primarily by higher managed premiums. Bamboo reported MGA pre-tax income of $14 million and $21 million and MGA adjusted EBITDA of $19 million and $37 million for the third quarter and first nine months of 2024.

### Managed premiums

Managed premiums represent the total premiums placed by Bamboo during the period. Managed premiums were $148 million for the third quarter of 2024 compared to $71 million for the third quarter of 2023 (prior to White Mountains’s ownership of Bamboo). Managed premiums were $358 million for the first nine months of 2024 compared to $140 million for the first nine months of 2023 (prior to White Mountains’s ownership of Bamboo). The increase in managed premiums was driven primarily by growth in new business volume as well as a growing renewal book.

The following table presents Bamboo’s managed premiums for the three and nine months ended September 30, 2024 and 2023, which includes periods 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 September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| New | **$84.2** | $53.8 | **$235.3** | $91.8 |
| Renewal | **64.1** | 17.4 | **122.3** | 48.1 |
| **Total Managed Premiums** | **$148.3** | $71.2 | **$357.6** | $139.9 |

### Other Operations

The following table presents the components of pre-tax income (loss) included in White Mountains’s Other Operations for the three and nine months ended September 30, 2024 and 2023:

| Millions | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Earned insurance premiums | **$11.2** | $— | **$19.8** | $— |
| Net investment income | **9.6** | 8.0 | **27.9** | 22.0 |
| Net realized and unrealized investment gains (losses) | **29.7** | 8.0 | **60.4** | 125.8 |
| Net realized and unrealized investment gains (losses) from investment in MediaAlpha | **88.2** | (46.8) | **159.7** | (38.9) |
| Commission and fee revenues | **4.1** | 3.5 | **11.1** | 10.0 |
| Other revenues | **14.8** | 15.2 | **43.7** | 67.1 |
| Total revenues | **157.6** | (12.1) | **322.6** | 186.0 |
| Loss and loss adjustment expenses | **4.2** | — | **8.1** | — |
| Acquisition expenses | **4.5** | — | **7.1** | — |
| Cost of sales | **7.6** | 8.0 | **22.2** | 33.5 |
| General and administrative expenses | **32.9** | 42.2 | **126.4** | 130.7 |
| Interest expense | **.3** | .9 | **1.6** | 2.9 |
| Total expenses | **49.5** | 51.1 | **165.4** | 167.1 |
| **Pre-tax income (loss)** | **$108.1** | $(63.2) | **$157.2** | $18.9 |

76

### Other Operations Results—Three Months Ended September 30, 2024 versus Three Months Ended September 30, 2023

White Mountains’s Other Operations reported pre-tax income (loss) of $108 million in the third quarter of 2024 compared to $(63) million in the third quarter of 2023. White Mountains’s Other Operations reported net realized and unrealized investment gains (losses) from its investment in MediaAlpha of $88 million in the third quarter of 2024 compared to $(47) million in the third quarter of 2023. Excluding MediaAlpha, White Mountains’s Other Operations reported net realized and unrealized investment gains of $30 million in the third quarter of 2024, driven by gains across the portfolio, compared to $8 million in the third quarter of 2023, driven primarily by gains from other long-term investments, partially offset by losses from fixed income and common equity securities. White Mountains’s Other Operations reported net investment income of $10 million in the third quarter of 2024 compared to $8 million in the third quarter of 2023. See **Summary of Investment Results** on page 78.

White Mountains’s Other Operations reported $15 million of other revenues in the third quarter of both 2024 and 2023. White Mountains’s Other Operations reported $8 million of cost of sales in the third quarter of both 2024 and 2023.

White Mountains’s Other Operations reported general and administrative expenses of $33 million in the third quarter of 2024 compared to $42 million in the third quarter of 2023. Other Operations general and administrative expenses in the third quarter of 2024 included $16 million of parent company compensation and benefits compared to $21 million in the third quarter of 2023.

In the third quarter of 2024, White Mountains’s Other Operations reported $11 million of earned premiums, $4 million of loss and loss adjustment expenses and $5 million of acquisition expenses related to Bamboo CRV.

