(State or other jurisdiction of incorporation or organization) | ||||||||
(I.R.S. Employer Identification No.) | ||||||||
(Zip Code) | ||||||||
(Address of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
per share | Bermuda Stock Exchange |
ý | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||||||||
Smaller reporting company | Emerging growth company |
Page No. | ||||||||
Three and Six Months Ended June 30, 2022 and 2021 | ||||||||
Three and Six Months Ended June 30, 2022 and 2021 | ||||||||
June 30, 2022 | December 31, 2021 | |||||||||||||
Millions, except share and per share amounts | ||||||||||||||
Assets | ||||||||||||||
Financial Guarantee (HG Global/BAM) | ||||||||||||||
Fixed maturity investments, at fair value | $ | $ | ||||||||||||
Short-term investments, at fair value | ||||||||||||||
Total investments | ||||||||||||||
Cash | ||||||||||||||
Insurance premiums receivable | ||||||||||||||
Deferred acquisition costs | ||||||||||||||
Other assets | ||||||||||||||
Total Financial Guarantee assets | ||||||||||||||
P&C Insurance and Reinsurance (Ark) | ||||||||||||||
Fixed maturity investments, at fair value | ||||||||||||||
Common equity securities, at fair value | ||||||||||||||
Short-term investments, at fair value | ||||||||||||||
Other long-term investments | ||||||||||||||
Total investments | ||||||||||||||
Cash | ||||||||||||||
Reinsurance recoverables | ||||||||||||||
Insurance premiums receivable | ||||||||||||||
Ceded unearned premiums | ||||||||||||||
Deferred acquisition costs and value of in-force business acquired | ||||||||||||||
Goodwill and other intangible assets | ||||||||||||||
Other assets | ||||||||||||||
Total P&C Insurance and Reinsurance assets | ||||||||||||||
Asset Management (Kudu) | ||||||||||||||
Other long-term investments | ||||||||||||||
Cash (restricted $ | ||||||||||||||
Accrued investment income | ||||||||||||||
Goodwill and other intangible assets | ||||||||||||||
Other assets | ||||||||||||||
Total Asset Management assets | ||||||||||||||
Other Operations | ||||||||||||||
Fixed maturity investments, at fair value | ||||||||||||||
Short-term investments, at fair value | ||||||||||||||
Investment in MediaAlpha, at fair value | ||||||||||||||
Other long-term investments | ||||||||||||||
Total investments | ||||||||||||||
Cash | ||||||||||||||
Goodwill and other intangible assets | ||||||||||||||
Other assets | ||||||||||||||
Assets held for sale - NSM Group | ||||||||||||||
Assets held for sale - Other | ||||||||||||||
Total Other Operations assets | ||||||||||||||
Total assets | $ | $ |
June 30, 2022 | December 31, 2021 | |||||||||||||
Millions, except share and per share amounts | ||||||||||||||
Liabilities | ||||||||||||||
Financial Guarantee (HG Global/BAM) | ||||||||||||||
Unearned insurance premiums | $ | $ | ||||||||||||
Debt | ||||||||||||||
Accrued incentive compensation | ||||||||||||||
Other liabilities | ||||||||||||||
Total Financial Guarantee liabilities | ||||||||||||||
P&C Insurance and Reinsurance (Ark) | ||||||||||||||
Loss and loss adjustment expense reserves | ||||||||||||||
Unearned insurance premiums | ||||||||||||||
Debt | ||||||||||||||
Reinsurance payable | ||||||||||||||
Contingent consideration | ||||||||||||||
Other liabilities | ||||||||||||||
Total P&C Insurance and Reinsurance liabilities | ||||||||||||||
Asset Management (Kudu) | ||||||||||||||
Debt | ||||||||||||||
Other liabilities | ||||||||||||||
Total Asset Management liabilities | ||||||||||||||
Other Operations | ||||||||||||||
Debt | ||||||||||||||
Accrued incentive compensation | ||||||||||||||
Other liabilities | ||||||||||||||
Liabilities held for sale - NSM Group | ||||||||||||||
Total Other Operations liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Equity | ||||||||||||||
White Mountains’s common shareholders’ equity | ||||||||||||||
White Mountains’s common shares at $ shares; issued and outstanding | ||||||||||||||
Paid-in surplus | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive income (loss), after-tax: | ||||||||||||||
Net unrealized gains (losses) from foreign currency translation and interest rate swap | ( | |||||||||||||
Total White Mountains’s common shareholders’ equity | ||||||||||||||
Non-controlling interests | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Financial Guarantee (HG Global/BAM) | ||||||||||||||||||||||||||
Earned insurance premiums | $ | $ | $ | $ | ||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ( | ( | ( | |||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||
Total Financial Guarantee revenues | ( | ( | ||||||||||||||||||||||||
P&C Insurance and Reinsurance (Ark) | ||||||||||||||||||||||||||
Earned insurance premiums | $ | |||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ( | ( | ||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||
Total P&C Insurance and Reinsurance revenues | ||||||||||||||||||||||||||
Asset Management (Kudu) | ||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ( | |||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||
Total Asset Management revenues | ( | |||||||||||||||||||||||||
Other Operations | ||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ( | |||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) from investment in MediaAlpha | ( | ( | ||||||||||||||||||||||||
Commission revenues | ||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||
Total Other Operations revenues | ( | ( | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||
Financial Guarantee (HG Global/BAM) | ||||||||||||||||||||||||||
Insurance acquisition expenses | $ | $ | $ | $ | ||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Total Financial Guarantee expenses | ||||||||||||||||||||||||||
P&C Insurance and Reinsurance (Ark) | ||||||||||||||||||||||||||
Loss and loss adjustment expenses | ||||||||||||||||||||||||||
Insurance and reinsurance acquisition expenses | ||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Total P&C Insurance and Reinsurance expenses | ||||||||||||||||||||||||||
Asset Management (Kudu) | ||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||
Amortization of other intangible assets | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Total Asset Management expenses | ||||||||||||||||||||||||||
Other Operations | ||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||
Amortization of other intangible assets | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Total Other Operations expenses | ||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||
Pre-tax income (loss) from continuing operations | ( | ( | ||||||||||||||||||||||||
Income tax (expense) benefit | ( | ( | ||||||||||||||||||||||||
Net income (loss) from continuing operations | ( | ( | ||||||||||||||||||||||||
Net gain (loss) from sale of discontinued operations, net of tax - Sirius | ||||||||||||||||||||||||||
Net income (loss) from NSM Group discontinued operations, net of tax | ( | |||||||||||||||||||||||||
Net income (loss) | ( | ( | ||||||||||||||||||||||||
Net (income) loss attributable to non-controlling interests | ||||||||||||||||||||||||||
Net income (loss) attributable to White Mountains’s common shareholders | $ | ( | $ | $ | ( | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Net income (loss) attributable to White Mountains’s common shareholders | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | ||||||||||||||||||||||||
Other comprehensive income (loss) from NSM Group discontinued operations, net of tax | ( | ( | ||||||||||||||||||||||||
Comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
Other comprehensive (income) loss attributable to non-controlling interests | ( | ( | ||||||||||||||||||||||||
Comprehensive income (loss) attributable to White Mountains’s common shareholders | $ | ( | $ | $ | ( | $ |
Earnings (loss) per share attributable to White Mountains’s common shareholders: | ||||||||||||||||||||||||||
Basic earnings (loss) per share | ||||||||||||||||||||||||||
Continuing operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Discontinued operations | ( | |||||||||||||||||||||||||
Total consolidated operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Diluted earnings (loss) per share | ||||||||||||||||||||||||||
Continuing operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Discontinued operations | ( | |||||||||||||||||||||||||
Total consolidated operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Dividends declared and paid per White Mountains’s common share | $ | $ | $ | $ |
White Mountains’s Common Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Millions | Common shares and paid-in surplus | Retained earnings | AOCI, after tax | Total | Non-controlling interest | Total Equity | ||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||
Net loss | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||
Net change in foreign currency translation and other | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total comprehensive loss | — | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Dividends to non-controlling interests | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Repurchases and retirements of common shares | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Issuances of common shares | — | — | — | |||||||||||||||||||||||||||||||||||
Issuances of shares of non-controlling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
BAM member surplus contribution, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Amortization of restricted share awards | — | — | — | |||||||||||||||||||||||||||||||||||
Recognition of equity-based compensation expense of subsidiaries | — | — | ||||||||||||||||||||||||||||||||||||
Net contributions and dilution from other non-controlling interests | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | $ | $ |
White Mountains’s Common Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Millions | Common shares and paid-in surplus | Retained earnings | AOCI, after tax | Total | Non-controlling interest | Total Equity | ||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( | |||||||||||||||||||||||||||||||||||
Net change in foreign currency translation and other | — | — | ||||||||||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | ( | ||||||||||||||||||||||||||||||||||||
Dividends to non-controlling interests | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Issuances of common shares | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of shares of non-controlling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchases and retirements of common shares | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
BAM member surplus contributions, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Amortization of restricted share awards | — | — | — | |||||||||||||||||||||||||||||||||||
Recognition of equity-based compensation expense of subsidiary | — | — | ||||||||||||||||||||||||||||||||||||
Net contributions and dilution from other non-controlling interests | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Acquisition of non-controlling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | $ | $ |
White Mountains’s Common Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Millions | Common shares and paid-in surplus | Retained earnings | AOCI, after tax | Total | Non-controlling interest | Total Equity | ||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net income (loss) | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Dividends declared on common shares | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Dividends to non-controlling interests | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Issuances of common shares | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of shares of non-controlling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchases and retirements of common shares | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
BAM member surplus contributions, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Amortization of restricted share awards | — | — | — | |||||||||||||||||||||||||||||||||||
Recognition of equity-based compensation expense of subsidiaries | — | — | ||||||||||||||||||||||||||||||||||||
Net contributions and dilution from other non-controlling interests | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | $ | $ |
White Mountains’s Common Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Millions | Common shares and paid-in surplus | Retained earnings | AOCI, after tax | Total | Non-controlling interest | Total Equity | ||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | ||||||||||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | ( | ||||||||||||||||||||||||||||||||||||
Dividends declared on common shares | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Dividends to non-controlling interests | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Issuances of common shares | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of shares of non-controlling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchases and retirements of common shares | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||||
BAM member surplus contributions, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Amortization of restricted share awards | — | — | — | |||||||||||||||||||||||||||||||||||
Recognition of equity-based compensation expense of subsidiary | — | — | — | |||||||||||||||||||||||||||||||||||
Net contributions and dilution from other non-controlling interests | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Acquisition of non-controlling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | $ | $ |
(Unaudited) | Six Months Ended June 30, | |||||||||||||
Millions | 2022 | 2021 | ||||||||||||
Cash flows from operations: | ||||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||
Adjustments to reconcile net income to net cash provided from (used for) operations: | ||||||||||||||
Net realized and unrealized investment (gains) losses | ( | |||||||||||||
Net realized and unrealized investment (gains) losses from investment in MediaAlpha | ( | |||||||||||||
Deferred income tax expense | ||||||||||||||
Amortization of restricted share awards | ||||||||||||||
Amortization and depreciation | ||||||||||||||
Net (income) loss from NSM Group discontinued operation, net of tax | ( | |||||||||||||
Net (gain) loss from sale of Sirius Group, net of tax | ( | |||||||||||||
Other operating items: | ||||||||||||||
Net change in reinsurance recoverables | ||||||||||||||
Net change in insurance premiums receivable | ( | ( | ||||||||||||
Net change in ceded unearned premiums | ( | |||||||||||||
Net change in loss and loss adjustment expense reserves | ||||||||||||||
Net change in unearned insurance premiums | ||||||||||||||
Net change in deferred acquisition costs | ( | ( | ||||||||||||
Net change in reinsurance payable | ( | ( | ||||||||||||
Net change in restricted cash | ||||||||||||||
Investments in Kudu Participation Contracts | ( | ( | ||||||||||||
Net change in other assets and liabilities, net | ( | ( | ||||||||||||
Net cash provided from (used for) operations - continuing operations | ( | |||||||||||||
Net cash provided from (used for) operations - NSM Group discontinued operations (Note 19) | ||||||||||||||
Net cash provided from (used for) operations | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Net change in short-term investments | ( | |||||||||||||
Sales of fixed maturity investments | ||||||||||||||
Maturities, calls and paydowns of fixed maturity investments | ||||||||||||||
Sales of common equity securities and investment in MediaAlpha | ||||||||||||||
Distributions and redemptions of other long-term investments | ||||||||||||||
Proceeds from the sale of consolidated subsidiaries, net of cash sold of $ | ||||||||||||||
Release of cash pre-funded/placed in escrow for Ark Transaction | ||||||||||||||
Purchases of consolidated subsidiaries, net of cash acquired of $ | ( | |||||||||||||
Purchases of other long-term investments | ( | ( | ||||||||||||
Purchases of common equity securities | ( | ( | ||||||||||||
Purchases of fixed maturity investments | ( | ( | ||||||||||||
Other investing activities, net | ( | |||||||||||||
Net cash provided from (used for) investing activities - continuing operations | ||||||||||||||
Net cash provided from (used for) investing activities - NSM Group discontinued operations (Note 19) | ( | |||||||||||||
Net cash provided from (used for) investing activities | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||
Draw down of debt and revolving line of credit | ||||||||||||||
Repayment of debt and revolving line of credit | ( | ( | ||||||||||||
Cash dividends paid to the Company’s common shareholders | ( | ( | ||||||||||||
Common shares repurchased | ( | ( | ||||||||||||
Net distributions from non-controlling interest shareholders | ( | ( | ||||||||||||
Contributions from discontinued operations | ||||||||||||||
Capital contributions from BAM members | ||||||||||||||
Acquisition of subsidiary shares by non-controlling interest shareholders | ||||||||||||||
Fidus Re premium payment | ( | ( | ||||||||||||
Other financing activities, net | ( | ( | ||||||||||||
Net cash provided from (used for) financing activities - continuing operations | ||||||||||||||
Net cash provided from (used for) financing activities - NSM Group discontinued operations (Note 19) | ( | ( | ||||||||||||
Net cash provided from (used for) financing activities | ||||||||||||||
Net change in cash during the period - continuing operations | ||||||||||||||
Cash balances at beginning of period (includes restricted cash balances of $ discontinued operations cash balances of $ | ||||||||||||||
Cash balances at end of period (includes restricted cash balances of $ operations cash balances of $ | $ | $ | ||||||||||||
Supplemental cash flows information: | ||||||||||||||
Interest paid | $ | ( | $ | ( | ||||||||||
Net income tax payments | $ | ( | $ | ( |
Millions | As of January 1, 2021 | ||||||||||
Investments | $ | ||||||||||
Cash | (1) | ||||||||||
Reinsurance recoverables | |||||||||||
Insurance premiums receivable | |||||||||||
Ceded unearned premiums | |||||||||||
Value of in-force business acquired | |||||||||||
Other assets | |||||||||||
Loss and loss adjustment expense reserves | ( | ||||||||||
Unearned insurance premiums | ( | ||||||||||
Debt | ( | ||||||||||
Ceded reinsurance payable | ( | ||||||||||
Other liabilities | ( | ||||||||||
Net tangible assets acquired | |||||||||||
Goodwill | |||||||||||
Other intangible assets - syndicate underwriting capacity | |||||||||||
Deferred tax liability on other intangible assets | ( | ||||||||||
Net assets acquired | $ | ||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Fixed maturity investments | $ | $ | $ | $ | ||||||||||||||||||||||
Short-term investments | ( | |||||||||||||||||||||||||
Common equity securities | ||||||||||||||||||||||||||
Other long-term investments | ||||||||||||||||||||||||||
Amount attributable to TPC Providers | ( | ( | ||||||||||||||||||||||||
Total investment income | ||||||||||||||||||||||||||
Third-party investment expenses | ( | ( | ( | ( | ||||||||||||||||||||||
Net investment income, pre-tax | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Realized investment gains (losses) | ||||||||||||||||||||||||||
Fixed maturity investments | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Short-term investments | ( | ( | ||||||||||||||||||||||||
Common equity securities | ||||||||||||||||||||||||||
Investment in MediaAlpha | ||||||||||||||||||||||||||
Other long-term investments | ( | |||||||||||||||||||||||||
Net realized investment gains (losses) | ( | |||||||||||||||||||||||||
Unrealized investment gains (losses) | ||||||||||||||||||||||||||
Fixed maturity investments | ( | ( | ( | |||||||||||||||||||||||
Short-term investments | ( | ( | ||||||||||||||||||||||||
Common equity securities | ( | ( | ||||||||||||||||||||||||
Investment in MediaAlpha | ( | ( | ( | |||||||||||||||||||||||
Other long-term investments | ( | |||||||||||||||||||||||||
Net unrealized investment gains (losses) | ( | ( | ( | |||||||||||||||||||||||
Net realized and unrealized investment gains (losses), before amount attributable to TPC providers(1) | ( | ( | ||||||||||||||||||||||||
Amount attributable to TPC Providers | ( | ( | ||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Fixed maturity and short-term investments | ||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Less: net realized and unrealized gains (losses) on investment securities sold during the period | ( | ( | ( | ( | ||||||||||||||||||||||
Net unrealized investment gains (losses) on investment securities held at the end of the period | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Common equity securities and investment in MediaAlpha | ||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) on common equity securities | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Net realized and unrealized investment gains (losses) from investment in MediaAlpha | ( | ( | ||||||||||||||||||||||||
Total net realized and unrealized investment gains (losses) | ( | ( | ||||||||||||||||||||||||
Less: net realized and unrealized gains (losses) on investment securities sold during the period | ||||||||||||||||||||||||||
Net unrealized investment gains (losses) on investment securities held at the end of the period | $ | ( | $ | $ | ( | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
Other long-term investments | $ | ( | $ | $ | $ | ||||||||||||||||||||||||
Total net unrealized investment gains, pre-tax - Level 3 investments | $ | ( | $ | $ | $ |
June 30, 2022 | ||||||||||||||||||||||||||||||||
Millions | Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Foreign Currency Gains (Losses) | Carrying Value | |||||||||||||||||||||||||||
U.S. Government and agency obligations | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Debt securities issued by corporations | ( | ( | ||||||||||||||||||||||||||||||
Municipal obligations | ( | |||||||||||||||||||||||||||||||
Mortgage and asset-backed securities | ( | |||||||||||||||||||||||||||||||
Collateralized loan obligations | ( | ( | ||||||||||||||||||||||||||||||
Total fixed maturity investments | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||
Millions | Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Foreign Currency Gains (Losses) | Carrying Value | |||||||||||||||||||||||||||
U.S. Government and agency obligations | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Debt securities issued by corporations | ( | ( | ||||||||||||||||||||||||||||||
Municipal obligations | ( | |||||||||||||||||||||||||||||||
Mortgage and asset-backed securities | ( | |||||||||||||||||||||||||||||||
Collateralized loan obligations | ( | ( | ||||||||||||||||||||||||||||||
Total fixed maturity investments | $ | $ | $ | ( | $ | ( | $ |
June 30, 2022 | ||||||||||||||
Millions | Cost or Amortized Cost | Carrying Value | ||||||||||||
Due in one year or less | $ | $ | ||||||||||||
Due after one year through five years | ||||||||||||||
Due after five years through ten years | ||||||||||||||
Due after ten years | ||||||||||||||
Mortgage and asset-backed securities and collateralized loan obligations | ||||||||||||||
Total fixed maturity investments | $ | $ |
June 30, 2022 | ||||||||||||||||||||||||||||||||
Millions | Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Foreign Currency Gains (Losses) | Carrying Value | |||||||||||||||||||||||||||
Common equity securities | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
Investment in MediaAlpha | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other long-term investments | $ | $ | $ | ( | $ | ( | $ |
December 31, 2021 | ||||||||||||||||||||||||||||||||
Millions | Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Foreign Currency Gains (Losses) | Carrying Value | |||||||||||||||||||||||||||
Common equity securities | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Investment in MediaAlpha | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other long-term investments | $ | $ | $ | ( | $ | ( | $ |
June 30, 2022 | ||||||||||||||||||||||||||
Millions | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Fixed maturity investments: | ||||||||||||||||||||||||||
