ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Bermuda
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94-2708455
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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80 South Main Street
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|
Hanover, New Hampshire
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03755-2053
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Shares, par value $1.00
|
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New York Stock Exchange
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per share
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Bermuda Stock Exchange
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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CERTIFICATIONS
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C-1
|
Net written premiums by line of business
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Property lines
|
|
|
|
|
|
|
||||||
Ocean and inland marine
|
|
$
|
190.1
|
|
|
$
|
201.9
|
|
|
$
|
187.1
|
|
Commercial multi-peril and auto physical damage
|
|
94.6
|
|
|
82.0
|
|
|
72.5
|
|
|||
Fire and allied
|
|
39.3
|
|
|
44.7
|
|
|
51.9
|
|
|||
Total property lines
|
|
324.0
|
|
|
328.6
|
|
|
311.5
|
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|||
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|
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|
||||||
Casualty lines
|
|
|
|
|
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|
||||||
General liability
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|
334.8
|
|
|
402.1
|
|
|
391.8
|
|
|||
Automobile liability
|
|
88.4
|
|
|
91.4
|
|
|
55.8
|
|
|||
Workers compensation
|
|
86.1
|
|
|
83.7
|
|
|
79.4
|
|
|||
Other casualty
|
|
51.8
|
|
|
40.3
|
|
|
38.3
|
|
|||
Total casualty lines
|
|
561.1
|
|
|
617.5
|
|
|
565.3
|
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|||
|
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||||||
Other lines
|
|
|
|
|
|
|
||||||
Accident and health
|
|
151.1
|
|
|
149.8
|
|
|
141.4
|
|
|||
Credit and other
|
|
59.0
|
|
|
58.0
|
|
|
55.6
|
|
|||
Surety
|
|
50.7
|
|
|
28.9
|
|
|
10.5
|
|
|||
Crop
(1)
|
|
(9.3
|
)
|
|
34.1
|
|
|
4.3
|
|
|||
Total other lines
|
|
251.5
|
|
|
270.8
|
|
|
211.8
|
|
|||
Total
|
|
$
|
1,136.6
|
|
|
$
|
1,216.9
|
|
|
$
|
1,088.6
|
|
Division
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Specialty Products
|
|
$
|
533.0
|
|
|
$
|
606.9
|
|
|
$
|
509.6
|
|
Specialty Industries
|
|
603.6
|
|
|
610.0
|
|
|
579.0
|
|
|||
Total
|
|
$
|
1,136.6
|
|
|
$
|
1,216.9
|
|
|
$
|
1,088.6
|
|
Underwriting Unit
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Healthcare
|
|
$
|
147.1
|
|
|
$
|
180.4
|
|
|
$
|
178.5
|
|
Programs
|
|
99.1
|
|
|
50.8
|
|
|
20.5
|
|
|||
Tuition Reimbursement
|
|
72.1
|
|
|
70.5
|
|
|
65.9
|
|
|||
Surety
|
|
47.4
|
|
|
28.9
|
|
|
10.5
|
|
|||
Other Professional Lines
|
|
46.8
|
|
|
80.4
|
|
|
78.1
|
|
|||
Management Liability
|
|
40.6
|
|
|
50.1
|
|
|
53.5
|
|
|||
Other Specialty Products
|
|
79.9
|
|
|
145.8
|
|
|
102.6
|
|
|||
Total Specialty Products
|
|
$
|
533.0
|
|
|
$
|
606.9
|
|
|
$
|
509.6
|
|
Underwriting Unit
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Technology
|
|
$
|
127.3
|
|
|
$
|
133.1
|
|
|
$
|
131.8
|
|
Ocean Marine
|
|
122.7
|
|
|
127.1
|
|
|
125.3
|
|
|||
Accident
|
|
118.8
|
|
|
113.4
|
|
|
105.9
|
|
|||
Entertainment
|
|
88.0
|
|
|
88.6
|
|
|
76.8
|
|
|||
Government Risks
|
|
84.5
|
|
|
82.3
|
|
|
83.4
|
|
|||
Inland Marine
|
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62.3
|
|
|
65.5
|
|
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55.8
|
|
|||
Total Specialty Industries
|
|
$
|
603.6
|
|
|
$
|
610.0
|
|
|
$
|
579.0
|
|
|
|
Year Ended December 31,
|
|||||||
Net written premiums by state
|
|
2015
|
|
2014
|
|
2013
|
|||
California
|
|
18
|
%
|
|
16
|
%
|
|
16
|
%
|
New York
|
|
10
|
|
|
10
|
|
|
10
|
|
Texas
|
|
6
|
|
|
7
|
|
|
7
|
|
District of Columbia
|
|
6
|
|
|
5
|
|
|
6
|
|
Florida
|
|
5
|
|
|
6
|
|
|
5
|
|
Other
|
|
55
|
|
|
56
|
|
|
56
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
OneBeacon Loss and LAE
(1)
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||||
$ in millions
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||||||||||||
I. Liability for unpaid loss and LAE:
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
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|
||||||||||||||||||||||
Gross balance
|
$
|
376.7
|
|
|
$
|
436.1
|
|
|
$
|
480.2
|
|
|
$
|
627.1
|
|
|
$
|
702.1
|
|
|
$
|
835.1
|
|
|
$
|
868.5
|
|
|
$
|
1,000.0
|
|
|
$
|
1,054.3
|
|
|
$
|
1,342.2
|
|
|
|
$1,389.8
|
|
Less reinsurance recoverable on
unpaid losses and LAE
|
(46.8
|
)
|
|
(30.6
|
)
|
|
(24.3
|
)
|
|
(49.6
|
)
|
|
(43.8
|
)
|
|
(53.6
|
)
|
|
(61.6
|
)
|
|
(107.3
|
)
|
|
(80.2
|
)
|
|
(161.6
|
)
|
|
(186.0
|
)
|
|||||||||||
Net balance
|
|
$329.9
|
|
|
|
$405.5
|
|
|
|
$455.9
|
|
|
|
$577.5
|
|
|
|
$658.3
|
|
|
|
$781.5
|
|
|
|
$806.9
|
|
|
|
$892.7
|
|
|
|
$974.1
|
|
|
|
$1,180.6
|
|
|
|
$1,203.8
|
|
II. Cumulative amount of net liability
paid through:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
1 year later
|
126.8
|
|
|
96.6
|
|
|
97.8
|
|
|
154.8
|
|
|
219.4
|
|
|
306.3
|
|
|
339.0
|
|
|
332.7
|
|
|
380.2
|
|
|
457.1
|
|
|
|
||||||||||||
2 years later
|
168.7
|
|
|
132.3
|
|
|
159.4
|
|
|
235.2
|
|
|
357.0
|
|
|
474.4
|
|
|
505.7
|
|
|
561.6
|
|
|
653.0
|
|
|
|
|
|
|||||||||||||
3 years later
|
185.4
|
|
|
167.2
|
|
|
197.3
|
|
|
294.4
|
|
|
436.3
|
|
|
560.1
|
|
|
616.7
|
|
|
716.7
|
|
|
|
|
|
|
|
||||||||||||||
4 years later
|
205.1
|
|
|
183.9
|
|
|
230.3
|
|
|
331.4
|
|
|
477.1
|
|
|
611.2
|
|
|
704.4
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
5 years later
|
214.1
|
|
|
195.3
|
|
|
244.7
|
|
|
346.8
|
|
|
501.6
|
|
|
654.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
6 years later
|
218.7
|
|
|
199.6
|
|
|
252.6
|
|
|
354.7
|
|
|
515.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
7 years later
|
221.4
|
|
|
201.9
|
|
|
256.2
|
|
|
359.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
8 years later
|
222.2
|
|
|
202.6
|
|
|
258.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
9 years later
|
222.5
|
|
|
203.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
10 years later
|
222.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
III. Net Liability re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1 year later
|
325.9
|
|
|
308.1
|
|
|
391.1
|
|
|
492.9
|
|
|
630.2
|
|
|
751.7
|
|
|
799.5
|
|
|
892.7
|
|
|
1,063.8
|
|
|
1,178.8
|
|
|
|
||||||||||||
2 years later
|
269.6
|
|
|
267.8
|
|
|
335.4
|
|
|
459.3
|
|
|
595.8
|
|
|
743.8
|
|
|
806.9
|
|
|
950.0
|
|
|
1,089.2
|
|
|
|
|
|
|||||||||||||
3 years later
|
243.1
|
|
|
243.2
|
|
|
318.8
|
|
|
416.1
|
|
|
589.6
|
|
|
733.2
|
|
|
830.3
|
|
|
963.4
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
4 years later
|
238.8
|
|
|
227.1
|
|
|
297.4
|
|
|
413.5
|
|
|
576.9
|
|
|
733.6
|
|
|
841.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
5 years later
|
228.8
|
|
|
224.8
|
|
|
294.3
|
|
|
396.9
|
|
|
567.1
|
|
|
733.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
6 years later
|
229.5
|
|
|
221.6
|
|
|
280.8
|
|
|
385.0
|
|
|
560.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
7 years later
|
230.2
|
|
|
216.0
|
|
|
272.9
|
|
|
380.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
8 years later
|
227.6
|
|
|
211.3
|
|
|
268.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
9 years later
|
227.0
|
|
|
207.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
10 years later
|
223.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
IV. Cumulative net redundancy/
(deficiency)
|
|
$106.8
|
|
|
|
$197.9
|
|
|
|
$187.0
|
|
|
|
$197.1
|
|
|
|
$97.6
|
|
|
|
$47.7
|
|
|
|
($34.3
|
)
|
|
|
($70.7
|
)
|
|
|
($115.1
|
)
|
|
|
$1.8
|
|
|
|
|
|
Percent redundant/(deficient)
|
32.4
|
%
|
|
48.8
|
%
|
|
41.0
|
%
|
|
34.1
|
%
|
|
14.8
|
%
|
|
6.1
|
%
|
|
(4.3
|
)%
|
|
(7.9
|
)%
|
|
(11.8
|
)%
|
|
0.2%
|
|
|
|||||||||||||
V. Reconciliation of net liability re-
estimated as of the end of the latest
re-estimation period (see III above):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross re-estimated liability
|
|
$299.7
|
|
|
|
$239.6
|
|
|
|
$306.5
|
|
|
|
$424.4
|
|
|
|
$601.7
|
|
|
|
$772.9
|
|
|
|
$876.1
|
|
|
$1,111.1
|
|
|
$1,202.9
|
|
|
$1,343.4
|
|
|
||||||
Less: gross re-estimated reinsurance
recoverable
|
(76.6
|
)
|
|
(32.0
|
)
|
|
(37.6
|
)
|
|
(44.0
|
)
|
|
(41.0
|
)
|
|
(39.1
|
)
|
|
(34.9
|
)
|
|
(147.7
|
)
|
|
(113.7
|
)
|
|
(164.6
|
)
|
|
|
||||||||||||
Net re-estimated liability
|
|
$223.1
|
|
|
|
$207.6
|
|
|
|
$268.9
|
|
|
|
$380.4
|
|
|
|
$560.7
|
|
|
|
$733.8
|
|
|
|
$841.2
|
|
|
|
$963.4
|
|
|
|
$1,089.2
|
|
|
|
$1,178.8
|
|
|
|
|
|
VI. Cumulative gross
redundancy/(deficiency)
|
|
$77.0
|
|
|
|
$196.5
|
|
|
|
$173.7
|
|
|
|
$202.7
|
|
|
|
$100.4
|
|
|
|
$62.2
|
|
|
|
($7.6
|
)
|
|
|
($111.1
|
)
|
|
|
($148.6
|
)
|
|
|
($1.2
|
)
|
|
|
||
Percent redundant/(deficient)
|
20.4
|
%
|
|
45.1
|
%
|
|
36.2
|
%
|
|
32.3
|
%
|
|
14.3
|
%
|
|
7.4
|
%
|
|
(0.9
|
)%
|
|
(11.1
|
)%
|
|
(14.1
|
)%
|
|
(0.1
|
)%
|
|
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Statutory reserves
|
|
$
|
1,203.8
|
|
|
$
|
1,180.6
|
|
Reinsurance recoverable on unpaid losses and LAE
(1)
|
|
186.0
|
|
|
161.6
|
|
||
GAAP reserves
|
|
$
|
1,389.8
|
|
|
$
|
1,342.2
|
|
(1)
|
Represents adjustments made to add back reinsurance recoverables on unpaid losses and LAE included with the presentation of reserves under statutory accounting.
|
Sector
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||
Millions
|
|
Gross Par Outstanding
|
|
Average Credit Rating
(1)
|
|
Gross Par Outstanding
|
|
Average Credit Rating
(1)
|
||||
General Obligation
|
|
$
|
13,963.6
|
|
|
A
|
|
$
|
8,188.9
|
|
|
A
|
Utility
|
|
3,032.8
|
|
|
A
|
|
1,615.3
|
|
|
A
|
||
Dedicated Tax
|
|
2,503.6
|
|
|
A
|
|
1,222.0
|
|
|
A
|
||
General Fund
|
|
1,786.6
|
|
|
A
|
|
736.4
|
|
|
A
|
||
Public Higher Education
|
|
630.4
|
|
|
A
|
|
311.7
|
|
|
A
|
||
Transportation
|
|
561.5
|
|
|
A
|
|
257.8
|
|
|
A
|
||
Other Public Finance
|
|
77.5
|
|
|
A
|
|
30.4
|
|
|
A
|
||
Total gross par outstanding
|
|
$
|
22,556.0
|
|
|
A
|
|
$
|
12,362.5
|
|
|
A
|
$ in millions
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
|
Credit Rating
(1) (2)
|
|||||
Town of Hamden, CT (New Haven County)
|
|
$
|
112.5
|
|
|
0.5
|
%
|
|
|
A+
|
|
Tulsa Airport, OK, (Tulsa County), Airport GARBs
|
|
110.3
|
|
|
0.5
|
|
|
|
BBB+
|
|
|
New Jersey Transportation Trust Fund Authority, Gas Tax - State
|
|
110.0
|
|
|
0.5
|
|
|
|
A-
|
|
|
Val Verde USD, CA (Riverside County)
|
|
105.3
|
|
|
0.5
|
|
|
|
A-
|
|
|
City of Shreveport, LA (Caddo Parish), Water & Sewer
|
|
104.0
|
|
|
0.5
|
|
|
|
BBB+
|
|
|
Sacramento City FA, CA (Sacramento County)
|
|
103.6
|
|
|
0.5
|
|
|
|
A+
|
|
|
City of Chicago, IL (Cook County)
|
|
103.0
|
|
|
0.5
|
|
|
|
BBB+
|
|
|
City of Jersey City, NJ (Hudson County)
|
|
99.5
|
|
|
0.4
|
|
|
|
A1
|
|
|
West Clermont Local SD, OH (Clermont County)
|
|
99.3
|
|
|
0.4
|
|
|
|
A
|
|
|
State of New Jersey
|
|
99.2
|
|
|
0.3
|
|
|
|
A-
|
|
|
Total of top ten exposures
|
|
$
|
1,046.7
|
|
|
4.6
|
%
|
|
|
|
|
|
|
December 31, 2015
|
||||||||
$ in millions
|
|
Number of Risks
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
||||
California
|
|
264
|
|
|
$
|
5,204.2
|
|
|
23.1
|
%
|
Texas
|
|
370
|
|
|
3,751.9
|
|
|
16.6
|
|
|
Pennsylvania
|
|
232
|
|
|
3,323.8
|
|
|
14.7
|
|
|
New York
|
|
177
|
|
|
1,966.6
|
|
|
8.7
|
|
|
Illinois
|
|
118
|
|
|
1,256.7
|
|
|
5.6
|
|
|
New Jersey
|
|
60
|
|
|
902.6
|
|
|
4.0
|
|
|
Florida
|
|
35
|
|
|
623.7
|
|
|
2.8
|
|
|
Ohio
|
|
37
|
|
|
568.2
|
|
|
2.5
|
|
|
Michigan
|
|
49
|
|
|
525.3
|
|
|
2.3
|
|
|
Louisiana
|
|
25
|
|
|
440.7
|
|
|
2.0
|
|
|
Other States
|
|
351
|
|
|
3,992.3
|
|
|
17.7
|
|
|
Total insured portfolio
|
|
1,718
|
|
|
$
|
22,556.0
|
|
|
100.0
|
%
|
|
|
December 31, 2014
|
||||||||
$ in millions
|
|
Number of Risks
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
||||
California
|
|
158
|
|
|
$
|
2,701.9
|
|
|
21.9
|
%
|
Texas
|
|
291
|
|
|
2,370.2
|
|
|
19.2
|
|
|
Pennsylvania
|
|
157
|
|
|
1,894.2
|
|
|
15.3
|
|
|
New York
|
|
124
|
|
|
1,207.9
|
|
|
9.8
|
|
|
Illinois
|
|
70
|
|
|
813.9
|
|
|
6.6
|
|
|
New Jersey
|
|
32
|
|
|
502.5
|
|
|
4.1
|
|
|
Louisiana
|
|
16
|
|
|
325.5
|
|
|
2.6
|
|
|
Michigan
|
|
27
|
|
|
318.3
|
|
|
2.6
|
|
|
Arizona
|
|
17
|
|
|
191.8
|
|
|
1.6
|
|
|
Florida
|
|
10
|
|
|
189.6
|
|
|
1.5
|
|
|
Other states
|
|
180
|
|
|
1,846.7
|
|
|
14.8
|
|
|
Total insured portfolio
|
|
1,082
|
|
|
$
|
12,362.5
|
|
|
100.0
|
%
|
Original Par Amount Per Issue
|
|
December 31, 2015
|
||||||||
$ in millions
|
|
Number of Risks
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
||||
Less than $10 million
|
|
1,099
|
|
|
$
|
5,160.6
|
|
|
22.9
|
%
|
$10 to $50 million
|
|
541
|
|
|
11,777.2
|
|
|
52.2
|
|
|
$50 to $100 million
|
|
69
|
|
|
4,398.5
|
|
|
19.5
|
|
|
$100 to $200 million
|
|
9
|
|
|
1,219.7
|
|
|
5.4
|
|
|
Total insured portfolio
|
|
1,718
|
|
|
$
|
22,556.0
|
|
|
100.0
|
%
|
Original Par Amount Per Issue
|
|
December 31, 2014
|
||||||||
$ in millions
|
|
Number of Risks
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
||||
Less than $10 million
|
|
734
|
|
|
$
|
3,640.6
|
|
|
29.4
|
%
|
$10 to $50 million
|
|
317
|
|
|
6,543.6
|
|
|
53.0
|
|
|
$50 to $100 million
|
|
27
|
|
|
1,753.2
|
|
|
14.2
|
|
|
$100 to $200 million
|
|
4
|
|
|
425.1
|
|
|
3.4
|
|
|
Total insured portfolio
|
|
1,082
|
|
|
$
|
12,362.5
|
|
|
100.0
|
%
|
Business class
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Property
|
|
$
|
282.7
|
|
|
$
|
292.5
|
|
|
$
|
275.2
|
|
Accident and health
|
|
262.3
|
|
|
230.3
|
|
|
203.1
|
|
|||
Property catastrophe excess
|
|
143.0
|
|
|
200.9
|
|
|
231.3
|
|
|||
Aviation and space
|
|
55.1
|
|
|
51.2
|
|
|
46.4
|
|
|||
Marine
|
|
46.5
|
|
|
42.3
|
|
|
45.3
|
|
|||
Trade credit
|
|
37.5
|
|
|
36.2
|
|
|
50.4
|
|
|||
Agriculture
|
|
15.0
|
|
|
16.1
|
|
|
13.9
|
|
|||
Casualty
|
|
14.7
|
|
|
1.2
|
|
|
2.2
|
|
|||
Contingency
|
|
10.6
|
|
|
11.8
|
|
|
8.8
|
|
|||
Parent company industry loss
warranty covers
(1)
|
|
(19.8
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
847.6
|
|
|
$
|
882.5
|
|
|
$
|
876.6
|
|
Geographic region
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
|
$
|
397.5
|
|
|
$
|
402.6
|
|
|
$
|
371.9
|
|
Europe
|
|
241.9
|
|
|
277.7
|
|
|
313.0
|
|
|||
Canada, the Caribbean, Bermuda and Latin America
|
|
101.2
|
|
|
99.8
|
|
|
94.9
|
|
|||
Asia and Other
|
|
107.0
|
|
|
102.4
|
|
|
96.8
|
|
|||
Total
|
|
$
|
847.6
|
|
|
$
|
882.5
|
|
|
$
|
876.6
|
|
|
|
|
|
|
|
|
|
Sirius Group Net After-Tax Loss
|
||||||||||||||
$ in millions
|
|
Modeled
Industry Loss
|
|
Sirius Group
Gross Loss
|
|
Net After
Reinsurance
and
Reinstatements
|
|
Net
After Tax
|
|
Net After-Tax as % of Adjusted GAAP
Capital
(1)
|
|
Net After-Tax
as % of Adjusted GAAP
Common
Shareholder’s
Equity
(1)
|
||||||||||
|
|
1-in-100 year event
|
||||||||||||||||||||
Europe
|
|
$
|
10,935
|
|
|
$
|
342
|
|
|
$
|
164
|
|
|
$
|
128
|
|
|
5
|
%
|
|
7
|
%
|
Southeast U.S.
|
|
$
|
69,245
|
|
|
$
|
322
|
|
|
$
|
165
|
|
|
$
|
123
|
|
|
5
|
%
|
|
6
|
%
|
Northeast U.S.
|
|
$
|
19,008
|
|
|
$
|
206
|
|
|
$
|
145
|
|
|
$
|
108
|
|
|
4
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
1-in-250 year event
|
||||||||||||||||||||
Southeast U.S.
|
|
$
|
102,416
|
|
|
$
|
439
|
|
|
$
|
279
|
|
|
$
|
211
|
|
|
8
|
%
|
|
11
|
%
|
West Coast U.S.
|
|
$
|
82,537
|
|
|
$
|
439
|
|
|
$
|
272
|
|
|
$
|
204
|
|
|
8
|
%
|
|
10
|
%
|
Florida U.S.
|
|
$
|
223,881
|
|
|
$
|
436
|
|
|
$
|
268
|
|
|
$
|
202
|
|
|
8
|
%
|
|
10
|
%
|
(1)
|
Adjusted GAAP capital and common shareholder’s equity as of
December 31, 2015
for Sirius Group is determined on a legal-entity basis.
|
Scope
|
|
Limit
|
|
Industry Loss Trigger
|
United States first event
|
|
$75.0 million
|
|
$40.0 billion
|
United States first event
|
|
$22.5 million
|
|
$50.0 billion
|
United States second event
|
|
$45.0 million
|
|
$15.0 billion
|
Japan first event
|
|
$25.0 million
|
|
$12.5 billion
|
(1)
|
the company is, or would after the payment be, unable to pay its liabilities as they become due; or
|
(2)
|
the realizable value of the company’s assets would thereby be less than its liabilities.
|
•
|
the acquisition or holding of land in Bermuda, except land held by way of lease or tenancy agreement which is required for the Company’s business and held for a term not exceeding 50 years, or which is used to provide accommodation or recreational facilities for the Company’s officers and employees and held with the consent of the Bermuda Minister of Finance, for a term not exceeding 21 years;
|
•
|
the taking of mortgages on land in Bermuda in excess of $50,000;
|
•
|
the acquisition of any bonds or debentures secured by any land in Bermuda, other than certain types of Bermuda government or public authority securities; or
|
•
|
subject to some exceptions, the carrying on of business of any kind in Bermuda for which the Company is not licensed in Bermuda.
|
|
A.M. Best
(1)
|
|
Fitch
(2)
|
|
Moody’s
(3)
|
|
Standard &
Poor’s
(4)
|
OneBeacon
|
|
|
|
|
|
|
|
Rating
|
“A” (Excellent)
|
|
“A” (Strong)
|
|
“A3” (Good)
|
|
“A-” (Strong)
|
Outlook
|
Stable
|
|
Negative
|
|
Stable
|
|
Stable
|
(1)
|
“A” is the third highest of sixteen financial strength ratings assigned by A.M. Best Company (“A.M. Best”).
|
(2)
|
“A” is the sixth highest of nineteen international financial strength ratings assigned by Fitch Ratings (“Fitch”).
|
(3)
|
“A3” is the seventh highest of twenty-one financial strength ratings assigned by Moody’s
|
(4)
|
“A-” is the seventh highest of twenty-one financial strength ratings assigned by Standard & Poor’s.
|
•
|
New theories of liability and disputes regarding medical causation with respect to certain diseases;
|
•
|
Claims related to data security breaches, information system failures or cyber-attacks; and
|
•
|
Claims related to blackouts caused by space weather.
|
Name
|
|
Position
|
|
Age
|
|
Executive
Officer since
|
Raymond Barrette
|
|
Chairman and CEO
|
|
65
|
|
2007
|
Reid T. Campbell
|
|
Managing Director of White Mountains Capital, Inc.
and President of WM Advisors
|
|
48
|
|
2007
|
David T. Foy
|
|
Executive Vice President and Chief Financial Officer
|
|
49
|
|
2003
|
T. Michael Miller
|
|
President and CEO of OneBeacon Ltd.
|
|
57
|
|
2005
|
Kernan V. Oberting
|
|
Managing Director of White Mountains Capital, Inc.
and President of Sirius Capital Markets
|
|
46
|
|
2013
|
J. Brian Palmer
|
|
Managing Director and Chief Accounting Officer
|
|
43
|
|
2001
|
G. Manning Rountree
|
|
Managing Director of White Mountains Capital, Inc.
|
|
43
|
|
2009
|
Robert L. Seelig
|
|
Managing Director and General Counsel
|
|
47
|
|
2002
|
Allan L. Waters
|
|
President and CEO of Sirius International Insurance Group, Ltd.
|
|
58
|
|
2007
|
|
|
2015
|
|
2014
|
||||||||||||
Quarter ended:
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
December 31
|
|
$
|
808.00
|
|
|
$
|
721.00
|
|
|
$
|
682.87
|
|
|
$
|
610.00
|
|
September 30
|
|
778.19
|
|
|
645.00
|
|
|
645.00
|
|
|
599.35
|
|
||||
June 30
|
|
704.50
|
|
|
635.00
|
|
|
608.63
|
|
|
583.51
|
|
||||
March 31
|
|
696.48
|
|
|
618.00
|
|
|
603.88
|
|
|
557.26
|
|
Months
|
|
Total Number of
Shares
Purchased
|
|
Average Price
Paid per
Share
|
|
Total Number of Shares
Purchased as Part of Publicly Announced Plan
(1)
|
|
Maximum Number of Shares that
May Yet Be Purchased
Under the Plan
(1)
|
|||||
October 1 - 31, 2015
|
|
58,837
|
|
|
$
|
753.72
|
|
|
57,530
|
|
|
538,636
|
|
November 1 - 30, 2015
|
|
37,715
|
|
|
$
|
767.58
|
|
|
37,715
|
|
|
500,921
|
|
December 1 - 31, 2015
|
|
24,715
|
|
|
$
|
769.18
|
|
|
24,668
|
|
|
476,253
|
|
Total
|
|
121,267
|
|
|
$
|
761.18
|
|
|
119,913
|
|
|
476,253
|
|
(1)
|
During the past several years, White Mountains’s board of directors has authorized the Company to repurchase its common shares, from time to time, subject to market conditions. Most recently, in February 2016, White Mountains’s Board of Directors authorized the Company to repurchase an additional 1 million common shares. The repurchase authorization does not have a stated expiration.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
$ in millions, except share and per share amounts
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
(a)
|
|
$
|
1,809
|
|
|
$
|
1,454
|
|
|
$
|
1,362
|
|
|
$
|
1,358
|
|
|
$
|
1,152
|
|
Expenses
|
|
1,654
|
|
|
1,483
|
|
|
1,204
|
|
|
1,260
|
|
|
1,097
|
|
|||||
Pre-tax income
|
|
155
|
|
|
(29
|
)
|
|
158
|
|
|
98
|
|
|
55
|
|
|||||
Income tax (expense) benefit
|
|
1
|
|
|
15
|
|
|
(33
|
)
|
|
(121
|
)
|
|
74
|
|
|||||
Non-controlling interest
|
|
18
|
|
|
22
|
|
|
13
|
|
|
14
|
|
|
(42
|
)
|
|||||
Equity in earnings (losses) of unconsolidated affiliates
|
|
25
|
|
|
45
|
|
|
37
|
|
|
29
|
|
|
(20
|
)
|
|||||
Discontinued operations, net of tax
(b)
|
|
99
|
|
|
259
|
|
|
147
|
|
|
187
|
|
|
701
|
|
|||||
Net income attributable to White Mountains’s common shareholders
|
|
$
|
298
|
|
|
$
|
312
|
|
|
$
|
322
|
|
|
$
|
207
|
|
|
$
|
768
|
|
Earnings (loss) attributable to White Mountains’s common
shareholders per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic — continuing operations
|
|
$
|
33.80
|
|
|
$
|
8.77
|
|
|
$
|
28.22
|
|
|
$
|
3.03
|
|
|
$
|
8.51
|
|
Basic — discontinued operations
|
|
16.80
|
|
|
42.36
|
|
|
23.63
|
|
|
27.47
|
|
|
88.93
|
|
|||||
Diluted — continuing operations
|
|
$
|
33.80
|
|
|
$
|
8.77
|
|
|
$
|
28.22
|
|
|
$
|
3.03
|
|
|
$
|
8.51
|
|
Diluted — discontinued operations
|
|
16.80
|
|
|
42.36
|
|
|
23.63
|
|
|
27.47
|
|
|
88.93
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
10,285
|
|
|
$
|
10,456
|
|
|
$
|
12,144
|
|
|
$
|
12,895
|
|
|
$
|
14,064
|
|
Debt
(c)
|
|
442
|
|
|
343
|
|
|
275
|
|
|
350
|
|
|
276
|
|
|||||
Non-controlling interests
(d)
|
|
455
|
|
|
543
|
|
|
492
|
|
|
526
|
|
|
580
|
|
|||||
White Mountains’s common shareholders’ equity
|
|
3,913
|
|
|
3,996
|
|
|
3,905
|
|
|
3,732
|
|
|
4,088
|
|
|||||
Book value per share
(e)
|
|
$
|
695.84
|
|
|
$
|
667.48
|
|
|
$
|
632.22
|
|
|
$
|
593.16
|
|
|
$
|
539.40
|
|
Adjusted book value per share
(f)
|
|
$
|
698.95
|
|
|
$
|
664.50
|
|
|
$
|
642.20
|
|
|
$
|
587.60
|
|
|
$
|
542.09
|
|
Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid per common share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Ending common shares (000’s)
(g)
|
|
5,624
|
|
|
5,986
|
|
|
6,177
|
|
|
6,291
|
|
|
7,578
|
|
|||||
Ending equivalent common shares (000’s)
(h)
|
|
(25
|
)
|
|
(26
|
)
|
|
(33
|
)
|
|
(39
|
)
|
|
(38
|
)
|
|||||
Ending common and equivalent common shares (000’s)
|
|
5,599
|
|
|
5,961
|
|
|
6,144
|
|
|
6,252
|
|
|
7,540
|
|
(a)
|
In 2015, White Mountains changed the accounting for its investment in Symetra from the equity method to fair value and recognized $259 of unrealized investment gains through net income. See
Note 17 - “Investments in Unconsolidated Affiliates”.
|
(b)
|
As a result of the Sirius Group Sale, Esurance Sale, the AutoOne Sale, and the Runoff Transaction, White Mountains has reclassified the results from these businesses for the past five years in the table above to discontinued operations, net of tax. In 2013, discontinued operations, net of tax, includes a $47 gain related to the sale of the Runoff Business and a net loss of $42 related to the operations of the Runoff Business. In 2012, discontinued operations, net of tax, includes a $91 loss related to the sale of the Runoff Business and a net loss of $24 related to the operations of the Runoff Business. In 2011, discontinued operations, net of tax, includes a $678 gain related to the Esurance Sale, a $19 loss related to the AutoOne Sale, and a $37 net loss related to the Runoff Business.
|
(c)
|
As of December 31, 2012, White Mountains had $75 outstanding under its credit facility, which was repaid in January 2013. During 2011 and 2010, OneBeacon repurchased $150 and $187 face value of the OBH Senior Notes.
|
(d)
|
See
Note 14 - “Common Shareholders’ Equity and Non-controlling Interests”
for a detailed breakdown of non-controlling interests by consolidated entity.
|
(e)
|
Includes the dilutive effects of outstanding incentive options to acquire common shares, the last of which were exercised in 2010. Non-qualified options were not included in the diluted earnings per share denominator as their inclusion would be anti-dilutive for the periods presented.
|
(f)
|
Adjusted book value per share is a non-GAAP measure which is derived by expanding the GAAP book value per share calculation to include the effects of assumed conversion of all in-the-money convertible securities and to exclude the net unrealized gains (losses) from Symetra’s fixed maturity portfolio and unearned restricted common shares. See the reconciliation of adjusted book value per share to book value per share on page 43.
|
(g)
|
During 2015, 2014, 2013, 2012 and 2011, White Mountains repurchased
387,495
, 217,879, 141,535, 1,329,640 and 646,502, respectively, of its common shares through a combination of tender offers, open market transactions and other transactions.
|
(h)
|
Includes outstanding options to acquire common shares, when applicable, and excludes unearned shares of restricted stock, the compensation of which, at the date of calculation, has yet to be amortized.
|
|
|
December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Book value per share numerators (in millions):
|
|
|
|
|
|
|
||||||
White Mountains’s common shareholders’ equity
(1)
|
|
$
|
3,913.2
|
|
|
$
|
3,995.7
|
|
|
$
|
3,905.1
|
|
Equity in net unrealized (gains) losses from Symetra’s fixed maturity portfolio
|
|
—
|
|
|
(34.9
|
)
|
|
40.4
|
|
|||
Adjusted book value per share numerator
(1)
|
|
$
|
3,913.2
|
|
|
$
|
3,960.8
|
|
|
$
|
3,945.5
|
|
Book value per share denominators (in thousands of shares):
|
|
|
|
|
|
|
||||||
Common shares outstanding
(1)
|
|
5,623.7
|
|
|
5,986.2
|
|
|
6,176.7
|
|
|||
Unearned restricted shares
|
|
(25.0
|
)
|
|
(25.7
|
)
|
|
(33.0
|
)
|
|||
Adjusted book value per share denominator
(1)
|
|
5,598.7
|
|
|
5,960.5
|
|
|
6,143.7
|
|
|||
Book value per share
|
|
$
|
695.84
|
|
|
$
|
667.48
|
|
|
$
|
632.22
|
|
Adjusted book value per share
|
|
$
|
698.95
|
|
|
$
|
664.50
|
|
|
$
|
642.20
|
|
Dividends paid per share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
(1)
|
Excludes stock options, which are anti-dilutive to book value.
|
Millions, except per share amounts
|
|
|
|
||
Assets held for sale
|
|
$
|
4,407.0
|
|
|
Liabilities held for sale
|
|
(2,884.0
|
)
|
|
|
Net assets held for sale
|
|
1,523.0
|
|
|
|
Assets to be contributed in exchange for December 31, 2015 carrying value of Symetra
and other amounts to be retained by White Mountains
|
|
702.8
|
|
|
|
Assets to be contributed to reflect Symetra at transaction value
|
|
3.7
|
|
(1)
|
|
Less: SIG Preference Shares
|
|
(250.0
|
)
|
|
|
Total net assets
|
|
1,979.5
|
|
|
|
Transaction multiple above total net assets
|
|
27.3
|
%
|
|
|
|
|
540.4
|
|
|
|
Additional consideration
|
|
10.0
|
|
|
|
Gain from the sale of Sirius Group
|
|
550.4
|
|
|
|
Estimated compensation expense, transaction costs and other, net of applicable tax
|
|
(80.0
|
)
|
|
|
Net gain from the sale of Sirius Group
|
|
$
|
470.4
|
|
|
Net gain from the sale of Sirius Group per share
|
|
$
|
84.02
|
|
|
|
|
December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Goodwill
|
|
|
|
|
|
|
||||||
Tranzact
|
|
$
|
163.8
|
|
|
$
|
145.1
|
|
|
$
|
—
|
|
MediaAlpha
|
|
18.3
|
|
|
18.3
|
|
|
—
|
|
|||
Wobi
|
|
5.8
|
|
|
5.5
|
|
|
—
|
|
|||
Total goodwill
|
|
187.9
|
|
|
168.9
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Intangible assets
|
|
|
|
|
|
|
||||||
Tranzact
|
|
156.1
|
|
|
142.8
|
|
|
—
|
|
|||
MediaAlpha
|
|
24.4
|
|
|
32.5
|
|
|
—
|
|
|||
Wobi and Other
|
|
7.3
|
|
|
7.0
|
|
|
5.1
|
|
|||
Total intangible assets
|
|
187.8
|
|
|
182.3
|
|
|
5.1
|
|
|||
|
|
|
|
|
|
|
||||||
Total goodwill and intangible assets
(1)
|
|
375.7
|
|
|
351.2
|
|
|
5.1
|
|
|||
|
|
|
|
|
|
|
||||||
Goodwill and intangible assets attributed to non-controlling interests
|
|
(135.8
|
)
|
|
(141.8
|
)
|
|
(1.3
|
)
|
|||
|
|
|
|
|
|
|
||||||
Goodwill and intangible assets included in adjusted book value
|
|
$
|
239.9
|
|
|
$
|
209.4
|
|
|
$
|
3.8
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Gross written premiums
|
|
$
|
1,361.7
|
|
|
$
|
1,362.2
|
|
|
$
|
1,176.5
|
|
Net written premiums
|
|
$
|
1,172.6
|
|
|
$
|
1,239.0
|
|
|
$
|
1,102.2
|
|
Revenues
|
|
|
|
|
|
|
||||||
Earned insurance premiums
|
|
$
|
1,188.2
|
|
|
$
|
1,185.0
|
|
|
$
|
1,120.9
|
|
Net investment income
|
|
60.8
|
|
|
59.5
|
|
|
59.8
|
|
|||
Net realized and unrealized investment gains
|
|
225.4
|
|
|
78.5
|
|
|
133.9
|
|
|||
Other revenue — Symetra warrants
|
|
—
|
|
|
—
|
|
|
10.8
|
|
|||
Other revenue — other
|
|
334.2
|
|
|
131.1
|
|
|
36.2
|
|
|||
Total revenues
|
|
1,808.6
|
|
|
1,454.1
|
|
|
1,361.6
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Losses and LAE
|
|
708.9
|
|
|
824.0
|
|
|
622.1
|
|
|||
Insurance acquisition expenses
|
|
220.1
|
|
|
206.2
|
|
|
210.4
|
|
|||
Other underwriting expenses
|
|
218.6
|
|
|
179.6
|
|
|
205.2
|
|
|||
General and administrative expenses
|
|
458.9
|
|
|
246.0
|
|
|
147.7
|
|
|||
General and administrative expenses — amortization of intangible assets
|
|
28.6
|
|
|
11.7
|
|
|
1.4
|
|
|||
Interest expense
|
|
18.6
|
|
|
15.6
|
|
|
16.2
|
|
|||
Total expenses
|
|
1,653.7
|
|
|
1,483.1
|
|
|
1,203.0
|
|
|||
Pre-tax income
|
|
154.9
|
|
|
(29.0
|
)
|
|
158.6
|
|
|||
Income tax benefit (expense)
|
|
.7
|
|
|
14.8
|
|
|
(32.6
|
)
|
|||
Net income from continuing operations
|
|
155.6
|
|
|
(14.2
|
)
|
|
126.0
|
|
|||
Net gain (loss) on sale of discontinued operations, net of tax
|
|
18.2
|
|
|
(1.6
|
)
|
|
46.6
|
|
|||
Net gain from discontinued operations, net of tax
|
|
80.6
|
|
|
260.2
|
|
|
99.9
|
|
|||
Equity in earnings of unconsolidated affiliates, net of tax
|
|
25.1
|
|
|
45.6
|
|
|
36.6
|
|
|||
Net income
|
|
279.5
|
|
|
290.0
|
|
|
309.1
|
|
|||
Net loss attributable to non-controlling interests
|
|
18.1
|
|
|
22.2
|
|
|
12.5
|
|
|||
Net income attributable to White Mountains’s common shareholders
|
|
297.6
|
|
|
312.2
|
|
|
321.6
|
|
|||
Change in equity in net unrealized gains (losses) from investments in Symetra common shares, net of tax
|
|
(34.9
|
)
|
|
75.3
|
|
|
(98.1
|
)
|
|||
Change in foreign currency translation and pension liability
|
|
(.5
|
)
|
|
(10.7
|
)
|
|
17.4
|
|
|||
Change in foreign currency translation and other items from discontinued operations
|
|
(65.0
|
)
|
|
(169.5
|
)
|
|
6.1
|
|
|||
Comprehensive income
|
|
197.2
|
|
|
207.3
|
|
|
247.0
|
|
|||
Comprehensive loss (income) attributable to non-controlling interests
|
|
—
|
|
|
3.3
|
|
|
(5.2
|
)
|
|||
Comprehensive income attributable to White Mountains’s common shareholders
|
|
197.2
|
|
|
210.6
|
|
|
241.8
|
|
|||
Change in net unrealized (losses) gains from Symetra’s fixed
maturity portfolio, net of tax
|
|
34.9
|
|
|
(75.3
|
)
|
|
98.1
|
|
|||
Adjusted comprehensive income
(1)
|
|
$
|
232.1
|
|
|
$
|
135.3
|
|
|
$
|
339.9
|
|
(1)
|
Adjusted comprehensive income is a non-GAAP measure. For a description of the most comparable GAAP measure (see
NON-GAAP FINANCIAL MEASURES
on page 75).