### Other Operations Results—Nine Months Ended September 30, 2024 versus Nine Months Ended September 30, 2023

White Mountains’s Other Operations reported pre-tax income of $157 million in the first nine months of 2024 compared to $19 million in the first nine months of 2023. White Mountains’s Other Operations results included net realized and unrealized investment gains (losses) from its investment in MediaAlpha of $160 million in the first nine months of 2024 compared to $(39) million in the first nine months of 2023. Excluding MediaAlpha, White Mountains’s Other Operations results included net realized and unrealized investment gains of $60 million in the first nine months of 2024 compared to $126 million in the first nine months of 2023, driven primarily by gains from common equity securities and other long-term investments in both periods. White Mountains’s Other Operations results included net investment income of $28 million in the first nine months of 2024 compared to $22 million in the first nine months of 2023. See **Summary of Investment Results** on page 78.

White Mountains’s Other Operations reported $44 million of other revenues in the first nine months of 2024 compared to $67 million in the first nine months of 2023. White Mountains’s Other Operations reported $22 million of cost of sales in the first nine months of 2024 compared to $34 million in the first nine months of 2023. The decrease in other revenues and cost of sales were driven primarily by a business sold within Other Operations in 2023.

White Mountains’s Other Operations reported general and administrative expenses of $126 million in the first nine months of 2024 compared to $131 million in the first nine months of 2023. Other Operations general and administrative expenses in the first nine months of 2024 included $67 million of parent company compensation and benefits compared to $62 million in the first nine months of 2023.

In the first nine months of 2024, White Mountains’s Other Operations reported $20 million of earned premiums, $8 million of loss and loss adjustment expenses and $7 million of acquisition expenses related to Bamboo CRV.

### II. Summary of Investment Results

White Mountains’s total investment results include results from all segments. Effective July 1, 2024, White Mountains no longer consolidates BAM. White Mountains’s consolidated financial statements through June 30, 2024 included BAM’s fixed income portfolio and related investment results. See **Note 2 — “Significant Transactions.”** 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 and nine months ended September 30, 2024 and 2023:

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Fixed income investments | **2.9%** | —% | **4.6%** | 2.5% |
| Bloomberg Barclays U.S. Intermediate Aggregate Index | **4.6%** | (1.9)% | **4.6%** | (0.3)% |
| Common equity securities | **4.0%** | (2.5)% | **12.1%** | 6.8% |
| Investment in MediaAlpha | **37.5%** | (19.9)% | **59.0%** | (17.2)% |
| Other long-term investments | **3.7%** | 2.8% | **9.5%** | 12.4% |
| Total common equity securities, investment in MediaAlpha and other long-term investments | **6.5%** | (0.4)% | **15.1%** | 8.6% |
| Total common equity securities and other long-term investments | **3.8%** | 1.4% | **10.1%** | 11.1% |
| S&P 500 Index (total return) | **5.9%** | (3.3)% | **22.1%** | 13.1% |
| Total consolidated portfolio | **4.6%** | (0.2)% | **9.4%** | 5.3% |
| Total consolidated portfolio - excluding MediaAlpha | **3.3%** | 0.6% | **6.9%** | 6.3% |

### Investment Returns—Three and Nine Months Ended September 30, 2024 versus Three and Nine Months Ended September 30, 2023

White Mountains’s total consolidated portfolio return on invested assets was 4.6% in the third quarter of 2024, which included $88 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.3% in the third quarter of 2024, driven primarily by net unrealized investment gains and net investment income from the fixed income and other long-term investments portfolios. White Mountains’s total consolidated portfolio return on invested assets was -0.2% in the third quarter of 2023, which included $47 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 0.6% in the third quarter of 2023, driven primarily by net unrealized investment gains and net investment income from other long-term investments, partially offset by net unrealized investment losses on common equity securities.

