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 $1.00
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New York Stock Exchange
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per share
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Bermuda Stock Exchange
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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NSM
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MediaAlpha
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Investments
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CERTIFICATIONS
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C-1
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Millions
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December 31, 2018
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December 31, 2017
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||||||||
Sector
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Gross Par Outstanding
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Average Standard & Poor’s Credit Rating
(1)
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Gross Par Outstanding
|
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Average Standard & Poor’s Credit Rating
(1)
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||||
General Obligation
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$
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30,627.0
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A
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$
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25,147.7
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A
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Utility
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6,451.0
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A
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5,425.8
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A
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||
Dedicated Tax
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6,263.8
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A
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4,852.6
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A
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General Fund
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4,858.5
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A
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3,638.8
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A
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Public Higher Education
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2,406.6
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|
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A-
|
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1,781.7
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|
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A-
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Transportation
|
|
1,293.6
|
|
|
A
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|
953.4
|
|
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A
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Other Public Finance
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301.1
|
|
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A-
|
|
290.6
|
|
|
A-
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||
Total gross par outstanding
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|
$
|
52,201.6
|
|
|
A
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|
$
|
42,090.6
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|
|
A
|
|
December 31, 2018
|
||||||||||
$ in Millions
|
|
Gross Par Outstanding
|
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Percent of Total Gross Par Outstanding
|
|
Standard & Poor’s Credit Rating
(1)
|
|||||
Municipal Authority of Westmoreland County, PA, Water
|
|
$
|
329.9
|
|
|
0.6
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%
|
|
|
A+
|
|
State of Illinois
|
|
329.8
|
|
|
0.6
|
|
|
|
BBB-
|
|
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City of Shreveport, LA (Caddo Parish), Water & Sewer
|
|
269.7
|
|
|
0.5
|
|
|
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A-
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|
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New Jersey Transportation Trust Fund Authority, System &
Program Bonds, NJ, Gas Tax
(2)
|
|
264.5
|
|
|
0.5
|
|
|
|
BBB+
|
|
|
Eastern Michigan University, MI (Lapeer County), Public Higher Education
- Gross Revenue
|
|
258.1
|
|
|
0.5
|
|
|
|
A
|
|
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State of New Jersey
|
|
250.6
|
|
|
0.5
|
|
|
|
BBB+
|
|
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Suffolk Country, NY
|
|
246.7
|
|
|
0.5
|
|
|
|
A-
|
|
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New Jersey Economic Development Authority (Motor Vehicle Surcharge)
|
|
225.7
|
|
|
0.4
|
|
|
|
BBB+
|
|
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State of Louisiana
|
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219.6
|
|
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0.4
|
|
|
|
A+
|
|
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State of Connecticut
|
|
211.0
|
|
|
0.4
|
|
|
|
A
|
|
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Total of top ten exposures
|
|
$
|
2,605.6
|
|
|
4.9
|
%
|
|
|
|
|
|
December 31, 2017
|
||||||||||
$ in Millions
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
|
Standard & Poor’s Credit Rating
(1)
|
|||||
Municipal Authority of Westmoreland County, PA, Water
|
|
$
|
334.0
|
|
|
0.8
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%
|
|
|
A+
|
|
State of Illinois
|
|
284.1
|
|
|
0.7
|
|
|
|
BBB-
|
|
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Commonwealth of Pennsylvania
|
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260.8
|
|
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0.6
|
|
|
|
A-
|
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Suffolk County, NY
|
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257.4
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|
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0.6
|
|
|
|
A-
|
|
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Eastern Michigan University, MI (Lapeer County),
Public Higher Education - Gross Revenue |
|
252.2
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|
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0.6
|
|
|
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A
|
|
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New Jersey Economic Development Authority (Motor Vehicle Surcharge)
|
|
213.3
|
|
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0.5
|
|
|
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BBB+
|
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State of New Jersey
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197.0
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|
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0.5
|
|
|
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BBB+
|
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West Travis County Public Utility Agency, TX (Travis County),
Water & Sewer |
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188.6
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0.4
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A
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City of Shreveport, LA (Caddo Parish), Water & Sewer
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177.6
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0.4
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A-
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City of New Brunswick, NJ (Middlesex County)
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162.5
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0.4
|
|
|
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A+
|
|
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Total of top ten exposures
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$
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2,327.5
|
|
|
5.5
|
%
|
|
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||
$ in Millions
|
|
Number of Risks
|
|
Gross Par Outstanding
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|
Percent of Total Gross Par Outstanding
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|
Number of Risks
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
||||||||
California
|
|
621
|
|
|
$
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12,044.6
|
|
|
23.1
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%
|
|
468
|
|
|
$
|
9,810.7
|
|
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23.3
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%
|
Texas
|
|
643
|
|
|
7,015.4
|
|
|
13.4
|
|
|
523
|
|
|
6,079.0
|
|
|
14.4
|
|
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Pennsylvania
|
|
417
|
|
|
6,460.1
|
|
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12.4
|
|
|
334
|
|
|
5,726.1
|
|
|
13.6
|
|
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Illinois
|
|
290
|
|
|
4,342.0
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|
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8.3
|
|
|
248
|
|
|
3,201.3
|
|
|
7.6
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|
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New York
|
|
312
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|
|
3,234.9
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|
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6.2
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|
|
261
|
|
|
2,931.5
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|
|
7.0
|
|
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New Jersey
|
|
118
|
|
|
2,429.1
|
|
|
4.7
|
|
|
93
|
|
|
1,839.5
|
|
|
4.4
|
|
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Ohio
|
|
126
|
|
|
1,436.2
|
|
|
2.8
|
|
|
82
|
|
|
1,174.3
|
|
|
2.8
|
|
||
Arizona
|
|
62
|
|
|
1,314.2
|
|
|
2.5
|
|
|
52
|
|
|
1,077.4
|
|
|
2.6
|
|
||
Michigan
|
|
97
|
|
|
1,236.0
|
|
|
2.4
|
|
|
78
|
|
|
1,092.9
|
|
|
2.6
|
|
||
Louisiana
|
|
55
|
|
|
1,208.5
|
|
|
2.3
|
|
|
43
|
|
|
895.4
|
|
|
2.1
|
|
||
Florida
|
|
55
|
|
|
1,145.0
|
|
|
2.2
|
|
|
48
|
|
|
1,006.4
|
|
|
2.4
|
|
||
Other States
|
|
769
|
|
|
10,335.6
|
|
|
19.7
|
|
|
594
|
|
|
7,256.1
|
|
|
17.2
|
|
||
Total insured portfolio
|
|
3,565
|
|
|
$
|
52,201.6
|
|
|
100.0
|
%
|
|
2,824
|
|
|
$
|
42,090.6
|
|
|
100.0
|
%
|
$ in Millions
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||
Original Par Amount Per Issue
(1)
|
|
Number of Risks
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
|
Number of Risks
|
|
Gross Par Outstanding
|
|
Percent of Total Gross Par Outstanding
|
||||||||
Less than $10 million
|
|
2,159
|
|
|
$
|
8,938.3
|
|
|
17.1
|
%
|
|
1,665
|
|
|
$
|
7,479.3
|
|
|
17.8
|
%
|
$10 to $50 million
|
|
1,182
|
|
|
23,567.4
|
|
|
45.1
|
|
|
981
|
|
|
20,113.5
|
|
|
47.8
|
|
||
$50 to $100 million
|
|
164
|
|
|
10,335.0
|
|
|
19.8
|
|
|
141
|
|
|
8,916.7
|
|
|
21.2
|
|
||
$100 to $200 million
|
|
46
|
|
|
5,972.5
|
|
|
11.4
|
|
|
30
|
|
|
3,782.3
|
|
|
9.0
|
|
||
$200 to $300 million
|
|
12
|
|
|
2,728.8
|
|
|
5.2
|
|
|
6
|
|
|
1,464.8
|
|
|
3.5
|
|
||
$300 to $400 million
|
|
2
|
|
|
659.7
|
|
|
1.4
|
|
|
1
|
|
|
334.0
|
|
|
.7
|
|
||
Total insured portfolio
|
|
3,565
|
|
|
$
|
52,201.7
|
|
|
100.0
|
%
|
|
2,824
|
|
|
$
|
42,090.6
|
|
|
100
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
Millions
|
|
Controlled Premium
(1)
|
|
Commission and Fee Revenue
|
|
Controlled Premium
(1)
|
|
Commission and Fee Revenue
|
|
Controlled Premium
(1)
|
|
Commission and Fee Revenue
|
||||||||||||
Specialty Transportation
|
|
$
|
136.8
|
|
|
$
|
43.0
|
|
|
$
|
112.6
|
|
|
$
|
32.9
|
|
|
$
|
112.4
|
|
|
$
|
37.4
|
|
Real Estate
|
|
135.7
|
|
|
30.3
|
|
|
106.8
|
|
|
22.2
|
|
|
97.6
|
|
|
19.9
|
|
||||||
Social Services
|
|
94.0
|
|
|
23.8
|
|
|
111.6
|
|
|
28.8
|
|
|
122.3
|
|
|
32.3
|
|
||||||
United Kingdom
|
|
108.8
|
|
|
34.9
|
|
|
46.0
|
|
|
16.1
|
|
|
1.2
|
|
|
.7
|
|
||||||
Other
|
|
119.4
|
|
|
19.8
|
|
|
113.4
|
|
|
18.6
|
|
|
112.3
|
|
|
18.3
|
|
||||||
Total
|
|
$
|
594.7
|
|
|
$
|
151.8
|
|
|
$
|
490.4
|
|
|
$
|
118.6
|
|
|
$
|
445.8
|
|
|
$
|
108.6
|
|
•
|
Open Exchange
: Under this model, the advertiser pays for media placement on publisher sites, on a source-transparent basis, through an agreement with MediaAlpha. MediaAlpha secures and manages the advertising partnerships, as well as the publisher relationships. MediaAlpha bills the advertiser for the media purchased through the Open Exchange and is responsible for collections from the advertiser and disbursements to publisher partners. Revenue recognized represents the gross dollars transacted through the Open Exchange (“transaction value”) and cost of sales is comprised of the revenue share payments to publisher partners.
|
•
|
Buyer Exchange
:
Under this model, the advertiser uses MediaAlpha’s advertiser platform to manage and optimize media campaigns that place ads on third-party publisher sites or advertising networks that do not use MediaAlpha for Publishers for the sale of their media. MediaAlpha tracks the transaction value of the media purchased through MediaAlpha’s platform from these third-party media partners and bills the advertiser a platform fee based on that total transaction value. Revenue is recognized on a net basis, representing the licensing fee, since MediaAlpha is not responsible for disbursing funds to the advertiser’s various third-party media partners.
|
•
|
Seller Exchange
:
Under this model, the publisher uses MediaAlpha’s publisher platform to manage, track, and optimize the media spend from advertisers with whom the publisher maintains direct contractual relationships. The publisher utilizes the platform as its ad serving, demand management, yield optimization, reporting, and analytics platform to enable the direct, programmatic sale of its performance media to its advertisers. MediaAlpha tracks the total transaction value generated through the publisher platform, but is not responsible for billing or collections from the publisher’s advertisers. MediaAlpha bills the publisher a platform fee based on the transaction value of the media sold by the publisher and recognizes this revenue on a net basis.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
$ in Millions
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
Open Exchange
(1)
|
|
$
|
289.0
|
|
|
73.2
|
%
|
|
$
|
159.9
|
|
|
73.1
|
%
|
|
$
|
113.2
|
|
|
64.8
|
%
|
Seller Exchange
|
|
67.6
|
|
|
17.1
|
|
|
33.9
|
|
|
15.5
|
|
|
38.4
|
|
|
21.9
|
|
|||
Buyer Exchange
|
|
38.4
|
|
|
9.7
|
|
|
25.0
|
|
|
11.4
|
|
|
23.2
|
|
|
13.3
|
|
|||
Total transaction value
|
|
$
|
395.0
|
|
|
100.0
|
%
|
|
$
|
218.8
|
|
|
100.0
|
%
|
|
$
|
174.8
|
|
|
100.0
|
%
|
•
|
P&C
consists of advertisers who acquire customers with the intent of selling automobile, home or motorcycle insurance coverage. The advertisers in this vertical are primarily national insurance carriers and advertising agencies commissioned by carriers. The publishers in this vertical are a mix of third-party publishers and national carriers (“Carrier Publishers”) and MediaAlpha’s owned and operated properties.
|
•
|
HLM
consists of advertisers who acquire customers with the intent of selling them health, life and Medicare insurance coverage. The advertisers in this vertical are primarily national carriers and advertising agencies commissioned by carriers. The publishers in this vertical are primarily third-party publishers and MediaAlpha’s owned and operated properties. On October 5, 2017, MediaAlpha acquired certain assets associated with the Health, Life and Medicare insurance business of Healthplans.com. The acquisition allowed MediaAlpha to supplement its position as the leading marketing technology provider for advertisers and publishers in this market. See
Note 4 — “Goodwill and Other Intangibles Assets”
on page F-30.
|
•
|
Travel
consists of advertisers who acquire customers with the intent of selling a leisure travel item (e.g. air fare, hotel, package deal, car rental). The advertisers in this vertical are primarily national brands, online travel agents, travel metasearch sites and advertising agencies commissioned by national brands. The publishers in this vertical are a mix of third-party publishers and MediaAlpha’s owned and operated properties. On January 15, 2016, MediaAlpha acquired certain travel-related assets from Oversee.net, including owned and operated websites, domain names and key customer relationships. The acquisition accelerated MediaAlpha’s entry into the travel vertical, providing MediaAlpha with access to a high quality owned and operated inventory and existing advertiser relationships, consisting primarily of major online travel agents, metasearch sites and national brands. See
Note 4 — “Goodwill and Other Intangibles Assets”
on page F-30.
|
•
|
Other verticals MediaAlpha operates in include the following:
|
◦
|
Education
consists of advertisers in the for-profit education industry, who seek to acquire customers that will enroll in higher or technical education programs.
|
◦
|
Personal Finance
consists of multiple sub verticals, ranging from mortgage products (refinance, HELOC, new home) to personal loans.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
$ in Millions
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
P&C
|
|
$
|
225.4
|
|
|
57.1
|
%
|
|
$
|
121.6
|
|
|
55.5
|
%
|
|
$
|
126.5
|
|
|
72.4
|
%
|
HLM
|
|
113.7
|
|
|
28.8
|
|
|
65.4
|
|
|
29.9
|
|
|
32.4
|
|
|
18.5
|
|
|||
Travel
|
|
29.5
|
|
|
7.5
|
|
|
18.3
|
|
|
8.4
|
|
|
10.1
|
|
|
5.8
|
|
|||
Other
|
|
26.4
|
|
|
6.6
|
|
|
13.5
|
|
|
6.2
|
|
|
5.8
|
|
|
3.3
|
|
|||
Total transaction value
|
|
$
|
395.0
|
|
|
100.0
|
%
|
|
$
|
218.8
|
|
|
100.0
|
%
|
|
$
|
174.8
|
|
|
100.0
|
%
|
•
|
Technology
: MediaAlpha’s proprietary technology provides advertisers with a set of robust tools to help them manage their adverting spend programmatically, on a granular, real time basis.
|
•
|
Transparency
: The marketplaces powered by MediaAlpha’s technology are fully source transparent, offering full placement-level pricing control to the advertiser.
|
•
|
Control:
MediaAlpha’s technology gives granular, self-service buying control to advertisers and enables publishers to control and manage all aspects of how their media is made available to advertisers.
|
•
|
Quality:
MediaAlpha’s publishers include some of the largest and most reputable names in the industry.
|
(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 Minister, 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.