U.S. Government and agency obligations | $ | $ | $ | $ | ||||||||||||||||||||||
Debt securities issued by corporations: | ||||||||||||||||||||||||||
Financials | ||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||
Technology | ||||||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||
Healthcare | ||||||||||||||||||||||||||
Utilities | ||||||||||||||||||||||||||
Communications | ||||||||||||||||||||||||||
Energy | ||||||||||||||||||||||||||
Materials | ||||||||||||||||||||||||||
Total debt securities issued by corporations | ||||||||||||||||||||||||||
Municipal obligations | ||||||||||||||||||||||||||
Mortgage and asset-backed securities | ||||||||||||||||||||||||||
Collateralized loan obligations | ||||||||||||||||||||||||||
Total fixed maturity investments | ||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||
Common equity securities (1) | ||||||||||||||||||||||||||
Investment in MediaAlpha | ||||||||||||||||||||||||||
Other long-term investments | ||||||||||||||||||||||||||
Other long-term investments — NAV (2) | ||||||||||||||||||||||||||
Total other long-term investments | ||||||||||||||||||||||||||
Total investments | $ | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
Millions | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Fixed maturity investments: | ||||||||||||||||||||||||||
U.S. Government and agency obligations | $ | $ | $ | $ | ||||||||||||||||||||||
Debt securities issued by corporations: | ||||||||||||||||||||||||||
Financials | ||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||
Technology | ||||||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||
Healthcare | ||||||||||||||||||||||||||
Utilities | ||||||||||||||||||||||||||
Communications | ||||||||||||||||||||||||||
Energy | ||||||||||||||||||||||||||
Materials | ||||||||||||||||||||||||||
Total debt securities issued by corporations | ||||||||||||||||||||||||||
Municipal obligations | ||||||||||||||||||||||||||
Mortgage and asset-backed securities | ||||||||||||||||||||||||||
Collateralized loan obligations | ||||||||||||||||||||||||||
Total fixed maturity investments | ||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||
Common equity securities (1) | ||||||||||||||||||||||||||
Investment in MediaAlpha | ||||||||||||||||||||||||||
Other long-term investments | ||||||||||||||||||||||||||
Other long-term investments — NAV (2) | ||||||||||||||||||||||||||
Total other long-term investments | ||||||||||||||||||||||||||
Total investments | $ | $ | $ | $ |
Fair Value at | ||||||||||||||
Millions | June 30, 2022 | December 31, 2021 | ||||||||||||
AAA | $ | $ | ||||||||||||
AA | ||||||||||||||
A | ||||||||||||||
BBB | ||||||||||||||
Other | ||||||||||||||
Debt securities issued by corporations (1) | $ | $ |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
Millions | Fair Value | Level 2 | Level 3 | Fair Value | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||||
Agency: | ||||||||||||||||||||||||||||||||||||||
FNMA | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
FHLMC | ||||||||||||||||||||||||||||||||||||||
GNMA | ||||||||||||||||||||||||||||||||||||||
Total agency (1) | ||||||||||||||||||||||||||||||||||||||
Non-agency: Residential | ||||||||||||||||||||||||||||||||||||||
Total non-agency | ||||||||||||||||||||||||||||||||||||||
Total mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||
Other asset-backed securities: | ||||||||||||||||||||||||||||||||||||||
Credit card receivables | ||||||||||||||||||||||||||||||||||||||
Vehicle receivables | ||||||||||||||||||||||||||||||||||||||
Total other asset-backed securities | ||||||||||||||||||||||||||||||||||||||
Total mortgage and asset-backed securities | ||||||||||||||||||||||||||||||||||||||
Collateralized loan obligations | ||||||||||||||||||||||||||||||||||||||
Total mortgage and asset-backed securities and collateralized loan obligations | $ | $ | $ | $ | $ | $ |
Fair Value at | ||||||||||||||
Millions | June 30, 2022 | December 31, 2021 | ||||||||||||
Kudu’s Participation Contracts | $ | $ | ||||||||||||
PassportCard/DavidShield | ||||||||||||||
Elementum Holdings, L.P. | ||||||||||||||
Other unconsolidated entities (1) | ||||||||||||||
Total unconsolidated entities | ||||||||||||||
Private equity funds and hedge funds | ||||||||||||||
Bank loan fund | ||||||||||||||
Lloyd’s trust deposits | ||||||||||||||
ILS funds | ||||||||||||||
Private debt investments | ||||||||||||||
Other | ||||||||||||||
Total other long-term investments | $ | $ |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Millions | Fair Value | Unfunded Commitments | Fair Value | Unfunded Commitments | ||||||||||||||||||||||
Private equity funds | ||||||||||||||||||||||||||
Aerospace/Defense/Government | $ | $ | $ | $ | ||||||||||||||||||||||
Financial services | ||||||||||||||||||||||||||
Real estate | ||||||||||||||||||||||||||
Total private equity funds | ||||||||||||||||||||||||||
Hedge funds | ||||||||||||||||||||||||||
European small/mid cap | ||||||||||||||||||||||||||
Total hedge funds | ||||||||||||||||||||||||||
Total private equity funds and hedge funds included in other long-term investments | $ | $ | $ | $ |
Millions | 1 – 3 years | 3 – 5 years | 5 – 10 years | >10 years | Total | |||||||||||||||||||||||||||
Private equity funds — expected lock-up period remaining | $ | $ | $ | $ | $ |
Level 3 Investments | |||||||||||||||||||||||
Millions | Other Long-term Investments | Other Long-term Investments | |||||||||||||||||||||
Balance at December 31, 2021 | $ | Balance at December 31, 2020 | $ | ||||||||||||||||||||
Net realized and unrealized gains | Net realized and unrealized gains | ||||||||||||||||||||||
Amortization/accretion | Amortization/accretion | ||||||||||||||||||||||
Purchases | Purchases | ||||||||||||||||||||||
Sales | ( | Sales | ( | ||||||||||||||||||||
Effect of Ark Transaction | Effect of Ark Transaction | ||||||||||||||||||||||
Transfers in | Transfers in | ||||||||||||||||||||||
Transfers out | Transfers out | ||||||||||||||||||||||
Balance at June 30, 2022 | $ | Balance at June 30, 2021 | $ |
$ in Millions | June 30, 2022 | |||||||||||||||||||||||||
Description | Valuation Technique(s) (1) | Fair Value (2) | Unobservable Inputs | |||||||||||||||||||||||
Discount Rate (6) | Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (6) | |||||||||||||||||||||||||
Kudu’s Participation Contracts (3)(4)(5) | Discounted cash flow | $ | ||||||||||||||||||||||||
PassportCard/DavidShield | Discounted cash flow | $ | ||||||||||||||||||||||||
Elementum Holdings, L.P. | Discounted cash flow | $ | ||||||||||||||||||||||||
Private debt investments | Discounted cash flow | $ | N/A | |||||||||||||||||||||||
$ in Millions | December 31, 2021 | |||||||||||||||||||||||||
Description | Valuation Technique(s) (1) | Fair Value (2) | Unobservable Inputs | |||||||||||||||||||||||
Discount Rate (6) | Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (6) | |||||||||||||||||||||||||
Kudu’s Participation Contracts (3)(4)(5) | Discounted cash flow | $ | ||||||||||||||||||||||||
PassportCard/DavidShield | Discounted cash flow | $ | ||||||||||||||||||||||||
Elementum Holdings, L.P. | Discounted cash flow | $ | ||||||||||||||||||||||||
Private debt investments | Discounted cash flow | $ | N/A | |||||||||||||||||||||||
$ in Millions | Weighted Average Economic Life (in years) | June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
Acquisition Date Fair Value | Accumulated Amortization | Net Carrying Value | Acquisition Date Fair Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||||||||||||||||||||||||
Goodwill: | ||||||||||||||||||||||||||||||||||||||||||||
Ark | N/A | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||||
Kudu | N/A | — | ||||||||||||||||||||||||||||||||||||||||||
Other Operations (1) | N/A | — | — | |||||||||||||||||||||||||||||||||||||||||
Total goodwill | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||
Ark | ||||||||||||||||||||||||||||||||||||||||||||
Underwriting Capacity | N/A | |||||||||||||||||||||||||||||||||||||||||||
Kudu | ||||||||||||||||||||||||||||||||||||||||||||
Trade names | ||||||||||||||||||||||||||||||||||||||||||||
Other Operations | ||||||||||||||||||||||||||||||||||||||||||||
Trade names | ||||||||||||||||||||||||||||||||||||||||||||
Customer relationships | ||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||
Subtotal | ||||||||||||||||||||||||||||||||||||||||||||
Total other intangible assets | ||||||||||||||||||||||||||||||||||||||||||||
Total goodwill and other intangible assets | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets attributed to non-controlling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets included in White Mountains’s common shareholders’ equity | $ | $ |
$ in Millions | ||||||||||||||
Acquisition of subsidiary/ asset | Goodwill and Other intangible asset (1) | Acquisition Date | ||||||||||||
Ark | $ | January 1, 2021 | ||||||||||||
Other Operations | $ | Various |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Millions | Goodwill | Other Intangible Assets | Total Goodwill and Other Intangible Assets | Goodwill | Other Intangible Assets | Total Goodwill and Other Intangible Assets | ||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Acquisition of businesses | (1) | (1) | ||||||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Millions | Goodwill | Other Intangible Assets | Total Goodwill and Other Intangible Assets | Goodwill | Other Intangible Assets | Total Goodwill and Other Intangible Assets | ||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Ark Transaction | ||||||||||||||||||||||||||||||||||||||
Acquisition of businesses | (2) | (2) | ||||||||||||||||||||||||||||||||||||
Measurement period adjustments (1) | ( | ( | ||||||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Gross beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Less: beginning reinsurance recoverable on unpaid losses (1) | ( | ( | ( | ( | ||||||||||||||||||||||
Net loss and LAE reserves | ||||||||||||||||||||||||||
Loss and LAE incurred relating to: | ||||||||||||||||||||||||||
Current year losses | ||||||||||||||||||||||||||
Prior year losses | ( | ( | ( | ( | ||||||||||||||||||||||
Net incurred losses and LAE | ||||||||||||||||||||||||||
Loss and LAE paid relating to: | ||||||||||||||||||||||||||
Current year losses | ( | ( | ( | ( | ||||||||||||||||||||||
Prior year losses | ( | ( | ( | ( | ||||||||||||||||||||||
Net paid loss and LAE | ( | ( | ( | ( | ||||||||||||||||||||||
Change in TPC Providers’ participation (2) | ( | |||||||||||||||||||||||||
Foreign currency translation and other adjustments to loss and LAE reserves | ( | ( | ( | |||||||||||||||||||||||
Net ending balance | ||||||||||||||||||||||||||
Plus: ending reinsurance recoverable on unpaid losses (3) | ||||||||||||||||||||||||||
Gross ending balance | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Written premiums: | ||||||||||||||||||||||||||
Gross | $ | $ | $ | $ | ||||||||||||||||||||||
Ceded | ( | ( | ( | ( | ||||||||||||||||||||||
Net written premiums | $ | $ | $ | $ | ||||||||||||||||||||||
Earned premiums: | ||||||||||||||||||||||||||
Gross | $ | $ | $ | $ | ||||||||||||||||||||||
Ceded | ( | ( | ( | ( | ||||||||||||||||||||||
Net earned premiums | $ | $ | $ | $ | ||||||||||||||||||||||
Losses and loss adjustment expenses: | ||||||||||||||||||||||||||
Gross | $ | $ | $ | $ | ||||||||||||||||||||||
Ceded | ( | ( | ( | ( | ||||||||||||||||||||||
Net losses and loss adjustment expenses | $ | $ | $ | $ |
$ in Millions | As of June 30, 2022 | |||||||||||||||||||||||||
A.M. Best Rating(1) | Gross | Collateral | Net | % of Total | ||||||||||||||||||||||
A+ or better | $ | $ | $ | % | ||||||||||||||||||||||
A- to A | $ | |||||||||||||||||||||||||
B++ or lower and not rated | ||||||||||||||||||||||||||
Total | $ | $ | $ | % |
$ in Millions | June 30, 2022 | Effective Rate | (1) | December 31, 2021 | Effective Rate | (1) | |||||||||||||||||||||||
HG Global Senior Notes | $ | $ | — | N/A | |||||||||||||||||||||||||
Unamortized discount and issuance cost | ( | — | |||||||||||||||||||||||||||
HG Global Senior Notes, carrying value | — | ||||||||||||||||||||||||||||
Ark 2007 Subordinated Notes, carrying value | |||||||||||||||||||||||||||||
Ark 2021 Notes Tranche 1 | |||||||||||||||||||||||||||||
Ark 2021 Notes Tranche 2 | |||||||||||||||||||||||||||||
Ark 2021 Notes Tranche 3 | |||||||||||||||||||||||||||||
Unamortized issuance cost | ( | ( | |||||||||||||||||||||||||||
Ark 2021 Subordinated Notes, carrying value | |||||||||||||||||||||||||||||
Total Ark Subordinated Notes, carrying value | |||||||||||||||||||||||||||||
Kudu Credit Facility | |||||||||||||||||||||||||||||
Unamortized issuance cost | ( | ( | |||||||||||||||||||||||||||
Kudu Credit Facility, carrying value | |||||||||||||||||||||||||||||
Other Operations debt | |||||||||||||||||||||||||||||
Unamortized issuance cost | ( | ( | |||||||||||||||||||||||||||
Other Operations debt, carrying value | |||||||||||||||||||||||||||||
Total debt | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Kudu Bank Facility | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Term loans | ||||||||||||||||||||||||||
Borrowings | ||||||||||||||||||||||||||
Repayments | ( | |||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
Kudu Credit Facility | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Term loans | ||||||||||||||||||||||||||
Borrowings | ||||||||||||||||||||||||||
Repayments | ||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ |
June 30, 2022 | December 31, 2021 | |||||||||||||
Contracts outstanding | ||||||||||||||
Remaining weighted average contract period outstanding (in years) | ||||||||||||||
Contractual debt service outstanding (in millions): | ||||||||||||||
Principal | $ | $ | ||||||||||||
Interest | ||||||||||||||
Total debt service outstanding | $ | $ | ||||||||||||
Gross unearned insurance premiums (in millions) | $ | $ |
Millions | June 30, 2022 | |||||||
July 1, 2022 - December 31, 2022 | $ | |||||||
January 1, 2023 - March 31, 2023 | ||||||||
April 1, 2023 - June 30, 2023 | ||||||||
July 1, 2023 - September 30, 2023 | ||||||||
October 1, 2023 - December 31, 2023 | ||||||||
Total 2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 and thereafter | ||||||||
Total gross unearned insurance premiums | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Written premiums: | ||||||||||||||||||||||||||
Direct | $ | $ | $ | $ | ||||||||||||||||||||||
Assumed | ||||||||||||||||||||||||||
Gross written premiums (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Earned premiums: | ||||||||||||||||||||||||||
Direct | $ | $ | $ | $ | ||||||||||||||||||||||
Assumed | ||||||||||||||||||||||||||
Gross earned premiums (1) | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Basic and diluted earnings per share numerators (in millions): | ||||||||||||||||||||||||||
Net income (loss) attributable to White Mountains’s common shareholders | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Less: total income (loss) from discontinued operations, net of tax (1) | ( | |||||||||||||||||||||||||
Less: net (income) loss from discontinued operations attributable to non-controlling interests | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Net income (loss) from continuing operations attributable to White Mountains’s common shareholders | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Allocation of (earnings) losses to participating restricted common shares (2) | ( | ( | ||||||||||||||||||||||||
Basic and diluted earnings (losses) per share numerators | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Basic earnings per share denominators (in thousands): | ||||||||||||||||||||||||||
Total average common shares outstanding during the period | ||||||||||||||||||||||||||
Average unvested restricted common shares (3) | ( | ( | ( | ( | ||||||||||||||||||||||
Basic earnings (losses) per share denominator | ||||||||||||||||||||||||||
Diluted earnings per share denominator (in thousands): | ||||||||||||||||||||||||||
Total average common shares outstanding during the period | ||||||||||||||||||||||||||
Average unvested restricted common shares (3) | ( | ( | ( | ( | ||||||||||||||||||||||
Diluted earnings (losses) per share denominator | ||||||||||||||||||||||||||
Basic and diluted earnings per share (in dollars) - continuing operations: | ||||||||||||||||||||||||||
Distributed earnings - dividends declared and paid | $ | $ | $ | $ | ||||||||||||||||||||||
Undistributed earnings (losses) | ( | ( | ||||||||||||||||||||||||
Basic and diluted earnings (losses) per share | $ | ( | $ | $ | ( | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Undistributed net earnings (losses) - continuing operations: | ||||||||||||||||||||||||||
Net income (losses) attributable to White Mountains’s common shareholders, net of restricted common share amounts | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Dividends declared, net of restricted common share amounts (1) | ( | ( | ||||||||||||||||||||||||
Total undistributed net earnings (losses), net of restricted common share amounts | $ | ( | $ | $ | ( | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Millions, except share amounts | Target Performance Shares Outstanding | Accrued Expense | Target Performance Shares Outstanding | Accrued Expense | Target Performance Shares Outstanding | Accrued Expense | Target Performance Shares Outstanding | Accrued Expense | ||||||||||||||||||||||||||||||||||||||||||
Beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Shares paid (1) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
New grants | ||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeitures and cancellations (2) | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Expense recognized | ||||||||||||||||||||||||||||||||||||||||||||||||||
End of period | $ | $ | $ | $ |
Six Months Ended June 30, 2022 | ||||||||||||||
Millions, except share amounts | Target Performance Shares Outstanding | Accrued Expense | ||||||||||||
Performance cycle: | ||||||||||||||
2020 – 2022 | $ | |||||||||||||
2021 – 2023 | ||||||||||||||
2022 – 2024 | ||||||||||||||
Sub-total | ||||||||||||||
Assumed forfeitures | ( | ( | ||||||||||||
June 30, 2022 | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Millions, except share amounts | Restricted Shares | Unamortized Issue Date Fair Value | Restricted Shares | Unamortized Issue Date Fair Value | Restricted Shares | Unamortized Issue Date Fair Value | Restricted Shares | Unamortized Issue Date Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Non-vested, | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Issued | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vested | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Expense recognized | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
End of period | $ | $ | $ | $ |
Millions | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
Lease Cost | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Lease cost | $ | $ | $ | $ | ||||||||||||||||||||||
Less: sublease income | ||||||||||||||||||||||||||
Net lease cost | $ | $ | $ | $ |
Millions | As of June 30, 2022 | |||||||
Remainder of 2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total undiscounted lease payments | ||||||||
Less: present value adjustment | ||||||||
Operating lease liability | $ |
As of June 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Millions | HG/BAM | Ark | Kudu | Other Operations | Total | Weighted Average Incremental Borrowing Rate (1) | ||||||||||||||||||||||||||||||||
ROU lease asset | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Lease liability | $ | $ | $ | $ | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Millions | HG/BAM | Ark | Kudu | Other Operations | Total | Weighted Average Incremental Borrowing Rate (1) | ||||||||||||||||||||||||||||||||
ROU lease asset | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Lease liability | $ | $ | $ | $ | $ |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||
$ in Millions | Non-controlling Percentage (1) | Non-controlling Equity | Non-controlling Percentage (1) | Non-controlling Equity | ||||||||||||||||||||||
Non-controlling interests, excluding BAM | ||||||||||||||||||||||||||
HG Global | % | $ | % | $ | ||||||||||||||||||||||
Ark | % | % | ||||||||||||||||||||||||
Kudu | % | % | ||||||||||||||||||||||||
NSM (2) | % | % | ||||||||||||||||||||||||
Other | various | various | ||||||||||||||||||||||||
Total, excluding BAM | ||||||||||||||||||||||||||
BAM | % | ( | % | ( | ||||||||||||||||||||||
Total non-controlling interests | $ | $ |
Millions | HG Global/ BAM | Ark | Kudu | Other Operations | Total | |||||||||||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||
Earned insurance premiums | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) from investment in MediaAlpha | ( | ( | ||||||||||||||||||||||||||||||
Commission revenues | ||||||||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||
Total revenues | ( | ( | ( | |||||||||||||||||||||||||||||
Loss and loss adjustment expenses | ||||||||||||||||||||||||||||||||
Insurance and reinsurance acquisition expenses | ||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||||||||
Amortization of other intangible assets | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||||||||
Pre-tax income (loss) from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Millions | HG Global/ BAM | Ark | Kudu | Other Operations | Total | |||||||||||||||||||||||||||
Three Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||
Earned insurance premiums | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ||||||||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) from investment in MediaAlpha | ||||||||||||||||||||||||||||||||
Commission revenues | ||||||||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||||||||
Losses and loss adjustment expenses | ||||||||||||||||||||||||||||||||
Insurance and reinsurance acquisition expenses | ||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||||||||
Amortization of other intangible assets | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||||||||
Pre-tax income (loss) from continuing operations | $ | $ | $ | $ | $ |
Millions | HG Global/ BAM | Ark | Kudu | Other Operations | Total | |||||||||||||||||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||
Earned insurance premiums | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ( | ( | ( | |||||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) from investment in MediaAlpha | ( | ( | ||||||||||||||||||||||||||||||
Commission revenues | ||||||||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||
Total revenues | ( | ( | ||||||||||||||||||||||||||||||
Loss and loss adjustment expenses | ||||||||||||||||||||||||||||||||
Insurance and reinsurance acquisition expenses | ||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||||||||
Amortization of other intangible assets | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||||||||
Pre-tax income (loss) from continuing operations | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Millions | HG Global/ BAM | Ark | Kudu | Other Operations | Total | |||||||||||||||||||||||||||
Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||
Earned insurance premiums | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | ( | |||||||||||||||||||||||||||||||
Net realized and unrealized investment gains (losses) from investment in MediaAlpha | ||||||||||||||||||||||||||||||||
Commission revenues | ||||||||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||||||||
Losses and loss adjustment expenses | ||||||||||||||||||||||||||||||||
Insurance and reinsurance acquisition expenses | ||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||||||||
Amortization of other intangible assets | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||||||||
Pre-tax income (loss) from continuing operations | $ | ( | $ | ( | $ | $ | $ |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Millions | Ownership Interest | Carrying Value | Ownership Interest | Carrying Value | ||||||||||||||||||||||
Kudu Participation Contracts (1) | $ | $ | ||||||||||||||||||||||||
Investment in MediaAlpha | % | % | ||||||||||||||||||||||||