|
|
|
Year Ended December 31,
|
||||||||||
$ in millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Gross written premiums
|
|
$
|
1,315.9
|
|
|
$
|
1,323.4
|
|
|
$
|
1,162.9
|
|
Net written premiums
|
|
$
|
1,136.6
|
|
|
$
|
1,216.9
|
|
|
$
|
1,088.6
|
|
|
|
|
|
|
|
|
||||||
Earned insurance premiums
|
|
$
|
1,176.2
|
|
|
$
|
1,177.1
|
|
|
$
|
1,120.4
|
|
Net investment income
|
|
45.9
|
|
|
43.4
|
|
|
43.0
|
|
|||
Net realized and unrealized investment (losses) gains
|
|
(35.1
|
)
|
|
40.4
|
|
|
49.4
|
|
|||
Other revenue
|
|
(.6
|
)
|
|
5.8
|
|
|
31.2
|
|
|||
Total revenues
|
|
1,186.4
|
|
|
1,266.7
|
|
|
1,244.0
|
|
|||
Losses and LAE
|
|
700.7
|
|
|
815.1
|
|
|
622.1
|
|
|||
Insurance acquisition expenses
|
|
213.8
|
|
|
203.3
|
|
|
208.9
|
|
|||
Other underwriting expenses
|
|
218.2
|
|
|
179.2
|
|
|
204.8
|
|
|||
General and administrative expenses
|
|
14.1
|
|
|
12.4
|
|
|
10.6
|
|
|||
Amortization of intangible assets
|
|
1.3
|
|
|
1.4
|
|
|
1.4
|
|
|||
Interest expense on debt
|
|
13.0
|
|
|
13.0
|
|
|
13.0
|
|
|||
Total expenses
|
|
1,161.1
|
|
|
1,224.4
|
|
|
1,060.8
|
|
|||
Pre-tax income
|
|
$
|
25.3
|
|
|
$
|
42.3
|
|
|
$
|
183.2
|
|
|
|
|
|
|
|
|
||||||
GAAP Ratios:
|
|
|
|
|
|
|
||||||
Losses and LAE
|
|
60
|
%
|
|
69
|
%
|
|
56
|
%
|
|||
Expense
|
|
36
|
|
|
33
|
|
|
36
|
|
|||
Combined
|
|
96
|
%
|
|
102
|
%
|
|
92
|
%
|
|
|
December 31,
|
||||||||||
Millions, except per share amounts
|
|
2015
|
|
2014
|
|
2013
|
||||||
OneBeacon’s common shareholders’ equity
|
|
$
|
1,000.9
|
|
|
$
|
1,045.8
|
|
|
$
|
1,103.7
|
|
OneBeacon common shares outstanding
|
|
95.1
|
|
|
95.3
|
|
|
95.4
|
|
|||
OneBeacon book value per common share
|
|
$
|
10.53
|
|
|
$
|
10.97
|
|
|
$
|
11.57
|
|
Dividends paid per common share
|
|
$
|
.84
|
|
|
$
|
.84
|
|
|
$
|
.84
|
|
Underwriting Unit
|
|
2014 Fourth Quarter Reserve Increases
|
|
Full Year 2014
|
||||||||||||
Millions
|
|
Current Accident Year
|
|
Prior
Accident Year
|
|
Total
|
|
Net Prior Year Development
|
||||||||
Professional Insurance
|
|
$
|
22.9
|
|
|
$
|
46.4
|
|
|
$
|
69.3
|
|
|
$
|
59.1
|
|
Specialty Property
|
|
(1.1
|
)
|
|
5.7
|
|
|
4.6
|
|
|
1.1
|
|
||||
Crop
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
||||
Other
|
|
2.8
|
|
|
(.4
|
)
|
|
2.4
|
|
|
1.6
|
|
||||
Specialty Products
|
|
28.4
|
|
|
51.7
|
|
|
80.1
|
|
|
61.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Entertainment
|
|
1.5
|
|
|
11.6
|
|
|
13.1
|
|
|
13.5
|
|
||||
Government Risks
|
|
1.2
|
|
|
7.1
|
|
|
8.3
|
|
|
8.5
|
|
||||
Accident
|
|
—
|
|
|
3.5
|
|
|
3.5
|
|
|
6.0
|
|
||||
Other
|
|
2.6
|
|
|
1.6
|
|
|
4.2
|
|
|
—
|
|
||||
Specialty Industries
|
|
5.3
|
|
|
23.8
|
|
|
29.1
|
|
|
28.0
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
33.7
|
|
|
$
|
75.5
|
|
|
$
|
109.2
|
|
|
$
|
89.8
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Gross written premiums
|
|
$
|
—
|
|
|
$
|
25.9
|
|
|
$
|
—
|
|
|
$
|
25.9
|
|
Assumed (ceded) written premiums
|
|
19.3
|
|
|
(19.3
|
)
|
|
—
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
19.3
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
25.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
2.5
|
|
|
$
|
.8
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
Net investment income
|
|
1.9
|
|
|
4.2
|
|
|
—
|
|
|
6.1
|
|
||||
Net investment income - BAM Surplus Notes
|
|
15.8
|
|
|
—
|
|
|
(15.8
|
)
|
|
—
|
|
||||
Net realized and unrealized investment (losses) gains
|
|
(.3
|
)
|
|
.9
|
|
|
—
|
|
|
.6
|
|
||||
Other revenue
|
|
—
|
|
|
.7
|
|
|
—
|
|
|
.7
|
|
||||
Total revenues
|
|
19.9
|
|
|
6.6
|
|
|
(15.8
|
)
|
|
10.7
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
.6
|
|
|
2.3
|
|
|
—
|
|
|
2.9
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
General and administrative expenses
|
|
1.4
|
|
|
35.4
|
|
|
—
|
|
|
36.8
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
15.8
|
|
|
(15.8
|
)
|
|
—
|
|
||||
Total expenses
|
|
2.0
|
|
|
53.9
|
|
|
(15.8
|
)
|
|
40.1
|
|
||||
Pre-tax income (loss)
|
|
$
|
17.9
|
|
|
$
|
(47.3
|
)
|
|
$
|
—
|
|
|
$
|
(29.4
|
)
|
|
|
Year Ended December 31, 2014
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Gross written premiums
|
|
$
|
—
|
|
|
$
|
16.2
|
|
|
$
|
—
|
|
|
$
|
16.2
|
|
Assumed (ceded) written premiums
|
|
12.3
|
|
|
(12.3
|
)
|
|
—
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
12.3
|
|
|
$
|
3.9
|
|
|
$
|
—
|
|
|
$
|
16.2
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
1.4
|
|
|
$
|
.4
|
|
|
$
|
—
|
|
|
$
|
1.8
|
|
Net investment income
|
|
1.4
|
|
|
5.7
|
|
|
—
|
|
|
7.1
|
|
||||
Net investment income - BAM Surplus Notes
|
|
15.7
|
|
|
—
|
|
|
(15.7
|
)
|
|
—
|
|
||||
Net realized and unrealized investment gains
|
|
1.7
|
|
|
6.6
|
|
|
—
|
|
|
8.3
|
|
||||
Other revenue
|
|
—
|
|
|
.6
|
|
|
—
|
|
|
.6
|
|
||||
Total revenues
|
|
20.2
|
|
|
13.3
|
|
|
(15.7
|
)
|
|
17.8
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
.3
|
|
|
1.8
|
|
|
—
|
|
|
2.1
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
General and administrative expenses
|
|
1.6
|
|
|
35.9
|
|
|
—
|
|
|
37.5
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
15.7
|
|
|
(15.7
|
)
|
|
—
|
|
||||
Total expenses
|
|
1.9
|
|
|
53.8
|
|
|
(15.7
|
)
|
|
40.0
|
|
||||
Pre-tax income (loss)
|
|
$
|
18.3
|
|
|
$
|
(40.5
|
)
|
|
$
|
—
|
|
|
$
|
(22.2
|
)
|
|
|
Year Ended December 31, 2013
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Gross written premiums
|
|
$
|
—
|
|
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
13.6
|
|
Assumed (ceded) written premiums
|
|
10.6
|
|
|
(10.6
|
)
|
|
—
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
10.6
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
13.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
.4
|
|
|
$
|
.1
|
|
|
$
|
—
|
|
|
$
|
.5
|
|
Net investment income
|
|
1.0
|
|
|
4.7
|
|
|
—
|
|
|
5.7
|
|
||||
Net investment income - BAM Surplus Notes
|
|
40.2
|
|
|
—
|
|
|
(40.2
|
)
|
|
—
|
|
||||
Net realized and unrealized investment losses
|
|
(2.0
|
)
|
|
(9.3
|
)
|
|
—
|
|
|
(11.3
|
)
|
||||
Other revenue
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
Total revenues
|
|
39.6
|
|
|
(4.1
|
)
|
|
(40.2
|
)
|
|
(4.7
|
)
|
||||
Insurance and reinsurance acquisition expenses
|
|
.1
|
|
|
1.4
|
|
|
—
|
|
|
1.5
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
General and administrative expenses
|
|
1.4
|
|
|
32.5
|
|
|
—
|
|
|
33.9
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
40.2
|
|
|
(40.2
|
)
|
|
—
|
|
||||
Total expenses
|
|
1.5
|
|
|
74.5
|
|
|
(40.2
|
)
|
|
35.8
|
|
||||
Pre-tax income (loss)
|
|
$
|
38.1
|
|
|
$
|
(78.6
|
)
|
|
$
|
—
|
|
|
$
|
(40.5
|
)
|
|
|
As of December 31,
|
||||||||
Millions
|
|
2015
|
2014
|
|||||||
Qualified statutory capital
|
|
$
|
449.6
|
|
|
$
|
453.4
|
|
||
Net unearned premiums
|
|
12.5
|
|
|
6.4
|
|
||||
Present value of future installment premiums
|
|
2.6
|
|
|
1.4
|
|
||||
Collateral trusts
|
|
136.6
|
|
|
120.0
|
|
||||
Claims paying resources
|
|
$
|
601.3
|
|
|
$
|
581.2
|
|
|
|
As of December 31,
|
|||||||||
Millions
|
|
2014
|
|
2013
|
|||||||
Qualified statutory capital
|
|
$
|
453.4
|
|
|
|
$
|
470.1
|
|
||
Net unearned premiums
|
|
6.4
|
|
|
|
3.0
|
|
||||
Present value of future installment premiums
|
|
1.4
|
|
|
|
--
|
|
||||
Collateral trusts
|
|
120.0
|
|
|
|
105.4
|
|
||||
Claims paying resources
|
|
$
|
581.2
|
|
|
|
$
|
578.5
|
|
|
|
As of December 31, 2015
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total Segment
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
130.6
|
|
|
$
|
417.0
|
|
|
$
|
—
|
|
|
$
|
547.6
|
|
Short-term investments
|
|
5.6
|
|
|
43.3
|
|
|
—
|
|
|
48.9
|
|
||||
Total investments
|
|
136.2
|
|
|
460.3
|
|
|
—
|
|
|
596.5
|
|
||||
Cash
|
|
.1
|
|
|
15.8
|
|
|
—
|
|
|
15.9
|
|
||||
BAM Surplus Notes
|
|
503.0
|
|
|
—
|
|
|
(503.0
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
90.2
|
|
|
—
|
|
|
(90.2
|
)
|
|
—
|
|
||||
Other assets
|
|
9.5
|
|
|
26.8
|
|
|
(.8
|
)
|
|
35.5
|
|
||||
Total assets
|
|
$
|
739.0
|
|
|
$
|
502.9
|
|
|
$
|
(594.0
|
)
|
|
$
|
647.9
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes
(1)
|
|
$
|
—
|
|
|
$
|
503.0
|
|
|
$
|
(503.0
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes
(2)
|
|
—
|
|
|
90.2
|
|
|
(90.2
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains's subsidiaries
(3)
|
|
135.4
|
|
|
—
|
|
|
—
|
|
|
135.4
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
||||
Other liabilities
|
|
41.5
|
|
|
49.7
|
|
|
(.8
|
)
|
|
90.4
|
|
||||
Total liabilities
|
|
181.2
|
|
|
642.9
|
|
|
(594.0
|
)
|
|
230.1
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
|
|
540.7
|
|
|
—
|
|
|
—
|
|
|
540.7
|
|
||||
Non-controlling interests
|
|
17.1
|
|
|
(140.0
|
)
|
|
—
|
|
|
(122.9
|
)
|
||||
Total equity
|
|
557.8
|
|
|
(140.0
|
)
|
|
—
|
|
|
417.8
|
|
||||
Total liabilities and equity
|
|
$
|
739.0
|
|
|
$
|
502.9
|
|
|
$
|
(594.0
|
)
|
|
$
|
647.9
|
|
|
|
As of December 31, 2014
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total Segment
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
114.4
|
|
|
$
|
419.4
|
|
|
$
|
—
|
|
|
$
|
533.8
|
|
Short-term investments
|
|
6.6
|
|
|
34.8
|
|
|
—
|
|
|
41.4
|
|
||||
Total investments
|
|
121.0
|
|
|
454.2
|
|
|
—
|
|
|
575.2
|
|
||||
Cash
|
|
.3
|
|
|
17.3
|
|
|
—
|
|
|
17.6
|
|
||||
BAM Surplus Notes
|
|
503.0
|
|
|
—
|
|
|
(503.0
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
74.4
|
|
|
—
|
|
|
(74.4
|
)
|
|
—
|
|
||||
Other assets
|
|
5.7
|
|
|
17.0
|
|
|
(.5
|
)
|
|
22.2
|
|
||||
Total assets
|
|
$
|
704.4
|
|
|
$
|
488.5
|
|
|
$
|
(577.9
|
)
|
|
$
|
615.0
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes
(1)
|
|
$
|
—
|
|
|
$
|
503.0
|
|
|
$
|
(503.0
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes
(2)
|
|
—
|
|
|
74.4
|
|
|
(74.4
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains's subsidiaries
(3)
|
|
93.3
|
|
|
—
|
|
|
—
|
|
|
93.3
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
||||
Other liabilities
|
|
24.8
|
|
|
33.0
|
|
|
(.5
|
)
|
|
57.3
|
|
||||
Total liabilities
|
|
121.0
|
|
|
610.4
|
|
|
(577.9
|
)
|
|
153.5
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
|
|
565.5
|
|
|
—
|
|
|
—
|
|
|
565.5
|
|
||||
Non-controlling interests
|
|
17.9
|
|
|
(121.9
|
)
|
|
—
|
|
|
(104.0
|
)
|
||||
Total equity
|
|
583.4
|
|
|
(121.9
|
)
|
|
—
|
|
|
461.5
|
|
||||
Total liabilities and equity
|
|
$
|
704.4
|
|
|
$
|
488.5
|
|
|
$
|
(577.9
|
)
|
|
$
|
615.0
|
|
(1)
|
Under GAAP, the BAM Surplus Notes are classified as debt by the issuer. Under U.S. Statutory accounting, they are classified as Surplus.
|
(2)
|
Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S. Statutory accounting, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
|
(3)
|
For segment reporting, the HG Global preferred dividend receivable at White Mountains is reclassified from the Other Operations segment to the HG Global/BAM segment. Dividends on HG Global preferred shares payable to White Mountains’s subsidiaries are eliminated in White Mountains’s consolidated financial statements.
|
|
|
Year Ended December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Gross par value of primary market policies priced
|
|
$
|
9,911.8
|
|
|
$
|
7,641.1
|
|
Gross par value of secondary market policies priced
|
|
611.1
|
|
|
470.9
|
|
||
Total gross par value of market policies priced
|
|
10,522.9
|
|
|
8,112.0
|
|
||
|
|
|
|
|
||||
Less: Gross par value of policies priced yet to close
|
|
(298.6
|
)
|
|
(379.5
|
)
|
||
Gross par value of policies closed that were previously priced
|
|
381.7
|
|
|
97.5
|
|
||
Total gross par value of market policies closed
|
|
$
|
10,606.0
|
|
|
$
|
7,830.0
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Earned insurance premiums
|
|
$
|
8.7
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
Net investment income
|
|
8.8
|
|
|
9.0
|
|
|
11.1
|
|
|||
Net realized and unrealized investment gains
|
|
259.9
|
|
|
29.8
|
|
|
95.8
|
|
|||
Other revenue—MediaAlpha
|
|
105.5
|
|
|
65.3
|
|
|
—
|
|
|||
Other revenue—Tranzact
|
|
186.9
|
|
|
43.2
|
|
|
—
|
|
|||
Other revenue—Symetra warrants
|
|
—
|
|
|
—
|
|
|
10.8
|
|
|||
Other revenue
|
|
41.7
|
|
|
16.2
|
|
|
4.6
|
|
|||
Total revenues
|
|
611.5
|
|
|
169.6
|
|
|
122.3
|
|
|||
Losses and LAE
|
|
8.2
|
|
|
8.9
|
|
|
—
|
|
|||
Insurance and reinsurance acquisition expenses
|
|
3.4
|
|
|
.8
|
|
|
—
|
|
|||
General and administrative expenses—MediaAlpha
|
|
99.0
|
|
|
60.6
|
|
|
—
|
|
|||
General and administrative expenses—Tranzact
|
|
167.3
|
|
|
37.4
|
|
|
—
|
|
|||
General and administrative expenses—amortization of intangible assets
|
|
27.3
|
|
|
10.3
|
|
|
—
|
|
|||
General and administrative expenses
|
|
141.7
|
|
|
98.1
|
|
|
103.2
|
|
|||
Interest expense on debt
|
|
5.6
|
|
|
2.6
|
|
|
3.2
|
|
|||
Total expenses
|
|
452.5
|
|
|
218.7
|
|
|
106.4
|
|
|||
Pre-tax income (loss)
|
|
$
|
159.0
|
|
|
$
|
(49.1
|
)
|
|
$
|
15.9
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2015
|
|
2014
|
|
2013
|
|||
Fixed maturity investments
|
|
0.3
|
%
|
|
0.9
|
%
|
|
0.5
|
%
|
Short-term investments
|
|
(0.9
|
)%
|
|
(2.0
|
)%
|
|
0.1
|
%
|
Total fixed income investment returns:
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
0.2
|
%
|
|
0.5
|
%
|
|
0.4
|
%
|
In local currencies
|
|
1.1
|
%
|
|
2.7
|
%
|
|
0.5
|
%
|
Barclays U.S. Intermediate Aggregate Index
|
|
1.2
|
%
|
|
4.1
|
%
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|||
Common equity securities
|
|
33.2
|
%
|
|
7.5
|
%
|
|
23.2
|
%
|
Other long-term investments
|
|
(10.1
|
)%
|
|
6.5
|
%
|
|
7.6
|
%
|
Total common equity securities and other long-term investments returns:
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
19.3
|
%
|
|
7.2
|
%
|
|
18.9
|
%
|
In local currencies
|
|
19.6
|
%
|
|
8.1
|
%
|
|
19.0
|
%
|
In local currencies - excluding Symetra
|
|
(1.4
|
)%
|
|
8.1
|
%
|
|
19.0
|
%
|
S&P 500 Index (total return)
|
|
1.4
|
%
|
|
13.7
|
%
|
|
32.4
|
%
|
|
|
|
|
|
|
|
|||
Total consolidated portfolio
|
|
|
|
|
|
|
|
|
|
In U.S. dollars
|
|
3.6
|
%
|
|
1.9
|
%
|
|
4.1
|
%
|
In local currencies
|
|
4.5
|
%
|
|
3.8
|
%
|
|
4.2
|
%
|
In local currencies - excluding Symetra
|
|
0.7
|
%
|
|
3.8
|
%
|
|
4.2
|
%
|
Index
|
|
Market Value
|
||
Millions
|
|
December 31, 2015
|
||
S&P 500
|
|
$
|
297.3
|
|
Russell 1000 Value
|
|
40.8
|
|
|
Russell 1000
|
|
17.7
|
|
|
Total
|
|
$
|
355.8
|
|
Pre-tax investment results
|
|
Year Ended December 31
|
|||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
|
||||||
Net investment income
|
|
$
|
60.8
|
|
|
$
|
59.5
|
|
|
$
|
59.8
|
|
|
Net realized and unrealized investment gains
(1)
|
|
225.4
|
|
|
78.5
|
|
|
133.9
|
|
|
|||
Total GAAP continuing operations pre-tax investment gains
|
|
$
|
286.2
|
|
|
$
|
138.0
|
|
|
$
|
193.7
|
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2015
|
|
2014
|
|
2013
|
|||
Total fixed income investment returns:
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
1.4
|
%
|
|
2.4
|
%
|
|
0.0
|
%
|
In local currencies
|
|
1.4
|
%
|
|
2.3
|
%
|
|
0.2
|
%
|
Barclays U.S. Intermediate Aggregate Index
|
|
1.2
|
%
|
|
4.1
|
%
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|||
Total common equity securities and other long-term investments returns:
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
25.6
|
%
|
|
7.1
|
%
|
|
17.0
|
%
|
In local currencies
|
|
26.1
|
%
|
|
7.9
|
%
|
|
17.2
|
%
|
In local currencies - excluding Symetra
|
|
(0.5
|
)%
|
|
7.9
|
%
|
|
17.2
|
%
|
S&P 500 Index (total return)
|
|
1.4
|
%
|
|
13.7
|
%
|
|
32.4
|
%
|
|
|
|
|
|
|
|
|||
Total consolidated portfolio
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
7.5
|
%
|
|
3.7
|
%
|
|
4.8
|
%
|
In local currencies
|
|
7.6
|
%
|
|
3.9
|
%
|
|
5.1
|
%
|
In local currencies - excluding Symetra
|
|
0.9
|
%
|
|
3.9
|
%
|
|
5.1
|
%
|
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
||||||||||
$ in millions
|
|
Carrying
value
|
|
% of total
|
|
Carrying
value
(1)
|
|
% of total
|
||||||
Fixed maturity investments
|
|
$
|
2,639.7
|
|
|
61.7
|
%
|
|
$
|
2,422.0
|
|
|
64.7
|
%
|
Short-term investments
|
|
211.3
|
|
|
4.9
|
|
|
376.8
|
|
|
10.1
|
|
||
Common equity securities
|
|
1,113.9
|
|
|
26.0
|
|
|
611.7
|
|
|
16.3
|
|
||
Other long-term investments
|
|
315.8
|
|
|
7.4
|
|
|
331.9
|
|
|
8.9
|
|
||
Total investments
|
|
$
|
4,280.7
|
|
|
100
|
%
|
|
$
|
3,742.4
|
|
|
100
|
%
|
|
|
As of December 31, 2015
|
||||||||||||
$ in millions
|
|
Amortized
cost
|
|
% of total
|
|
Carrying
Value
|
|
% of total
|
||||||
U.S. government and government-sponsored entities
(1)
|
|
$
|
491.1
|
|
|
18.6
|
%
|
|
$
|
490.5
|
|
|
18.6
|
%
|
AAA/Aaa
|
|
443.0
|
|
|
16.8
|
|
|
441.9
|
|
|
16.7
|
|
||
AA/Aa
|
|
421.3
|
|
|
16.0
|
|
|
420.5
|
|
|
15.9
|
|
||
A/A
|
|
551.5
|
|
|
20.9
|
|
|
553.2
|
|
|
21.0
|
|
||
BBB/Baa
|
|
575.3
|
|
|
21.8
|
|
|
576.8
|
|
|
21.9
|
|
||
Other/not rated
|
|
156.9
|
|
|
5.9
|
|
|
156.8
|
|
|
5.9
|
|
||
Total fixed maturity investments
|
|
$
|
2,639.1
|
|
|
100
|
%
|
|
$
|
2,639.7
|
|
|
100
|
%
|
(1)
|
Includes 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 December 31, 2015
|
||||||
Millions
|
|
Amortized
cost
|
|
Carrying
Value
|
||||
Due in one year or less
|
|
$
|
241.6
|
|
|
$
|
242.0
|
|
Due after one year through five years
|
|
982.3
|
|
|
981.5
|
|
||
Due after five years through ten years
|
|
96.4
|
|
|
96.1
|
|
||
Due after ten years
|
|
69.9
|
|
|
70.4
|
|
||
Mortgage-backed and asset-backed securities
|
|
1,170.6
|
|
|
1,167.0
|
|
||
Preferred stocks
|
|
78.3
|
|
|
82.7
|
|
||
Total fixed maturity investments
|
|
$
|
2,639.1
|
|
|
$
|
2,639.7
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2015
|
|
2014
|
|
2013
|
|||
Total fixed income investment returns:
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
(1.1
|
)%
|
|
(1.3
|
)%
|
|
0.9
|
%
|
In local currencies
|
|
0.9
|
%
|
|
3.0
|
%
|
|
0.7
|
%
|
Barclays U.S. Intermediate Aggregate Index
|
|
1.2
|
%
|
|
4.1
|
%
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|||
Total common equity securities and other long-term investments returns:
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
(4.4
|
)%
|
|
7.7
|
%
|
|
25.8
|
%
|
In local currencies
|
|
(4.5
|
)%
|
|
8.0
|
%
|
|
25.7
|
%
|
S&P 500 Index (total return)
|
|
1.4
|
%
|
|
13.7
|
%
|
|
32.4
|
%
|
|
|
|
|
|
|
|
|||
Total consolidated portfolio
|
|
|
|
|
|
|
|||
In U.S. dollars
|
|
(1.4
|
)%
|
|
(0.5
|
)%
|
|
3.1
|
%
|
In local currencies
|
|
0.4
|
%
|
|
3.5
|
%
|
|
3.0
|
%
|
|
|
December 31,
|
||
Millions
|
|
2015
|
||
Cash and short-term investments
|
|
$
|
63.8
|
|
Direct obligations of the government of Japan
|
|
—
|
|
|
Reinsurance premium receivable
|
|
.5
|
|
|
Settlements due from brokers and dealers
|
|
.2
|
|
|
Derivative instruments
|
|
20.1
|
|
|
Total assets
|
|
84.6
|
|
|
Variable annuity liabilities
|
|
(.3
|
)
|
|
Counterparty collateral held
|
|
6.9
|
|
|
Intercompany line of credit outstanding
|
|
—
|
|
|
Accounts payable and accrued expenses
|
|
.5
|
|
|
Total liabilities
|
|
7.1
|
|
|
Total shareholder’s equity
|
|
$
|
77.5
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
$ in millions
|
|
Continuing Operations
|
|
Discontinued Operations
|
|
Total
|
|
Continuing Operations
|
|
Discontinued Operations
|
|
Total
|
||||||||||||
Loss and LAE reserves
|
|
$
|
1,395.8
|
|
|
$
|
1,644.4
|
|
|
$
|
3,040.2
|
|
|
$
|
1,350.0
|
|
|
$
|
1,809.8
|
|
|
$
|
3,159.8
|
|
Unearned insurance and reinsurance premiums
|
|
612.6
|
|
|
342.2
|
|
|
954.8
|
|
|
616.7
|
|
|
338.6
|
|
|
955.3
|
|
||||||
Ceded reinsurance payable
|
|
30.5
|
|
|
67.1
|
|
|
97.6
|
|
|
34.2
|
|
|
71.5
|
|
|
105.7
|
|
||||||
Funds held under insurance and reinsurance contracts
|
|
137.8
|
|
|
52.9
|
|
|
190.7
|
|
|
81.0
|
|
|
57.9
|
|
|
138.9
|
|
||||||
Deferred tax on safety reserve
(1)
|
|
—
|
|
|
279.2
|
|
|
279.2
|
|
|
—
|
|
|
295.7
|
|
|
295.7
|
|
||||||
Insurance liabilities
|
|
2,176.7
|
|
|
2,385.8
|
|
|
4,562.5
|
|
|
2,081.9
|
|
|
2,573.5
|
|
|
4,655.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash in regulated insurance and reinsurance subsidiaries
|
|
$
|
43.9
|
|
|
$
|
129.2
|
|
|
$
|
173.1
|
|
|
$
|
17.4
|
|
|
$
|
102.6
|
|
|
$
|
120.0
|
|
Reinsurance recoverable on paid and unpaid losses
|
|
194.0
|
|
|
293.3
|
|
|
487.3
|
|
|
173.9
|
|
|
333.6
|
|
|
507.5
|
|
||||||
Insurance and reinsurance premiums receivable
|
|
223.3
|
|
|
323.6
|
|
|
546.9
|
|
|
241.1
|
|
|
306.6
|
|
|
547.7
|
|
||||||
Funds held by ceding entities
|
|
—
|
|
|
90.6
|
|
|
90.6
|
|
|
37.1
|
|
|
91.9
|
|
|
129.0
|
|
||||||
Deferred acquisition costs
|
|
107.6
|
|
|
74.6
|
|
|
182.2
|
|
|
107.2
|
|
|
69.9
|
|
|
177.1
|
|
||||||
Ceded unearned insurance and reinsurance premiums
|
|
29.5
|
|
|
87.7
|
|
|
117.2
|
|
|
17.8
|
|
|
76.2
|
|
|
94.0
|
|
||||||
Insurance assets
|
|
598.3
|
|
|
999.0
|
|
|
1,597.3
|
|
|
594.5
|
|
|
980.8
|
|
|
1,575.3
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Insurance float
|
|
$
|
1,578.4
|
|
|
$
|
1,386.8
|
|
|
$
|
2,965.2
|
|
|
$
|
1,487.4
|
|
|
$
|
1,592.7
|
|
|
$
|
3,080.1
|
|
Insurance float as a multiple of total adjusted capital
|
|
0.3x
|
|
|
N/A
|
|
0.6x
|
|
|
0.3x
|
|
|
N/A
|
|
0.6x
|
|
||||||||
Insurance float as a multiple of White Mountains’s common shareholders’ equity
|
|
0.4x
|
|
|
N/A
|
|
0.8x
|
|
|
0.4x
|
|
|
N/A
|
|
0.8x
|
|
|
|
December 31,
|
||||||
$ in millions
|
|
2015
|
|
2014
|
||||
WTM Bank Facility
|
|
$
|
50.0
|
|
|
$
|
—
|
|
OBH Senior Notes, carrying value
|
|
274.8
|
|
|
274.7
|
|
||
OneBeacon Bank Facility
|
|
—
|
|
|
—
|
|
||
Tranzact Bank Facility, carrying value
|
|
102.9
|
|
|
67.4
|
|
||
MediaAlpha Bank Facility, carrying value
|
|
14.7
|
|
|
—
|
|
||
Other debt
|
|
—
|
|
|
1.0
|
|
||
Total debt in continuing operations
|
|
442.4
|
|
|
343.1
|
|
||
Total debt in discontinued operations
(1)
|
|
403.5
|
|
|
403.5
|
|
||
Total debt
|
|
845.9
|
|
|
746.6
|
|
||
Non-controlling interest - OneBeacon Ltd.
|
|
245.6
|
|
|
258.4
|
|
||
Non-controlling interest - SIG Preference Shares
|
|
250.0
|
|
|
250.0
|
|
||
Non-controlling interests - other, excluding mutuals and reciprocals
(2)
|
|
115.2
|
|
|
168.6
|
|
||
Total White Mountains’s common shareholders’ equity
|
|
3,913.2
|
|
|
3,995.7
|
|
||
Total capital
(2)
|
|
5,369.9
|
|
|
5,419.3
|
|
||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio, net of applicable taxes
|
|
—
|
|
|
(34.9
|
)
|
||
Total adjusted capital
|
|
$
|
5,369.9
|
|
|
$
|
5,384.4
|
|
Total debt to total adjusted capital
|
|
16
|
%
|
|
14
|
%
|
||
Total debt and SIG Preference Shares to total adjusted capital
|
|
20
|
%
|
|
19
|
%
|
(1)
|
See
Note 22 - “Discontinued Operations”
.
|
(2)
|
Total capital only includes non-controlling interests that White Mountains (i) benefits from the return on or (ii) has the ability to utilize the net assets supporting the non-controlling interest.
|
Millions
|
|
Due in
Less Than
One Year
|
|
Due in
One to Three
Years
|
|
Due in
Three to Five
Years
|
|
Due After
Five
Years
|
|
Total
|
||||||||||
Loss and LAE reserves
(1)
|
|
$
|
481.3
|
|
|
$
|
513.2
|
|
|
$
|
229.6
|
|
|
$
|
171.7
|
|
|
$
|
1,395.8
|
|
Debt
|
|
74.9
|
|
|
43.3
|
|
|
51.5
|
|
|
275.0
|
|
|
444.7
|
|
|||||
Interest on debt
|
|
18.0
|
|
|
32.3
|
|
|
27.2
|
|
|
25.4
|
|
|
102.9
|
|
|||||
Long-term incentive compensation
|
|
54.4
|
|
|
80.1
|
|
|
1.9
|
|
|
4.7
|
|
|
141.1
|
|
|||||
Pension and other benefit plan obligations
|
|
13.3
|
|
|
6.6
|
|
|
6.2
|
|
|
28.0
|
|
|
54.1
|
|
|||||
Operating leases
|
|
14.3
|
|
|
24.8
|
|
|
17.3
|
|
|
33.3
|
|
|
89.7
|
|
|||||
Capital leases
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|||||
Total contractual obligations
|
|
$
|
657.9
|
|
|
$
|
700.3
|
|
|
$
|
333.7
|
|
|
$
|
538.1
|
|
|
$
|
2,230.0
|
|
(1)
|
Represents expected future cash outflows resulting from loss and LAE payments. The amounts presented are gross of reinsurance recoverables on unpaid losses of
$187
and net of the discount on OneBeacon’s workers compensation loss and LAE reserves of
$1
as of
December 31, 2015
.
|
|
|
|
|
|
|
|
|
Average price per share as % of
|
|||||||
|
|
|
|
|
|
|
|
|
|
Adjusted book
|
|||||
|
|
|
|
|
|
Average
|
|
|
|
value per share,
|
|||||
|
|
Shares
|
|
Cost
|
|
price
|
|
Adjusted book
|
|
including estimated
|
|||||
Dates
|
|
Repurchased
|
|
(millions)
|
|
per share
|
|
value per share
|
|
gain on Sirius sale
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Year-to-date February 25, 2016
|
|
90,743
|
|
|
$
|
66.3
|
|
|
$
|
730.76
|
|
|
105%
|
|
93%
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2015
|
|
387,495
|
|
|
$
|
284.2
|
|
|
$
|
733.37
|
|
|
105%
|
|
94%
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2014
|
|
217,879
|
|
|
$
|
134.5
|
|
|
$
|
617.29
|
|
|
93%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2013
|
|
141,535
|
|
|
$
|
79.8
|
|
|
$
|
563.91
|
|
|
88%
|
|
N/A
|
|
For the year ended December 31, 2015
|
|||||||
|
GAAP returns
|
|
Remove Symetra
|
|
Returns - excluding Symetra
|
|||
|
|
|
|
|
|
|||
In local currencies:
|
|
|
|
|
|
|||
Total consolidated portfolio returns
|
4.5
|
%
|
|
(3.8
|
)%
|
|
0.7
|
%
|
Total common equity securities and
other long-term investments returns
|
19.6
|
%
|
|
(21.0
|
)%
|
|
(1.4
|
)%
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Millions
|
|
Case
|
|
IBNR
|
|
Total
|
|
Case
|
|
IBNR
|
|
Total
|
||||||||||||
Automobile liability
|
|
$
|
49.8
|
|
|
$
|
57.7
|
|
|
$
|
107.5
|
|
|
$
|
42.2
|
|
|
$
|
45.4
|
|
|
$
|
87.6
|
|
General liability - occurrence
|
|
68.5
|
|
|
198.7
|
|
|
267.2
|
|
|
50.8
|
|
|
184.2
|
|
|
235.0
|
|
||||||
General liability - claims made
|
|
88.0
|
|
|
182.5
|
|
|
270.5
|
|
|
89.8
|
|
|
205.1
|
|
|
294.9
|
|
||||||
Medical malpractice
|
|
84.4
|
|
|
94.5
|
|
|
178.9
|
|
|
86.8
|
|
|
102.7
|
|
|
189.5
|
|
||||||
Other casualty
|
|
52.8
|
|
|
38.7
|
|
|
91.5
|
|
|
44.3
|
|
|
36.3
|
|
|
80.6
|
|
||||||
Workers compensation
|
|
54.1
|
|
|
62.2
|
|
|
116.3
|
|
|
47.1
|
|
|
65.2
|
|
|
112.3
|
|
||||||
Property
|
|
33.9
|
|
|
37.6
|
|
|
71.5
|
|
|
53.4
|
|
|
38.3
|
|
|
91.7
|
|
||||||
Other
|
|
23.8
|
|
|
76.6
|
|
|
100.4
|
|
|
27.7
|
|
|
61.3
|
|
|
89.0
|
|
||||||
Total
|
|
$
|
455.3
|
|
|
$
|
748.5
|
|
|
$
|
1,203.8
|
|
|
$
|
442.1
|
|
|
$
|
738.5
|
|
|
$
|
1,180.6
|
|
•
|
Changes in claim handling philosophies (e.g., case reserving standards), including the use of third-party claims administrators
|
•
|
Changes in policy provisions or court interpretations of such provisions
|
•
|
New theories of liability (e.g., cyber-related claims)
|
•
|
Trends in litigation or jury awards
|
•
|
Changes in the propensity to sue, in general with specificity to particular issues
|
•
|
Changes in statutes of limitations
|
•
|
Changes in the underlying court system
|
•
|
Distortions from losses resulting from large single accounts or single issues
|
•
|
Changes in tort or case law
|
•
|
Subrogation opportunities
|
•
|
Shifts in lawsuit mix between federal and state courts
|
•
|
Changes in settlement patterns, including frequency and severity
|
•
|
Changes in the type, frequency of utilization or cost of medical treatments (e.g., changes in the use of pharmaceutical drugs, types of health providers used, use of preferred provider networks and other medical cost containment practices)
|
•
|
Availability of new medical processes and equipment
|
•
|
Degree of patient responsiveness to treatment
|
•
|
Mortality trends of injured workers with lifetime indemnity and medical treatment benefits
|
•
|
Degree of cost shifting between workers compensation and health insurance
|
•
|
Time required to recover from the injury and return to regular or transitional work
|
•
|
Future wage inflation for states that index benefits
|
•
|
Changes in claims handling philosophies (e.g., case reserving standards)
|
•
|
Frequency of claims with payment capped by policy limits
|
•
|
Change in average severity of accidents, or proportion of severe accidents
|
•
|
Frequency of visits to health providers
|
•
|
Number of medical procedures given during visits to health providers
|
•
|
Types of health providers used
|
•
|
Types of medical treatments received
|
•
|
Changes in cost of medical treatments
|
•
|
Degree of patient responsiveness to treatment
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Millions
|
|
Low
|
|
Recorded
|
|
High
|
|
Low
|
|
Recorded
|
|
High
|
||||||||||||
Total
|
|
$
|
1,009
|
|
|
$
|
1,203.8
|
|
|
$
|
1,356
|
|
|
$
|
970
|
|
|
$
|
1,180.6
|
|
|
$
|
1,308
|
|
•
|
Various sources of inflation volatility impact all of OneBeacon’s reserves in different ways. Using its internal economic capital model, OneBeacon has derived a distribution of future loss payments under the range of inflation scenarios and related claim cost trends in its economic scenario set, holding all other sources of reserve volatility constant. At the 75th percentile of modeled outcomes, the estimated impact of claim cost inflation above OneBeacon’s actuarially indicated reserves is $38 million, net of reinsurance.