|
Name
|
|
Position
|
|
Age
|
|
Executive Officer Since
|
G. Manning Rountree
|
|
Chief Executive Officer
|
|
46
|
|
2009
|
Reid T. Campbell
|
|
Executive Vice President and Chief Financial Officer
|
|
51
|
|
2007
|
J. Brian Palmer
|
|
Managing Director and Chief Accounting Officer
|
|
46
|
|
2001
|
Robert L. Seelig
|
|
Executive Vice President and General Counsel
|
|
50
|
|
2002
|
|
|
2018
|
|
2017
|
||||||||||||
Quarter Ended:
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
December 31
|
|
$
|
942.35
|
|
|
$
|
832.88
|
|
|
$
|
903.26
|
|
|
$
|
841.33
|
|
September 30
|
|
980.89
|
|
|
895.01
|
|
|
888.00
|
|
|
838.65
|
|
||||
June 30
|
|
933.70
|
|
|
804.40
|
|
|
900.05
|
|
|
845.41
|
|
||||
March 31
|
|
858.09
|
|
|
786.23
|
|
|
948.94
|
|
|
834.20
|
|
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, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
643,130
|
|
November 1 - 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
643,130
|
|
December 1 - 31, 2018
|
|
7,425
|
|
|
$
|
840.82
|
|
|
7,425
|
|
|
635,705
|
|
Total
|
|
7,425
|
|
|
$
|
840.82
|
|
|
7,425
|
|
|
635,705
|
|
(1)
|
White Mountains’s board of directors has authorized the Company to repurchase its common shares, from time to time, subject to market conditions. The repurchase authorization does not have a stated expiration.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
$ in Millions, Except Share and Per Share Amounts
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
(a)
|
|
$
|
369
|
|
|
$
|
374
|
|
|
$
|
158
|
|
|
$
|
440
|
|
|
$
|
137
|
|
Expenses
(b)
|
|
547
|
|
|
366
|
|
|
305
|
|
|
311
|
|
|
216
|
|
|||||
Pre-tax (loss) income
|
|
(178
|
)
|
|
8
|
|
|
(147
|
)
|
|
129
|
|
|
(79
|
)
|
|||||
Income tax benefit (expense)
|
|
4
|
|
|
8
|
|
|
33
|
|
|
(13
|
)
|
|
3
|
|
|||||
Non-controlling interest income (loss)
(c)
|
|
50
|
|
|
34
|
|
|
(7
|
)
|
|
19
|
|
|
22
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
45
|
|
|||||
Discontinued operations, net of tax
(d)
|
|
(17
|
)
|
|
577
|
|
|
523
|
|
|
135
|
|
|
314
|
|
|||||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(141
|
)
|
|
$
|
627
|
|
|
$
|
402
|
|
|
$
|
295
|
|
|
$
|
305
|
|
(Loss) income attributable to White Mountains’s common
shareholders per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic — continuing operations
|
|
$
|
(36.67
|
)
|
|
$
|
11.56
|
|
|
$
|
(24.26
|
)
|
|
$
|
27.22
|
|
|
$
|
(1.39
|
)
|
Basic — discontinued operations
|
|
(5.09
|
)
|
|
134.50
|
|
|
104.37
|
|
|
22.98
|
|
|
51.37
|
|
|||||
Total basic (loss) income per share
|
|
$
|
(41.76
|
)
|
|
$
|
146.06
|
|
|
$
|
80.11
|
|
|
$
|
50.20
|
|
|
$
|
49.98
|
|
Diluted — continuing operations
|
|
$
|
(36.67
|
)
|
|
$
|
11.56
|
|
|
$
|
(24.26
|
)
|
|
$
|
27.22
|
|
|
$
|
(1.39
|
)
|
Diluted — discontinued operations
|
|
(5.09
|
)
|
|
134.50
|
|
|
104.32
|
|
|
22.98
|
|
|
51.37
|
|
|||||
Total diluted (loss) income per share
|
|
$
|
(41.76
|
)
|
|
$
|
146.06
|
|
|
$
|
80.06
|
|
|
$
|
50.20
|
|
|
$
|
49.98
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
(e)
|
|
$
|
3,363
|
|
|
$
|
3,659
|
|
|
$
|
6,520
|
|
|
$
|
10,271
|
|
|
$
|
10,448
|
|
Debt
(f)
|
|
193
|
|
|
24
|
|
|
13
|
|
|
65
|
|
|
1
|
|
|||||
Non-controlling interests
(g)
|
|
(125
|
)
|
|
(132
|
)
|
|
133
|
|
|
454
|
|
|
543
|
|
|||||
White Mountains’s common shareholders’ equity
|
|
2,843
|
|
|
3,493
|
|
|
3,583
|
|
|
3,903
|
|
|
3,996
|
|
|||||
Book value per share
|
|
$
|
896.00
|
|
|
$
|
931.30
|
|
|
$
|
785.01
|
|
|
$
|
694.06
|
|
|
$
|
667.46
|
|
Adjusted book value per share
(h)
|
|
$
|
887.85
|
|
|
$
|
914.75
|
|
|
$
|
789.08
|
|
|
$
|
697.16
|
|
|
$
|
664.48
|
|
Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid per common share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Ending common shares (000’s)
(i)
|
|
3,173
|
|
|
3,750
|
|
|
4,564
|
|
|
5,624
|
|
|
5,986
|
|
(a)
|
MediaAlpha recognized advertising and commission revenues of $296 in 2018, compared to $163 in 2017, and NSM, which was acquired during 2018, recognized advertising and commission revenues of $95 from May 11, 2018 through December 31, 2018. Other Operations recognized net realized and unrealized investment (losses) gains of $(101), $133 and $(28), in 2018 and 2017 and 2016, respectively, which contributed to the increase and decrease in revenues.
In 2015, White Mountains changed the accounting for its investment in Symetra Financial Corporation from the equity method to fair value and recognized $259 of unrealized investment gains.
|
(b)
|
MediaAlpha recognized cost of sales of $245 in 2018, compared to $136 in 2017, and NSM recognized general and administrative expenses of $62 and broker commission expenses of $29 in the 2018 ownership period.
|
(c)
|
White Mountains reported $52 of non-controlling interest loss related to BAM in 2018, compared to $40 in 2017. Amounts also include non-controlling interests in OneBeacon, Sirius Group and Tranzact prior to their sales.
|
(d)
|
As a result of the sale of OneBeacon, Sirius Group, Tranzact and Esurance Holdings, Inc. and its subsidiaries and Answer Financial Inc. and its subsidiaries (collectively, “Esurance”), 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 2018, discontinued operations, net of tax, includes a loss of $17 for the recognition of a contingent liability related to the sale of Sirius. In 2017, discontinued operations, net of tax, includes a gain from sale of OneBeacon of $555 and income of $21 and a (loss) gain from sale of Sirius and Tranzact of $(1) and $3. In 2016, discontinued operations, net of tax, includes a gain from sale of Sirius and Tranzact of $363 and $52 and net income of $108 primarily related to the operations of OneBeacon. In 2015, discontinued operations, net of tax, includes a gain from sale of Esurance of $18 and net income of $117. In 2014, discontinued operations, net of tax, includes a loss on sale of other discontinued operations of $19, mostly offset by a gain from sale of Fireman’s Fund Insurance Company (“FFIC”) of $14, and net income of $261, primarily related to the operations of Sirius Group. See
Note 19 — “Held for Sale and Discontinued Operations”
on page F-55.
|
(e)
|
White Mountains’s total assets decreased as a result of share repurchases, and the sales of OneBeacon in 2017 and Sirius Group in 2016.
|
(f)
|
White Mountains’s total debt increased as a result of the acquisition of NSM in 2018. As of December 31, 2015, White Mountains had $50 outstanding under its credit facility, which was repaid in April 2016. See
Note 5 — “Debt”
on page F-32.
|
(g)
|
White Mountains’s non-controlling interests decreased as a result of the sale of OneBeacon in 2017 and Sirius Group in 2016. See
Note 11 — “Common Shareholders’ Equity and Non-controlling Interests”
on page F-47 for a detailed breakdown of non-controlling interests by consolidated entity.
|
(h)
|
Adjusted book value per share is a non-GAAP measure. See
“NON-GAAP FINANCIAL MEASURES”
on page 55
.
|
(i)
|
During 2018, 2017, 2016, 2015, and 2014, White Mountains repurchased
592,458
, 832,725, 1,106,145, 387,495, and 217,879 respectively, of its common shares through a combination of tender offers, open market transactions and other transactions.
|
|
|
December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Book value per share numerators (in millions):
|
|
|
|
|
|
|
||||||
White Mountains’s common shareholders’ equity
|
|
$
|
2,843.1
|
|
|
$
|
3,492.5
|
|
|
$
|
3,582.7
|
|
Future proceeds from options
(1)
|
|
—
|
|
|
—
|
|
|
29.7
|
|
|||
Time-value of money discount on expected future payments
on the BAM Surplus Notes
(2)
|
|
(141.2
|
)
|
|
(157.0
|
)
|
|
N/A
|
||||
HG Global’s unearned premium reserve
(2)
|
|
136.9
|
|
|
103.9
|
|
|
N/A
|
||||
HG Global’s net deferred acquisition costs
(2)
|
|
(34.6
|
)
|
|
(24.3
|
)
|
|
N/A
|
||||
Adjusted book value per share numerator
|
|
$
|
2,804.2
|
|
|
$
|
3,415.1
|
|
|
$
|
3,612.4
|
|
Book value per share denominators (in thousands of shares):
|
|
|
|
|
|
|
||||||
Common shares outstanding
|
|
3,173.1
|
|
|
3,750.2
|
|
|
4,563.8
|
|
|||
Unearned restricted shares
|
|
(14.6
|
)
|
|
(16.8
|
)
|
|
(25.9
|
)
|
|||
Options assumed issued
(1)
|
|
—
|
|
|
—
|
|
|
40.0
|
|
|||
Adjusted book value per share denominator
|
|
3,158.5
|
|
|
3,733.4
|
|
|
4,577.9
|
|
|||
GAAP book value per share
|
|
$
|
896.00
|
|
|
$
|
931.30
|
|
|
$
|
785.01
|
|
Adjusted book value per share
|
|
$
|
887.85
|
|
|
$
|
914.75
|
|
|
$
|
789.08
|
|
Dividends paid per share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
(1)
|
Adjusted book value per share at December 31, 2016 includes the impact of 40,000 non-qualified stock options exercisable for $742 per common share. All non-qualified options were exercised prior to their expiration date of January 20, 2017.
|
(2)
|
Amounts reflects White Mountains’s preferred share ownership in HG Global of 96.9%.
|
|
|
December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Goodwill:
|
|
|
|
|
|
|
||||||
NSM
(1)
|
|
$
|
354.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
MediaAlpha
|
|
18.3
|
|
|
18.3
|
|
|
18.3
|
|
|||
Buzz
|
|
7.3
|
|
|
7.6
|
|
|
7.6
|
|
|||
Total goodwill
|
|
379.9
|
|
|
25.9
|
|
|
25.9
|
|
|||
|
|
.
|
|
|
|
|
|
|||||
Other intangible assets:
|
|
|
|
|
|
|
||||||
NSM
|
|
131.9
|
|
|
—
|
|
|
—
|
|
|||
MediaAlpha
|
|
25.1
|
|
|
35.4
|
|
|
18.3
|
|
|||
Buzz
|
|
.6
|
|
|
.8
|
|
|
1.0
|
|
|||
Total other intangible assets
|
|
157.6
|
|
|
36.2
|
|
|
19.3
|
|
|||
Total goodwill and other intangible assets
(2)
|
|
537.5
|
|
|
62.1
|
|
|
45.2
|
|
|||
Goodwill and other intangible assets held for sale
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|||
Goodwill and other intangible assets attributed to non-controlling interests
|
|
(40.6
|
)
|
|
(21.1
|
)
|
|
(17.1
|
)
|
|||
Goodwill and other intangible assets included in White Mountains’s
common shareholders’ equity
|
|
$
|
496.9
|
|
|
$
|
41.0
|
|
|
$
|
29.3
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Financial Guarantee revenues
|
|
$
|
24.3
|
|
|
$
|
23.3
|
|
|
$
|
16.7
|
|
Specialty Insurance Distribution revenues
|
|
101.6
|
|
|
—
|
|
|
—
|
|
|||
Marketing Technology revenues
|
|
297.1
|
|
|
163.2
|
|
|
116.5
|
|
|||
Other revenues
|
|
(53.9
|
)
|
|
187.3
|
|
|
24.5
|
|
|||
Total revenues
|
|
369.1
|
|
|
373.8
|
|
|
157.7
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Financial Guarantee expenses
|
|
53.7
|
|
|
47.3
|
|
|
43.4
|
|
|||
Specialty Insurance Distribution expenses
|
|
106.8
|
|
|
—
|
|
|
—
|
|
|||
Marketing Technology expenses
|
|
288.2
|
|
|
163.6
|
|
|
120.6
|
|
|||
Other expenses
|
|
98.6
|
|
|
155.1
|
|
|
141.0
|
|
|||
Total expenses
|
|
547.3
|
|
|
366.0
|
|
|
305.0
|
|
|||
Pre-tax (loss) income
|
|
|
|
|
|
|
||||||
Financial Guarantee pre-tax loss
|
|
(29.4
|
)
|
|
(24.0
|
)
|
|
(26.7
|
)
|
|||
Specialty Insurance Distribution pre-tax loss
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|||
Marketing Technology pre-tax income (loss)
|
|
8.9
|
|
|
(.4
|
)
|
|
(4.1
|
)
|
|||
Other pre-tax (loss) income
|
|
(152.5
|
)
|
|
32.2
|
|
|
(116.5
|
)
|
|||
Total pre-tax (loss) income
|
|
(178.2
|
)
|
|
7.8
|
|
|
(147.3
|
)
|
|||
Income tax benefit
|
|
4.0
|
|
|
7.8
|
|
|
32.9
|
|
|||
Net (loss) income from continuing operations
|
|
(174.2
|
)
|
|
15.6
|
|
|
(114.4
|
)
|
|||
(Loss) gain on sale of discontinued operations, net of tax
|
|
(17.2
|
)
|
|
557.0
|
|
|
415.1
|
|
|||
Net income from discontinued operations, net of tax
|
|
—
|
|
|
20.5
|
|
|
108.3
|
|
|||
Net (loss) income
|
|
(191.4
|
)
|
|
593.1
|
|
|
409.0
|
|
|||
Net loss (income) attributable to non-controlling interests
|
|
50.2
|
|
|
34.1
|
|
|
(7.2
|
)
|
|||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
(141.2
|
)
|
|
627.2
|
|
|
401.8
|
|
|||
Other comprehensive (loss) income, net of tax
|
|
(4.8
|
)
|
|
.3
|
|
|
(.7
|
)
|
|||
Comprehensive income from discontinued operations, net of tax
|
|
—
|
|
|
3.2
|
|
|
146.3
|
|
|||
Comprehensive (loss) income
|
|
(146.0
|
)
|
|
630.7
|
|
|
547.4
|
|
|||
Comprehensive income (loss) attributable to non-controlling interests
|
|
.3
|
|
|
(.2
|
)
|
|
(.3
|
)
|
|||
Comprehensive (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(145.7
|
)
|
|
$
|
630.5
|
|
|
$
|
547.1
|
|
|
|
December 31, 2018
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Direct written premiums
|
|
$
|
—
|
|
|
$
|
44.8
|
|
|
$
|
—
|
|
|
$
|
44.8
|
|
Assumed (ceded) written premiums
|
|
44.9
|
|
|
(36.8
|
)
|
|
—
|
|
|
8.1
|
|
||||
Net written premiums
|
|
$
|
44.9
|
|
|
$
|
8.0
|
|
|
$
|
—
|
|
|
$
|
52.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
11.0
|
|
|
$
|
2.9
|
|
|
$
|
—
|
|
|
$
|
13.9
|
|
Net investment income
|
|
5.7
|
|
|
11.0
|
|
|
—
|
|
|
16.7
|
|
||||
Net investment income - BAM Surplus Notes
|
|
22.9
|
|
|
—
|
|
|
(22.9
|
)
|
|
—
|
|
||||
Net realized and unrealized investment losses
|
|
(4.1
|
)
|
|
(3.4
|
)
|
|
—
|
|
|
(7.5
|
)
|
||||
Other revenues
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||
Total revenues
|
|
35.5
|
|
|
11.7
|
|
|
(22.9
|
)
|
|
24.3
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
2.7
|
|
|
2.6
|
|
|
—
|
|
|
5.3
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
General and administrative expenses
|
|
1.1
|
|
|
46.9
|
|
|
—
|
|
|
48.0
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
22.9
|
|
|
(22.9
|
)
|
|
—
|
|
||||
Total expenses
|
|
3.8
|
|
|
72.8
|
|
|
(22.9
|
)
|
|
53.7
|
|
||||
Pre-tax income (loss)
|
|
$
|
31.7
|
|
|
$
|
(61.1
|
)
|
|
$
|
—
|
|
|
$
|
(29.4
|
)
|
Supplemental information:
|
|
|
|
|
|
|
|
|
||||||||
MSC collected
(1)
|
|
$
|
—
|
|
|
$
|
53.8
|
|
|
$
|
—
|
|
|
$
|
53.8
|
|
|
|
December 31, 2017
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Direct written premiums
|
|
$
|
—
|
|
|
$
|
63.2
|
|
|
$
|
—
|
|
|
$
|
63.2
|
|
Assumed (ceded) written premiums
|
|
53.6
|
|
|
(53.6
|
)
|
|
—
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
53.6
|
|
|
$
|
9.6
|
|
|
$
|
—
|
|
|
$
|
63.2
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
7.1
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
9.4
|
|
Net investment income
|
|
3.3
|
|
|
9.0
|
|
|
—
|
|
|
12.3
|
|
||||
Net investment income - BAM Surplus Notes
|
|
19.0
|
|
|
—
|
|
|
(19.0
|
)
|
|
—
|
|
||||
Net realized and unrealized investment (losses) gains
|
|
(1.2
|
)
|
|
1.8
|
|
|
—
|
|
|
.6
|
|
||||
Other revenues
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||
Total revenues
|
|
28.2
|
|
|
14.1
|
|
|
(19.0
|
)
|
|
23.3
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
1.5
|
|
|
2.5
|
|
|
—
|
|
|
4.0
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
General and administrative expenses
|
|
1.0
|
|
|
41.9
|
|
|
—
|
|
|
42.9
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
19.0
|
|
|
(19.0
|
)
|
|
—
|
|
||||
Total expenses
|
|
2.5
|
|
|
63.8
|
|
|
(19.0
|
)
|
|
47.3
|
|
||||
Pre-tax income (loss)
|
|
$
|
25.7
|
|
|
$
|
(49.7
|
)
|
|
$
|
—
|
|
|
$
|
(24.0
|
)
|
Supplemental information:
|
|
|
|
|
|
|
|
|
||||||||
MSC collected
(1)
|
|
$
|
—
|
|
|
$
|
37.4
|
|
|
$
|
—
|
|
|
$
|
37.4
|
|
|
|
December 31, 2016
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Direct written premiums
|
|
$
|
—
|
|
|
$
|
38.6
|
|
|
$
|
—
|
|
|
$
|
38.6
|
|
Assumed (ceded) written premiums
|
|
27.2
|
|
|
(27.2
|
)
|
|
—
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
27.2
|
|
|
$
|
11.4
|
|
|
$
|
—
|
|
|
$
|
38.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
4.4
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