PassportCard/DavidShield | % | % | ||||||||||||||||||||||||
Elementum Holdings, L.P. | % | % | ||||||||||||||||||||||||
Other equity method eligible investments, at fair value | Under 50.0% | Under 50.0% | ||||||||||||||||||||||||
Other equity method eligible investments, at fair value | 50.0% and over | 50.0% and over | ||||||||||||||||||||||||
Millions | June 30, 2022 | December 31, 2021 | ||||||||||||
Balance sheet data: | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Total liabilities | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Income statement data: | ||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Total expenses | $ | $ | $ | $ | ||||||||||||||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Millions | Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||||||||||
HG Global Senior Notes | $ | $ | $ | $ | ||||||||||||||||||||||
Ark 2007 Subordinated Notes | $ | $ | $ | $ | ||||||||||||||||||||||
Ark 2021 Subordinated Notes | $ | $ | $ | $ | ||||||||||||||||||||||
Kudu Credit Facility | $ | $ | $ | $ | ||||||||||||||||||||||
Other Operations debt | $ | $ | $ | $ |
Millions | June 30, 2022 | December 31, 2021 | ||||||||||||
Assets held for sale | ||||||||||||||
Short-term investments, at fair value | $ | $ | ||||||||||||
Cash (restricted $ | ||||||||||||||
Premiums and commissions receivable | ||||||||||||||
Goodwill and other intangible assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets held for sale | $ | $ | ||||||||||||
Liabilities held for sale | ||||||||||||||
Debt | $ | $ | ||||||||||||
Premiums payable | ||||||||||||||
Contingent consideration | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities held for sale | ||||||||||||||
Net assets held for sale | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Commission revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||
Total revenues - NSM Group | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||
Broker commission expenses | ||||||||||||||||||||||||||
Change in fair value of contingent consideration | ||||||||||||||||||||||||||
Amortization of other intangible assets | ||||||||||||||||||||||||||
Loss on assets held for sale | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Total expenses - NSM Group | ||||||||||||||||||||||||||
Pre-tax income (loss) from NSM Group discontinued operations | ( | |||||||||||||||||||||||||
Income tax (expense) benefit | ( | ( | ||||||||||||||||||||||||
Net income (loss) income from NSM Group discontinued operations | ( | |||||||||||||||||||||||||
Gain (loss) from sale of Sirius Group, net of tax | ||||||||||||||||||||||||||
Total income (loss) from discontinued operations, net of tax | ( | |||||||||||||||||||||||||
Net (income) loss from discontinued operations attributable to non-controlling interests | ( | ( | ||||||||||||||||||||||||
Total income (loss) from discontinued operations attributable to White Mountains’s common shareholders | ( | |||||||||||||||||||||||||
Other comprehensive income (loss) from NSM discontinued operations, net of tax | ( | ( | ||||||||||||||||||||||||
Comprehensive income (loss) from discontinued operations | ( | |||||||||||||||||||||||||
Other comprehensive income (loss) from NSM discontinued operations attributable to non-controlling interests | ( | |||||||||||||||||||||||||
Comprehensive income (loss) from discontinued operations attributable to White Mountains’s common shareholders | $ | $ | $ | $ | ( |
Six Months Ended June 30, | ||||||||||||||
Millions | 2022 | 2021 | ||||||||||||
Net cash provided from (used for) operations | $ | $ | ||||||||||||
Net cash provided from (used for) investing activities | ( | |||||||||||||
Net cash used from (used for) financing activities | ( | ( | ||||||||||||
Effect of exchange rate changes on cash | ( | |||||||||||||
Net change in cash during the period | ||||||||||||||
Cash balances at beginning of period (includes restricted cash of $ | ||||||||||||||
Cash balances at end of period (includes restricted cash of $ | ||||||||||||||
Supplemental cash flows information: | ||||||||||||||
Interest paid | $ | $ | ||||||||||||
Net income tax payments | $ | $ | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Basic and diluted earnings per share numerators (in millions): | ||||||||||||||||||||||||||
Net income (loss) attributable to White Mountains’s common shareholders | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Less: net income (loss) from continuing operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Less: net (income) loss from continuing operations attributable to non-controlling interests | $ | $ | $ | $ | ||||||||||||||||||||||
Total gain (loss) from discontinued operations attributable to White Mountains’s common shareholders (1) | $ | $ | $ | $ | ( | |||||||||||||||||||||
Allocation of earnings to participating restricted common shares (2) | ( | ( | ||||||||||||||||||||||||
Basic and diluted earnings per share numerators (3) | $ | $ | $ | $ | ( | |||||||||||||||||||||
Basic earnings per share denominators (in thousands): | ||||||||||||||||||||||||||
Total average common shares outstanding during the period | ||||||||||||||||||||||||||
Average unvested restricted common shares (4) | ( | ( | ( | ( | ||||||||||||||||||||||
Basic earnings per share denominator | ||||||||||||||||||||||||||
Diluted earnings per share denominator (in thousands): | ||||||||||||||||||||||||||
Total average common shares outstanding during the period | ||||||||||||||||||||||||||
Average unvested restricted common shares (4) | ( | ( | ( | ( | ||||||||||||||||||||||
Diluted earnings per share denominator | ||||||||||||||||||||||||||
Basic and diluted earnings (losses) per share (in dollars) - discontinued operations: | $ | $ | $ | $ | ( |
June 30, 2022 | March 31, 2022 | December 31, 2021 | June 30, 2021 | |||||||||||||||||||||||
Book value per share numerators (in millions): | ||||||||||||||||||||||||||
White Mountains’s common shareholders’ equity - GAAP book value per share numerator | $ | 3,323.3 | $ | 3,542.1 | $ | 3,548.1 | $ | 3,978.2 | ||||||||||||||||||
Time value of money discount on expected future payments on the BAM Surplus Notes (1) | (115.9) | (120.9) | (125.9) | (132.8) | ||||||||||||||||||||||
HG Global’s unearned premium reserve (1) | 221.6 | 215.8 | 214.6 | 201.5 | ||||||||||||||||||||||
HG Global’s net deferred acquisition costs (1) | (62.6) | (60.6) | (60.8) | (56.3) | ||||||||||||||||||||||
Adjusted book value per share numerator | $ | 3,366.4 | $ | 3,576.4 | $ | 3,576.0 | $ | 3,990.6 | ||||||||||||||||||
Book value per share denominators (in thousands of shares): | ||||||||||||||||||||||||||
Common shares outstanding - GAAP book value per share denominator | 2,942.9 | 2,994.2 | 3,017.8 | 3,109.2 | ||||||||||||||||||||||
Unearned restricted common shares | (20.9) | (24.2) | (13.7) | (20.6) | ||||||||||||||||||||||
Adjusted book value per share denominator | 2,922.0 | 2,970.0 | 3,004.1 | 3,088.6 | ||||||||||||||||||||||
GAAP book value per share | $ | 1,129.27 | $ | 1,183.00 | $ | 1,175.73 | $ | 1,279.49 | ||||||||||||||||||
Adjusted book value per share | $ | 1,152.12 | $ | 1,204.17 | $ | 1,190.39 | $ | 1,292.03 | ||||||||||||||||||
Year-to-date dividends paid per share | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 |
Millions | June 30, 2022 | March 31, 2022 | December 31, 2021 | June 30, 2021 | ||||||||||||||||||||||
Goodwill: | ||||||||||||||||||||||||||
Ark | $ | 116.8 | $ | 116.8 | $ | 116.8 | $ | 116.8 | ||||||||||||||||||
Kudu | 7.6 | 7.6 | 7.6 | 7.6 | ||||||||||||||||||||||
Other Operations (1) | 77.4 | 17.9 | 17.9 | 27.1 | ||||||||||||||||||||||
Total goodwill | 201.8 | 142.3 | 142.3 | 151.5 | ||||||||||||||||||||||
Other intangible assets: | ||||||||||||||||||||||||||
Ark | 175.7 | 175.7 | 175.7 | 175.7 | ||||||||||||||||||||||
Kudu | 1.1 | 1.3 | 1.3 | 1.5 | ||||||||||||||||||||||
Other Operations (1) | 19.4 | 20.2 | 21.2 | 23.9 | ||||||||||||||||||||||
Total other intangible assets | 196.2 | 197.2 | 198.2 | 201.1 | ||||||||||||||||||||||
Total goodwill and other intangible assets (2) | 398.0 | 339.5 | 340.5 | 352.6 | ||||||||||||||||||||||
Goodwill and other intangible assets attributed to non-controlling interests | (103.4) | (91.8) | (91.8) | (92.4) | ||||||||||||||||||||||
Goodwill and other intangible assets included in White Mountains’s common shareholders’ equity | $ | 294.6 | $ | 247.7 | $ | 248.7 | $ | 260.2 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Financial Guarantee revenues | $ | (13.2) | $ | 17.4 | $ | (44.5) | $ | 10.7 | ||||||||||||||||||
P&C Insurance and Reinsurance revenues | 182.2 | 130.5 | 357.9 | 239.6 | ||||||||||||||||||||||
Asset Management revenues | (3.8) | 36.2 | 31.1 | 60.3 | ||||||||||||||||||||||
Other Operations revenues | (88.5) | 158.3 | (7.4) | 135.2 | ||||||||||||||||||||||
Total revenues | 76.7 | 342.4 | 337.1 | 445.8 | ||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Financial Guarantee expenses | 25.6 | 15.5 | 44.9 | 33.8 | ||||||||||||||||||||||
P&C Insurance and Reinsurance expenses | 203.6 | 112.7 | 402.4 | 254.3 | ||||||||||||||||||||||
Asset Management expenses | 6.4 | 4.8 | 12.0 | 13.2 | ||||||||||||||||||||||
Other Operations expenses | 73.7 | 48.0 | 125.2 | 88.5 | ||||||||||||||||||||||
Total expenses | 309.3 | 181.0 | 584.5 | 389.8 | ||||||||||||||||||||||
Pre-tax income (loss) | ||||||||||||||||||||||||||
Financial Guarantee pre-tax income (loss) | (38.8) | 1.9 | (89.4) | (23.1) | ||||||||||||||||||||||
P&C Insurance and Reinsurance pre-tax income (loss) | (21.4) | 17.8 | (44.5) | (14.7) | ||||||||||||||||||||||
Asset Management pre-tax income (loss) | (10.2) | 31.4 | 19.1 | 47.1 | ||||||||||||||||||||||
Other Operations pre-tax income (loss) | (162.2) | 110.3 | (132.6) | 46.7 | ||||||||||||||||||||||
Total pre-tax income (loss) from continuing operations | (232.6) | 161.4 | (247.4) | 56.0 | ||||||||||||||||||||||
Income tax (expense) benefit | 16.0 | (30.0) | 18.7 | (23.6) | ||||||||||||||||||||||
Net income (loss) from continuing operations | (216.6) | 131.4 | (228.7) | 32.4 | ||||||||||||||||||||||
Gain (loss) on sale of Sirius Group, net of tax | — | — | — | 18.7 | ||||||||||||||||||||||
Net income (loss) from NSM Group discontinued operations, net of tax | 6.4 | 1.1 | 10.1 | (29.1) | ||||||||||||||||||||||
Net income (loss) | (210.2) | 132.5 | (218.6) | 22.0 | ||||||||||||||||||||||
Net (income) loss attributable to non-controlling interests | 41.0 | 6.0 | 82.8 | 41.2 | ||||||||||||||||||||||
Net income (loss) attributable to White Mountains’s common shareholders | (169.2) | 138.5 | (135.8) | 63.2 | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax | (1.1) | .5 | (1.5) | .2 | ||||||||||||||||||||||
Other comprehensive income (loss) from NSM Group discontinued operations, net of tax | (4.0) | .5 | (5.9) | 2.6 | ||||||||||||||||||||||
Comprehensive income (loss) | (174.3) | 139.5 | (143.2) | 66.0 | ||||||||||||||||||||||
Other comprehensive (income) loss attributable to non-controlling interests | .5 | (.1) | .7 | (.2) | ||||||||||||||||||||||
Comprehensive income (loss) attributable to White Mountains’s common shareholders | $ | (173.8) | $ | 139.4 | $ | (142.5) | $ | 65.8 | ||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||
Millions | HG Global | BAM | Eliminations | Total | ||||||||||||||||||||||
Direct written premiums | $ | — | $ | 17.1 | $ | — | $ | 17.1 | ||||||||||||||||||
Assumed written premiums | 14.7 | — | (14.7) | — | ||||||||||||||||||||||
Gross written premiums | 14.7 | 17.1 | (14.7) | 17.1 | ||||||||||||||||||||||
Ceded written premiums | — | (14.7) | 14.7 | — | ||||||||||||||||||||||
Net written premiums | $ | 14.7 | $ | 2.4 | $ | — | $ | 17.1 | ||||||||||||||||||
Earned insurance premiums | $ | 8.7 | $ | 1.8 | $ | — | $ | 10.5 | ||||||||||||||||||
Net investment income | 2.2 | 2.6 | — | 4.8 | ||||||||||||||||||||||
Net investment income - BAM Surplus Notes | 3.0 | — | (3.0) | — | ||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | (14.7) | (15.4) | — | (30.1) | ||||||||||||||||||||||
Other revenues | .1 | 1.5 | — | 1.6 | ||||||||||||||||||||||
Total revenues | (0.7) | (9.5) | (3.0) | (13.2) | ||||||||||||||||||||||
Insurance acquisition expenses | 3.4 | 1.4 | — | 4.8 | ||||||||||||||||||||||
General and administrative expenses | .8 | 16.6 | — | 17.4 | ||||||||||||||||||||||
Interest expense - HG Global Senior Notes | 3.4 | — | — | 3.4 | ||||||||||||||||||||||
Interest expense - BAM Surplus Notes | — | 3.0 | (3.0) | — | ||||||||||||||||||||||
Total expenses | 7.6 | 21.0 | (3.0) | 25.6 | ||||||||||||||||||||||
Pre-tax income (loss) | $ | (8.3) | $ | (30.5) | $ | — | $ | (38.8) | ||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||
MSC collected (1) | $ | — | $ | 24.0 | $ | — | $ | 24.0 |
Three Months Ended June 30, 2021 | ||||||||||||||||||||||||||
Millions | HG Global | BAM | Eliminations | Total | ||||||||||||||||||||||
Direct written premiums | $ | — | $ | 13.8 | $ | — | $ | 13.8 | ||||||||||||||||||
Assumed written premiums | 11.8 | — | (11.8) | — | ||||||||||||||||||||||
Gross written premiums | 11.8 | 13.8 | (11.8) | 13.8 | ||||||||||||||||||||||
Ceded written premiums | — | (11.8) | 11.8 | — | ||||||||||||||||||||||
Net written premiums | $ | 11.8 | $ | 2.0 | $ | — | $ | 13.8 | ||||||||||||||||||
Earned insurance premiums | $ | 5.3 | $ | 1.2 | $ | — | $ | 6.5 | ||||||||||||||||||
Net investment income | 1.7 | 2.6 | — | 4.3 | ||||||||||||||||||||||
Net investment income - BAM Surplus Notes | 3.0 | — | (3.0) | — | ||||||||||||||||||||||
Net realized and unrealized investment gains | 2.4 | 3.9 | — | 6.3 | ||||||||||||||||||||||
Other revenues | .1 | .2 | — | .3 | ||||||||||||||||||||||
Total revenues | 12.5 | 7.9 | (3.0) | 17.4 | ||||||||||||||||||||||
Insurance acquisition expenses | 1.3 | .3 | — | 1.6 | ||||||||||||||||||||||
General and administrative expenses | .5 | 13.4 | — | 13.9 | ||||||||||||||||||||||
Interest expense - BAM Surplus Notes | — | 3.0 | (3.0) | — | ||||||||||||||||||||||
Total expenses | 1.8 | 16.7 | (3.0) | 15.5 | ||||||||||||||||||||||
Pre-tax income (loss) | $ | 10.7 | $ | (8.8) | $ | — | $ | 1.9 | ||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||
MSC collected (1) | $ | — | $ | 16.3 | $ | — | $ | 16.3 |
Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||
Millions | HG Global | BAM | Eliminations | Total | ||||||||||||||||||||||
Direct written premiums | $ | — | $ | 26.5 | $ | — | $ | 26.5 | ||||||||||||||||||
Assumed written premiums | 22.8 | — | (22.8) | — | ||||||||||||||||||||||
Gross written premiums | 22.8 | 26.5 | (22.8) | 26.5 | ||||||||||||||||||||||
Ceded written premiums | — | (22.8) | 22.8 | — | ||||||||||||||||||||||
Net written premiums | $ | 22.8 | $ | 3.7 | $ | — | $ | 26.5 | ||||||||||||||||||
Earned insurance premiums | $ | 15.6 | $ | 3.3 | $ | — | $ | 18.9 | ||||||||||||||||||
Net investment income | 4.3 | 5.1 | — | 9.4 | ||||||||||||||||||||||
Net investment income - BAM Surplus Notes | 5.9 | — | (5.9) | — | ||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | (38.2) | (37.0) | — | (75.2) | ||||||||||||||||||||||
Other revenues | .2 | 2.2 | — | 2.4 | ||||||||||||||||||||||
Total revenues | (12.2) | (26.4) | (5.9) | (44.5) | ||||||||||||||||||||||
Insurance acquisition expenses | 6.0 | 1.8 | — | 7.8 | ||||||||||||||||||||||
General and administrative expenses | 1.5 | 32.2 | — | 33.7 | ||||||||||||||||||||||
Interest expense - HG Global Senior Notes | 3.4 | — | — | 3.4 | ||||||||||||||||||||||
Interest expense - BAM Surplus Notes | — | 5.9 | (5.9) | — | ||||||||||||||||||||||
Total expenses | 10.9 | 39.9 | (5.9) | 44.9 | ||||||||||||||||||||||
Pre-tax income (loss) | $ | (23.1) | $ | (66.3) | $ | — | $ | (89.4) | ||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||
MSC collected (1) | $ | — | $ | 36.3 | $ | — | $ | 36.3 |
Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||
Millions | HG Global | BAM | Eliminations | Total | ||||||||||||||||||||||
Direct written premiums | $ | — | $ | 21.8 | $ | — | $ | 21.8 | ||||||||||||||||||
Assumed written premiums | 22.5 | 4.5 | (22.5) | 4.5 | ||||||||||||||||||||||
Gross written premiums | 22.5 | 26.3 | (22.5) | 26.3 | ||||||||||||||||||||||
Ceded written premiums | — | (22.5) | 22.5 | — | ||||||||||||||||||||||
Net written premiums | $ | 22.5 | $ | 3.8 | $ | — | $ | 26.3 | ||||||||||||||||||
Earned insurance premiums | $ | 10.6 | $ | 2.3 | $ | — | $ | 12.9 | ||||||||||||||||||
Net investment income | 3.5 | 5.3 | — | 8.8 | ||||||||||||||||||||||
Net investment income - BAM Surplus Notes | 6.0 | — | (6.0) | — | ||||||||||||||||||||||
Net realized and unrealized investment losses | (7.5) | (4.1) | — | (11.6) | ||||||||||||||||||||||
Other revenues | .2 | .4 | — | .6 | ||||||||||||||||||||||
Total revenues | 12.8 | 3.9 | (6.0) | 10.7 | ||||||||||||||||||||||
Insurance acquisition expenses | 2.8 | .7 | — | 3.5 | ||||||||||||||||||||||
General and administrative expenses | 1.1 | 29.2 | — | 30.3 | ||||||||||||||||||||||
Interest expense - BAM Surplus Notes | — | 6.0 | (6.0) | — | ||||||||||||||||||||||
Total expenses | 3.9 | 35.9 | (6.0) | 33.8 | ||||||||||||||||||||||
Pre-tax income (loss) | $ | 8.9 | $ | (32.0) | $ | — | $ | (23.1) | ||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||
MSC collected (1) | $ | — | 30.1 | $ | — | $ | 30.1 |
Three Months Ended June 30, | ||||||||||||||
$ in Millions | 2022 | 2021 | ||||||||||||
Gross par value of primary market policies issued | $ | 4,123.7 | $ | 4,815.5 | ||||||||||
Gross par value of secondary market policies issued | 1,743.8 | 312.1 | ||||||||||||
Gross par value of assumed reinsurance | — | — | ||||||||||||
Total gross par value of market policies issued | $ | 5,867.5 | $ | 5,127.6 | ||||||||||
Gross written premiums | $ | 17.1 | $ | 13.7 | ||||||||||
MSC collected | 24.0 | 16.3 | ||||||||||||
Total gross written premiums and MSC collected | $ | 41.1 | $ | 30.0 | ||||||||||
Present value of future installment MSC collections | — | — | ||||||||||||
Gross written premium adjustments on existing installment policies | — | .1 | ||||||||||||
Gross written premiums and MSC from new business (1) | $ | 41.1 | $ | 30.1 | ||||||||||
Total pricing | 70 bps | 59 bps |
Six Months Ended June 30, | ||||||||||||||
$ in Millions | 2022 | 2021 | ||||||||||||
Gross par value of primary market policies issued | $ | 6,878.8 | $ | 7,357.5 | ||||||||||
Gross par value of secondary market policies issued | 2,442.9 | 489.2 | ||||||||||||
Gross par value of assumed reinsurance | — | 805.5 | ||||||||||||
Total gross par value of market policies issued | $ | 9,321.7 | $ | 8,652.2 | ||||||||||
Gross written premiums | 26.5 | 26.2 | ||||||||||||
MSC collected | 36.3 | 30.1 | ||||||||||||
Total gross written premiums and MSC collected | $ | 62.8 | $ | 56.3 | ||||||||||
Present value of future installment MSC collections | — | — | ||||||||||||
Gross written premium adjustments on existing installment policies | — | .1 | ||||||||||||
Gross written premiums and MSC from new business | $ | 62.8 | $ | 56.4 | ||||||||||
Total pricing | 67 bps | 65 bps |
Millions | June 30, 2022 | December 31, 2021 | June 30, 2021 | |||||||||||||||||
Policyholders’ surplus | $ | 303.4 | $ | 298.1 | $ | 323.1 | ||||||||||||||
Contingency reserve | 109.8 | 101.8 | 97.4 | |||||||||||||||||
Qualified statutory capital | 413.2 | 399.9 | 420.5 | |||||||||||||||||
Net unearned premiums | 51.1 | 49.5 | 47.4 | |||||||||||||||||
Present value of future installment premiums and MSC | 13.9 | 13.8 | 13.8 | |||||||||||||||||
HG Re Collateral trusts at statutory value | 499.4 | 478.9 | 433.0 | |||||||||||||||||
Fidus Re Collateral trust at statutory value | 250.0 | 250.0 | 250.0 | |||||||||||||||||
Claims paying resources | $ | 1,227.6 | $ | 1,192.1 | $ | 1,164.7 |
June 30, 2022 | ||||||||||||||||||||||||||
Millions | HG Global | BAM | Eliminations and Segment Adjustment | Total | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Fixed maturity investments, at fair value | $ | 443.7 | $ | 440.7 | $ | — | $ | 884.4 | ||||||||||||||||||
Short-term investments, at fair value | 40.0 | 15.3 | — | 55.3 | ||||||||||||||||||||||
Total investments | 483.7 | 456.0 | — | 939.7 | ||||||||||||||||||||||
Cash | 12.8 | 8.8 | — | 21.6 | ||||||||||||||||||||||
BAM Surplus Notes | 364.6 | — | (364.6) | — | ||||||||||||||||||||||
Accrued interest receivable on BAM Surplus Notes | 163.5 | — | (163.5) | — | ||||||||||||||||||||||
Insurance premiums receivable | 4.3 | 6.9 | (4.3) | 6.9 | ||||||||||||||||||||||
Deferred acquisition costs | 64.6 | 33.9 | (64.6) | 33.9 | ||||||||||||||||||||||
Other assets | 4.1 | 16.8 | (1.2) | 19.7 | ||||||||||||||||||||||
Total assets | $ | 1,097.6 | $ | 522.4 | $ | (598.2) | $ | 1,021.8 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
BAM Surplus Notes(1) | $ | — | $ | 364.6 | $ | (364.6) | $ | — | ||||||||||||||||||
Accrued interest payable on BAM Surplus Notes(2) | — | 163.5 | (163.5) | — | ||||||||||||||||||||||
Preferred dividends payable to White Mountains(3) | 313.3 | — | — | 313.3 | ||||||||||||||||||||||
Preferred dividends payable to non-controlling interests | 11.5 | — | — | 11.5 | ||||||||||||||||||||||
Unearned insurance premiums | 228.7 | 45.3 | — | 274.0 | ||||||||||||||||||||||
Debt - HG Global Senior Notes | 146.3 | — | — | 146.3 | ||||||||||||||||||||||
Accrued incentive compensation | .8 | 15.7 | — | 16.5 | ||||||||||||||||||||||
Other liabilities | 4.1 | 87.2 | (70.1) | 21.2 | ||||||||||||||||||||||
Total liabilities | 704.7 | 676.3 | (598.2) | 782.8 | ||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||
White Mountains’s common shareholders’ equity | 390.2 | — | — | 390.2 | ||||||||||||||||||||||
Non-controlling interests | 2.7 | (153.9) | — | (151.2) | ||||||||||||||||||||||
Total equity | 392.9 | (153.9) | — | 239.0 | ||||||||||||||||||||||
Total liabilities and equity | $ | 1,097.6 | $ | 522.4 | $ | (598.2) | $ | 1,021.8 |
December 31, 2021 | ||||||||||||||||||||||||||
Millions | HG Global | BAM | Eliminations and Segment Adjustment | Total Segment | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Fixed maturity investments, at fair value | $ | 461.7 | $ | 472.4 | $ | — | $ | 934.1 | ||||||||||||||||||
Short-term investments, at fair value | 17.8 | 14.6 | — | 32.4 | ||||||||||||||||||||||
Total investments | 479.5 | 487.0 | — | 966.5 | ||||||||||||||||||||||
Cash | 13.4 | 6.4 | — | 19.8 | ||||||||||||||||||||||
BAM Surplus Notes | 364.6 | — | (364.6) | — | ||||||||||||||||||||||
Accrued interest receivable on BAM Surplus Notes | 157.6 | — | (157.6) | — | ||||||||||||||||||||||
Insurance premiums receivable | 4.3 | 6.9 | (4.3) | 6.9 | ||||||||||||||||||||||
Deferred acquisition costs | 62.7 | 33.1 | (62.7) | 33.1 | ||||||||||||||||||||||
Other assets | 2.1 | 16.6 | (.2) | 18.5 | ||||||||||||||||||||||
Total assets | $ | 1,084.2 | $ | 550.0 | $ | (589.4) | $ | 1,044.8 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
BAM Surplus Notes(1) | $ | — | $ | 364.6 | $ | (364.6) | $ | — | ||||||||||||||||||
Accrued interest payable on BAM Surplus Notes(2) | — | 157.6 | (157.6) | — | ||||||||||||||||||||||
Preferred dividends payable to White Mountains(3) | 400.5 | — | — | 400.5 | ||||||||||||||||||||||
Preferred dividends payable to non-controlling interests | 14.2 | — | — | 14.2 | ||||||||||||||||||||||
Unearned insurance premiums | 221.5 | 44.8 | — | 266.3 | ||||||||||||||||||||||
Accrued incentive compensation | 1.1 | 23.6 | — | 24.7 | ||||||||||||||||||||||
Other liabilities | .5 | 83.4 | (67.2) | 16.7 | ||||||||||||||||||||||
Total liabilities | 637.8 | 674.0 | (589.4) | 722.4 | ||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||
White Mountains’s common shareholders’ equity | 437.5 | — | — | 437.5 | ||||||||||||||||||||||
Non-controlling interests | 8.9 | (124.0) | — | (115.1) | ||||||||||||||||||||||
Total equity | 446.4 | (124.0) | — | 322.4 | ||||||||||||||||||||||
Total liabilities and equity | $ | 1,084.2 | $ | 550.0 | $ | (589.4) | $ | 1,044.8 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Earned insurance premiums | $ | 217.3 | $ | 117.8 | $ | 411.7 | $ | 222.4 | ||||||||||||||||||
Net investment income | 3.2 | .4 | 4.8 | 1.2 | ||||||||||||||||||||||
Net realized and unrealized investment gains (losses) | (44.6) | 8.9 | (62.1) | 10.0 | ||||||||||||||||||||||