|
•
|
The volatility associated with the frequency and severity of large losses, defined as claims greater than or equal to $2.5 million, can have a material impact on OneBeacon’s results. The frequency and severity of large claims is driven primarily by the random nature of the insurance process but also by claim cost inflation and parameter risk. These large losses often emerge over a long time period potentially leading to a material impact on OneBeacon’s reserves. One way OneBeacon considers this sensitivity is by examining the volatility of large losses in the current accident year using its economic capital model. At the 75th percentile of modeled outcomes, OneBeacon estimates that large losses could exceed the mean by $19 million gross of reinsurance and $8 million, net of reinsurance.
|
•
|
As OneBeacon starts up new businesses, its initial loss estimates and development patterns are often based on industry data. As actual losses develop OneBeacon will revise its initial expectations with its actual experience. However, depending on the tail for the specific business, it can be a few years before OneBeacon has sufficient internal data to rely on. As of December 31, 2015, OneBeacon has $259 million of inception-to-date premium from its newer businesses (Programs, Environmental and Surety). A 10% error in OneBeacon’s initial loss ratio estimates could result in approximately $26 million adverse net variance in loss reserves.
|
•
|
Professional liability:
Recorded loss and allocated LAE reserves, net of reinsurance recoverable, for professional liability were $483 million as of December 31, 2015. A key assumption for professional liability is the implicit loss cost trend, particularly the severity inflation trend component of loss costs. Across the entire reserve base, a 5 point change in assumed annual severity trend would have changed the estimated net reserve by approximately $74 million as of December 31, 2015, in either direction.
|
•
|
Multiple peril liability:
Recorded loss and LAE reserves, net of reinsurance recoverable for multiple peril were $66 million as of December 31, 2015. Reported loss development patterns are a key assumption for this line of business, particularly for more mature accident years. Historically, assumptions on reported loss development patterns have been impacted by, among other things, emergence of new types of claims (e.g. construction defect claims) or a shift in the mixture between smaller, more routine claims and larger, more complex claims. If case reserve adequacy for multiple peril claims changed by 10 points this would have changed the estimated net reserve by approximately $2 million as of December 31, 2015, in either direction.
|
•
|
Workers compensation:
Recorded workers compensation loss and LAE reserves, net of reinsurance recoverable, were $116 million as of December 31, 2015. The two most important assumptions for workers compensation reserves are loss development factors and loss cost trends, particularly medical cost inflation. Loss development patterns are dependent on medical cost inflation. Approximately half of the workers compensation net reserves are related to future medical costs. Across the entire reserve base, a 1 point change in calendar year medical inflation would have changed the estimated net reserve by approximately $34 million as of December 31, 2015, in either direction.
|
Net loss and LAE reserves by class of business
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Millions
|
|
Case
|
|
IBNR
|
|
Total
|
|
Case
|
|
IBNR
|
|
Total
|
||||||||||||
Casualty (excluding A&E)
|
|
$
|
114.3
|
|
|
$
|
161.5
|
|
|
$
|
275.8
|
|
|
$
|
139.0
|
|
|
$
|
193.3
|
|
|
$
|
332.3
|
|
Property (excluding catastrophe excess)
|
|
156.6
|
|
|
99.0
|
|
|
255.6
|
|
|
170.9
|
|
|
92.4
|
|
|
263.3
|
|
||||||
A&E
(1)
|
|
60.4
|
|
|
129.3
|
|
|
189.7
|
|
|
69.4
|
|
|
140.8
|
|
|
210.2
|
|
||||||
Property catastrophe excess
|
|
74.2
|
|
|
18.3
|
|
|
92.5
|
|
|
111.2
|
|
|
20.5
|
|
|
131.7
|
|
||||||
Aviation and space
|
|
89.4
|
|
|
28.3
|
|
|
117.7
|
|
|
85.0
|
|
|
34.0
|
|
|
119.0
|
|
||||||
Accident and health
|
|
31.4
|
|
|
81.3
|
|
|
112.7
|
|
|
38.3
|
|
|
61.4
|
|
|
99.7
|
|
||||||
Marine
|
|
57.6
|
|
|
31.8
|
|
|
89.4
|
|
|
65.5
|
|
|
28.6
|
|
|
94.1
|
|
||||||
Trade Credit
|
|
48.3
|
|
|
25.4
|
|
|
73.7
|
|
|
57.4
|
|
|
22.0
|
|
|
79.4
|
|
||||||
Contingency
|
|
5.9
|
|
|
5.9
|
|
|
11.8
|
|
|
2.5
|
|
|
3.1
|
|
|
5.6
|
|
||||||
Agriculture
|
|
2.4
|
|
|
5.9
|
|
|
8.3
|
|
|
1.2
|
|
|
3.4
|
|
|
4.6
|
|
||||||
Runoff
(2)
|
|
66.2
|
|
|
67.9
|
|
|
134.1
|
|
|
73.9
|
|
|
73.8
|
|
|
147.7
|
|
||||||
Total
|
|
$
|
706.7
|
|
|
$
|
654.6
|
|
|
$
|
1,361.3
|
|
|
$
|
814.3
|
|
|
$
|
673.3
|
|
|
$
|
1,487.6
|
|
(1)
|
Sirius Group’s A&E exposures are principally the result of runoff of businesses acquired in the 1990s.
|
(2)
|
Included in this class are primarily the runoff exposures from various acquisitions.
|
Net loss and LAE reserves
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Millions
|
|
Low
|
|
Recorded
|
|
High
|
|
Low
|
|
Recorded
|
|
High
|
||||||||||||
Total
|
|
$
|
1,229
|
|
|
$
|
1,361.3
|
|
|
$
|
1,447
|
|
|
$
|
1,351
|
|
|
$
|
1,487.6
|
|
|
$
|
1,572
|
|
•
|
Sustained Economic and Tort Inflation
. Future inflation beyond the recent historical levels could impact the required reserves. For example, Sirius America has loss reserves of roughly $725 million including asbestos and environmental at the end of fourth quarter 2015. The estimated additional claim payments for Sirius America due to hypothetical increases in the inflation rate of 200 to 800 basis points beginning in 2019 and continuing through 2023 is estimated to be $31 to $160 million.
|
•
|
Asbestos and Environmental (A&E).
The internal actuarial and claims analysis suggests that Sirius Group’s A&E losses are covered by its previous paid activity and current reserves. However, the ongoing nature of the litigation surrounding these complex exposures can significantly affect Sirius Group’s liabilities. Sirius Group ended 2015 with $190 million in net reserves for A&E claims. Applying varying assumptions and industry benchmarks yielded a net range of A&E reserves from $164 million to $213 million. Further information is detailed below about Sirius Group’s A&E exposure.
|
Net incurred loss and LAE activity
|
|
Year Ended
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Asbestos
|
|
$
|
(.4
|
)
|
|
$
|
8.0
|
|
Environmental
|
|
3.0
|
|
|
1.6
|
|
||
Total
|
|
$
|
2.6
|
|
|
$
|
9.6
|
|
Millions
|
|
Asbestos
paid loss and LAE
|
|
Environmental
paid loss and LAE
|
||||||||||||
Year Ended December 31,
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||
2006
|
|
$
|
9.8
|
|
|
$
|
7.9
|
|
|
$
|
.6
|
|
|
$
|
.5
|
|
2007
|
|
12.3
|
|
|
10.7
|
|
|
2.0
|
|
|
1.7
|
|
||||
2008
|
|
19.7
|
|
|
14.3
|
|
|
2.2
|
|
|
1.6
|
|
||||
2009
|
|
11.4
|
|
|
10.3
|
|
|
1.5
|
|
|
1.5
|
|
||||
2010
|
|
14.5
|
|
|
12.1
|
|
|
.8
|
|
|
.9
|
|
||||
2011
|
|
20.4
|
|
|
15.6
|
|
|
3.2
|
|
|
3.6
|
|
||||
2012
|
|
34.7
|
|
|
29.4
|
|
|
2.3
|
|
|
1.5
|
|
||||
2013
|
|
25.9
|
|
|
20.3
|
|
|
1.9
|
|
|
1.8
|
|
||||
2014
|
|
21.9
|
|
|
16.9
|
|
|
1.4
|
|
|
1.6
|
|
||||
2015
|
|
22.0
|
|
|
19.4
|
|
|
4.3
|
|
|
3.6
|
|
|
|
Year Ended December 31,
|
||||
A&E Claims Activity
|
|
2015
|
|
2014
|
||
Asbestos
|
|
|
|
|
||
Total asbestos claims at the beginning of the year
|
|
2,492
|
|
|
2,023
|
|
Asbestos claims acquired during the year
|
|
—
|
|
|
304
|
|
Asbestos claims reported during the year
|
|
180
|
|
|
416
|
|
Asbestos claims closed during the year
|
|
(324
|
)
|
|
(251
|
)
|
Total asbestos claims at the end of the year
|
|
2,348
|
|
|
2,492
|
|
Environmental
|
|
|
|
|
||
Total environmental claims at the beginning of the year
|
|
490
|
|
|
399
|
|
Environmental claims acquired during the year
|
|
—
|
|
|
64
|
|
Environmental claims reported during the year
|
|
69
|
|
|
61
|
|
Environmental claims closed during the year
|
|
(97
|
)
|
|
(34
|
)
|
Total environmental claims at the end of the year
|
|
462
|
|
|
490
|
|
Total
|
|
|
|
|
||
Total A&E claims at the beginning of the year
|
|
2,982
|
|
|
2,422
|
|
A&E claims acquired during the year
|
|
—
|
|
|
368
|
|
A&E claims reported during the year
|
|
249
|
|
|
477
|
|
A&E claims closed during the year
|
|
(421
|
)
|
|
(285
|
)
|
Total A&E claims at the end of the year
|
|
2,810
|
|
|
2,982
|
|
|
|
December 31, 2015
|
|||||||||
$ in millions
|
|
Fair value
|
|
Level 3 Inputs
|
|
Level 3 Inputs as a % of
total fair value
|
|||||
U.S. Government and agency obligations
|
|
$
|
160.0
|
|
|
$
|
—
|
|
|
—
|
|
Debt securities issued by industrial corporations
|
|
1,000.0
|
|
|
—
|
|
|
—
|
|
||
Municipal obligations
|
|
228.8
|
|
|
—
|
|
|
—
|
|
||
Mortgage-backed and asset-backed securities
|
|
1,167.0
|
|
|
—
|
|
|
—
|
|
||
Foreign government, agency and provincial obligations
|
|
1.2
|
|
|
—
|
|
|
—
|
|
||
Preferred stocks
|
|
82.7
|
|
|
70.0
|
|
|
85
|
%
|
||
Fixed maturity investments
|
|
2,639.7
|
|
|
70.0
|
|
|
3
|
%
|
||
Common equity securities
|
|
1,113.9
|
|
|
—
|
|
|
—
|
%
|
||
Short-term investments
|
|
211.3
|
|
|
—
|
|
|
—
|
|
||
Other long-term investments
(1)
|
|
297.3
|
|
|
297.3
|
|
|
100
|
%
|
||
Total investments
|
|
$
|
4,262.2
|
|
|
$
|
367.3
|
|
|
9
|
%
|
(1)
|
Excludes carrying value of
$3.8
associated with other long-term investment limited partnerships accounted for using the equity method. Excludes carrying value of $14.7 associated with a tax advantaged federal affordable housing development fund accounted for using the proportional amortization method.
|
|
|
December 31, 2015
|
||||||||||||||
|
|
Change in fair value
|
|
Change in fair value
|
||||||||||||
Millions
|
|
10% decline
|
|
10% increase
|
|
30% decline
|
|
30% increase
|
||||||||
Hedge funds
|
|
$
|
(3.7
|
)
|
|
$
|
3.7
|
|
|
$
|
(11.1
|
)
|
|
$
|
11.1
|
|
Private equity funds
|
|
$
|
(9.1
|
)
|
|
$
|
9.1
|
|
|
$
|
(27.3
|
)
|
|
$
|
27.3
|
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||
HFRX Equal Weighted Strategies Index
|
|
(1.5
|
)%
|
|
(0.5
|
)%
|
|
6.3
|
%
|
|
2.5
|
%
|
|
(6.2
|
)%
|
S&P 500 Index
|
|
1.4
|
%
|
|
13.7
|
%
|
|
32.4
|
%
|
|
16.0
|
%
|
|
2.1
|
%
|
|
|
Equity Market
Returns
|
|
Foreign Currency
Exchange
(1)
|
|
Interest Rates
(2)
|
|
Market Volatility
(3)
|
||||||||||||||||||||||||
Millions
|
|
20%
|
|
(20)%
|
|
15%
|
|
(15)%
|
|
Favorable
|
|
Unfavorable
|
|
Decrease
|
|
Increase
|
||||||||||||||||
Liabilities
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Hedge Assets
|
|
(1
|
)
|
|
5
|
|
|
1
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
3
|
|
||||||||
Net
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
(1)
|
The value of foreign currencies in Japanese yen terms.
|
(2)
|
In the unfavorable scenario, Japanese interest rates are decreased 70 bps, Japanese swap spreads are tightened by 25 bps, and foreign bond fund yields are increased 70 bps. Conversely, in the favorable scenario, Japanese interest rates are increased 70 bps, Japanese swap spreads are widened 25 bps and foreign bond fund yields are decreased 70 bps.
|
(3)
|
White Mountains’s sensitivities for market implied volatilities vary by term. For equity implied volatilities, White Mountains changes implied volatilities by 15%. For foreign currency implied volatilities, White Mountains changes implied volatilities by 6%.
|
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
||||||||||||
Change in millions
|
|
Down Market
|
|
Up Market
|
|
Down Market
|
|
Up Market
|
||||||||
Liabilities
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
(6
|
)
|
Hedge Assets
(1)
|
|
34
|
|
|
—
|
|
|
87
|
|
|
(6
|
)
|
||||
Net
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
(1)
|
Assumed hedge effectiveness in down and up markets of 93% and 106%, respectively, as of December 31, 2015 and 2014, adjusted for the unhedged portion of Japanese discount rate exposure. Some Japanese discount rate coverage remains primarily through WM Life Re's put option portfolio.
|
|
|
Change in fair value
of liability
|
||||||
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Decrease 100% (to zero surrenders)
|
|
$
|
(.1
|
)
|
|
$
|
—
|
|
Increase 100%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Balance at January 1, 2015
|
|
$
|
.7
|
|
|
$
|
18.9
|
|
|
$
|
33.8
|
|
|
$
|
3.7
|
|
|
$
|
56.4
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Realized and unrealized gains (losses)
|
|
(.4
|
)
|
|
(9.7
|
)
|
|
(7.5
|
)
|
|
8.4
|
|
|
(8.8
|
)
|
|||||
Transfers in (out)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(6.5
|
)
|
|
(9.8
|
)
|
|
(11.2
|
)
|
|
(27.5
|
)
|
|||||
Balance at December 31, 2015
|
|
$
|
.3
|
|
|
$
|
2.7
|
|
|
$
|
16.5
|
|
|
$
|
0.9
|
|
|
$
|
20.1
|
|
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Balance at January 1, 2014
|
|
$
|
(52.8
|
)
|
|
$
|
63.4
|
|
|
$
|
4.7
|
|
|
$
|
1.1
|
|
|
$
|
69.2
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Realized and unrealized gains (losses)
|
|
53.5
|
|
|
(38.6
|
)
|
|
(71.0
|
)
|
|
37.2
|
|
|
(72.4
|
)
|
|||||
Transfers in (out)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(5.9
|
)
|
|
100.1
|
|
|
(34.6
|
)
|
|
59.6
|
|
|||||
Balance at December 31, 2014
|
|
$
|
.7
|
|
|
$
|
18.9
|
|
|
$
|
33.8
|
|
|
$
|
3.7
|
|
|
$
|
56.4
|
|
(1)
|
Includes over-the-counter instruments.
|
(2)
|
Includes interest rate swaps, total return swaps and foreign currency forward contracts. Fair value measurement based upon bid/ask pricing quotes for similar instruments that are actively traded, where available. Swaps for which an active market does not exist have been priced using observable inputs including the swap curve and the underlying bond index.
|
(3)
|
Includes exchange traded equity index, foreign currency and interest rate futures. Fair value measurements based upon quoted prices for identical instruments that are actively traded.
|
(4)
|
In addition to derivative instruments, WM Life Re held cash, short-term and fixed maturity investments of $5.8 and $33.2 as of
December 31, 2015 and 2014
posted as collateral to its counterparties.
|
|
|
Type of Surplus Note
|
|
Total as of December 31, 2015
|
|
Total as of December 31, 2014
|
||||||||||
Millions
|
|
Seller Priority
|
|
Pari Passu
|
|
|||||||||||
Par Value
|
|
$
|
57.9
|
|
|
$
|
43.1
|
|
|
$
|
101.0
|
|
|
$
|
101.0
|
|
Fair value adjustments to reflect:
|
|
|
|
|
|
|
|
|
||||||||
Current market rates on public debt and contract-based repayments
(1)
|
|
(.4
|
)
|
|
(14.7
|
)
|
|
(15.1
|
)
|
|
(6.6
|
)
|
||||
Regulatory approval
(2)
|
|
(11.7
|
)
|
|
(12.5
|
)
|
|
(24.2
|
)
|
|
(12.6
|
)
|
||||
Liquidity adjustment
(3)
|
|
(7.8
|
)
|
|
(2.4
|
)
|
|
(10.2
|
)
|
|
(16.7
|
)
|
||||
Total adjustments
|
|
(19.9
|
)
|
|
(29.6
|
)
|
|
(49.5
|
)
|
|
(35.9
|
)
|
||||
Fair value
(4)
|
|
$
|
38.0
|
|
|
$
|
13.5
|
|
|
$
|
51.5
|
|
|
$
|
65.1
|
|
(1)
|
Represents the value of the OneBeacon surplus notes, at current market yields on publicly traded debt, and assuming issuer is allowed to make principal and interest payments when its financial capacity is available, as measured by statutory capital in excess of a 250% RBC score.
|
(2)
|
Represents anticipated delay in securing regulatory approvals of interest and principal payments to reflect graduated changes in Issuer's statutory surplus. The monetary impact of the anticipated delay is measured based on credit spreads of public securities with roughly equivalent percentages of discounted payments missed.
|
(3)
|
Represents impact of liquidity spread to account for OneBeacon’s sole ownership of the surplus notes, lack of a trading market and ongoing regulatory approval risk.
|
Estimates affecting fair value
|
|
Pre-tax increase (decrease) in fair value
|
||||||||||||||
Millions
|
|
|||||||||||||||
Liquidity Spread
(1)
|
|
-100 bp
|
|
-50 bp
|
|
+50 bp
|
|
+100 bp
|
||||||||
Seller priority note
|
|
$
|
2.8
|
|
|
$
|
1.4
|
|
|
$
|
(1.4
|
)
|
|
$
|
(2.6
|
)
|
Pari passu note
|
|
1.0
|
|
|
0.4
|
|
|
(.4
|
)
|
|
(0.8
|
)
|
||||
Total OneBeacon Surplus Notes
|
|
$
|
3.8
|
|
|
$
|
1.8
|
|
|
$
|
(1.8
|
)
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Credit Assignment
(2)
|
|
+2 Notches
|
|
+1 Notch
|
|
-1 Notch
|
|
-2 Notches
|
||||||||
Seller priority note
|
|
$
|
8.7
|
|
|
$
|
4.1
|
|
|
$
|
(3.6
|
)
|
|
$
|
(6.8
|
)
|
Pari passu note
|
|
2.7
|
|
|
1.3
|
|
|
(1.1
|
)
|
|
(2.1
|
)
|
||||
Total OneBeacon Surplus Notes
|
|
$
|
11.4
|
|
|
$
|
5.4
|
|
|
$
|
(4.7
|
)
|
|
$
|
(8.9
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Principal Repayments
(3)
|
|
-3 Years
|
|
-1 Year
|
|
+1 Year
|
|
+3 Years
|
||||||||
Seller priority note
|
|
$
|
2.5
|
|
|
$
|
0.7
|
|
|
$
|
(.9
|
)
|
|
$
|
(2.3
|
)
|
Pari passu note
|
|
.9
|
|
|
.3
|
|
|
(.1
|
)
|
|
(.4
|
)
|
||||
Total OneBeacon Surplus Notes
|
|
$
|
3.4
|
|
|
$
|
1.0
|
|
|
$
|
(1.0
|
)
|
|
$
|
(2.7
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Repayments
(4)
|
|
-3 Years
|
|
-1 Year
|
|
+1 Year
|
|
+3 Years
|
||||||||
Seller priority note
|
|
$
|
6.6
|
|
|
$
|
2.8
|
|
|
$
|
(4.2
|
)
|
|
$
|
(11.8
|
)
|
Pari passu note
|
|
6.0
|
|
|
2.6
|
|
|
(2.7
|
)
|
|
(6.8
|
)
|
||||
Total OneBeacon Surplus Notes
|
|
$
|
12.6
|
|
|
$
|
5.4
|
|
|
$
|
(6.9
|
)
|
|
$
|
(18.6
|
)
|
•
|
change in adjusted book value per share or return on equity;
|
•
|
business strategy;
|
•
|
financial and operating targets or plans;
|
•
|
incurred loss and loss adjustment expenses and the adequacy of its loss and loss adjustment expense reserves and related reinsurance;
|
•
|
projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts;
|
•
|
expansion and growth of its business and operations; and
|
•
|
future capital expenditures.
|
•
|
the risks associated with Item 1A of this Report on Form 10-K;
|
•
|
claims arising from catastrophic events, such as hurricanes, earthquakes, floods, fires, terrorist attacks or severe winter weather;
|
•
|
the continued availability of capital and financing;
|
•
|
general economic, market or business conditions;
|
•
|
business opportunities (or lack thereof) that may be presented to it and pursued;
|
•
|
competitive forces, including the conduct of other property and casualty insurers and reinsurers;
|
•
|
changes in domestic or foreign laws or regulations, or their interpretation, applicable to White Mountains, its competitors or its customers;
|
•
|
an economic downturn or other economic conditions adversely affecting its financial position;
|
•
|
recorded loss reserves subsequently proving to have been inadequate;
|
•
|
actions taken by ratings agencies from time to time, such as financial strength or credit ratings downgrades or placing ratings on negative watch; and
|
•
|
other factors, most of which are beyond White Mountains’s control.
|
$ in millions
|
|
Fair Value at
December 31, 2015
|
|
Assumed Change
in Relevant
Interest Rate
|
|
Estimated
Fair Value
After Change in
Interest Rate
|
|
After-Tax Increase
(Decrease) in
Carrying Value
|
||||||
Fixed maturity investments
|
|
$
|
2,639.7
|
|
|
100 bp decrease
|
|
$
|
2,692.0
|
|
|
$
|
35.1
|
|
|
|
|
|
50 bp decrease
|
|
2,669.2
|
|
|
19.8
|
|
||||
|
|
|
|
50 bp increase
|
|
2,608.6
|
|
|
(20.9
|
)
|
||||
|
|
|
|
100 bp increase
|
|
2,577.4
|
|
|
(42.0
|
)
|
|
|
December 31, 2015
|
||||||||||||||||||
Millions
|
|
Fair Value
|
|
Tighten 50
|
|
Tighten 25
|
|
Widen 25
|
|
Widen 50
|
||||||||||
U.S. Government and agency obligations
|
|
$
|
160.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign government, agency and provincial
obligations
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Tighten 100
|
|
Tighten 50
|
|
Widen 50
|
|
Widen 100
|
|||||
Agency mortgage-backed
|
330.5
|
|
|
7.6
|
|
|
4.2
|
|
|
(5.2
|
)
|
|
(10.3
|
)
|
Asset-backed
|
562.9
|
|
|
5.0
|
|
|
3.6
|
|
|
(4.4
|
)
|
|
(8.7
|
)
|
|
|
|
Tighten 200
|
|
Tighten 100
|
|
Widen 100
|
|
Widen 200
|
|||||
Debt securities issued by corporations
|
1,000.0
|
|
|
32.8
|
|
|
21.7
|
|
|
(24.6
|
)
|
|
(48.4
|
)
|
Municipal obligations
|
228.8
|
|
|
16.1
|
|
|
8.8
|
|
|
(9.9
|
)
|
|
(19.4
|
)
|
|
|
|
Tighten 400
|
|
Tighten 200
|
|
Widen 200
|
|
Widen 400
|
|||||
Non-agency commercial mortgage-backed
|
140.4
|
|
|
14.4
|
|
|
10.5
|
|
|
(10.7
|
)
|
|
(20.3
|
)
|
|
|
|
Tighten 600
|
|
Tighten 300
|
|
Widen 300
|
|
Widen 600
|
|||||
Preferred stocks
|
82.7
|
|
|
3.6
|
|
|
3.5
|
|
|
(4.7
|
)
|
|
(7.1
|
)
|
Non-agency residential mortgage-backed
|
133.2
|
|
|
9.4
|
|
|
9.3
|
|
|
(11.8
|
)
|
|
(21.5
|
)
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
OBH Senior Notes
|
|
$
|
276.4
|
|
|
$
|
274.8
|
|
|
$
|
286.0
|
|
|
$
|
274.7
|
|
Tranzact Bank Facility
|
|
102.8
|
|
|
102.9
|
|
|
68.7
|
|
|
67.4
|
|
||||
MediaAlpha Bank Facility
|
|
15.0
|
|
|
14.7
|
|
|
—
|
|
|
—
|
|
||||
SIG Senior Notes
|
|
410.0
|
|
|
399.8
|
|
|
437.8
|
|
|
399.7
|
|
||||
SIG Preference Shares
|
|
255.0
|
|
|
250.0
|
|
|
260.0
|
|
|
250.0
|
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
|
10% increase
|
|
10% decrease
|
||||||||||||||||||||
Millions
|
|
Continuing Operations
|
|
Discontinued Operations
|
|
Total Operations
|
|
Continuing Operations
|
|
Discontinued Operations
|
|
Total Operations
|
||||||||||||
British pound sterling to U.S. dollar
|
|
$
|
(1.1
|
)
|
|
$
|
(17.1
|
)
|
|
$
|
(18.2
|
)
|
|
$
|
1.1
|
|
|
$
|
17.1
|
|
|
$
|
18.2
|
|
Swedish krona to U.S. dollar
|
|
—
|
|
|
(6.4
|
)
|
|
(6.4
|
)
|
|
—
|
|
|
6.4
|
|
|
6.4
|
|
||||||
Canadian dollar to U.S. dollar
|
|
—
|
|
|
(4.8
|
)
|
|
(4.8
|
)
|
|
—
|
|
|
4.8
|
|
|
4.8
|
|
||||||
Euro to U.S. dollar
|
|
(2.4
|
)
|
|
—
|
|
|
(2.4
|
)
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
|
December 31, 2014
|
||||||||||||||||||||||
|
|
10% increase
|
|
10% decrease
|
||||||||||||||||||||
Millions
|
|
Continuing Operations
|
|
Discontinued Operations
|
|
Total Operations
|
|
Continuing Operations
|
|
Discontinued Operations
|
|
Total Operations
|
||||||||||||
British pound sterling to U.S. dollar
|
|
$
|
(1.6
|
)
|
|
$
|
(15.0
|
)
|
|
$
|
(16.6
|
)
|
|
$
|
1.6
|
|
|
$
|
15.0
|
|
|
$
|
16.6
|
|
Swedish krona to U.S. dollar
|
|
—
|
|
|
(24.8
|
)
|
|
(24.8
|
)
|
|
—
|
|
|
24.8
|
|
|
24.8
|
|
||||||
Canadian dollar to U.S. dollar
|
|
—
|
|
|
(4.9
|
)
|
|
(4.9
|
)
|
|
—
|
|
|
4.9
|
|
|
4.9
|
|
||||||
Euro to U.S. dollar
|
|
(2.5
|
)
|
|
(2.3
|
)
|
|
(4.8
|
)
|
|
2.5
|
|
|
2.3
|
|
|
4.8
|
|
Exhibit
number
|
|
Name
|
2
|
|
Plan of Reorganization (incorporated by reference herein to the Company’s Registration Statement on S-4 (No. 333-87649) dated September 23, 1999)
|
3.1
|
|
Memorandum of Continuance of the Company (incorporated by reference herein to Exhibit (3)(i) of the Company’s Current Report on Form 8-K dated November 1, 1999)
|
3.2
|
|
Amended and Restated Bye-Laws of the Company (incorporated by reference herein to Exhibit 3.2 of the Company’s 2012 Annual Report on Form 10-K)
|
4.1
|
|
Fiscal Agency Agreement between White Mountains Re Group, Ltd. as Issuer and The Bank of New York as Fiscal Agent governing the SIG Senior Notes (incorporated by reference herein to Exhibit 4.1 of the Company’s Report on Form 8-K dated March 14, 2007)
|
4.2
|
|
Certificate of Designation, setting forth the designations, powers, preferences and rights of the SIG Preference Shares (incorporated by reference herein to Exhibit 3.1 of the Company’s Report on Form 8-K dated May 29, 2007)
|
4.3
|
|
Indenture, dated as of November 9, 2012, among OneBeacon U.S. Holdings, Inc., the Company, and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference herein to Exhibit 4.3 of the Company’s 2012 Annual Report on Form 10-K)
|
4.4
|
|
First Supplemental Indenture, dated as of November 9, 2012, among OneBeacon U.S. Holdings, Inc., the Company and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference herein to Exhibit 4.4 of the Company’s 2012 Annual Report on Form 10-K)
|
10.1
|
|
$425,000,000 Credit Agreement, dated August 14, 2013 among the Company, as the Borrower, Wells Fargo Bank, N.A., as Administrative Agent, Swing Line Lender and Issuing Lender, and the other lenders party hereto (incorporated by reference herein to Exhibit 10.1 of the Company’s Report on Form 10-Q dated October 28, 2013)
|
10.2
|
|
Amendment No.1 to the $425,000,000 Credit Agreement, dated August 14, 2013 among the Company, as the Borrower, Wells Fargo Bank, N.A., as Administrative Agent, Swing Line Lender and Issuing Lender, and the other lenders party hereto.(incorporated by reference herein to Exhibit 10.1 of the Company’s Report on Form 10-Q dated October 29, 2014)
|
10.3
|
|
Investment Management Agreement between Prospector Partners, LLC and White Mountains Advisors LLC (incorporated by reference herein to Exhibit 99.1 of the Company’s Report on Form 8-K dated June 20, 2005)
|
10.4
|
|
Amendment to the Investment Management Agreement between Prospector Partners, LLC and White Mountains Advisors, LLC dated February 23, 2006 (incorporated by reference herein to the Company’s Report on Form 8-K dated February 28, 2006)
|
10.5
|
|
Amended and restated Investment Management Agreement between White Mountains Advisors, LLC and OneBeacon dated December 23, 2014 (incorporated by reference herein to Exhibit 10.6 of the Company’s 2014 Annual Report on Form 10-K)
|
10.6
|
|
Investment Management Agreement between Prospector Partners, LLC and OneBeacon dated
February 25, 2015 (incorporated by reference herein to Exhibit 10.7 of the Company’s 2014 Annual Report on Form 10-K)
|
Exhibit
number
|
|
Name
|
10.7
|
|
Consulting Letter Agreement between Prospector Partners, LLC and White Mountains Advisors LLC (incorporated by reference herein to Exhibit 99.2 of the Company’s Report on Form 8-K dated June 20, 2005)
|
10.8
|
|
White Mountains Long-Term Incentive Plan, as amended, (incorporated by reference to Appendix A of the Company’s Notice of 2010 Annual General Meeting of Members and Proxy Statement dated March 29, 2010)
|
10.9
|
|
White Mountains Long-Term Incentive Plan, as amended, (incorporated by reference to Appendix A of the Company’s Notice of 2013 Annual General Meeting of Members and Proxy Statement dated April 10, 2013)
|
10.10
|
|
White Mountains Bonus Plan*
|
10.11
|
|
White Mountains Re Long Term Incentive Plan (incorporated by reference herein to Exhibit 10.12 of the Company’s 2009 Annual Report on Form 10-K)
|
10.12
|
|
OneBeacon Deferred Compensation Plan (incorporated by reference herein to Exhibit 10.16 of the Company’s 2012 Annual Report on Form 10-K)
|
10.13
|
|
OneBeacon Long-Term Incentive Plan (2007) (incorporated by reference herein to Exhibit 10.15 of the Company’s 2014 Annual Report on Form 10-K)
|
10.14
|
|
OneBeacon’s 2015 Management Incentive Plan (*)
|
10.15
|
|
Restricted Share Award Agreement by and between OneBeacon Insurance Group, Ltd. And T. Michael Miller dated as of May 27, 2011(incorporated by reference herein to Exhibit 10.22 of the Company’s 2011 Annual Report on Form 10-K)
|
10.16
|
|
Amended and Restated Revenue Sharing Agreement among John D. Gillespie, Fund American Companies, Inc. and Folksamerica Reinsurance Company (incorporated by reference herein to Exhibit 10.26 of the Company’s 2004 Annual Report on Form 10-K)
|
10.17
|
|
Nonqualified Stock Option Agreement made as of the 6th day of March 2007, by and between the Company and Raymond Barrette (incorporated by reference herein to Exhibit 99.1 of the Company’s Report on Form 8-K/A dated March 7, 2007)
|
10.18
|
|
Amendment No. 1 to Nonqualified Stock Option Agreement made as of the 10th day of August 2010, by and between the Company and Raymond Barrette (incorporated by reference herein to Exhibit 10.1 of the Company’s Report on Form 10-Q dated October 29, 2010)
|
10.19
|
|
Restricted Share Award Agreement made as of the 6th day of March 2007, by and between the Company and Raymond Barrette (incorporated by reference herein to Exhibit 99.2 of the Company’s Report on Form 8-K/A dated March 7, 2007)
|
10.20
|
|
Amendment No.1 to Restricted Share Award Agreement made as of the 10th day of August 2010, by and between the Company and Raymond Barrette (incorporated by reference herein to Exhibit 10.2 of the Company’s Report on Form 10-Q dated October 29, 2010)
|
10.21
|
|
Stock Purchase Agreement, dated May 17, 2011, between White Mountains Holdings (Luxembourg) S.à r.l. and The Allstate Corporation (incorporated by reference herein to Exhibit 10.1 of the Company’s Report on Form 8-K dated May 18, 2011)
|
10.22
|
|
Stock Purchase Agreement by and among the OneBeacon Insurance Group Ltd., OneBeacon Insurance Group LLC, Trebuchet and Armour Group Holdings Limited dated as of October 18, 2012. (incorporated by reference herein to Exhibit 10.1 of the Company’s Report on 10-Q dated October 30, 2012)
|
10.23
|
|
Amendment No.1 dated as of February 1, 2013 to Stock Purchase Agreement by and among OneBeacon Insurance Group Ltd., OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc. and Armour Group Holdings Limited (incorporated by reference herein to Exhibit 10.25 of the Company’s 2014 Annual Report on Form 10-K)
|
10.24
|
|
Amendment No. 2 dated as of October 25, 2013 to Stock Purchase Agreement by and among OneBeacon Insurance Group Ltd., OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc. and Armour Group Holdings Limited (incorporated by reference herein to Exhibit 10.30 of the Company’s Annual Report on 10-K dated February 28, 2014)
|
10.25
|
|
Amendment No. 3 dated as of June 19, 2014 to Stock Purchase Agreement by and among OneBeacon Insurance Group Ltd., OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc. and Armour Group Holdings Limited (incorporated by reference herein to Exhibit 10.1 of the Company’s Report on 10-Q dated July 29, 2014)
|
10.26
|
|
Amendment No. 4 dated as of November 3, 2014 to Stock Purchase Agreement by and among OneBeacon Insurance Group Ltd., OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc. and Armour Group Holdings Limited (incorporated by reference herein to Exhibit 10.28 of the Company’s 2014 Annual Report on Form 10-K)
|
Exhibit
number
|
|
Name
|
10.27
|
|
Regulation 114 Trust Agreement by and among Build America Mutual Assurance Company, HG Re Ltd. and The Bank of New York Mellon, dated as of July 20, 2012. (incorporated by reference herein to Exhibit 10.2 of the Company’s Report on 10-Q dated October 30, 2012)
|
10.28
|
|
Supplemental Trust Agreement by and among Build America Mutual Assurance Company, HGR Patton (Luxembourg) S.à r.l., United States of America Branch,
and The Bank of New York Mellon, dated as of July 20, 2012. (incorporated by reference herein to Exhibit 10.3 of the Company’s Report on 10-Q dated
October 30, 2012)
|
10.29
|
|
Surplus Note Purchase Agreement between Build America Mutual Assurance Company, as Issuer and HG Holdings Ltd. and HG Re Ltd. as Purchasers dated as of July 17, 2012.(incorporated by reference herein to Exhibit 10.4 of the Company’s Report on 10-Q dated October 30, 2012)
|
10.30
|
|
Amended and Restated Surplus Note Purchase Agreement between Build America Mutual Assurance Company, as Issuer and HG Holdings Ltd. and HG Re Ltd. as Purchasers dated as of January 1, 2014.(incorporated by reference herein to Exhibit 10.1 of the Company’s Report on 10-Q dated April 28, 2014)
|
10.31
|
|
Stock Purchase Agreement dated July 24, 2015 between Lone Tree Holdings Ltd., Sirius International Insurance Group, Ltd., CM International Holding Pte. Ltd. and CM Bermuda Limited (incorporated by reference herein to Exhibit 10.1 of the Company's Report on Form 8-K dated July 24, 2015)
|
10.32
|
|
Sabbatical Agreement dated June 1, 2015 between White Mountains Capital, Inc. and G. Manning Rountree (incorporated by reference herein to Exhibit 10.2 of the Company's Report on Form 10-Q dated August 3, 2015)
|
10.33
|
|
Employment Agreement dated as of July 24, 2015 between Sirius International Insurance Group, Ltd. and Allan L. Waters (incorporated by reference herein to Exhibit 10.3 of the Company's Report on Form 10-Q dated November 2, 2015)
|
11
|
|
Statement Re Computation of Per Share Earnings (**)
|
12
|
|
Statement Re Computation of Ratio of Earnings to Fixed Charges (*)
|
14
|
|
The Company’s Code of Business Conduct, which applies to all directors, officers and employees in carrying out their responsibilities to and on behalf of the Company (*)
|
21
|
|
Subsidiaries of the Registrant (*)
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP dated February 29, 2016 (*)
|
23.2
|
|
Consent of Ernst & Young LLP dated February 29, 2016 (*)
|
24
|
|
Powers of Attorney (*)
|
31.1
|
|
Principal Executive Officer Certification Pursuant to Rule 13a-14 (a) of the Securities Exchange Act of 1934 (*)
|
31.2
|
|
Principal Financial Officer Certification Pursuant to Rule 13a-14 (a) of the Securities Exchange Act of 1934 (*)
|
32.1
|
|
Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
|
32.2
|
|
Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
|
99.1
|
|
Symetra Financial Corporation’s financial statements for the years ended December 31, 2014 and 2013 (incorporated by reference herein from Symetra Financial Corporation’s 2014 Annual Report on Form 10-K dated February 26, 2015 and Form 10-K/A dated April 22, 2015, Commission file number: 001-33808) (***)
|
99.2
|
|
Symetra Financial Corporation’s financial statements for the interim period ended September 30, 2015 (incorporated by reference herein from Symetra Financial Corporation’s Report on Form 10-Q dated November 6, 2015, Commission file number: 001-33808) (***)
|
101.1
|
|
The following financial information from White Mountains’s Annual Report on Form 10-K for the year ended December 31, 2015 formatted in XBRL: (i) Consolidated balance sheets as of December 31, 2015 and December 31, 2014; (ii) Consolidated statements of operations and comprehensive income for each of the years ended December 31, 2015, 2014 and 2013; (iii) Consolidated statements of shareholders’ equity for each of the years ended December 31, 2015, 2014 and 2013; (iv) Consolidated statements of cash flows for each of the years ended December 31, 2015, 2014 and 2013; and (v) Notes to consolidated financial statements (*).
|
(*)
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Included herein.