White Mountains’s total consolidated portfolio return on invested assets was 9.4% in the first nine months of 2024, which included $160 million of net realized and unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.9% in the first nine months of 2024, driven primarily by net realized and unrealized gains and net investment income from the fixed income and other-long term investments portfolios and unrealized investment gains from common equity securities. White Mountains’s total consolidated portfolio return on invested assets was 5.3% in the first nine months of 2023, which included $39 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.3% in the first nine months of 2023, driven primarily by net realized and unrealized investment gains and net investment income from other long-term investments, net investment income from the fixed income portfolio and net realized and unrealized investment gains from common equity securities.

#### Fixed Income Results

White Mountains’s fixed income portfolio, including short-term investments, totaled $3.3 billion and $3.6 billion as of September 30, 2024 and December 31, 2023, which represented 52% and 56% of total invested assets. The decrease was driven primarily by the deconsolidation of BAM’s invested assets. The duration of White Mountains’s fixed income portfolio, including short-term investments, was 1.9 years as of both September 30, 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 2.9% in the third quarter of 2024 compared to a flat return in the third quarter of 2023, underperforming and outperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of 4.6% and -1.9% for the comparable periods. The results in the third quarter of 2024 were driven primarily by net investment income, coupled with net unrealized investment gains due to the decrease in interest rates on White Mountains’s short duration fixed income portfolio. The results in the third quarter of 2023 were driven primarily by net investment income, offset by net unrealized investment losses due to the increase in interest rates on White Mountains’s short duration fixed income portfolio.

White Mountains’s fixed income portfolio returned 4.6% in the first nine months of 2024 compared to 2.5% in the first nine months of 2023, in line with and outperforming the Bloomberg Barclays U.S. Intermediate Aggregate Index returns of 4.6% and -0.3% for the comparable periods. The results in the first nine months of 2024 were driven primarily by net investment income, coupled with net unrealized investment gains due to the decrease in interest rates on White Mountains’s short duration fixed income portfolio. The results in the first nine months of 2023 were driven primarily by net investment income.

#### 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 totaled $3.0 billion and $2.8 billion as of September 30, 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 6.5% in the third quarter of 2024, which included $88 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 3.8% in the third quarter of 2024. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -0.4% in the third quarter of 2023, which included $47 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 1.4% in the third quarter of 2023.

White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 15.1% in the first nine months of 2024, which included $160 million of net realized and unrealized investment gains from White Mountains’s investment in MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 10.1% in the first nine months of 2024. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 8.6% in the first nine months of 2023, which included $39 million of unrealized investment losses from White Mountains’s investment in MediaAlpha. White Mountains’s portfolio of common equity securities and other long-term investments returned 11.1% in the first nine months of 2023.

White Mountains’s portfolio of common equity securities consists of international listed equity funds, primarily held at Ark, as well as passive ETFs that seek to provide investment results generally corresponding to the performance of the S&P 500 Index. White Mountains’s portfolio of common equity securities was $655 million and $538 million as of September 30, 2024 and December 31, 2023.

White Mountains’s portfolio of common equity securities returned 4.0% in the third quarter of 2024 compared to -2.5% in the third quarter of 2023, underperforming and outperforming the S&P 500 Index returns of 5.9% and -3.3% for the comparable periods. The results in the third quarter of 2024 and 2023 were driven by relative underperformance and outperformance in White Mountains’s international listed equity funds as compared to the S&P 500 Index. White Mountains’s portfolio of common equity securities returned 12.1% in the first nine months of 2024 compared to 6.8% in the first nine months of 2023, underperforming the S&P 500 Index returns of 22.1% and 13.1% for the comparable periods. The results in the first nine months of 2024 and 2023 were driven by relative underperformance in White Mountains’s international listed equity funds as compared to the S&P 500 Index.

White Mountains maintains a portfolio of other long-term investments that consists primarily of unconsolidated entities, including Kudu’s Participation Contracts, private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits, ILS funds and private debt instruments. White Mountains’s portfolio of other long-term investments totaled $2.1 billion and $2.0 billion as of September 30, 2024 and December 31, 2023.