Other revenues | 6.3 | 3.4 | 3.5 | 6.0 | ||||||||||||||||||||||
Total revenues | 182.2 | 130.5 | 357.9 | 239.6 | ||||||||||||||||||||||
Losses and LAE | 120.5 | 52.6 | 242.5 | 118.6 | ||||||||||||||||||||||
Insurance and reinsurance acquisition expenses | 50.2 | 34.0 | 100.1 | 70.7 | ||||||||||||||||||||||
General and administrative expenses - other underwriting | 18.6 | 19.1 | 40.7 | 30.3 | ||||||||||||||||||||||
General and administrative expenses - all other | 11.2 | 5.7 | 12.2 | 32.3 | ||||||||||||||||||||||
Interest expense | 3.1 | 1.3 | 6.9 | 2.4 | ||||||||||||||||||||||
Total expenses | 203.6 | 112.7 | 402.4 | 254.3 | ||||||||||||||||||||||
Pre-tax income (loss) | $ | (21.4) | $ | 17.8 | $ | (44.5) | $ | (14.7) |
Three Months Ended June 30, 2022 | ||||||||||||||||||||
$ in Millions | GAAP | TPC Providers’ Share | Adjusted (1) | |||||||||||||||||
Insurance premiums: | ||||||||||||||||||||
Gross written premiums | $ | 403.9 | $ | — | $ | 403.9 | ||||||||||||||
Net written premiums | $ | 270.2 | $ | (.6) | $ | 269.6 | ||||||||||||||
Net earned premiums | $ | 217.3 | $ | 1.1 | $ | 218.4 | ||||||||||||||
Insurance expenses: | ||||||||||||||||||||
Loss and loss adjustment expenses | $ | 120.5 | $ | (2.3) | $ | 118.2 | ||||||||||||||
Insurance and reinsurance acquisition expenses | 50.2 | — | 50.2 | |||||||||||||||||
Other underwriting expenses | 18.6 | .8 | 19.4 | |||||||||||||||||
Total insurance expenses | $ | 189.3 | $ | (1.5) | $ | 187.8 | ||||||||||||||
Ratios: | ||||||||||||||||||||
Loss and loss adjustment expense | 55.5 | % | 54.1 | % | ||||||||||||||||
Insurance and reinsurance acquisition expense | 23.1 | 23.0 | ||||||||||||||||||
Other underwriting expense | 8.6 | 8.9 | ||||||||||||||||||
Combined Ratio | 87.2 | % | 86.0 | % |
Three Months Ended June 30, 2021 | ||||||||||||||||||||
$ in Millions | GAAP | TPC Providers’ Share | Adjusted (1) | |||||||||||||||||
Insurance premiums: | ||||||||||||||||||||
Gross written premiums | $ | 328.1 | $ | — | $ | 328.1 | ||||||||||||||
Net written premiums | $ | 262.2 | $ | (3.0) | $ | 259.2 | ||||||||||||||
Net earned premiums | $ | 117.8 | $ | 15.7 | $ | 133.5 | ||||||||||||||
Insurance expenses: | ||||||||||||||||||||
Loss and loss adjustment expenses | $ | 52.6 | $ | 6.6 | $ | 59.2 | ||||||||||||||
Insurance and reinsurance acquisition expenses | 34.1 | — | 34.1 | |||||||||||||||||
Other underwriting expenses | 19.1 | (.1) | 19.0 | |||||||||||||||||
Total insurance expenses | $ | 105.8 | $ | 6.5 | $ | 112.3 | ||||||||||||||
Ratios: | ||||||||||||||||||||
Loss and loss adjustment expense | 44.7 | % | 44.3 | % | ||||||||||||||||
Insurance and reinsurance acquisition expense | 28.9 | 25.5 | ||||||||||||||||||
Other underwriting expense | 16.2 | 14.2 | ||||||||||||||||||
Combined Ratio | 89.8 | % | 84.0 | % |
Three Months Ended June 30, | ||||||||||||||
Millions | 2022 | 2021 | ||||||||||||
Property | $ | 245.6 | $ | 176.7 | ||||||||||
Specialty | 66.5 | 68.8 | ||||||||||||
Marine & Energy | 57.2 | 50.2 | ||||||||||||
Casualty | 25.9 | 17.5 | ||||||||||||
Accident & Health | 8.7 | 14.9 | ||||||||||||
Total Gross Written Premium | $ | 403.9 | $ | 328.1 | ||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||
$ in Millions | GAAP | TPC Providers’ Share | Adjusted (1) | |||||||||||||||||
Insurance premiums: | ||||||||||||||||||||
Gross written premiums | $ | 1,037.0 | $ | — | $ | 1,037.0 | ||||||||||||||
Net written premiums | $ | 814.0 | $ | 1.2 | $ | 815.2 | ||||||||||||||
Net earned premiums | $ | 411.7 | $ | 5.9 | $ | 417.6 | ||||||||||||||
Insurance expenses: | ||||||||||||||||||||
Loss and loss adjustment expenses | $ | 242.5 | $ | 3.4 | $ | 245.9 | ||||||||||||||
Insurance and reinsurance acquisition expenses | 100.1 | — | 100.1 | |||||||||||||||||
Other underwriting expenses | 40.7 | 1.8 | 42.5 | |||||||||||||||||
Total insurance expenses | $ | 383.3 | $ | 5.2 | $ | 388.5 | ||||||||||||||
Ratios: | ||||||||||||||||||||
Loss and loss adjustment expense | 58.9 | % | 58.9 | % | ||||||||||||||||
Insurance and reinsurance acquisition expense | 24.3 | 23.9 | ||||||||||||||||||
Other underwriting expense | 9.9 | 10.2 | ||||||||||||||||||
Combined Ratio | 93.1 | % | 93.0 | % |
Six Months Ended June 30, 2021 | ||||||||||||||||||||
$ in Millions | GAAP | TPC Providers’ Share | Adjusted (1) | |||||||||||||||||
Insurance premiums: | ||||||||||||||||||||
Gross written premiums | $ | 732.6 | $ | — | $ | 732.6 | ||||||||||||||
Net written premiums | $ | 604.6 | $ | (8.0) | $ | 596.6 | ||||||||||||||
Net earned premiums | $ | 222.4 | $ | 46.9 | $ | 269.3 | ||||||||||||||
Insurance expenses: | ||||||||||||||||||||
Loss and loss adjustment expenses | $ | 118.6 | $ | 38.2 | $ | 156.8 | ||||||||||||||
Insurance and reinsurance acquisition expenses | 70.8 | — | 70.8 | |||||||||||||||||
Other underwriting expenses | 30.3 | 1.2 | 31.5 | |||||||||||||||||
Total insurance expenses | $ | 219.7 | $ | 39.4 | $ | 259.1 | ||||||||||||||
Ratios: | ||||||||||||||||||||
Loss and loss adjustment expense | 53.3 | % | 58.2 | % | ||||||||||||||||
Insurance and reinsurance acquisition expense | 31.8 | 26.3 | ||||||||||||||||||
Other underwriting expense | 13.6 | 11.7 | ||||||||||||||||||
Combined Ratio | 98.7 | % | 96.2 | % |
For the Six Months Ended | ||||||||||||||
Millions | June 30, 2022 | June 30, 2021 | ||||||||||||
Property | $ | 419.1 | $ | 280.3 | ||||||||||
Specialty | 283.7 | 178.5 | ||||||||||||
Marine & Energy | 235.2 | 190.2 | ||||||||||||
Casualty | 50.8 | 30.8 | ||||||||||||
Accident & Health | 48.3 | 52.8 | ||||||||||||
Total Gross Written Premium | $ | 1,037.1 | $ | 732.6 | ||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Net investment income | $ | 13.8 | $ | 8.4 | $ | 26.4 | $ | 16.6 | ||||||||||||||||||
Net realized and unrealized investment gains (losses) | (17.6) | 27.8 | 4.7 | 43.6 | ||||||||||||||||||||||
Other revenues | — | — | — | .1 | ||||||||||||||||||||||
Total revenues | (3.8) | 36.2 | 31.1 | 60.3 | ||||||||||||||||||||||
General and administrative expenses | 3.0 | 3.2 | 5.7 | 5.7 | ||||||||||||||||||||||
Amortization of other intangible assets | .1 | .1 | .2 | .2 | ||||||||||||||||||||||
Interest expense | 3.3 | 1.5 | 6.1 | 7.3 | ||||||||||||||||||||||
Total expenses | 6.4 | 4.8 | 12.0 | 13.2 | ||||||||||||||||||||||
GAAP pre-tax income (loss) | (10.2) | 31.4 | 19.1 | 47.1 | ||||||||||||||||||||||
Income tax (expense) benefit | 1.6 | (9.7) | (4.5) | (17.5) | ||||||||||||||||||||||
GAAP net income (loss) | (8.6) | 21.7 | 14.6 | 29.6 | ||||||||||||||||||||||
Add back: | ||||||||||||||||||||||||||
Interest expense | 3.3 | 1.5 | 6.1 | 7.3 | ||||||||||||||||||||||
Income tax expense (benefit) | (1.6) | 9.7 | 4.5 | 17.5 | ||||||||||||||||||||||
General and administrative expenses - depreciation | — | — | — | — | ||||||||||||||||||||||
Amortization of other intangible assets | .1 | .1 | .2 | .2 | ||||||||||||||||||||||
EBITDA (1) | (6.8) | 33.0 | 25.4 | 54.6 | ||||||||||||||||||||||
Exclude: | ||||||||||||||||||||||||||
Net realized and unrealized investment (gains) losses | 17.6 | (27.8) | (4.7) | (43.6) | ||||||||||||||||||||||
Non-cash equity-based compensation expense | — | .1 | .1 | .2 | ||||||||||||||||||||||
Transaction expenses | .2 | — | .2 | — | ||||||||||||||||||||||
Adjusted EBITDA (1) | $ | 11.0 | $ | 5.3 | $ | 21.0 | $ | 11.2 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Net investment income | $ | 3.3 | $ | 4.0 | $ | 5.1 | $ | 11.1 | ||||||||||||||||||
Net realized and unrealized investment gains (losses) | (11.8) | 16.6 | 20.1 | 18.7 | ||||||||||||||||||||||
Net realized and unrealized investment gains (losses) from investment in MediaAlpha | (113.5) | 113.0 | (94.7) | 71.3 | ||||||||||||||||||||||
Commission revenues | 2.6 | 2.3 | 5.5 | 4.6 | ||||||||||||||||||||||
Other revenues | 30.9 | 22.4 | 56.6 | 29.5 | ||||||||||||||||||||||
Total revenues | (88.5) | 158.3 | (7.4) | 135.2 | ||||||||||||||||||||||
Cost of sales | 22.4 | 17.9 | 43.8 | 21.9 | ||||||||||||||||||||||
General and administrative expenses | 50.1 | 29.3 | 79.0 | 65.0 | ||||||||||||||||||||||
Amortization of other intangible assets | .9 | .4 | 1.8 | .9 | ||||||||||||||||||||||
Interest expense | .3 | .4 | .6 | .7 | ||||||||||||||||||||||
Total expenses | 73.7 | 48.0 | 125.2 | 88.5 | ||||||||||||||||||||||
Pre-tax income (loss) | $ | (162.2) | $ | 110.3 | $ | (132.6) | $ | 46.7 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Fixed income investments | (2.4) | % | 0.8 | % | (5.5) | % | (0.1) | % | ||||||||||||||||||
Bloomberg Barclays U.S. Intermediate Aggregate Index | (2.9) | % | 0.8 | % | (7.5) | % | (0.8) | % | ||||||||||||||||||
Common equity securities | (4.0) | % | 3.6 | % | (3.8) | % | 5.5 | % | ||||||||||||||||||
Investment in MediaAlpha | (40.5) | % | 18.8 | % | (36.2) | % | 8.7 | % | ||||||||||||||||||
Other long-term investments | (1.3) | % | 5.7 | % | 4.6 | % | 10.0 | % | ||||||||||||||||||
Total common equity securities, investment in MediaAlpha and other long-term investments | (7.2) | % | 10.0 | % | (2.2) | % | 10.9 | % | ||||||||||||||||||
Total common equity securities and other long-term investments | (1.8) | % | 5.4 | % | 3.1 | % | 9.4 | % | ||||||||||||||||||
S&P 500 Index (total return) | (16.1) | % | 8.5 | % | (20.0) | % | 15.3 | % | ||||||||||||||||||
Total consolidated portfolio | (4.7) | % | 5.0 | % | (4.0) | % | 4.7 | % | ||||||||||||||||||
Total consolidated portfolio - excluding MediaAlpha | (2.1) | % | 2.4 | % | (1.9) | % | 3.1 | % | ||||||||||||||||||
Currency $ in Millions | Ark | Kudu | Other Operations | Total Fair Value | % of Total Shareholders’ Equity | |||||||||||||||||||||||||||
CAD | $ | 61.0 | $ | 78.5 | $ | — | $ | 139.5 | 4.0 | % | ||||||||||||||||||||||
AUD | 19.5 | 37.6 | — | 57.1 | 1.6 | |||||||||||||||||||||||||||
GBP | 36.6 | — | — | 36.6 | 1.0 | |||||||||||||||||||||||||||
EUR | (58.1) | — | 11.9 | (46.2) | (1.3) | |||||||||||||||||||||||||||
All other | — | — | 1.9 | 1.9 | .1 | |||||||||||||||||||||||||||
Total | $ | 59.0 | $ | 116.1 | $ | 13.8 | $ | 188.9 | 5.4 | % | ||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Millions | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Commission revenues | $ | 80.2 | $ | 68.0 | $ | 150.3 | $ | 127.6 | ||||||||||||||||||
Broker commission expenses | 24.1 | 21.6 | 44.7 | 40.5 | ||||||||||||||||||||||
Gross profit | 56.1 | 46.4 | 105.6 | 87.1 | ||||||||||||||||||||||
Other revenues | 22.7 | 16.3 | 41.1 | 31.5 | ||||||||||||||||||||||
General and administrative expenses (2) | 57.1 | 47.3 | 111.1 | 93.3 | ||||||||||||||||||||||
Change in fair value of contingent consideration | — | .2 | .1 | .2 | ||||||||||||||||||||||
Amortization of other intangible assets | — | 8.2 | 9.1 | 16.8 | ||||||||||||||||||||||
Loss on assets held for sale | — | — | — | 28.7 | ||||||||||||||||||||||
Interest expense | 8.4 | 5.9 | 10.5 | 11.8 | ||||||||||||||||||||||
GAAP pre-tax income (loss) | 13.3 | 1.1 | 15.9 | (32.2) | ||||||||||||||||||||||
Income tax (expense) benefit (2) | (6.2) | (1.2) | (5.8) | 6.8 | ||||||||||||||||||||||
GAAP net income (loss) | 7.1 | (.1) | 10.1 | (25.4) | ||||||||||||||||||||||
Add back: | ||||||||||||||||||||||||||
Interest expense | 8.4 | 5.9 | 10.5 | 11.8 | ||||||||||||||||||||||
Income tax expense (benefit) | 6.2 | 1.2 | 5.8 | (6.8) | ||||||||||||||||||||||
General and administrative expenses — depreciation | — | 1.2 | 1.2 | 2.3 | ||||||||||||||||||||||
Amortization of other intangible assets | — | 8.2 | 9.1 | 16.8 | ||||||||||||||||||||||
EBITDA (1) | 21.7 | 16.4 | 36.7 | (1.3) | ||||||||||||||||||||||
Exclude: | ||||||||||||||||||||||||||
Change in fair value of contingent consideration | — | .2 | .1 | .2 | ||||||||||||||||||||||
Non-cash equity-based compensation expense | 6.3 | .5 | 7.1 | 1.1 | ||||||||||||||||||||||
Impairments of intangible assets | — | — | — | — | ||||||||||||||||||||||
Loss on assets held for sale | — | — | — | 28.7 | ||||||||||||||||||||||
Transaction expenses | .4 | .2 | 1.7 | .2 | ||||||||||||||||||||||
Investments made in the development of new business lines | .2 | .1 | .5 | .1 | ||||||||||||||||||||||
Restructuring expenses | .2 | 1.6 | .8 | 4.4 | ||||||||||||||||||||||
Adjusted EBITDA (1) | $ | 28.8 | $ | 19.0 | $ | 46.9 | $ | 33.4 |
$ in Millions | June 30, 2022 | December 31, 2021 | ||||||||||||
HG Global Senior Notes (1) | $ | 146.3 | $ | — | ||||||||||
Ark 2007 Subordinated Notes (1) | 30.0 | 30.0 | ||||||||||||
Ark 2021 Subordinated Notes (1)(2) | 153.5 | 155.9 | ||||||||||||
Kudu Credit Facility (1)(2) | 253.3 | 218.2 | ||||||||||||
Other Operations debt (1)(2) | 35.0 | 16.8 | ||||||||||||
Total debt from continuing operations | 618.1 | 420.9 | ||||||||||||
Debt from discontinued operations (2)(3) | 261.7 | 272.1 | ||||||||||||
Total debt | 879.8 | 693.0 | ||||||||||||
Non-controlling interests—excluding BAM | 322.6 | 280.6 | ||||||||||||
Total White Mountains’s common shareholders’ equity | 3,323.3 | 3,548.1 | ||||||||||||
Total capital | 4,525.7 | 4,521.7 | ||||||||||||
Time-value discount on expected future payments on the BAM Surplus Notes (4) | (115.9) | (125.9) | ||||||||||||
HG Global’s unearned premium reserve (4) | 221.6 | 214.6 | ||||||||||||
HG Global’s net deferred acquisition costs (4) | (62.6) | (60.8) | ||||||||||||
Total adjusted capital | $ | 4,568.8 | $ | 4,549.6 | ||||||||||
Total debt to total adjusted capital | 19.3 | % | 15.2 | % |
Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||
GAAP Return | Remove MediaAlpha | Return - Excluding MediaAlpha | GAAP Return | Remove MediaAlpha | Return - Excluding MediaAlpha | |||||||||||||||||||||||||||||||||
Total consolidated portfolio return | (4.7) | % | 2.6 | % | (2.1) | % | 5.0 | % | (2.6) | % | 2.4 | % |
Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||
GAAP Return | Remove MediaAlpha | Return - Excluding MediaAlpha | GAAP Return | Remove MediaAlpha | Return - Excluding MediaAlpha | |||||||||||||||||||||||||||||||||
Total consolidated portfolio return | (4.0) | % | 2.1 | % | (1.9) | % | 4.7 | % | (1.6) | % | 3.1 | % |
Months | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans (1) | Maximum Number of Shares that May Yet Be Purchased Under the Plans (1) | ||||||||||||||||||||||
April 1- April 30, 2022 | 6,999 | $ | 1,047.23 | 6,999 | 410,801 | |||||||||||||||||||||
May 1 - May 31, 2022 | 9,492 | $ | 1,072.39 | 9,492 | 401,309 | |||||||||||||||||||||
June 1 - June 30, 2022 | 36,609 | $ | 1,233.23 | 36,609 | 364,700 | |||||||||||||||||||||
Total | 53,100 | $ | 1,179.96 | 53,100 | 364,700 |
(a) | Exhibit number | Name | ||||||||||||||||||
2.1 | — | |||||||||||||||||||
2.2 | — | |||||||||||||||||||
3.1 | — | |||||||||||||||||||
3.2 | — | |||||||||||||||||||
31.1 | — | |||||||||||||||||||
31.2 | — | |||||||||||||||||||
32.1 | — | |||||||||||||||||||
32.2 | — | |||||||||||||||||||
101 | — | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
(*) | Included herein | ||||
(**) | Portions of this exhibit are redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | August 8, 2022 | By: /s/ Michaela J. Hildreth | ||||||||||||
Michaela J. Hildreth | ||||||||||||||
Managing Director and Chief Accounting Officer |
/s/ G. Manning Rountree | |||||
Chief Executive Officer (Principal Executive Officer) | |||||
August 8, 2022 |
/s/ Liam P. Caffrey | |||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||||
August 8, 2022 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Common shares, par value per share (in dollars per share) | $ 1 | $ 1 |
Common shares, authorized shares (in shares) | 50,000,000 | 50,000,000 |
Common shares, issued shares (in shares) | 2,942,877 | 3,017,772 |
Common shares, outstanding shares (in shares) | 2,942,877 | 3,017,772 |
Asset Management (Kudu) | ||
Restricted cash | $ 7.3 | $ 4.5 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Cash sold in subsidiary transaction | $ 0.0 | $ 0.0 |
Cash acquired from acquisition | 0.3 | 52.2 |
Restricted cash balance | 7.3 | 4.0 |
Discontinued operations cash balance | 383.4 | 171.9 |
Discontinued Operations, Held-for-sale | NSM Insurance Group | ||
Restricted cash balance | 108.9 | 90.3 |
Discontinued operations cash balance | $ 142.7 | $ 154.8 |
Basis of Presentation and Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation White Mountains Insurance Group, Ltd. (the “Company” or the “Registrant”) is an exempted Bermuda limited liability company whose principal businesses are conducted through its subsidiaries and other affiliates. The Company’s headquarters is located at 26 Reid Street, Hamilton, Bermuda HM 11, its principal executive office is located at 23 South Main Street, Suite 3B, Hanover, New Hampshire 03755-2053 and its registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda HM 11. The Company’s website is www.whitemountains.com. The information contained on White Mountains’s website is not incorporated by reference into, and is not a part of, this report. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company, its subsidiaries (collectively with the Company, “White Mountains”) and other entities required to be consolidated under GAAP. Intercompany transactions have been eliminated in consolidation. Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These interim financial statements include all adjustments considered necessary by management to fairly state the financial position, results of operations and cash flows of White Mountains. These interim financial statements may not be indicative of financial results for the full year and should be read in conjunction with the Company’s 2021 Annual Report on Form 10-K. Reportable Segments White Mountains has determined its reportable segments based on the nature of the underlying businesses, the manner in which the Company’s subsidiaries and affiliates are organized and managed and the organization of the financial information provided to the chief operating decision maker to assess performance and make decisions regarding allocation of resources. As of June 30, 2022, White Mountains’s reportable segments were HG Global/BAM, Ark, Kudu and Other Operations. The HG Global/BAM segment consists of HG Global Ltd. and its wholly-owned subsidiaries (“HG Global”) and the consolidated results of Build America Mutual Assurance Company (“BAM”) (collectively, “HG Global/BAM”). BAM is the first and only mutual municipal bond insurance company in the United States. By insuring the timely payment of principal and interest, BAM provides market access to, and lowers interest expense for, issuers of municipal bonds used to finance essential public purpose projects, such as schools, utilities and transportation facilities. BAM is owned by and operated for the benefit of its members, the municipalities that purchase BAM’s insurance for their debt issuances. HG Global was established to fund the startup of BAM and, through its reinsurance subsidiary, HG Re Ltd. (“HG Re”), to provide up to 15%-of-par, first loss reinsurance protection for policies underwritten by BAM. HG Global, together with its subsidiaries, funded the initial capitalization of BAM through the purchase of $503.0 million of surplus notes issued by BAM (the “BAM Surplus Notes”). As of June 30, 2022 and December 31, 2021, White Mountains owned 96.9% of HG Global’s preferred equity and 88.4% of its common equity. White Mountains does not have an ownership interest in BAM. However, White Mountains is required to consolidate BAM’s results in its financial statements because BAM is a variable interest entity for which White Mountains is the primary beneficiary. BAM’s results are all attributed to non-controlling interests. The Ark segment consists of Ark Insurance Holdings Limited and its subsidiaries (collectively, “Ark”). Ark is a specialty property and casualty insurance and reinsurance company that offers a wide range of niche insurance and reinsurance products, including property, marine & energy, specialty, accident & health and casualty. Ark underwrites select coverages through Lloyd’s Syndicates 4020 and 3902 (the “Syndicates”) and its wholly-owned subsidiary Group Ark Insurance Limited (“GAIL”). White Mountains acquired a controlling ownership interest in Ark on January 1, 2021 (the “Ark Transaction”). See Note 2 — “Significant Transactions.” As of June 30, 2022 and December 31, 2021, White Mountains owned 72.0% of Ark on a basic shares outstanding basis (63.0% after taking account of management’s equity incentives). The remaining shares are owned by current and former employees. In the future, management rollover shareholders could earn additional shares in Ark if and to the extent that White Mountains achieves certain multiple of invested capital return thresholds. If fully earned, these additional shares would represent 12.5% of the shares outstanding at closing. For the years of account prior to the Ark Transaction, a significant proportion of the Syndicates’ underwriting capital was provided by third-party insurance and reinsurance groups (“TPC Providers”) using whole account reinsurance contracts with Ark’s corporate member. For the years of account subsequent to the Ark Transaction, Ark is no longer using TPC Providers to provide underwriting capital for the Syndicates. Captions within results of operations and other comprehensive income are shown net of amounts relating to the TPC Providers share of the Syndicates’ results, including investment results. The Kudu segment consists of Kudu Investment Management, LLC and its subsidiaries (collectively “Kudu”). Kudu provides capital solutions for boutique asset and wealth managers for a variety of purposes including generational ownership transfers, management buyouts, acquisition and growth finance and legacy partner liquidity. Kudu also provides strategic assistance to investees from time to time. Kudu’s capital solutions typically are structured as minority preferred equity stakes with distribution rights, generally tied to gross revenues and designed to generate strong, stable cash yields. As of June 30, 2022 and December 31, 2021, White Mountains owned 89.3% and 99.3% of the basic units outstanding (76.1% and 84.7% on a fully diluted, fully converted basis). The Other Operations segment consists of the Company and its wholly-owned subsidiary, White Mountains Capital, LLC (“WM Capital”), its other intermediate holding companies, its wholly-owned investment management subsidiary, White Mountains Advisors LLC (“WM Advisors”), investment assets managed by WM Advisors, its interests in MediaAlpha, Inc. (“MediaAlpha”), PassportCard Limited (“PassportCard”) and DavidShield Life Insurance Agency (2000) Ltd. (“DavidShield”) (collectively, “PassportCard/DavidShield”), Elementum Holdings LP (“Elementum”), and certain other consolidated and unconsolidated entities (“Other Operating Businesses”) and certain other assets. Discontinued Operations On May 9, 2022, White Mountains Holdings (Luxembourg) S.à r.l. (“WTM Holdings Seller”) and White Mountains Catskill Holdings, Inc. (“NSM Holdings”), each an indirect wholly owned subsidiary of the Company, entered into a securities purchase agreement (the “NSM SPA”) together with NSM Insurance HoldCo, LLC (“NSM” and, collectively with NSM Holdings, the “NSM Group”) to sell NSM Holdings for cash (the “NSM Transaction”) to investment funds affiliated with The Carlyle Group Inc. (“Carlyle”). See Note 2 — “Significant Transactions.” NSM is a full-service managing general agent (“MGA”) and program administrator with delegated binding authorities for specialty property and casualty insurance. As of June 30, 2022 and December 31, 2021, White Mountains owned 96.5% of the basic units outstanding of NSM (87.3% on a fully diluted, fully converted basis). As a result of the NSM Transaction, effective as of and for the periods ended June 30, 2022, the assets and liabilities of NSM Group have been presented in the balance sheet as held for sale and the results of operations for NSM Group have been classified as discontinued operations in the statements of operations and comprehensive income. Prior period amounts have been reclassified to conform to the current period’s presentation. See Note 19 — “Held for Sale and Discontinued Operations.” Significant Accounting Policies Refer to the Company’s 2021 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s significant accounting policies.