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(**)
|
Not included herein as the information is contained elsewhere within report. See
Note 11—“Earnings Per Share”
of the accompanying consolidated financial statements.
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(***)
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Exhibits 99.1 and 99.2 to this Annual Report on Form 10-K are being filed to provide audited and unaudited financial statements and the related footnotes of Symetra in accordance with SEC Rule 3-09 of Regulation S-X. The management of Symetra is solely responsible for the form and content of the Symetra financial statements. White Mountains has no responsibility for the form or content of the Symetra financial statements since it does not control Symetra.
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WHITE MOUNTAINS INSURANCE GROUP, LTD.
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Date:
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February 29, 2016
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By:
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/s/ J. BRIAN PALMER
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J. Brian Palmer
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Managing Director and Chief Accounting Officer
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Signature
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Title
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Date
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/s/ RAYMOND BARRETTE
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Chairman, CEO (Principal Executive Officer) and Director
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February 29, 2016
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Raymond Barrette
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YVES BROUILLETTE*
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Director
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February 25, 2016
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Yves Brouillette
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MORGAN W. DAVIS*
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Director
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February 25, 2016
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Morgan W. Davis
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A. MICHAEL FRINQUELLI*
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Director
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February 25, 2016
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A. Michael Frinquelli
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/s/ DAVID T. FOY
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Executive Vice President and CFO (Principal Financial Officer)
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February 29, 2016
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David T. Foy
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EDITH E. HOLIDAY*
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Director
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February 25, 2016
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Edith E. Holiday
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/s/ J. BRIAN PALMER
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Managing Director and Chief Accounting Officer (Principal Accounting Officer)
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February 29, 2016
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Brian Palmer
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LOWNDES A. SMITH*
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Director
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February 25, 2016
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Lowndes A. Smith
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GARY C. TOLMAN*
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Director
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February 25, 2016
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Gary C. Tolman
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By:
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/s/ RAYMOND BARRETTE
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Raymond Barrette,
Attorney-in-Fact
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Form 10-K
page(s)
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Consolidated financial statements:
|
|
|
F-3
|
||
F-4
|
||
F-5
|
||
|
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Other financial information:
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Financial statement schedules:
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CONSOLIDATED BALANCE SHEETS
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||||||||
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|
December 31,
|
||||||
Millions, except share and per share amounts
|
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
|
$
|
2,639.7
|
|
|
$
|
2,422.0
|
|
Short-term investments, at amortized cost (which approximates fair value)
|
|
211.3
|
|
|
376.8
|
|
||
Common equity securities, at fair value
|
|
1,113.9
|
|
|
611.7
|
|
||
Other long-term investments
|
|
315.8
|
|
|
331.9
|
|
||
Total investments
|
|
4,280.7
|
|
|
3,742.4
|
|
||
Cash (restricted $5.8 and $23.7)
|
|
179.3
|
|
|
261.7
|
|
||
Reinsurance recoverable on unpaid losses
|
|
186.5
|
|
|
161.7
|
|
||
Reinsurance recoverable on paid losses
|
|
7.5
|
|
|
12.2
|
|
||
Insurance premiums receivable
|
|
223.3
|
|
|
241.1
|
|
||
Investments in unconsolidated affiliates
|
|
—
|
|
|
414.4
|
|
||
Deferred acquisition costs
|
|
107.6
|
|
|
107.2
|
|
||
Deferred tax asset
|
|
112.8
|
|
|
114.6
|
|
||
Ceded unearned insurance premiums
|
|
29.5
|
|
|
17.8
|
|
||
Accrued investment income
|
|
14.0
|
|
|
14.3
|
|
||
Accounts receivable on unsettled investment sales
|
|
41.9
|
|
|
37.8
|
|
||
Goodwill and intangible assets
|
|
375.7
|
|
|
351.2
|
|
||
Other assets
|
|
318.7
|
|
|
348.7
|
|
||
Assets held for sale
|
|
4,407.0
|
|
|
4,630.6
|
|
||
Total assets
|
|
$
|
10,284.5
|
|
|
$
|
10,455.7
|
|
Liabilities
|
|
|
|
|
|
|
||
Loss and loss adjustment expense reserves
|
|
$
|
1,395.8
|
|
|
$
|
1,350.0
|
|
Unearned insurance premiums
|
|
612.6
|
|
|
616.7
|
|
||
Debt
|
|
442.4
|
|
|
343.1
|
|
||
Deferred tax liability
|
|
7.0
|
|
|
—
|
|
||
Accrued incentive compensation
|
|
141.7
|
|
|
108.1
|
|
||
Ceded reinsurance payable
|
|
30.5
|
|
|
34.2
|
|
||
Funds held under insurance contracts
|
|
137.8
|
|
|
81.0
|
|
||
Accounts payable on unsettled investment purchases
|
|
—
|
|
|
.5
|
|
||
Other liabilities
|
|
264.7
|
|
|
278.4
|
|
||
Liabilities held for sale
|
|
2,884.0
|
|
|
3,105.3
|
|
||
Total liabilities
|
|
5,916.5
|
|
|
5,917.3
|
|
||
Equity
|
|
|
|
|
|
|
||
White Mountains’s common shareholders’ equity
|
|
|
|
|
|
|
||
White Mountains’s common shares at $1 par value per share—authorized 50,000,000
shares; issued and outstanding 5,623,735 and 5,986,214 shares |
|
5.6
|
|
|
6.0
|
|
||
Paid-in surplus
|
|
972.6
|
|
|
1,028.7
|
|
||
Retained earnings
|
|
3,084.9
|
|
|
3,010.5
|
|
||
Accumulated other comprehensive income (loss), after-tax:
|
|
|
|
|
||||
Equity in net unrealized gains from investments in Symetra common shares
|
|
—
|
|
|
34.9
|
|
||
Net unrealized foreign currency translation losses
|
|
(145.6
|
)
|
|
(79.8
|
)
|
||
Pension liability and other
|
|
(4.3
|
)
|
|
(4.6
|
)
|
||
Total White Mountains’s common shareholders’ equity
|
|
3,913.2
|
|
|
3,995.7
|
|
||
Non-controlling interests
|
|
454.8
|
|
|
542.7
|
|
||
Total equity
|
|
4,368.0
|
|
|
4,538.4
|
|
||
Total liabilities and equity
|
|
$
|
10,284.5
|
|
|
$
|
10,455.7
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions, except per share amounts
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Earned insurance premiums
|
|
$
|
1,188.2
|
|
|
$
|
1,185.0
|
|
|
$
|
1,120.9
|
|
Net investment income
|
|
60.8
|
|
|
59.5
|
|
|
59.8
|
|
|||
Net realized and unrealized investment gains
|
|
225.4
|
|
|
78.5
|
|
|
133.9
|
|
|||
Other revenue
|
|
334.2
|
|
|
131.1
|
|
|
47.0
|
|
|||
Total revenues
|
|
1,808.6
|
|
|
1,454.1
|
|
|
1,361.6
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses
|
|
708.9
|
|
|
824.0
|
|
|
622.1
|
|
|||
Insurance and reinsurance acquisition expenses
|
|
220.1
|
|
|
206.2
|
|
|
210.4
|
|
|||
Other underwriting expenses
|
|
218.6
|
|
|
179.6
|
|
|
205.2
|
|
|||
General and administrative expenses
|
|
487.5
|
|
|
257.7
|
|
|
149.1
|
|
|||
Interest expense on debt
|
|
18.6
|
|
|
15.6
|
|
|
16.2
|
|
|||
Total expenses
|
|
1,653.7
|
|
|
1,483.1
|
|
|
1,203.0
|
|
|||
Pre-tax income (loss)
|
|
154.9
|
|
|
(29.0
|
)
|
|
158.6
|
|
|||
Income tax (expense) benefit
|
|
.7
|
|
|
14.8
|
|
|
(32.6
|
)
|
|||
Net income (loss) from continuing operations
|
|
155.6
|
|
|
(14.2
|
)
|
|
126.0
|
|
|||
Gain (loss) on sale of discontinued operations, net of tax
|
|
18.2
|
|
|
(1.6
|
)
|
|
46.6
|
|
|||
Net income from discontinued operations, net of tax
|
|
80.6
|
|
|
260.2
|
|
|
99.9
|
|
|||
Income before equity in earnings of unconsolidated affiliates
|
|
254.4
|
|
|
244.4
|
|
|
272.5
|
|
|||
Equity in earnings of unconsolidated affiliates, net of tax
|
|
25.1
|
|
|
45.6
|
|
|
36.6
|
|
|||
Net income
|
|
279.5
|
|
|
290.0
|
|
|
309.1
|
|
|||
Net loss attributable to non-controlling interests
|
|
18.1
|
|
|
22.2
|
|
|
12.5
|
|
|||
Net income attributable to White Mountains’s common shareholders
|
|
297.6
|
|
|
312.2
|
|
|
321.6
|
|
|||
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
||||||
Change in equity in net unrealized (losses) gains from investments in Symetra common shares, net of tax
|
|
(34.9
|
)
|
|
75.3
|
|
|
(98.1
|
)
|
|||
Change in foreign currency translation, net of tax
|
|
(65.8
|
)
|
|
(168.5
|
)
|
|
2.7
|
|
|||
Net change in pension liability and other, net of tax
|
|
.3
|
|
|
(11.7
|
)
|
|
20.8
|
|
|||
Comprehensive income
|
|
197.2
|
|
|
207.3
|
|
|
247.0
|
|
|||
Comprehensive loss (income) attributable to non-controlling interests
|
|
—
|
|
|
3.3
|
|
|
(5.2
|
)
|
|||
Comprehensive income attributable to White Mountains’s common
shareholders |
|
$
|
197.2
|
|
|
$
|
210.6
|
|
|
$
|
241.8
|
|
Earnings per share attributable to White Mountains’s common
shareholders
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
33.80
|
|
|
$
|
8.77
|
|
|
$
|
28.22
|
|
Discontinued operations
|
|
16.80
|
|
|
42.36
|
|
|
23.63
|
|
|||
Total consolidated operations
|
|
$
|
50.60
|
|
|
$
|
51.13
|
|
|
$
|
51.85
|
|
Diluted earnings per share
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
33.80
|
|
|
$
|
8.77
|
|
|
$
|
28.22
|
|
Discontinued operations
|
|
16.80
|
|
|
42.36
|
|
|
23.63
|
|
|||
Total consolidated operations
|
|
$
|
50.60
|
|
|
$
|
51.13
|
|
|
$
|
51.85
|
|
Dividends declared and paid per White Mountains’s common share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||||||
|
|
White Mountains’s Common Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||
Millions
|
|
Common shares and
paid-in
surplus
|
|
Retained
earnings
|
|
AOCI,
after-tax
|
|
Total
|
|
Non-controlling
Interests
|
|
Total Equity
|
||||||||||||
Balances at December 31, 2012
|
|
$
|
1,057.2
|
|
|
$
|
2,542.5
|
|
|
$
|
131.9
|
|
|
$
|
3,731.6
|
|
|
$
|
526.3
|
|
|
$
|
4,257.9
|
|
Net income (loss)
|
|
—
|
|
|
321.6
|
|
|
—
|
|
|
321.6
|
|
|
(12.5
|
)
|
|
309.1
|
|
||||||
Net change in unrealized losses from investments in unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
(98.1
|
)
|
|
(98.1
|
)
|
|
—
|
|
|
(98.1
|
)
|
||||||
Net change in foreign currency translation
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
||||||
Net change in pension liability and other accumulated comprehensive items
|
|
—
|
|
|
—
|
|
|
15.6
|
|
|
15.6
|
|
|
5.2
|
|
|
20.8
|
|
||||||
Comprehensive income (loss)
|
|
—
|
|
|
321.6
|
|
|
(79.8
|
)
|
|
241.8
|
|
|
(7.3
|
)
|
|
234.5
|
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
(6.2
|
)
|
||||||
Dividends/distributions to
non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39.7
|
)
|
|
(39.7
|
)
|
||||||
Issuances of common shares
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||||
Repurchases and retirements of common shares
|
|
(23.8
|
)
|
|
(56.0
|
)
|
|
—
|
|
|
(79.8
|
)
|
|
—
|
|
|
(79.8
|
)
|
||||||
Net contributions from non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.5
|
|
|
11.5
|
|
||||||
Amortization of restricted share and
option awards
|
|
16.7
|
|
|
—
|
|
|
—
|
|
|
16.7
|
|
|
.9
|
|
|
17.6
|
|
||||||
Balances at December 31, 2013
|
|
1,051.1
|
|
|
2,801.9
|
|
|
52.1
|
|
|
3,905.1
|
|
|
491.7
|
|
|
4,396.8
|
|
||||||
Net income (loss)
|
|
—
|
|
|
312.2
|
|
|
—
|
|
|
312.2
|
|
|
(22.2
|
)
|
|
290.0
|
|
||||||
Net change in unrealized gains from
investments in unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
75.3
|
|
|
75.3
|
|
|
—
|
|
|
75.3
|
|
||||||
Net change in foreign currency translation
|
|
—
|
|
|
—
|
|
|
(168.2
|
)
|
|
(168.2
|
)
|
|
(.3
|
)
|
|
(168.5
|
)
|
||||||
Net change in pension liability and
other accumulated comprehensive items
|
|
—
|
|
|
—
|
|
|
(8.7
|
)
|
|
(8.7
|
)
|
|
(3.0
|
)
|
|
(11.7
|
)
|
||||||
Comprehensive income (loss)
|
|
—
|
|
|
312.2
|
|
|
(101.6
|
)
|
|
210.6
|
|
|
(25.5
|
)
|
|
185.1
|
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
(6.2
|
)
|
||||||
Dividends/distributions to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40.7
|
)
|
|
(40.7
|
)
|
||||||
Issuances of common shares
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
4.8
|
|
||||||
Repurchases and retirements of common shares
|
|
(37.1
|
)
|
|
(97.4
|
)
|
|
—
|
|
|
(134.5
|
)
|
|
—
|
|
|
(134.5
|
)
|
||||||
Net contributions from non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.3
|
|
|
8.3
|
|
||||||
Non-controlling interest from acquisitions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122.1
|
|
|
122.1
|
|
||||||
Redemptions of Prospector Turtle Fund
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.0
|
)
|
|
(14.0
|
)
|
||||||
Amortization of restricted share and
option awards
|
|
15.9
|
|
|
—
|
|
|
—
|
|
|
15.9
|
|
|
.8
|
|
|
16.7
|
|
||||||
Balances at December 31, 2014
|
|
1,034.7
|
|
|
3,010.5
|
|
|
(49.5
|
)
|
|
3,995.7
|
|
|
542.7
|
|
|
4,538.4
|
|
||||||
Net income (loss)
|
|
—
|
|
|
297.6
|
|
|
—
|
|
|
297.6
|
|
|
(18.1
|
)
|
|
279.5
|
|
||||||
Net change in unrealized losses from
investments in unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
(34.9
|
)
|
|
(34.9
|
)
|
|
—
|
|
|
(34.9
|
)
|
||||||
Net change in foreign currency translation
|
|
—
|
|
|
—
|
|
|
(65.8
|
)
|
|
(65.8
|
)
|
|
—
|
|
|
(65.8
|
)
|
||||||
Net change in pension liability and
other accumulated comprehensive items
|
|
—
|
|
|
—
|
|
|
.3
|
|
|
.3
|
|
|
—
|
|
|
.3
|
|
||||||
Comprehensive income (loss)
|
|
—
|
|
|
297.6
|
|
|
(100.4
|
)
|
|
197.2
|
|
|
(18.1
|
)
|
|
179.1
|
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
||||||
Dividends/distributions to
non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51.1
|
)
|
|
(51.1
|
)
|
||||||
Issuances of common shares
|
|
.9
|
|
|
—
|
|
|
—
|
|
|
.9
|
|
|
—
|
|
|
.9
|
|
||||||
Repurchases and retirements of common shares
|
|
(67.0
|
)
|
|
(217.2
|
)
|
|
—
|
|
|
(284.2
|
)
|
|
—
|
|
|
(284.2
|
)
|
||||||
Net contributions from non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.5
|
|
|
17.5
|
|
||||||
Acquisition from non-controlling interests
|
|
(5.3
|
)
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
(2.7
|
)
|
|
(8.0
|
)
|
||||||
Redemption of Prospector Turtle Fund
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31.5
|
)
|
|
(31.5
|
)
|
||||||
Amortization of restricted share and
option awards
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|
14.9
|
|
|
(2.0
|
)
|
|
12.9
|
|
||||||
Balances at December 31, 2015
|
|
$
|
978.2
|
|
|
$
|
3,084.9
|
|
|
$
|
(149.9
|
)
|
|
$
|
3,913.2
|
|
|
$
|
454.8
|
|
|
$
|
4,368.0
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operations:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
279.5
|
|
|
$
|
290.0
|
|
|
$
|
309.1
|
|
Charges (credits) to reconcile net income to net cash (used for) provided from operations:
|
|
|
|
|
|
|
|
|
|
|||
Net realized and unrealized investment gains
|
|
(225.4
|
)
|
|
(78.5
|
)
|
|
(133.9
|
)
|
|||
Net gain on sale of consolidated and unconsolidated affiliates
|
|
(16.1
|
)
|
|
—
|
|
|
(21.3
|
)
|
|||
Amortization and depreciation
|
|
67.5
|
|
|
38.2
|
|
|
28.6
|
|
|||
Deferred income tax expense (benefit)
|
|
5.1
|
|
|
(22.5
|
)
|
|
10.1
|
|
|||
Undistributed equity in earnings from unconsolidated affiliates, after-tax
|
|
(25.1
|
)
|
|
(45.6
|
)
|
|
(36.6
|
)
|
|||
Net income from discontinued operations
|
|
(80.6
|
)
|
|
(260.2
|
)
|
|
(99.9
|
)
|
|||
Net (gain) loss on sale of other discontinued operations
|
|
(18.2
|
)
|
|
1.6
|
|
|
(46.6
|
)
|
|||
Other operating items:
|
|
|
|
|
|
|
||||||
Net change in loss and loss adjustment expense reserves
|
|
45.8
|
|
|
282.2
|
|
|
54.3
|
|
|||
Net change in reinsurance recoverable on paid and unpaid losses
|
|
(20.1
|
)
|
|
(83.2
|
)
|
|
20.7
|
|
|||
Net change in unearned insurance premiums
|
|
(4.1
|
)
|
|
57.6
|
|
|
(15.8
|
)
|
|||
Net change in ceded reinsurance premiums payable
|
|
(3.7
|
)
|
|
11.5
|
|
|
10.2
|
|
|||
Net change in ceded unearned insurance premiums
|
|
(11.6
|
)
|
|
(3.5
|
)
|
|
(2.8
|
)
|
|||
Net change in insurance premiums receivable
|
|
17.8
|
|
|
(8.8
|
)
|
|
(2.6
|
)
|
|||
Net change in variable annuity benefit guarantee liabilities
|
|
(.4
|
)
|
|
(53.5
|
)
|
|
(388.7
|
)
|
|||
Net change in variable annuity benefit derivative instruments
|
|
36.3
|
|
|
12.7
|
|
|
29.1
|
|
|||
Net change in deferred acquisition costs
|
|
(.4
|
)
|
|
(1.8
|
)
|
|
18.5
|
|
|||
Net change in funds held under insurance contracts
|
|
56.7
|
|
|
17.7
|
|
|
57.4
|
|
|||
Net change in restricted cash
|
|
17.9
|
|
|
32.4
|
|
|
193.7
|
|
|||
Net change in other assets and liabilities, net
|
|
40.1
|
|
|
(127.5
|
)
|
|
(23.0
|
)
|
|||
Net cash provided from (used for) continuing operations
|
|
161.0
|
|
|
58.8
|
|
|
(39.5
|
)
|
|||
Net cash provided from (used for) discontinued operations
|
|
14.7
|
|
|
60.0
|
|
|
(61.5
|
)
|
|||
Net cash provided from (used for) operations
|
|
175.7
|
|
|
118.8
|
|
|
(101.0
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Net change in short-term investments
|
|
140.0
|
|
|
(138.0
|
)
|
|
64.6
|
|
|||
Sales of fixed maturity and convertible investments
|
|
1,281.7
|
|
|
2,210.8
|
|
|
1,925.3
|
|
|||
Maturities, calls and paydowns of fixed maturity and convertible investments
|
|
335.0
|
|
|
452.4
|
|
|
280.9
|
|
|||
Sales of common equity securities
|
|
461.4
|
|
|
609.8
|
|
|
435.0
|
|
|||
Distributions and redemptions of other long-term investments
|
|
84.7
|
|
|
64.5
|
|
|
31.6
|
|
|||
Sales of unconsolidated affiliates, net of cash sold and held in escrow
|
|
24.0
|
|
|
—
|
|
|
32.4
|
|
|||
Contributions to other long-term investments
|
|
(78.0
|
)
|
|
(114.7
|
)
|
|
(22.0
|
)
|
|||
Funding of operational cash flows for discontinued operations
|
|
17.5
|
|
|
(88.1
|
)
|
|
(72.3
|
)
|
|||
Purchases of common equity securities
|
|
(409.9
|
)
|
|
(289.7
|
)
|
|
(366.5
|
)
|
|||
Purchases of fixed maturity and convertible investments
|
|
(1,867.2
|
)
|
|
(2,456.1
|
)
|
|
(2,047.9
|
)
|
|||
Purchases of consolidated and unconsolidated affiliates (net of cash acquired)
|
|
(37.1
|
)
|
|
(190.1
|
)
|
|
—
|
|
|||
Net change in unsettled investment purchases and sales
|
|
(4.6
|
)
|
|
(44.7
|
)
|
|
3.7
|
|
|||
Net dispositions (acquisitions) of property and equipment
|
|
32.5
|
|
|
(4.0
|
)
|
|
(11.7
|
)
|
|||
Net cash (used for) provided from investing activities — continuing operations
|
|
(20.0
|
)
|
|
12.1
|
|
|
253.1
|
|
|||
Net cash provided from investing activities — discontinued operations
|
|
31.3
|
|
|
35.8
|
|
|
148.7
|
|
|||
Net cash provided from investing activities
|
|
11.3
|
|
|
47.9
|
|
|
401.8
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Draw down of debt and revolving line of credit
|
|
195.5
|
|
|
133.6
|
|
|
200.0
|
|
|||
Repayment of debt and revolving line of credit
|
|
(95.6
|
)
|
|
(66.5
|
)
|
|
(275.0
|
)
|
|||
Change in capital lease obligation
|
|
(5.4
|
)
|
|
(5.3
|
)
|
|
(5.7
|
)
|
|||
Cash dividends paid to the Company’s common shareholders
|
|
(6.0
|
)
|
|
(6.2
|
)
|
|
(6.2
|
)
|
|||
Cash dividends paid to OneBeacon Ltd.’s non-controlling common shareholders
|
|
(19.7
|
)
|
|
(19.8
|
)
|
|
(19.9
|
)
|
|||
Acquisitions of additional shares from non-controlling interest
|
|
(9.1
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions from (contributions to) discontinued operations
|
|
(12.1
|
)
|
|
37.9
|
|
|
69.6
|
|
|||
Common shares repurchased
|
|
(268.6
|
)
|
|
(128.2
|
)
|
|
(79.8
|
)
|
|||
OneBeacon Ltd. common shares repurchased and retired
|
|
(3.7
|
)
|
|
(1.7
|
)
|
|
—
|
|
|||
Capital contributions from non-controlling interest of consolidated LPs
|
|
—
|
|
|
4.9
|
|
|
1.6
|
|
|||
Redemptions paid to non-controlling interest of consolidated LPs
|
|
—
|
|
|
(5.5
|
)
|
|
(.7
|
)
|
|||
Distribution to non-controlling interest shareholders of Tranzact and MediaAlpha
|
|
(10.0
|
)
|
|
(25.8
|
)
|
|
—
|
|
|||
Capital contributions from BAM members
|
|
29.2
|
|
|
16.2
|
|
|
17.1
|
|
|||
Net cash used for financing activities — continuing operations
|
|
(205.5
|
)
|
|
(66.4
|
)
|
|
(99.0
|
)
|
|||
Net cash (used for) provided from financing activities — discontinued operations
|
|
(9.1
|
)
|
|
(63.2
|
)
|
|
(87.5
|
)
|
|||
Net cash used for financing activities
|
|
(214.6
|
)
|
|
(129.6
|
)
|
|
(186.5
|
)
|
|||
Effect of exchange rate changes on cash (excludes (4.5), (14.3) and (.2) related to discontinued operations)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net change in cash during the period - continuing operations
|
|
(64.5
|
)
|
|
4.5
|
|
|
114.6
|
|
|||
Cash balance at beginning of year (excludes restricted cash balances of $23.7, $56.1, and $249.8 and discontinued operations cash balances of $111.5, $93.2, and $93.7)
|
|
238.0
|
|
|
233.5
|
|
|
118.9
|
|
|||
Cash balance at end of year (excludes restricted cash balances of $5.8, $23.7, and $56.1 and discontinued operations cash balances of $143.9, $111.5 and $93.2)
|
|
$
|
173.5
|
|
|
$
|
238.0
|
|
|
$
|
233.5
|
|
|
F-4
|
|
Currency
|
|
Opening Rate
2015
|
|
Closing Rate
2015
|
|
Opening Rate
2014
|
|
Closing Rate
2014
|
||||
Swedish kronor
|
|
7.7737
|
|
|
8.4247
|
|
|
6.4339
|
|
|
7.7737
|
|
British pound
|
|
0.6426
|
|
|
0.6757
|
|
|
0.6044
|
|
|
0.6426
|
|
Euro
|
|
0.8245
|
|
|
0.9189
|
|
|
0.7259
|
|
|
0.8245
|
|
Scope
|
|
Limit
|
|
Industry Loss Trigger
|
United States first event
|
|
$75.0 million
|
|
$40.0 billion
|
United States first event
|
|
$22.5 million
|
|
$50.0 billion
|
United States second event
|
|
$45.0 million
|
|
$15.0 billion
|
Japan first event
|
|
$25.0 million
|
|
$12.5 billion
|
•
|
Historical paid loss development methods:
These methods use historical loss payments over discrete periods of time to estimate future losses. Historical paid loss development methods assume that the ratio of losses paid in one period to losses paid in an earlier period will remain constant. These methods necessarily assume that factors that have affected paid losses in the past, such as inflation or the effects of litigation, will remain constant in the future. Because historical paid loss development methods do not use case reserves to estimate ultimate losses, they can be more reliable than the other methods discussed below that look to case reserves (such as actuarial methods that use incurred losses) in situations where there are significant changes in how case reserves are established by a company’s claims adjusters. However, historical paid loss development methods are more leveraged, meaning that small changes in payments have a larger impact on estimates of ultimate losses, than actuarial methods that use incurred losses because cumulative loss payments take much longer to equal the expected ultimate losses than cumulative incurred amounts. In addition, and for similar reasons, historical paid loss development methods are often slow to react to situations when new or different factors arise than those that have affected paid losses in the past.
|
•
|
Historical incurred loss development methods:
These methods, like historical paid loss development methods, assume that the ratio of losses in one period to losses in an earlier period will remain constant in the future. However, instead of using paid losses, these methods use incurred losses (i.e., the sum of cumulative historical loss payments plus outstanding case reserves) over discrete periods of time to estimate future losses. Historical incurred loss development methods can be preferable to historical paid loss development methods because they explicitly take into account open cases and the claims adjusters’ evaluations of the cost to settle all known claims. However, historical incurred loss development methods necessarily assume that case reserving practices are consistently applied over time. Therefore, when there have been significant changes in how case reserves are established, using incurred loss data to project ultimate losses can be less reliable than other methods.
|
•
|
Expected loss ratio methods:
These methods are based on the assumption that ultimate losses vary proportionately with premiums. Expected loss ratios are typically developed based upon the information used in pricing, and are multiplied by the total amount of premiums earned to calculate ultimate losses. Expected loss ratio methods are useful for estimating ultimate losses in the early years of long-tailed lines of business, when little or no paid or incurred loss information is available.
|
•
|
Adjusted historical paid and incurred loss development methods:
These methods take traditional historical paid and incurred loss development methods and adjust them for the estimated impact of changes from the past in factors such as inflation, the speed of claim payments or the adequacy of case reserves. Adjusted historical paid and incurred loss development methods are often more reliable methods of predicting ultimate losses in periods of significant change, provided the actuaries can develop methods to reasonably quantify the impact of changes.