White Mountains’s portfolio of other long-term investments returned 3.7% in the third quarter of 2024 compared to 2.8% in the third quarter of 2023. Investment returns for the third quarter of 2024 were driven primarily by net investment income and unrealized investment gains from Kudu’s Participation Contracts and private equity funds, as well as net unrealized investment gains from ILS funds. Investment returns for the third quarter of 2023 were driven primarily by net investment income and net unrealized investment gains from Kudu’s Participation Contracts, as well as net unrealized investment gains from certain unconsolidated entities and ILS funds.

White Mountains’s portfolio of other long-term investments returned 9.5% in the first nine months of 2024 compared to 12.4% in the first nine months of 2023. Investment returns for the first nine months of 2024 were driven primarily by net investment income and net realized and unrealized investment gains from Kudu’s Participation Contracts, as well as net investment income and net unrealized gains from ILS funds. Investment returns for the first nine months of 2023 were driven primarily by net investment income and net realized and unrealized investment gains from Kudu’s Participation Contracts, net realized and unrealized investment gains from private equity funds and net unrealized investment gains from unconsolidated entities and ILS funds.

### Foreign Currency Exposure

As of September 30, 2024, White Mountains had foreign currency exposure on $246 million of net assets, primarily related to Ark/WM Outrigger’s non-U.S. contracts, Kudu’s non-U.S. Participation Contracts and a private debt instrument, as well as 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 September 30, 2024:

*$ in Millions Currency*

|  | Ark/WM Outrigger | Kudu | Other Operations | Total Fair Value | % of Total Shareholders’ Equity |
| --- | ---: | ---: | ---: | ---: | ---: |
| CAD | $95.1 | $70.7 | $— | $165.8 | 3.1% |
| AUD | 36.3 | 73.1 | — | 109.4 | 2.1 |
| GBP | (6.4) | — | — | (6.4) | (0.1) |
| EUR | (53.8) | 21.4 | 9.0 | (23.4) | (0.4) |
| All other | — | — | .6 | .6 | — |
| Total | **$71.2** | **$165.2** | **$9.6** | **$246.0** | 4.7% |

80

### 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 (“IIR”) 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. As of July 1, 2024, White Mountains no longer consolidates BAM. As a result of the deconsolidation, the BAM Surplus Notes are recorded at fair value, which resulted in the reversal of a $5 million deferred tax liability, generating a $5 million tax benefit in the third quarter of 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 Undertaxed Profits Rule (“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 September 30, 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. On April 1, 2023, the U.K. corporate tax rate increased from 19% to 25%.

White Mountains’s income tax expense related to pre-tax income from continuing operations for the three and nine months ended September 30, 2024 represented an effective tax rate of 5% and 7%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States.

White Mountains’s income tax expense related to pre-tax income from continuing operations for the three months ended September 30, 2023 represented an effective tax rate of 35%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by an increase in the full valuation allowance at BAM, as well as withholding taxes and state income taxes, partially offset by full year forecasted income in jurisdictions with lower tax rates than the United States. White Mountains’s income tax expense related to pre-tax income from continuing operations for the nine months ended September 30, 2023 represented an effective tax rate of 8%. The effective tax rate was different from the U.S. statutory rate of 21%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States.

### 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 nine months ended September 30, 2024, GAIL did not pay any dividends to its immediate parent.

During the nine months ended September 30, 2024, Ark declared and paid a $33 million dividend to its shareholders, including $24 million that was paid to White Mountains. As of September 30, 2024, Ark and its intermediate holding companies had $6 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 agreements with GAIL. As of September 30, 2024, WM Outrigger Re had less than $1 million of net unrestricted cash and investments held outside the collateral trust. As of September 30, 2024, WM Outrigger Re had $180 million of statutory capital and surplus and $200 million of assets held in the collateral trusts pursuant to the reinsurance agreements with GAIL.

During January 2024, White Mountains received a return of capital of $68 million from WM Outrigger Re as a result of its reduced capital commitment relating to the 2024 underwriting year. During the third quarter of 2024, White Mountains received an additional $65 million from WM Outrigger Re, reflecting an initial profit distribution from the 2023 underwriting year.