|
Significant Transactions |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Transactions | Significant Transactions NSM On May 9, 2022, WTM Holdings Seller entered into the NSM SPA to sell 100% of White Mountains’s equity interest in NSM Group to investment funds affiliated with Carlyle. The NSM Transaction closed on August 1, 2022. White Mountains received $1.4 billion in net cash proceeds at closing and recognized a net transaction gain of approximately $870.0 million in the third quarter of 2022. The amount received at closing was based on estimates of cash, indebtedness, working capital and transaction expenses. The proceeds may be adjusted upon determination of the final closing amounts. Kudu On May 26, 2022, Kudu raised $114.5 million of equity capital (the “Kudu Transaction”) from Massachusetts Mutual Life Insurance Company (“Mass Mutual”), White Mountains and Kudu management. Mass Mutual, White Mountains and Kudu management contributed $64.1 million, $50.0 million and $0.4 million and in each case, at a pre-money valuation of 1.3x, or $114.0 million above the December 31, 2021 equity value of Kudu’s go-forward portfolio of participation contracts. As of June 30, 2022, Kudu’s go-forward portfolio of participation contracts excludes $39.1 million of enterprise value relating to two portfolio companies that had announced sale transactions prior to the capital raise. As a result of the Kudu Transaction, White Mountains’s basic ownership of Kudu decreased from 99.1% to 89.3%. Ark On October 1, 2020, White Mountains entered into a subscription and purchase agreement (the “Ark SPA”) with Ark and certain selling shareholders (collectively with Ark, the “Ark Sellers”). Under the terms of the Ark SPA, White Mountains agreed to contribute $605.4 million of equity capital to Ark, at a pre-money valuation of $300.0 million, and to purchase $40.9 million of shares from the Ark Sellers. White Mountains also agreed to contribute up to an additional $200.0 million of equity capital to Ark in 2021. In accordance with the Ark SPA, in the fourth quarter of 2020, White Mountains pre-funded/placed in escrow a total of $646.3 million in preparation for closing the Ark Transaction, including $280.0 million funded directly to Lloyd’s on behalf of Ark under the terms of a credit facility agreement and $366.3 million placed in escrow. On January 1, 2021, White Mountains completed the Ark Transaction in accordance with the terms of the Ark SPA. As of June 30, 2022, White Mountains owned 72.0% of Ark on a basic shares outstanding basis (63.0%) after taking account of management’s equity incentives). The remaining shares are owned by current and former employees. In the future, management rollover shareholders could earn additional shares in Ark if and to the extent that White Mountains achieves certain multiple of invested capital return thresholds. If fully earned, these additional shares would represent 12.5% of the shares outstanding at closing. White Mountains recognized total assets acquired related to the Ark Transaction of $2.5 billion, including goodwill and other intangible assets of $292.5 million, and total liabilities of $1.7 billion, including contingent consideration of $22.5 million and non-controlling interest of $220.2 million. Ark incurred transaction costs of $25.3 million in the first quarter of 2021. In the third quarter of 2021, Ark issued $163.3 million of floating rate unsecured subordinated notes (the “Ark 2021 Subordinated Notes”) in three separate transactions. See Note 7 — “Debt.” In connection with the issuance of the Ark 2021 Subordinated Notes, White Mountains and Ark terminated White Mountains’s commitment to provide up to $200.0 million of additional equity capital to Ark in 2021. The following presents additional details of the assets acquired and liabilities assumed as of the January 1, 2021 acquisition date:
(1) Cash excludes the White Mountains cash contribution of $605.4 as part of the Ark transaction. The values of net tangible assets acquired and the resulting goodwill, other intangible assets and contingent consideration were recorded at fair value using Level 3 inputs. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill, other intangible assets and the contingent consideration liability were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. White Mountains developed internal estimates for the expected future cash flows and discount rates used in the present value calculations. The value of in-force business acquired represents the estimated profits relating to the unexpired contracts, net of related prepaid reinsurance, at the acquisition date through the expiration date of the contracts. For the three and six months ended June 30, 2022, Ark recognized $1.4 million and $6.1 million of amortization expense on the value of in-force business acquired. For the three and six months ended June 30, 2021, Ark recognized $15.1 million and $43.9 million of amortization expense on the value of in-force business acquired. The value of the syndicate underwriting capacity intangible asset was estimated using net cash flows attributable to Ark’s rights to write business in the Lloyd’s market. The value of the in-force business acquired and the syndicate underwriting capacity were estimated using a discounted cash flow method. Significant inputs to the valuation models include estimates of growth in premium revenues, investment returns, claim costs, expenses and discount rates based on a weighted average cost of capital. In evaluating the fair value of Ark’s loss and loss adjustment expense reserves (“LAE”), White Mountains determined that the risk-free rate of interest was approximately equal to the risk factor reflecting the uncertainty within the reserves and that no adjustment was necessary. As of June 30, 2022 and December 31, 2021, Ark recognized total contingent consideration liabilities of $30.2 million and $28.0 million. Any future adjustments to contingent consideration liabilities will be recognized through pre-tax income (loss). For the three and six months ended June 30, 2022, Ark recognized pre-tax expense of $0.1 million and $2.2 million and for the change in the fair value of its contingent consideration liabilities. For the three and six months ended June 30, 2021, Ark did not recognize any pre-tax income (loss) for the change in the fair value of its contingent consideration liabilities. MediaAlpha On October 30, 2020, MediaAlpha completed an initial public offering (the “MediaAlpha IPO”). In the offering, White Mountains sold 3.6 million shares at $19.00 per share ($17.67 per share net of underwriting fees) and received total proceeds of $63.8 million. White Mountains also received $55.0 million of net proceeds related to a dividend recapitalization at MediaAlpha. Subsequent to the MediaAlpha IPO, White Mountains’s investment in MediaAlpha is accounted for at fair value based on the publicly traded share price of MediaAlpha’s common stock, and White Mountains presents its investment in MediaAlpha as a separate line item on the balance sheet. On March 23, 2021, MediaAlpha completed a secondary offering of 8.05 million shares. In the secondary offering, White Mountains sold 3.6 million shares at $46.00 per share ($44.62 per share net of underwriting fees) for net proceeds of $160.3 million. As of June 30, 2022, White Mountains owned 16.9 million shares, representing a 27.6% basic ownership interest (25.0% fully-diluted/fully-converted basis). At this current level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $5.80 per share increase or decrease in White Mountains’s book value per share. At the June 30, 2022 closing price of $9.85 per share, the fair value of White Mountains’s investment in MediaAlpha was $166.9 million. See Note 16 — “Equity-Method Eligible Investments.” PassportCard/DavidShield On January 24, 2018, White Mountains acquired a 50.0% ownership interest in DavidShield, its joint venture partner in PassportCard. DavidShield is an MGA that is the leading provider of expatriate medical insurance in Israel and uses the same card-based delivery system as PassportCard. As part of the transaction, White Mountains reorganized its equity stake in PassportCard so that White Mountains and its partner in DavidShield would each own 50.0% of both businesses. To facilitate the transaction, White Mountains provided financing to its partner in the form of a non-interest bearing loan that is secured by the partner’s equity in PassportCard and DavidShield. The gross purchase price for the 50.0% interest in DavidShield was $41.8 million, or $28.3 million net of the financing provided for the restructuring. On May 7, 2020, White Mountains made an additional $15.0 million investment in PassportCard/DavidShield to support operations through the ongoing COVID-19 pandemic. The transaction increased White Mountains’s ownership interest from 50.0% to 53.8%, but had no impact on the governance structure of the companies, including White Mountains’s board representation or other investor rights. The governance structures for both PassportCard and DavidShield were designed to give White Mountains and its co-investor equal power to make the decisions that most significantly impact the operations of PassportCard and DavidShield. Because White Mountains does not have the unilateral power to direct the operations of PassportCard or DavidShield, White Mountains does not hold a controlling financial interest in either PassportCard or DavidShield and does not consolidate either entity. White Mountains’s ownership interest gives White Mountains the opportunity to exert significant influence over the significant financial and operating activities of PassportCard and DavidShield. Accordingly, PassportCard and DavidShield meet the criteria to be accounted for under the equity method. White Mountains has taken the fair value option for its investment in PassportCard and DavidShield. Changes in the fair value of PassportCard and DavidShield are recorded in realized and unrealized investment gains. White Mountains’s maximum exposure to loss on its equity investment in PassportCard/DavidShield and the non-interest bearing loan to its partner is limited to the total carrying value of $143.0 million.
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities White Mountains’s portfolio of investment securities held for general investment purposes consists of fixed maturity investments, short-term investments, common equity securities, its investment in MediaAlpha and other long-term investments, which are classified as trading securities. Trading securities are reported at fair value as of the balance sheet date. Net realized and unrealized investment gains (losses) on trading securities are reported in pre-tax revenues. White Mountains’s fixed maturity investments are generally valued using industry standard pricing methodologies. Key inputs include benchmark yields, benchmark securities, reported trades, issuer spreads, bids, offers, credit ratings and prepayment speeds. Income on mortgage and asset-backed securities is recognized using an effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from anticipated prepayments, the estimated economic life is recalculated and the remaining unamortized premium or discount is amortized prospectively over the remaining economic life. Realized investment gains (losses) resulting from sales of investment securities are accounted for using the specific identification method. Premiums and discounts on all fixed maturity investments are amortized or accreted to income over the anticipated life of the investment. Short-term investments consist of interest-bearing money market funds, certificates of deposit and other securities, which at the time of purchase, mature or become available for use within one year. Short-term investments are carried at fair value, which approximated amortized cost, as of June 30, 2022 and December 31, 2021. Other long-term investments consist primarily of unconsolidated entities, including Kudu’s Participation Contracts, private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits, insurance-linked securities (“ILS”) funds and private debt investments. Net Investment Income White Mountains’s net investment income is comprised primarily of interest income associated with White Mountains’s fixed maturity investments and short-term investments, dividend income from common equity securities, distributions from its investment in MediaAlpha and distributions from other long-term investments. The following table presents pre-tax net investment income for the three and six months ended June 30, 2022 and 2021:
Net Realized and Unrealized Investment Gains (Losses) The following table presents net realized and unrealized investment gains (losses) for the three and six months ended June 30, 2022 and 2021:
(1) For the three months ended June 30, 2022 and 2021, includes $(24.5) and $(0.2) of realized and unrealized investment gains (losses) related to foreign currency exchange. For the six months ended June 30, 2022 and 2021, includes $(21.8) and $(0.4) of realized and unrealized investment gains (losses) related to foreign currency exchange. The following table presents total gains included in earnings attributable to net unrealized investment gains for Level 3 investments for the three and six months ended June 30, 2022 and 2021 for investments still held at the end of the period:
Investment Holdings The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses) and carrying values of White Mountains’s fixed maturity investments as of June 30, 2022 and December 31, 2021:
The following table presents the cost or amortized cost and carrying values of White Mountains’s fixed maturity investments by contractual maturity as of June 30, 2022. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.
The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses), and carrying values of common equity securities, White Mountains’s investment in MediaAlpha and other long-term investments as of June 30, 2022 and December 31, 2021:
Fair Value Measurements Fair value measurements are categorized into a hierarchy that distinguishes between inputs based on market data from independent sources (observable inputs) and a reporting entity’s internal assumptions based upon the best information available when external market data is limited or unavailable (unobservable inputs). Quoted prices in active markets for identical assets or liabilities have the highest priority (Level 1), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities (Level 2) and unobservable inputs, including the reporting entity’s estimates of the assumptions that market participants would use, having the lowest priority (Level 3). See Note 19 — “Fair Value of Financial Instruments.” As of June 30, 2022 and December 31, 2021, White Mountains used quoted market prices or other observable inputs to determine fair value for approximately 64% and 68% of the investment portfolio. Fair Value Measurements by Level The following tables present White Mountains’s fair value measurements for investments as of June 30, 2022 and December 31, 2021 by level. The major security types were based on the legal form of the securities. White Mountains has disaggregated its fixed maturity investments based on the issuing entity type, which impacts credit quality, with debt securities issued by U.S. government entities carrying minimal credit risk, while the credit and other risks associated with other issuers, such as corporations, municipalities or entities issuing mortgage and asset-backed securities vary depending on the nature of the issuing entity type. White Mountains further disaggregates debt securities issued by corporations by industry sector because investors often reference commonly used benchmarks and their subsectors to monitor risk and performance. Accordingly, White Mountains has further disaggregated this asset class into subclasses based on the similar sectors and industry classifications it uses to evaluate investment risk and performance against commonly used benchmarks, such as the Bloomberg Barclays U.S. Intermediate Aggregate.
(1) Consist of investments in listed funds that predominantly invest in international equities. (2) Consists of private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured at net asset value (“NAV”) using the practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.
(1) Consist of investments in listed funds that predominantly invest in international equities. (2) Consists of private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured at NAV using the practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy. Investments Held on Deposit or as Collateral As of June 30, 2022 and December 31, 2021, investments of $461.5 million and $479.5 million were held in trusts required to be maintained in relation to HG Global’s reinsurance agreements with BAM. BAM and one of the Other Operating Businesses are required to maintain deposits with certain insurance regulatory agencies in order to maintain their insurance licenses. The fair value of such deposits, which represent state deposits and are included within the investment portfolio, totaled $4.8 million as of June 30, 2022 and December 31, 2021. Lloyd’s trust deposits are generally required of Lloyd's syndicates to protect policyholders in non-U.K. markets and are pledged into Lloyd’s trust accounts to provide a portion of the capital needed to support obligations at Lloyd’s. As of June 30, 2022 and December 31, 2021, Ark held Lloyd’s trust deposits with a fair value of $113.4 million and $113.8 million The underwriting capacity of a member of Lloyd’s must be supported by providing a deposit (“Funds at Lloyd’s”) in the form of cash, securities or letters of credit in an amount determined by Lloyd’s. The amount of such deposit is calculated for each member through the completion of an annual capital adequacy exercise. These requirements allow Lloyd’s to evaluate that each member has sufficient assets to meet its underwriting liabilities plus a required solvency margin. As of June 30, 2022 and December 31, 2021, the fair value of Ark’s Funds at Lloyd’s investment deposits totaled $304.8 million and $342.8 million. As of June 30, 2022 and December 31, 2021, Ark had $49.8 million and $50.0 million of short-term investments pledged as collateral under an uncommitted standby letter of credit. See Note 7 — “Debt.” Debt Securities Issued by Corporations The following table presents the credit ratings of debt securities issued by corporations held in White Mountains’s investment portfolio as of June 30, 2022 and December 31, 2021:
(1) Credit ratings are based upon issuer credit ratings provided by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”), or if unrated by Standard & Poor’s, long-term obligation ratings provided by Moody’s Investor Service, Inc. Mortgage and Asset-backed Securities and Collateralized Loan Obligations The following table presents the fair value of White Mountains’s mortgage and asset-backed securities and collateralized loan obligations as of June 30, 2022 and December 31, 2021:
(1) Represents publicly traded mortgage-backed securities which carry the full faith and credit guaranty of the U.S. Government (i.e., GNMA) or are guaranteed by a government sponsored entity (i.e., FNMA, FHLMC). As of June 30, 2022, White Mountains’s investment portfolio included $141.8 million of collateralized loan obligations that are within the senior tranches of their respective fund securitization structures. All of White Mountains’s collateral loan obligations were rated AAA or AA as of June 30, 2022. Investment in MediaAlpha Following the MediaAlpha IPO, White Mountains’s investment in MediaAlpha is accounted for at fair value based on the publicly traded share price of MediaAlpha’s common stock and is presented as a separate line item on the balance sheet. At the June 30, 2022 closing price of $9.85 per share, the fair value of White Mountains’s investment in MediaAlpha was $166.9 million. See Note 2 — “Significant Transactions.” Other Long-Term Investments The following table presents the carrying values of White Mountains’s other long-term investments as of June 30, 2022 and December 31, 2021:
(1) Includes White Mountains’s non-controlling equity interests in certain private common equity securities, convertible preferred securities, limited liability company units and Simple Agreement for Future Equity (“SAFE”) investments. Private Equity Funds and Hedge Funds White Mountains invests in private equity funds and hedge funds, which are included in other long-term investments. The fair value of these investments is generally estimated using the NAV of the funds. As of June 30, 2022, White Mountains held investments in 16 private equity funds and one hedge fund. The largest investment in a single private equity fund or hedge fund was $35.4 million and $31.3 million as of June 30, 2022 and December 31, 2021. The following table presents the fair value of investments and unfunded commitments in private equity funds and hedge funds by investment objective and sector as of June 30, 2022 and December 31, 2021:
Investments in private equity funds are generally subject to a lock-up period during which investors may not request a redemption. Distributions prior to the expected termination date of the fund may be limited to dividends or proceeds arising from the liquidation of the fund’s underlying investments. In addition, certain private equity funds have the option to extend the lock-up period. The following table presents investments in private equity funds that were subject to lock-up periods as of June 30, 2022:
Investors in private equity funds are generally subject to indemnification obligations outside of the capital commitment period and prior to the winding up of the fund. As of June 30, 2022 and December 31, 2021, White Mountains is not aware of any indemnification claims relating to its investments in private equity funds. Redemption of investments in most hedge funds is subject to restrictions, including lock-up periods where no redemptions or withdrawals are allowed, restrictions on redemption frequency and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. White Mountains’s hedge fund investment is subject to a perpetual two-year restriction on redemption frequency from the initial investment in the fund and a 90 days advanced notice period requirement. Bank Loan Fund White Mountains’s other long-term investments include a bank loan fund with a fair value of $154.4 million as of June 30, 2022. The fair value of this investment is estimated using the NAV of the fund. The bank loan fund’s investment objective is to provide, on an unleveraged basis, high current income consistent with preservation of capital and low duration. The bank loan fund primarily invests in a broad portfolio of U.S. dollar-denominated, non-investment grade, floating-rate senior secured loans and may invest in other financial instruments, such as secured and unsecured corporate debt, credit default swaps, reverse repurchase agreements, synthetic indices and cash and cash equivalents. The investment in the bank loan fund is subject to restrictions on redemption frequency and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. White Mountains may redeem all or a portion of its bank loan fund investment as of any calendar month-end upon 15 calendar days advanced written notice. Lloyd’s Trust Deposits White Mountains’s other long-term investments include Lloyd’s trust deposits, which consist of non-U.K. deposits and Canadian comingled pooled funds. The Lloyd’s trust deposits invest primarily in short-term government securities, agency securities and corporate bonds held in trusts that are managed by Lloyd's of London. These investments are generally required of Lloyd's syndicates to protect policyholders in non-U.K. markets and are pledged into Lloyd’s trust accounts to provide a portion of the capital needed to support obligations at Lloyd’s. The fair value of the Lloyd’s trust deposits is generally estimated using the NAV of the funds. As of June 30, 2022, White Mountains held Lloyd’s trust deposits with a fair value of $113.4 million. Insurance-Linked Securities Funds White Mountains’s other long-term investments include ILS fund investments. The fair value of these investments is generally estimated using the NAV of the funds. As of June 30, 2022, White Mountains held investments in ILS funds with a fair value of $51.6 million. Investments in ILS funds are generally subject to restrictions, including lock-up periods where no redemptions or withdrawals are allowed, non-renewal clauses, restrictions on redemption frequency and advance notice periods for redemptions. From time to time, natural catastrophe, liquidity, market or other events will occur that make the determination of fair value for underlying investments in ILS funds less certain due to the potential for loss development. In such circumstances, the impacted investments may be subject to additional lock-up provisions. ILS funds are typically subject to monthly and annual restrictions on redemptions and advance redemption notice period requirements that range between 30 and 90 days. Amounts requested for redemption remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. One of the ILS funds in White Mountains’s portfolio requires shareholders to provide advance redemption notice on or before September 15 of each calendar year. Amounts requested for redemption in this fund remain subject to market fluctuation until the underlying investment has fully matured or been commuted, which may be up to a period of three years from the start of each calendar year. Rollforward of Level 3 Investments Level 3 measurements as of June 30, 2022 and 2021 consist of securities for which the estimated fair value has not been determined based upon quoted market price inputs for identical or similar securities. The following table presents the changes in White Mountains’s fair value measurements for Level 3 investments for the six months ended June 30, 2022 and 2021:
Fair Value Measurements — Transfers Between Levels - Six months ended June 30, 2022 and 2021 Transfers between levels are recorded using the fair value measurement as of the end of the quarterly period in which the event or change in circumstance giving rise to the transfer occurred. During the six months ended June 30, 2022 and 2021, there were no fixed maturity investments or other long-term investments classified as Level 3 measurements in the prior period that were transferred to Level 2 measurements. During the six months ended June 30, 2022 and 2021, there were no fixed maturity investments or other long-term investments classified as Level 2 measurements in the prior period that were transferred to Level 3 measurements. Significant Unobservable Inputs The following tables present significant unobservable inputs used in estimating the fair value of White Mountains’s other long-term investments, classified within Level 3 as of June 30, 2022 and December 31, 2021. The tables below exclude $18.3 million and $46.7 million of Level 3 other long-term investments generally valued based on recent or expected transaction prices. The fair value of investments in private equity funds and hedge funds, bank loan funds, Lloyd’s trust deposits and ILS funds are generally estimated using the NAV of the funds.
(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates. (2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs. (3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts is 20% and 11x. (4) As of June 30, 2022, two of Kudu’s Participation Contracts with a total fair value of $185.9 were valued using a probability weighted expected return method, which was based on a discounted cash flow analysis and an expected sale transaction. (5) In 2022, Kudu deployed a total of $52.8 into new and existing Kudu Participation Contracts, including Gramercy Funds Management and TK Partners. (6) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.
(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates. (2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs. (3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts is 20% and 10x. (4) In 2021, Kudu deployed a total of $223.4 into new and existing Kudu Participation Contracts, including TIG Advisors, TK Partners, Third Eye Capital Management, Douglass Winthrop Advisors, Granahan Investment Management and Radcliffe Capital Management. (5) As of December 31, 2021, one of Kudu’s Participation Contracts with a total fair value of $78.8 was valued using a probability weighted expected return method, which was based on a discounted cash flow analysis and an expected sale transaction. (6) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets White Mountains accounts for purchases of businesses 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 reportable segment as of June 30, 2022 and December 31, 2021:
(1) The relative fair values of goodwill and other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized as of June 30, 2022. Intangible Assets Valuation Methods The goodwill recognized for the entities shown above is attributed to expected future cash flows. The acquisition date fair values of other intangible assets with finite lives are estimated using income approach techniques, which use future expected cash flows to develop a discounted present value amount. The multi-period-excess-earnings method estimates fair value using the present value of the incremental after-tax cash flows attributable solely to the other intangible asset over its remaining life. This approach was used to estimate the fair value of other intangible assets associated with the underwriting capacity, 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 other intangible assets that provide an incremental benefit. Under this method, the fair value of the other intangible asset is calculated by comparing the value of the entity with and without the other intangible asset. This approach was used to estimate the fair value of favorable lease terms. 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 from January 1, 2021 through June 30, 2022:
(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. The following tables present the change in goodwill and other intangible assets for the three and six months ended June 30, 2022 and 2021:
(1) The relative fair values of goodwill and other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized.
(1) Measurement period adjustments relate to updated information about acquisition date fair values of assets acquired and liabilities assumed. During the six months ended June 30, 2021, adjustments primarily relate to goodwill and other intangible assets of $0.2 in connection with the acquisition in the Other Operations segment. (2) The relative fair values of goodwill and other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized.
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Loss and Loss Adjustment Expense Reserves |
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Insurance Loss Reserves [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and Loss Adjustment Expense Reserves | Loss and Loss Adjustment Expense Reserves The following table summarizes the loss and LAE reserve activity of Ark’s insurance and reinsurance subsidiaries for the three and six months ended June 30, 2022 and 2021:
(1) The beginning reinsurance recoverable on unpaid losses includes amounts attributable to TPC Providers of $207.3 and $331.0 for the three months ended June 30, 2022 and 2021 and $276.8 and $319.2 for the six months ended June 30, 2022 and 2021. (2) Amount represents the impact to net loss and LAE reserves due to a change in the TPC Providers’ participation related to the annual reinsurance to close (“RITC”) process. (3) The ending reinsurance recoverable on unpaid losses includes amounts attributable to TPC Providers of $182.4 and $314.6 as of June 30, 2022 and 2021. For the three and six months ended June 30, 2022, Ark recognized $22.7 million and $26.4 million of net favorable prior year loss reserve development. Ark’s net favorable prior year loss reserve development in 2022 was driven primarily by the property and accident & health and specialty reserving lines of business, including favorable claims experience on prior year catastrophe events in the second quarter. For the three and six months ended June 30, 2021, Ark recognized $9.0 million and $8.5 million of net favorable prior year loss reserve development. Ark’s net favorable prior year loss reserve development in 2021, primarily related to property and accident & health and marine & energy reserving lines of business. TPC Providers’ Participation For the years of account prior to the Ark Transaction, a significant proportion of the Syndicates’ underwriting capital was provided by TPC Providers using whole account reinsurance contracts with Ark’s corporate member. The TPC Providers’ participation in the Syndicates for the 2020 open year of account is 42.8% of the total net result of the Syndicates. For the years of account subsequent to the Ark Transaction, Ark is no longer using TPC Providers to provide underwriting capital for the Syndicates. An RITC agreement is generally put in place after the third year of operations for a year of account such that the outstanding loss and LAE reserves, including future development thereon, are reinsured into the next year of account. As a result, and in combination with the changing participation provided by TPC Providers, Ark’s participation on outstanding loss and LAE reserves reinsured into the next year of account may change, perhaps significantly. During the first quarter of 2022, an RITC was executed such that the outstanding loss and LAE reserves for claims arising out of the 2019 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 58.3%, were reinsured into the 2020 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates is 42.8%. During the first quarter of 2021, an RITC was executed such that the outstanding loss and LAE reserves for claims arising out of the 2018 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 57.6%, were reinsured into the 2019 year of account, for which the TPC Providers’ participation in the total net results of the Syndicates was 58.3%. Municipal Bond Guarantee Insurance HG Re and BAM do not have any outstanding loss and LAE reserves related to BAM’s municipal bond guarantee insurance business.
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Third-Party Reinsurance |
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Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third-Party Reinsurance | Third-Party Reinsurance In the normal course of business, Ark may seek to limit losses that may arise from catastrophes or other events by reinsuring certain risks with third-party reinsurers. Ark remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts. The following table summarizes the effects of reinsurance on written and earned premiums and on losses and LAE for Ark for the three and six months ended June 30, 2022 and 2021:
As of June 30, 2022, Ark had $375.5 million and $23.2 million of reinsurance recoverables on unpaid and paid losses. As of June 30, 2021, Ark had $425.3 million and $6.0 million of reinsurance recoverables on unpaid and paid losses. As reinsurance contracts do not relieve Ark of its obligation to its policyholders, Ark seeks to reduce the credit risk associated with reinsurance balances by avoiding over-reliance on specific reinsurers through the application of concentration limits and thresholds. Ark is selective with its reinsurers, placing reinsurance with only those reinsurers having a strong financial condition. Ark monitors the financial strength of its reinsurers on an ongoing basis. As of June 30, 2022, Ark’s reinsurance recoverables of $398.7 million included $182.4 million attributable to TPC Providers, which are collateralized. As of June 30, 2021, Ark’s reinsurance recoverables of $431.3 million included $314.6 million related to TPC Providers, which are collateralized. The following table provides a listing of Ark’s remaining gross and net reinsurance recoverables, excluding amounts attributable to TPC Providers, by the reinsurer’s A.M. Best Company, Inc (“A.M. Best”) rating and the percentage of total recoverables as of June 30, 2022:
(1) A.M. Best ratings as detailed above are: “A+ or better” (Superior) “A- to A” (Excellent), “B++” (Good). See Note 10 — “Municipal Bond Guarantee Insurance” for third-party reinsurance balances related to White Mountains’s financial guarantee business. Reinsurance Contracts Accounted for as Deposits Ark has an aggregate excess of loss contract with SiriusPoint Ltd. (“SiriusPoint”), which is accounted for using the deposit method and recorded within other assets. Ark earns an annual crediting rate of 3.0%, which is recorded within other revenue. During the fourth quarter of 2021, Ark negotiated a reduction of $31.7 million, including accrued interest, to the aggregate excess of loss contract with SiriusPoint. As of June 30, 2022, the carrying value of Ark’s deposit in SiriusPoint, including accrued interest, was $20.1 million. See Note 10 — “Municipal Bond Guarantee Insurance” for reinsurance contracts accounted for as deposits related to White Mountains’s financial guarantee business.