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Gross beginning balance
|
|
$
|
1,350.0
|
|
|
$
|
1,054.3
|
|
|
$
|
1,000.0
|
|
Less beginning reinsurance recoverable on unpaid losses
|
|
(161.7
|
)
|
|
(80.2
|
)
|
|
(107.3
|
)
|
|||
Net loss and LAE reserves
|
|
1,188.3
|
|
|
974.1
|
|
|
892.7
|
|
|||
|
|
|
|
|
|
|
||||||
Loss and LAE reserves consolidated — SSIE
|
|
—
|
|
|
13.6
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Losses and LAE incurred relating to:
|
|
|
|
|
|
|
||||||
Current year losses
|
|
712.9
|
|
|
732.0
|
|
|
622.1
|
|
|||
Prior year losses
|
|
(4.0
|
)
|
|
92.0
|
|
|
—
|
|
|||
Total incurred losses and LAE
|
|
708.9
|
|
|
824.0
|
|
|
622.1
|
|
|||
|
|
|
|
|
|
|
||||||
Loss and LAE paid relating to:
|
|
|
|
|
|
|
|
|
|
|||
Current year losses
|
|
(208.8
|
)
|
|
(202.6
|
)
|
|
(188.6
|
)
|
|||
Prior year losses
|
|
(479.1
|
)
|
|
(420.8
|
)
|
|
(352.1
|
)
|
|||
Total loss and LAE payments
|
|
(687.9
|
)
|
|
(623.4
|
)
|
|
(540.7
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net ending balance
|
|
1,209.3
|
|
|
1,188.3
|
|
|
974.1
|
|
|||
Plus ending reinsurance recoverable on unpaid losses
|
|
186.5
|
|
|
161.7
|
|
|
80.2
|
|
|||
Gross ending balance
|
|
$
|
1,395.8
|
|
|
$
|
1,350.0
|
|
|
$
|
1,054.3
|
|
Underwriting Unit
|
|
2014 Fourth Quarter Reserve Increases
|
|
Full Year 2014
|
||||||||||||
Millions
|
|
Current Accident Year
|
|
Prior Accident Year
|
|
Total
|
|
Net Prior Year Development
|
||||||||
Professional Insurance
|
|
$
|
22.9
|
|
|
$
|
46.4
|
|
|
$
|
69.3
|
|
|
$
|
59.1
|
|
Specialty Property
|
|
(1.1
|
)
|
|
5.7
|
|
|
4.6
|
|
|
1.1
|
|
||||
Crop
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
||||
Other
|
|
2.8
|
|
|
(.4
|
)
|
|
2.4
|
|
|
1.6
|
|
||||
Specialty Products
|
|
28.4
|
|
|
51.7
|
|
|
80.1
|
|
|
61.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Entertainment
|
|
1.5
|
|
|
11.6
|
|
|
13.1
|
|
|
13.5
|
|
||||
Accident
|
|
—
|
|
|
3.5
|
|
|
3.5
|
|
|
6.0
|
|
||||
Government Risks
|
|
1.2
|
|
|
7.1
|
|
|
8.3
|
|
|
8.5
|
|
||||
Other
|
|
2.6
|
|
|
1.6
|
|
|
4.2
|
|
|
—
|
|
||||
Specialty Industries
|
|
5.3
|
|
|
23.8
|
|
|
29.1
|
|
|
28.0
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
33.7
|
|
|
$
|
75.5
|
|
|
$
|
109.2
|
|
|
$
|
89.8
|
|
|
|
Year ended December 31, 2015
|
||||||||||||||
Millions
|
|
OneBeacon
|
|
HG/BAM
(1)
|
|
Other
|
|
Total
|
||||||||
Written premiums:
|
|
|
|
|
|
|
|
|
||||||||
Direct
|
|
$
|
1,279.9
|
|
|
$
|
25.9
|
|
|
$
|
19.9
|
|
|
$
|
1,325.7
|
|
Assumed
|
|
36.0
|
|
|
—
|
|
|
—
|
|
|
36.0
|
|
||||
Gross written premiums
|
|
1,315.9
|
|
|
25.9
|
|
|
19.9
|
|
|
1,361.7
|
|
||||
Ceded
|
|
(179.3
|
)
|
(2)
|
—
|
|
|
(9.8
|
)
|
|
(189.1
|
)
|
||||
Net written premiums
|
|
$
|
1,136.6
|
|
|
$
|
25.9
|
|
|
$
|
10.1
|
|
|
$
|
1,172.6
|
|
Earned premiums:
|
|
|
|
|
|
|
|
|
||||||||
Direct
|
|
$
|
1,298.0
|
|
|
$
|
3.3
|
|
|
$
|
20.7
|
|
|
$
|
1,322.0
|
|
Assumed
|
|
45.9
|
|
|
—
|
|
|
—
|
|
|
45.9
|
|
||||
Gross earned premiums
|
|
1,343.9
|
|
|
3.3
|
|
|
20.7
|
|
|
1,367.9
|
|
||||
Ceded
|
|
(167.7
|
)
|
(2)
|
—
|
|
|
(12.0
|
)
|
|
(179.7
|
)
|
||||
Net earned premiums
|
|
$
|
1,176.2
|
|
|
3.3
|
|
|
$
|
8.7
|
|
|
$
|
1,188.2
|
|
|
Losses and LAE:
|
|
|
|
|
|
|
|
|
||||||||
Direct
|
|
$
|
783.0
|
|
|
$
|
—
|
|
|
$
|
19.5
|
|
|
$
|
802.5
|
|
Assumed
|
|
55.7
|
|
|
—
|
|
|
—
|
|
|
55.7
|
|
||||
Gross losses and LAE
|
|
838.7
|
|
|
—
|
|
|
19.5
|
|
|
858.2
|
|
||||
Ceded
|
|
(138.0
|
)
|
(2)
|
—
|
|
|
(11.3
|
)
|
|
(149.3
|
)
|
||||
Net losses and LAE
|
|
$
|
700.7
|
|
|
$
|
—
|
|
|
$
|
8.2
|
|
|
$
|
708.9
|
|
|
|
Year ended December 31, 2014
|
||||||||||||||
Millions
|
|
OneBeacon
|
|
HG/BAM
(1)
|
|
Other
(2)
|
|
Total
|
||||||||
Written premiums:
|
|
|
|
|
|
|
|
|
||||||||
Direct
|
|
$
|
1,257.5
|
|
|
$
|
16.2
|
|
|
$
|
22.6
|
|
|
$
|
1,296.3
|
|
Assumed
|
|
65.9
|
|
|
—
|
|
|
—
|
|
|
65.9
|
|
||||
Gross written premiums
|
|
1,323.4
|
|
|
16.2
|
|
|
22.6
|
|
|
1,362.2
|
|
||||
Ceded
|
|
(106.5
|
)
|
|
—
|
|
|
(16.7
|
)
|
|
(123.2
|
)
|
||||
Net written premiums
|
|
$
|
1,216.9
|
|
|
$
|
16.2
|
|
|
$
|
5.9
|
|
|
$
|
1,239.0
|
|
Earned premiums:
|
|
|
|
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
1,209.1
|
|
|
$
|
1.8
|
|
|
$
|
22.6
|
|
|
$
|
1,233.5
|
|
Assumed
|
|
70.9
|
|
|
—
|
|
|
—
|
|
|
70.9
|
|
||||
Gross earned premiums
|
|
1,280.0
|
|
|
1.8
|
|
|
22.6
|
|
|
1,304.4
|
|
||||
Ceded
|
|
(102.9
|
)
|
|
—
|
|
|
(16.5
|
)
|
|
(119.4
|
)
|
||||
Net earned premiums
|
|
$
|
1,177.1
|
|
|
1.8
|
|
|
$
|
6.1
|
|
|
$
|
1,185.0
|
|
|
Losses and LAE:
|
|
|
|
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
778.7
|
|
|
$
|
—
|
|
|
$
|
24.1
|
|
|
$
|
802.8
|
|
Assumed
|
|
115.7
|
|
|
—
|
|
|
—
|
|
|
115.7
|
|
||||
Gross losses and LAE
|
|
894.4
|
|
|
—
|
|
|
24.1
|
|
|
918.5
|
|
||||
Ceded
|
|
(79.3
|
)
|
|
—
|
|
|
(15.2
|
)
|
|
(94.5
|
)
|
||||
Net losses and LAE
|
|
$
|
815.1
|
|
|
$
|
—
|
|
|
$
|
8.9
|
|
|
$
|
824.0
|
|
|
|
Year ended December 31, 2013
|
||||||||||
Millions
|
|
OneBeacon
|
|
HG/BAM
(1)
|
|
Total
|
||||||
Written premiums:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
1,103.1
|
|
|
$
|
13.6
|
|
|
$
|
1,116.7
|
|
Assumed
|
|
59.8
|
|
|
—
|
|
|
59.8
|
|
|||
Gross written premiums
|
|
1,162.9
|
|
|
13.6
|
|
|
1,176.5
|
|
|||
Ceded
|
|
(74.3
|
)
|
|
—
|
|
|
(74.3
|
)
|
|||
Net written premiums
|
|
$
|
1,088.6
|
|
|
$
|
13.6
|
|
|
$
|
1,102.2
|
|
Earned premiums:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
1,043.3
|
|
|
$
|
.5
|
|
|
$
|
1,043.8
|
|
Assumed
|
|
148.5
|
|
|
—
|
|
|
148.5
|
|
|||
Gross earned premiums
|
|
1,191.8
|
|
|
.5
|
|
|
1,192.3
|
|
|||
Ceded
|
|
(71.4
|
)
|
|
—
|
|
|
(71.4
|
)
|
|||
Net earned premiums
|
|
$
|
1,120.4
|
|
|
$
|
.5
|
|
|
$
|
1,120.9
|
|
Losses and LAE:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
584.9
|
|
|
$
|
—
|
|
|
$
|
584.9
|
|
Assumed
|
|
76.3
|
|
|
—
|
|
|
76.3
|
|
|||
Gross losses and LAE
|
|
661.2
|
|
|
—
|
|
|
661.2
|
|
|||
Ceded
|
|
(39.1
|
)
|
|
—
|
|
|
(39.1
|
)
|
|||
Net losses and LAE
|
|
$
|
622.1
|
|
|
$
|
—
|
|
|
$
|
622.1
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Investment income:
|
|
|
|
|
|
|
||||||
Fixed maturity investments
|
|
$
|
52.6
|
|
|
$
|
51.3
|
|
|
$
|
48.1
|
|
Short-term investments
|
|
.2
|
|
|
.1
|
|
|
.8
|
|
|||
Common equity securities
|
|
10.1
|
|
|
16.6
|
|
|
16.5
|
|
|||
Other long-term investments
|
|
3.3
|
|
|
4.4
|
|
|
6.8
|
|
|||
Total investment income
|
|
66.2
|
|
|
72.4
|
|
|
72.2
|
|
|||
Third-party investment expenses
|
|
(5.4
|
)
|
|
(12.9
|
)
|
|
(12.4
|
)
|
|||
Net investment income, pre-tax
|
|
$
|
60.8
|
|
|
$
|
59.5
|
|
|
$
|
59.8
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net realized investment gains, pre-tax
|
|
$
|
77.3
|
|
|
$
|
166.8
|
|
|
$
|
95.5
|
|
Net unrealized investment gains (losses), pre-tax
|
|
148.1
|
|
|
(88.3
|
)
|
|
38.4
|
|
|||
Net realized and unrealized investment gains, pre-tax
|
|
225.4
|
|
|
78.5
|
|
|
133.9
|
|
|||
Income tax expense attributable to net realized and unrealized investment gains
|
|
(35.2
|
)
|
|
(18.0
|
)
|
|
(12.8
|
)
|
|||
Net realized and unrealized investment gains, after tax
|
|
$
|
190.2
|
|
|
$
|
60.5
|
|
|
$
|
121.1
|
|
|
|
Year ended December 31, 2015
|
||||||||||
Millions
|
|
Net realized gains (losses)
|
|
Net foreign
exchange gains |
|
Total changes in
fair value reflected in earnings |
||||||
Fixed maturity investments
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
Common equity securities
|
|
64.4
|
|
|
.4
|
|
|
64.8
|
|
|||
Other long-term investments
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
|||
Net realized investment gains, pre-tax
|
|
76.9
|
|
|
.4
|
|
|
77.3
|
|
|||
Income tax expense attributable to realized investment gains
|
|
(22.8
|
)
|
|
—
|
|
|
(22.8
|
)
|
|||
Net realized investment gains, after-tax
|
|
$
|
54.1
|
|
|
$
|
.4
|
|
|
$
|
54.5
|
|
|
|
Year ended December 31, 2014
|
||||||||||
Millions
|
|
Net realized gains (losses)
|
|
Net foreign
exchange gains |
|
Total changes in
fair value reflected in earnings |
||||||
Fixed maturity investments
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
Common equity securities
|
|
138.0
|
|
|
—
|
|
|
138.0
|
|
|||
Other long-term investments
|
|
23.0
|
|
|
—
|
|
|
23.0
|
|
|||
Net realized investment gains, pre-tax
|
|
166.8
|
|
|
—
|
|
|
166.8
|
|
|||
Income tax expense attributable to realized investment gains
|
|
(28.4
|
)
|
|
—
|
|
|
(28.4
|
)
|
|||
Net realized investment gains, after-tax
|
|
$
|
138.4
|
|
|
$
|
—
|
|
|
$
|
138.4
|
|
|
|
Year ended December 31, 2013
|
||||||||||
Millions
|
|
Net realized gains (losses)
|
|
Net foreign
exchange gains |
|
Total changes in
fair value reflected in earnings |
||||||
Fixed maturity investments
|
|
$
|
(.2
|
)
|
|
$
|
(.2
|
)
|
|
$
|
(.4
|
)
|
Short-term investments
|
|
.1
|
|
|
—
|
|
|
.1
|
|
|||
Common equity securities
|
|
89.4
|
|
|
—
|
|
|
89.4
|
|
|||
Other long-term investments
|
|
6.4
|
|
|
—
|
|
|
6.4
|
|
|||
Net realized investment gains (losses), pre-tax
|
|
95.7
|
|
|
(.2
|
)
|
|
95.5
|
|
|||
Income tax (expense) benefit attributable to realized investment gains (losses)
|
|
(16.2
|
)
|
|
.1
|
|
|
(16.1
|
)
|
|||
Net realized investment gains (losses), after-tax
|
|
$
|
79.5
|
|
|
$
|
(.1
|
)
|
|
$
|
79.4
|
|
|
|
Year ended December 31, 2015
|
||||||||||
Millions
|
|
Net
unrealized
gains
(losses)
|
|
Net
foreign
exchange
gains
(losses)
|
|
Total net unrealized
gains (losses)
reflected in
earnings
|
||||||
Fixed maturity investments
|
|
$
|
(15.6
|
)
|
|
$
|
—
|
|
|
$
|
(15.6
|
)
|
Common equity securities
|
|
207.6
|
|
|
(3.7
|
)
|
|
203.9
|
|
|||
Other long-term investments
|
|
(39.1
|
)
|
|
(1.1
|
)
|
|
(40.2
|
)
|
|||
Net unrealized investment gains (losses), pre-tax
|
|
152.9
|
|
|
(4.8
|
)
|
|
148.1
|
|
|||
Income tax expense attributable to unrealized investment gains (losses)
|
|
(12.3
|
)
|
|
(.1
|
)
|
|
(12.4
|
)
|
|||
Net unrealized investment gains (losses), after-tax
|
|
$
|
140.6
|
|
|
$
|
(4.9
|
)
|
|
$
|
135.7
|
|
|
|
Year ended December 31, 2014
|
||||||||||
Millions
|
|
Net
unrealized gains (losses) |
|
Net
foreign exchange gains (losses) |
|
Total net unrealized
gains (losses) reflected in earnings |
||||||
Fixed maturity investments
|
|
$
|
11.3
|
|
|
$
|
—
|
|
|
$
|
11.3
|
|
Common equity securities
|
|
(83.0
|
)
|
|
(7.7
|
)
|
|
(90.7
|
)
|
|||
Other long-term investments
|
|
(7.6
|
)
|
|
(1.3
|
)
|
|
(8.9
|
)
|
|||
Net unrealized investment losses, pre-tax
|
|
(79.3
|
)
|
|
(9.0
|
)
|
|
(88.3
|
)
|
|||
Income tax benefit attributable to unrealized investment losses
|
|
9.9
|
|
|
.5
|
|
|
10.4
|
|
|||
Net unrealized investment losses, after-tax
|
|
$
|
(69.4
|
)
|
|
$
|
(8.5
|
)
|
|
$
|
(77.9
|
)
|
|
|
Year ended December 31, 2013
|
||||||||||
Millions
|
|
Net
unrealized
gains
(losses)
|
|
Net
foreign
exchange
gains
(losses)
|
|
Total net unrealized
gains (losses)
reflected in
earnings
|
||||||
Fixed maturity investments
|
|
$
|
(49.9
|
)
|
|
$
|
—
|
|
|
$
|
(49.9
|
)
|
Common equity securities
|
|
86.1
|
|
|
(1.9
|
)
|
|
84.2
|
|
|||
Other long-term investments
|
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|||
Net unrealized investment gains (losses), pre-tax
|
|
40.3
|
|
|
(1.9
|
)
|
|
38.4
|
|
|||
Income tax benefit attributable to unrealized investment gains (losses)
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||
Net unrealized investment gains (losses), after-tax
|
|
$
|
43.6
|
|
|
$
|
(1.9
|
)
|
|
$
|
41.7
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed maturity investments
|
|
$
|
(1.1
|
)
|
|
$
|
1.9
|
|
|
$
|
(1.6
|
)
|
Common equity securities
|
|
(9.0
|
)
|
|
5.8
|
|
|
.9
|
|
|||
Other long-term investments
|
|
(40.1
|
)
|
|
—
|
|
|
2.1
|
|
|||
Total net unrealized investment (losses) gains, pre-tax - Level 3 investments
|
|
$
|
(50.2
|
)
|
|
$
|
7.7
|
|
|
$
|
1.4
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net change in pre-tax unrealized gains (losses) on investments in
unconsolidated affiliates
|
|
$
|
(39.2
|
)
|
|
$
|
81.2
|
|
|
$
|
(106.4
|
)
|
Income tax benefit (expense)
|
|
2.9
|
|
|
(5.9
|
)
|
|
8.3
|
|
|||
Net change in unrealized (losses) gains on investments in
unconsolidated affiliates, after tax
|
|
(36.3
|
)
|
|
75.3
|
|
|
(98.1
|
)
|
|||
Reversal of accumulated other comprehensive income related to change in
accounting for the investment in Symetra
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|||
Total investment (losses) gains through accumulated other
comprehensive income
|
|
(34.9
|
)
|
|
75.3
|
|
|
(98.1
|
)
|
|||
Net realized and unrealized investment gains, after-tax
|
|
190.2
|
|
|
60.5
|
|
|
121.1
|
|
|||
Total investment gains recorded during the period, after-tax
|
|
$
|
155.3
|
|
|
$
|
135.8
|
|
|
$
|
23.0
|
|
|
|
December 31, 2015
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
gains (losses)
|
|
Carrying
value
|
||||||||||
US Government and agency obligations
|
|
$
|
160.4
|
|
|
$
|
—
|
|
|
$
|
(.4
|
)
|
|
$
|
—
|
|
|
$
|
160.0
|
|
Debt securities issued by corporations
|
|
1,001.0
|
|
|
4.3
|
|
|
(5.3
|
)
|
|
—
|
|
|
1,000.0
|
|
|||||
Municipal obligations
|
|
227.8
|
|
|
2.2
|
|
|
(1.2
|
)
|
|
—
|
|
|
228.8
|
|
|||||
Mortgage-backed and asset-backed securities
|
|
1,170.6
|
|
|
2.0
|
|
|
(5.6
|
)
|
|
—
|
|
|
1,167.0
|
|
|||||
Foreign government, agency and provincial
obligations
|
|
1.0
|
|
|
.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|||||
Preferred stocks
|
|
78.3
|
|
|
4.4
|
|
|
—
|
|
|
—
|
|
|
82.7
|
|
|||||
Total fixed maturity investments
|
|
$
|
2,639.1
|
|
|
$
|
13.1
|
|
|
$
|
(12.5
|
)
|
|
$
|
—
|
|
|
$
|
2,639.7
|
|
|
|
December 31, 2014
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
losses
|
|
Carrying
value
|
||||||||||
US Government and agency obligations
|
|
$
|
105.4
|
|
|
$
|
.1
|
|
|
$
|
(.3
|
)
|
|
$
|
—
|
|
|
$
|
105.2
|
|
Debt securities issued by corporations
|
|
1,162.0
|
|
|
13.1
|
|
|
(3.4
|
)
|
|
—
|
|
|
1,171.7
|
|
|||||
Municipal obligations
|
|
81.0
|
|
|
1.4
|
|
|
(.2
|
)
|
|
—
|
|
|
82.2
|
|
|||||
Mortgage-backed and asset-backed securities
|
|
967.5
|
|
|
2.8
|
|
|
(2.4
|
)
|
|
—
|
|
|
967.9
|
|
|||||
Foreign government, agency and provincial
obligations
|
|
11.5
|
|
|
.3
|
|
|
(1.0
|
)
|
|
—
|
|
|
10.8
|
|
|||||
Preferred stocks
|
|
78.3
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
84.2
|
|
|||||
Total fixed maturity investments
|
|
$
|
2,405.7
|
|
|
$
|
23.6
|
|
|
$
|
(7.3
|
)
|
|
$
|
—
|
|
|
$
|
2,422.0
|
|
|
|
December 31, 2015
|
||||||
Millions
|
|
Cost or
amortized cost
|
|
Carrying
value
|
||||
Due in one year or less
|
|
$
|
241.6
|
|
|
$
|
242.0
|
|
Due after one year through five years
|
|
982.3
|
|
|
981.5
|
|
||
Due after five years through ten years
|
|
96.4
|
|
|
96.1
|
|
||
Due after ten years
|
|
69.9
|
|
|
70.4
|
|
||
Mortgage-backed and asset-backed securities
|
|
1,170.6
|
|
|
1,167.0
|
|
||
Preferred stocks
|
|
78.3
|
|
|
82.7
|
|
||
Total
|
|
$
|
2,639.1
|
|
|
$
|
2,639.7
|
|
|
|
December 31, 2015
|
||||||||||||||||||
Millions
|
|
Cost or
amortized cost
|
|
Gross unrealized
gains
|
|
Gross unrealized
losses
|
|
Net foreign
currency losses
|
|
Carrying
value
|
||||||||||
Common equity securities
|
|
$
|
822.5
|
|
|
$
|
302.8
|
|
|
$
|
(11.4
|
)
|
|
$
|
—
|
|
|
$
|
1,113.9
|
|
Other long-term investments
|
|
$
|
304.5
|
|
|
$
|
32.0
|
|
|
$
|
(18.4
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
315.8
|
|
|
|
December 31, 2014
|
||||||||||||||||||
Millions
|
|
Cost or
amortized cost
|
|
Gross unrealized
gains
|
|
Gross unrealized
losses
|
|
Net foreign
currency losses
|
|
Carrying
value
|
||||||||||
Common equity securities
|
|
$
|
495.3
|
|
|
$
|
127.4
|
|
|
$
|
(3.6
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
611.7
|
|
Other long-term investments
|
|
$
|
286.7
|
|
|
$
|
53.3
|
|
|
$
|
(6.8
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
331.9
|
|
|
|
December 31, 2015
|
||||||||||||||
Millions
|
|
Fair value
|
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency obligations
|
|
$
|
160.0
|
|
|
$
|
133.4
|
|
|
$
|
26.6
|
|
|
$
|
—
|
|
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer
|
|
253.3
|
|
|
—
|
|
|
253.3
|
|
|
—
|
|
||||
Financials
|
|
175.9
|
|
|
—
|
|
|
175.9
|
|
|
—
|
|
||||
Health Care
|
|
151.3
|
|
|
—
|
|
|
151.3
|
|
|
—
|
|
||||
Industrial
|
|
135.6
|
|
|
—
|
|
|
135.6
|
|
|
—
|
|
||||
Energy
|
|
82.0
|
|
|
—
|
|
|
82.0
|
|
|
—
|
|
||||
Utilities
|
|
61.5
|
|
|
—
|
|
|
61.5
|
|
|
—
|
|
||||
Technology
|
|
60.0
|
|
|
—
|
|
|
60.0
|
|
|
—
|
|
||||
Communications
|
|
49.2
|
|
|
—
|
|
|
49.2
|
|
|
—
|
|
||||
Materials
|
|
31.2
|
|
|
—
|
|
|
31.2
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total debt securities issued by corporations:
|
|
1,000.0
|
|
|
—
|
|
|
1,000.0
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage-backed and asset-backed securities
|
|
1,167.0
|
|
|
—
|
|
|
1,167.0
|
|
|
—
|
|
||||
Municipal obligations
|
|
228.8
|
|
|
—
|
|
|
228.8
|
|
|
—
|
|
||||
Foreign government, agency and provincial obligations
|
|
1.2
|
|
|
.6
|
|
|
.6
|
|
|
—
|
|
||||
Preferred stocks
|
|
82.7
|
|
|
—
|
|
|
12.7
|
|
|
70.0
|
|
||||
Total fixed maturity investments
|
|
2,639.7
|
|
|
134.0
|
|
|
2,435.7
|
|
|
70.0
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
|
211.3
|
|
|
211.3
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
|
|
141.8
|
|
|
120.5
|
|
|
21.3
|
|
|
—
|
|
||||
Financials
|
|
694.7
|
|
|
694.7
|
|
|
—
|
|
|
—
|
|
||||
Consumer
|
|
70.0
|
|
|
70.0
|
|
|
—
|
|
|
—
|
|
||||
Communications
|
|
43.7
|
|
|
43.7
|
|
|
—
|
|
|
—
|
|
||||
Health Care
|
|
35.7
|
|
|
35.7
|
|
|
—
|
|
|
—
|
|
||||
Technology
|
|
27.0
|
|
|
27.0
|
|
|
—
|
|
|
—
|
|
||||
Industrial
|
|
26.6
|
|
|
26.6
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
74.4
|
|
|
—
|
|
|
74.4
|
|
|
—
|
|
||||
Total common equity securities
|
|
1,113.9
|
|
|
1,018.2
|
|
|
95.7
|
|
|
—
|
|
||||
Other long-term investments
(1)
|
|
297.3
|
|
|
—
|
|
|
—
|
|
|
297.3
|
|
||||
Total investments
(1)
|
|
$
|
4,262.2
|
|
|
$
|
1,363.5
|
|
|
$
|
2,531.4
|
|
|
$
|
367.3
|
|
(1)
|
Excludes carrying value of
$3.8
associated with other long-term investment limited partnerships accounted for using the equity method. Excludes carrying value of
$14.7
associated with a tax advantaged federal affordable housing development fund accounted for using the proportional amortization method.
|
|
|
December 31, 2014
|
||||||||||||||
Millions
|
|
Fair value
|
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government and agency obligations
|
|
$
|
105.2
|
|
|
$
|
51.2
|
|
|
$
|
54.0
|
|
|
$
|
—
|
|
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer
|
|
259.2
|
|
|
—
|
|
|
259.2
|
|
|
—
|
|
||||
Financials
|
|
254.7
|
|
|
—
|
|
|
254.7
|
|
|
—
|
|
||||
Health Care
|
|
181.8
|
|
|
—
|
|
|
181.8
|
|
|
—
|
|
||||
Industrial
|
|
107.3
|
|
|
—
|
|
|
102.0
|
|
|
5.3
|
|
||||
Communications
|
|
71.5
|
|
|
—
|
|
|
71.5
|
|
|
—
|
|
||||
Energy
|
|
65.6
|
|
|
—
|
|
|
65.6
|
|
|
—
|
|
||||
Utilities
|
|
84.1
|
|
|
—
|
|
|
84.1
|
|
|
—
|
|
||||
Technology
|
|
88.3
|
|
|
—
|
|
|
88.3
|
|
|
—
|
|
||||
Materials
|
|
51.7
|
|
|
—
|
|
|
51.7
|
|
|
—
|
|
||||
Other
|
|
7.5
|
|
|
—
|
|
|
7.5
|
|
|
—
|
|
||||
Total debt securities issued by corporations:
|
|
1,171.7
|
|
|
—
|
|
|
1,166.4
|
|
|
5.3
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage-backed and asset-backed securities
|
|
967.9
|
|
|
—
|
|
|
967.9
|
|
|
—
|
|
||||
Municipal obligations
|
|
82.2
|
|
|
—
|
|
|
82.2
|
|
|
—
|
|
||||
Foreign government, agency and provincial obligations
|
|
10.8
|
|
|
.6
|
|
|
10.2
|
|
|
—
|
|
||||
Preferred stocks
|
|
84.2
|
|
|
—
|
|
|
13.1
|
|
|
71.1
|
|
||||
Total fixed maturity investments
|
|
2,422.0
|
|
|
51.8
|
|
|
2,293.8
|
|
|
76.4
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
|
376.8
|
|
|
376.3
|
|
|
.5
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financials
|
|
180.7
|
|
|
141.2
|
|
|
—
|
|
|
39.5
|
|
||||
Consumer
|
|
116.0
|
|
|
115.9
|
|
|
.1
|
|
|
—
|
|
||||
Health Care
|
|
74.4
|
|
|
74.4
|
|
|
—
|
|
|
—
|
|
||||
Industrial
|
|
57.1
|
|
|
57.1
|
|
|
—
|
|
|
—
|
|
||||
Technology
|
|
44.8
|
|
|
44.8
|
|
|
—
|
|
|
—
|
|
||||
Communications
|
|
28.5
|
|
|
28.5
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
|
18.1
|
|
|
18.1
|
|
|
—
|
|
|
—
|
|
||||
Materials
|
|
12.0
|
|
|
12.0
|
|
|
—
|
|
|
—
|
|
||||
Utilities
|
|
4.9
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
75.2
|
|
|
1.9
|
|
|
73.3
|
|
|
—
|
|
||||
Total common equity securities
|
|
611.7
|
|
|
498.8
|
|
|
73.4
|
|
|
39.5
|
|
||||
Other long-term investments
(1)
|
|
309.9
|
|
|
—
|
|
|
5.7
|
|
|
304.2
|
|
||||
Total investments
(1)
|
|
$
|
3,720.4
|
|
|
$
|
926.9
|
|
|
$
|
2,373.4
|
|
|
$
|
420.1
|
|
(1)
|
Excludes the carrying value of
$5.2
associated with other long-term investment limited partnerships accounted for using the equity method and the carrying value of
$16.8
associated with a tax advantaged federal affordable housing development fund accounted for using the proportional amortization method.
|
|
|
Fair Value at
|
||||||
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
AA
|
|
$
|
95.2
|
|
|
$
|
144.9
|
|
A
|
|
397.7
|
|
|
594.9
|
|
||
BBB
|
|
507.1
|
|
|
426.5
|
|
||
Other
|
|
—
|
|
|
5.4
|
|
||
Debt securities issued by corporations
(1)
|
|
$
|
1,000.0
|
|
|
$
|
1,171.7
|
|
(1)
|
Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor’s and 2) Moody’s.
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Millions
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
GNMA
|
|
$
|
265.5
|
|
|
$
|
265.5
|
|
|
$
|
—
|
|
|
$
|
308.7
|
|
|
$
|
308.7
|
|
|
$
|
—
|
|
FNMA
|
|
42.2
|
|
|
42.2
|
|
|
—
|
|
|
33.4
|
|
|
33.4
|
|
|
—
|
|
||||||
FHLMC
|
|
22.8
|
|
|
22.8
|
|
|
—
|
|
|
28.9
|
|
|
28.9
|
|
|
—
|
|
||||||
Total Agency
(1)
|
|
330.5
|
|
|
330.5
|
|
|
—
|
|
|
371.0
|
|
|
371.0
|
|
|
—
|
|
||||||
Non-agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential
|
|
133.2
|
|
|
133.2
|
|
|
—
|
|
|
71.0
|
|
|
71.0
|
|
|
—
|
|
||||||
Commercial
|
|
140.4
|
|
|
140.4
|
|
|
—
|
|
|
109.3
|
|
|
109.3
|
|
|
—
|
|
||||||
Total Non-agency
|
|
273.6
|
|
|
273.6
|
|
|
—
|
|
|
180.3
|
|
|
180.3
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total mortgage-backed securities
|
|
604.1
|
|
|
604.1
|
|
|
—
|
|
|
551.3
|
|
|
551.3
|
|
|
—
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit card receivables
|
|
217.7
|
|
|
217.7
|
|
|
—
|
|
|
218.1
|
|
|
218.1
|
|
|
—
|
|
||||||
Vehicle receivables
|
|
269.7
|
|
|
269.7
|
|
|
—
|
|
|
152.8
|
|
|
152.8
|
|
|
—
|
|
||||||
Other
|
|
75.5
|
|
|
75.5
|
|
|
—
|
|
|
45.7
|
|
|
45.7
|
|
|
—
|
|
||||||
Total asset-backed securities
|
|
562.9
|
|
|
562.9
|
|
|
—
|
|
|
416.6
|
|
|
416.6
|
|
|
—
|
|
||||||
Total mortgage and asset-backed securities
|
|
$
|
1,167.0
|
|
|
$
|
1,167.0
|
|
|
$
|
—
|
|
|
$
|
967.9
|
|
|
$
|
967.9
|
|
|
$
|
—
|
|
(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).
|
|
|
|
|
|
|
Security Issuance Year
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
Millions
|
|
Fair Value
|
|
2004
|
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||||||||||||||||
Non-agency RMBS
|
|
$
|
133.2
|
|
|
$
|
17.3
|
|
|
$
|
8.6
|
|
|
$
|
3.9
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
|
$
|
15.2
|
|
|
$
|
13.5
|
|
|
$
|
9.8
|
|
|
$
|
14.0
|
|
|
$
|
47.3
|
|
|
$
|
—
|
|
Non-agency CMBS
|
|
140.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
|
—
|
|
|
18.0
|
|
|
17.2
|
|
|
55.0
|
|
|
$
|
44.8
|
|
||||||||||||
Total
|
|
$
|
273.6
|
|
|
$
|
17.3
|
|
|
$
|
8.6
|
|
|
$
|
3.9
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
|
$
|
20.6
|
|
|
$
|
13.5
|
|
|
$
|
27.8
|
|
|
$
|
31.2
|
|
|
$
|
102.3
|
|
|
$
|
44.8
|
|
Millions
|
|
Fair Value
|
|
Super Senior
(1)
|
|
Senior
(2)
|
|
Subordinate
(3)
|
||||||||
Prime
|
|
$
|
133.1
|
|
|
$
|
65.6
|
|
|
$
|
67.5
|
|
|
$
|
—
|
|
Non-prime
|
|
.1
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
||||
Sub-prime
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
133.2
|
|
|
$
|
65.6
|
|
|
$
|
67.6
|
|
|
$
|
—
|
|
(1)
|
At issuance, Super Senior, or in the case of resecuritization, the underlying securities, were rated “AAA” by Standard & Poor’s, “Aaa” by Moody’s or “AAA” by Fitch and were senior to other “AAA” or “Aaa” bonds.
|
(2)
|
At issuance, Senior, or in the case of resecuritization, the underlying securities, were rated “AAA” by Standard & Poor’s, “Aaa” by Moody’s or “AAA” by Fitch and were senior to non-“AAA” or non-“Aaa” bonds.
|
(3)
|
At issuance, Subordinate were not rated “AAA” by Standard & Poor’s, “Aaa” by Moody’s or “AAA” by Fitch and were junior to “AAA” or “Aaa” bonds.
|
Millions
|
|
Fair Value
|
|
Super Senior
(1)
|
|
Senior
(2)
|
|
Subordinate
(3)
|
||||||||
Fixed rate CMBS
|
|
$
|
101.1
|
|
|
$
|
8.7
|
|
|
$
|
48.6
|
|
|
$
|
43.8
|
|
Floating rate CMBS
|
|
39.3
|
|
|
—
|
|
|
—
|
|
|
39.3
|
|
||||
Total
|
|
$
|
140.4
|
|
|
$
|
8.7
|
|
|
$
|
48.6
|
|
|
$
|
83.1
|
|
(1)
|
At issuance, Super Senior, or in the case of resecuritization, the underlying securities, were rated “AAA” by Standard & Poor’s, “Aaa” by Moody’s or “AAA” by Fitch and were senior to other “AAA” or “Aaa” bonds.
|
(2)
|
At issuance, Senior, or in the case of resecuritization, the underlying securities, were rated “AAA” by Standard & Poor’s, “Aaa” by Moody’s or “AAA” by Fitch and were senior to non-“AAA” or non-“Aaa” bonds.
|
(3)
|
At issuance, Subordinate were not rated “AAA” by Standard & Poor’s, “Aaa” by Moody’s or “AAA” by Fitch and were junior to “AAA” or “Aaa” bonds.
|
|
|
Carrying Value at
|
||||||
Millions
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Hedge funds and private equity funds, at fair value
(1)
|
|
$
|
127.8
|
|
|
$
|
178.5
|
|
Private equity securities and limited liability companies, at fair value
(1)
|
|
82.1
|
|
|
45.3
|
|
||
Surplus notes investments, at fair value
(1)
|
|
51.5
|
|
|
65.1
|
|
||
Convertible preferred securities
(1)
|
|
32.7
|
|
|
8.3
|
|
||
Tax advantaged federal affordable housing development fund
(2)
|
|
14.7
|
|
|
16.8
|
|
||
Partnership investments accounted for under the equity method
|
|
3.8
|
|
|
5.2
|
|
||
Convertible fixed maturity investments
(1)
|
|
—
|
|
|
5.6
|
|
||
Other
(1)
|
|
3.2
|
|
|
7.1
|
|
||
Total other-long term investments
|
|
$
|
315.8
|
|
|
$
|
331.9
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
Millions
|
|
Fair Value
|
|
Unfunded
Commitments |
|
Fair Value
|
|
Unfunded
Commitments |
||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long/short equity REIT
|
|
$
|
20.6
|
|
|
$
|
—
|
|
|
$
|
20.4
|
|
|
$
|
—
|
|
Long/short credit & distressed
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|
—
|
|
||||
Long/short banks and financial
|
|
12.8
|
|
|
—
|
|
|
29.9
|
|
|
—
|
|
||||
Other
|
|
3.6
|
|
|
—
|
|
|
15.7
|
|
|
—
|
|
||||
Total hedge funds
|
|
37.0
|
|
|
—
|
|
|
74.4
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy infrastructure & services
|
|
20.7
|
|
|
3.4
|
|
|
33.1
|
|
|
4.8
|
|
||||
Manufacturing/Industrial
|
|
24.9
|
|
|
2.5
|
|
|
23.2
|
|
|
7.3
|
|
||||
Multi-sector
|
|
14.8
|
|
|
2.1
|
|
|
14.5
|
|
|
2.2
|
|
||||
Aerospace/Defense/Government
|
|
19.8
|
|
|
30.3
|
|
|
20.7
|
|
|
5.1
|
|
||||
Healthcare
|
|
3.8
|
|
|
.4
|
|
|
3.1
|
|
|
1.4
|
|
||||
Private equity secondaries
|
|
4.4
|
|
|
2.1
|
|
|
5.7
|
|
|
2.1
|
|
||||
Insurance
|
|
2.0
|
|
|
41.3
|
|
|
2.1
|
|
|
41.3
|
|
||||
Real estate
|
|
.4
|
|
|
.1
|
|
|
1.7
|
|
|
0.1
|
|
||||
Total private equity funds
|
|
90.8
|
|
|
82.2
|
|
|
104.1
|
|
|
64.3
|
|
||||
Total hedge and private equity funds included
in other long-term investments
|
|
$
|
127.8
|
|
|
$
|
82.2
|
|
|
$
|
178.5
|
|
|
$
|
64.3
|
|
Redemption frequency
|
|
Notice Period
|
||||||||||||||||||
Millions
|
|
30-59 days
notice
|
|
60-89 days
notice
|
|
90-119 days
notice
|
|
120+ days
notice
|
|
Total
|
||||||||||
Monthly
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Quarterly
|
|
13.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.8
|
|
|||||
Semi-annual
|
|
—
|
|
|
20.6
|
|
|
—
|
|
|
—
|
|
|
20.6
|
|
|||||
Annual
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|||||
Total
|
|
$
|
13.8
|
|
|
$
|
20.6
|
|
|
$
|
2.6
|
|
|
$
|
—
|
|
|
$
|
37.0
|
|
Millions
|
|
1-3 years
|
|
3 – 5 years
|
|
5 – 10 years
|
|
>10 years
|
|
Total
|
||||||||||
Private Equity Funds — expected lock-up period remaining
|
|
$
|
24.3
|
|
|
$
|
10.9
|
|
|
$
|
55.6
|
|
|
$
|
—
|
|
|
$
|
90.8
|
|
|
|
Type of Surplus Note
|
|
Total as of December 31, 2015
|
|
Total as of December 31, 2014
|
||||||||||
Millions
|
|
Seller Priority
|
|
Pari Passu
|
|
|||||||||||
Par Value
|
|
$
|
57.9
|
|
|
$
|
43.1
|
|
|
$
|
101.0
|
|
|
$
|
101.0
|
|
Fair value adjustments to reflect:
|
|
|
|
|
|
|
|
|
||||||||
Current market rates on public debt and contract-based repayments
(1)
|
|
(.4
|
)
|
|
(14.7
|
)
|
|
(15.1
|
)
|
|
(6.6
|
)
|
||||
Regulatory approval
(2)
|
|
(11.7
|
)
|
|
(12.5
|
)
|
|
(24.2
|
)
|
|
(12.6
|
)
|
||||
Liquidity adjustment
(3)
|
|
(7.8
|
)
|
|
(2.4
|
)
|
|
(10.2
|
)
|
|
(16.7
|
)
|
||||
Total adjustments
|
|
(19.9
|
)
|
|
(29.6
|
)
|
|
(49.5
|
)
|
|
(35.9
|
)
|
||||
Fair value
(4)
|
|
$
|
38.0
|
|
|
$
|
13.5
|
|
|
$
|
51.5
|
|
|
$
|
65.1
|
|
(1)
|
Represents the value of the surplus notes, at current market yields on comparable publicly traded debt, and assuming issuer is allowed to make principal and interest payments when its financial capacity is available, as measured by statutory capital in excess of a
250
% RBC score.
|
(2)
|
Represents anticipated delay in securing regulatory approvals of interest and principal payments to reflect graduated changes in Issuer’s statutory surplus.