### HG Global

As of September 30, 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, payable when and if declared by HG Global. As of September 30, 2024, HG Global has accrued $460 million of dividends payable to holders of its preferred shares, $446 million of which is payable to White Mountains and is eliminated in consolidation. As of September 30, 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 September 30, 2024, HG Re had less than $1 million of net unrestricted cash and investments. As of September 30, 2024, HG Re had $148 million of accrued interest on the BAM Surplus Notes held outside the Collateral Trusts. As of September 30, 2024, HG Re had $757 million of statutory capital and surplus and $976 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 September 30, 2024 was $613 million.

As of September 30, 2024, the Collateral Trusts held assets of $976 million, which included $645 million of cash and investments, $317 million of BAM Surplus Notes and $14 million of accrued interest on the BAM Surplus Notes.

Through June 30, 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, with each payment applied pro rata between outstanding principal and interest. Accordingly, in 2024 the interest rate on the BAM Surplus Notes was 8.2% through June 30, 2024. Effective July 1, 2024 and through maturity, HG Global and BAM amended the interest rate on the BAM Surplus Notes to be 10.0%, with a higher proportion of each payment to be applied to outstanding principal.

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” financial strength 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 nine months ended September 30, 2024, BAM made an $8 million cash payment of principal and interest on the BAM Surplus Notes held by HG Global. Of this payment, $5 million was a repayment of principal held in the Supplement Trust, less than $1 million was a payment of accrued interest held in the Supplemental Trust and $3 million was a payment of accrued interest held outside the Supplemental Trust.

See **Note 10 — “Municipal Bond Guarantee Reinsurance.”**

### Kudu

During the nine months ended September 30, 2024, Kudu distributed $24 million to unitholders, substantially all of which was paid to White Mountains. As of September 30, 2024, Kudu had $82 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 nine months ended September 30, 2024, Bamboo Captive did not pay any dividends to its immediate parent. As of September 30, 2024, Bamboo Captive had $5 million of net unrestricted cash and short-term investments.

As of September 30, 2024, Bamboo had $29 million of net unrestricted cash and short-term investments outside of Bamboo Captive.

### Other Operations

During the nine months ended September 30, 2024, White Mountains paid a $3 million common share dividend. As of September 30, 2024, the Company and its intermediate holding companies had $537 million of net unrestricted cash, short-term investments and fixed maturity investments, $323 million of MediaAlpha common stock, $220 million of common equity securities and $352 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 September 30, 2024 and December 31, 2023:

*$ in Millions*

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Ark 2007 Subordinated Notes (1) | **$—** | $30.0 |
| Ark 2021 Subordinated Notes (1)(2) | **156.8** | 155.5 |
| HG Global Senior Notes (1)(2) | **147.3** | 146.9 |
| Kudu Credit Facility (1)(2) | **218.5** | 203.8 |
| Other Operations debt (1)(2) | **22.3** | 28.4 |
| Total debt | **544.9** | 564.6 |
| Noncontrolling interests (3) | **649.2** | 460.9 |
| Total White Mountains’s common shareholders’ equity | **4,610.6** | 4,240.5 |
| Total capital | **5,804.7** | 5,266.0 |
| HG Global’s unearned premium reserve (4) | **278.1** | 265.4 |
| HG Global’s net deferred acquisition costs (4) | **(80.6)** | (76.5) |
| Time-value discount on expected future payments on the BAM Surplus Notes (4)(5) | **—** | (87.9) |
| Total adjusted capital | **$6,002.2** | $5,367.0 |
| Total debt to total capital | **9.4%** | 10.7% |
| Total debt to total adjusted capital | **9.1%** | 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) Noncontrolling interests as of December 31, 2023 excludes BAM. As of July 1, 2024, White Mountains no longer consolidates BAM.

(4) Amount reflects White Mountains’s preferred share ownership in HG Global of 96.9%.

