Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

White Mountains accounts for business combinations using the acquisition method. Under the acquisition method, White Mountains recognizes and measures the assets acquired, liabilities assumed and any non-controlling interest in the acquired entities at their acquisition date fair values. The estimated acquisition date fair values, generally consisting of intangible assets and liabilities for contingent consideration, may be recorded at provisional amounts in circumstances where the information necessary to complete the acquisition accounting is not available at the reporting date. Any such provisional amounts are finalized as measurement period adjustments within one year of the acquisition date.

The following table presents the economic lives, acquisition date fair values, accumulated amortization and net carrying values for other intangible assets and goodwill, by company as of December 31, 2021 and 2020:


$ in Millions	Weighted Average Economic Life (in years)	December 31, 2021								December 31, 2020
		Acquisition Date Fair Value		Accumulated Amortization		Impairments and Amounts Allocated to Held for Sale		Net Carrying Value		Acquisition Date Fair Value		Accumulated Amortization		Impairments		Net Carrying Value
Goodwill:
Ark	N/A	$	116.8	$	—	$	—	$	116.8	$	—	$	—	$	—	$	—
NSM (1)	N/A	533.4		—		30.2		503.2		506.4		—		—		506.4
Kudu	N/A	7.6		—		—		7.6		7.6		—		—		7.6


Other Operations	N/A	17.9		—		—		17.9		11.5		—		—		11.5
Total goodwill		675.7		—		30.2		645.5		525.5		—		—		525.5
Other intangible assets:
Ark
Underwriting Capacity	N/A	175.7		—		—		175.7		—		—		—		—
NSM (1)
Customer relationships	9.0	159.9		57.0		3.5		99.4		136.2		36.7		3.5		96.0
Trade names	18	68.6		11.9		1.0		55.7		65.4		8.3		1.0		56.1
Information technology platform	0	3.1		1.4		1.7		—		3.1		1.4		1.7		—
Renewal rights	12	82.5		15.8		—		66.7		82.5		4.9		—		77.6
Other	3.3	1.1		.7		—		.4		1.7		1.0		—		.7
Subtotal		315.2		86.8		6.2		222.2		288.9		52.3		6.2		230.4
Kudu
Trade names	7	2.2		.9		—		1.3		2.2		.6		—		1.6





Other Operations
Trade names	17.5	8.2		1.5		—		6.7		3.6		.3		—		3.3
Customer relationships	13.0	18.8		4.5		—		14.3		14.2		1.4		—		12.8

Insurance licenses (2)	N/A	—		—		—		—		8.6		—		—		8.6
Other	5.3	.3		.1		—		.2		.3		.1		—		.2
Subtotal		27.3		6.1		—		21.2		26.7		1.8				24.9
Total other intangible assets		520.4		93.8		6.2		420.4		317.8		54.7		6.2		256.9
Total goodwill and other intangible assets		$	1,196.1	$	93.8	$	36.4	1,065.9		$	843.3	$	54.7	$	6.2	782.4
Goodwill and other intangible assets attributed to non-controlling interests								(117.6)								(28.1)
Goodwill and other intangible assets included in White Mountains’s common shareholders’ equity								$	948.3							$	754.3

(1) During 2021, NSM’s goodwill and intangible assets includes $(1.5) and $(0.3) of the effect of foreign currency translation. During 2020, NSM’s goodwill and intangible assets includes $13.4 and $1.6 of the effect of foreign currency translation.

(2) As of December 31, 2021, White Mountains has classified one of its Other Operating Businesses as held for sale, which includes of $8.6 of insurance licenses. See Note. 21 — “Held for Sale and Discontinued Operations”.

Intangible Assets Valuation Methods

The goodwill recognized for the entities shown above is attributed to expected future cash flows. The acquisition date fair values of other intangible assets with finite lives are estimated using income approach techniques, which use future expected cash flows to develop a discounted present value amount.

The multi-period-excess-earnings method estimates fair value using the present value of the incremental after-tax cash flows attributable solely to the other intangible asset over its remaining life. This approach was used to estimate the fair value of other intangible assets associated with trade names, customer relationships and contracts and information technology.

The relief-from-royalty method was used to estimate fair value for other intangible assets that relate to rights that could be obtained via a license from a third-party owner. Under this method, the fair value is estimated using the present value of license fees avoided by owning rather than leasing the asset. This technique was used to estimate the fair value of domain names, certain trademarks and brand names.

The with-or-without method estimates the fair value of an other intangible asset that provides an incremental benefit. Under this method, the fair value of the other intangible asset is calculated by comparing the value of the entity with and without the other intangible asset. This approach was used to estimate the fair value of favorable lease terms.