T
he monetary impact of the anticipated delay is measured based on credit spreads of public securities with roughly equivalent percentages of discounted payments missed.
|
|
|
|
|
|
|
Level 3 Investments
|
|
|
|
||||||||||||||||
Millions
|
|
Level 1
Investments
|
|
Level 2
Investments
|
|
Fixed
maturity investments
|
|
Common
equity
securities
|
|
Other long-term
investments
|
|
Total
|
|
||||||||||||
Balance at January 1, 2015
|
|
$
|
550.6
|
|
|
$
|
2,372.9
|
|
|
$
|
76.4
|
|
|
$
|
39.5
|
|
|
$
|
304.2
|
|
(1)
|
$
|
3,343.6
|
|
(1)(2)
|
Total realized and unrealized gains (losses)
|
|
263.0
|
|
|
(13.7
|
)
|
|
(1.1
|
)
|
|
7.8
|
|
|
(29.2
|
)
|
|
226.8
|
|
(3)(4)
|
||||||
Amortization/Accretion
|
|
—
|
|
|
(19.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.6
|
)
|
|
||||||
Purchases
|
|
814.5
|
|
|
1,436.0
|
|
|
35.3
|
|
|
—
|
|
|
91.3
|
|
|
2,377.1
|
|
|
||||||
Sales
|
|
(825.7
|
)
|
|
(1,286.0
|
)
|
|
—
|
|
|
(43.7
|
)
|
|
(54.7
|
)
|
|
(2,210.1
|
)
|
|
||||||
Symetra transfer
|
|
394.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
394.5
|
|
|
||||||
Effect of redemption of Prospector hedge funds
|
|
(43.5
|
)
|
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
|
(14.3
|
)
|
|
(61.4
|
)
|
|
||||||
Transfers in
|
|
—
|
|
|
41.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41.8
|
|
|
||||||
Transfers out
|
|
(1.2
|
)
|
|
—
|
|
|
(40.6
|
)
|
|
—
|
|
|
—
|
|
|
(41.8
|
)
|
|
||||||
Balance at December 31, 2015
|
|
$
|
1,152.2
|
|
|
$
|
2,531.4
|
|
|
$
|
70.0
|
|
|
$
|
—
|
|
|
$
|
297.3
|
|
(1)
|
$
|
4,050.9
|
|
(1)(2)
|
(1)
|
Excludes carrying value of
$3.8
and
$5.2
as of
December 31, 2015
and
January 1, 2015
associated with other long-term investments accounted for using the equity method.
|
(2)
|
Excludes carrying value of
$211.3
and
$376.8
as of
December 31, 2015
and
January 1, 2015
classified as short-term investments.
|
(3)
|
Excludes $
0.8
of realized and unrealized losses associated with the Prospector Funds consolidation of investment-related liabilities.
|
(4)
|
Includes unrealized gains of
$258.8
associated with the Symetra transfer from investments in unconsolidated affiliates to common equity securities.
|
|
|
|
|
|
|
Level 3 Investments
|
|
||||||||||||||||||
Millions
|
|
Level 1
Investments
|
|
Level 2
Investments
|
|
Fixed
maturity investments |
|
Common
equity
securities
|
|
Other long-term
investments
|
|
Total
|
|
||||||||||||
Balance at January 1, 2014
|
|
$
|
997.2
|
|
|
$
|
2,575.4
|
|
|
$
|
81.8
|
|
|
$
|
45.4
|
|
|
$
|
189.2
|
|
(1)
|
$
|
3,889.0
|
|
(1)(2)(3)
|
Total realized and unrealized gains
|
|
50.1
|
|
|
8.9
|
|
|
1.8
|
|
|
6.2
|
|
|
16.3
|
|
|
83.3
|
|
|
||||||
Amortization/Accretion
|
|
.1
|
|
|
(18.7
|
)
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
(18.5
|
)
|
|
||||||
Purchases
|
|
886.9
|
|
|
1,805.3
|
|
|
39.6
|
|
|
5.0
|
|
|
131.7
|
|
|
2,868.5
|
|
|
||||||
Sales
|
|
(1,384.2
|
)
|
|
(2,065.9
|
)
|
|
—
|
|
|
(17.1
|
)
|
|
(33.0
|
)
|
|
(3,500.2
|
)
|
|
||||||
Net change in investments related to
purchases and sales of consolidated
affiliates |
|
(2.7
|
)
|
|
24.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.5
|
|
|
||||||
Exchange
|
|
3.4
|
|
|
(9.3
|
)
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Transfers in
|
|
—
|
|
|
53.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53.0
|
|
|
||||||
Transfers out
|
|
(.2
|
)
|
|
—
|
|
|
(52.8
|
)
|
|
—
|
|
|
—
|
|
|
(53.0
|
)
|
|
||||||
Balance at December 31, 2014
|
|
$
|
550.6
|
|
|
$
|
2,372.9
|
|
|
$
|
76.4
|
|
|
$
|
39.5
|
|
|
$
|
304.2
|
|
(1)
|
$
|
3,343.6
|
|
(1)(2)(3)
|
(1)
|
Excludes carrying value of
$5.2
and
$6.8
as of
December 31, 2014
and
January 1, 2014
associated with other long-term investment limited partnerships accounted for using the equity method.
|
(2)
|
Carrying value includes
$236.3
as of
January 1, 2014
that is classified as assets held for sale relating to discontinued operations.
|
(3)
|
Excludes carrying value of
$376.8
and
$310.4
as of
December 31, 2014
and
January 1, 2014
classified as short-term investments.
|
(4)
|
Excludes
$4.0
of realized and unrealized losses associated with the Prospector Funds and Prospector Turtle Fund consolidation of investment-related liabilities.
|
|
||||||||||
Description
|
|
December 31, 2015
|
||||||||
$ in millions, except share price
|
|
Rating
(2)
|
|
Valuation Technique(s)
|
|
Fair
Value (3) |
|
Unobservable Input
|
||
Preferred Stock
(1)
|
|
NR
|
|
Par value
(8)
|
|
$70.0
|
|
Issuer’s intent to call
|
-
|
$70.0
|
Private equity security
(1)
|
|
NR
|
|
Share price of most recent transaction
|
|
$21.0
|
|
Share price
|
-
|
$1.00
|
Private equity security
(1)
|
|
NR
|
|
Share price of most recent transaction
|
|
$33.8
|
|
Share price
|
-
|
$1.03
|
Convertible preferred security
(1)
|
|
NR
|
|
Multiple of EBITDA
|
|
$5.7
|
|
EBITDA multiple
|
-
|
6.00
|
Convertible preferred security
(1)
|
|
NR
|
|
Share price of most recent transaction
|
|
$27.0
|
|
Share price
|
-
|
$3.83
|
Private equity security
(1)
|
|
NR
|
|
Option pricing method
|
|
$9.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Time until expiration
|
-
|
4 years
|
|
|
|
|
|
|
Volatility/Standard deviation
|
-
|
60.0%
|
||
|
|
|
|
|
|
Risk free rate
|
-
|
1.15%
|
||
Surplus notes
(7)
:
|
|
NR
|
|
|
|
|
|
|
||
- Seller priority
|
|
|
|
Discounted cash flow
|
|
$38.0
|
|
Discount rate
(4)
|
-
|
13.0%
|
|
|
|
|
|
|
Timing of interest payments
(6)
|
-
|
5 years
|
||
|
|
|
|
|
|
Timing of principal payments
(6)
|
-
|
10 years
|
||
- Pari passu
|
|
|
|
Discounted cash flow
|
|
$13.5
|
|
Discount rate
(5)
|
-
|
22.4%
|
|
|
|
|
|
|
Timing of interest payments
(6)
|
-
|
5 years
|
||
|
|
|
|
|
|
Timing of principal payments
(6)
|
-
|
15 years
|
Description
|
|
December 31, 2014
|
||||||||
$ in millions, except share price
|
|
Rating
(2)
|
|
Valuation
Technique(s)
|
|
Fair
Value
(7)
|
|
Unobservable Input
|
||
Preferred Stock
(1)
|
|
NR
|
|
Discounted cash flow
|
|
$71.1
|
|
Discount yield
|
-
|
7.1%
|
Private equity security
(1)
|
|
NR
|
|
Multiple of GAAP book value
|
|
$39.5
|
|
Multiple of GAAP book value
|
-
|
1.10
|
Private equity security
(1)
|
|
NR
|
|
Share price of most recent transaction
|
|
$20.1
|
|
Share price
|
-
|
$1.06
|
Convertible preferred security
(1)
|
|
NR
|
|
Multiple of EBITDA
|
|
$3.8
|
|
EBITDA multiple
|
-
|
6.00
|
Convertible preferred security
(1)
|
|
NR
|
|
Share price of most recent transaction
|
|
$4.5
|
|
Share price
|
-
|
$0.71
|
Debt security issued by corporation
(1)
|
|
NR
|
|
Discounted cash flow
|
|
$5.3
|
|
Illiquidity discount
(3)
|
-
|
10.0%
|
Private equity security
(1)
|
|
NR
|
|
Share price of recent transaction
|
|
$10.4
|
|
Share price
|
-
|
$290.96
|
Surplus notes:
|
|
NR
|
|
|
|
|
|
|
||
- Seller priority
|
|
|
|
Discounted cash flow
|
|
$44.0
|
|
Discount rate
(4)
|
-
|
9.3%
|
|
|
|
|
|
|
Timing of interest payments
(6)
|
-
|
5 years
|
||
|
|
|
|
|
|
Timing of principal payments
(6)
|
-
|
10 years
|
||
- Pari passu
|
|
|
|
Discounted cash flow
|
|
$21.1
|
|
Discount rate
(5)
|
-
|
13.5%
|
|
|
|
|
|
|
Timing of interest payments
(6)
|
-
|
5 years
|
||
|
|
|
|
|
|
Timing of principal payments
(6)
|
-
|
15 years
|
(1)
|
As of December 31, 2014 each asset type consists of
one
security.
|
(2)
|
Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor’s and 2) Moody’s.
|
(3)
|
Judgmentally determined based on the Company’s limited trading ability of the issuer.
|
(4)
|
Stochastic modeling supporting the fair value estimation indicates that the average percentage of discounted payments missed on the seller priority note is roughly equivalent to that of a conventional debt security with a credit rating of ‘B’. The corresponding credit spread increased by an additional 250 bps to reflect both a liquidity discount for a private debt instrument and regulatory payment approval uncertainty, was added to the treasury rate to determine the discount rate for the seller priority note.
|
(5)
|
Stochastic modeling supporting the fair value estimation indicates that the average percentage of discounted payments missed on the pari passu note is roughly equivalent to that of a conventional debt security with a credit rating of ‘CCC’. The corresponding credit spread increased by an additional 250 bps to reflect both a liquidity discount for a private debt instrument and regulatory payment approval uncertainty, was added to the treasury rate to determine the discount rate for the seller priority note.
|
(6)
|
For estimated value purposes, the assumption has been made that interest payouts begin in year five and that principal repayments being on a graduated basis in year ten for the seller priority notes and year fifteen for the pari passu note.
|
(7)
|
Includes the unrealized gains and losses associated with foreign currency; foreign currency effects based on observable inputs.
|
$ in millions
|
|
Weighted Average Economic
life
(in years)
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Acquisition date fair value
|
|
Accumulated amortization
|
|
Net carrying value
|
|
Acquisition date fair value
|
|
Accumulated amortization
|
|
Net carrying value
|
|||||||||||||||
Tranzact:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domain and trade names
|
|
7
|
|
$
|
30.5
|
|
|
$
|
5.4
|
|
|
$
|
25.1
|
|
|
$
|
25.6
|
|
|
$
|
.9
|
|
|
$
|
24.7
|
|
Customer relationships
|
|
11
|
|
132.3
|
|
|
13.1
|
|
|
119.2
|
|
|
107.5
|
|
|
2.1
|
|
|
105.4
|
|
||||||
Information technology
|
|
6
|
|
12.7
|
|
|
2.8
|
|
|
9.9
|
|
|
12.7
|
|
|
.5
|
|
|
12.2
|
|
||||||
Other
|
|
8
|
|
2.0
|
|
|
.1
|
|
|
1.9
|
|
|
.5
|
|
|
—
|
|
|
.5
|
|
||||||
Subtotal
|
|
|
|
177.5
|
|
|
21.4
|
|
|
156.1
|
|
|
146.3
|
|
|
3.5
|
|
|
142.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MediaAlpha:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
4
|
|
6.5
|
|
|
2.9
|
|
|
3.6
|
|
|
6.5
|
|
|
1.2
|
|
|
5.3
|
|
||||||
Information technology
|
|
5
|
|
32.0
|
|
|
11.2
|
|
|
20.8
|
|
|
32.0
|
|
|
4.8
|
|
|
27.2
|
|
||||||
Subtotal
|
|
|
|
38.5
|
|
|
14.1
|
|
|
24.4
|
|
|
38.5
|
|
|
6.0
|
|
|
32.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wobi:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademark
|
|
8
|
|
2.1
|
|
|
.5
|
|
|
1.6
|
|
|
2.1
|
|
|
.2
|
|
|
1.9
|
|
||||||
Information technology
|
|
7
|
|
3.6
|
|
|
.7
|
|
|
2.9
|
|
|
.8
|
|
|
.2
|
|
|
.6
|
|
||||||
Subtotal
|
|
|
|
5.7
|
|
|
1.2
|
|
|
4.5
|
|
|
2.9
|
|
|
.4
|
|
|
2.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Star & Shield:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
3
|
|
1.2
|
|
|
.8
|
|
|
.4
|
|
|
1.2
|
|
|
.4
|
|
|
.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OneBeacon (EBI)
|
|
10
|
|
9.4
|
|
|
7.0
|
|
|
2.4
|
|
|
9.4
|
|
|
5.7
|
|
|
3.7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total other intangible assets
|
|
232.3
|
|
|
44.5
|
|
|
187.8
|
|
|
198.3
|
|
|
16.0
|
|
|
182.3
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tranzact
|
|
N/A
|
|
163.8
|
|
|
—
|
|
|
163.8
|
|
|
145.1
|
|
|
—
|
|
|
145.1
|
|
||||||
Quote Lab
|
|
N/A
|
|
18.3
|
|
|
—
|
|
|
18.3
|
|
|
18.3
|
|
|
—
|
|
|
18.3
|
|
||||||
Wobi
|
|
N/A
|
|
5.8
|
|
|
—
|
|
|
5.8
|
|
|
5.5
|
|
|
—
|
|
|
5.5
|
|
||||||
Total goodwill
|
|
187.9
|
|
|
—
|
|
|
187.9
|
|
|
168.9
|
|
|
—
|
|
|
168.9
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total goodwill and other intangible assets
|
|
$
|
420.2
|
|
|
$
|
44.5
|
|
|
$
|
375.7
|
|
|
$
|
367.2
|
|
|
$
|
16.0
|
|
|
$
|
351.2
|
|
|
|
December 31,
|
||||||||||||||
Millions
|
|
2015
|
|
2014
|
||||||||||||
|
|
Goodwill
|
|
Other intangible assets
|
|
Goodwill
|
|
Other intangible assets
|
||||||||
Beginning balance
|
|
$
|
168.9
|
|
|
$
|
182.3
|
|
|
$
|
—
|
|
|
$
|
5.1
|
|
Acquisitions of businesses
|
|
19.0
|
|
|
34.0
|
|
|
168.9
|
|
|
188.9
|
|
||||
Dispositions of businesses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization, including foreign currency translation
|
|
—
|
|
|
(28.5
|
)
|
|
—
|
|
|
(11.7
|
)
|
||||
Ending balance
|
|
$
|
187.9
|
|
|
$
|
187.8
|
|
|
$
|
168.9
|
|
|
$
|
182.3
|
|
Millions
|
|
Amortization expense
|
||
2016
|
|
$
|
30.4
|
|
2017
|
|
29.6
|
|
|
2018
|
|
27.2
|
|
|
2019
|
|
19.4
|
|
|
2020
|
|
16.1
|
|
|
Total
|
|
$
|
122.7
|
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
WTM Bank Facility
|
|
$
|
50.0
|
|
|
$
|
—
|
|
OBH Senior Notes, at face value
|
|
275.0
|
|
|
275.0
|
|
||
Unamortized original issue discount
|
|
(.2
|
)
|
|
(.3
|
)
|
||
OBH Senior Notes, carrying value
|
|
274.8
|
|
|
274.7
|
|
||
OneBeacon Bank Facility
|
|
—
|
|
|
—
|
|
||
Tranzact Bank Facility
|
|
104.7
|
|
|
68.7
|
|
||
Unamortized issuance cost
|
|
(1.8
|
)
|
|
(1.3
|
)
|
||
Tranzact Bank Facility, carrying value
|
|
102.9
|
|
|
67.4
|
|
||
MediaAlpha Bank Facility
|
|
15.0
|
|
|
—
|
|
||
Unamortized issuance cost
|
|
(.3
|
)
|
|
—
|
|
||
MediaAlpha Bank Facility, carrying value
|
|
14.7
|
|
|
—
|
|
||
Other debt
|
|
—
|
|
|
1.0
|
|
||
Total debt
|
|
$
|
442.4
|
|
|
$
|
343.1
|
|
Millions
|
|
December 31,
2015 |
||
Due in one year or less
|
|
$
|
74.9
|
|
Due in two to three years
|
|
43.3
|
|
|
Due in four to five years
|
|
51.5
|
|
|
Due after five years
|
|
275.0
|
|
|
Total
|
|
$
|
444.7
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current tax (expense) benefit:
|
|
|
|
|
|
|
|
|
|
|||
U.S. federal
|
|
$
|
9.1
|
|
|
$
|
(4.3
|
)
|
|
$
|
(20.3
|
)
|
State
|
|
(1.8
|
)
|
|
(2.0
|
)
|
|
(1.0
|
)
|
|||
Non-U.S.
|
|
(1.5
|
)
|
|
(1.4
|
)
|
|
(1.2
|
)
|
|||
Total current tax expense
|
|
5.8
|
|
|
(7.7
|
)
|
|
(22.5
|
)
|
|||
Deferred tax (expense) benefit:
|
|
|
|
|
|
|
|
|
|
|||
U.S. federal
|
|
(5.1
|
)
|
|
22.5
|
|
|
(10.1
|
)
|
|||
Total deferred tax benefit (expense)
|
|
(5.1
|
)
|
|
22.5
|
|
|
(10.1
|
)
|
|||
Total income tax (expense) benefit
|
|
$
|
.7
|
|
|
$
|
14.8
|
|
|
$
|
(32.6
|
)
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Tax (expense) benefit at the U.S. statutory rate
|
|
$
|
(54.2
|
)
|
|
$
|
10.2
|
|
|
$
|
(55.5
|
)
|
Differences in taxes resulting from:
|
|
|
|
|
|
|
|
|
|
|||
Non-U.S. earnings, net of foreign taxes
|
|
76.7
|
|
|
37.8
|
|
|
75.1
|
|
|||
Change in valuation allowance
|
|
(18.7
|
)
|
|
(36.0
|
)
|
|
(49.9
|
)
|
|||
Tax exempt interest and dividends
|
|
2.6
|
|
|
2.5
|
|
|
2.4
|
|
|||
Tax reserve adjustments
|
|
(1.7
|
)
|
|
5.2
|
|
|
(1.2
|
)
|
|||
Withholding tax
|
|
(1.2
|
)
|
|
(2.4
|
)
|
|
(1.0
|
)
|
|||
Other, net
|
|
(2.8
|
)
|
|
(2.5
|
)
|
|
(2.5
|
)
|
|||
Total income tax (expense) benefit on pre-tax income
|
|
$
|
.7
|
|
|
$
|
14.8
|
|
|
$
|
(32.6
|
)
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Deferred income tax assets related to:
|
|
|
|
|
|
|
||
U.S. federal net operating and capital loss carryforwards
|
|
$
|
186.6
|
|
|
$
|
152.3
|
|
Incentive compensation
|
|
45.4
|
|
|
40.2
|
|
||
Unearned premiums
|
|
37.5
|
|
|
38.3
|
|
||
Non-U.S. net operating loss carryforwards
|
|
33.8
|
|
|
33.1
|
|
||
Loss reserve discount
|
|
26.8
|
|
|
41.4
|
|
||
Tax credit carryforwards
|
|
16.9
|
|
|
13.4
|
|
||
Runoff Transaction
|
|
12.6
|
|
|
12.6
|
|
||
Deferred compensation
|
|
6.2
|
|
|
6.7
|
|
||
Fixed assets
|
|
1.7
|
|
|
2.3
|
|
||
Accrued interest
|
|
1.3
|
|
|
5.0
|
|
||
Other items
|
|
3.0
|
|
|
2.8
|
|
||
Total gross deferred income tax assets
|
|
371.8
|
|
|
348.1
|
|
||
Less: valuation allowances
|
|
(156.8
|
)
|
|
(140.5
|
)
|
||
Total net deferred income tax assets
|
|
215.0
|
|
|
207.6
|
|
||
Deferred income tax liabilities related to:
|
|
|
|
|
|
|
||
Deferred acquisition costs
|
|
34.9
|
|
|
32.0
|
|
||
Net unrealized investment gains
|
|
28.2
|
|
|
31.1
|
|
||
Members surplus contributions
|
|
19.0
|
|
|
10.3
|
|
||
Investment basis difference
|
|
13.8
|
|
|
17.0
|
|
||
Purchase accounting
|
|
9.3
|
|
|
—
|
|
||
Pension and benefit accruals
|
|
3.5
|
|
|
2.5
|
|
||
Other items
|
|
.5
|
|
|
.1
|
|
||
Total deferred income tax liabilities
|
|
109.2
|
|
|
93.0
|
|
||
Net deferred tax asset
|
|
$
|
105.8
|
|
|
$
|
114.6
|
|
|
|
December 31, 2015
|
||||||||||||||||||
Millions
|
|
United States
|
|
Luxembourg
|
|
Netherlands
|
|
Israel
|
|
Total
|
||||||||||
2016 - 2020
|
|
$
|
.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
.8
|
|
2021 - 2025
|
|
2.0
|
|
|
—
|
|
|
.3
|
|
|
—
|
|
|
2.3
|
|
|||||
2026 - 2035
|
|
540.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
540.6
|
|
|||||
No expiration date
|
|
—
|
|
|
96.8
|
|
|
—
|
|
|
21.8
|
|
|
118.6
|
|
|||||
Total
|
|
$
|
543.4
|
|
|
$
|
96.8
|
|
|
$
|
.3
|
|
|
$
|
21.8
|
|
|
$
|
662.3
|
|
Gross deferred tax asset
|
|
$
|
186.6
|
|
|
$
|
28.3
|
|
|
$
|
.1
|
|
|
$
|
5.5
|
|
|
$
|
220.5
|
|
Valuation allowance
|
|
(121.2
|
)
|
|
(28.3
|
)
|
|
(.1
|
)
|
|
(5.5
|
)
|
|
(155.1
|
)
|
|||||
Net deferred tax asset
|
|
$
|
65.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65.4
|
|
Millions
|
|
Permanent
Differences
(1)
|
|
Temporary
Differences
(2)
|
|
Interest and
Penalties
(3)
|
|
Total
|
||||||||
Balance at January 1, 2013
|
|
$
|
8.4
|
|
|
$
|
23.6
|
|
|
$
|
8.0
|
|
|
$
|
40.0
|
|
Changes in prior year tax positions
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.0
|
|
||||
Tax positions taken during the current year
|
|
—
|
|
|
(7.0
|
)
|
|
—
|
|
|
(7.0
|
)
|
||||
Lapse in statute of limitations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements with tax authorities
|
|
—
|
|
|
—
|
|
|
(.3
|
)
|
|
(.3
|
)
|
||||
Balance at December 31, 2013
|
|
8.4
|
|
|
16.6
|
|
|
8.7
|
|
|
33.7
|
|
||||
Changes in prior year tax positions
|
|
(2.2
|
)
|
|
(.8
|
)
|
|
(1.9
|
)
|
|
(4.9
|
)
|
||||
Tax positions taken during the current year
|
|
—
|
|
|
7.3
|
|
|
—
|
|
|
7.3
|
|
||||
Lapse in statute of limitations
|
|
(.8
|
)
|
|
—
|
|
|
(.3
|
)
|
|
(1.1
|
)
|
||||
Balance at December 31, 2014
|
|
5.4
|
|
|
23.1
|
|
|
6.5
|
|
|
35.0
|
|
||||
Changes in prior year tax positions
|
|
—
|
|
|
(12.4
|
)
|
|
1.7
|
|
|
(10.7
|
)
|
||||
Tax positions taken during the current year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Lapse in statute of limitations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements with tax authorities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at December 31, 2015
|
|
$
|
5.4
|
|
|
$
|
10.7
|
|
|
$
|
8.2
|
|
|
$
|
24.3
|
|
(1)
|
Represents the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate.
|
(2)
|
Represents the amount of unrecognized tax benefits that, if recognized would create a temporary difference between the reported amount of an item in the Company’s Consolidated Balance Sheet and its tax basis.
|
(3)
|
Net of tax benefit.
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Fees, included in other revenue
|
|
$
|
9.3
|
|
|
$
|
18.6
|
|
|
$
|
25.0
|
|
Change in fair value of variable annuity liability, included in other revenue
|
|
(.4
|
)
|
|
52.9
|
|
|
378.5
|
|
|||
Change in fair value of derivatives, included in other revenue
|
|
(8.8
|
)
|
|
(72.4
|
)
|
|
(402.0
|
)
|
|||
Foreign exchange, included in other revenue
|
|
(1.3
|
)
|
|
(3.2
|
)
|
|
(14.5
|
)
|
|||
Other investment income and (losses) gains
|
|
(.4
|
)
|
|
(1.4
|
)
|
|
(7.1
|
)
|
|||
Total revenues
|
|
(1.6
|
)
|
|
(5.5
|
)
|
|
(20.1
|
)
|
|||
Change in fair value of variable annuity death benefit liabilities, included in
general and administrative expenses
|
|
—
|
|
|
.6
|
|
|
10.2
|
|
|||
Death benefit claims paid, included in general and administrative expenses
|
|
(.1
|
)
|
|
(.1
|
)
|
|
(1.9
|
)
|
|||
General and administrative expenses
|
|
(4.0
|
)
|
|
(4.3
|
)
|
|
(4.9
|
)
|
|||
Pre-tax loss
|
|
$
|
(5.7
|
)
|
|
$
|
(9.3
|
)
|
|
$
|
(16.7
|
)
|
|
|
|
|
|
|
|
|
Carrying Value
|
||||||||||||
|
|
Year Ended December 31,
|
|
December 31,
|
||||||||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
||||||||||
Fixed income/interest rate
|
|
$
|
6.4
|
|
|
$
|
(33.7
|
)
|
|
$
|
(108.7
|
)
|
|
$
|
.5
|
|
|
$
|
(1.7
|
)
|
Foreign exchange
|
|
(7.3
|
)
|
|
(1.3
|
)
|
|
(96.7
|
)
|
|
14.8
|
|
|
44.1
|
|
|||||
Equity
|
|
(7.9
|
)
|
|
(37.4
|
)
|
|
(196.6
|
)
|
|
4.8
|
|
|
14.0
|
|
|||||
Total
|
|
$
|
(8.8
|
)
|
|
$
|
(72.4
|
)
|
|
$
|
(402.0
|
)
|
|
$
|
20.1
|
|
|
$
|
56.4
|
|
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)(6)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Balance at January 1, 2015
|
|
$
|
.7
|
|
|
$
|
18.9
|
|
|
$
|
33.8
|
|
|
$
|
3.7
|
|
|
$
|
56.4
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Realized and unrealized (losses) gains
|
|
(.4
|
)
|
(5)
|
(9.7
|
)
|
|
(7.5
|
)
|
|
8.4
|
|
|
(8.8
|
)
|
|||||
Transfers in (out)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(6.5
|
)
|
|
(9.8
|
)
|
|
(11.2
|
)
|
|
(27.5
|
)
|
|||||
Balance at December 31, 2015
|
|
$
|
.3
|
|
|
$
|
2.7
|
|
|
$
|
16.5
|
|
|
$
|
0.9
|
|
|
$
|
20.1
|
|
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)(6)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Balance at January 1, 2014
|
|
$
|
(52.8
|
)
|
|
$
|
63.4
|
|
|
$
|
4.7
|
|
|
$
|
1.1
|
|
|
$
|
69.2
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Realized and unrealized gains (losses)
|
|
53.5
|
|
(5)
|
(38.6
|
)
|
|
(71.0
|
)
|
|
37.2
|
|
|
(72.4
|
)
|
|||||
Transfers in (out)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(5.9
|
)
|
|
100.1
|
|
|
(34.6
|
)
|
|
59.6
|
|
|||||
Balance at December 31, 2014
|
|
$
|
.7
|
|
|
$
|
18.9
|
|
|
$
|
33.8
|
|
|
$
|
3.7
|
|
|
$
|
56.4
|
|
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)(6)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Balance at January 1, 2013
|
|
$
|
(441.5
|
)
|
|
$
|
140.5
|
|
|
$
|
(20.5
|
)
|
|
$
|
(21.7
|
)
|
|
$
|
98.3
|
|
Purchases
|
|
—
|
|
|
59.4
|
|
|
—
|
|
|
—
|
|
|
59.4
|
|
|||||
Realized and unrealized gains (losses)
|
|
388.7
|
|
(5)
|
(136.5
|
)
|
|
(196.1
|
)
|
|
(69.4
|
)
|
|
(402.0
|
)
|
|||||
Transfers in (out)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
—
|
|
|
221.3
|
|
|
92.2
|
|
|
313.5
|
|
|||||
Balance at December 31, 2013
|
|
$
|
(52.8
|
)
|
|
$
|
63.4
|
|
|
$
|
4.7
|
|
|
$
|
1.1
|
|
|
$
|
69.2
|
|
(1)
|
Consists of over-the-counter instruments.
|
(2)
|
Consists of interest rate swaps, total return swaps, foreign currency forward contracts, and bond forwards. Fair value measurement based upon bid/ask pricing quotes for similar instruments that are actively traded, where available. Swaps for which an active market does not exist have been priced using observable inputs including the swap curve and the underlying bond index.
|
(3)
|
Consists of exchange traded equity index, foreign currency and interest rate futures. Fair value measurements based upon quoted prices for identical instruments that are actively traded.
|
(4)
|
In addition to derivative instruments, WM Life Re held cash, short-term and fixed maturity investments of
$5.8
,
$33.2
and
$81.3
as of
December 31, 2015, 2014 and 2013
posted as collateral to its reinsurance counterparties.
|
(5)
|
There was no changes in the fair value of variable annuity death benefit liabilities for the year ended December 31, 2015. In 2014 and 2013,
$0.6
and
$10.2
related to the change in
the fair value of variable annuity death benefit liabilities, which are included in general and administrative expenses.
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Cash
|
|
$
|
5.8
|
|
|
$
|
23.7
|
|
Fixed maturity investments
|
|
—
|
|
|
9.5
|
|
||
Total
|
|
$
|
5.8
|
|
|
$
|
33.2
|
|
Description
|
|
December 31, 2015
|
|||||||||||||||
$ in millions
|
|
Fair
Value
|
|
Valuation
Technique(s)
|
|
Unobservable Input
|
|
Range
|
|
Weighted Average
|
|||||||
Variable annuity benefit guarantee asset
|
|
$
|
(.3
|
)
|
|
Discounted cash flows
|
|
Surrenders
|
|
0.1
|
%
|
-
|
40.0
|
%
|
|
40.0
|
%
|
|
|
|
|
|
|
|
Mortality
|
|
0.0
|
%
|
-
|
6.4%
|
|
1.0
|
%
|
||
|
|
|
|
|
|
|
Foreign exchange volatilities
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
0-1 year
|
|
11.5
|
%
|
-
|
18.7%
|
|
13.1
|
%
|
|||
|
|
|
|
|
|
Index volatilities
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
0-1 year
|
|
25.0
|
%
|
-
|
27.5%
|
|
26.4
|
%
|
|||
Foreign Exchange Options
|
|
$
|
1.9
|
|
|
Counterparty valuations, adjusted for unwind quote discount
|
|
Adjustment to counterparty valuations
|
|
(0.5
|
)%
|
-
|
(7.3)%
|
|
(5.9
|
)%
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity Index Options
|
|
$
|
.8
|
|
|
Counterparty valuations, adjusted for unwind quote discount
|
|
Adjustment to counterparty valuations
|
|
0.7
|
%
|
-
|
(6.7)%
|
|
(2.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Millions
|
|
Gross asset amounts before offsets
(1)
|
|
Gross liability amounts offset under master netting arrangements
|
|
Net amounts recognized in Other Assets
|
|
Gross asset amounts before offsets
(1)
|
|
Gross liability amounts offset under master netting arrangements
|
|
Net amounts recognized in Other Assets
|
||||||||||||
Interest rate contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OTC
|
|
$
|
2.4
|
|
|
$
|
(2.1
|
)
|
|
$
|
0.3
|
|
|
$
|
1.0
|
|
|
$
|
(5.4
|
)
|
|
$
|
(4.4
|
)
|
Exchange traded
|
|
.1
|
|
|
(.1
|
)
|
|
—
|
|
|
2.8
|
|
|
(.1
|
)
|
|
2.7
|
|
||||||
Foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OTC
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|
45.5
|
|
|
—
|
|
|
45.5
|
|
||||||
Exchange traded
|
|
.1
|
|
|
(.3
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
||||||
Equity contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OTC
|
|
4.4
|
|
|
(.6
|
)
|
|
3.8
|
|
|
11.7
|
|
|
(.2
|
)
|
|
11.5
|
|
||||||
Exchange traded
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
3.4
|
|
|
(.9
|
)
|
|
2.5
|
|
||||||
Total
(2)
|
|
$
|
23.2
|
|
|
$
|
(3.1
|
)
|
|
$
|
20.1
|
|
|
$
|
64.4
|
|
|
$
|
(8.0
|
)
|
|
$
|
56.4
|
|
|
|
December 31, 2015
|
|||||||||||||||||||||||||||||||||
Millions
|
|
Net amount of assets reflected in Balance Sheet
|
|
Collateral provided to counterparty - Cash
|
|
Collateral provided to counter-party - Financial Instruments
|
|
Net amount of exposure after effect of collateral provided
|
|
Excess collateral provided to counter-party- Cash
|
|
Excess collateral provided - Financial Instruments
|
|
Counter-party collateral held by WM Life Re - Cash
|
|
Net amount of exposure to counter-party
|
|
Standard
& Poor's
Rating
(1)
|
|||||||||||||||||
JP Morgan
|
|
$
|
8.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.5
|
|
|
$
|
3.0
|
|
|
A
|
+
|
Bank of America
|
|
.7
|
|
|
—
|
|
|
—
|
|
|
.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.7
|
|
|
A
|
|
||||||||
Citigroup - OTC
|
|
9.9
|
|
|
—
|
|
|
—
|
|
|
9.9
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
8.5
|
|
|
A
|
|
||||||||
Citigroup - Exchange Traded
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
6.8
|
|
|
A
|
|
||||||||
Total
|
|
$
|
20.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.1
|
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
|
$
|
19.0
|
|
|
|
|
|
|
December 31, 2014
|
|||||||||||||||||||||||||||||||||
Millions
|
|
Net amount of assets reflected in Balance Sheet
|
|
Collateral provided to counterparty - Cash
|
|
Collateral provided to counter-party - Financial Instruments
|
|
Net amount of exposure after effect of collateral provided
|
|
Excess collateral provided to counter-party- Cash
|
|
Excess collateral provided - Financial Instruments
|
|
Counter-party collateral held by WM Life Re- Cash
|
|
Net amount of exposure to counter-party
|
|
Standard
& Poor's
Rating
(1)
|
|||||||||||||||||
JP Morgan
|
|
$
|
24.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.8
|
|
|
$
|
15.5
|
|
|
A
|
+
|
Bank of America
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|
A
|
|
||||||||
Nomura
|
|
(3.5
|
)
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
9.5
|
|
|
—
|
|
|
11.2
|
|
|
BBB
|
+
|
||||||||
Citigroup - OTC
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
21.1
|
|
|
A
|
|
||||||||
Citigroup - Exchange Traded
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
16.0
|
|
|
—
|
|
|
—
|
|
|
19.7
|
|
|
A
|
|
||||||||
Royal Bank of Scotland
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
A
|
-
|
||||||||
Barclays
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
A
|
|
||||||||
Total
|
|
$
|
56.4
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
59.9
|
|
|
$
|
17.7
|
|
|
$
|
9.5
|
|
|
$
|
9.9
|
|
|
$
|
77.2
|
|
|
|
|
(1)
|
Standard & Poor’s ratings as detailed above are: “A+” (Strong, which is the fifth highest of
twenty-one
creditworthiness ratings),“A” (which is the sixth highest of
twenty-one
creditworthiness ratings), “A-” (which is the seventh highest of
twenty-one
creditworthiness ratings), and BBB+ (which is the eighth highest of
twenty-one
creditworthiness ratings).
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Contracts outstanding
|
|
3,103
|
|
|
1,750
|
|
||
Remaining weighted average contract period (in years)
|
|
12.8
|
|
|
12.8
|
|
||
Contractual debt service outstanding (in millions):
|
|
|
|
|
||||
Principal
|
|
$
|
22,556.0
|
|
|
$
|
12,362.5
|
|
Interest
|
|
$
|
11,984.4
|
|
|
$
|
7,086.9
|
|
Gross unearned insurance premiums
|
|
$
|
50.2
|
|
|
$
|
27.6
|
|
Millions
|
|
December 31, 2015
|
||
January 1, 2016 - March 31, 2016
|
|
$
|
1.1
|
|
April 1, 2016 - June 30, 2016
|
|
1.1
|
|
|
July 1, 2016 - September 30, 2016
|
|
1.1
|
|
|
October 1, 2016 - December 31, 2016
|
|
1.1
|
|
|
|
|
4.4
|
|
|
|
|
|
||
2017
|
|
4.3
|
|
|
2018
|
|
4.1
|
|
|
2019
|
|
3.8
|
|
|
2020
|
|
3.6
|
|
|
2020 and thereafter
|
|
30.0
|
|
|
Total
|
|
$
|
50.2
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
|
|
|
|
|
|||
Net income from continuing operations attributable to
White Mountains’s common shareholders
|
|
$
|
198.8
|
|
|
$
|
53.6
|
|
|
$
|
175.1
|
|
Allocation of income for unvested restricted common shares
(1)
|
|
(2.3
|
)
|
|
(.7
|
)
|
|
(2.6
|
)
|
|||
Dividends declared on participating restricted common shares
(1)
|
|
(.1
|
)
|
|
(.1
|
)
|
|
(.1
|
)
|
|||
Total allocation to restricted common shares
|
|
(2.4
|
)
|
|
(.8
|
)
|
|
(2.7
|
)
|
|||
Net income attributable to White Mountains’s common shareholders,
net of restricted share amounts |
|
$
|
196.4
|
|
|
$
|
52.8
|
|
|
$
|
172.4
|
|
Undistributed net earnings (in millions):
|
|
|
|
|
|
|
||||||
Net income attributable to White Mountains’s common shareholders,
net of restricted common share amounts |
|
$
|
196.4
|
|
|
$
|
52.8
|
|
|
$
|
172.4
|
|
Dividends declared net of restricted common share amounts
(1)
|
|
(5.9
|
)
|
|
(6.1
|
)
|
|
(6.1
|
)
|
|||
Total undistributed net earnings, net of restricted common share amounts
|
|
$
|
190.5
|
|
|
$
|
46.7
|
|
|
$
|
166.3
|
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
|
|
||||||
Total average common shares outstanding during the period
|
|
5,879.2
|
|
|
6,104.9
|
|
|
6,200.4
|
|
|||
Average unvested restricted common shares
(2)
|
|
(68.0
|
)
|
|
(78.9
|
)
|
|
(91.4
|
)
|
|||
Basic earnings per share denominator
|
|
5,811.2
|
|
|
6,026.0
|
|
|
6,109.0
|
|
|||
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
|
|
||||||
Total average common shares outstanding during the period
|
|
5,879.2
|
|
|
6,104.9
|
|
|
6,200.4
|
|
|||
Average unvested restricted common shares
(2)
|
|
(68.0
|
)
|
|
(78.9
|
)
|
|
(91.4
|
)
|
|||
Average outstanding dilutive options to acquire common shares
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted earnings per share denominator
|
|
5,811.2
|
|
|
6,026.0
|
|
|
6,109.0
|
|
|||
Basic earnings per share (in dollars):
|
|
|
|
|
|
|
||||||
Net income attributable to White Mountains’s common shareholders
|
|
$
|
33.80
|
|
|
$
|
8.77
|
|
|
$
|
28.22
|
|
Dividends declared and paid
|
|
(1.00
|
)
|
|
(1.00
|
)
|
|
(1.00
|
)
|
|||
Undistributed earnings
|
|
$
|
32.80
|
|
|
$
|
7.77
|
|
|
$
|
27.22
|
|
Diluted earnings per share (in dollars)
|
|
|
|
|
|
|
||||||
Net income attributable to White Mountains’s common shareholders
|
|
$
|
33.80
|
|
|
$
|
8.77
|
|
|
$
|
28.22
|
|
Dividends declared and paid
|
|
(1.00
|
)
|
|
(1.00
|
)
|
|
(1.00
|
)
|
|||
Undistributed earnings
|
|
$
|
32.80
|
|
|
$
|
7.77
|
|
|
$
|
27.22
|
|
(1)
|
Restricted shares issued by White Mountains receive dividends, and therefore, are considered participating securities.
|
(2)
|
Restricted common shares outstanding vest either in equal annual installments or upon a stated date (see
Note 13 - “Employee Share-Based Incentive Compensation Plans”
).
|
(3)
|
The diluted earnings per share denominator for the years ended
December 31, 2015, 2014 and 2013
do not include the impact of
125,000
common shares issuable upon exercise of the non-qualified options outstanding as they are anti-dilutive to the calculation.
|
|
|
Pension Benefits
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
||
Projected benefit obligation at beginning of year
|
|
$
|
119.7
|
|
|
$
|
102.9
|
|
Service cost
|
|
.9
|
|
|
.6
|
|
||
Interest cost
|
|
4.6
|
|
|
4.7
|
|
||
Settlement loss
(1)
|
|
(1.8
|
)
|
|
—
|
|
||
Special termination benefits expense
|
|
—
|
|
|
.3
|
|
||
Assumption changes
|
|
(3.5
|
)
|
|
17.5
|
|
||
Actuarial loss
|
|
.9
|
|
|
1.1
|
|
||
Benefits and expenses paid with plan assets
|
|
(13.7
|
)
|
|
(5.2
|
)
|
||
Benefits paid directly by OneBeacon
|
|
(2.2
|
)
|
|
(2.2
|
)
|
||
Remeasurement due to plan termination
(2)
|
|
4.6
|
|
|
—
|
|
||
Projected benefit obligation at end of year
|
|
$
|
109.5
|
|
|
$
|
119.7
|
|
Change in plan assets:
|
|
|
|
|
|
|
||
Fair value of plan assets at beginning of year
|
|
$
|
146.0
|
|
|
$
|
142.8
|
|
Actual return on plan assets
|
|
7.5
|
|
|
8.4
|
|
||
Benefits and expenses paid
|
|
(13.7
|
)
|
|
(5.2
|
)
|
||
Fair value of plan assets at end of year
|
|
$
|
139.8
|
|
|
$
|
146.0
|
|
Funded status at end of year
|
|
$
|
30.3
|
|
|
$
|
26.3
|
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Net assets of the Qualified Plan recorded in other assets
|
|
$
|
55.8
|
|
|
$
|
53.4
|
|
Net liabilities of the Non-qualified Plan recorded in other liabilities
|
|
(25.5
|
)
|
|
(27.1
|
)
|
||
Net amount accrued in the financial statements
|
|
$
|
30.3
|
|
|
$
|
26.3
|
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Projected benefit obligation
|
|
$
|
25.5
|
|
|
$
|
27.1
|
|
Accumulated benefit obligation
|
|
$
|
25.5
|
|
|
$
|
27.1
|
|
Fair value of plan assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Projected benefit obligation
|
|
$
|
84.0
|
|
(1)
|
$
|
92.6
|
|
Accumulated benefit obligation
|
|
$
|
84.0
|
|
(1)
|
$
|
92.6
|
|
Fair value of plan net assets
|
|
$
|
139.8
|
|
|
$
|
146.0
|
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Accumulated other comprehensive (loss) income beginning balance
|
|
$
|
(8.0
|
)
|
|
$
|
10.5
|
|
Increase (decrease) in accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
||
Amortization of net actuarial gains recognized during the year
|
|
1.3
|
|
|
.3
|
|
||
Net actuarial losses occurring during the year
(1)
|
|
(1.3
|
)
|
|
(18.8
|
)
|
||
Accumulated other comprehensive loss ending balance
|
|
$
|
(8.0
|
)
|
|
$
|
(8.0
|
)
|
(1)
|
Net actuarial gains (losses) resulted from investment returns and demographic experience different than assumed. The 2015 amount reflects the valuation of the Qualified Plan on a termination basis.