(5) For periods subsequent to July 1, 2024, White Mountains carries the BAM Surplus Notes under GAAP at fair value, which incorporates time value into its estimate.

Management believes that White Mountains has the flexibility and capacity to obtain funds externally through debt or equity financing on both a short-term and long-term basis. However, White Mountains can provide no assurance that, if needed, it would be able to obtain additional debt or equity financing on satisfactory terms, if at all.

It is possible that, in the future, one or more of the rating agencies may lower White Mountains’s existing ratings. If one or more of its ratings were lowered, White Mountains could incur higher borrowing costs on future borrowings and its ability to access the capital markets could be impacted.

### Covenant Compliance

As of September 30, 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 September 30, 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 nine months ended September 30, 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 80% of White Mountains’s adjusted book value per share as of September 30, 2024. All of the shares White Mountains repurchased in the first nine 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 nine months ended September 30, 2023, White Mountains repurchased and retired 24,165 of its common shares for $33 million at an average share price of $1,355, which was approximately 85% of White Mountains’s adjusted book value per share as of September 30, 2023. Of the shares White Mountains repurchased in the first nine months of 2023, 4,629 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the amount available under the Board repurchase authorizations.

### Cash Flows

Detailed information concerning White Mountains’s cash flows from continuing operations during the nine months ended September 30, 2024 and 2023 follows:

### Cash flows from operations for the nine months ended September 30, 2024 and September 30, 2023

Net cash provided from operations was $523 million for the nine months ended September 30, 2024 compared to $380 million for the nine months ended September 30, 2023. The increase in cash provided from operations was driven primarily by cash provided from operations at Ark, Kudu and Bamboo in 2024. As of September 30, 2024, the Company and its intermediate holding companies had $537 million of net unrestricted cash, short-term investments and fixed maturity investments, $323 million of MediaAlpha common stock, $220 million of common equity securities and $352 million of private equity funds, hedge funds, ILS funds and unconsolidated entities.

### Cash flows from investing and financing activities for the nine months ended September 30, 2024

#### Financing and Other Capital Activities

During the nine months ended September 30, 2024, the Company declared and paid a $3 million cash dividend to its common shareholders.

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

BAM received $26 million in MSC during the six months ended June 30, 2024, prior to its deconsolidation.

During the nine months ended September 30, 2024, Kudu borrowed $15 million in term loans under the Kudu Credit Facility.

#### 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 nine months ended September 30, 2023

#### Financing and Other Capital Activities

During the nine months ended September 30, 2023, the Company declared and paid a $3 million cash dividend to its common shareholders.

During the nine months ended September 30, 2023, White Mountains repurchased and retired 24,165 of its common shares for $33 million. Of the shares White Mountains repurchased in the first three months of 2023, 4,629 were to satisfy employee income tax withholding pursuant to employee benefit plans.

During the nine months ended September 30, 2023, BAM received $46 million in MSC.

During the nine months ended September 30, 2023, Kudu borrowed $12 million in term loans under the Kudu Credit Facility.

During the nine months ended September 30, 2023, Kudu repaid $17 million in term loans under the Kudu Credit Facility.

### NON-GAAP FINANCIAL MEASURES

This report includes 11 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) for periods prior to July 1, 2024, to include a discount for the time value of money arising from the modeled timing of cash payments of principal and interest on the BAM Surplus Notes and (ii) for all periods, to add back the unearned premium reserve, net of deferred acquisition costs, at HG Global.

Under GAAP, for periods prior to July 1, 2024, the BAM Surplus Notes, including accrued interest receivable, were classified as intercompany notes carried at nominal value with no consideration for time value of money and eliminated in consolidation. 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 $87 million, $91 million and $93 million less than the nominal GAAP carrying values as of June 30, 2024, December 31, 2023 and September 30, 2023, respectively. For periods subsequent to July 1, 2024, White Mountains carries the BAM Surplus Notes under GAAP at fair value, and there is no longer a separate time value of money adjustment for adjusted book value purposes.