Net investment income
|
|
2.2
|
|
|
6.8
|
|
|
—
|
|
|
9.0
|
|
||||
Net investment income - BAM Surplus Notes
|
|
17.8
|
|
|
—
|
|
|
(17.8
|
)
|
|
—
|
|
||||
Net realized and unrealized investment gains
|
|
.1
|
|
|
.6
|
|
|
—
|
|
|
.7
|
|
||||
Other revenues
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||
Total revenues
|
|
24.5
|
|
|
10.0
|
|
|
(17.8
|
)
|
|
16.7
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
.9
|
|
|
2.5
|
|
|
—
|
|
|
3.4
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
General and administrative expenses
|
|
1.4
|
|
|
38.2
|
|
|
—
|
|
|
39.6
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
17.8
|
|
|
(17.8
|
)
|
|
—
|
|
||||
Total expenses
|
|
2.3
|
|
|
58.9
|
|
|
(17.8
|
)
|
|
43.4
|
|
||||
Pre-tax income (loss)
|
|
$
|
22.2
|
|
|
$
|
(48.9
|
)
|
|
$
|
—
|
|
|
$
|
(26.7
|
)
|
Supplemental information:
|
|
|
|
|
|
|
|
|
||||||||
MSC collected
(1)
|
|
$
|
—
|
|
|
$
|
38.0
|
|
|
$
|
—
|
|
|
$
|
38.0
|
|
|
|
Year Ended December 31,
|
||||||
$ in Millions
|
|
2018
|
|
2017
|
||||
Gross par value of primary market policies issued
|
|
$
|
11,015.7
|
|
|
$
|
9,633.5
|
|
Gross par value of secondary market policies issued
|
|
959.6
|
|
|
793.2
|
|
||
Total gross par value of market policies issued
|
|
$
|
11,975.3
|
|
|
$
|
10,426.7
|
|
Gross written premiums
|
|
$
|
52.9
|
|
|
$
|
63.2
|
|
MSC collected
|
|
53.8
|
|
|
37.4
|
|
||
Total gross written premiums and MSC collected
|
|
$
|
106.7
|
|
|
$
|
100.6
|
|
Present value of future installment MSC collections
|
|
3.1
|
|
|
2.8
|
|
||
Gross written premium adjustments on existing installment policies
|
|
1.1
|
|
|
—
|
|
||
Gross written premiums and MSC from new business
(1)
|
|
$
|
110.9
|
|
|
$
|
103.4
|
|
Total pricing
|
|
93 bps
|
|
|
99 bps
|
|
|
|
Year Ended December 31,
|
||||||
$ in Millions
|
|
2017
|
|
2016
|
||||
Gross par value of primary market policies issued
|
|
$
|
9,633.5
|
|
|
$
|
10,336.1
|
|
Gross par value of secondary market policies issued
|
|
793.2
|
|
|
967.2
|
|
||
Total gross par value of market policies issued
|
|
$
|
10,426.7
|
|
|
$
|
11,303.3
|
|
Gross written premiums
|
|
$
|
63.2
|
|
|
$
|
38.6
|
|
MSC collected
|
|
37.4
|
|
|
38.0
|
|
||
Total gross written premiums and MSC collected
|
|
$
|
100.6
|
|
|
$
|
76.6
|
|
Present value of future installment MSC collections
|
|
2.8
|
|
|
—
|
|
||
Gross written premium adjustments on existing installment policies
|
|
—
|
|
|
—
|
|
||
Gross written premiums and MSC from new business
(1)
|
|
$
|
103.4
|
|
|
$
|
76.6
|
|
Total pricing
|
|
99 bps
|
|
|
68 bps
|
|
Millions
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Policyholders’ surplus
|
|
$
|
413.7
|
|
|
$
|
427.3
|
|
Contingency reserve
|
|
50.3
|
|
|
34.8
|
|
||
Qualified statutory capital
|
|
464.0
|
|
|
462.1
|
|
||
Net unearned premiums
|
|
36.2
|
|
|
30.5
|
|
||
Present value of future installment premiums and MSC
|
|
12.9
|
|
|
9.0
|
|
||
HG Re Collateral Trusts at statutory value
|
|
258.3
|
|
|
206.8
|
|
||
Fidus Re collateral trust at statutory value
|
|
100.0
|
|
|
—
|
|
||
Claims paying resources
|
|
$
|
871.4
|
|
|
$
|
708.4
|
|
Millions
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Policyholders’ surplus
|
|
$
|
427.3
|
|
|
$
|
431.5
|
|
Contingency reserve
|
|
34.8
|
|
|
22.7
|
|
||
Qualified statutory capital
|
|
462.1
|
|
|
454.2
|
|
||
Net unearned premiums
|
|
30.5
|
|
|
23.2
|
|
||
Present value of future installment premiums and MSC
|
|
9.0
|
|
|
3.3
|
|
||
HG Re Collateral Trusts at statutory value
|
|
206.8
|
|
|
163.0
|
|
||
Claims paying resources
|
|
$
|
708.4
|
|
|
$
|
643.7
|
|
|
|
December 31, 2018
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total Segment
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
225.8
|
|
|
$
|
475.6
|
|
|
$
|
—
|
|
|
$
|
701.4
|
|
Short-term investments
|
|
28.5
|
|
|
38.4
|
|
|
—
|
|
|
66.9
|
|
||||
Total investments
|
|
254.3
|
|
|
514.0
|
|
|
—
|
|
|
768.3
|
|
||||
Cash
|
|
6.0
|
|
|
6.5
|
|
|
—
|
|
|
12.5
|
|
||||
BAM Surplus Notes
|
|
481.3
|
|
|
—
|
|
|
(481.3
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
143.7
|
|
|
—
|
|
|
(143.7
|
)
|
|
—
|
|
||||
Deferred acquisition costs
|
|
35.7
|
|
|
19.0
|
|
|
(35.7
|
)
|
|
19.0
|
|
||||
Insurance premiums receivable
|
|
4.0
|
|
|
6.4
|
|
|
(4.0
|
)
|
|
6.4
|
|
||||
Accounts receivable on unsettled investments sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other assets
|
|
1.3
|
|
|
9.0
|
|
|
(.3
|
)
|
|
10.0
|
|
||||
Total assets
|
|
$
|
926.3
|
|
|
$
|
554.9
|
|
|
$
|
(665.0
|
)
|
|
$
|
816.2
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes
(1)
|
|
$
|
—
|
|
|
$
|
481.3
|
|
|
$
|
(481.3
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes
(2)
|
|
—
|
|
|
143.7
|
|
|
(143.7
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains's subsidiaries
(3)
|
|
278.5
|
|
|
—
|
|
|
—
|
|
|
278.5
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
9.6
|
|
|
—
|
|
|
—
|
|
|
9.6
|
|
||||
Unearned insurance premiums
|
|
141.3
|
|
|
34.7
|
|
|
—
|
|
|
176.0
|
|
||||
Accounts payable on unsettled investment purchases
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
||||
Other liabilities
|
|
1.1
|
|
|
63.6
|
|
|
(40.0
|
)
|
|
24.7
|
|
||||
Total liabilities
|
|
430.5
|
|
|
725.5
|
|
|
(665.0
|
)
|
|
491.0
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
(3)
|
|
481.3
|
|
|
—
|
|
|
—
|
|
|
481.3
|
|
||||
Non-controlling interests
|
|
14.5
|
|
|
(170.6
|
)
|
|
—
|
|
|
(156.1
|
)
|
||||
Total equity
|
|
495.8
|
|
|
(170.6
|
)
|
|
—
|
|
|
325.2
|
|
||||
Total liabilities and equity
|
|
$
|
926.3
|
|
|
$
|
554.9
|
|
|
$
|
(665.0
|
)
|
|
$
|
816.2
|
|
(1)
|
Under GAAP, the BAM Surplus Notes are classified as debt by the issuer. Under U.S. Statutory accounting, they are classified as policyholders’ surplus.
|
(2)
|
Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S. Statutory accounting, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
|
(3)
|
HG Global preferred dividends payable to White Mountains’s subsidiaries is eliminated in White Mountains’s consolidated financial statements. For segment reporting, the HG Global preferred dividends payable to White Mountains’s subsidiaries included within the HG Global/BAM segment are eliminated against the offsetting receivable included within the Other Operations segment, and therefore are added back to White Mountains’s common shareholders’ equity within the HG Global/BAM segment.
|
|
|
December 31, 2017
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total Segment
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
175.5
|
|
|
$
|
448.1
|
|
|
$
|
—
|
|
|
$
|
623.6
|
|
Short-term investments
|
|
28.5
|
|
|
41.3
|
|
|
—
|
|
|
69.8
|
|
||||
Total investments
|
|
204.0
|
|
|
489.4
|
|
|
—
|
|
|
693.4
|
|
||||
Cash
|
|
1.9
|
|
|
23.7
|
|
|
—
|
|
|
25.6
|
|
||||
BAM Surplus Notes
|
|
499.0
|
|
|
—
|
|
|
(499.0
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
126.0
|
|
|
—
|
|
|
(126.0
|
)
|
|
—
|
|
||||
Deferred acquisition costs
|
|
25.1
|
|
|
14.9
|
|
|
(25.2
|
)
|
|
14.8
|
|
||||
Insurance premiums receivable
|
|
2.7
|
|
|
4.7
|
|
|
(2.9
|
)
|
|
4.5
|
|
||||
Accounts receivable on unsettled investments sales
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
.1
|
|
||||
Other assets
|
|
.8
|
|
|
8.2
|
|
|
—
|
|
|
9.0
|
|
||||
Total assets
|
|
$
|
859.5
|
|
|
$
|
541.0
|
|
|
$
|
(653.1
|
)
|
|
$
|
747.4
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes
(1)
|
|
$
|
—
|
|
|
$
|
499.0
|
|
|
$
|
(499.0
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes
(2)
|
|
—
|
|
|
126.0
|
|
|
(126.0
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains's subsidiaries
(3)
|
|
227.9
|
|
|
—
|
|
|
—
|
|
|
227.9
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
||||
Unearned insurance premiums
|
|
107.2
|
|
|
29.6
|
|
|
—
|
|
|
136.8
|
|
||||
Accounts payable on unsettled investment purchases
|
|
—
|
|
|
.6
|
|
|
—
|
|
|
.6
|
|
||||
Other liabilities
|
|
1.0
|
|
|
49.0
|
|
|
(28.1
|
)
|
|
21.9
|
|
||||
Total liabilities
|
|
343.8
|
|
|
704.2
|
|
|
(653.1
|
)
|
|
394.9
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
(3)
|
|
499.8
|
|
|
—
|
|
|
—
|
|
|
499.8
|
|
||||
Non-controlling interests
|
|
15.9
|
|
|
(163.2
|
)
|
|
—
|
|
|
(147.3
|
)
|
||||
Total equity
|
|
515.7
|
|
|
(163.2
|
)
|
|
—
|
|
|
352.5
|
|
||||
Total liabilities and equity
|
|
$
|
859.5
|
|
|
$
|
541.0
|
|
|
$
|
(653.1
|
)
|
|
$
|
747.4
|
|
(1)
|
Under GAAP, the BAM Surplus Notes are classified as debt by the issuer. Under U.S. Statutory accounting, they are classified as policyholders’ surplus.
|
(2)
|
Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S. Statutory accounting, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
|
(3)
|
HG Global preferred dividends payable to White Mountains’s subsidiaries is eliminated in White Mountains’s consolidated financial statements. For segment reporting, the HG Global preferred dividends payable to White Mountains’s subsidiaries included within the HG Global/BAM segment are eliminated against the offsetting receivable included within the Other Operations segment, and therefore are added back to White Mountains’s common shareholders’ equity within the HG Global/BAM segment.
|
|
|
Year Ended December 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Gross par value of primary market policies issued
|
|
$
|
11,015.7
|
|
|
$
|
9,633.5
|
|
Gross par value of secondary market policies issued
|
|
959.6
|
|
|
793.2
|
|
||
Total gross par value of policies issued
|
|
11,975.3
|
|
|
10,426.7
|
|
||
|
|
|
|
|
||||
Gross par value of policies priced yet to close
|
|
247.3
|
|
|
114.4
|
|
||
Less: Gross par value of policies closed that were priced in a previous period
|
|
114.4
|
|
|
353.3
|
|
||
Total gross par value of market policies priced
|
|
$
|
12,108.2
|
|
|
$
|
10,187.8
|
|
Millions
|
|
Period Ended
December 31, 2018 (1) |
||
Commission revenues
|
|
$
|
94.7
|
|
Broker commission expense
|
|
28.9
|
|
|
Gross profit
|
|
65.8
|
|
|
Other revenues
|
|
6.9
|
|
|
General and administrative expenses
|
|
61.6
|
|
|
Amortization of other intangible assets
|
|
8.3
|
|
|
Interest expense
|
|
8.0
|
|
|
GAAP pre-tax loss
|
|
(5.2
|
)
|
|
Income tax expense
|
|
—
|
|
|
GAAP net loss
|
|
(5.2
|
)
|
|
Add back:
|
|
|
||
Change in fair value of contingent consideration earnout liabilities
|
|
2.7
|
|
|
Interest expense
|
|
8.0
|
|
|
Income tax expense
|
|
—
|
|
|
General and administrative expenses — depreciation
|
|
1.7
|
|
|
Amortization of other intangible assets
|
|
8.3
|
|
|
Adjusted EBITDA
(2)
|
|
$
|
15.5
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
$ in Millions
|
|
Controlled Premium
(1)
|
|
Commission and Fee Revenue
|
|
Controlled Premium
(1)
|
|
Commission and Fee Revenue
|
|
Controlled Premium
(1)
|
|
Commission and Fee Revenue
|
||||||||||||
Specialty Transportation
|
|
$
|
136.8
|
|
|
$
|
43.0
|
|
|
$
|
112.6
|
|
|
$
|
32.9
|
|
|
$
|
112.4
|
|
|
$
|
37.4
|
|
Real Estate
|
|
135.7
|
|
|
30.3
|
|
|
106.8
|
|
|
22.2
|
|
|
97.6
|
|
|
19.9
|
|
||||||
Social Services
|
|
94.0
|
|
|
23.8
|
|
|
111.6
|
|
|
28.8
|
|
|
122.3
|
|
|
32.3
|
|
||||||
United Kingdom
|
|
108.8
|
|
|
34.9
|
|
|
46.0
|
|
|
16.1
|
|
|
1.2
|
|
|
.7
|
|
||||||
Other
|
|
119.4
|
|
|
19.8
|
|
|
113.4
|
|
|
18.6
|
|
|
112.3
|
|
|
18.3
|
|
||||||
Total
|
|
$
|
594.7
|
|
|
$
|
151.8
|
|
|
$
|
490.4
|
|
|
$
|
118.6
|
|
|
$
|
445.8
|
|
|
$
|
108.6
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Advertising and commission revenues
|
|
$
|
295.5
|
|
|
$
|
163.2
|
|
|
$
|
116.5
|
|
Cost of sales
|
|
245.0
|
|
|
135.9
|
|
|
97.8
|
|
|||
Gross profit
|
|
50.5
|
|
|
27.3
|
|
|
18.7
|
|
|||
Other revenue
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|||
General and administrative expenses
|
|
31.7
|
|
|
16.2
|
|
|
11.8
|
|
|||
Amortization of other intangible assets
|
|
10.3
|
|
|
10.5
|
|
|
10.1
|
|
|||
Interest expense
|
|
1.2
|
|
|
1.0
|
|
|
.9
|
|
|||
GAAP pre-tax income (loss)
|
|
8.9
|
|
|
(.4
|
)
|
|
(4.1
|
)
|
|||
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
GAAP net income (loss)
|
|
8.9
|
|
|
(.4
|
)
|
|
(4.1
|
)
|
|||
Add back:
|
|
|
|
|
|
|
||||||
Non-cash equity-based compensation expense
|
|
11.7
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
|
1.2
|
|
|
1.0
|
|
|
.9
|
|
|||
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
General and administrative expenses — depreciation
|
|
.2
|
|
|
.2
|
|
|
.1
|
|
|||
Amortization of other intangible assets
|
|
10.3
|
|
|
10.5
|
|
|
10.1
|
|
|||
Adjusted EBITDA
(1)
|
|
$
|
32.3
|
|
|
$
|
11.3
|
|
|
$
|
7.0
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Earned insurance premiums
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
7.5
|
|
Net investment income
|
|
42.3
|
|
|
43.7
|
|
|
23.1
|
|
|||
Net realized and unrealized investment (losses) gains
|
|
(100.8
|
)
|
|
132.7
|
|
|
(28.1
|
)
|
|||
Advertising and commission revenues
|
|
4.1
|
|
|
3.8
|
|
|
1.8
|
|
|||
Other revenues
|
|
.5
|
|
|
6.1
|
|
|
20.2
|
|
|||
Total revenues
|
|
(53.9
|
)
|
|
187.3
|
|
|
24.5
|
|
|||
Losses and LAE
|
|
—
|
|
|
1.1
|
|
|
8.0
|
|
|||
Insurance and reinsurance acquisition expenses
|
|
—
|
|
|
.1
|
|
|
2.2
|
|
|||
Cost of sales
|
|
3.7
|
|
|
3.5
|
|
|
4.2
|
|
|||
General and administrative and other expenses
|
|
94.4
|
|
|
148.9
|
|
|
124.1
|
|
|||
Amortization of other intangible assets
|
|
.2
|
|
|
.2
|
|
|
.4
|
|
|||
Interest expense
|
|
.3
|
|
|
1.3
|
|
|
2.1
|
|
|||
Total expenses
|
|
98.6
|
|
|
155.1
|
|
|
141.0
|
|
|||
Pre-tax (loss) income
|
|
$
|
(152.5
|
)
|
|
$
|
32.2
|
|
|
$
|
(116.5
|
)
|
|
|
Year Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Common equity securities
|
|
(7.7
|
)%
|
|
20.1
|
%
|
|
6.2
|
%
|
Other long-term investments
|
|
10.0
|
%
|
|
(5.8
|
)%
|
|
0.8
|
%
|
Total common equity securities and other long-term investments
|
|
(3.6
|
)%
|
|
12.7
|
%
|
|
4.3
|
%
|
S&P 500 Index (total return)
|
|
(4.4
|
)%
|
|
21.8
|
%
|
|
12.0
|
%
|
|
|
|
|
|
|
|
|||
Fixed income investments
|
|
1.2
|
%
|
|
3.5
|
%
|
|
2.4
|
%
|
Bloomberg Barclays U.S. Intermediate Aggregate Index
|
|
0.9
|
%
|
|
2.3
|
%
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|||
Total consolidated portfolio
|
|
(1.7
|
)%
|
|
5.6
|
%
|
|
2.7
|
%
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
$ in Millions
|
|
Carrying Value
|
|
% of Total
|
|
Carrying Value
|
|
% of Total
|
||||||
Fixed maturity investments
|
|
$
|
1,077.5
|
|
|
42.4
|
%
|
|
$
|
2,129.7
|
|
|
63.0
|
%
|
Short-term investments
|
|
214.2
|
|
|
8.4
|
|
|
176.1
|
|
|
5.2
|
|
||
Common equity securities
|
|
925.6
|
|
|
36.4
|
|
|
866.1
|
|
|
25.6
|
|
||
Other long-term investments
|
|
325.6
|
|
|
12.8
|
|
|
208.8
|
|
|
6.2
|
|
||
Total investments
|
|
$
|
2,542.9
|
|
|
100.0
|
%
|
|
$
|
3,380.7
|
|
|
100.0
|
%
|
|
|
December 31, 2018
|
||||||||||||
$ in Millions
|
|
Amortized
Cost
|
|
% of Total
|
|
Carrying
Value |
|
% of Total
|
||||||
U.S. government and government-sponsored entities
(1)
|
|
$
|
271.9
|
|
|
25.0
|
%
|
|
$
|
268.6
|
|
|
25.0
|
%
|
AAA/Aaa
|
|
66.4
|
|
|
6.1
|
|
|
66.1
|
|
|
6.1
|
|
||
AA/Aa
|
|
264.2
|
|
|
24.3
|
|
|
264.4
|
|
|
24.6
|
|
||
A/A
|
|
328.2
|
|
|
30.1
|
|
|
324.8
|
|
|
30.1
|
|
||
BBB/Baa
|
|
151.8
|
|
|
14.0
|
|
|
148.0
|
|
|
13.7
|
|
||
Other/not rated
|
|
5.6
|
|
|
0.5
|
|
|
5.6
|
|
|
0.5
|
|
||
Total fixed maturity investments
|
|
$
|
1,088.1
|
|
|
100.0
|
%
|
|
$
|
1,077.5
|
|
|
100.0
|
%
|
(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).