On at least an annual basis beginning no later than the interim period included in the one-year anniversary of an acquisition, White Mountains evaluates goodwill and other intangible assets for potential impairment. Between annual evaluations, White Mountains considers changes in circumstances or events subsequent to the most recent evaluation that may indicate that an impairment may exist and, if necessary will perform an interim review for potential impairment.

The following table presents a summary of the acquisition date fair values of goodwill and other intangible assets for acquisitions completed during 2021 and 2020:


$ in Millions
Acquisition of Subsidiary/ Asset	Goodwill and Other Intangible Assets (1)		Acquisition Date
Kingsbridge	$	131.7	April 7, 2020
J.C. Taylor	55.7		August 6, 2021
Total NSM segment	$	187.4
Ark	$	292.5	January 1, 2021
Other Operations	$	31.1	Various

(1) Acquisition date fair values include the effect of adjustments during the measurement period and excludes the effect of foreign currency translation subsequent to the acquisition date.

Goodwill and Other Intangible Asset Rollforward

The following table presents the change in goodwill and other intangible assets:


	December 31, 2021						December 31, 2020
Millions	Goodwill		Other Intangible Assets		Total Goodwill and Other Intangible Assets		Goodwill		Other Intangible Assets		Total Goodwill and Other Intangible Assets
Beginning balance	$	525.5	$	256.9	$	782.4	$	394.7	$	260.0	$	654.7
Acquisition of businesses (1)	71.5		—		71.5		140.0		—		140.0
Ark Transaction	116.8		175.7		292.5		—		—		—
Attribution of acquisition date fair value estimates between goodwill and other intangible assets (2)	(36.5)		36.5		—		(23.2)		23.2		—
Measurement period adjustments(5)	(.1)		—		(.1)		.6		6.6		7.2
Dispositions of businesses	—		—		—		—		—		—
Amortization	—		(39.8)		(39.8)		—		(28.3)		(28.3)
Impairments (3)	—		—		—		—		(6.2)		(6.2)
Assets held for sale			(8.6)		(8.6)		—		—		—
Loss on assets held for sale (4)	(30.2)		—		(30.2)		—		—		—
Foreign currency translation	(1.5)		(.3)		(1.8)		13.4		1.6		15.0
Ending balance	$	645.5	$	420.4	$	1,065.9	$	525.5	$	256.9	$	782.4

(1) During 2021, amounts include acquisition of J.C. Taylor of $55.7 and acquisitions within Other Operations of $15.8. During 2020, amounts include acquisition of Kingsbridge of $125.1 and acquisitions within Other Operations of $14.9.

(2) During 2021, the attribution of acquisition date fair value estimates between goodwill and other intangible assets were $27.2 for the acquisition of J.C. Taylor and $9.3 for acquisitions within Other Operations segment. During 2020, the attribution of acquisition date fair value estimates between goodwill and other intangible assets were $13.6 for the acquisition of Kingsbridge and $9.6 for acquisitions within Other Operations segment.

(3) In 2020, impairments relate to NSM’s UK vertical.

(4) Relates to the sale of NSM’s Fresh Insurance’s motor business recorded in 2021. This amount excludes $1.5 of net proceeds related to the sale.

(5) Measurement period adjustments relate to updated information about acquisition date fair values of assets acquired and liabilities assumed. During 2021, adjustments relate to acquisitions within the Other Operations segment. During 2020, adjustments primarily relate to contingent considerations of $4.1 in connection with the acquisition of Kingsbridge and the remaining amount related to acquisitions within Other Operations segment.

During the years ended December 31, 2021 and 2020, White Mountains did not recognize any impairments to goodwill.

On April 12, 2021, NSM sold Fresh Insurance’s motor business. During 2021, in connection with the sale, White Mountains recognized a loss of $28.7 million. See Note 21 — “Held for Sale and Discontinued Operations”.

During 2020, White Mountains recognized impairments of other intangible assets of $6.2 million related to the UK vertical. The impairments related to lower premium volumes, including due to the impact of the COVID-19 pandemic, and certain reorganization initiatives at the UK vertical.

During 2019, White Mountains recognized an impairment of other intangible assets of $2.4 million related to Fresh Insurance and impairments of goodwill and other intangible assets of $7.6 million and $0.4 million, respectively, related to Other Operations. Impairment charges are presented within general and administrative assets expenses for the segments affected on the statement of operations.

Amortization of Other Intangible Assets

Amortization expense was $39.8 million, $28.3 million and $21.8 million for the years ended December 31, 2021, 2020 and 2019.

White Mountains expects to recognize amortization expense in each of the next five years as the following table presents:


Millions	Amortization Expense
2022	$	39.4
2023	36.0
2024	32.7
2025	30.5
2026 and years after	106.1
Total (1)	$	244.7

(1) Excludes Ark’s indefinite-lived intangible assets of $175.7.