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Service cost
|
|
$
|
.9
|
|
|
$
|
.6
|
|
|
$
|
.8
|
|
Interest cost
|
|
4.6
|
|
|
4.7
|
|
|
4.2
|
|
|||
Expected return on plan assets
|
|
(8.7
|
)
|
|
(8.5
|
)
|
|
(7.1
|
)
|
|||
Amortization of unrecognized loss
|
|
1.3
|
|
|
.3
|
|
|
.9
|
|
|||
Net periodic pension income before settlements, curtailments and
special termination benefits
|
|
(1.9
|
)
|
|
(2.9
|
)
|
|
(1.2
|
)
|
|||
Special termination benefits expense
(1)
|
|
—
|
|
|
.3
|
|
|
.3
|
|
|||
Total net periodic benefit income
|
|
$
|
(1.9
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(.9
|
)
|
(1)
|
Special termination benefits represent additional payments made from the Qualified Plan to certain vested participants when their employment was terminated due to a reduction in force.
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||||||
Millions
|
|
Fair
Value
|
|
Level 1
Inputs
|
|
Level 2
Inputs
|
|
Level 3
Inputs
|
|
Fair
Value
|
|
Level 1
Inputs
|
|
Level 2
Inputs
|
|
Level 3
Inputs
|
||||||||||||||||
Fixed maturity investments
|
|
$
|
132.4
|
|
|
$
|
132.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.2
|
|
|
$
|
—
|
|
|
$
|
24.2
|
|
|
$
|
—
|
|
Common equity securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101.0
|
|
|
101.0
|
|
|
—
|
|
|
—
|
|
||||||||
Convertible fixed maturity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.8
|
|
|
—
|
|
|
12.8
|
|
|
—
|
|
||||||||
Cash and short-term investments
|
|
7.0
|
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
4.8
|
|
|
.4
|
|
|
—
|
|
||||||||
Total
|
|
$
|
139.4
|
|
|
$
|
139.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
143.2
|
|
|
$
|
105.8
|
|
|
$
|
37.4
|
|
|
$
|
—
|
|
|
|
Plan Assets at
December 31,
|
||||
Asset Category
|
|
2015
|
|
2014
|
||
Fixed maturity investments
|
|
95.0
|
%
|
|
16.9
|
%
|
Common equity securities
|
|
—
|
|
|
70.6
|
|
Convertible fixed maturity investments
|
|
—
|
|
|
8.9
|
|
Cash and short-term investments
|
|
5.0
|
|
|
3.6
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
Millions
|
|
Expected Benefit Payments
|
||
2016
|
|
$
|
86.8
|
|
2017
|
|
2.1
|
|
|
2018
|
|
2.1
|
|
|
2019
|
|
2.0
|
|
|
2020
|
|
2.0
|
|
|
2021-2025
|
|
8.9
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
$ in millions
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|||||||||
Beginning of period
|
|
113,198
|
|
|
$
|
44.4
|
|
|
108,605
|
|
|
$
|
54.9
|
|
|
108,065
|
|
|
$
|
26.5
|
|
Shares paid or expired
(1)
|
|
(42,958
|
)
|
|
(30.8
|
)
|
|
(33,730
|
)
|
|
(24.5
|
)
|
|
(43,100
|
)
|
|
(10.1
|
)
|
|||
New grants
|
|
29,828
|
|
|
—
|
|
|
41,580
|
|
|
—
|
|
|
43,660
|
|
|
—
|
|
|||
Assumed forfeitures and cancellations
(2)(3)
|
|
(3,857
|
)
|
|
(.3
|
)
|
|
(3,257
|
)
|
|
(.1
|
)
|
|
(20
|
)
|
|
(.6
|
)
|
|||
Expense recognized
|
|
—
|
|
|
44.4
|
|
|
—
|
|
|
14.1
|
|
|
—
|
|
|
39.1
|
|
|||
End of period
(4)
|
|
96,211
|
|
|
$
|
57.7
|
|
|
113,198
|
|
|
$
|
44.4
|
|
|
108,605
|
|
|
$
|
54.9
|
|
(1)
|
WTM performance share payments in 2015 for the 2012-2014 performance cycle ranged from
91%
to
145.5%
of target. WTM performance shares payments in 2014 for the 2011-2013 performance cycle ranged from
88%
to
131.5%
of target. WTM performance shares payments in 2013 for the 2010-2012 performance cycle ranged from
33%
to
98%
of target.
|
(2)
|
On November 19, 2014, the Compensation Committee canceled
3,040
WTM performance shares for the 2014-2016 performance cycle and issued the same number of WTM restricted shares.
|
(3)
|
Amounts include changes in assumed forfeitures, as required under GAAP.
|
(4)
|
Outstanding performance share awards as of December 31, 2015, 2014 and 2013 exclude
7,997
,
10,351
and
10,615
performance shares awards, net of assumed forfeitures, granted to employees of Sirius Group, which is accounted for as discontinued operation.
|
$ in millions
|
|
Target WTM
Performance Shares
Outstanding
|
|
Accrued Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2015 – 2017
|
|
29,828
|
|
|
$
|
8.3
|
|
2014 – 2016
|
|
32,557
|
|
|
12.9
|
|
|
2013 – 2015
|
|
36,293
|
|
|
38.0
|
|
|
Sub-total
|
|
98,678
|
|
|
59.2
|
|
|
Assumed forfeitures
|
|
(2,467
|
)
|
|
(1.5
|
)
|
|
Total at December 31, 2015
|
|
96,211
|
|
|
$
|
57.7
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
$ in millions
|
|
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
|
|
83,314
|
|
|
$
|
14.3
|
|
|
94,130
|
|
|
$
|
17.0
|
|
|
69,910
|
|
|
$
|
16.8
|
|
Issued
(1)
|
|
23,640
|
|
|
15.7
|
|
|
23,440
|
|
|
13.1
|
|
|
25,720
|
|
|
14.4
|
|
|||
Vested
|
|
(36,279
|
)
|
|
—
|
|
|
(33,205
|
)
|
|
—
|
|
|
(1,500
|
)
|
|
—
|
|
|||
Forfeited
|
|
—
|
|
|
—
|
|
|
(1,051
|
)
|
|
(.5
|
)
|
|
—
|
|
|
—
|
|
|||
Expense recognized
|
|
—
|
|
|
(14.3
|
)
|
|
—
|
|
|
(15.3
|
)
|
|
—
|
|
|
(14.2
|
)
|
|||
End of period
(2)
|
|
70,675
|
|
|
$
|
15.7
|
|
|
83,314
|
|
|
$
|
14.3
|
|
|
94,130
|
|
|
$
|
17.0
|
|
(1)
|
On November 19, 2014, the Compensation Committee canceled
3,040
WTM performance shares for the 2014-2016 performance cycle and issued the same number of WTM restricted shares.
|
(2)
|
Outstanding restricted share awards as of December 31, 2015, 2014 and 2013 include
3,571
,
3,265
, and
3,789
restricted shares issued to employees of Sirius Group, which is accounted for as discontinued operations.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
$ in millions
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|||||||||
Beginning of period
|
|
517,470
|
|
|
$
|
3.4
|
|
|
493,421
|
|
|
$
|
4.0
|
|
|
563,190
|
|
|
$
|
1.2
|
|
Payments and deferrals
(1)
|
|
(181,290
|
)
|
|
(1.5
|
)
|
|
(142,138
|
)
|
|
(1.0
|
)
|
|
(238,658
|
)
|
|
—
|
|
|||
New awards
|
|
154,887
|
|
|
—
|
|
|
165,800
|
|
|
—
|
|
|
179,000
|
|
|
—
|
|
|||
Forfeitures and cancellations
(2)
|
|
(41,632
|
)
|
|
(.1
|
)
|
|
387
|
|
|
—
|
|
|
(10,111
|
)
|
|
(.1
|
)
|
|||
Expense recognized
|
|
—
|
|
|
(.4
|
)
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
2.9
|
|
|||
End of period
|
|
449,435
|
|
|
$
|
1.4
|
|
|
517,470
|
|
|
$
|
3.4
|
|
|
493,421
|
|
|
$
|
4.0
|
|
(1)
|
OneBeacon performance share payments in 2015 for the 2012-2014 performance cycle were at
45.7%
of target. OneBeacon performance share payments in 2014 for the 2011-2013 performance cycle were at
37.1%
of target. No payments were made in 2013 for the 2010-2012 OneBeacon performance cycle as the performance factor was zero.
|
(2)
|
Amounts include changes in assumed forfeitures, as required under GAAP.
|
$ in millions
|
|
Target
OneBeacon
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2015 – 2017
|
|
146,659
|
|
|
$
|
.7
|
|
2014 – 2016
|
|
142,710
|
|
|
.1
|
|
|
2013 – 2015
|
|
167,300
|
|
|
.6
|
|
|
Sub-total
|
|
456,669
|
|
|
1.4
|
|
|
Assumed forfeitures
|
|
(7,234
|
)
|
|
—
|
|
|
Total at December 31, 2015
|
|
449,435
|
|
|
$
|
1.4
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
$ in millions
|
|
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
|
|
612,500
|
|
|
$
|
3.5
|
|
|
915,000
|
|
|
$
|
6.5
|
|
|
927,000
|
|
|
$
|
9.6
|
|
Issued
|
|
75,950
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Vested
|
|
(296,000
|
)
|
|
—
|
|
|
(300,000
|
)
|
|
—
|
|
|
(9,000
|
)
|
|
—
|
|
|||
Forfeited
|
|
(9,728
|
)
|
|
(.1
|
)
|
|
(2,500
|
)
|
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|||
Expense recognized
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
(3.1
|
)
|
|||
End of period
|
|
382,722
|
|
|
$
|
2.5
|
|
|
612,500
|
|
|
$
|
3.5
|
|
|
915,000
|
|
|
$
|
6.5
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
$ in millions
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
||||||
OneBeacon Ltd.
|
|
24.5
|
%
|
|
$
|
245.6
|
|
|
24.7
|
%
|
|
$
|
258.4
|
|
SIG Preference Shares
|
|
100.0
|
|
|
250.0
|
|
|
100.0
|
|
|
250.0
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Other, excluding mutuals and reciprocals
|
|
|
|
|
|
|
|
|
||||||
HG Global
|
|
3.1
|
|
|
17.1
|
|
|
3.1
|
|
|
17.9
|
|
||
MediaAlpha
|
|
40.0
|
|
|
14.4
|
|
|
40.0
|
|
|
22.6
|
|
||
Tranzact
|
|
36.8
|
|
|
79.4
|
|
|
36.8
|
|
|
88.2
|
|
||
Wobi
|
|
3.9
|
|
|
.6
|
|
|
36.7
|
|
|
5.4
|
|
||
Prospector Offshore Fund
|
|
—
|
|
|
—
|
|
|
23.4
|
|
|
31.1
|
|
||
Dewar
|
|
19.0
|
|
|
3.7
|
|
|
18.0
|
|
|
3.4
|
|
||
Total other, excluding mutuals and
reciprocals
|
|
|
|
115.2
|
|
|
|
|
168.6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
Mutuals and reciprocals
|
|
|
|
|
|
|
|
|
||||||
BAM
|
|
100.0
|
|
|
(140.0
|
)
|
|
100.0
|
|
|
(121.9
|
)
|
||
SSIE
|
|
100.0
|
|
|
(16.0
|
)
|
|
100.0
|
|
|
(12.4
|
)
|
||
Total non-controlling interests
|
|
|
|
$
|
454.8
|
|
|
|
|
$
|
542.7
|
|
|
|
|
|
HG Global/BAM
|
|
|
|
|
||||||||||||
Millions
|
|
OneBeacon
|
|
HG Global
|
|
BAM
(1)
|
|
Other
Operations
|
|
Total
|
||||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earned insurance and reinsurance premiums
|
|
$
|
1,176.2
|
|
|
$
|
2.5
|
|
|
$
|
.8
|
|
|
$
|
8.7
|
|
|
$
|
1,188.2
|
|
Net investment income
|
|
45.9
|
|
|
1.9
|
|
|
4.2
|
|
|
8.8
|
|
|
60.8
|
|
|||||
Net investment income (loss) - surplus note interest
|
|
—
|
|
|
15.8
|
|
|
(15.8
|
)
|
|
—
|
|
|
—
|
|
|||||
Net realized and unrealized investment (losses) gains
|
|
(35.1
|
)
|
|
(.3
|
)
|
|
.9
|
|
|
259.9
|
|
(2)
|
225.4
|
|
|||||
Other (expense) revenue
|
|
(.6
|
)
|
|
—
|
|
|
.7
|
|
|
334.1
|
|
(4)
|
334.2
|
|
|||||
Total revenues
(3)
|
|
1,186.4
|
|
|
19.9
|
|
|
(9.2
|
)
|
|
611.5
|
|
|
1,808.6
|
|
|||||
Losses and LAE
|
|
700.7
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
708.9
|
|
|||||
Insurance and reinsurance acquisition expenses
|
|
213.8
|
|
|
.6
|
|
|
2.3
|
|
|
3.4
|
|
|
220.1
|
|
|||||
Other underwriting expenses
|
|
218.2
|
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
218.6
|
|
|||||
General and administrative expenses
|
|
14.1
|
|
|
1.4
|
|
|
35.4
|
|
|
408.0
|
|
(5)
|
458.9
|
|
|||||
Amortization of intangible assets
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
27.3
|
|
|
28.6
|
|
|||||
Interest expense
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|
18.6
|
|
|||||
Total expenses
|
|
1,161.1
|
|
|
2.0
|
|
|
38.1
|
|
|
452.5
|
|
|
1,653.7
|
|
|||||
Pre-tax income (loss)
|
|
$
|
25.3
|
|
|
$
|
17.9
|
|
|
$
|
(47.3
|
)
|
|
$
|
159.0
|
|
|
$
|
154.9
|
|
|
|
|
|
HG Global/BAM
|
|
|
|
|
||||||||||||
Millions
|
|
OneBeacon
|
|
HG Global
|
|
BAM
(1)
|
|
Other
Operations
|
|
Total
|
||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earned insurance and reinsurance premiums
|
|
$
|
1,177.1
|
|
|
$
|
1.4
|
|
|
$
|
.4
|
|
|
$
|
6.1
|
|
|
$
|
1,185.0
|
|
Net investment income
|
|
43.4
|
|
|
1.4
|
|
|
5.7
|
|
|
9.0
|
|
|
59.5
|
|
|||||
Net investment income (loss) - surplus note interest
|
|
—
|
|
|
15.7
|
|
|
(15.7
|
)
|
|
—
|
|
|
—
|
|
|||||
Net realized and unrealized investment gains
|
|
40.4
|
|
|
1.7
|
|
|
6.6
|
|
|
29.8
|
|
|
78.5
|
|
|||||
Other revenue
|
|
5.8
|
|
|
—
|
|
|
.6
|
|
|
124.7
|
|
(4)
|
131.1
|
|
|||||
Total revenues
(3)
|
|
1,266.7
|
|
|
20.2
|
|
|
(2.4
|
)
|
|
169.6
|
|
|
1,454.1
|
|
|||||
Losses and LAE
|
|
815.1
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
|
824.0
|
|
|||||
Insurance and reinsurance acquisition expenses
|
|
203.3
|
|
|
.3
|
|
|
1.8
|
|
|
.8
|
|
|
206.2
|
|
|||||
Other underwriting expenses
|
|
179.2
|
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
179.6
|
|
|||||
General and administrative expenses
|
|
12.4
|
|
|
1.6
|
|
|
35.9
|
|
|
196.1
|
|
|
246.0
|
|
|||||
Amortization of intangible assets
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
10.3
|
|
|
11.7
|
|
|||||
Interest expense
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
15.6
|
|
|||||
Total expenses
|
|
1,224.4
|
|
|
1.9
|
|
|
38.1
|
|
|
218.7
|
|
|
1,483.1
|
|
|||||
Pre-tax income (loss)
|
|
$
|
42.3
|
|
|
$
|
18.3
|
|
|
$
|
(40.5
|
)
|
|
$
|
(49.1
|
)
|
|
$
|
(29.0
|
)
|
|
|
|
|
HG Global/BAM
|
|
|
|
|
||||||||||||
Millions
|
|
OneBeacon
|
|
HG Global
|
|
BAM
(1)
|
|
Other
Operations
|
|
Total
|
||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earned insurance and reinsurance premiums
|
|
$
|
1,120.4
|
|
|
$
|
.4
|
|
|
$
|
.1
|
|
|
$
|
—
|
|
|
$
|
1,120.9
|
|
Net investment income
|
|
43.0
|
|
|
1.0
|
|
|
4.7
|
|
|
11.1
|
|
|
59.8
|
|
|||||
Net investment income (loss) - surplus note interest
|
|
—
|
|
|
40.2
|
|
|
(40.2
|
)
|
|
—
|
|
|
—
|
|
|||||
Net realized and unrealized investment gains (losses)
|
|
49.4
|
|
|
(2.0
|
)
|
|
(9.3
|
)
|
|
95.8
|
|
|
133.9
|
|
|||||
Other revenue
|
|
31.2
|
|
|
—
|
|
|
.4
|
|
|
15.4
|
|
|
47.0
|
|
|||||
Total revenues
(3)
|
|
1,244.0
|
|
|
39.6
|
|
|
(44.3
|
)
|
|
122.3
|
|
|
1,361.6
|
|
|||||
Losses and LAE
|
|
622.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
622.1
|
|
|||||
Insurance and reinsurance acquisition expenses
|
|
208.9
|
|
|
.1
|
|
|
1.4
|
|
|
—
|
|
|
210.4
|
|
|||||
Other underwriting expenses
|
|
204.8
|
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
205.2
|
|
|||||
General and administrative expenses
|
|
10.6
|
|
|
1.4
|
|
|
32.5
|
|
|
103.2
|
|
|
147.7
|
|
|||||
Amortization of intangible assets
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|||||
Interest expense
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|
16.2
|
|
|||||
Total expenses
|
|
1,060.8
|
|
|
1.5
|
|
|
34.3
|
|
|
106.4
|
|
|
1,203.0
|
|
|||||
Pre-tax income (loss)
|
|
$
|
183.2
|
|
|
$
|
38.1
|
|
|
$
|
(78.6
|
)
|
|
$
|
15.9
|
|
|
$
|
158.6
|
|
(1)
|
BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes surplus notes and is not reduced by accruals of interest expense on the surplus notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the New York Department of Financial Services.
|
(2)
|
Net realized and unrealized investment gains (losses) in the Other Operations segment includes the unrealized gain of
$258.8
related to the investment in Symetra common shares, representing the difference between the carrying value under the equity method at November 5, 2015 and the fair value at December 31, 2015. (See
Note 17 - “Investments in Unconsolidated Affiliates”
).
|
|
|
|
|
HG Global/BAM
|
|
|
|
|
|
|
|||||||||||||||
Selected Balance Sheet Data
Millions
|
|
OneBeacon
|
|
HG Global
|
|
BAM
|
|
Other
Operations
|
|
Discontinued
Operations
|
|
Total
|
|||||||||||||
December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments
|
|
$
|
2,591.4
|
|
|
$
|
136.2
|
|
|
$
|
460.3
|
|
|
$
|
1,092.8
|
|
|
$
|
—
|
|
|
$
|
4,280.7
|
|
|
Reinsurance recoverable on paid and unpaid losses
|
|
193.5
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
194.0
|
|
|||||||
Assets held for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,407.0
|
|
|
4,407.0
|
|
|||||||
Total assets
|
|
3,602.7
|
|
|
739.0
|
|
|
(91.1
|
)
|
(1
|
)
|
1,626.9
|
|
|
4,407.0
|
|
|
10,284.5
|
|
||||||
Loss and LAE reserves
|
|
1,389.8
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
1,395.8
|
|
|||||||
Liabilities held for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,884.0
|
|
|
2,884.0
|
|
|||||||
Total liabilities
|
|
2,598.2
|
|
|
181.2
|
|
|
48.9
|
|
|
204.2
|
|
|
2,884.0
|
|
|
5,916.5
|
|
|||||||
Total White Mountains’s common shareholders’
equity |
|
755.2
|
|
|
540.7
|
|
|
—
|
|
|
1,344.3
|
|
|
1,273.0
|
|
|
3,913.2
|
|
|||||||
Non-controlling interest
|
|
249.3
|
|
|
17.1
|
|
|
(140.0
|
)
|
|
78.4
|
|
|
—
|
|
(2)
|
204.8
|
|
|||||||
December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments
|
|
$
|
2,525.8
|
|
|
$
|
121.0
|
|
|
$
|
454.2
|
|
|
$
|
641.4
|
|
|
$
|
—
|
|
|
$
|
3,742.4
|
|
|
Reinsurance recoverable on paid and unpaid losses
|
|
173.8
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
173.9
|
|
|||||||
Assets held for sale
|
|
58.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,572.5
|
|
|
4,630.6
|
|
|||||||
Total assets
|
|
3,559.8
|
|
|
704.4
|
|
|
(89.4
|
)
|
(1
|
)
|
1,708.4
|
|
|
4,572.5
|
|
|
10,455.7
|
|
||||||
Loss and LAE reserves
|
|
1,342.2
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
|
—
|
|
|
1,350.0
|
|
|||||||
Liabilities held for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,105.3
|
|
|
3,105.3
|
|
|||||||
Total liabilities
|
|
2,510.5
|
|
|
121.0
|
|
|
32.5
|
|
|
148.0
|
|
|
3,105.3
|
|
|
5,917.3
|
|
|||||||
Total White Mountains’s common shareholders’
equity |
|
787.5
|
|
|
565.5
|
|
|
—
|
|
|
1,425.5
|
|
|
1,217.2
|
|
|
3,995.7
|
|
|||||||
Non-controlling interest
|
|
261.8
|
|
|
17.9
|
|
|
(121.9
|
)
|
|
134.9
|
|
|
—
|
|
(2)
|
292.7
|
|
(1)
|
BAM total assets reflect the elimination of
$503.0
in surplus notes issued to HG Global and its subsidiaries, and
$90.2
and
$74.4
in accrued interest related to those surplus notes as of December 31, 2015 and 2014.
|
|
|
November 5,
|
|
December 31,
|
||||
Millions
|
|
2015
|
|
2014
|
||||
Symetra common shares
|
|
$
|
394.4
|
|
|
$
|
373.8
|
|
Unrealized (losses) gains from Symetra’s fixed maturity portfolio
|
|
(1.6
|
)
|
|
37.6
|
|
||
Carrying value of Symetra common shares
|
|
392.8
|
|
|
411.4
|
|
||
|
|
|
|
|
||||
Hamer
|
|
—
|
|
|
3.0
|
|
||
Total investments in unconsolidated affiliates
|
|
$
|
392.8
|
|
|
$
|
414.4
|
|
Millions
|
|
Common
shares
|
|
Warrants
|
|
Total
|
||||||
Equity method carrying value of investment in Symetra as of December 31, 2012
(2)
|
|
$
|
351.2
|
|
|
$
|
30.3
|
|
|
$
|
381.5
|
|
Equity in earnings
(1)(3)(6)
|
|
37.8
|
|
|
—
|
|
|
37.8
|
|
|||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio
(4)(5)
|
|
(106.4
|
)
|
|
—
|
|
|
(106.4
|
)
|
|||
Dividends received
|
|
(6.4
|
)
|
|
—
|
|
|
(6.4
|
)
|
|||
Increase in value of warrants
|
|
—
|
|
|
10.8
|
|
|
10.8
|
|
|||
Exercise of warrants
|
|
41.1
|
|
|
(41.1
|
)
|
|
—
|
|
|||
Equity method carrying value of investment in Symetra as of December 31, 2013
(2)
|
|
317.3
|
|
|
—
|
|
|
317.3
|
|
|||
Equity in earnings
(1)(3)(6)
|
|
47.0
|
|
|
—
|
|
|
47.0
|
|
|||
Equity in net unrealized losses from Symetra’s fixed maturity portfolio
(4)(5)
|
|
81.2
|
|
|
—
|
|
|
81.2
|
|
|||
Dividends received
|
|
(34.1
|
)
|
|
—
|
|
|
(34.1
|
)
|
|||
Equity method carrying value of investment in Symetra as of December 31, 2014
(2)
|
|
411.4
|
|
|
—
|
|
|
411.4
|
|
|||
Equity in earnings
(1)(3)(6)
|
|
25.1
|
|
|
—
|
|
|
25.1
|
|
|||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio
(4)(5)
|
|
(39.2
|
)
|
|
—
|
|
|
(39.2
|
)
|
|||
Distribution from Prospector Offshore Fund
|
|
12.4
|
|
|
—
|
|
|
12.4
|
|
|||
Dividends received
|
|
(16.9
|
)
|
|
—
|
|
|
(16.9
|
)
|
|||
Equity method carrying value of investment in Symetra as of November 5, 2015
(2)(7)
|
|
$
|
392.8
|
|
|
$
|
—
|
|
|
$
|
392.8
|
|
(1)
|
Equity in earnings for the period ended November 5, 2015 and years ended December 31, 2014 and 2013 excludes tax expense of
$1.6
,
$3.3
, and
$2.8
|
(2)
|
Includes White Mountains’s equity in net unrealized gains (losses) from Symetra’s fixed maturity portfolio of
$(1.6)
,
$37.6
, and
$(43.6)
as of November 5, 2015 and December 31, 2014 and 2013, which excludes tax benefit (expense) of
$0.2
,
$(2.7)
and
$3.2
|
(3)
|
Equity in earnings for the period ended November 5, 2015 and years ended December 31, 2014 and 2013 includes
$2.3
,
$3.0
and
$3.0
increases relating to the pre-tax amortization of the Symetra common share basis difference.
|
(4)
|
Net unrealized gains for the period ended November 5, 2015 and years ended December 31, 2014 and 2013 includes
$9.4
,
$12.7
and
$11.8
increases relating to the pre-tax amortization of the Symetra common share basis difference.
|
(5)
|
Net unrealized gains (losses) from Symetra’s fixed maturity portfolio excludes tax benefit (expense) of
$2.9
,
$(5.9)
and
$8.3
for the period ended November 5, 2015 and years ended December 31, 2014 and 2013.
|
(6)
|
Equity in earnings for the period ended November 5, 2015 and years ended December 31, 2014 and 2013 includes
$(0.1)
,
$(0.1)
, and
$0.2
(gain) loss from the dilutive effect of Symetra’s yearly dividend and the issuance of restricted shares by Symetra
|
(7)
|
The aggregate value of White Mountains’s investment in common shares of Symetra was
$651.2
based upon the quoted market price of
$31.67
per share as of November 5, 2015.
|
|
|
September 30,
|
|
December 31,
|
||||
Millions
|
|
2015
|
|
2014
|
||||
Symetra balance sheet data:
|
|
|
|
|
|
|
||
Total investments
|
|
$
|
32,409.2
|
|
|
$
|
30,634.3
|
|
Separate account assets
|
|
885.9
|
|
|
949.8
|
|
||
Total assets
|
|
34,962.8
|
|
|
33,001.7
|
|
||
Policyholder liabilities
|
|
29,492.0
|
|
|
27,276.0
|
|
||
Long-term debt
|
|
697.5
|
|
|
697.2
|
|
||
Separate account liabilities
|
|
885.9
|
|
|
949.8
|
|
||
Total liabilities
|
|
31,836.7
|
|
|
29,641.1
|
|
||
Common shareholders’ equity
|
|
3,126.1
|
|
|
3,360.6
|
|
|
|
Nine months ended September 30,
|
|
Year ended December 31,
|
||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Symetra income statement data:
|
|
|
|
|
|
|
||||||
Net premiums earned
|
|
$
|
539.3
|
|
|
$
|
629.1
|
|
|
$
|
627.2
|
|
Net investment income
|
|
994.3
|
|
|
1,320.5
|
|
|
1,285.0
|
|
|||
Total revenues
|
|
1,605.9
|
|
|
2,182.4
|
|
|
2,139.5
|
|
|||
Policy benefits
|
|
1,143.7
|
|
|
1,399.7
|
|
|
1,394.9
|
|
|||
Total expenses
|
|
1,543.6
|
|
|
1,882.5
|
|
|
1,865.4
|
|
|||
Net income
|
|
89.6
|
|
|
254.4
|
|
|
220.7
|
|
|||
Comprehensive net (loss) income
|
|
(234.1
|
)
|
|
397.0
|
|
|
(777.6
|
)
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
OBH Senior Notes
|
|
$
|
276.4
|
|
|
$
|
274.8
|
|
|
$
|
286.0
|
|
|
$
|
274.7
|
|
Tranzact Bank Facility
|
|
102.8
|
|
|
102.9
|
|
|
68.7
|
|
|
67.4
|
|
||||
MediaAlpha Bank Facility
|
|
15.0
|
|
|
14.7
|
|
|
—
|
|
|
—
|
|
|
|
Type of Surplus Note
|
|
|
||||||||
Millions
|
|
Seller Priority
|
|
Pari Passu
|
|
Total
|
||||||
Par Value
|
|
$
|
57.9
|
|
|
$
|
43.1
|
|
|
$
|
101.0
|
|
Fair value adjustments to reflect:
|
|
|
|
|
|
|
||||||
Current market rates on public debt and contract-based repayments
(1)
|
|
1.6
|
|
|
(8.4
|
)
|
|
(6.8
|
)
|
|||
Regulatory approval
(2)
|
|
(4.6
|
)
|
|
(8.0
|
)
|
|
(12.6
|
)
|
|||
Liquidity adjustment
(3)
|
|
(11.0
|
)
|
|
(5.7
|
)
|
|
(16.7
|
)
|
|||
Total adjustments
|
|
(14.0
|
)
|
|
(22.1
|
)
|
|
(36.1
|
)
|
|||
Fair value
|
|
$
|
43.9
|
|
|
$
|
21.0
|
|
|
$
|
64.9
|
|
(1)
|
Represents the value of the OneBeacon Surplus Notes, at current market yields on publicly traded debt, and assuming issuer is allowed to make principal and interest payments when its financial capacity is available, as measured by statutory capital in excess of a 250% RBC score.
|
(2)
|
Represents anticipated delay in securing regulatory approvals of interest and principal payments to reflect graduated changes in Issuer’s statutory surplus.
T
he monetary impact of the anticipated delay is measured based on credit spreads of public securities with roughly equivalent percentages of discounted payments missed.
|
(3)
|
Represents impact of liquidity spread to account for OneBeacon’s sole ownership of the surplus notes, lack of a trading market and ongoing regulatory approval risk.
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Assets held for sale
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
|
$
|
2,374.0
|
|
|
$
|
2,362.3
|
|
Short term
|
|
352.0
|
|
|
494.9
|
|
||
Common Equities
|
|
174.4
|
|
|
189.9
|
|
||
Other
|
|
72.2
|
|
|
95.6
|
|
||
Total Investments
|
|
2,972.6
|
|
|
3,142.7
|
|
||
Cash
|
|
143.9
|
|
|
111.5
|
|
||
Reinsurance recoverable on unpaid losses
|
|
283.1
|
|
|
322.2
|
|
||
Reinsurance recoverable on paid losses
|
|
10.2
|
|
|
11.4
|
|
||
Insurance premiums receivable
|
|
323.6
|
|
|
306.6
|
|
||
Deferred acquisition costs
|
|
74.6
|
|
|
69.9
|
|
||
Deferred tax asset
|
|
303.1
|
|
|
341.5
|
|
||
Ceded unearned insurance and reinsurance premiums
|
|
87.7
|
|
|
76.2
|
|
||
Accounts receivable on unsettled investment sales
|
|
29.0
|
|
|
18.7
|
|
||
Intangible assets
|
|
10.2
|
|
|
15.2
|
|
||
Other assets
|
|
169.0
|
|
|
156.6
|
|
||
Other assets - OneBeacon building
|
|
—
|
|
|
58.1
|
|
||
Total assets held for sale
|
|
$
|
4,407.0
|
|
|
$
|
4,630.6
|
|
Liabilities held for sale
|
|
|
|
|
||||
Loss and loss adjustment expense reserves
|
|
$
|
1,644.4
|
|
|
$
|
1,809.8
|
|
Unearned insurance premiums
|
|
342.2
|
|
|
338.6
|
|
||
Debt
|
|
403.5
|
|
|
403.5
|
|
||
Deferred tax liability
|
|
263.6
|
|
|
282.8
|
|
||
Accrued incentive compensation
|
|
63.2
|
|
|
76.5
|
|
||
Ceded reinsurance payable
|
|
67.1
|
|
|
71.5
|
|
||
Funds held under reinsurance treaties
|
|
52.9
|
|
|
57.9
|
|
||
Accounts payable on unsettled investment purchases
|
|
—
|
|
|
2.1
|
|
||
Other liabilities
|
|
47.1
|
|
|
62.6
|
|
||
Total liabilities held for sale
|
|
2,884.0
|
|
|
3,105.3
|
|
||
Net assets held for sale
|
|
$
|
1,523.0
|
|
|
$
|
1,525.3
|
|
|
|
Year Ended December 31, 2015
|
||||||||||
Millions
|
|
Sirius Group
|
|
Other Disc Ops
|
|
Total
|
||||||
Revenues
|
|
|
|
|
|
|
|
|||||
Earned insurance premiums
|
|
$
|
847.0
|
|
|
$
|
—
|
|
|
$
|
847.0
|
|
Net investment income
|
|
40.7
|
|
|
—
|
|
|
40.7
|
|
|||
Net realized and unrealized investment gains
|
|
15.1
|
|
|
—
|
|
|
15.1
|
|
|||
Other revenue
|
|
(20.6
|
)
|
|
(.7
|
)
|
|
(21.3
|
)
|
|||
Total revenues
|
|
882.2
|
|
|
(.7
|
)
|
|
881.5
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses
|
|
422.7
|
|
|
—
|
|
|
422.7
|
|
|||
Insurance and reinsurance acquisition expenses
|
|
189.8
|
|
|
—
|
|
|
189.8
|
|
|||
Other underwriting expenses
|
|
107.9
|
|
|
—
|
|
|
107.9
|
|
|||
Interest expense on debt
|
|
26.6
|
|
|
—
|
|
|
26.6
|
|
|||
General and administrative expenses
|
|
27.0
|
|
|
—
|
|
|
27.0
|
|
|||
Total expenses
|
|
774.0
|
|
|
—
|
|
|
774.0
|
|
|||
Pre-tax income (loss)
|
|
108.2
|
|
|
(.7
|
)
|
|
107.5
|
|
|||
Income tax expense
|
|
(27.1
|
)
|
|
.2
|
|
|
(26.9
|
)
|
|||
Net income (loss) from discontinued operations
|
|
81.1
|
|
|
(.5
|
)
|
|
80.6
|
|
|||
Net gain from sales of discontinued operations - OneBeacon
|
|
—
|
|
|
.3
|
|
|
.3
|
|
|||
Net gain from sales of discontinued operations - Esurance
|
|
—
|
|
|
17.9
|
|
|
17.9
|
|
|||
Total income from discontinued operations
|
|
81.1
|
|
|
17.7
|
|
|
98.8
|
|
|||
Change in foreign currency translation and
other from discontinued operations
|
|
(65.0
|
)
|
|
—
|
|
|
(65.0
|
)
|
|||
Comprehensive income from discontinued operations
|
|
$
|
16.1
|
|
|
$
|
17.7
|
|
|
$
|
33.8
|
|
|
|
Year Ended December 31, 2014
|
||||||||||
Millions
|
|
Sirius Group
|
|
Other Disc Ops
|
|
Total
|
||||||
Revenues
|
|
|
|
|
|
|
|
|||||
Earned insurance premiums
|
|
$
|
873.9
|
|
|
$
|
.1
|
|
|
$
|
874.0
|
|
Net investment income
|
|
40.9
|
|
|
—
|
|
|
40.9
|
|
|||
Net realized and unrealized investment gains
|
|
205.4
|
|
|
—
|
|
|
205.4
|
|
|||
Other revenue
|
|
(62.4
|
)
|
|
—
|
|
|
(62.4
|
)
|
|||
Total revenues
|
|
1,057.8
|
|
|
.1
|
|
|
1,057.9
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|||||
Loss and loss adjustment expenses
|
|
345.3
|
|
|
(.7
|
)
|
|
344.6
|
|
|||
Insurance and reinsurance acquisition expenses
|
|
193.6
|
|
|
.1
|
|
|
193.7
|
|
|||
Other underwriting expenses
|
|
129.7
|
|
|
3.5
|
|
|
133.2
|
|
|||
Interest expense on debt
|
|
26.3
|
|
|
—
|
|
|
26.3
|
|
|||
General and administrative expenses
|
|
30.5
|
|
|
—
|
|
|
30.5
|
|
|||
Total expenses
|
|
725.4
|
|
|
2.9
|
|
|
728.3
|
|
|||
Pre-tax income (loss)
|
|
332.4
|
|
|
(2.8
|
)
|
|
329.6
|
|
|||
Income tax (expense) benefit
|
|
(70.4
|
)
|
|
1.0
|
|
|
(69.4
|
)
|
|||
Net income (loss) from discontinued operations
|
|
262.0
|
|
|
(1.8
|
)
|
|
260.2
|
|
|||
Net gain from sales of discontinued operations - FFIC
|
|
—
|
|
|
14.0
|
|
|
14.0
|
|
|||
Net losses from sales of discontinued operations - OneBeacon
|
|
—
|
|
|
(18.8
|
)
|
|
(18.8
|
)
|
|||
Net gain from sales of discontinued operations - Esurance
|
|
—
|
|
|
3.2
|
|
|
3.2
|
|
|||
Total income from discontinued operations
|
|
262.0
|
|
|
(3.4
|
)
|
|
258.6
|
|
|||
Change in foreign currency translation and
other from discontinued operations
|
|
(169.5
|
)
|
|
—
|
|
|
(169.5
|
)
|
|||
Comprehensive income (loss) from discontinued operations
|
|
$
|
92.5
|
|
|
$
|
(3.4
|
)
|
|
$
|
89.1
|
|
|
|
Year Ended December 31, 2013
|
||||||||||
Millions
|
|
Sirius Group
|
|
Other Disc Ops
|
|
Total
|
||||||
Revenues
|
|
|
|
|
|
|
|
|||||
Earned insurance premiums
|
|
$
|
866.4
|
|
|
$
|
.8
|
|
|
$
|
867.2
|
|
Net investment income
|
|
46.7
|
|
|
—
|
|
|
46.7
|
|
|||
Net realized and unrealized investment gains
|
|
27.8
|
|
|
—
|
|
|
27.8
|
|
|||
Other revenue
|
|
16.8
|
|
|
10.8
|
|
|
27.6
|
|
|||
Total revenues
|
|
957.7
|
|
|
11.6
|
|
|
969.3
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|||||
Loss and loss adjustment expenses
|
|
418.4
|
|
|
78.9
|
|
|
497.3
|
|
|||
Insurance and reinsurance acquisition expenses
|
|
166.5
|
|
|
—
|
|
|
166.5
|
|
|||
Other underwriting expenses
|
|
126.1
|
|
|
(.2
|
)
|
|
125.9
|
|
|||
Interest expense on debt
|
|
26.3
|
|
|
—
|
|
|
26.3
|
|
|||
General and administrative expenses
|
|
32.2
|
|
|
—
|
|
|
32.2
|
|
|||
Total expenses
|
|
769.5
|
|
|
78.7
|
|
|
848.2
|
|
|||
Pre-tax income (loss)
|
|
188.2
|
|
|
(67.1
|
)
|
|
121.1
|
|
|||
Income tax (expense) benefit
|
|
(46.2
|
)
|
|
25.0
|
|
|
(21.2
|
)
|
|||
Net income (loss) from discontinued operations
|
|
142.0
|
|
|
(42.1
|
)
|
|
99.9
|
|
|||
Net gain from sales of discontinued operations
|
|
—
|
|
|
46.6
|
|
|
46.6
|
|
|||
Total income from discontinued operations
|
|
142.0
|
|
|
4.5
|
|
|
146.5
|
|
|||
Change in foreign currency translation and
other from discontinued operations
|
|
6.1
|
|
|
—
|
|
|
6.1
|
|
|||
Comprehensive income from discontinued operations
|
|
$
|
148.1
|
|
|
$
|
4.5
|
|
|
$
|
152.6
|
|
|
|
Year ended
|
||||||||||
|
|
December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash provided from (used for) operations
|
|
$
|
14.7
|
|
|
$
|
60.0
|
|
|
$
|
(61.5
|
)
|
Net cash provided from investing activities
|
|
31.3
|
|
|
35.8
|
|
|
148.7
|
|
|||
Net cash used for financing activities
|
|
(9.1
|
)
|
|
(63.2
|
)
|
|
(87.5
|
)
|
|||
Effect of exchange rate changes on cash
|
|
(4.5
|
)
|
|
(14.3
|
)
|
|
(.2
|
)
|
|||
Net change in cash during the period
|
|
32.4
|
|
|
18.3
|
|
|
(.5
|
)
|
|||
Cash balances at beginning of period
|
|
111.5
|
|
|
93.2
|
|
|
93.7
|
|
|||
Cash balances at end of period
|
|
$
|
143.9
|
|
|
$
|
111.5
|
|
|
$
|
93.2
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
|
|
|
|
||||
Net income attributable to White Mountains’s common shareholders
|
|
$
|
98.8
|
|
|
$
|
258.6
|
|
|
$
|
146.5
|
|
Allocation of income for participating unvested restricted common shares
(1)
|
|
(1.1
|
)
|
|
(3.3
|
)
|
|
(2.2
|
)
|
|||
Net income attributable to White Mountains’s common shareholders, net of
restricted common share amounts
(2)
|
|
$
|
97.7
|
|
|
$
|
255.3
|
|
|
$
|
144.3
|
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
5,879.2
|
|
|
6,104.9
|
|
|
6,200.4
|
|
|||
Average unvested restricted common shares
(3)
|
|
(68.0
|
)
|
|
(78.9
|
)
|
|
(91.4
|
)
|
|||
Basic earnings per share denominator
|
|
5,811.2
|
|
|
6,026.0
|
|
|
6,109.0
|
|
|||
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
5,879.2
|
|
|
6,104.9
|
|
|
6,200.4
|
|
|||
Average unvested restricted common shares
(3)
|
|
(68.0
|
)
|
|
(78.9
|
)
|
|
(91.4
|
)
|
|||
Average outstanding dilutive options to acquire common shares
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted earnings per share denominator
|
|
5,811.2
|
|
|
6,026.0
|
|
|
6,109.0
|
|
|||
Basic and diluted earnings per share (in dollars):
|
|
$
|
16.80
|
|
|
$
|
42.36
|
|
|
$
|
23.63
|
|
(1)
|
Restricted shares issued by White Mountains contain dividend participation features, and therefore, are considered participating securities.
|
(2)
|
Net income (loss) attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the years ended
December 31, 2015, 2014 and 2013
.
|
(3)
|
Restricted common shares outstanding vest either in equal annual installments or upon a stated date (see
Note 13 - “Employee Share-Based Incentive Compensation Plans”
).
|
(4)
|
The diluted earnings (loss) per share denominator for the years ended
December 31, 2015, 2014 and 2013
does not include the impact of
125,000
common shares issuable upon exercise of the non-qualified options outstanding as they are anti-dilutive to the calculation.