|
|
|
December 31, 2018
|
||||||
Millions
|
|
Amortized
Cost
|
|
Carrying
Value |
||||
Due in one year or less
|
|
$
|
84.8
|
|
|
$
|
84.4
|
|
Due after one year through five years
|
|
500.8
|
|
|
496.2
|
|
||
Due after five years through ten years
|
|
222.4
|
|
|
218.0
|
|
||
Due after ten years
|
|
144.0
|
|
|
145.4
|
|
||
Mortgage and asset-backed securities
|
|
136.1
|
|
|
133.5
|
|
||
Total fixed maturity investments
|
|
$
|
1,088.1
|
|
|
$
|
1,077.5
|
|
$ in Millions
Currency
(1)
|
|
Fair Value
|
|
% of Common Shareholders
’
Equity
|
|||
GBP
|
|
$
|
76.0
|
|
|
2.7
|
%
|
EUR
|
|
54.0
|
|
|
1.9
|
|
|
JPY
|
|
49.9
|
|
|
1.8
|
|
|
All other
|
|
63.9
|
|
|
2.2
|
|
|
Total
|
|
$
|
243.8
|
|
|
8.6
|
%
|
|
|
December 31,
|
||||||
$ in Millions
|
|
2018
|
|
2017
|
||||
WTM Bank Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
NSM Bank Facility, net of unamortized issuance costs
|
|
176.6
|
|
|
—
|
|
||
MediaAlpha Bank Facility, net of unamortized issuance costs
|
|
14.2
|
|
|
23.8
|
|
||
Other NSM debt
|
|
1.9
|
|
|
—
|
|
||
Total debt
|
|
192.7
|
|
|
23.8
|
|
||
Non-controlling interests — other, excluding BAM
|
|
45.7
|
|
|
31.5
|
|
||
Total White Mountains’s common shareholders’ equity
|
|
2,843.1
|
|
|
3,492.5
|
|
||
Total capital
|
|
3,081.5
|
|
|
3,547.8
|
|
||
Time-value discount on expected future payments on the BAM Surplus Notes
(1)
|
|
(141.2
|
)
|
|
(157.0
|
)
|
||
HG Global’s unearned premium reserve
(1)
|
|
136.9
|
|
|
103.9
|
|
||
HG Global’s net deferred acquisition costs
(1)
|
|
(34.6
|
)
|
|
(24.3
|
)
|
||
Total adjusted capital
|
|
$
|
3,042.6
|
|
|
$
|
3,470.4
|
|
|
|
|
|
|
||||
Total debt to total adjusted capital
|
|
6.3
|
%
|
|
0.7
|
%
|
(1)
|
Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%.
|
Millions
|
|
Due in Less Than One Year
|
|
Due in One to Three Years
|
|
Due in Three to Five Years
|
|
Due After
Five Years
|
|
Total
|
||||||||||
Debt
|
|
$
|
5.2
|
|
|
$
|
10.4
|
|
|
$
|
9.4
|
|
|
$
|
171.9
|
|
|
$
|
196.9
|
|
Interest on debt
|
|
14.1
|
|
|
26.6
|
|
|
12.5
|
|
|
—
|
|
|
53.2
|
|
|||||
Long-term incentive compensation
|
|
17.0
|
|
|
30.7
|
|
|
—
|
|
|
—
|
|
|
47.7
|
|
|||||
Contingent consideration earnout liabilities
(1)
|
|
20.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.2
|
|
|||||
Operating leases
(2)
|
|
6.6
|
|
|
9.1
|
|
|
7.8
|
|
|
4.2
|
|
|
27.7
|
|
|||||
Total contractual obligations and commitments
|
|
$
|
63.1
|
|
|
$
|
76.8
|
|
|
$
|
29.7
|
|
|
$
|
176.1
|
|
|
$
|
345.7
|
|
|
|
|
|
|
|
|
|
|
|
Average price per share as % of
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Book Value
|
|||||||
|
|
|
|
|
|
|
|
Adjusted
|
|
|
|
Per Share, Including
|
|||||||
|
|
|
|
|
|
Average
|
|
Book
|
|
|
|
Estimated Gain From
|
|||||||
|
|
Shares
|
|
Cost
|
|
Price
|
|
Value
|
|
Adjusted Book
|
|
MediaAlpha
|
|||||||
Year Ended
|
|
Repurchased
|
|
(Millions)
|
|
Per Share
|
|
Per Share
|
|
Value Per Share
|
|
Transaction
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2018
|
|
592,458
|
|
|
$
|
519.4
|
|
|
$
|
876.69
|
|
|
$
|
887.85
|
|
|
99%
|
|
93%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2017
|
|
832,725
|
|
|
$
|
723.9
|
|
|
$
|
869.29
|
|
|
$
|
914.75
|
|
|
95%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2016
|
|
1,106,145
|
|
|
$
|
887.2
|
|
|
$
|
802.08
|
|
|
$
|
789.08
|
|
|
102%
|
|
N/A
|
|
|
December 31, 2018
|
|||||||||
$ in Millions
|
|
Fair Value
|
|
Level 3 Inputs
|
|
Level 3 Inputs as a % of
Total Fair Value
|
|||||
U.S. Government and agency obligations
|
|
$
|
153.2
|
|
|
$
|
—
|
|
|
—
|
%
|
Debt securities issued by corporations
|
|
510.5
|
|
|
—
|
|
|
—
|
|
||
Municipal obligations
|
|
280.3
|
|
|
—
|
|
|
—
|
|
||
Mortgage and asset-backed securities
|
|
133.5
|
|
|
—
|
|
|
—
|
|
||
Fixed maturity investments
|
|
1,077.5
|
|
|
—
|
|
|
—
|
|
||
Short-term investments
|
|
214.2
|
|
|
—
|
|
|
—
|
|
||
Common equity securities
|
|
925.6
|
|
|
—
|
|
|
—
|
|
||
Other long-term investments
—
NAV
|
|
186.9
|
|
|
—
|
|
|
—
|
|
||
Other long-term investments
—
level 3
|
|
138.7
|
|
|
138.7
|
|
|
100
|
%
|
||
Total investments
|
|
$
|
2,542.9
|
|
|
$
|
138.7
|
|
|
5
|
%
|
$ in Millions
|
|
Discount Rate
|
||||||||||||||||||
Exit Multiple
|
|
16%
|
|
17%
|
|
18%
|
|
19%
|
|
20%
|
||||||||||
1.25
|
|
$
|
93
|
|
|
$
|
89
|
|
|
$
|
84
|
|
|
$
|
81
|
|
|
$
|
77
|
|
1.00
|
|
$
|
83
|
|
|
$
|
79
|
|
|
$
|
75
|
|
|
$
|
72
|
|
|
$
|
69
|
|
0.75
|
|
$
|
73
|
|
|
$
|
70
|
|
|
$
|
67
|
|
|
$
|
64
|
|
|
$
|
61
|
|
|
|
|
|
Change in Fair Value at
|
||||||||||||||||
|
|
Carrying Value at
|
|
December 31, 2018
|
||||||||||||||||
Millions
|
|
December 31, 2018
|
|
10% Decline
|
|
10% Increase
|
|
30% Decline
|
|
30% Increase
|
||||||||||
Unconsolidated entities — level 3
|
|
$
|
124.9
|
|
|
$
|
(12.5
|
)
|
|
$
|
12.5
|
|
|
$
|
(37.5
|
)
|
|
$
|
37.5
|
|
Unconsolidated entities — NAV
|
|
40.8
|
|
|
(4.1
|
)
|
|
4.1
|
|
|
(12.3
|
)
|
|
12.3
|
|
|||||
Private equity funds — NAV
|
|
91.8
|
|
|
(9.2
|
)
|
|
9.2
|
|
|
(27.5
|
)
|
|
27.5
|
|
|||||
Hedge fund — NAV
|
|
54.3
|
|
|
(5.4
|
)
|
|
5.4
|
|
|
(16.3
|
)
|
|
16.3
|
|
|||||
Other — level 3
|
|
13.8
|
|
|
(1.4
|
)
|
|
1.4
|
|
|
(4.1
|
)
|
|
4.1
|
|
|||||
Total other long-term investments
|
|
$
|
325.6
|
|
|
$
|
(32.6
|
)
|
|
$
|
32.6
|
|
|
$
|
(97.7
|
)
|
|
$
|
97.7
|
|
•
|
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;
|
•
|
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;
|
•
|
business opportunities (or lack thereof) that may be presented to it and pursued;
|
•
|
actions taken by ratings agencies from time to time, such as financial strength or credit ratings downgrades or placing ratings on negative watch;
|
•
|
the continued availability of capital and financing;
|
•
|
general economic, market or business conditions;
|
•
|
competitive forces, including the conduct of other insurers;
|
•
|
changes in domestic or foreign laws or regulations, or their interpretation, applicable to White Mountains, its competitors or its customers;
|
•
|
an economic downturn or other economic conditions adversely affecting its financial condition; and
|
•
|
other factors, most of which are beyond White Mountains’s control.
|
$ in Millions
|
|
Fair Value at
December 31, 2018
|
|
Assumed Change in Relevant Interest Rate
|
|
Estimated Fair Value
After Change in
Interest Rate
|
|
Pre-Tax Increase (Decrease) in Fair Value
|
||||||
Fixed maturity investments
|
|
$
|
1,077.5
|
|
|
100 bps decrease
|
|
$
|
1,121.4
|
|
|
$
|
43.9
|
|
|
|
|
|
50 bps decrease
|
|
1,099.5
|
|
|
22.0
|
|
||||
|
|
|
|
50 bps increase
|
|
1,055.4
|
|
|
(22.1
|
)
|
||||
|
|
|
|
100 bps increase
|
|
1,033.4
|
|
|
(44.0
|
)
|
|
|
December 31, 2018
|
||||||||||||||||||
Millions
|
|
Fair Value
|
|
Tighten 50
|
|
Tighten 25
|
|
Widen 25
|
|
Widen 50
|
||||||||||
U.S. Government and agency obligations
|
|
$
|
153.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Tighten 100
|
|
Tighten 50
|
|
Widen 50
|
|
Widen 100
|
||||||||||
Agency mortgage-backed securities
|
|
115.4
|
|
|
2.8
|
|
|
2.1
|
|
|
(2.5
|
)
|
|
(5.1
|
)
|
|||||
Other asset-backed securities
|
|
18.1
|
|
|
0.1
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|||||
|
|
|
|
Tighten 200
|
|
Tighten 100
|
|
Widen 100
|
|
Widen 200
|
||||||||||
Debt securities issued by corporations
|
|
510.5
|
|
|
25.1
|
|
|
18.3
|
|
|
(20.6
|
)
|
|
(41.3
|
)
|
|||||
Municipal obligations
|
|
280.3
|
|
|
13.0
|
|
|
12.4
|
|
|
(16.0
|
)
|
|
(31.9
|
)
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
NSM Bank Facility
|
|
$
|
176.1
|
|
|
$
|
176.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
MediaAlpha Bank Facility
|
|
$
|
14.6
|
|
|
$
|
14.2
|
|
|
$
|
23.9
|
|
|
$
|
23.8
|
|
Currency
(1)
$ in Millions
|
|
Fair Value
|
|
% of Common Shareholders
’
Equity
|
|||
GBP
|
|
$
|
76.0
|
|
|
2.7
|
%
|
EUR
|
|
54.0
|
|
|
1.9
|
|
|
JPY
|
|
49.9
|
|
|
1.8
|
|
|
All other
|
|
63.9
|
|
|
2.2
|
|
|
Total
|
|
$
|
243.8
|
|
|
8.6
|
%
|
Exhibit
Number
|
|
Name
|
2
|
|
|
3.1
|
|
|
3.2
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
11
|
|
Exhibit
Number
|
|
Name
|
12
|
|
|
14
|
|
|
21
|
|
|
23
|
|
|
24
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.1
|
|
The following financial information from White Mountains’s Annual Report on Form 10-K for the year ended December 31, 2018 formatted in XBRL: (i) Consolidated balance sheets as of December 31, 2018 and December 31, 2017; (ii) Consolidated statements of operations and comprehensive income for each of the years ended December 31, 2018, 2017 and 2016; (iii) Consolidated statements of shareholders’ equity for each of the years ended December 31, 2018, 2017 and 2016; (iv) Consolidated statements of cash flows for each of the years ended December 31, 2018, 2017 and 2016; and (v) Notes to consolidated financial statements (*).
|
(*)
|
Included herein.
|
(**)
|
Not included herein as the information is contained elsewhere within report. See
Note 9 — “Earnings Per Share”
on page F-43.
|
|
|
WHITE MOUNTAINS INSURANCE GROUP, LTD.