The value of HG Global’s unearned premium reserve, net of deferred acquisition costs, was $204 million, $199 million, $195 million and $187 million as of September 30, 2024, June 30, 2024, December 31, 2023 and September 30, 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 BAM surplus notes and the value of the in-force business at HG Re, HG Global’s reinsurance subsidiary.

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 53.

### Value of BAM Surplus Notes for adjusted book value purposes

The value of the BAM Surplus Notes for adjusted book value purposes is a non-GAAP financial measure derived, for periods prior to July 1, 2024, by adjusting the nominal GAAP carrying value for a time value discount included in the calculation of adjusted book value per share prior to the deconsolidation of BAM. A reconciliation of the nominal GAAP carrying value to the value of the BAM Surplus Notes for adjusted book value purposes follows. The amounts disclosed are gross of noncontrolling interests. White Mountains believes this non-GAAP financial measure is useful to management and investors in analyzing the impact to White Mountains from the value of the BAM Surplus Notes pre- and post-deconsolidation.

| Millions | June 30, 2024 | July 1, 2024 | September 30, 2024 |
| --- | ---: | ---: | ---: |
| Nominal GAAP carrying value (1) | **$501.9** | **$501.9** | **$509.8** |
| Less GAAP fair value discount | **—** | **(114.5)** | **(98.7)** |
| GAAP carrying value | **501.9** | **387.4** | **411.1** |
| Less time value discount as of June 30, 2024 (2) (3) | **(87.4)** | **—** | **—** |
| Value of the BAM Surplus Notes for adjusted book value purposes (2) | **$414.5** | **$387.4** | **$411.1** |

(1) The nominal carrying value of the BAM Surplus Notes includes principal and accrued interest receivable.

(2) For periods subsequent to July 1, 2024, White Mountains carries the BAM Surplus Notes under GAAP at fair value, and there is no longer a separate time value of money adjustment for adjusted book value purposes.

(3) See adjusted book value per share non-GAAP measure on page 86.

### 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 recorded 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 73.

### 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 | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
| --- | ---: | ---: |
| Bamboo’s consolidated GAAP pre-tax income (loss) | **$15.5** | **$22.8** |
| Remove pre-tax (income) loss, Bamboo Captive | **(1.9)** | **(1.9)** |
| MGA pre-tax income (loss) | **$13.6** | **$20.9** |

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 and capital planning activities associated with the development of new markets.

White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating Bamboo’s performance. See page 75 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 White Mountains’s investment in MediaAlpha.

The following tables present reconciliations from GAAP to the reported percentages for three and nine months ended September 30, 2024 and 2023:

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Total consolidated portfolio return | **4.6%** | (0.2)% | **9.4%** | 5.3% |
| Remove MediaAlpha | **(1.3)%** | 0.8% | **(2.5)%** | 1.0% |
| Total consolidated portfolio return excluding MediaAlpha | **3.3%** | 0.6% | **6.9%** | 6.3% |

### Total adjusted capital and total debt to 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) for periods prior to July 1, 2024, to include a discount for the time value of money arising from the modeled timing of cash payments of principal and interest on the BAM Surplus Notes and (ii) to add back the unearned premium reserve, net of deferred acquisition costs, at HG Global. For periods subsequent to July 1, 2024, White Mountains carries the BAM Surplus Notes under GAAP at fair value, which incorporates time value into its estimate. Total debt to total adjusted capital is a non-GAAP financial measure that is derived using the ratio of total debt to total adjusted capital. White Mountains believes these non-GAAP financial measures are useful to management and investors in analyzing White Mountains’s capital structure, including the value of the BAM surplus notes and the value of the in-force business at HG Re, HG Global’s reinsurance subsidiary. The reconciliation of total capital to total adjusted capital is included on page 84.

### 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. The following presents an update to **Fair Value Measurements** as of September 30, 2024.