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Debt | Debt The following table presents White Mountains’s debt outstanding as of June 30, 2022 and December 31, 2021:
(1) Effective rate includes the effect of the amortization of debt issuance costs. HG Global Senior Notes On April 29, 2022, HG Global received the proceeds of its $150.0 million face value floating rate secured senior notes (the “HG Global Senior Notes”). The HG Global Senior Notes, which mature in April 2032, accrue interest at a floating rate equal to the three-month Secured Overnight Financing Rate (“SOFR”) plus 6.3% per annum. Subsequent to the five-year anniversary of the funding date, absent the occurrence of an early amortization trigger event, HG Global will make payments of principal on a quarterly basis totaling $15.0 million annually. Upon the occurrence of an early amortization trigger event, HG Global is required to use all available cash flow to repay the notes. Early amortization trigger events include scenarios in which HG Re is effectively in run off. HG Global has the option to redeem, in whole or in part, the HG Global Senior Notes after the five-year anniversary of the funding date at the outstanding principal amounts plus accrued interest. The HG Global Senior Notes require HG Global to maintain an interest reserve account of eight times the interest accrued for the most recent quarterly interest period, which is included in short-term investments. As of June 30, 2022, the interest reserve account is $22.0 million. The HG Global Senior Notes are secured by the capital stock and other equity interests of HG Global’s subsidiaries, the interest reserve account, and all cash and non-cash proceeds from the foregoing collateral. The HG Global Senior Notes contain various affirmative and negative covenants that White Mountains considers to be customary for such borrowings. If the payments of principal and interest under the HG Global Senior Notes become subject to tax withholding on behalf of a relevant governmental authority for certain indemnified taxes, the HG Global Senior Notes require the payment of additional amounts such that the amount received by the noteholders is the same as would have been received absent the tax withholding being imposed. The HG Global Senior Notes require the payment of additional interest of 1.0% per annum if the HG Global Senior Notes receive a non-investment grade rating or are no longer rated. As of June 30, 2022, the HG Global Senior Notes had an outstanding principal balance of $150.0 million. Ark Subordinated Notes In March 2007, GAIL issued $30.0 million face value of floating rate unsecured junior subordinated deferrable interest notes to Alesco Preferred Funding XII Ltd., Alesco Preferred Funding XIII Ltd. and Alesco Preferred Funding XIV Ltd (the “Ark 2007 Subordinated Notes”). The Ark 2007 Subordinated Notes, which mature in June 2037, accrue interest at a floating rate equal to the three-month U.S. London Inter-Bank Offered Rate (“LIBOR”) plus 4.6% per annum. As of June 30, 2022, the Ark 2007 Subordinated Notes had an outstanding principal balance of $30.0 million. In the third quarter of 2021, GAIL issued $163.3 million face value floating rate subordinated notes at par in three separate transactions for proceeds of $157.8 million, net of debt issuance costs. The unsecured subordinated notes (the “Ark 2021 Subordinated Notes”) were issued in private placement offerings that were exempt from the registration requirements of the Securities Act of 1933. On July 13, 2021, Ark issued €39.1 million ($46.3 million based upon the foreign exchange spot rate as of the date of the transaction) face value floating rate unsecured subordinated notes (“Ark 2021 Notes Tranche 1”). The Ark 2021 Notes Tranche 1, which mature in July 2041, accrue interest at a floating rate equal to the three-month EURIBOR plus 5.75% per annum. On August 11, 2021, Ark issued $47.0 million face value floating rate unsecured subordinated notes (“Ark 2021 Notes Tranche 2”). The Ark 2021 Notes Tranche 2, which mature in August 2041, accrue interest at a floating rate equal to the three-month U.S. LIBOR plus 5.75% per annum. On September 8, 2021, Ark issued $70.0 million face value floating rate unsecured subordinated notes (“Ark 2021 Notes Tranche 3”). The Ark 2021 Notes Tranche 3, which mature in September 2041, accrue interest at a floating rate equal to the three-month U.S. LIBOR plus 6.1% per annum. On the ten-year anniversary of the issue dates, the interest rate for the Ark 2021 Subordinated Notes will increase by 1.0% per annum. Ark has the option to redeem, in whole or in part, the Ark 2021 Subordinated Notes ahead of contractual maturity at the outstanding principal amounts plus accrued interest at the ten-year anniversary or any subsequent interest payment date. All payments of principal and interest under the Ark 2021 Subordinated Notes are conditional upon GAIL’s solvency and compliance with the enhanced capital requirements of the Bermuda Monetary Authority (“BMA”). The deferral of payments of principal and interest under these conditions does not constitute a default by Ark and does not give the noteholders any rights to accelerate repayment of the Ark 2021 Subordinated Notes or take any enforcement action under the Ark 2021 Subordinated Notes. If the payments of principal and interest under the Ark 2021 Subordinated Notes become subject to tax withholding on behalf of Bermuda or any political subdivision there, the Ark 2021 Subordinated Notes require the payment of additional amounts such that the amount received by the noteholders is the same as would have been received absent the tax withholding being imposed. The Ark 2021 Notes Tranche 3 require the payment of additional interest of 1.0% per annum upon the occurrence of a premium load event until such event is remedied. Premium load events include the failure to meet payment obligations of the Ark 2021 Notes Tranche 3 when due, failure of GAIL to maintain an investment grade credit rating, failure to maintain 120% of GAIL’s Bermuda solvency capital requirement, failure of GAIL to maintain a debt to capital ratio below 40%, late filing of GAIL’s or Ark’s financial information, and making a restricted payment or distribution on GAIL’s common stock or other securities that rank junior or pari passu with the Ark 2021 Notes Tranche 3 when a different premium load event exists or will be caused by the restricted payment. As of June 30, 2022, the Ark 2021 Notes Tranche 1 had an outstanding principal balance of €39.1 million ($41.5 million based upon the foreign exchange spot rate as of June 30, 2022), the Ark 2021 Notes Tranche 2 had an outstanding principal balance of $47.0 million, and the Ark 2021 Notes Tranche 3 had an outstanding principal balance of $70.0 million. The Ark Subordinated Notes contain various affirmative and negative covenants that White Mountains considers to be customary for such borrowings. Ark Standby Letter of Credit Facilities In December 2021, Ark entered into two uncommitted secured standby letter of credit facility agreements to support the continued growth and expansion of its GAIL insurance and reinsurance operations. The standby letter of credit facility agreements were executed with ING Bank N.V., London Branch (the “ING LOC Facility”) with capacity of $50.0 million on an uncollateralized basis and with Citibank Europe Plc (the “Citibank LOC Facility”) with capacity of $100.0 million on a collateralized basis. As of June 30, 2022, the ING LOC Facility was undrawn. As of June 30, 2022, the Citibank LOC Facility had an outstanding principal balance of $36.2 million. As of June 30, 2022, $49.8 million of short-term investments were pledged as collateral under the Citibank LOC Facility. Ark’s uncommitted secured standby letter of credit facility agreements contain various representations, warranties and covenants that White Mountains considers to be customary for such borrowings. Kudu Credit Facility and Kudu Bank Facility On December 23, 2019, Kudu entered into a secured credit facility with Monroe Capital Management Advisors, LLC (the “Kudu Bank Facility”). On March 23, 2021, Kudu replaced the Kudu Bank Facility and entered into a secured revolving credit facility (the “Kudu Credit Facility”) with Mass Mutual to repay the Kudu Bank Facility, and to fund new investments and related transaction expenses. The maximum borrowing capacity of the Kudu Credit Facility is $300.0 million. The Kudu Credit Facility matures on March 23, 2036. In connection with the replacement of the Kudu Bank Facility, Kudu recognized a total loss of $4.1 million, representing debt issuance costs and prepayment fees, which are included within interest expense for the year to date period ended June 30, 2021. The Kudu Credit Facility requires Kudu to maintain an interest reserve account, which is included in restricted cash. As of June 30, 2022, the interest reserve account is $7.3 million. The Kudu Credit Facility requires Kudu to maintain a ratio of the outstanding balance to the sum of the fair market value of the participation contracts and cash held in certain accounts (the “LTV Percentage”) of less than 50% in years 0-3, 40% in years 4-6, 25% in years 7-8, 15% in years 9-10, and 0% thereafter. As of June 30, 2022, Kudu has a 34.1% LTV Percentage. Kudu may borrow undrawn balances within the initial three-year availability period, subject to customary terms and conditions, to the extent the amount borrowed under the Kudu Credit Facility does not exceed the borrowing base, which is equal to 35% of the fair value of qualifying Kudu Participation Contracts. As of June 30, 2022, the available undrawn balance was $27.8 million. The following table presents the change in debt under the Kudu Bank Facility and Kudu Credit Facility for the three and six months ended June 30, 2022 and 2021:
The Kudu Credit Facility is secured by all property of the loan parties and contains various affirmative and negative covenants that White Mountains considers to be customary for such borrowings. Other Operations Debt As of June 30, 2022, debt in White Mountains’s Other Operations segment consisted of five secured credit facilities (collectively, “Other Operations debt”). The first credit facility has a maximum borrowing capacity of $16.3 million, which is comprised of a term loan of $11.3 million, a delayed-draw term loan of $3.0 million and a revolving credit loan commitment of $2.0 million, all with a maturity date of March 12, 2024. The second credit facility has a maximum borrowing capacity of $15.0 million, which is comprised of a term loan of $9.0 million, a delayed-draw term loan of $4.0 million and a revolving credit loan commitment of $2.0 million, all with a maturity date of July 2, 2025. The third credit facility has a maximum borrowing capacity of $8.0 million, which is comprised of a revolving credit loan commitment, with a maturity date of December 9, 2026. The fourth credit facility has a maximum borrowing capacity of $11.5 million, which is comprised of a revolving credit loan commitment, with a maturity date of April 7, 2027. The fifth credit facility has a maximum borrowing capacity of $11.5 million, which is comprised of a revolving credit loan commitment, with a maturity date of May 31, 2027. During the three months ended and six months ended June 30, 2022, White Mountains’s Other Operations segment borrowed $19.0 million and $21.0 million. During the three and six months ended June 30, 2022, White Mountains’s Other Operations segment made repayments of $1.1 million and $2.4 million. During the three and six months ended June 30, 2021, White Mountains’s Other Operations segment had no borrowings. During the three and six months ended June 30, 2021, White Mountains’s Other Operation segment made repayments of $0.2 million and $0.4 million on the term loans, under the second credit facility. As of June 30, 2022 and December 31, 2021, the White Mountains’s Other Operations segment debt had an outstanding principal balance of $35.7 million and $17.1 million. Compliance At June 30, 2022, White Mountains was in compliance in all material respects with the covenants under all of its debt instruments.
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company and its Bermuda domiciled subsidiaries are not subject to Bermuda income tax under current Bermuda law. In the event there is a change in the current law such that taxes are imposed, the Bermuda Exempted Undertakings Tax Protection Act of 1966 states that the Company and its Bermuda domiciled subsidiaries would be exempt from such tax until March 31, 2035. The Company has subsidiaries and branches that operate in various other jurisdictions around the world and are subject to tax in the jurisdictions in which they operate. As of June 30, 2022, the primary jurisdictions in which the Company’s subsidiaries and branches were subject to tax were Ireland, Israel, Luxembourg, the United Kingdom and the United States. White Mountains’s income tax benefit related to pre-tax loss from continuing operations for the three and six months ended June 30, 2022 represented an effective tax rate of 6.9% and 7.6%. 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, partially offset by a full valuation allowance on net deferred tax assets in certain U.S. operations, consisting of the WM Adams, Inc. consolidated tax group within the Other Operations segment, and BAM and state income taxes. White Mountains’s income tax expense related to pre-tax income from continuing operations for the three months ended June 30, 2021 represented an effective tax rate of 18.6%. 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, partially offset by additional tax expense related to the revaluation of U.K. deferred tax assets and liabilities. On June 10, 2021, the U.K. enacted an increase in its corporate tax rate from 19.0% to 25.0% for periods after April 1, 2023. On June 30, 2021, White Mountains increased its net U.K. deferred tax liability to reflect the higher tax rate on temporary differences projected to reverse after the new rate becomes effective. White Mountains’s income tax expense related to pre-tax income from continuing operations for the six months ended June 30, 2021 represented an effective tax rate of 42.1%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by the additional tax expense related to the revaluation of U.K. deferred tax assets and liabilities in relation to White Mountains’s pre-tax income in the first six months of 2021. In arriving at the effective tax rate for the three and six months ended June 30, 2022 and 2021, White Mountains forecasted all income and expense items including the change in unrealized investment gains (losses) and realized investment gains (losses) for the years ending December 31, 2022 and 2021. White Mountains records a valuation allowance against deferred tax assets if it becomes more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in income tax expense in the period of change. In determining whether or not a valuation allowance, or change therein, is warranted, White Mountains considers factors such as prior earnings history, expected future earnings, carryback and carryforward periods and strategies that if executed would result in the realization of a deferred tax asset. With few exceptions, White Mountains is no longer subject to U.S. federal, state, or non-U.S. income tax examinations by tax authorities for years before 2016.
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Derivatives |
6 Months Ended |
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Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives HG Global Interest Rate Cap On June 16, 2022, HG entered into an interest rate cap agreement, effective on July 25, 2022, to limit its exposure to the risk of interest rate increases on the HG Global Senior Notes. The notional amount of the interest rate cap is $150.0 million and the termination date is July 25, 2025. HG paid initial premiums of $3.3 million for the interest rate cap. Under the terms of the interest rate cap agreement, if the current three-month SOFR rate at the measurement date exceeds 3.5%, HG will receive payments from the counterparty equal to the difference between the three-month SOFR rate on the determination date and 3.5%, multiplied by the notional amount of the cap based on the number of days in the quarter and a year equal to 360 days. As of June 30, 2022, the three-month SOFR rate was 2.1%. HG accounts for the interest rate cap as a derivative at fair value, with changes in fair value recognized in current period earnings within interest expense. For the three and six months ended June 30, 2022, White Mountains recognized a loss of $1.5 million related to the change in fair value on the interest rate cap within interest expense. As of June 30, 2022, the estimated fair value of the interest rate cap recorded in other assets was $1.8 million.
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Municipal Bond Guarantee Insurance |
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Guarantees [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal Bond Guarantee Insurance | Municipal Bond Guarantee Insurance HG Global was established to fund the startup of BAM, a mutual municipal bond insurer. HG Global, together with its subsidiaries, provided the initial capitalization of BAM through the purchase of $503.0 million of the BAM Surplus Notes. Reinsurance Treaties FLRT BAM is a party to a first loss reinsurance treaty (“FLRT”) with HG Re under which HG Re provides first loss protection up to 15%-of-par outstanding on each municipal bond insured by BAM. For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds. In return, BAM cedes up to 60% of the risk premium charged for insuring the municipal bond, which is net of a ceding commission. The FLRT is a perpetual agreement with terms that can be renegotiated after a specified period of time. During 2021, BAM and HG Re agreed that the terms may be renegotiated at the end of 2024, and each subsequent five-year period thereafter. Fidus Re BAM is party to a collateralized financial guarantee excess of loss reinsurance agreement that serves to increase BAM’s claims paying resources and is provided by Fidus Re Ltd. (“Fidus Re”). In 2018, Fidus Re was initially capitalized by the issuance of $100.0 million of insurance-linked securities (the “Fidus Re 2018 Agreement”). The proceeds from issuance were placed in a collateral trust supporting Fidus Re’s obligations to BAM. The insurance-linked securities were issued by Fidus Re with an initial term of 12 years and are callable five years after the date of issuance. Under the Fidus Re 2018 Agreement, Fidus Re reinsures 90% of aggregate losses exceeding $165.0 million on a portion of BAM’s financial guarantee portfolio (the “2018 Covered Portfolio”) up to a total reimbursement of $100.0 million. The Fidus Re 2018 Agreement does not provide coverage for losses in excess of $276.1 million. The 2018 Covered Portfolio consists of approximately 29% of BAM’s portfolio of financial guaranty policies issued through June 30, 2022. In the first quarter of 2021, Fidus Re issued an additional $150.0 million of insurance-linked securities (the “Fidus Re 2021 Agreement”) with an initial term of 12 years and are callable five years after the date of issuance. The proceeds from issuance were placed in a collateral trust supporting Fidus Re’s obligations to BAM. Under the Fidus Re 2021 Agreement, Fidus Re reinsures 90% of aggregate losses exceeding $135.0 million on a portion of BAM’s financial guarantee portfolio (the “2021 Covered Portfolio”) up to a total reimbursement of $150.0 million. The Fidus Re 2021 Agreement does not provide coverage for losses in excess of $301.7 million. The 2021 Covered Portfolio consists of approximately 34% of BAM’s portfolio of financial guaranty policies issued through June 30, 2022. The Fidus Re agreements are accounted for using deposit accounting and any related financing expenses are recorded in general and administrative expenses as they do not meet the risk transfer requirements necessary to be accounted for as reinsurance. XOLT In January 2020, BAM entered into an excess of loss reinsurance agreement (the “XOLT”) with HG Re. Under the XOLT, HG Re provides last dollar protection for exposures on municipal bonds insured by BAM in excess of New York State Department of Financial Services (“NYDFS”) single issuer limits. The XOLT is subject to an aggregate limit equal to the lesser of $75.0 million or the assets held in the supplemental collateral trust (the “Supplemental Trust”) at any point in time. The agreement is accounted for using deposit accounting and any related financing expenses are recorded in general and administrative expenses as the agreement does not meet the risk transfer requirements necessary to be accounted for as reinsurance. Collateral Trusts HG Re’s obligations under the FLRT are limited to the assets in two collateral trusts: the Supplemental Trust and a Regulation 114 Trust (together, the “Collateral Trusts”). Losses required to be reimbursed under the FLRT are subject to an aggregate limit equal to the assets held in the Collateral Trusts at any point in time. On a monthly basis, BAM deposits cash equal to ceded premiums, net of ceding commissions, due to HG Re under the FLRT directly into the Regulation 114 Trust. The Regulation 114 Trust target balance is equal to gross ceded unearned premiums and unpaid ceded loss and LAE, if any. If, at the end of any quarter, the Regulation 114 Trust balance is below the target balance, funds will be withdrawn from the Supplemental Trust and deposited into the Regulation 114 Trust in an amount equal to the shortfall. If, at the end of any quarter, the Regulation 114 Trust balance is above 102% of the target balance, funds will be withdrawn from the Regulation 114 Trust and deposited into the Supplemental Trust. The Regulation 114 Trust balance as of June 30, 2022 and December 31, 2021 was $253.6 million and $250.2 million. The Supplemental Trust target balance is $603.0 million, less the amount of cash and securities in the Regulation 114 Trust in excess of its target balance (the “Supplemental Trust Target Balance”). If, at the end of any quarter, the Supplemental Trust balance exceeds the Supplemental Trust Target Balance, such excess may be distributed to HG Re. The distribution will be made first as an assignment of accrued interest on the BAM Surplus Notes and second in cash and/or fixed income securities. As the BAM Surplus Notes are repaid over time, the BAM Surplus Notes will be replaced in the Supplemental Trust by cash and fixed income securities. The Supplemental Trust balance as of June 30, 2022 and December 31, 2021 was $583.6 million and $601.8 million. As of June 30, 2022 and December 31, 2021, the Collateral Trusts held assets of $837.2 million and $852.0 million, which included $463.9 million and $481.7 million of cash and investments, $364.6 million and $364.6 million of BAM Surplus Notes and $8.7 million and $5.7 million of interest receivable on the BAM Surplus Notes. BAM Surplus Notes Through 2024, the interest rate on the BAM Surplus Notes is a variable rate equal to the one-year U.S. Treasury rate plus 300 basis points, set annually. During 2022, the interest rate on the BAM Surplus Notes is 3.2%. Beginning in 2025, the interest rate will be fixed at the higher of the then current variable rate or 8.0%. Under its agreements with HG Global, BAM is required to seek regulatory approval to pay interest and principal on the BAM Surplus Notes only to the extent that its remaining qualified statutory capital and other capital resources continue to support its outstanding obligations, its business plan and its “AA/stable” rating from Standard & Poor’s. No payment of principal or interest on the BAM Surplus Notes may be made without the approval of the NYDFS. In December 2021, BAM made a $33.8 million cash payment of principal and interest on the BAM Surplus Notes held by HG Global. Of this payment, $23.6 million was a repayment of principal held in the Supplemental Trust, $0.4 million was a payment of accrued interest held inside the Supplemental Trust and $9.8 million was a payment of accrued interest held outside the Supplemental Trust. During the three and six months ended June 30, 2022 and 2021, BAM made no repayments of the BAM Surplus Notes or accrued interest. As of June 30, 2022 and December 31, 2021, the principal balance on the BAM Surplus Notes was $364.6 million and $364.6 million and total interest receivable on the BAM Surplus Notes was $163.5 million and $157.6 million. Insured Obligations and Premiums The following table presents a schedule of BAM’s insured obligations as of June 30, 2022 and December 31, 2021:
The following table presents a schedule of BAM’s future premium revenues as of June 30, 2022:
The following table presents a schedule of written premiums and earned premiums included in White Mountains’s HG Global/BAM segment for the three and six months ended June 30, 2022 and 2021:
(1) There are no ceded premium amounts in the periods presented and gross earned premiums are equivalent to net written premiums and net earned premiums. In January 2021, BAM entered into a 100% facultative quota share reinsurance agreement under which it assumed a portfolio of municipal bond guarantee contracts with a par value of $805.5 million. None of the contracts assumed under these reinsurance agreements were non-performing, and no loss reserves have been established for any of the contracts, either as of the transaction date or as of June 30, 2022. The agreement, which covers future claims exposure only, meets the risk transfer criteria under ASC 944-20, Insurance Activities and accordingly has been accounted for as reinsurance.
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share White Mountains calculates earnings per share using the two-class method, which allocates earnings between common shares and unvested restricted common shares. Both classes of shares participate equally in dividends and earnings on a per share basis. Basic earnings per share amounts are based on the weighted average number of common shares outstanding adjusted for unvested restricted common shares. The following table presents the Company’s computation of earnings per share from continuing operations for the three and six months ended June 30, 2022 and 2021. See Note 19 — “Held for Sale and Discontinued Operations.”
(1) Includes net gain (loss) from sale of Sirius Group, net of tax and net income (loss) from NSM Group discontinued operations, net of tax. See Note 19 — “Held for Sale and Discontinued Operations.” (2) Restricted shares issued by White Mountains receive dividends and are therefore considered participating securities. (3) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.” The following table presents the undistributed net earnings (losses) from continuing operations for the three and six months ended June 30, 2022 and 2021. See Note 19 — “Held for Sale and Discontinued Operations.”
(1) Restricted shares issued by White Mountains receive dividends and are therefore considered participating securities.
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Employee Share-Based Incentive Compensation Plans |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Share-Based Incentive Compensation Plans | Employee Share-Based Incentive Compensation Plans White Mountains’s Long-Term Incentive Plan (the “WTM Incentive Plan”) provides for grants of various types of share-based and non-share-based incentive awards to key employees of White Mountains. As of June 30, 2022 and 2021, White Mountains’s share-based compensation incentive awards consist of performance shares and restricted shares. Performance Shares Performance shares are designed to reward employees for meeting company-wide performance targets. Performance shares are conditional grants of a specified maximum number of common shares or an equivalent amount of cash. Awards generally vest at the end of a three-year service period, are subject to the attainment of pre-specified performance goals, and are valued based on the market value of common shares at the time awards are paid. Performance shares earned under the WTM Incentive Plan are typically paid in cash but may be paid in common shares. Compensation expense is recognized for the vested portion of the awards over the related service periods. The level of payout ranges from zero to two times the number of shares initially granted, depending on White Mountains’s financial performance. Performance shares become payable at the conclusion of a performance cycle (typically 3 years) if pre-defined financial targets are met. The performance measures used for determining performance share payouts are growth in White Mountains’s adjusted book value per share and intrinsic value per share. Intrinsic value per share is generally calculated by adjusting adjusted book value per share for differences between the adjusted book value of certain assets and liabilities and White Mountains’s estimate of their underlying intrinsic values. The following table presents the performance share activity for the three and six months ended June 30, 2022 and 2021 for performance shares granted under the WTM Incentive Plan:
(1) WTM performance share payments in 2022 for the 2019-2021 performance cycle, which were paid in cash in March 2022 at 172% of target. WTM performance share payments in 2021 for the 2018-2020 performance cycle, which were paid in cash in March 2021 at 200% of target. (2) Amounts include changes in assumed forfeitures, as required under GAAP. During the three and six months ended June 30, 2022, White Mountains granted 150 and 13,225 performance shares for the 2022-2024 performance cycle. During the three and six months ended June 30, 2021, White Mountains granted 475 and 13,475 performance shares for the 2021-2023 performance cycle. For the 2019-2021 performance cycle, the Company issued common shares for 750 performance shares earned and all other performance shares earned were settled in cash. For the 2018-2020 performance cycle, all performance shares earned were settled in cash. If all the outstanding WTM performance shares had vested on June 30, 2022, the total additional compensation cost to be recognized would have been $44.0 million, based on accrual factors (common share price and payout assumptions) as of June 30, 2022. The following table presents performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan as of June 30, 2022 for each performance cycle:
Restricted Shares Restricted shares are grants of a specified number of common shares that generally vest at the end of a 34-month service period. The following table presents the unrecognized compensation cost associated with the outstanding restricted share awards for the three and six months ended June 30, 2022 and 2021:
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases White Mountains has entered into lease agreements, primarily for office space. These leases are classified as operating leases, with lease expense recognized on a straight-line basis over the term of the lease. Lease incentives, such as free rent or landlord reimbursements for leasehold improvements, are recognized at lease inception and amortized on a straight-line basis over the term of the lease. Lease expense and the amortization of leasehold improvements are recognized within general and administrative expenses. Lease payments related to options to extend or renew the lease term are excluded from the calculation of lease liabilities unless White Mountains is reasonably certain of exercising those options. As of June 30, 2022 and December 31, 2021, the right of use (“ROU”) asset was $26.2 million and $28.1 million and lease liabilities were $28.2 million and $30.0 million. The following table summarizes net lease expense recognized in White Mountains’s consolidated statements of operations for the three and six months ended June 30, 2022 and 2021:
The following table presents the contractual maturities of the lease liabilities associated with White Mountains’s operating lease agreements as of June 30, 2022:
The following tables present lease related assets and liabilities by reportable segment as of June 30, 2022 and December 31, 2021:
(1) The present value of the remaining lease payments was determined by discounting the lease payments using the incremental borrowing rate.