|
|
|
|
|
|
Date:
|
February 27, 2019
|
By:
|
/s/ J. BRIAN PALMER
|
|
|
J. Brian Palmer
|
|
|
|
Managing Director and Chief Accounting Officer
|
Signature
|
|
Title
|
|
Date
|
YVES BROUILLETTE*
|
|
Director
|
|
February 27, 2019
|
Yves Brouillette
|
|
|
|
|
/s/ REID T. CAMPBELL
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
February 27, 2019
|
Reid T. Campbell
|
|
|
|
|
MARY C. CHOKSI*
|
|
Director
|
|
February 27, 2019
|
Mary C. Choksi
|
|
|
|
|
MORGAN W. DAVIS*
|
|
Chairman
|
|
February 27, 2019
|
Morgan W. Davis
|
|
|
|
|
PHILIP A. GELSTON*
|
|
Director
|
|
February 27, 2019
|
Philip A. Gelston
|
|
|
|
|
EDITH E. HOLIDAY*
|
|
Director
|
|
February 27, 2019
|
Edith E. Holiday
|
|
|
|
|
/s/ J. BRIAN PALMER
|
|
Managing Director and Chief Accounting Officer
(Principal Accounting Officer)
|
|
February 27, 2019
|
J. Brian Palmer
|
|
|
|
|
/s/ G. MANNING ROUNTREE
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
February 27, 2019
|
G. Manning Rountree
|
|
|
|
|
LOWNDES A. SMITH*
|
|
Director
|
|
February 27, 2019
|
Lowndes A. Smith
|
|
|
|
|
DAVID A. TANNER*
|
|
Director
|
|
February 27, 2019
|
David A. Tanner
|
|
|
|
|
* By:
|
/s/ G. MANNING ROUNTREE
|
|
|
G. Manning Rountree,
Attorney-in-Fact
|
|
|
|
Form 10-K
Page(s)
|
Consolidated financial statements:
|
|
|
F - 1
|
||
December 31, 201
8, 2017 and 2016
|
||
F - 4
|
||
December 31, 201
8, 2017 and 2016
|
F - 6
|
|
F - 6
|
||
F - 7
|
||
|
|
|
Other financial information:
|
|
|
|
|
|
Financial statement schedules:
|
|
|
Summary of investments—other than investments in related parties
as of December 31
,
2018
|
FS - 1
|
|
Condensed financial information of the Registrant
as of December 31, 2018 and 2017 and for each
of the years ended December 31, 2018, 2017 and 2016
|
FS - 2
|
|
Supplementary insurance information
as of December 31, 2018 and 2017 and for each of the years
ended December 31, 2018, 2017 and 2016
|
FS - 5
|
|
Reinsurance
for each of the years ended December 31, 2018, 2017 and 2016
|
FS - 6
|
|
|
December 31,
|
||||||
Millions, Except Share and Per Share Amounts
|
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
|
$
|
701.4
|
|
|
$
|
623.6
|
|
Short-term investments, at fair value
|
|
66.9
|
|
|
69.8
|
|
||
Total investments
|
|
768.3
|
|
|
693.4
|
|
||
Cash
|
|
12.5
|
|
|
25.6
|
|
||
Insurance premiums receivable
|
|
6.4
|
|
|
4.5
|
|
||
Deferred acquisition costs
|
|
19.0
|
|
|
14.8
|
|
||
Accrued investment income
|
|
4.9
|
|
|
3.4
|
|
||
Accounts receivable on unsettled investment sales
|
|
—
|
|
|
—
|
|
||
Other assets
|
|
5.1
|
|
|
5.7
|
|
||
Total Financial Guarantee assets
|
|
816.2
|
|
|
747.4
|
|
||
|
|
|
|
|
||||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
||||
Short-term investments, at fair value
|
|
1.7
|
|
|
—
|
|
||
Cash (restricted $50.0)
|
|
66.2
|
|
|
—
|
|
||
Premium and commission receivable
|
|
44.0
|
|
|
—
|
|
||
Goodwill and other intangible assets
|
|
486.2
|
|
|
—
|
|
||
Other assets
|
|
28.9
|
|
|
—
|
|
||
Total Specialty Insurance Distribution assets
|
|
627.0
|
|
|
—
|
|
||
|
|
|
|
|
||||
Marketing Technology (MediaAlpha)
|
|
|
|
|
||||
Cash
|
|
5.7
|
|
|
9.1
|
|
||
Goodwill and other intangible assets
|
|
43.4
|
|
|
53.7
|
|
||
Accounts receivable from publishers and advertisers
|
|
37.0
|
|
|
32.4
|
|
||
Other assets
|
|
2.3
|
|
|
1.3
|
|
||
Total Marketing Technology assets
|
|
88.4
|
|
|
96.5
|
|
||
|
|
|
|
|
||||
Other
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
|
376.1
|
|
|
1,506.1
|
|
||
Short-term investments, at fair value
|
|
145.6
|
|
|
106.3
|
|
||
Common equity securities, at fair value
|
|
925.6
|
|
|
866.1
|
|
||
Other long-term investments
|
|
325.6
|
|
|
208.8
|
|
||
Total investments
|
|
1,772.9
|
|
|
2,687.3
|
|
||
Cash
|
|
25.9
|
|
|
62.4
|
|
||
Accrued investment income
|
|
5.5
|
|
|
13.9
|
|
||
Accounts receivable on unsettled investment sales
|
|
—
|
|
|
20.9
|
|
||
Goodwill and other intangible assets
|
|
7.9
|
|
|
8.4
|
|
||
Other assets
|
|
15.5
|
|
|
19.1
|
|
||
Assets held for sale
|
|
3.3
|
|
|
3.3
|
|
||
Total Other assets
|
|
1,831.0
|
|
|
2,815.3
|
|
||
Total assets
|
|
$
|
3,362.6
|
|
|
$
|
3,659.2
|
|
|
|
December 31,
|
||||||
Millions, Except Share and Per Share Amounts
|
|
2018
|
|
2017
|
||||
Liabilities
|
|
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Unearned insurance premiums
|
|
$
|
176.0
|
|
|
$
|
136.8
|
|
Accounts payable on unsettled investment purchases
|
|
2.2
|
|
|
.6
|
|
||
Other liabilities
|
|
34.3
|
|
|
29.6
|
|
||
Total Financial Guarantee liabilities
|
|
212.5
|
|
|
167.0
|
|
||
|
|
|
|
|
||||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
||||
Debt
|
|
178.5
|
|
|
—
|
|
||
Premiums payable
|
|
77.2
|
|
|
—
|
|
||
Contingent consideration earnout liabilities
|
|
20.2
|
|
|
—
|
|
||
Other liabilities
|
|
38.9
|
|
|
—
|
|
||
Total Specialty Insurance Distribution liabilities
|
|
314.8
|
|
|
—
|
|
||
|
|
|
|
|
||||
Marketing Technology (MediaAlpha)
|
|
|
|
|
||||
Debt
|
|
14.2
|
|
|
23.8
|
|
||
Amounts due to publishers and advertisers
|
|
27.0
|
|
|
31.6
|
|
||
Other liabilities
|
|
5.7
|
|
|
4.4
|
|
||
Total Marketing Technology liabilities
|
|
46.9
|
|
|
59.8
|
|
||
|
|
|
|
|
||||
Other
|
|
|
|
|
||||
Accrued incentive compensation
|
|
38.9
|
|
|
60.6
|
|
||
Accounts payable on unsettled investment purchases
|
|
5.0
|
|
|
—
|
|
||
Other liabilities
|
|
26.3
|
|
|
11.0
|
|
||
Total Other liabilities
|
|
70.2
|
|
|
71.6
|
|
||
Total liabilities
|
|
644.4
|
|
|
298.4
|
|
||
|
|
|
|
|
||||
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 3,173,115 and 3,750,171 shares |
|
3.2
|
|
|
3.8
|
|
||
Paid-in surplus
|
|
580.8
|
|
|
666.8
|
|
||
Retained earnings
|
|
2,264.9
|
|
|
2,823.2
|
|
||
Accumulated other comprehensive loss, after-tax:
|
|
|
|
|
||||
Net unrealized foreign currency translation losses and interest rate swap
|
|
(5.8
|
)
|
|
(1.3
|
)
|
||
Total White Mountains’s common shareholders’ equity
|
|
2,843.1
|
|
|
3,492.5
|
|
||
Non-controlling interests
|
|
(124.9
|
)
|
|
(131.7
|
)
|
||
Total equity
|
|
2,718.2
|
|
|
3,360.8
|
|
||
Total liabilities and equity
|
|
$
|
3,362.6
|
|
|
$
|
3,659.2
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
||||||
Earned insurance premiums
|
|
$
|
13.9
|
|
|
$
|
9.4
|
|
|
$
|
5.9
|
|
Net investment income
|
|
16.7
|
|
|
12.3
|
|
|
9.0
|
|
|||
Net realized and unrealized investment (losses) gains
|
|
(7.5
|
)
|
|
.6
|
|
|
.7
|
|
|||
Other revenues
|
|
1.2
|
|
|
1.0
|
|
|
1.1
|
|
|||
Total Financial Guarantee revenues
|
|
24.3
|
|
|
23.3
|
|
|
16.7
|
|
|||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
|
|
||||||
Commission revenues
|
|
94.7
|
|
|
—
|
|
|
—
|
|
|||
Other revenues
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|||
Total Specialty Insurance Distribution revenues
|
|
101.6
|
|
|
—
|
|
|
—
|
|
|||
Marketing Technology (MediaAlpha)
|
|
|
|
|
|
|
||||||
Advertising and commission revenues
|
|
295.5
|
|
|
163.2
|
|
|
116.5
|
|
|||
Other revenues
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|||
Total Marketing Technology revenues
|
|
297.1
|
|
|
163.2
|
|
|
116.5
|
|
|||
Other
|
|
|
|
|
|
|
||||||
Earned insurance premiums
|
|
—
|
|
|
1.0
|
|
|
7.5
|
|
|||
Net investment income
|
|
42.3
|
|
|
43.7
|
|
|
23.1
|
|
|||
Net realized and unrealized investment (losses) gains
|
|
(100.8
|
)
|
|
132.7
|
|
|
(28.1
|
)
|
|||
Advertising and commission revenues
|
|
4.1
|
|
|
3.8
|
|
|
1.8
|
|
|||
Other revenues
|
|
.5
|
|
|
6.1
|
|
|
20.2
|
|
|||
Total Other revenues
|
|
(53.9
|
)
|
|
187.3
|
|
|
24.5
|
|
|||
Total revenues
|
|
369.1
|
|
|
373.8
|
|
|
157.7
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
||||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
||||||
Insurance acquisition expenses
|
|
5.3
|
|
|
4.0
|
|
|
3.4
|
|
|||
Other underwriting expenses
|
|
.4
|
|
|
.4
|
|
|
.4
|
|
|||
General and administrative expenses
|
|
48.0
|
|
|
42.9
|
|
|
39.6
|
|
|||
Total Financial Guarantee expenses
|
|
53.7
|
|
|
47.3
|
|
|
43.4
|
|
|||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
61.6
|
|
|
—
|
|
|
—
|
|
|||
Broker commission expense
|
|
28.9
|
|
|
—
|
|
|
—
|
|
|||
Amortization of other intangible assets
|
|
8.3
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
|
8.0
|
|
|
—
|
|
|
—
|
|
|||
Total Specialty Insurance Distribution expenses
|
|
106.8
|
|
|
—
|
|
|
—
|
|
|||
Marketing Technology (MediaAlpha)
|
|
|
|
|
|
|
||||||
Cost of sales
|
|
245.0
|
|
|
135.9
|
|
|
97.8
|
|
|||
General and administrative expenses
|
|
31.7
|
|
|
16.2
|
|
|
11.8
|
|
|||
Amortization of other intangible assets
|
|
10.3
|
|
|
10.5
|
|
|
10.1
|
|
|||
Interest expense
|
|
1.2
|
|
|
1.0
|
|
|
.9
|
|
|||
Total Marketing Technology expenses
|
|
288.2
|
|
|
163.6
|
|
|
120.6
|
|
|||
Other
|
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses
|
|
—
|
|
|
1.1
|
|
|
8.0
|
|
|||
Insurance acquisition expense
|
|
—
|
|
|
.1
|
|
|
2.2
|
|
|||
Cost of sales
|
|
3.7
|
|
|
3.5
|
|
|
4.2
|
|
|||
General and administrative and other expenses
|
|
94.4
|
|
|
148.9
|
|
|
124.1
|
|
|||
Amortization of other intangible assets
|
|
.2
|
|
|
.2
|
|
|
.4
|
|
|||
Interest expense
|
|
.3
|
|
|
1.3
|
|
|
2.1
|
|
|||
Total Other expenses
|
|
98.6
|
|
|
155.1
|
|
|
141.0
|
|
|||
Total expenses
|
|
547.3
|
|
|
366.0
|
|
|
305.0
|
|
|||
Pre-tax (loss) income from continuing operations
|
|
(178.2
|
)
|
|
7.8
|
|
|
(147.3
|
)
|
|||
Income tax benefit
|
|
4.0
|
|
|
7.8
|
|
|
32.9
|
|
|||
Net (loss) income from continuing operations
|
|
(174.2
|
)
|
|
15.6
|
|
|
(114.4
|
)
|
|||
Gain from sale of OneBeacon, net of tax
|
|
—
|
|
|
554.5
|
|
|
—
|
|
|||
Gain from sale of Tranzact, net of tax
|
|
—
|
|
|
3.2
|
|
|
51.9
|
|
|||
(Loss) gain from sale of Sirius Group, net of tax
|
|
(17.2
|
)
|
|
(.7
|
)
|
|
363.2
|
|
|||
Net income from discontinued operations, net of tax
|
|
—
|
|
|
20.5
|
|
|
108.3
|
|
|||
Net (loss) income
|
|
(191.4
|
)
|
|
593.1
|
|
|
409.0
|
|
|||
Net loss (income) attributable to non-controlling interests
|
|
50.2
|
|
|
34.1
|
|
|
(7.2
|
)
|
|||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(141.2
|
)
|
|
$
|
627.2
|
|
|
$
|
401.8
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(141.2
|
)
|
|
$
|
627.2
|
|
|
$
|
401.8
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, net of tax
|
|
(4.8
|
)
|
|
.3
|
|
|
(.7
|
)
|
|||
Comprehensive income from discontinued operations, net of tax
|
|
—
|
|
|
3.2
|
|
|
146.3
|
|
|||
Comprehensive (loss) income
|
|
(146.0
|
)
|
|
630.7
|
|
|
547.4
|
|
|||
Comprehensive income (loss) attributable to non-controlling interests
|
|
.3
|
|
|
(.2
|
)
|
|
(.3
|
)
|
|||
Comprehensive (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(145.7
|
)
|
|
$
|
630.5
|
|
|
$
|
547.1
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
Basic (loss) earnings per share
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(36.67
|
)
|
|
$
|
11.56
|
|
|
$
|
(24.26
|
)
|
Discontinued operations
|
|
(5.09
|
)
|
|
134.50
|
|
|
104.37
|
|
|||
Total consolidated operations
|
|
$
|
(41.76
|
)
|
|
$
|
146.06
|
|
|
$
|
80.11
|
|
Diluted (loss) earnings per share
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(36.67
|
)
|
|
$
|
11.56
|
|
|
$
|
(24.26
|
)
|
Discontinued operations
|
|
(5.09
|
)
|
|
134.50
|
|
|
104.32
|
|
|||
Total consolidated operations
|
|
$
|
(41.76
|
)
|
|
$
|
146.06
|
|
|
$
|
80.06
|
|
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
|
|
AOCL,
After-tax
|
|
Total
|
|
Non-controlling
Interests
|
|
Total Equity
|
||||||||||||
Balances at December 31, 2015
|
|
$
|
978.2
|
|
|
$
|
3,075.0
|
|
|
$
|
(149.9
|
)
|
|
$
|
3,903.3
|
|
|
$
|
454.3
|
|
|
$
|
4,357.6
|
|
Net income
|
|
—
|
|
|
401.8
|
|
|
—
|
|
|
401.8
|
|
|
7.2
|
|
|
409.0
|
|
||||||
Net change in foreign currency translation
|
|
—
|
|
|
—
|
|
|
31.4
|
|
|
31.4
|
|
|
.3
|
|
|
31.7
|
|
||||||
Net change in pension liability and other accumulated comprehensive items
|
|
—
|
|
|
—
|
|
|
113.9
|
|
|
113.9
|
|
|
—
|
|
|
113.9
|
|
||||||
Comprehensive income
|
|
—
|
|
|
401.8
|
|
|
145.3
|
|
|
547.1
|
|
|
7.5
|
|
|
554.6
|
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
(5.4
|
)
|
||||||
Dividends to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.7
|
)
|
|
(22.7
|
)
|
||||||
Issuances of common shares
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
|
9.1
|
|
||||||
Repurchases and retirements of common shares
|
|
(192.4
|
)
|
|
(694.8
|
)
|
|
—
|
|
|
(887.2
|
)
|
|
—
|
|
|
(887.2
|
)
|
||||||
Capital contributions from BAM members, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.3
|
|
|
27.3
|
|
||||||
Deconsolidation of non-controlling interests
associated with the sale of Sirius Group |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(250.0
|
)
|
|
(250.0
|
)
|
||||||
Deconsolidation of non-controlling interests associated with the sale of Tranzact
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78.4
|
)
|
|
(78.4
|
)
|
||||||
Acquisition of noncontrolling interest
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
(8.8
|
)
|
|
(11.5
|
)
|
||||||
Acquisition of subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
3.3
|
|
||||||
Amortization of restricted share and option awards
|
|
18.5
|
|
|
—
|
|
|
—
|
|
|
18.5
|
|
|
.8
|
|
|
19.3
|
|
||||||
Balances at December 31, 2016
|
|
810.7
|
|
|
2,776.6
|
|
|
(4.6
|
)
|
|
3,582.7
|
|
|
133.3
|
|
|
3,716.0
|
|
||||||
Net income (loss)
|
|
—
|
|
|
627.2
|
|
|
—
|
|
|
627.2
|
|
|
(34.1
|
)
|
|
593.1
|
|
||||||
Net change in foreign currency translation
|
|
—
|
|
|
—
|
|
|
.4
|
|
|
.4
|
|
|
.1
|
|
|
.5
|
|
||||||
Net change in pension liability and
other accumulated comprehensive items