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Beginning of period
|
|
$
|
4.1
|
|
|
$
|
11.1
|
|
Net realized and unrealized losses
|
|
(2.2
|
)
|
|
(7.0
|
)
|
||
End of period
|
|
$
|
1.9
|
|
|
$
|
4.1
|
|
|
|
December 31, 2015
|
||||
Millions
|
|
Collateral Balances Held
|
|
Standard & Poor’s
Rating
(1)
|
||
Barclays Bank Plc
|
|
$
|
1.3
|
|
|
A-
|
Nordea Bank Finland Plc
|
|
.6
|
|
|
AA-
|
|
Total
|
|
$
|
1.9
|
|
|
|
(1)
|
Standard & Poor’s ratings as detailed above are: “A” (Strong, which is the sixth highest of
twenty-one
creditworthiness ratings) and “AA-” (Very Strong, which is the fourth highest of
twenty-one
creditworthiness ratings).
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
SIG Senior Notes
|
|
$
|
410.0
|
|
|
$
|
399.8
|
|
|
$
|
437.8
|
|
|
$
|
399.7
|
|
SIG Preference Shares
|
|
255.0
|
|
|
250.0
|
|
|
260.0
|
|
|
250.0
|
|
/s/ RAYMOND BARRETTE
|
|
/s/ DAVID T. FOY
|
Chairman and CEO
(Principal Executive Officer)
|
|
Executive Vice President and CFO
(Principal Financial Officer)
|
/s/ PricewaterhouseCoopers LLP
|
|
Boston, Massachusetts
|
|
February 29, 2016
|
|
|
|
2015 Three Months Ended
|
|
2014 Three Months Ended
|
||||||||||||||||||||||||||||
Millions, except per share amounts
|
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
||||||||||||||||
Revenues
|
|
$
|
678.5
|
|
|
$
|
334.7
|
|
|
$
|
403.6
|
|
|
$
|
391.8
|
|
|
$
|
405.6
|
|
|
$
|
323.2
|
|
|
$
|
393.5
|
|
|
$
|
331.8
|
|
Expenses
|
|
420.4
|
|
|
429.3
|
|
|
412.7
|
|
|
391.3
|
|
|
471.3
|
|
|
358.7
|
|
|
359.9
|
|
|
293.2
|
|
||||||||
Pre-tax income
|
|
258.1
|
|
|
(94.6
|
)
|
|
(9.1
|
)
|
|
.5
|
|
|
(65.7
|
)
|
|
(35.5
|
)
|
|
33.6
|
|
|
38.6
|
|
||||||||
Tax benefit (expense)
|
|
1.5
|
|
|
1.6
|
|
|
2.2
|
|
|
(4.6
|
)
|
|
26.2
|
|
|
4.7
|
|
|
(7.1
|
)
|
|
(9.0
|
)
|
||||||||
Income (loss) from continuing operations
|
|
259.6
|
|
|
(93.0
|
)
|
|
(6.9
|
)
|
|
(4.1
|
)
|
|
(39.5
|
)
|
|
(30.8
|
)
|
|
26.5
|
|
|
29.6
|
|
||||||||
Income from discontinued operations, net of tax
|
|
7.3
|
|
|
14.2
|
|
|
3.5
|
|
|
73.8
|
|
|
82.1
|
|
|
63.9
|
|
|
61.1
|
|
|
51.5
|
|
||||||||
Non-controlling interest in consolidated subsidiaries
|
|
(6.1
|
)
|
|
16.0
|
|
|
.9
|
|
|
7.3
|
|
|
15.0
|
|
|
11.2
|
|
|
(4.6
|
)
|
|
.6
|
|
||||||||
Equity in earnings of unconsolidated affiliates
|
|
7.1
|
|
|
3.9
|
|
|
6.8
|
|
|
7.3
|
|
|
12.3
|
|
|
7.0
|
|
|
12.5
|
|
|
13.8
|
|
||||||||
Income (loss) attributable to White Mountains’s common shareholders
|
|
$
|
267.9
|
|
|
$
|
(58.9
|
)
|
|
$
|
4.3
|
|
|
$
|
84.3
|
|
|
$
|
69.9
|
|
|
$
|
51.3
|
|
|
$
|
95.5
|
|
|
$
|
95.5
|
|
Income (loss) attributable to White Mountains’s common shareholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
|
$
|
45.99
|
|
|
$
|
(12.42
|
)
|
|
$
|
.13
|
|
|
$
|
1.76
|
|
|
$
|
(2.03
|
)
|
|
$
|
(2.07
|
)
|
|
$
|
5.58
|
|
|
$
|
7.13
|
|
Discontinued operations
|
|
1.29
|
|
|
2.41
|
|
|
.59
|
|
|
12.33
|
|
|
13.68
|
|
|
10.49
|
|
|
9.92
|
|
|
8.35
|
|
||||||||
Total consolidated operations
|
|
$
|
47.28
|
|
|
$
|
(10.01
|
)
|
|
$
|
.72
|
|
|
$
|
14.09
|
|
|
$
|
11.65
|
|
|
$
|
8.42
|
|
|
$
|
15.50
|
|
|
$
|
15.48
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
45.96
|
|
|
$
|
(12.42
|
)
|
|
$
|
.13
|
|
|
$
|
1.76
|
|
|
$
|
(2.03
|
)
|
|
$
|
(2.07
|
)
|
|
$
|
5.58
|
|
|
$
|
7.13
|
|
Discontinued operations
|
|
1.29
|
|
|
2.41
|
|
|
.59
|
|
|
12.33
|
|
|
13.68
|
|
|
10.49
|
|
|
9.92
|
|
|
8.35
|
|
||||||||
Total consolidated operations
|
|
$
|
47.25
|
|
|
$
|
(10.01
|
)
|
|
$
|
.72
|
|
|
$
|
14.09
|
|
|
$
|
11.65
|
|
|
$
|
8.42
|
|
|
$
|
15.50
|
|
|
$
|
15.48
|
|
Millions
|
|
Cost
|
|
Carrying
Value
|
|
Fair
Value
|
||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|||
Bonds:
|
|
|
|
|
|
|
||||||
U.S. Government and government agencies and authorities
|
|
$
|
160.4
|
|
|
$
|
160.0
|
|
|
$
|
160.0
|
|
Debt securities issued by corporations
|
|
1,001.0
|
|
|
1,000.0
|
|
|
1,000.0
|
|
|||
States, municipalities and political subdivisions
|
|
227.8
|
|
|
228.8
|
|
|
228.8
|
|
|||
Mortgage-backed and asset-backed securities
|
|
1,170.6
|
|
|
1,167.0
|
|
|
1,167.0
|
|
|||
Foreign governments
|
|
1.0
|
|
|
1.2
|
|
|
1.2
|
|
|||
Redeemable preferred stocks
|
|
78.3
|
|
|
82.7
|
|
|
82.7
|
|
|||
Total fixed maturity investments
|
|
2,639.1
|
|
|
2,639.7
|
|
|
2,639.7
|
|
|||
Short-term investments
|
|
211.3
|
|
|
211.3
|
|
|
211.3
|
|
|||
Common equity securities:
|
|
|
|
|
|
|
||||||
Exchange traded funds
|
|
147.2
|
|
|
141.8
|
|
|
141.8
|
|
|||
Banks, trust and insurance companies
|
|
436.9
|
|
|
694.7
|
|
|
694.7
|
|
|||
Public utilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Industrial, miscellaneous and other
|
|
238.4
|
|
|
277.4
|
|
|
277.4
|
|
|||
Total common equity securities
|
|
822.5
|
|
|
1,113.9
|
|
|
1,113.9
|
|
|||
Other long-term investments
(1)
|
|
285.9
|
|
|
297.3
|
|
|
297.3
|
|
|||
Total investments
|
|
$
|
3,958.8
|
|
|
$
|
4,262.2
|
|
|
$
|
4,262.2
|
|
|
|
December 31,
|
||||||
Millions
|
|
2015
|
|
2014
|
||||
Assets:
|
|
|
|
|
|
|
||
Cash
|
|
$
|
.3
|
|
|
$
|
.2
|
|
Short-term investments, at amortized cost
|
|
23.4
|
|
|
31.0
|
|
||
Other assets
|
|
6.3
|
|
|
.2
|
|
||
Investments in consolidated and unconsolidated affiliates
|
|
4,350.9
|
|
|
4,118.5
|
|
||
Total assets
|
|
$
|
4,380.9
|
|
|
$
|
4,149.9
|
|
Liabilities:
|
|
|
|
|
|
|
||
Revolving line of credit
|
|
$
|
50.0
|
|
|
$
|
—
|
|
Payable to subsidiary
(2)
|
|
400.0
|
|
|
161.6
|
|
||
Other liabilities
|
|
17.7
|
|
|
(7.4
|
)
|
||
Total liabilities
|
|
467.7
|
|
|
154.2
|
|
||
White Mountains’s common shareholders’ equity
|
|
3,913.2
|
|
|
3,995.7
|
|
||
Total liabilities and equity
|
|
$
|
4,380.9
|
|
|
$
|
4,149.9
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues (including realized gains and losses)
|
|
$
|
5.0
|
|
|
$
|
.3
|
|
|
$
|
1.2
|
|
Expenses
|
|
59.9
|
|
|
32.3
|
|
|
39.0
|
|
|||
Pre-tax loss
|
|
(54.9
|
)
|
|
(32.0
|
)
|
|
(37.8
|
)
|
|||
Income tax benefit (expense)
|
|
—
|
|
|
.9
|
|
|
(.1
|
)
|
|||
Net loss
|
|
(54.9
|
)
|
|
(31.1
|
)
|
|
(37.9
|
)
|
|||
Net gain from discontinued operations, net of tax
|
|
—
|
|
|
13.9
|
|
(1)
|
—
|
|
|||
Equity in earnings from consolidated and unconsolidated affiliates
|
|
352.5
|
|
|
329.4
|
|
|
359.5
|
|
|||
Net income attributable to White Mountains’s common shareholders
|
|
297.6
|
|
|
312.2
|
|
|
321.6
|
|
|||
Other comprehensive (loss) income items, after-tax
|
|
(100.4
|
)
|
|
(101.6
|
)
|
|
(79.8
|
)
|
|||
Comprehensive income attributable to White Mountains’s common
shareholders |
|
$
|
197.2
|
|
|
$
|
210.6
|
|
|
$
|
241.8
|
|
Computation of net income available to common shareholders:
|
|
|
|
|
|
|
||||||
Net income available to common shareholders
|
|
$
|
297.6
|
|
|
$
|
312.2
|
|
|
$
|
321.6
|
|
(1)
|
During 2014, the Company received a payment from Allianz, the purchaser of White Mountains’s former subsidiary Fireman’s Fund Insurance Company (“FFIC”), related to the utilization of alternative minimum tax credits associated with the tax loss on the sale of FFIC in 1991.
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net income attributable to White Mountains’s common shareholders
|
|
$
|
297.6
|
|
|
$
|
312.2
|
|
|
$
|
321.6
|
|
Charges (credits) to reconcile net income to net cash from operations:
|
|
|
|
|
|
|
|
|
|
|||
Net realized and unrealized gain on sales of investments
|
|
—
|
|
|
(.2
|
)
|
|
(.2
|
)
|
|||
Undistributed current earnings from subsidiaries
|
|
(352.5
|
)
|
|
(329.4
|
)
|
|
(359.5
|
)
|
|||
Net gain on sale of other discontinued operations
(7)
|
|
—
|
|
|
(13.9
|
)
|
|
—
|
|
|||
Other non-cash reconciling items including restricted share and option amortization
|
|
(.4
|
)
|
|
12.9
|
|
|
15.4
|
|
|||
Net change in other assets and liabilities
(2)
|
|
21.4
|
|
|
(7.6
|
)
|
|
(2.7
|
)
|
|||
Net cash used for continuing operations
|
|
(33.9
|
)
|
|
(26.0
|
)
|
|
(25.4
|
)
|
|||
Net cash provided from discontinued operations
(7)
|
|
—
|
|
|
13.9
|
|
|
—
|
|
|||
Net cash used for operations
|
|
(33.9
|
)
|
|
(12.1
|
)
|
|
(25.4
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Net decrease in short-term investments
|
|
7.6
|
|
|
(29.6
|
)
|
|
7.5
|
|
|||
Purchases of investment securities
(4)
|
|
—
|
|
|
(7.6
|
)
|
|
(26.2
|
)
|
|||
Sales and maturities of investment securities
|
|
—
|
|
|
39.4
|
|
|
61.1
|
|
|||
Issuance of debt from subsidiaries
(5)
|
|
271.0
|
|
|
144.6
|
|
|
153.9
|
|
|||
Repayment of debt to subsidiaries
|
|
(35.0
|
)
|
|
(30.0
|
)
|
|
(10.3
|
)
|
|||
Receipt of cash flows from discontinued operations
(7)
|
|
—
|
|
|
13.9
|
|
|
—
|
|
|||
Contributions to subsidiaries
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Distributions from subsidiaries
(1)(3)(4)
|
|
15.0
|
|
|
29.7
|
|
|
.1
|
|
|||
Net cash provided from investing activities — continuing operations
|
|
258.6
|
|
|
160.4
|
|
|
186.1
|
|
|||
Net cash used for investing activities — discontinued operations
|
|
—
|
|
|
(13.9
|
)
|
|
—
|
|
|||
Net cash provided from investing activities
|
|
258.6
|
|
|
146.5
|
|
|
186.1
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Draw down of revolving line of credit
(6)
|
|
125.0
|
|
|
65.0
|
|
|
200.0
|
|
|||
Repayment of revolving line of credit
(5)(6)
|
|
(75.0
|
)
|
|
(65.0
|
)
|
|
(275.0
|
)
|
|||
Proceeds from issuances of common shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Repurchases and retirement of common shares
(5)
|
|
(268.6
|
)
|
|
(128.2
|
)
|
|
(79.8
|
)
|
|||
Dividends paid on common shares
|
|
(6.0
|
)
|
|
(6.2
|
)
|
|
(6.2
|
)
|
|||
Net cash used for financing activities — continuing operations
|
|
(224.6
|
)
|
|
(134.4
|
)
|
|
(161.0
|
)
|
|||
Net cash (used for) provided from financing activities — discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net cash used for financing activities
|
|
(224.6
|
)
|
|
(134.4
|
)
|
|
(161.0
|
)
|
|||
Net decrease in cash during the year
|
|
.1
|
|
|
—
|
|
|
(.3
|
)
|
|||
Cash balance at beginning of year
|
|
.2
|
|
|
.2
|
|
|
.5
|
|
|||
Cash balance at end of year
|
|
$
|
.3
|
|
|
$
|
.2
|
|
|
$
|
.2
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
—
|
|
|
$
|
(.3
|
)
|
|
$
|
(2.0
|
)
|
(1)
|
During 2015, the Company received a distribution of
$15.0
from Lone Tree Holdings, Ltd., a direct wholly-owned subsidiary.
|
(2)
|
For 2015, net change in other assets and liabilities includes a
$2.4
payable to the Company’s subsidiaries.
|
(3)
|
During 2014, the Company received a distribution of
$29.7
from Lone Tree Holdings, Ltd.
|
(4)
|
During 2013, the Company received a distribution of
$28.0
from Lone Tree Holdings, Ltd. The distribution included
$27.9
of fixed maturities and
$.1
of cash. Purchases of investment securities excludes the non-cash distribution of
$27.9
.
|
(5)
|
During 2015 and 2014, the Company used cash proceeds received from the issuance of debt from its direct wholly-owned subsidiary primarily to fund repurchases of its common shares. During 2013, the Company used cash proceeds received from the issuance of debt from subsidiaries to repurchase
$79.8
of its common shares and repay
$75.0
of its revolving line of credit.
|
(6)
|
The WTM Bank Facility presented in
Note 7 - “Debt”
is a direct obligation of the Registrant.
|
(7)
|
During 2014, the Company received a payment from Allianz, the purchaser of White Mountains’s former subsidiary Fireman’s Fund Insurance Company (“FFIC”), related to the utilization of alternative minimum tax credits associated with the tax loss on the sale of FFIC in 1991. See
Note 22 - “Discontinued Operations”
.
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
|
Column G
|
|
Column H
|
|
Column I
|
|
Column J
|
|
Column K
|
||||||||||||||||||||
Segment
Millions
|
|
Deferred
acquisition
costs
|
|
Future policy
benefits, losses, claims
and loss
expenses
|
|
Unearned
premiums
|
|
Other policy
claims and
benefits
payable
|
|
Premiums
earned
|
|
Net
investment
income
(1)
|
|
Benefits,
claims,
losses, and
settlement
expenses
|
|
Amortization
of deferred
policy
acquisition
costs
|
|
Other
operating
expenses
|
|
Premiums
written
|
||||||||||||||||||||
Years ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OneBeacon
(2)
|
|
$
|
100.7
|
|
|
$
|
1,389.8
|
|
|
$
|
560.3
|
|
|
$
|
—
|
|
|
$
|
1,176.2
|
|
|
$
|
45.9
|
|
|
$
|
700.7
|
|
|
$
|
213.8
|
|
|
$
|
218.2
|
|
|
$
|
1,136.6
|
|
HG Global/BAM
|
|
6.9
|
|
|
—
|
|
|
50.2
|
|
|
—
|
|
|
3.3
|
|
|
6.1
|
|
|
—
|
|
|
2.9
|
|
|
.4
|
|
|
25.9
|
|
||||||||||
Other operations
(3)
|
|
—
|
|
|
6.0
|
|
|
2.1
|
|
|
—
|
|
|
8.7
|
|
|
.2
|
|
|
8.2
|
|
|
3.4
|
|
|
—
|
|
|
10.1
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OneBeacon
(2)
|
|
$
|
103.2
|
|
|
$
|
1,342.2
|
|
|
$
|
588.3
|
|
|
$
|
—
|
|
|
$
|
1,177.1
|
|
|
$
|
43.4
|
|
|
$
|
815.1
|
|
|
$
|
203.3
|
|
|
$
|
179.2
|
|
|
$
|
1,216.9
|
|
HG Global/BAM
|
|
4.0
|
|
|
—
|
|
|
27.6
|
|
|
—
|
|
|
1.8
|
|
|
7.1
|
|
|
—
|
|
|
2.1
|
|
|
.4
|
|
|
16.2
|
|
||||||||||
Other operations
|
|
—
|
|
|
7.8
|
|
|
0.8
|
|
|
—
|
|
|
6.1
|
|
|
.2
|
|
|
8.9
|
|
|
0.8
|
|
|
—
|
|
|
5.9
|
|
||||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OneBeacon
(2)
|
|
$
|
103.7
|
|
|
$
|
1,054.3
|
|
|
$
|
544.9
|
|
|
$
|
—
|
|
|
$
|
1,120.4
|
|
|
$
|
43.0
|
|
|
$
|
622.1
|
|
|
$
|
208.9
|
|
|
$
|
204.8
|
|
|
$
|
1,088.6
|
|
Other operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The amounts shown exclude net investment income relating to non-insurance operations of
$8.6
,
$8.8
and
$11.0
for the twelve months ended
December 31, 2015, 2014 and 2013
, respectively.
|
(2)
|
The amounts shown excludes balances reclassified to held for sale in the consolidated balance sheets related to the Runoff Transaction as of December 31, 2013 and 2012 and to AutoOne as of December 31, 2011. See
Note 22 - “Discontinued Operations”
.
|
(3)
|
The Other operations amounts shown relate to SSIE. SSIE’s results are attributed to non-controlling interests.
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
|||||||||
Premiums earned
$ in millions
|
|
Gross amount
|
|
Ceded to other
companies
|
|
Assumed from
other companies
|
|
Net amount
|
|
Percentage of
amount assumed
to net
|
|||||||||
Years ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OneBeacon
(1)
|
|
$
|
1,298.0
|
|
|
$
|
(167.7
|
)
|
|
$
|
45.9
|
|
|
$
|
1,176.2
|
|
|
3.9
|
%
|
HG/BAM
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
%
|
||||
Other operations
(2)
|
|
20.7
|
|
|
(12.0
|
)
|
|
—
|
|
|
8.7
|
|
|
—
|
|
||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OneBeacon
(1)
|
|
$
|
1,209.1
|
|
|
$
|
(102.9
|
)
|
|
$
|
70.9
|
|
|
$
|
1,177.1
|
|
|
6.0
|
%
|
HG/BAM
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
%
|
||||
Other operations
(2)
|
|
22.6
|
|
|
(16.5
|
)
|
|
—
|
|
|
6.1
|
|
|
—
|
|
||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OneBeacon
(1)
|
|
$
|
1,043.3
|
|
|
$
|
(71.4
|
)
|
|
$
|
148.5
|
|
|
$
|
1,120.4
|
|
|
13.3
|
%
|
(1)
|
The amounts shown excludes balances reclassified to discontinued operations in the consolidated income statement related to the Runoff Transaction as of December 31, 2015, 2014 and 2013. See
Note 22 - “Discontinued Operations”
.
|
(2)
|
The Other operations amounts shown relate to SSIE. SSIE’s results are attributed to non-controlling interests.
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||||||
|
|
|
|
Additions (subtractions)
|
|
|
|
|
||||||||||||
Millions
|
|
Balance at beginning of
period
|
|
Charged to costs
and expenses
|
|
Charged to other
accounts
|
|
Deductions described
(1)
|
|
Balance at end of
period
|
||||||||||
Years ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reinsurance recoverable on paid losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for reinsurance balances
|
|
$
|
2.2
|
|
|
$
|
(.1
|
)
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
.7
|
|
Property and casualty insurance and reinsurance premiums receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts
|
|
1.9
|
|
|
.8
|
|
|
(.7
|
)
|
|
—
|
|
|
2.0
|
|
|||||
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for uncollectible accounts
|
|
3.3
|
|
|
3.2
|
|
|
—
|
|
|
(.7
|
)
|
|
5.8
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reinsurance recoverable on paid losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for reinsurance balances
|
|
$
|
14.3
|
|
|
$
|
(.5
|
)
|
|
$
|
—
|
|
|
$
|
(11.6
|
)
|
|
$
|
2.2
|
|
Property and casualty insurance and reinsurance premiums receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts
|
|
3.1
|
|
|
(.2
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
1.9
|
|
|||||
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for uncollectible accounts
|
|
—
|
|
|
3.6
|
|
|
—
|
|
|
(.3
|
)
|
|
3.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reinsurance recoverable on paid losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for reinsurance balances
|
|
$
|
25.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11.3
|
)
|
|
$
|
14.3
|
|
Property and casualty insurance and reinsurance premiums receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts
|
|
4.4
|
|
|
.3
|
|
|
—
|
|
|
(1.6
|
)
|
|
3.1
|
|
(1)
|
Represents net collections (charge-offs) of balances receivable.
|
(2)
|
Schedule excludes amounts related to Sirius Group for all periods presented. See
Note 22 - “Discontinued Operations”
.
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
|
Column G
|
|
Column H
|
|
Column I
|
|
Column J
|
|
Column K
|
||||||||||||||||||||||||
Affiliation with
registrant
|
|
Deferred acquisition
costs
|
|
Reserves
for Unpaid Claims and Claims Adjustment
Expenses
|
|
Discount, if any, deducted in
Column C
|
|
Unearned
Premiums
|
|
Earned
Premiums
|
|
Net investment
income
|
|
Claims and Claims
Adjustment Expenses
Incurred Related to
|
|
Amortization
of deferred policy acquisition
costs
|
|
Paid
Claims and Claims Adjustment
Expenses
|
|
Premiums
written
|
||||||||||||||||||||||||
Millions
|
|
|
|
|
|
|
|
Current
Year
(1)
|
|
Prior
Year
|
|
|
|
|||||||||||||||||||||||||||||||
OneBeacon
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
2015
|
|
$
|
100.7
|
|
|
$
|
1,389.8
|
|
|
$
|
1.1
|
|
(1)
|
$
|
560.3
|
|
|
$
|
1,176.2
|
|
|
$
|
45.9
|
|
|
$
|
702.5
|
|
|
$
|
(1.8
|
)
|
|
$
|
(213.8
|
)
|
|
$
|
677.5
|
|
|
$
|
1,136.6
|
|
2014
|
|
103.2
|
|
|
1,342.2
|
|
|
1.0
|
|
(1)
|
588.3
|
|
|
1,177.1
|
|
|
43.4
|
|
|
725.3
|
|
|
89.8
|
|
|
(203.3
|
)
|
|
608.6
|
|
|
1,216.9
|
|
|||||||||||
2013
|
|
103.7
|
|
|
1,054.3
|
|
|
3.0
|
|
(1)
|
544.9
|
|
|
1,120.4
|
|
|
43.0
|
|
|
622.1
|
|
|
—
|
|
|
(208.9
|
)
|
|
540.7
|
|
|
1,088.6
|
|
|||||||||||
Other operations
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
2015
|
|
$
|
—
|
|
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
8.7
|
|
|
$
|
.2
|
|
|
$
|
10.4
|
|
|
$
|
(2.2
|
)
|
|
$
|
—
|
|
|
$
|
10.4
|
|
|
$
|
10.1
|
|
2014
|
|
—
|
|
|
7.8
|
|
|
—
|
|
|
0.8
|
|
|
6.1
|
|
|
.2
|
|
|
6.7
|
|
|
2.2
|
|
|
—
|
|
|
14.8
|
|
|
5.9
|
|
|||||||||||
2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The amounts shown represent OneBeacon’s discount on its long-term workers compensation loss and LAE reserves, as such liabilities constitute unpaid but settled claims under which the payment pattern and ultimate costs are fixed and determinable on an individual basis. OneBeacon discounts these reserves using a discount rate which is determined based on the facts and circumstances applicable at the time the claims are settled (
2.5%
,
2.5%
and
3.5%
as of
December 31, 2015, 2014 and 2013
).
|
(2)
|
The amounts shown excludes balances reclassified to held for sale in the consolidated balance sheets related to the Runoff Transaction as of December 31, 2013. See
Note 22 - “Discontinued Operations”
.
|
(3)
|
The Other operations amounts shown relate to SSIE. SSIE’s results are attributed to non-controlling interests.
|
|
|
Year Ended
|
||||||||||||||||||
|
|
2015
|
|
2014
(1)
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Consolidated pre-tax income (loss) from continuing operations before equity in earnings of affiliates, accounting changes and extraordinary items
|
|
$
|
154.9
|
|
|
$
|
(29.0
|
)
|
|
$
|
158.6
|
|
|
$
|
97.9
|
|
|
$
|
55.7
|
|
Interest expense on debt
|
|
18.6
|
|
|
15.6
|
|
|
16.2
|
|
|
18.6
|
|
|
23.6
|
|
|||||
Interest portion of rental expense
|
|
6.1
|
|
|
5.1
|
|
|
5.3
|
|
|
6.1
|
|
|
7.8
|
|
|||||
Earnings (loss)
|
|
179.6
|
|
|
(8.3
|
)
|
|
180.1
|
|
|
122.6
|
|
|
87.1
|
|
|||||
Interest expense on debt
|
|
18.6
|
|
|
15.6
|
|
|
42.5
|
|
|
18.6
|
|
|
23.6
|
|
|||||
Interest portion of rental expense
|
|
6.1
|
|
|
5.1
|
|
|
5.3
|
|
|
6.1
|
|
|
7.8
|
|
|||||
Fixed charges
|
|
24.7
|
|
|
20.7
|
|
|
47.8
|
|
|
24.7
|
|
|
31.4
|
|
|||||
Ratio of earnings to fixed charges
|
|
7.3
|
|
|
—
|
|
|
3.8
|
|
|
5.0
|
|
|
2.8
|
|
1.
|
Compliance with Laws, Rules and Regulations
|
2.
|
Corporate Opportunities
|
3.
|
Conflicts of Interest
|
4.
|
Insider Trading
|
5.
|
Competition and Fair Dealing
|
6.
|
Gifts and Entertainment
|
7.
|
Discrimination and Harassment; Human Resources Practices
|
8.
|
Record-keeping, Retention and Destruction
|
9.
|
Confidentiality
|
10.
|
Protection and Proper Use of Company Assets and Proprietary Information
|
11.
|
Illegal Payments; Relationships with Government Personnel
|
12.
|
Waivers of the Code of Business Conduct; Applicability
|
13.
|
Reporting of Illegal, Improper or Other Questionable Behavior or Accounting/Auditing Complaints
|
14.
|
Cooperation in Internal Investigations
|
15.
|
Conflict with Subsidiary Company Business Codes of Conduct and Conflicts of Interest Policies
|
16.
|
Adopted by the Board of Directors
|
FULL NAME OF SUBSIDIARY
|
PLACE OF INCORPORATION
|
SIRIUS INTERNATIONAL HOLDING COMPANY, INC.
|
NEW YORK, USA
|
SIRIUS AMERICA INSURANCE COMPANY
|
NEW YORK, USA
|
FUND AMERICAN HOLDINGS AB
|
SWEDEN
|
GUILFORD HOLDINGS, INC.
|
DELAWARE, USA
|
HOMELAND INSURANCE COMPANY OF DELAWARE
|
DELWARE, USA
|
LONE TREE HOLDINGS LTD.
|
BERMUDA
|
MILL SHARES HOLDINGS BERMUDA LIMITED
|
BERMUDA
|
ONEBEACON U.S. ENTERPRISES HOLDINGS, INC.
|
DELAWARE, USA
|
ONEBEACON U.S. FINANCIAL SERVICES, INC.
|
DELAWARE, USA
|
ONEBEACON U.S. HOLDINGS, INC.
|
DELAWARE, USA
|
ONEBEACON HOLDINGS (GIBRALTAR) LIMITED
|
GIBRALTAR
|
S.I. HOLDINGS (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
ATLANTIC SPECIALTY INSURANCE COMPANY
|
NEW YORK, USA
|
ONEBEACON INSURANCE GROUP LLC
|
DELAWARE, USA
|
ONEBEACON INSURANCE GROUP LTD.
|
BERMUDA
|
ONEBEACON INVESTMENTS (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
PSC HOLDINGS LTD.
|
BERMUDA
|
SIRIUS INSURANCE HOLDING SWEDEN AB
|
SWEDEN
|
SIRIUS INTERNATIONAL INSURANCE CORPORATION
|
SWEDEN
|
WHITE MOUNTAINS ADVISORS LLC
|
DELAWARE, USA
|
SIRIUS GROUP HOLDINGS (NL)B.V.
|
NETHERLANDS
|
WHITE MOUNTAINS HOLDINGS (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
SIRIUS GROUP INTERNATIONAL S.A.R.L.
|
LUXEMBOURG
|
WHITE MOUNTAINS INVESTMENTS BERMUDA LTD.
|
BERMUDA
|
WHITE MOUNTAINS LIFE REINSURANCE (BERMUDA) LTD.
|
BERMUDA
|
SIRIUS BERMUDA INSURANCE COMPANY LTD.
|
BERMUDA
|
SIRIUS INTERNATIONAL GROUP, LTD.
|
BERMUDA
|
SIRIUS RE HOLDINGS, INC.
|
DELAWARE, USA
|
SIRIUS INTERNATIONAL HOLDINGS, LTD.
|
BERMUDA
|
SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.
|
BERMUDA
|
SIRIUS GROUP HOLDINGS (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WHITE SANDS HOLDINGS (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WM ALAMEDA (GIBRALTAR) LIMITED
|
GIBRALTAR
|
WM BELVAUX (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
SI CALETA (GIBRALTAR) LIMITED
|
GIBRALTAR
|
SI CUMBERLAND (GIBRALTAR) LIMITED
|
GIBRALTAR
|
WM FINDEL (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WM KEHLEN (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
SI LIMESTONE (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WM LINGER (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WM MERL (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WM OLM (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WM QUEENSWAY (GIBRALTAR) LIMITED
|
GIBRALTAR
|
SI VIANDEN (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
SI PHOENIX (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WHITE SHOALS RE LTD.
|
BERMUDA
|
SIRIUS INTERNATIONAL CORPORATE MEMBER LIMITED
|
UNITED KINGDOM
|
SIRIUS RE UNDERWRITING SERVICES AMERICA LLC.
|
NEW YORK, USA
|
SIRIUS GLOBAL SERVICES LLC.
|
DELAWARE, USA
|
SIRIUS GLOBAL SOLUTIONS HOLDINGS COMPANY
|
CONNECTICUT, USA
|
SIRIUS GLOBAL SOLUTIONS INC
|
CONNECTICUT, USA
|
SIRIUS INTERNATIONAL HOLDINGS (NL)B.V.
|
NETHERLANDS
|
STAR RE LTD
|
BERMUDA
|
BRIDGE HOLDINGS (BERMUDA) LTD
|
BERMUDA
|
WHITE MOUNTAINS CAPITAL, INC
|
DELAWARE, USA
|
WHITE MOUNTAINS FINANCIAL SERVICES LLC
|
DELAWARE, USA
|
WHITE MOUNTAINS SERVICES LLC
|
DELAWARE, USA
|
ONEBEACON SERVICES LLC
|
DELAWARE, USA
|
SYA INSURANCE HOLDINGS (NL)B.V.
|
NETHERLANDS
|
HG GLOBAL LTD
|
BERMUDA
|
HG HOLDINGS LTD
|
BERMUDA
|
HG SERVICES LTD
|
BERMUDA
|
HG RE LTD
|
BERMUDA
|
HG (GIBRALTAR) LIMITED
|
GIBRALTAR
|
HGR (GIBRALTAR) LIMITED
|
GIBRALTAR
|
HG ROOSEVELT (LUXEMBOURG) S.A.R.L
|
LUXEMBOURG
|
HGR PATTON (LUXEMBOURG) S.A.R.L
|
LUXEMBOURG
|
WHITE MOUNTAINS INVESTMENTS (LUXEMBOURG) S.A.R.L
|
LUXEMBOURG
|
TLP HOLDINGS (GIBRALTAR) LIMITED
|
GIBRALTAR
|
TLP HOLDINGS (LUXEMBOURG) S.A.R.L
|
LUXEMBOURG
|
OAKWOOD INSURANCE COMPANY
|
TENNESSEE, USA
|
EMPIRE INSURANCE COMPANY
|
NEW YORK, USA
|
ASHMERE INSURANCE COMPANY
|
ILLINOIS, USA
|
ALSTEAD REINSURANCE LTD
|
BERMUDA
|
WOBI INSURANCE AGENCY, LTD
|
ISRAEL
|
TRANZACT HOLDINGS LLC
|
DELAWARE, USA
|
QL HOLDINGS LLC
|
DELAWARE, USA
|
QUOTELAB, LLC
|
DELAWARE, USA
|
MEDIAALPHA VENTURES LLC
|
DELAWARE, USA
|
ABIAKA HOLDINGS LLC
|
DELAWARE, USA
|
STAR & SHIELD SERVICES LLC
|
DELAWARE, USA
|
STAR & SHIELD RISK MANAGEMENT LLC
|
FLORIDA, USA
|
STAR & SHIELD CLAIMS SERVICES LLC
|
FLORIDA, USA
|
WTM (BARBADOS) INTERNATIONAL SRL
|
BARBADOS
|
OB (BARBADOS) INTERNATIONAL SRL
|
BARBADOS
|
GRAND MARAIS CAPITAL LIMITED
|
UNITED KINGDOM
|
SPLIT ROCK INSURANCE, LTD
|
BERMUDA
|
TNUVA FINANCIT LTD
|
ISRAEL
|
TRAZUTARY HOLDINGS LLC
|
DELAWARE, USA
|
|
/s/ YVES BROUILLETTE
|
|
/s/ MORGAN W. DAVIS
|
|
/s/ A. MICHAEL FRINQUELLI
|
|
/s/ EDITH E. HOLIDAY
|
|
/s/ LOWNDES A. SMITH
|
|
/s/ GARY C. TOLMAN
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
February 29, 2016
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
February 29, 2016
|
|