(1) The present value of the remaining lease payments was determined by discounting the lease payments using the incremental borrowing rate.
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling Interests | Non-controlling Interests Non-controlling interests consist of the ownership interests of non-controlling shareholders in consolidated entities and are presented separately on the balance sheet. The following table presents the balance of non-controlling interests included in White Mountains’s total equity and the ownership interests held by non-controlling shareholders as of June 30, 2022 and December 31, 2021:
(1) The non-controlling percentage represents the basic ownership interests held by non-controlling shareholders with the exception of HG Global, for which the non-controlling percentage represents the preferred share ownership held by non-controlling shareholders. (2) As a result of the NSM Transaction, NSM has been classified as discontinued operations. See Note 19 — “Held for Sale and Discontinued Operations.”
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information As of June 30, 2022, White Mountains conducted its operations through four segments: (1) HG Global/BAM, (2) Ark, (3) Kudu, and (4) Other Operations. As a result of the NSM Transaction, the results of operations for NSM, previously reported as a segment, have been classified as discontinued operations in the statements of operations and comprehensive income. Prior period amounts have been reclassified to conform to the current period’s presentation. See Note 19 — “Held for Sale and Discontinued Operations.” White Mountains has made its segment determination based on consideration of the following criteria: (i) the nature of the business activities of each of the Company’s subsidiaries and affiliates; (ii) the manner in which the Company’s subsidiaries and affiliates are organized; (iii) the existence of primary managers responsible for specific subsidiaries and affiliates; and (iv) the organization of information provided to the chief operating decision makers and the Board of Directors. Significant intercompany transactions among White Mountains’s segments have been eliminated herein. The following tables present the financial information for White Mountains’s segments:
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Equity-Method Eligible Investments |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Method Eligible Investments | Equity-Method Eligible Investments White Mountains’s equity method eligible investments include White Mountains’s investment in MediaAlpha, certain other unconsolidated entities, including Kudu’s Participation Contracts, private equity funds and hedge funds in which White Mountains has the ability to exert significant influence over the investee’s operating and financial policies. The following table presents the ownership interests and carrying values of White Mountains’s equity method eligible investments as of June 30, 2022 and December 31, 2021:
(1) Ownership interest generally references basic ownership interest with the exception of Kudu’s Participation Contracts, which are non-controlling equity interests in the form of revenue and earnings participation contracts. For the three and six months ended June 30, 2022, White Mountains received dividend and income distributions from equity method eligible investments of $15.6 million and $28.7 million, which were recorded within net investment income in the consolidated statements of operations. For the three and six months ended June 30, 2021, White Mountains received dividend and income distributions from equity method eligible investments of $11.0 million, and $24.7 million, which were recorded within net investment income in the consolidated statements of operations. Subsequent to the MediaAlpha IPO, White Mountains’s investment in MediaAlpha is accounted for at fair value based on the publicly traded share price of MediaAlpha’s common stock, and White Mountains presents its investment in MediaAlpha as a separate line item on the balance sheet. See Note 2 — “Significant Transactions.” For the six months ended June 30, 2022 and 2021, MediaAlpha was considered a significant subsidiary. The following tables present summarized financial information for MediaAlpha as of June 30, 2022 and December 31, 2021 and for the three and six months ended June 30, 2022 and 2021:
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Fair Value of Financial Instruments |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments White Mountains records its financial instruments at fair value with the exception of debt obligations, which are recorded as debt at face value less unamortized original issue discount. See Note 7 — “Debt.” The following tables presents the fair value and carrying value of these financial instruments as of June 30, 2022 and December 31, 2021:
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Contingencies White Mountains, and the insurance industry in general, is routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, nor are directly related to, claims activity. White Mountains’s estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. See Note 5 — “Losses and Loss Adjustment Expense Reserves.” White Mountains considers the requirements of ASC 450 when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or if there is a reasonable possibility that a loss may have been incurred. White Mountains does not have any current non-claims related litigation that may have a material adverse effect on White Mountains’s financial condition, results of operations or cash flows.
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Held for Sale and Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Held for Sale and Discontinued Operations | Held for Sale and Discontinued Operations NSM On August 1, 2022, White Mountains closed the previously announced NSM Transaction. See Note 2 — “Significant Transactions.” As a result of the NSM Transaction, effective as of and for the periods ended June 30, 2022, the assets and liabilities of NSM Group have been presented in the balance sheet as held for sale, and the results of operations for NSM Group have been classified as discontinued operations in the statements of operations and comprehensive income. Prior period amounts have been reclassified to conform to the current period’s presentation. Sirius Group On April 18, 2016, White Mountains completed the sale of Sirius International Insurance Group, Ltd. (“Sirius Group”) to CM International Pte. Ltd. and CM Bermuda Limited (collectively “CMI”). In connection with the sale, White Mountains indemnified Sirius Group against the loss of certain interest deductions claimed by Sirius Group related to periods prior to the sale of Sirius Group to CMI that had been disputed by the Swedish Tax Agency. In late October 2018, the Swedish Administrative Court ruled against Sirius Group on its appeal of the Swedish Tax Agency’s denial of these interest deductions. As a result, in 2018 White Mountains recorded a loss of $17.3 million within net gain (loss) on sale of discontinued operations reflecting the value of these interest deductions. As of December 31, 2020, White Mountains’s liability related to the tax indemnification provided in connection with the sale of Sirius Group in 2016 was $18.7 million. In April 2021, the Swedish Tax Agency informed the Swedish Administrative Court of Appeal that Sirius Group should prevail in its appeal and that the interest deductions should not be disallowed. In June 2021, the Swedish Administrative Court of Appeal ruled in Sirius Group’s favor. For the six months ended June 30, 2021, White Mountains recorded a gain of $17.6 million in discontinued operations to reverse the liability accrued as of December 31, 2020 and $1.1 million gain related to foreign currency translation. Summary of Reclassified Balances and Related Items Net Assets Held for Sale The following summarizes the assets and liabilities associated with NSM Group classified as held for sale. As of December 31, 2021, the amounts presented exclude $16.1 million of insurance licenses, investments and cash classified as assets held for sale related to one of the Other Operating Businesses.
Net Income (Loss) from Discontinued Operations The following summarizes the results of operations, including related income taxes associated with the businesses classified as discontinued operations for the three and six months ended June 30, 2022 and 2021:
Net Change in Cash from Discontinued Operations The following summarizes the net change in cash associated with the businesses classified as discontinued operations for the six months ended June 30, 2022 and 2021:
Earnings Per Share from Discontinued Operations White Mountains calculates earnings per share using the two-class method, which allocates earnings between common and unvested restricted common shares. Both classes of shares participate equally in earnings on a per share basis. Basic earnings per share amounts are based on the weighted average number of common shares outstanding adjusted for unvested restricted common shares. Diluted earnings per share amounts are also impacted by the net effect of potentially dilutive common shares outstanding. The following table presents the Company’s computation of earnings per share for discontinued operations for the three and six months ended June 30, 2022 and 2021:
(1) Includes net gain (loss) from sale of Sirius Group, net of tax, net income (loss) from NSM Group discontinued operations, net of tax and net (income) loss from discontinued operations attributable to non-controlling interests. (2) Restricted shares issued by White Mountains receive dividends and are therefore considered participating securities. (3) Net earnings attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the three and six months ended June 30, 2022 and 2021. (4) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.”
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventOn August 1, 2022, White Mountains closed the previously announced sale of NSM Group. See Note 2 — “Significant Transactions.” |
Basis of Presentation and Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation White Mountains Insurance Group, Ltd. (the “Company” or the “Registrant”) is an exempted Bermuda limited liability company whose principal businesses are conducted through its subsidiaries and other affiliates. The Company’s headquarters is located at 26 Reid Street, Hamilton, Bermuda HM 11, its principal executive office is located at 23 South Main Street, Suite 3B, Hanover, New Hampshire 03755-2053 and its registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda HM 11. The Company’s website is www.whitemountains.com. The information contained on White Mountains’s website is not incorporated by reference into, and is not a part of, this report. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company, its subsidiaries (collectively with the Company, “White Mountains”) and other entities required to be consolidated under GAAP. Intercompany transactions have been eliminated in consolidation. Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These interim financial statements include all adjustments considered necessary by management to fairly state the financial position, results of operations and cash flows of White Mountains. These interim financial statements may not be indicative of financial results for the full year and should be read in conjunction with the Company’s 2021 Annual Report on Form 10-K.
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Reportable Segments | Reportable Segments White Mountains has determined its reportable segments based on the nature of the underlying businesses, the manner in which the Company’s subsidiaries and affiliates are organized and managed and the organization of the financial information provided to the chief operating decision maker to assess performance and make decisions regarding allocation of resources. As of June 30, 2022, White Mountains’s reportable segments were HG Global/BAM, Ark, Kudu and Other Operations. The HG Global/BAM segment consists of HG Global Ltd. and its wholly-owned subsidiaries (“HG Global”) and the consolidated results of Build America Mutual Assurance Company (“BAM”) (collectively, “HG Global/BAM”). BAM is the first and only mutual municipal bond insurance company in the United States. By insuring the timely payment of principal and interest, BAM provides market access to, and lowers interest expense for, issuers of municipal bonds used to finance essential public purpose projects, such as schools, utilities and transportation facilities. BAM is owned by and operated for the benefit of its members, the municipalities that purchase BAM’s insurance for their debt issuances. HG Global was established to fund the startup of BAM and, through its reinsurance subsidiary, HG Re Ltd. (“HG Re”), to provide up to 15%-of-par, first loss reinsurance protection for policies underwritten by BAM. HG Global, together with its subsidiaries, funded the initial capitalization of BAM through the purchase of $503.0 million of surplus notes issued by BAM (the “BAM Surplus Notes”). As of June 30, 2022 and December 31, 2021, White Mountains owned 96.9% of HG Global’s preferred equity and 88.4% of its common equity. White Mountains does not have an ownership interest in BAM. However, White Mountains is required to consolidate BAM’s results in its financial statements because BAM is a variable interest entity for which White Mountains is the primary beneficiary. BAM’s results are all attributed to non-controlling interests. The Ark segment consists of Ark Insurance Holdings Limited and its subsidiaries (collectively, “Ark”). Ark is a specialty property and casualty insurance and reinsurance company that offers a wide range of niche insurance and reinsurance products, including property, marine & energy, specialty, accident & health and casualty. Ark underwrites select coverages through Lloyd’s Syndicates 4020 and 3902 (the “Syndicates”) and its wholly-owned subsidiary Group Ark Insurance Limited (“GAIL”). White Mountains acquired a controlling ownership interest in Ark on January 1, 2021 (the “Ark Transaction”). See Note 2 — “Significant Transactions.” As of June 30, 2022 and December 31, 2021, White Mountains owned 72.0% of Ark on a basic shares outstanding basis (63.0% after taking account of management’s equity incentives). The remaining shares are owned by current and former employees. In the future, management rollover shareholders could earn additional shares in Ark if and to the extent that White Mountains achieves certain multiple of invested capital return thresholds. If fully earned, these additional shares would represent 12.5% of the shares outstanding at closing. For the years of account prior to the Ark Transaction, a significant proportion of the Syndicates’ underwriting capital was provided by third-party insurance and reinsurance groups (“TPC Providers”) using whole account reinsurance contracts with Ark’s corporate member. For the years of account subsequent to the Ark Transaction, Ark is no longer using TPC Providers to provide underwriting capital for the Syndicates. Captions within results of operations and other comprehensive income are shown net of amounts relating to the TPC Providers share of the Syndicates’ results, including investment results. The Kudu segment consists of Kudu Investment Management, LLC and its subsidiaries (collectively “Kudu”). Kudu provides capital solutions for boutique asset and wealth managers for a variety of purposes including generational ownership transfers, management buyouts, acquisition and growth finance and legacy partner liquidity. Kudu also provides strategic assistance to investees from time to time. Kudu’s capital solutions typically are structured as minority preferred equity stakes with distribution rights, generally tied to gross revenues and designed to generate strong, stable cash yields. As of June 30, 2022 and December 31, 2021, White Mountains owned 89.3% and 99.3% of the basic units outstanding (76.1% and 84.7% on a fully diluted, fully converted basis). The Other Operations segment consists of the Company and its wholly-owned subsidiary, White Mountains Capital, LLC (“WM Capital”), its other intermediate holding companies, its wholly-owned investment management subsidiary, White Mountains Advisors LLC (“WM Advisors”), investment assets managed by WM Advisors, its interests in MediaAlpha, Inc. (“MediaAlpha”), PassportCard Limited (“PassportCard”) and DavidShield Life Insurance Agency (2000) Ltd. (“DavidShield”) (collectively, “PassportCard/DavidShield”), Elementum Holdings LP (“Elementum”), and certain other consolidated and unconsolidated entities (“Other Operating Businesses”) and certain other assets.
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Discontinued Operations | Discontinued Operations On May 9, 2022, White Mountains Holdings (Luxembourg) S.à r.l. (“WTM Holdings Seller”) and White Mountains Catskill Holdings, Inc. (“NSM Holdings”), each an indirect wholly owned subsidiary of the Company, entered into a securities purchase agreement (the “NSM SPA”) together with NSM Insurance HoldCo, LLC (“NSM” and, collectively with NSM Holdings, the “NSM Group”) to sell NSM Holdings for cash (the “NSM Transaction”) to investment funds affiliated with The Carlyle Group Inc. (“Carlyle”). See Note 2 — “Significant Transactions.” NSM is a full-service managing general agent (“MGA”) and program administrator with delegated binding authorities for specialty property and casualty insurance. As of June 30, 2022 and December 31, 2021, White Mountains owned 96.5% of the basic units outstanding of NSM (87.3% on a fully diluted, fully converted basis). As a result of the NSM Transaction, effective as of and for the periods ended June 30, 2022, the assets and liabilities of NSM Group have been presented in the balance sheet as held for sale and the results of operations for NSM Group have been classified as discontinued operations in the statements of operations and comprehensive income. Prior period amounts have been reclassified to conform to the current period’s presentation. See Note 19 — “Held for Sale and Discontinued Operations.”
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Significant Transactions (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following presents additional details of the assets acquired and liabilities assumed as of the January 1, 2021 acquisition date:
(1) Cash excludes the White Mountains cash contribution of $605.4 as part of the Ark transaction. The following table presents a summary of the acquisition date fair values of goodwill and other intangible assets for acquisitions completed from January 1, 2021 through June 30, 2022:
(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.
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax net investment income | The following table presents pre-tax net investment income for the three and six months ended June 30, 2022 and 2021:
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Schedule of net realized and unrealized investment gains and losses | The following table presents net realized and unrealized investment gains (losses) for the three and six months ended June 30, 2022 and 2021:
(1) For the three months ended June 30, 2022 and 2021, includes $(24.5) and $(0.2) of realized and unrealized investment gains (losses) related to foreign currency exchange. For the six months ended June 30, 2022 and 2021, includes $(21.8) and $(0.4) of realized and unrealized investment gains (losses) related to foreign currency exchange.
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Net unrealized investment gains (losses) for Level 3 investments | The following table presents total gains included in earnings attributable to net unrealized investment gains for Level 3 investments for the three and six months ended June 30, 2022 and 2021 for investments still held at the end of the period:
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Investment holdings, equity securities, convertible fixed maturities and other long-term investments | The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses) and carrying values of White Mountains’s fixed maturity investments as of June 30, 2022 and December 31, 2021:
The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses), and carrying values of common equity securities, White Mountains’s investment in MediaAlpha and other long-term investments as of June 30, 2022 and December 31, 2021:
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Schedule of fixed maturity investment holdings | The following table presents the cost or amortized cost and carrying values of White Mountains’s fixed maturity investments by contractual maturity as of June 30, 2022. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.
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Fair value measurements by level, investment securities | The following tables present White Mountains’s fair value measurements for investments as of June 30, 2022 and December 31, 2021 by level. The major security types were based on the legal form of the securities. White Mountains has disaggregated its fixed maturity investments based on the issuing entity type, which impacts credit quality, with debt securities issued by U.S. government entities carrying minimal credit risk, while the credit and other risks associated with other issuers, such as corporations, municipalities or entities issuing mortgage and asset-backed securities vary depending on the nature of the issuing entity type. White Mountains further disaggregates debt securities issued by corporations by industry sector because investors often reference commonly used benchmarks and their subsectors to monitor risk and performance. Accordingly, White Mountains has further disaggregated this asset class into subclasses based on the similar sectors and industry classifications it uses to evaluate investment risk and performance against commonly used benchmarks, such as the Bloomberg Barclays U.S. Intermediate Aggregate.
(1) Consist of investments in listed funds that predominantly invest in international equities. (2) Consists of private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured at net asset value (“NAV”) using the practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.
(1) Consist of investments in listed funds that predominantly invest in international equities. (2) Consists of private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured at NAV using the practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.
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Debt securities issued by corporations, credit ratings | The following table presents the credit ratings of debt securities issued by corporations held in White Mountains’s investment portfolio as of June 30, 2022 and December 31, 2021:
(1) Credit ratings are based upon issuer credit ratings provided by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”), or if unrated by Standard & Poor’s, long-term obligation ratings provided by Moody’s Investor Service, Inc.
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Mortgage-backed, asset-backed securities | The following table presents the fair value of White Mountains’s mortgage and asset-backed securities and collateralized loan obligations as of June 30, 2022 and December 31, 2021:
(1) Represents publicly traded mortgage-backed securities which carry the full faith and credit guaranty of the U.S. Government (i.e., GNMA) or are guaranteed by a government sponsored entity (i.e., FNMA, FHLMC).
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Schedule of carrying values for other long-term investments | The following table presents the carrying values of White Mountains’s other long-term investments as of June 30, 2022 and December 31, 2021:
(1) Includes White Mountains’s non-controlling equity interests in certain private common equity securities, convertible preferred securities, limited liability company units and Simple Agreement for Future Equity (“SAFE”) investments.
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Other long-term investments | The following table presents the fair value of investments and unfunded commitments in private equity funds and hedge funds by investment objective and sector as of June 30, 2022 and December 31, 2021:
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Fair value of private equity funds subject to lock-up periods | The following table presents investments in private equity funds that were subject to lock-up periods as of June 30, 2022:
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Rollforward of fair value investments by level | The following table presents the changes in White Mountains’s fair value measurements for Level 3 investments for the six months ended June 30, 2022 and 2021:
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Schedule of significant unobservable inputs used in estimating the fair value of investment securities | The following tables present significant unobservable inputs used in estimating the fair value of White Mountains’s other long-term investments, classified within Level 3 as of June 30, 2022 and December 31, 2021. The tables below exclude $18.3 million and $46.7 million of Level 3 other long-term investments generally valued based on recent or expected transaction prices. The fair value of investments in private equity funds and hedge funds, bank loan funds, Lloyd’s trust deposits and ILS funds are generally estimated using the NAV of the funds.
(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates. (2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs. (3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts is 20% and 11x. (4) As of June 30, 2022, two of Kudu’s Participation Contracts with a total fair value of $185.9 were valued using a probability weighted expected return method, which was based on a discounted cash flow analysis and an expected sale transaction. (5) In 2022, Kudu deployed a total of $52.8 into new and existing Kudu Participation Contracts, including Gramercy Funds Management and TK Partners. (6) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.
(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates. (2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs. (3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts is 20% and 10x. (4) In 2021, Kudu deployed a total of $223.4 into new and existing Kudu Participation Contracts, including TIG Advisors, TK Partners, Third Eye Capital Management, Douglass Winthrop Advisors, Granahan Investment Management and Radcliffe Capital Management. (5) As of December 31, 2021, one of Kudu’s Participation Contracts with a total fair value of $78.8 was valued using a probability weighted expected return method, which was based on a discounted cash flow analysis and an expected sale transaction. (6) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.
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Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill | The following table presents the economic lives, acquisition date fair values, accumulated amortization and net carrying values for other intangible assets and goodwill, by reportable segment as of June 30, 2022 and December 31, 2021:
(1) The relative fair values of goodwill and other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized as of June 30, 2022. The following tables present the change in goodwill and other intangible assets for the three and six months ended June 30, 2022 and 2021:
(1) The relative fair values of goodwill and other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized.
(1) Measurement period adjustments relate to updated information about acquisition date fair values of assets acquired and liabilities assumed. During the six months ended June 30, 2021, adjustments primarily relate to goodwill and other intangible assets of $0.2 in connection with the acquisition in the Other Operations segment. (2) The relative fair values of goodwill and other intangible assets recognized in connection with recent acquisitions within Other Operations had not yet been finalized.
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following presents additional details of the assets acquired and liabilities assumed as of the January 1, 2021 acquisition date:
(1) Cash excludes the White Mountains cash contribution of $605.4 as part of the Ark transaction. The following table presents a summary of the acquisition date fair values of goodwill and other intangible assets for acquisitions completed from January 1, 2021 through June 30, 2022:
(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.
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Loss and Loss Adjustment Expense Reserves (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance Loss Reserves [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The following table summarizes the loss and LAE reserve activity of Ark’s insurance and reinsurance subsidiaries for the three and six months ended June 30, 2022 and 2021:
(1) The beginning reinsurance recoverable on unpaid losses includes amounts attributable to TPC Providers of $207.3 and $331.0 for the three months ended June 30, 2022 and 2021 and $276.8 and $319.2 for the six months ended June 30, 2022 and 2021. (2) Amount represents the impact to net loss and LAE reserves due to a change in the TPC Providers’ participation related to the annual reinsurance to close (“RITC”) process. (3) The ending reinsurance recoverable on unpaid losses includes amounts attributable to TPC Providers of $182.4 and $314.6 as of June 30, 2022 and 2021.
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Third-Party Reinsurance (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effects of Reinsurance | The following table summarizes the effects of reinsurance on written and earned premiums and on losses and LAE for Ark for the three and six months ended June 30, 2022 and 2021:
The following table provides a listing of Ark’s remaining gross and net reinsurance recoverables, excluding amounts attributable to TPC Providers, by the reinsurer’s A.M. Best Company, Inc (“A.M. Best”) rating and the percentage of total recoverables as of June 30, 2022:
(1) A.M. Best ratings as detailed above are: “A+ or better” (Superior) “A- to A” (Excellent), “B++” (Good).
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt outstanding | The following table presents White Mountains’s debt outstanding as of June 30, 2022 and December 31, 2021:
(1) Effective rate includes the effect of the amortization of debt issuance costs. The following table presents the change in debt under the Kudu Bank Facility and Kudu Credit Facility for the three and six months ended June 30, 2022 and 2021:
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Municipal Bond Guarantee Insurance (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Municipal Bond Guarantee Insured Obligations | The following table presents a schedule of BAM’s insured obligations as of June 30, 2022 and December 31, 2021:
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Financial Guarantee Insurance Contracts, Premium Received over Contract Period | The following table presents a schedule of BAM’s future premium revenues as of June 30, 2022:
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Schedule of Net Written Premiums | The following table presents a schedule of written premiums and earned premiums included in White Mountains’s HG Global/BAM segment for the three and six months ended June 30, 2022 and 2021:
(1) There are no ceded premium amounts in the periods presented and gross earned premiums are equivalent to net written premiums and net earned premiums.
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Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of earnings per share | The following table presents the Company’s computation of earnings per share from continuing operations for the three and six months ended June 30, 2022 and 2021. See Note 19 — “Held for Sale and Discontinued Operations.”
(1) Includes net gain (loss) from sale of Sirius Group, net of tax and net income (loss) from NSM Group discontinued operations, net of tax. See Note 19 — “Held for Sale and Discontinued Operations.” (2) Restricted shares issued by White Mountains receive dividends and are therefore considered participating securities. (3) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.”
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Schedule of Undistributed Net Earnings (Losses) from Continuing Operations | The following table presents the undistributed net earnings (losses) from continuing operations for the three and six months ended June 30, 2022 and 2021. See Note 19 — “Held for Sale and Discontinued Operations.”
(1) Restricted shares issued by White Mountains receive dividends and are therefore considered participating securities.
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Employee Share-Based Incentive Compensation Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan | The following table presents the performance share activity for the three and six months ended June 30, 2022 and 2021 for performance shares granted under the WTM Incentive Plan:
(1) WTM performance share payments in 2022 for the 2019-2021 performance cycle, which were paid in cash in March 2022 at 172% of target. WTM performance share payments in 2021 for the 2018-2020 performance cycle, which were paid in cash in March 2021 at 200% of target. (2) Amounts include changes in assumed forfeitures, as required under GAAP.
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Share-based Compensation, Performance Shares Award Outstanding Activity | The following table presents performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan as of June 30, 2022 for each performance cycle:
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Summary of restricted shares activity | Restricted shares are grants of a specified number of common shares that generally vest at the end of a 34-month service period. The following table presents the unrecognized compensation cost associated with the outstanding restricted share awards for the three and six months ended June 30, 2022 and 2021:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Lease Expense | The following table summarizes net lease expense recognized in White Mountains’s consolidated statements of operations for the three and six months ended June 30, 2022 and 2021:
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Schedule of Future Maturities of Operating Lease Liabilities, Lessee | The following table presents the contractual maturities of the lease liabilities associated with White Mountains’s operating lease agreements as of June 30, 2022:
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Schedule of Right-of-Use Assets and Lease Liabilities | The following tables present lease related assets and liabilities by reportable segment as of June 30, 2022 and December 31, 2021:
(1) The present value of the remaining lease payments was determined by discounting the lease payments using the incremental borrowing rate.