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
2.9
|
|
|
—
|
|
|
2.9
|
|
||||||
Comprehensive income (loss)
|
|
—
|
|
|
627.2
|
|
|
3.3
|
|
|
630.5
|
|
|
(34.0
|
)
|
|
596.5
|
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
||||||
Dividends to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.3
|
)
|
|
(19.3
|
)
|
||||||
Issuances of common shares
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
||||||
Repurchases and retirements of common shares
|
|
(147.9
|
)
|
|
(576.0
|
)
|
|
—
|
|
|
(723.9
|
)
|
|
(5.2
|
)
|
|
(729.1
|
)
|
||||||
Issuance of shares of non-controlling interests
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
5.2
|
|
|
1.1
|
|
||||||
Net contributions from non-controlling interests
|
|
(4.6
|
)
|
|
—
|
|
|
—
|
|
|
(4.6
|
)
|
|
3.0
|
|
|
(1.6
|
)
|
||||||
Capital contributions from BAM members, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.2
|
|
|
27.2
|
|
||||||
Deconsolidation of non-controlling interests
associated with the sale of OneBeacon
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(238.3
|
)
|
|
(238.3
|
)
|
||||||
Deconsolidation of non-controlling interests
associated with the sale of Star & Shield
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
(4.4
|
)
|
||||||
Amortization of restricted share and option awards
|
|
14.8
|
|
|
—
|
|
|
—
|
|
|
14.8
|
|
|
.8
|
|
|
15.6
|
|
||||||
Balances at December 31, 2017
|
|
670.6
|
|
|
2,823.2
|
|
|
(1.3
|
)
|
|
3,492.5
|
|
|
(131.7
|
)
|
|
3,360.8
|
|
||||||
Net loss
|
|
—
|
|
|
(141.2
|
)
|
|
—
|
|
|
(141.2
|
)
|
|
(50.2
|
)
|
|
(191.4
|
)
|
||||||
Net change in foreign currency translation and interest rate swap
|
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|
(4.5
|
)
|
|
(.3
|
)
|
|
(4.8
|
)
|
||||||
Comprehensive loss
|
|
—
|
|
|
(141.2
|
)
|
|
(4.5
|
)
|
|
(145.7
|
)
|
|
(50.5
|
)
|
|
(196.2
|
)
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
(3.8
|
)
|
||||||
Dividends to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.0
|
)
|
|
(8.0
|
)
|
||||||
Issuances of common shares
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
||||||
Repurchases and retirements of common shares
|
|
(105.8
|
)
|
|
(413.3
|
)
|
|
—
|
|
|
(519.1
|
)
|
|
—
|
|
|
(519.1
|
)
|
||||||
Capital contributions from BAM members, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45.0
|
|
|
45.0
|
|
||||||
Recognition of compensation costs for equity-based units of subsidiary
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|
4.3
|
|
|
11.7
|
|
||||||
Dilution from equity units of subsidiary
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
1.5
|
|
|
—
|
|
||||||
Acquisition of subsidiary
|
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
|
(1.7
|
)
|
||||||
Acquisition from non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.5
|
|
|
14.5
|
|
||||||
Amortization of restricted share and option awards
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
13.0
|
|
||||||
Balances at December 31, 2018
|
|
$
|
584.0
|
|
|
$
|
2,264.9
|
|
|
$
|
(5.8
|
)
|
|
$
|
2,843.1
|
|
|
$
|
(124.9
|
)
|
|
$
|
2,718.2
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operations:
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(191.4
|
)
|
|
$
|
593.1
|
|
|
$
|
409.0
|
|
Charges (credits) to reconcile net income to net cash provided from (used for) operations:
|
|
|
|
|
|
|
|
|
|
|||
Net realized and unrealized investment losses (gains)
|
|
108.3
|
|
|
(133.3
|
)
|
|
27.4
|
|
|||
Amortization of restricted share and option awards
|
|
13.0
|
|
|
14.8
|
|
|
18.5
|
|
|||
Amortization and depreciation
|
|
25.7
|
|
|
22.4
|
|
|
20.4
|
|
|||
Deferred income tax benefit
|
|
(8.4
|
)
|
|
(11.4
|
)
|
|
(12.5
|
)
|
|||
Net income from discontinued operations
|
|
—
|
|
|
(20.5
|
)
|
|
(108.3
|
)
|
|||
Net loss (gain) on sale of discontinued operations
|
|
17.2
|
|
|
(557.0
|
)
|
|
(415.1
|
)
|
|||
Other operating items:
|
|
|
|
|
|
|
||||||
Net change in unearned insurance premiums
|
|
39.2
|
|
|
54.5
|
|
|
31.7
|
|
|||
Net change in deferred acquisition costs
|
|
(4.2
|
)
|
|
(4.2
|
)
|
|
(3.7
|
)
|
|||
Net change in restricted cash
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|||
Net change in other assets and liabilities, net
|
|
(27.1
|
)
|
|
(20.8
|
)
|
|
(146.1
|
)
|
|||
Net cash used for continuing operations
|
|
(31.1
|
)
|
|
(62.4
|
)
|
|
(178.7
|
)
|
|||
Net cash provided from discontinued operations (
Note 19
)
|
|
—
|
|
|
157.0
|
|
|
23.6
|
|
|||
Net cash (used for) provided from operations
|
|
(31.1
|
)
|
|
94.6
|
|
|
(155.1
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Net change in short-term investments
|
|
(39.0
|
)
|
|
(1.7
|
)
|
|
(27.2
|
)
|
|||
Sales of fixed maturity and convertible investments
|
|
1,848.5
|
|
|
2,124.4
|
|
|
2,605.8
|
|
|||
Maturities, calls and paydowns of fixed maturity and convertible investments
|
|
141.0
|
|
|
213.4
|
|
|
253.4
|
|
|||
Sales of common equity securities
|
|
169.9
|
|
|
424.1
|
|
|
815.9
|
|
|||
Distributions and redemptions of other long-term investments
|
|
5.0
|
|
|
29.4
|
|
|
17.3
|
|
|||
Sales of unconsolidated affiliates and consolidated subsidiaries, net of cash sold
|
|
—
|
|
|
1,131.0
|
|
|
2,646.2
|
|
|||
Proceeds paid to non-controlling common shareholders from the sale of consolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
(141.6
|
)
|
|||
Purchases of other long-term investments
|
|
(95.9
|
)
|
|
(84.1
|
)
|
|
(38.5
|
)
|
|||
Net settlement of investment cash flows and contributions with discontinued operations
|
|
—
|
|
|
167.7
|
|
|
(402.0
|
)
|
|||
Purchases of common equity securities
|
|
(328.3
|
)
|
|
(881.2
|
)
|
|
(278.3
|
)
|
|||
Purchases of fixed maturity and convertible investments
|
|
(970.2
|
)
|
|
(2,365.2
|
)
|
|
(4,407.0
|
)
|
|||
Purchases of consolidated subsidiaries, net of cash acquired of $90.9, including $53.4 of restricted cash
|
|
(295.2
|
)
|
|
(27.6
|
)
|
|
(13.4
|
)
|
|||
Net change in unsettled investment purchases and sales
|
|
27.6
|
|
|
—
|
|
|
—
|
|
|||
Other investing activities, net
|
|
(4.2
|
)
|
|
(14.7
|
)
|
|
4.8
|
|
|||
Net cash provided from investing activities — continuing operations
|
|
459.2
|
|
|
715.5
|
|
|
1,035.4
|
|
|||
Net cash provided from investing activities — discontinued operations (
Note 19
)
|
|
—
|
|
|
3.0
|
|
|
241.4
|
|
|||
Net cash provided from investing activities
|
|
459.2
|
|
|
718.5
|
|
|
1,276.8
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Draw down of debt and revolving line of credit
|
|
84.1
|
|
|
376.0
|
|
|
352.5
|
|
|||
Repayment of debt and revolving line of credit
|
|
(15.4
|
)
|
|
(365.0
|
)
|
|
(404.6
|
)
|
|||
Cash dividends paid to the Company’s common shareholders
|
|
(3.8
|
)
|
|
(4.6
|
)
|
|
(5.4
|
)
|
|||
Acquisitions of additional shares from non-controlling interest
|
|
(1.7
|
)
|
|
(.7
|
)
|
|
—
|
|
|||
Distributions from discontinued operations
|
|
—
|
|
|
45.2
|
|
|
57.2
|
|
|||
Common shares repurchased
|
|
(511.9
|
)
|
|
(714.6
|
)
|
|
(881.3
|
)
|
|||
Proceeds from issuances of common shares
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||
Capital contributions from non-controlling interest shareholders
|
|
1.3
|
|
|
.5
|
|
|
—
|
|
|||
Distributions to non-controlling interest shareholders
|
|
(6.0
|
)
|
|
(2.0
|
)
|
|
(1.1
|
)
|
|||
Payments to contingent considerations related to purchases of consolidated subsidiaries
|
|
(2.6
|
)
|
|
—
|
|
|
(7.8
|
)
|
|||
Capital contributions from BAM members
|
|
53.8
|
|
|
37.4
|
|
|
38.0
|
|
|||
Fidus Re premium payment
|
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities, net
|
|
(8.4
|
)
|
|
(9.3
|
)
|
|
(5.8
|
)
|
|||
Net cash used for financing activities — continuing operations
|
|
(414.3
|
)
|
|
(637.1
|
)
|
|
(854.6
|
)
|
|||
Net cash used for financing activities — discontinued operations (Note 19)
|
|
—
|
|
|
(61.9
|
)
|
|
(93.8
|
)
|
|||
Net cash used for financing activities
|
|
(414.3
|
)
|
|
(699.0
|
)
|
|
(948.4
|
)
|
|||
Effect of exchange rate changes on cash
|
|
(.6
|
)
|
|
—
|
|
|
—
|
|
|||
Net change in cash during the period - continuing operations
|
|
13.2
|
|
|
16.0
|
|
|
2.1
|
|
|||
Cash balance at beginning of year (includes restricted cash balances of $0.0, $0.0, $5.8 and excludes
held for sale and discontinued operations cash balances of $0.0, $70.5, and $245.4) |
|
97.1
|
|
|
80.2
|
|
|
77.8
|
|
|||
Add: cash held for sale at the beginning of period
|
|
—
|
|
|
.9
|
|
|
1.2
|
|
|||
Less: cash held for sale at the end of period
|
|
—
|
|
|
—
|
|
|
.9
|
|
|||
Cash balance at end of year (includes restricted cash balances of $50.0, $0.0, $0.0 and
excludes held for sale and discontinued operations cash balances of $0.0, $0.0, $70.5) |
|
$
|
110.3
|
|
|
$
|
97.1
|
|
|
$
|
80.2
|
|
Millions
|
|
Year ended December 31, 2016
|
||
Gain from sale of Tranzact reported in discontinued operations
|
|
$
|
51.9
|
|
Add back reclassification from continuing operations for the
release of a tax valuation allowance
|
|
30.2
|
|
|
Increase to White Mountains’s book value from sale of Tranzact
|
|
$
|
82.1
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Fixed maturity investments
|
|
$
|
35.1
|
|
|
$
|
44.9
|
|
|
$
|
28.5
|
|
Short-term investments
|
|
8.0
|
|
|
1.8
|
|
|
.9
|
|
|||
Common equity securities
|
|
15.1
|
|
|
10.6
|
|
|
4.0
|
|
|||
Other long-term investments
|
|
3.8
|
|
|
1.2
|
|
|
1.1
|
|
|||
Total investment income
|
|
62.0
|
|
|
58.5
|
|
|
34.5
|
|
|||
Third-party investment expenses
|
|
(3.0
|
)
|
|
(2.5
|
)
|
|
(2.4
|
)
|
|||
Net investment income, pre-tax
|
|
$
|
59.0
|
|
|
$
|
56.0
|
|
|
$
|
32.1
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net realized investment (losses) gains, pre-tax
|
|
$
|
(12.9
|
)
|
|
$
|
24.1
|
|
|
$
|
270.0
|
|
Net unrealized investment (losses) gains, pre-tax
|
|
(95.4
|
)
|
|
109.2
|
|
|
(297.4
|
)
|
|||
Net realized and unrealized investment (losses) gains, pre-tax
|
|
(108.3
|
)
|
|
133.3
|
|
|
(27.4
|
)
|
|||
Income tax benefit (expense) attributable to net realized and
unrealized investment (losses) gains
|
|
18.2
|
|
|
(12.9
|
)
|
|
2.7
|
|
|||
Net realized and unrealized investment (losses) gains, after-tax
|
|
$
|
(90.1
|
)
|
|
$
|
120.4
|
|
|
$
|
(24.7
|
)
|
|
|
Year Ended December 31, 2018
|
||||||||||
Millions
|
|
Net Realized (Losses) Gains
|
|
Net Foreign
Exchange Gains (Losses) |
|
Total Net Realized (Losses) Gains Reflected in Earnings
|
||||||
Fixed maturity investments
|
|
$
|
(29.8
|
)
|
|
$
|
18.2
|
|
|
$
|
(11.6
|
)
|
Short-term investments
|
|
(.8
|
)
|
|
—
|
|
|
(.8
|
)
|
|||
Common equity securities
|
|
6.6
|
|
|
—
|
|
|
6.6
|
|
|||
Other long-term investments
|
|
.1
|
|
|
(7.2
|
)
|
|
(7.1
|
)
|
|||
Net realized investment (losses) gains, pre-tax
|
|
(23.9
|
)
|
|
11.0
|
|
|
(12.9
|
)
|
|||
Income tax benefit attributable to net realized investment (losses) gains
|
|
9.1
|
|
|
—
|
|
|
9.1
|
|
|||
Net realized investment (losses) gains, after-tax
|
|
$
|
(14.8
|
)
|
|
$
|
11.0
|
|
|
$
|
(3.8
|
)
|
|
|
Year Ended December 31, 2017
|
||||||||||
Millions
|
|
Net Realized (Losses) Gains
|
|
Net Foreign
Exchange Gains (Losses) |
|
Total Net Realized Gains (Losses) Reflected in Earnings
|
||||||
Fixed maturity investments
|
|
$
|
(1.6
|
)
|
|
$
|
4.1
|
|
|
$
|
2.5
|
|
Short-term investments
|
|
(.3
|
)
|
|
—
|
|
|
(.3
|
)
|
|||
Common equity securities
|
|
18.1
|
|
|
6.0
|
|
|
24.1
|
|
|||
Other long-term investments
|
|
19.1
|
|
|
(21.3
|
)
|
|
(2.2
|
)
|
|||
Net realized investment gains (losses), pre-tax
|
|
35.3
|
|
|
(11.2
|
)
|
|
24.1
|
|
|||
Income tax expense attributable to net realized investment gains (losses)
|
|
(8.9
|
)
|
|
—
|
|
|
(8.9
|
)
|
|||
Net realized investment gains (losses), after-tax
|
|
$
|
26.4
|
|
|
$
|
(11.2
|
)
|
|
$
|
15.2
|
|
|
|
Year Ended December 31, 2016
|
||||||||||
Millions
|
|
Net Realized (Losses) Gains
|
|
Net Foreign
Exchange Gains |
|
Total Net Realized (Losses) Gains Reflected in Earnings
|
||||||
Fixed maturity investments
|
|
$
|
(1.9
|
)
|
|
$
|
.3
|
|
|
$
|
(1.6
|
)
|
Short-term investments
|
|
.4
|
|
|
—
|
|
|
.4
|
|
|||
Common equity securities
|
|
268.5
|
|
|
—
|
|
|
268.5
|
|
|||
Other long-term investments
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|||
Net realized investment gains, pre-tax
|
|
269.7
|
|
|
.3
|
|
|
270.0
|
|
|||
Income tax expense attributable to net realized investment gains
|
|
(45.6
|
)
|
|
—
|
|
|
(45.6
|
)
|
|||
Net realized investment gains, after-tax
|
|
$
|
224.1
|
|
|
$
|
.3
|
|
|
$
|
224.4
|
|
|
|
Year Ended December 31, 2018
|
||||||||||
Millions
|
|
Net Unrealized (Losses) Gains
|
|
Net Foreign
Exchange
(Losses) Gains
|
|
Total Net Unrealized (Losses) Gains Reflected in Earnings
|
||||||
Fixed maturity investments
|
|
$
|
(8.3
|
)
|
|
$
|
(14.8
|
)
|
|
$
|
(23.1
|
)
|
Common equity securities
|
|
(105.5
|
)
|
|
—
|
|
|
(105.5
|
)
|
|||
Other long-term investments
|
|
30.2
|
|
|
3.0
|
|
|
33.2
|
|
|||
Net unrealized investment losses, pre-tax
|
|
(83.6
|
)
|
|
(11.8
|
)
|
|
(95.4
|
)
|
|||
Income tax benefit attributable to net unrealized investment losses
|
|
9.1
|
|
|
—
|
|
|
9.1
|
|
|||
Net unrealized investment losses, after-tax
|
|
$
|
(74.5
|
)
|
|
$
|
(11.8
|
)
|
|
$
|
(86.3
|
)
|
|
|
Year Ended December 31, 2017
|
||||||||||
Millions
|
|
Net Unrealized Gains (Losses)
|
|
Net Foreign
Exchange Gains (Losses) |
|
Total Net Unrealized Gains (Losses) Reflected in Earnings
|
||||||
Fixed maturity investments
|
|
$
|
13.8
|
|
|
$
|
12.7
|
|
|
$
|
26.5
|
|
Common equity securities
|
|
99.3
|
|
|
—
|
|
|
99.3
|
|
|||
Other long-term investments
|
|
(15.6
|
)
|
|
(1.0
|
)
|
|
(16.6
|
)
|
|||