#### Valuation of the BAM Surplus Notes

Prior to the deconsolidation of BAM on July 1, 2024, the BAM Surplus Notes, including accrued interest receivable, were classified as intercompany notes carried at nominal value, which eliminated in consolidation. Upon deconsolidation, White Mountains elected the fair value option for the BAM Surplus Notes. As of July 1, 2024 and September 30, 2024, the estimated fair value of the BAM Surplus Notes was $387 million and $411 million. The difference between the nominal value of the BAM Surplus Notes and the fair value as of July 1, 2024 was recorded as an unrealized loss on deconsolidation in the third quarter of 2024. This loss includes the impact of a discount for the time value of money, which was previously included in adjusted book value per share as a non-GAAP adjustment to book value per share.

Subsequent to the deconsolidation, White Mountains values the BAM Surplus Notes each quarter using a discounted cash flow analysis. The BAM Surplus Notes are classified as Level 3 measurements. The discounted cash flow analysis used to value the BAM Surplus Notes depends on key inputs, such as projections of future revenues and earnings for BAM, expected payments on the BAM Surplus Notes through maturity and a discount rate to reflect time value and related uncertainty of the repayment pattern. The expected payments on the BAM Surplus Notes are based on management judgment, considering current performance, budgets and projected future results. These expected payments depend on BAM’s ability to generate excess cash flows from its operations, driven primarily by assumptions regarding future trends for the issuance of municipal bonds, interest rates, credit spreads, insured market penetration, competitive activity in the market for municipal bond insurance and other factors affecting the demand for and pricing of BAM’s municipal bond insurance. The discount rate considers comparably-rated companies and instruments, adjusted for risks specific to BAM and the BAM Surplus Notes.

When making its fair value selection, which is within a range of reasonable values derived from the discounted cash flow analysis, White Mountains considers all available information, facts and circumstances specific to BAM’s businesses and industry and any infrequent or unusual results for the period.

As of September 30, 2024, White Mountains concluded that a 7.5% discount rate was appropriate for the valuation of the BAM Surplus Notes. Utilizing this assumption and all available information, White Mountains determined that the fair value of the BAM Surplus Notes was $411 million as of September 30, 2024.

With a discounted cash flow analysis, small changes to key inputs may result in significant changes to fair value. The following table presents the estimated effect on the fair value of the BAM Surplus Notes as of September 30, 2024, resulting from changes in key inputs to the discounted cash flow analysis, such as the discount rate:

| Millions | Discount Rate |  |  |  |  |
| --- | ---: | ---: | ---: | ---: | ---: |
|  | **5.5%** | **6.5%** | **7.5%** | **8.5%** | **9.5%** |
| BAM Surplus Notes, at fair value | $467 | $438 | **$411** | $387 | $365 |

89

### 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, 669 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 September 30, 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 third 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, 1,512 characters.

Refer to the Company’s 2023 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s risk factors. The following presents an update related to the potential volatility from White Mountains’s election of the fair value option for the BAM Surplus Notes.

***We may be subject to volatility from our investment in the BAM Surplus Notes, which could materially adversely affect our results of operations and financial condition.***

Upon the deconsolidation of BAM on July 1, 2024, White Mountains elected the fair value option, and the BAM Surplus Notes, including accrued interest receivable, were measured at their estimated fair value of $387 million using a discounted cash flow analysis, which resulted in an unrealized loss on deconsolidation of $115 million. As of September 30, 2024, the estimated fair value of the BAM Surplus Notes was $411 million. Subsequent to the deconsolidation, White Mountains recognized accrued interest of $8 million and an increase in fair value of $16 million for the third quarter of 2024. White Mountains’s reported book value per share and adjusted book value per share may be subject to greater volatility in the future, as the valuation of the BAM Surplus Notes under the discounted cash flow analysis could be more volatile than the carrying value prior to the deconsolidation. Should there be a significant decrease in the valuation of the BAM Surplus Notes, it could materially adversely affect our results of operations and financial condition.

Filed Nov 6, 2024.
Source: SEC EDGAR, the filing index for accession 0000776867-24-000019. Last ingested by Listed: Nov 6, 2026, 02:06 ET. No prices; not investment advice.