(1) The present value of the remaining lease payments was determined by discounting the lease payments using the incremental borrowing rate.
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Non-controlling Interests (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling Interests | The following table presents the balance of non-controlling interests included in White Mountains’s total equity and the ownership interests held by non-controlling shareholders as of June 30, 2022 and December 31, 2021:
(1) The non-controlling percentage represents the basic ownership interests held by non-controlling shareholders with the exception of HG Global, for which the non-controlling percentage represents the preferred share ownership held by non-controlling shareholders. (2) As a result of the NSM Transaction, NSM has been classified as discontinued operations. See Note 19 — “Held for Sale and Discontinued Operations.”
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Information for White Mountains' Segments | The following tables present the financial information for White Mountains’s segments:
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Schedule of Reconciliation of Revenue from Segments to Consolidated |
Equity-Method Eligible Investments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | The following table presents the ownership interests and carrying values of White Mountains’s equity method eligible investments as of June 30, 2022 and December 31, 2021:
(1) Ownership interest generally references basic ownership interest with the exception of Kudu’s Participation Contracts, which are non-controlling equity interests in the form of revenue and earnings participation contracts. The following tables present summarized financial information for MediaAlpha as of June 30, 2022 and December 31, 2021 and for the three and six months ended June 30, 2022 and 2021:
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the fair value and carrying value of financial instruments | The following tables presents the fair value and carrying value of these financial instruments as of June 30, 2022 and December 31, 2021:
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Held for Sale and Discontinued Operations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | The following summarizes the assets and liabilities associated with NSM Group classified as held for sale. As of December 31, 2021, the amounts presented exclude $16.1 million of insurance licenses, investments and cash classified as assets held for sale related to one of the Other Operating Businesses.
Net Income (Loss) from Discontinued Operations The following summarizes the results of operations, including related income taxes associated with the businesses classified as discontinued operations for the three and six months ended June 30, 2022 and 2021:
Net Change in Cash from Discontinued Operations The following summarizes the net change in cash associated with the businesses classified as discontinued operations for the six months ended June 30, 2022 and 2021:
(1) Includes net gain (loss) from sale of Sirius Group, net of tax, net income (loss) from NSM Group discontinued operations, net of tax and net (income) loss from discontinued operations attributable to non-controlling interests. (2) Restricted shares issued by White Mountains receive dividends and are therefore considered participating securities. (3) Net earnings attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the three and six months ended June 30, 2022 and 2021. (4) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.”
|
Significant Transactions - NSM (Details) - Discontinued Operations, Held-for-sale - NSM Insurance Group - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 01, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Other Significant Noncash Transactions [Line Items] | ||||||
Gain on transaction | $ 0.0 | $ 0.0 | $ 0.0 | $ 28.7 | ||
Forecast | ||||||
Other Significant Noncash Transactions [Line Items] | ||||||
Gain on transaction | $ 870.0 | |||||
Subsequent Event | ||||||
Other Significant Noncash Transactions [Line Items] | ||||||
Expected net proceeds | $ 1,400.0 |
Significant Transactions - Kudu (Details) $ in Millions |
6 Months Ended | ||
---|---|---|---|
May 26, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
May 25, 2022 |
|
Kudu | |||
Other Significant Noncash Transactions [Line Items] | |||
Basic ownership | 89.30% | 99.10% | |
Mass Mutual | |||
Other Significant Noncash Transactions [Line Items] | |||
Equity capital raised | $ 64.1 | ||
Kudu Investment Management, LLC | |||
Other Significant Noncash Transactions [Line Items] | |||
Equity capital raised | 0.4 | ||
White Mountains | |||
Other Significant Noncash Transactions [Line Items] | |||
Equity capital raised | $ 50.0 | ||
Kudu | |||
Other Significant Noncash Transactions [Line Items] | |||
Pre-money valuation | 1.3 | ||
Pre-money valuation, amount | $ 114.0 | ||
Enterprise value excluded | $ 39.1 | ||
Kudu | |||
Other Significant Noncash Transactions [Line Items] | |||
Equity capital raised | $ 114.5 |
Significant Transactions - Schedule of Assets Acquired and Liabilities Assumed, Ark (Details) - USD ($) $ in Millions |
Jan. 01, 2021 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Other Significant Transactions [Line Items] | |||
Goodwill | $ 201.8 | $ 142.3 | |
Ark | |||
Other Significant Transactions [Line Items] | |||
Investments | $ 594.3 | ||
Cash | 52.0 | ||
Reinsurance recoverables | 433.4 | ||
Insurance premiums receivable | 236.7 | ||
Ceded unearned premiums | 170.2 | ||
Value of in-force business acquired | 71.7 | ||
Other assets | 88.9 | ||
Loss and loss adjustment expense reserves | (696.0) | ||
Unearned insurance premiums | (326.1) | ||
Debt | (46.4) | ||
Ceded reinsurance payable | (528.3) | ||
Other liabilities | (25.9) | ||
Net tangible assets acquired | 24.5 | ||
Goodwill | 116.8 | ||
Other intangible assets - syndicate underwriting capacity | 175.7 | ||
Deferred tax liability on other intangible assets | (33.4) | ||
Net assets acquired | 283.6 | ||
Merger agreement, equity capital contributed | $ 605.4 |
Significant Transactions - PassportCard/DavidShield (Details) - USD ($) $ in Millions |
May 07, 2020 |
Jan. 24, 2018 |
Jun. 30, 2022 |
Dec. 31, 2021 |
May 06, 2020 |
---|---|---|---|---|---|
DavidShield | |||||
Other Significant Noncash Transactions [Line Items] | |||||
Ownership interest (as a percent) | 50.00% | ||||
PassportCard | |||||
Other Significant Noncash Transactions [Line Items] | |||||
Ownership interest (as a percent) | 50.00% | ||||
PassportCard/DavidShield | |||||
Other Significant Noncash Transactions [Line Items] | |||||
Ownership interest (as a percent) | 53.80% | 53.80% | 53.80% | 50.00% | |
Payments to acquire businesses, gross | $ 41.8 | ||||
Payments to acquire business, net | $ 28.3 | ||||
Stock issued during period, value, acquisitions | $ 15.0 | ||||
Maximum loss exposure | $ 143.0 |
Investment Securities - Schedule of Interest Income on Fixed Maturity Investments (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Schedule of Investments [Line Items] | ||||
Total investment income | $ 25.5 | $ 17.7 | $ 46.5 | $ 38.7 |
Third-party investment expenses | (0.4) | (0.6) | (0.8) | (1.0) |
Net investment income | 25.1 | 17.1 | 45.7 | 37.7 |
Fixed maturity investments | ||||
Schedule of Investments [Line Items] | ||||
Total investment income | 9.4 | 7.2 | 17.6 | 13.7 |
Short-term investments | ||||
Schedule of Investments [Line Items] | ||||
Total investment income | 0.4 | (1.1) | 0.5 | 0.5 |
Common equity securities | ||||
Schedule of Investments [Line Items] | ||||
Total investment income | 0.1 | 0.0 | 0.1 | 0.0 |
Other long-term investments | ||||
Schedule of Investments [Line Items] | ||||
Total investment income | 15.6 | 11.3 | 28.8 | 25.1 |
TPC Providers | ||||
Schedule of Investments [Line Items] | ||||
Total investment income | $ 0.0 | $ 0.3 | $ 0.5 | $ 0.6 |
Investment Securities - Investment gains (losses) for Level 3 (Details) - Level 3 - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Debt and Equity Securities, FV-NI [Line Items] | ||||
Total net unrealized investment gains, pre-tax - Level 3 investments | $ (10.2) | $ 32.3 | $ 17.0 | $ 49.0 |
Other long-term investments | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Total net unrealized investment gains, pre-tax - Level 3 investments | $ (10.2) | $ 32.3 | $ 17.0 | $ 49.0 |
Investment Securities - Cost and Amortized Cost Maturity Schedule (Details) $ in Millions |
Jun. 30, 2022
USD ($)
|
---|---|
Cost or Amortized Cost | |
Total fixed maturity investments | $ 1,987.6 |
Carrying Value | |
Total fixed maturity investments | 1,866.7 |
Fixed Maturities and Convertible Fixed Maturities Excluding Mortgage Backed Securities | |
Cost or Amortized Cost | |
Due in one year or less | 205.1 |
Due after one year through five years | 892.5 |
Due after five years through ten years | 361.1 |
Due after ten years | 109.6 |
Carrying Value | |
Due in one year or less | 202.2 |
Due after one year through five years | 843.7 |
Due after five years through ten years | 330.0 |
Due after ten years | 104.4 |
Mortgage and asset-backed securities | |
Cost or Amortized Cost | |
Mortgage and asset-backed securities and collateralized loan obligations | 419.3 |
Carrying Value | |
Mortgage and asset-backed securities and collateralized loan obligations | $ 386.4 |
Investment Securities - Fair Value Measurements (Details) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Percentage of investments recorded at fair value | 64.00% | 68.00% |
Investment Securities - Investments Held on Deposit or as Collateral (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt and Equity Securities, FV-NI [Line Items] | ||
Investments held in trusts | $ 461.5 | $ 479.5 |
Assets held by insurance regulators | 4.8 | 4.8 |
Other long-term investments | 1,468.7 | 1,377.8 |
Lloyd’s trust deposits | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Other long-term investments | 113.4 | 113.8 |
Short-term investments | Asset Pledged as Collateral | Citibank LOC Facility | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investments pledged as collateral | 49.8 | 50.0 |
Lloyds Bank | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investments held in trusts | 113.4 | |
Fair value investments | $ 304.8 | $ 342.8 |
Investment Securities - Debt securities issued by corporation (Details) - Debt securities issued by corporations - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | $ 974.2 | $ 992.9 |
AAA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | 11.6 | 12.0 |
AA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | 87.2 | 85.0 |
A | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | 502.3 | 490.4 |
BBB | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | 366.4 | 396.8 |
Other | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | $ 6.7 | $ 8.7 |
Investment Securities - Investment in MediaAlpha textual (Details) - Marketing Technology (MediaAlpha) $ / shares in Units, $ in Millions |
Jun. 30, 2022
USD ($)
$ / shares
|
---|---|
Subsidiary, Sale of Stock [Line Items] | |
Share price (in usd per share) | $ / shares | $ 9.85 |
Investment owned, balance | $ | $ 166.9 |
Investment Securities - Hedge Funds and Private Equity Funds (Details) $ in Millions |
Jun. 30, 2022
USD ($)
fund
|
Dec. 31, 2021
USD ($)
|
---|---|---|
Private equity funds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Number of investments | 16 | |
Hedge funds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Number of investments | 1 | |
Hedge and private equity funds included in other long-term investments | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Largest single fund investment | $ | $ 35.4 | $ 31.3 |
Investment Securities - Investments In Private Equity Funds Subject to Lock-Up Periods (Details) - Private equity funds $ in Millions |
Jun. 30, 2022
USD ($)
|
---|---|
Debt and Equity Securities, FV-NI [Line Items] | |
Fair Value | $ 191.7 |
1 – 3 years | |
Debt and Equity Securities, FV-NI [Line Items] | |
Fair Value | 29.8 |
3 – 5 years | |
Debt and Equity Securities, FV-NI [Line Items] | |
Fair Value | 21.0 |
5 – 10 years | |
Debt and Equity Securities, FV-NI [Line Items] | |
Fair Value | 128.8 |
Greater than 10 years | |
Debt and Equity Securities, FV-NI [Line Items] | |
Fair Value | $ 12.1 |
Investment Securities - Lloyd's Trust Deposits, Bank Loan Fund, and Insurance-Linked Securities Funds (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Debt and Equity Securities, FV-NI [Line Items] | ||
Investments held in trusts | $ 461.5 | $ 479.5 |
Minimum | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Redemptions and advanced redemption notice period | 30 days | |
Maximum | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Redemptions and advanced redemption notice period | 90 days | |
Bank loan fund | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | $ 154.4 | |
Lloyds Bank | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | 304.8 | $ 342.8 |
Investments held in trusts | 113.4 | |
ILS funds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value investments | $ 51.6 |
Investment Securities - Rollforward of Fair Value Measurements by Level (Details) - Other long-term investments - Level 3 Investments - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Debt and Equity Securities, FV-NI [Line Items] | ||
Beginning balance | $ 890.6 | $ 614.2 |
Net realized and unrealized gains | 16.6 | 48.9 |
Amortization/accretion | 0.0 | 0.0 |
Purchases | 57.8 | 13.2 |
Sales | (31.7) | (11.5) |
Transfers in | 0.0 | 0.0 |
Transfers out | 0.0 | 0.0 |
Ending balance | 933.3 | 674.4 |
Ark | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Purchases | $ 0.0 | $ 9.6 |
Goodwill and Other Intangible Assets - Summary of the Acquisition Date Fair Values of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions |
Apr. 27, 2021 |
Jan. 01, 2021 |
---|---|---|
Ark | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill and intangible assets acquired | $ 292.5 | |
Other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill and intangible assets acquired | $ 90.5 |
Third-Party Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Earned premiums: | ||||
Net earned premiums | $ 227.8 | $ 124.3 | $ 430.6 | $ 235.3 |
Ark | ||||
Written premiums: | ||||
Gross | 403.9 | 328.1 | 1,037.0 | 732.6 |
Ceded | (133.7) | (65.9) | (223.0) | (128.0) |
Net written premiums | 270.2 | 262.2 | 814.0 | 604.6 |
Earned premiums: | ||||
Gross | 266.4 | 174.9 | 511.7 | 337.5 |
Ceded | (49.1) | (57.1) | (100.0) | (115.1) |
Net earned premiums | 217.3 | 117.8 | 411.7 | 222.4 |
Losses and loss adjustment expenses: | ||||
Gross | 138.4 | 63.6 | 321.5 | 179.2 |
Ceded | (17.9) | (11.0) | (79.0) | (60.6) |
Net losses and loss adjustment expenses | $ 120.5 | $ 52.6 | $ 242.5 | $ 118.6 |
Third-Party Reinsurance - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2021 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Reinsurance [Line Items] | ||||||
Reinsurance recoverables on unpaid losses | $ 375.5 | $ 425.3 | ||||
Reinsurance recoverables on paid losses | 23.2 | 6.0 | ||||
Loss and loss adjustment expense reserves | $ 428.9 | 375.5 | $ 396.0 | 425.3 | $ 447.5 | $ 433.4 |
TPC Providers | ||||||
Reinsurance [Line Items] | ||||||
Reinsurance recoverables | 314.6 | |||||
Loss and loss adjustment expense reserves | 276.8 | $ 207.3 | 314.6 | $ 331.0 | $ 319.2 | |
Ark | ||||||
Reinsurance [Line Items] | ||||||
Reinsurance recoverables | $ 448.4 | 398.7 | $ 431.3 | |||
Ark | TPC Providers | ||||||
Reinsurance [Line Items] | ||||||
Reinsurance recoverables | 182.4 | |||||
Ark | Third Point Re | ||||||
Reinsurance [Line Items] | ||||||
Annual crediting rate | 3.00% | |||||
Decrease in investment | $ 31.7 | |||||
Carrying value of investment | $ 20.1 |
Debt - Schedule of the Change in Debt (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Debt Instrument | ||||
Beginning balance | $ 420.9 | |||
Repayments | (2.4) | $ (94.2) | ||
Ending balance | $ 618.1 | 618.1 | ||
Kudu Credit Facility | ||||
Debt Instrument | ||||
Beginning balance | 218.2 | |||
Ending balance | 253.3 | 253.3 | ||
Kudu | Term Loan | Kudu Bank Facility | ||||
Debt Instrument | ||||
Beginning balance | 0.0 | $ 0.0 | 0.0 | 89.2 |
Borrowings | 0.0 | 0.0 | 0.0 | 3.0 |
Repayments | 0.0 | 0.0 | 0.0 | (92.2) |
Ending balance | 0.0 | 0.0 | 0.0 | 0.0 |
Kudu | Term Loan | Kudu Credit Facility | ||||
Debt Instrument | ||||
Beginning balance | 225.4 | 102.0 | 225.4 | 0.0 |
Borrowings | 35.0 | 0.0 | 35.0 | 102.0 |
Repayments | 0.0 | 0.0 | 0.0 | 0.0 |
Ending balance | $ 260.4 | $ 102.0 | $ 260.4 | $ 102.0 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation, percent | 6.90% | 18.60% | 7.60% | 42.10% |
Derivatives (Details) - HG Global - Interest Rate Cap - USD ($) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 16, 2022 |
Jun. 30, 2022 |
Jun. 30, 2022 |
|
Derivative [Line Items] | |||
Notional amount | $ 150,000,000 | ||
Premiums paid | $ 3,300,000 | ||
Derivative, fair value, net | $ 1,800,000 | $ 1,800,000 | |
Interest Expense | |||
Derivative [Line Items] | |||
Change in fair value of derivative instruments | $ (1,500,000) | $ (1,500,000) | |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Derivative [Line Items] | |||
Derivative, cap interest rate | 3.50% | ||
3-month variable rate | 2.10% | 2.10% |
Municipal Bond Guarantee Insurance - Schedule of Municipal Bond Guarantee Insured Obligations (Details) - BAM $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2022
USD ($)
Contract
|
Dec. 31, 2021
USD ($)
Contract
|
Jan. 31, 2021
USD ($)
|
|
Guarantor Obligations [Line Items] | |||
Contracts outstanding | Contract | 12,852 | 12,350 | |
Remaining weighted average contract period outstanding (in years) | 10 years 8 months 12 days | 10 years 9 months 18 days | |
Principal | $ 95,926.1 | $ 89,196.5 | $ 805.5 |
Interest | 45,150.7 | 41,486.5 | |
Total debt service outstanding | 141,076.8 | 130,683.0 | |
Total gross unearned insurance premiums | $ 274.0 | $ 266.3 |
Municipal Bond Guarantee Insurance - Schedule of Municipal Guarantee Insurance Contracts, Premium Received Over Contract Period (Details) - BAM - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Guarantor Obligations [Line Items] | ||
July 1, 2022 - December 31, 2022 | $ 13.0 | |
January 1, 2023 - March 31, 2023 | 6.4 | |
April 1, 2023 - June 30, 2023 | 6.3 | |
July 1, 2023 - September 30, 2023 | 6.2 | |
October 1, 2023 - December 31, 2023 | 6.1 | |
Total | 25.0 | |
2024 | 23.5 | |
2025 | 21.8 | |
2026 | 20.3 | |
2027 | 18.9 | |
2028 and thereafter | 151.5 | |
Total gross unearned insurance premiums | $ 274.0 | $ 266.3 |
Municipal Bond Guarantee Insurance - Schedule of Net Written Premiums (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Earned premiums: | ||||
Net earned premiums | $ 227.8 | $ 124.3 | $ 430.6 | $ 235.3 |
HG/BAM | ||||
Written premiums: | ||||
Direct | 17.1 | 13.8 | 26.5 | 21.8 |
Assumed | 0.0 | 0.0 | 0.0 | 4.5 |
Net written premiums | 17.1 | 13.8 | 26.5 | 26.3 |
Earned premiums: | ||||
Direct | 7.9 | 5.6 | 15.5 | 10.9 |
Assumed | 2.6 | 0.9 | 3.4 | 2.0 |
Net earned premiums | $ 10.5 | $ 6.5 | $ 18.9 | $ 12.9 |
Earnings Per Share - Undistributed Net Earnings From Continuing Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||
Net income (losses) attributable to White Mountains’s common shareholders, net of restricted common share amounts | $ (172.9) | $ 135.7 | $ (143.7) | $ 71.6 |
Dividends declared net of restricted common share amounts | 0.0 | 0.0 | (3.0) | (3.1) |
Total undistributed net earnings (losses), net of restricted common share amounts | $ (172.9) | $ 135.7 | $ (146.7) | $ 68.5 |
Employee Share-Based Incentive Compensation Plans - Performance Shares (Details) - Performance Share - W T M Incentive Plan - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | 36 Months Ended | |||
---|---|---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Target Performance Shares Outstanding | |||||||
Beginning of period (in shares) | 39,302 | 40,784 | 40,828 | 42,458 | |||
Shares paid (in shares) | 0 | 0 | (14,625) | (14,117) | |||
New grants (in shares) | 150 | 475 | 13,225 | 13,475 | 750 | ||
Forfeitures and cancellations (in shares) | (3) | (7) | (21) | (564) | |||
Expense recognized (in shares) | 0 | 0 | 0 | 0 | |||
End of period (in shares) | 39,302 | 40,784 | 39,449 | 41,252 | 39,449 | 41,252 | 40,828 |
Accrued Expense | |||||||
Beginning of period | $ 21.9 | $ 38.2 | $ 42.2 | $ 56.3 | |||
Shares paid | 0.0 | 0.0 | (26.4) | (34.6) | |||
New grants | 0.0 | 0.0 | 0.0 | 0.0 | |||
Forfeitures and cancellations | (0.4) | (0.2) | (0.1) | 0.2 | |||
Expense recognized | 19.7 | 7.7 | 25.5 | 23.8 | |||
End of period | $ 21.9 | $ 38.2 | $ 41.2 | $ 45.7 | $ 41.2 | $ 45.7 | $ 42.2 |
Range Of Performance Cycle Current Year | |||||||
Accrued Expense | |||||||
Percentage of target payout - minimum actual | 172.00% | ||||||
Range Of Performance Cycle Previous Year | |||||||
Accrued Expense | |||||||
Percentage of target payout - minimum actual | 200.00% |
Employee Share-Based Incentive Compensation Plans - Restricted Shares (Details) - W T M Incentive Plan - Restricted Stock - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Restricted Shares | ||||
Beginning of period (in shares) | 38,200 | 37,805 | 37,850 | 43,105 |
Issued (in shares) | 150 | 475 | 13,225 | 13,475 |
Vested (in shares) | 0 | 0 | (12,725) | (17,717) |
Forfeited (in shares) | 0 | 0 | 0 | (583) |
Expense recognized (in shares) | 0 | 0 | 0 | 0 |
End of period (in shares) | 38,350 | 38,280 | 38,350 | 38,280 |
Unamortized Issue Date Fair Value | ||||
Beginning of period | $ 26.5 | $ 26.2 | $ 15.9 | $ 15.2 |
Issued | 0.2 | 0.5 | 13.8 | 16.1 |
Vested | 0.0 | 0.0 | 0.0 | 0.0 |
Forfeited | 0.0 | 0.0 | 0.0 | (0.6) |
Expense recognized | (3.7) | (3.5) | (6.7) | (7.5) |
End of period | $ 23.0 | $ 23.2 | $ 23.0 | $ 23.2 |
Leases - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
ROU lease asset | $ 26.2 | $ 28.1 |
Operating lease liability | $ 28.2 | $ 30.0 |
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Leases [Abstract] | ||||
Lease cost | $ 2.0 | $ 1.8 | $ 4.0 | $ 2.9 |
Less: sublease income | 0.1 | 0.1 | 0.3 | 0.2 |
Net lease cost | $ 1.9 | $ 1.7 | $ 3.7 | $ 2.7 |
Leases - Schedule of Future Minimum Payments on Operating Leases (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Remainder of 2022 | $ 3.4 | |
2023 | 8.2 | |
2024 | 7.2 | |
2025 | 4.9 | |
2026 | 2.6 | |
Thereafter | 5.0 | |
Total undiscounted lease payments | 31.3 | |
Less: present value adjustment | 3.1 | |
Operating lease liability | $ 28.2 | $ 30.0 |
Leases - Schedule of Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Lessee, Lease, Description [Line Items] | ||
ROU lease asset | $ 26.2 | $ 28.1 |
Lease liability | $ 28.2 | $ 30.0 |
Operating lease, weighted average incremental borrowing rate, percent | 4.10% | 4.00% |
HG/BAM | ||
Lessee, Lease, Description [Line Items] | ||
ROU lease asset | $ 6.7 | $ 7.6 |
Lease liability | 7.2 | 8.1 |
Ark | ||
Lessee, Lease, Description [Line Items] | ||
ROU lease asset | 7.3 | 7.0 |
Lease liability | 7.3 | 7.0 |
Asset Management (Kudu) | ||
Lessee, Lease, Description [Line Items] | ||
ROU lease asset | 6.1 | 6.4 |
Lease liability | 6.9 | 7.1 |
Other Operations (1) | ||
Lessee, Lease, Description [Line Items] | ||
ROU lease asset | 6.1 | 7.1 |
Lease liability | $ 6.8 | $ 7.8 |
Segment Information - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Equity-Method Eligible Investments - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Equity Method Investee | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds from dividends received | $ 15.6 | $ 11.0 | $ 28.7 | $ 24.7 |
Equity-Method Eligible Investments - Equity Method Investments Financial Data (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Schedule of Equity Method Investments [Line Items] | |||||
Total assets | $ 7,660.9 | $ 7,660.9 | $ 7,000.7 | ||
Total liabilities | 4,168.9 | 4,168.9 | 3,296.0 | ||
Total revenues | 76.7 | $ 342.4 | 337.1 | $ 445.8 | |
Net income (loss) | (169.2) | 138.5 | (135.8) | 63.2 | |
Marketing Technology (MediaAlpha) | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total assets | 285.9 | 285.9 | 289.8 | ||
Total liabilities | 345.4 | 345.4 | $ 351.4 | ||
Total revenues | 103.4 | 157.4 | 246.0 | 330.9 | |
Total expenses | 116.4 | 157.8 | 268.9 | 331.1 | |
Net income (loss) | $ (13.0) | $ (0.4) | $ (22.9) | $ (0.2) |
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