Net unrealized investment gains, pre-tax
|
|
97.5
|
|
|
11.7
|
|
|
109.2
|
|
|||
Income tax expense attributable to net unrealized investment gains
|
|
(4.0
|
)
|
|
—
|
|
|
(4.0
|
)
|
|||
Net unrealized investment gains, after-tax
|
|
$
|
93.5
|
|
|
$
|
11.7
|
|
|
$
|
105.2
|
|
|
|
Year Ended December 31, 2016
|
||||||||||
Millions
|
|
Net
Unrealized Losses
|
|
Net Foreign
Exchange Gains (Losses)
|
|
Total Net Unrealized
Losses Reflected in
Earnings
|
||||||
Fixed maturity investments
|
|
$
|
(14.6
|
)
|
|
$
|
2.1
|
|
|
$
|
(12.5
|
)
|
Common equity securities
|
|
(257.4
|
)
|
|
(3.3
|
)
|
|
(260.7
|
)
|
|||
Other long-term investments
|
|
(22.7
|
)
|
|
(1.5
|
)
|
|
(24.2
|
)
|
|||
Net unrealized investment losses, pre-tax
|
|
(294.7
|
)
|
|
(2.7
|
)
|
|
(297.4
|
)
|
|||
Income tax benefit attributable to net unrealized investment losses
|
|
48.3
|
|
|
—
|
|
|
48.3
|
|
|||
Net unrealized investment losses, after-tax
|
|
$
|
(246.4
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(249.1
|
)
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Fixed maturity investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Other long-term investments
|
|
22.6
|
|
|
(15.4
|
)
|
|
(14.3
|
)
|
|||
Total net unrealized investment gains (losses), pre-tax - Level 3 investments
|
|
$
|
22.6
|
|
|
$
|
(15.4
|
)
|
|
$
|
(14.2
|
)
|
|
|
December 31, 2018
|
||||||||||||||||||
Millions
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net Foreign
Currency
Gains
|
|
Carrying
Value |
||||||||||
U.S. Government and agency obligations
|
|
$
|
154.0
|
|
|
$
|
.1
|
|
|
$
|
(.9
|
)
|
|
$
|
—
|
|
|
$
|
153.2
|
|
Debt securities issued by corporations
|
|
519.0
|
|
|
1.0
|
|
|
(9.5
|
)
|
|
—
|
|
|
510.5
|
|
|||||
Municipal obligations
|
|
279.0
|
|
|
2.4
|
|
|
(1.1
|
)
|
|
—
|
|
|
280.3
|
|
|||||
Mortgage and asset-backed securities
|
|
136.1
|
|
|
.1
|
|
|
(2.7
|
)
|
|
—
|
|
|
133.5
|
|
|||||
Total fixed maturity investments
|
|
$
|
1,088.1
|
|
|
$
|
3.6
|
|
|
$
|
(14.2
|
)
|
|
$
|
—
|
|
|
$
|
1,077.5
|
|
|
|
December 31, 2017
|
||||||||||||||||||
Millions
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net Foreign
Currency
Gains
|
|
Carrying
Value
|
||||||||||
U.S. Government and agency obligations
|
|
$
|
297.8
|
|
|
$
|
—
|
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
|
$
|
296.5
|
|
Debt securities issued by corporations
|
|
867.6
|
|
|
2.9
|
|
|
(4.3
|
)
|
|
14.7
|
|
|
880.9
|
|
|||||
Mortgage and asset-backed securities
|
|
697.2
|
|
|
1.6
|
|
|
(4.1
|
)
|
|
—
|
|
|
694.7
|
|
|||||
Municipal obligations
|
|
252.0
|
|
|
3.7
|
|
|
(.8
|
)
|
|
—
|
|
|
254.9
|
|
|||||
Foreign government, agency and provincial
obligations
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
2.7
|
|
|||||
Total fixed maturity investments
|
|
$
|
2,117.2
|
|
|
$
|
8.2
|
|
|
$
|
(10.5
|
)
|
|
$
|
14.8
|
|
|
$
|
2,129.7
|
|
|
|
December 31, 2018
|
||||||
Millions
|
|
Cost or Amortized Cost
|
|
Carrying Value
|
||||
Due in one year or less
|
|
$
|
84.8
|
|
|
$
|
84.4
|
|
Due after one year through five years
|
|
500.8
|
|
|
496.2
|
|
||
Due after five years through ten years
|
|
222.4
|
|
|
218.0
|
|
||
Due after ten years
|
|
144.0
|
|
|
145.4
|
|
||
Mortgage and asset-backed securities
|
|
136.1
|
|
|
133.5
|
|
||
Total
|
|
$
|
1,088.1
|
|
|
$
|
1,077.5
|
|
|
|
December 31, 2018
|
||||||||||||||||||
Millions
|
|
Cost or
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Net Foreign
Currency Losses
|
|
Carrying
Value
|
||||||||||
Common equity securities
|
|
$
|
904.7
|
|
|
$
|
51.0
|
|
|
$
|
(30.1
|
)
|
|
$
|
—
|
|
|
$
|
925.6
|
|
Other long-term investments
|
|
$
|
330.3
|
|
|
$
|
52.2
|
|
|
$
|
(54.9
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
325.6
|
|
|
|
December 31, 2017
|
||||||||||||||||||
Millions
|
|
Cost or
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Net Foreign
Currency Losses
|
|
Carrying
Value
|
||||||||||
Common equity securities
|
|
$
|
739.7
|
|
|
$
|
129.4
|
|
|
$
|
(3.0
|
)
|
|
$
|
—
|
|
|
$
|
866.1
|
|
Other long-term investments
|
|
$
|
246.6
|
|
|
$
|
6.8
|
|
|
$
|
(39.7
|
)
|
|
$
|
(4.9
|
)
|
|
$
|
208.8
|
|
|
|
December 31, 2018
|
||||||||||||||
Millions
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency obligations
|
|
$
|
153.2
|
|
|
$
|
153.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|||||||
Financials
|
|
143.4
|
|
|
—
|
|
|
143.4
|
|
|
—
|
|
||||
Consumer
|
|
68.5
|
|
|
—
|
|
|
68.5
|
|
|
—
|
|
||||
Technology
|
|
60.5
|
|
|
—
|
|
|
60.5
|
|
|
—
|
|
||||
Energy
|
|
57.6
|
|
|
—
|
|
|
57.6
|
|
|
—
|
|
||||
Healthcare
|
|
55.0
|
|
|
—
|
|
|
55.0
|
|
|
—
|
|
||||
Industrial
|
|
47.6
|
|
|
—
|
|
|
47.6
|
|
|
—
|
|
||||
Communications
|
|
31.8
|
|
|
—
|
|
|
31.8
|
|
|
—
|
|
||||
Materials
|
|
26.3
|
|
|
—
|
|
|
26.3
|
|
|
—
|
|
||||
Utilities
|
|
19.8
|
|
|
—
|
|
|
19.8
|
|
|
—
|
|
||||
Total debt securities issued by corporations
|
|
510.5
|
|
|
—
|
|
|
510.5
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage and asset-backed securities
|
|
133.5
|
|
|
—
|
|
|
133.5
|
|
|
—
|
|
||||
Municipal obligations
|
|
280.3
|
|
|
—
|
|
|
280.3
|
|
|
—
|
|
||||
Total fixed maturity investments
|
|
1,077.5
|
|
|
153.2
|
|
|
924.3
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments
(1)
|
|
214.2
|
|
|
204.4
|
|
|
9.8
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Exchange traded funds
(2)
|
|
675.3
|
|
|
617.0
|
|
|
58.3
|
|
|
—
|
|
||||
Healthcare
|
|
14.0
|
|
|
14.0
|
|
|
—
|
|
|
—
|
|
||||
Financials
|
|
13.5
|
|
|
13.5
|
|
|
—
|
|
|
—
|
|
||||
Communications
|
|
12.7
|
|
|
12.7
|
|
|
—
|
|
|
—
|
|
||||
Industrial
|
|
11.4
|
|
|
11.4
|
|
|
—
|
|
|
—
|
|
||||
Technology
|
|
7.4
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
||||
Consumer
|
|
6.2
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
|
4.1
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
||||
Materials
|
|
3.1
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
||||
Other
(3)
|
|
177.9
|
|
|
—
|
|
|
177.9
|
|
|
—
|
|
||||
Total common equity securities
|
|
925.6
|
|
|
689.4
|
|
|
236.2
|
|
|
—
|
|
||||
Other long-term investments
|
|
138.7
|
|
|
—
|
|
|
—
|
|
|
138.7
|
|
||||
Other long-term investments
—
NAV
(4)
|
|
186.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total investments
|
|
$
|
2,542.9
|
|
|
$
|
1,047.0
|
|
|
$
|
1,170.3
|
|
|
$
|
138.7
|
|
|
|
December 31, 2017
|
||||||||||||||
Millions
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government and agency obligations
|
|
$
|
296.5
|
|
|
$
|
296.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer
|
|
185.1
|
|
|
—
|
|
|
185.1
|
|
|
—
|
|
||||
Communications
|
|
127.8
|
|
|
—
|
|
|
127.8
|
|
|
—
|
|
||||
Financials
|
|
114.8
|
|
|
—
|
|
|
114.8
|
|
|
—
|
|
||||
Utilities
|
|
108.9
|
|
|
—
|
|
|
108.9
|
|
|
—
|
|
||||
Materials
|
|
95.5
|
|
|
—
|
|
|
95.5
|
|
|
—
|
|
||||
Healthcare
|
|
94.3
|
|
|
—
|
|
|
94.3
|
|
|
—
|
|
||||
Technology
|
|
80.5
|
|
|
—
|
|
|
80.5
|
|
|
—
|
|
||||
Energy
|
|
48.1
|
|
|
—
|
|
|
48.1
|
|
|
—
|
|
||||
Industrial
|
|
25.9
|
|
|
—
|
|
|
25.9
|
|
|
—
|
|
||||
Total debt securities issued by corporations
|
|
880.9
|
|
|
—
|
|
|
880.9
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage and asset-backed securities
|
|
694.7
|
|
|
—
|
|
|
694.7
|
|
|
—
|
|
||||
Municipal obligations
|
|
254.9
|
|
|
—
|
|
|
254.9
|
|
|
—
|
|
||||
Foreign government, agency and provincial obligations
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
Total fixed maturity investments
|
|
2,129.7
|
|
|
296.5
|
|
|
1,833.2
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments
(1)
|
|
176.1
|
|
|
151.0
|
|
|
25.1
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
(2)
|
|
569.7
|
|
|
508.1
|
|
|
61.6
|
|
|
—
|
|
||||
Healthcare
|
|
17.1
|
|
|
17.1
|
|
|
—
|
|
|
—
|
|
||||
Financials
|
|
16.3
|
|
|
16.3
|
|
|
—
|
|
|
—
|
|
||||
Technology
|
|
15.1
|
|
|
15.1
|
|
|
—
|
|
|
—
|
|
||||
Industrial
|
|
11.9
|
|
|
11.9
|
|
|
—
|
|
|
—
|
|
||||
Communications
|
|
10.9
|
|
|
10.9
|
|
|
—
|
|
|
—
|
|
||||
Consumer
|
|
10.7
|
|
|
10.7
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
|
3.8
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
||||
Other
(3)
|
|
210.6
|
|
|
—
|
|
|
210.6
|
|
|
—
|
|
||||
Total common equity securities
|
|
866.1
|
|
|
593.9
|
|
|
272.2
|
|
|
—
|
|
||||
Other long-term investments
(4)
|
|
77.2
|
|
|
—
|
|
|
—
|
|
|
77.2
|
|
||||
Other long-term investments
—
NAV
(5)
|
|
135.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total investments
|
|
$
|
3,384.4
|
|
|
$
|
1,041.4
|
|
|
$
|
2,130.5
|
|
|
$
|
77.2
|
|
|
|
Fair Value at December 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
AAA
|
|
$
|
8.9
|
|
|
$
|
1.6
|
|
AA
|
|
88.7
|
|
|
42.6
|
|
||
A
|
|
270.5
|
|
|
192.5
|
|
||
BBB
|
|
142.4
|
|
|
465.2
|
|
||
BB
|
|
—
|
|
|
161.7
|
|
||
B
|
|
—
|
|
|
17.3
|
|
||
Debt securities issued by corporations
(1)
|
|
$
|
510.5
|
|
|
$
|
880.9
|
|
(1)
|
Credit ratings are based upon issuer credit ratings provided by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”), or if unrated by Standard & Poor’s, long term obligation ratings provided by Moody's Investor Service, Inc.
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Millions
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FNMA
|
|
$
|
53.6
|
|
|
$
|
53.6
|
|
|
$
|
—
|
|
|
$
|
84.5
|
|
|
$
|
84.5
|
|
|
$
|
—
|
|
FHLMC
|
|
38.1
|
|
|
38.1
|
|
|
—
|
|
|
62.0
|
|
|
62.0
|
|
|
—
|
|
||||||
GNMA
|
|
23.7
|
|
|
23.7
|
|
|
—
|
|
|
46.3
|
|
|
46.3
|
|
|
—
|
|
||||||
Total agency
(1)
|
|
115.4
|
|
|
115.4
|
|
|
—
|
|
|
192.8
|
|
|
192.8
|
|
|
—
|
|
||||||
Non-agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70.5
|
|
|
70.5
|
|
|
—
|
|
||||||
Total non-agency
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70.5
|
|
|
70.5
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total mortgage-backed securities
|
|
115.4
|
|
|
115.4
|
|
|
—
|
|
|
263.3
|
|
|
263.3
|
|
|
—
|
|
||||||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Vehicle receivables
|
|
9.2
|
|
|
9.2
|
|
|
—
|
|
|
142.4
|
|
|
142.4
|
|
|
—
|
|
||||||
Credit card receivables
|
|
8.9
|
|
|
8.9
|
|
|
—
|
|
|
206.0
|
|
|
206.0
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83.0
|
|
|
83.0
|
|
|
—
|
|
||||||
Total other asset-backed securities
|
|
18.1
|
|
|
18.1
|
|
|
—
|
|
|
431.4
|
|
|
431.4
|
|
|
—
|
|
||||||
Total mortgage and asset-backed securities
|
|
$
|
133.5
|
|
|
$
|
133.5
|
|
|
$
|
—
|
|
|
$
|
694.7
|
|
|
$
|
694.7
|
|
|
$
|
—
|
|
(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).
|
|
|
Carrying Value at December 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
PassportCard/DavidShield
(1)
|
|
$
|
75.0
|
|
|
$
|
21.0
|
|
Kudu
|
|
30.7
|
|
|
—
|
|
||
Other unconsolidated entities
(1)(2)
|
|
60.0
|
|
|
62.2
|
|
||
Total unconsolidated entities
(1)(2)
|
|
165.7
|
|
|
83.2
|
|
||
Private equity funds and hedge funds
|
|
146.1
|
|
|
125.3
|
|
||
Foreign currency forward contracts
|
|
—
|
|
|
(3.7
|
)
|
||
Other
|
|
13.8
|
|
|
4.0
|
|
||
Total other long-term investments
|
|
$
|
325.6
|
|
|
$
|
208.8
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
Millions
|
|
Fair Value
|
|
Unfunded
Commitments |
|
Fair Value
|
|
Unfunded
Commitments |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Manufacturing/Industrial
|
|
$
|
42.9
|
|
|
$
|
10.5
|
|
|
$
|
43.3
|
|
|
$
|
10.4
|
|
Aerospace/Defense/Government
|
|
27.6
|
|
|
34.9
|
|
|
15.8
|
|
|
12.9
|
|
||||
Direct lending
|
|
13.0
|
|
|
17.7
|
|
|
7.1
|
|
|
23.1
|
|
||||
Financial services
|
|
8.3
|
|
|
13.6
|
|
|
4.2
|
|
|
11.7
|
|
||||
Total private equity funds
|
|
91.8
|
|
|
76.7
|
|
|
70.4
|
|
|
58.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long/short banks and financial
|
|
54.3
|
|
|
—
|
|
|
54.9
|
|
|
—
|
|
||||
Total hedge funds
|
|
54.3
|
|
|
—
|
|
|
54.9
|
|
|
—
|
|
||||
Total private equity funds and hedge funds
included in other long-term investments
|
|
$
|
146.1
|
|
|
$
|
76.7
|
|
|
$
|
125.3
|
|
|
$
|
58.1
|
|
Millions
|
|
1 – 3 years
|
|
3 – 5 years
|
|
5 – 10 years
|
|
>10 years
|
|
Total
|
||||||||||
Private equity funds — expected lock-up period remaining
|
|
$
|
1.8
|
|
|
$
|
5.5
|
|
|
$
|
63.2
|
|
|
$
|
21.3
|
|
|
$
|
91.8
|
|
|
|
|
|
|
|
Level 3 Investments
|
|
Unconsolidated Entities, Private Equity Funds and Hedge Funds Measured at NAV
(3)
|
|
|
|
||||||||||
Millions
|
|
Level 1
Investments
|
|
Level 2
Investments
|
|
Other Long-term
Investments
|
|
|
Total
|
||||||||||||
Balance at December 31, 2017
|
|
$
|
890.4
|
|
|
$
|
2,105.4
|
|
|
$
|
77.2
|
|
|
$
|
135.3
|
|
|
$
|
3,208.3
|
|
(1)(2)
|
Net realized and unrealized (losses) gains
|
|
(64.9
|
)
|
|
(64.4
|
)
|
|
16.2
|
|
|
13.3
|
|
|
(99.8
|
)
|
(4)
|
|||||
Amortization/accretion
|
|
.2
|
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
|||||
Purchases
|
|
514.7
|
|
|
783.8
|
|
|
45.3
|
|
|
50.5
|
|
|
1,394.3
|
|
|
|||||
Sales
|
|
(497.8
|
)
|
|
(1,661.6
|
)
|
|
—
|
|
|
(12.2
|
)
|
|
(2,171.6
|
)
|
|
|||||
Transfers in
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Transfers out
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Balance at December 31, 2018
|
|
$
|
842.6
|
|
|
$
|
1,160.5
|
|
|
$
|
138.7
|
|
|
$
|
186.9
|
|
|
$
|
2,328.7
|
|
(2)
|
(1)
|
Excludes carrying value of
$(3.7)
as of
December 31, 2017
associated with foreign currency forward contracts.
|
(2)
|
Excludes carrying value of
$214.2
and
$176.1
as of
December 31, 2018
and 2017 classified as short-term investments.
|
(3)
|
Investments for which fair value is measured at NAV using the practical expedient are no longer classified within the fair value hierarchy. See
Note 1 — “Basis of Presentation and Significant Accounting Policies”
.
|
|
|
|
|
|
|
Level 3 Investments
|
|
Unconsolidated Entities, Private Equity Funds and Hedge Funds Measured at NAV (3)
|
|
|
|
||||||||||||||
Millions
|
|
Level 1
Investments
|
|
Level 2
Investments
|
|
Fixed
Maturity Investments |
|
Other Long- term
Investments
|
|
|
Total
|
||||||||||||||
Balance at December 31, 2016
|
|
$
|
279.5
|
|
|
$
|
2,093.8
|
|
|
$
|
—
|
|
|
$
|
91.4
|
|
|
$
|
82.6
|
|
|
$
|
2,547.3
|
|
(1)(2)(5)
|
Net realized and unrealized gains (losses)
|
|
82.7
|
|
|
69.6
|
|
|
—
|
|
|
(15.3
|
)
|
|
20.4
|
|
|
157.4
|
|
(4)
|
||||||
Amortization/accretion
|
|
—
|
|
|
(9.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.1
|
)
|
|
||||||
Purchases
|
|
1,209.3
|
|
|
2,007.9
|
|
|
31.2
|
|
|
3.1
|
|
|
81.0
|
|
|
3,332.5
|
|
|
||||||
Sales
|
|
(681.1
|
)
|
|
(2,070.3
|
)
|
|
(12.5
|
)
|
|
(2.0
|
)
|
|
(48.7
|
)
|
|
(2,814.6
|
)
|
|
||||||
Deconsolidation of SSIE
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|
||||||
Transfers in
|
|
—
|
|
|
18.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18.7
|
|
|
||||||
Transfers out
|
|
—
|
|
|
—
|
|
|
(18.7
|
)
|
|
—
|
|
|
—
|
|
|
(18.7
|
)
|
|
||||||
Balance at December 31, 2017
|
|
$
|
890.4
|
|
|
$
|
2,105.4
|
|
|
$
|
—
|
|
|
$
|
77.2
|
|
|
$
|
135.3
|
|
|
$
|
3,208.3
|
|
(1)(2)
|
(3)
|
Investments for which fair value is measured at NAV using the practical expedient are no longer classified within the fair value hierarchy. See
Note 1 — “Basis of Presentation and Significant Accounting Policies”
.
|
|
||||||||
$ in Millions, Except Share Price
|
|
December 31, 2018
|
||||||
Description
|
|
Valuation Technique(s)
|
|
Fair Value
(1)
|
|
Unobservable Input
|
||
PassportCard/DavidShield
|
|
Discounted cash flow
|
|
$75.0
|
|
Discount rate
|
-
|
18.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
1.00
|
Compare.com
|
|
Discounted cash flow
|
|
$16.9
|
|
Discount rate
|
-
|
22.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
2.75
|
YOUSURE Tarifvergleich GmbH (“durchblicker”)
|
|
Discounted cash flow
|
|
$15.5
|
|
Discount rate
|
-
|
23.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
2.25
|
Captricity, Inc.
|
|
Discounted cash flow
|
|
$14.5
|
|
Discount rate
|
-
|
23.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
3.75
|
Galvanic Applied Sciences
|
|
Multiple of EBITDA
|
|
$3.1
|
|
EBITDA multiple
|
-
|
6.00
|
Private debt instrument
|
|
Discounted cash flow
|
|
$10.0
|
|
Discount rate
|
-
|
9.62%
|
|
||||||||
$ in Millions, Except Share Price
|
|
December 31, 2017
|
||||||
Description
|
|
Valuation Technique(s)
|
|
Fair Value
(1)
|
|
Unobservable Input
|
||
PassportCard
|
|
Discounted cash flow
|
|
$21.0
|
|
Discount rate
|
-
|
25.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
1.00
|
Compare.com
|
|
Discounted cash flow
|
|
$22.1
|
|
Discount rate
|
-
|
35.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
1.75
|
durchblicker
|
|
Discounted cash flow
|
|
$11.3
|
|
Discount rate
|
-
|
21.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
1.75
|
Captricity, Inc.
|
|
Discounted cash flow
|
|
$14.5
|
|
Discount rate
|
-
|
30.0%
|
|
|
|
|
|
|
Exit multiple
|
-
|
3.50
|
Galvanic Applied Sciences
|
|
Multiple of EBITDA
|
|
$0.6
|
|
EBITDA multiple
|
-
|
6.00
|
OneTitle Holdings LLC
|
|
Share price of most recent transaction
|
|
$3.6
|
|
Share price
|
-
|
$2.52
|
$ in Millions
|
|
Weighted Average Economic
Life
(in Years)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Acquisition Date Fair Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Acquisition Date Fair Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|||||||||||||||
Goodwill:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NSM
(1)(2)
|
|
N/A
|
|
$
|
354.3
|
|
|
$
|
—
|
|
|
$
|
354.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
MediaAlpha
|
|
N/A
|
|
18.3
|
|
|
—
|
|
|
18.3
|
|
|
18.3
|
|
|
—
|
|
|
18.3
|
|
||||||
Buzz
(3)
|
|
N/A
|
|
7.3
|
|
|
—
|
|
|
7.3
|
|
|
7.6
|
|
|
—
|
|
|
7.6
|
|
||||||
Total goodwill
|
|
|
|
379.9
|
|
|
—
|
|
|
379.9
|
|
|
25.9
|
|
|
—
|
|
|
25.9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NSM
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
9
|
|
85.3
|
|
|
6.0
|
|
|
79.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Trade names
|
|
20
|
|
51.2
|
|
|
1.8
|
|
|
49.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Information technology
|
|
5
|
|
3.7
|
|
|
.5
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
|
|
|
140.2
|
|
|
8.3
|
|
|
131.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MediaAlpha
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
9
|
|
26.8
|
|
|
4.9
|
|
|
21.9
|
|
|
26.8
|
|
|
2.4
|
|
|
24.4
|
|
||||||
Information technology
|
|
5
|
|
33.3
|
|
|
30.9
|
|
|
2.4
|
|
|
33.3
|
|
|
24.3
|
|
|
9.0
|
|
||||||
Other
|
|
3
|
|
9.8
|
|
|
9.0
|
|
|
.8
|
|
|
9.8
|
|
|
7.8
|
|
|
2.0
|
|
||||||
Subtotal
|
|
|
|
69.9
|
|
|
44.8
|
|
|
25.1
|
|
|
69.9
|
|
|
34.5
|
|
|
35.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Buzz
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademark
|
|
7
|
|
.6
|
|
|
.2
|
|
|
.4
|
|
|
.6
|
|
|
.1
|
|
|
.5
|
|
||||||
Information technology
|
|
5
|
|
.5
|
|
|
.3
|
|
|
.2
|
|
|
.5
|
|
|
.2
|
|
|
.3
|
|
||||||
Subtotal
|
|
|
|
1.1
|
|
|
.5
|
|
|
.6
|
|
|
1.1
|
|
|
.3
|
|
|
.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total other intangible assets
|
|
211.2
|
|
|
53.6
|
|
|
157.6
|
|
|
71.0
|
|
|
34.8
|
|
|
36.2
|
|
||||||||
Total goodwill and other
intangible assets
|
|
$
|
591.1
|
|
|
$
|
53.6
|
|
|
$
|
537.5
|
|
|
$
|
96.9
|
|
|
$
|
34.8
|
|
|
$
|
62.1
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill and other intangible assets
attributed to non-controlling interests |
|
|
|
|
|
(40.6
|
)
|
|
|
|
|
|
(21.1
|
)
|
||||||||||||
Goodwill and other intangible assets
included in White Mountains’s common shareholders’ equity |
|
|
|
|
|
$
|
496.9
|
|
|
|
|
|
|
$
|
41.0
|
|
|
|
December 31,
|
||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||
Millions
|
|
Goodwill
|
|
Other Intangible Assets
|
|
Goodwill
|
|
Other Intangible Assets
|
||||||||
Beginning balance
|
|
$
|
25.9
|
|
|
$
|
36.2
|
|
|
$
|
25.9
|
|
|
$
|
19.3
|
|
Acquisitions of businesses
(1)
|
|
356.5
|
|
|
140.9
|
|
|
—
|
|
|
—
|
|
||||
Acquisitions of asset groups
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.6
|
|
||||
Foreign currency translation
|
|
(2.5
|
)
|
|
(.7
|
)
|
|
—
|
|
|
—
|
|
||||
Acquisitions of other intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization
|
|
—
|
|
|
(18.8
|
)
|
|
—
|
|
|
(10.7
|
)
|
||||
Ending balance
|
|
$
|
379.9
|
|
|
$
|
157.6
|
|
|
$
|
25.9
|
|
|
$
|
36.2
|
|
Millions
|
|
Amortization Expense
|
||
2019
|
|
$
|
18.1
|
|
2020
|
|
16.0
|
|
|
2021
|
|
16.0
|
|
|
2022
|
|
15.8
|
|
|
2023 and years after
|
|
89.5
|
|
|
Total
|
|
$
|
155.4
|
|
|
|
December 31,
|
|
Effective
|
|
December 31,
|
|
Effective
|
||||
Millions
|
|
2018
|
|
Rate
(1)
|
|
2017
|
|
Rate
(1)
|
||||
WTM Bank Facility
|
|
$
|
—
|
|
|
N/A
|
|
$
|
—
|
|
|
N/A
|
NSM Bank Facility
|
|
180.4
|
|
|
7.4%
|
|
—
|
|
|
|
||
Unamortized issuance cost
|
|
(3.8
|
)
|
|
|
|
—
|
|
|
|
||
NSM Bank Facility, carrying value
|
|
176.6
|
|
|
—
|
|
—
|
|
|
|
||
MediaAlpha Bank Facility
|
|
14.3
|
|
|
7.1%
|
|
23.9
|
|
|
5.6%
|
||
Unamortized issuance cost
|
|
(.1
|
)
|
|
|
|
(.1
|
)
|
|
|
||
MediaAlpha Bank Facility, carrying value
|
|
14.2
|
|
|
|
|
23.8
|
|
|
|
||
Other NSM debt, carrying value
|
|
1.9
|
|
|
|
|
—
|
|
|
|
||
Total debt
|
|
$
|
192.7
|
|
|
|
|
$
|
23.8
|
|
|
|
Millions
|
|
December 31,
2018 |
||
Due in one year or less
|
|
$
|
5.2
|
|
Due in two to three years
|
|
10.4
|
|
|
Due in four to five years
|
|
9.4
|
|
|
Due after five years
|
|
171.9
|
|
|
Total
|
|
$
|
196.9
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current income tax (expense) benefit:
|
|
|
|
|
|
|
|
|
|
|||
U.S. federal
|
|
$
|
(.1
|
)
|
|
$
|
(.3
|
)
|
|
$
|
21.4
|
|
State
|
|
(1.4
|
)
|
|
(1.3
|
)
|
|
(.7
|
)
|
|||
Non-U.S.
|
|
(2.9
|
)
|
|
(2.0
|
)
|
|
(.3
|
)
|
|||
Total current income tax (expense) benefit
|
|
(4.4
|
)
|
|
(3.6
|
)
|
|
20.4
|
|
|||
Deferred income tax benefit:
|
|
|
|
|
|
|
|
|
|
|||
U.S. federal
|
|
8.3
|
|
|
11.4
|
|
|
12.5
|
|
|||
Non-U.S.
|
|
.1
|
|
|
—
|
|
|
—
|
|
|||
Total deferred income tax benefit
|
|
8.4
|
|
|
11.4
|
|
|
12.5
|
|
|||
Total income tax benefit
|
|
$
|
4.0
|
|
|
$
|
7.8
|
|
|
$
|
32.9
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Tax benefit (expense) at the U.S. statutory rate
|
|
$
|
37.4
|
|
|
$
|
(2.7
|
)
|
|
$
|
51.6
|
|
Differences in taxes resulting from:
|
|
|
|
|
|
|
|
|
|
|||
Change in valuation allowance
|
|
(31.0
|
)
|
|
42.6
|
|
|
6.9
|
|
|||
State taxes
|
|
4.0
|
|
|
.6
|
|
|
(1.2
|
)
|
|||
Non-U.S. earnings, net of foreign taxes
|
|
(2.9
|
)
|
|
21.5
|
|
|
(19.2
|
)
|
|||
Withholding tax
|
|
(2.7
|
)
|
|
(2.0
|
)
|
|
(.2
|
)
|
|||
Member’s surplus contributions (“MSC”)
|
|
(2.6
|
)
|
|
(3.0
|
)
|
|
(2.3
|
)
|
|||
Tax rate changes
|
|
1.7
|
|
|
(44.3
|
)
|
|
(3.9
|
)
|
|||
Tax reserve adjustments
|
|
(.8
|
)
|
|
(.3
|
)
|
|
—
|
|
|||
Tax exempt interest and dividends
|
|
.6
|
|
|
.5
|
|
|
.1
|
|
|||
Officer compensation
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|||
Other, net
|
|
.3
|
|
|
(1.0
|
)
|
|
1.1
|
|
|||
Total income tax benefit on pre-tax (loss) income
|
|
$
|
4.0
|
|
|
$
|
7.8
|
|
|
$
|
32.9
|
|
|
|
December 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Deferred tax assets related to:
|
|
|
|
|
|
|
||
U.S. federal and state net operating and capital
loss carryforwards
|
|
$
|
95.5
|
|
|
$
|
73.0
|
|
Non-U.S. net operating loss carryforwards
|
|
36.6
|
|
|
33.9
|
|
||
Incentive compensation
|
|
14.1
|
|
|
20.4
|
|
||
Investment basis difference
|
|
11.1
|
|
|
4.9
|
|
||
Net unrealized investment losses
|
|
9.5
|
|
|
—
|
|
||
Tax credit carryforwards
|
|
4.2
|
|
|
1.3
|
|
||
Deferred acquisition costs
|
|
3.5
|
|
|
2.0
|
|
||
Other items
|
|
5.8
|
|
|
1.6
|
|
||
Total gross deferred tax assets
|
|
180.3
|
|
|
137.1
|
|
||
Less: valuation allowances
|
|
139.9
|
|
|
109.6
|
|
||
Total net deferred tax assets
|
|
40.4
|
|
|
27.5
|
|
||
Deferred tax liabilities related to:
|
|
|
|
|
|
|
||
MSC
|
|
32.8
|
|
|
24.1
|
|
||
Purchase accounting
|
|
4.2
|
|
|
.2
|
|
||
Net unrealized investment gains
|
|
—
|
|
|
1.0
|
|
||
Other items
|
|
1.2
|
|
|
.9
|
|
||
Total deferred tax liabilities
|
|
38.2
|
|
|
26.2
|
|
||
Net deferred tax asset
|
|
$
|
2.2
|
|
|
$
|
1.3
|
|
|
|
December 31, 2018
|
||||||||||||||||||
Millions
|
|
United States
|
|
Luxembourg
|
|
United Kingdom
|
|
Israel
|
|
Total
|
||||||||||
2019-2023
|
|
$
|
.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
.4
|
|
2024-2028
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2029-2038
|
|
342.8
|
|
|
47.0
|
|
|
—
|
|
|
—
|
|
|
389.8
|
|
|||||
No expiration date
|
|
81.5
|
|
|
29.8
|
|
|
14.9
|
|
|
61.1
|
|
|
187.3
|
|
|||||
Total
|
|
$
|
424.7
|
|
|
$
|
76.8
|
|
|
$
|
14.9
|
|
|
$
|
61.1
|
|
|
$
|
577.5
|
|
Gross deferred tax asset
|
|
89.7
|
|
|
20.0
|
|
|
2.6
|
|
|
14.0
|
|
|
126.3
|
|
|||||
Valuation allowance
|
|
(87.3
|
)
|
|
(20.0
|
)
|
|
(1.8
|
)
|
|
(14.0
|
)
|
|
(123.1
|
)
|
|||||
Net deferred tax asset
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
.8
|
|
|
$
|
—
|
|
|
$
|
3.2
|
|
Millions
|
|
Permanent
Differences
(1)
|
|
Temporary
Differences
(2)
|
|
Interest and
Penalties
(3)
|
|
Total
|
||||||||
Balance at January 1, 2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Changes in prior year tax positions
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
||||
Tax positions taken during the current year
|
|
.2
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
||||
Balance at December 31, 2017
|
|
.3
|
|
|
—
|
|
|
—
|
|
|
.3
|
|
||||
Changes in prior year tax positions
|
|
.8
|
|
|
—
|
|
|
—
|
|
|
.8
|
|
||||
Balance at December 31, 2018
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
(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 White Mountains’s Consolidated Balance Sheet and its tax basis.
|
(3)
|
Net of tax benefit.
|
Millions
|
|
Year Ended
December 31, 2016 |
||
Fees, included in other revenue
|
|
$
|
1.2
|
|
Change in fair value of variable annuity liability, included in other revenue
|
|
(.3
|
)
|
|
Change in fair value of derivatives, included in other revenue
|
|
(2.0
|
)
|
|
Foreign exchange, included in other revenue
|
|
1.3
|
|
|
Total revenues
|
|
.2
|
|
|
Death benefit claims paid, included in general and administrative expenses
|
|
(.3
|
)
|
|
General and administrative expenses
|
|
(2.6
|
)
|
|
Pre-tax loss
|
|
$
|
(2.7
|
)
|
Millions
|
|
Gains (Losses)
Year Ended
December 31, 2016
|
||
Fixed income/interest rate
|
|
$
|
1.8
|
|
Foreign exchange
|
|
(4.8
|
)
|
|
Equity
|
|
1.0
|
|
|
Total
|
|
$
|
(2.0
|
)
|
|
|
Variable Annuity
Liabilities
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
|
||||||||||
Balance at January 1, 2016
|
|
$
|
.3
|
|
|
$
|
2.7
|
|
|
$
|
16.5
|
|
|
$
|
.9
|
|
|
$
|
20.1
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Realized and unrealized (losses) gains
|
|
(.3
|
)
|
|
2.9
|
|
|
(.7
|
)
|
|
(4.2
|
)
|
|
(2.0
|
)
|
|||||
Transfers in
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(5.6
|
)
|
|
(15.8
|
)
|
|
3.3
|
|
|
(18.1
|
)
|
|||||
Balance at December 31, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(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.
|
|
|
December 31, 2017
|
||||||||
Millions
|
|
Notional Amount
|
|
Carrying Value
|
|
Standard & Poor
’
s Rating
(1)
|
||||
Barclays Bank PLC
|
|
$
|
206.3
|
|
|
$
|
(3.7
|
)
|
|
A
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Contracts outstanding
|
|
7,525
|
|
|
6,371
|
|
||
Remaining weighted average contract period (in years)
|
|
10.7
|
|
|
10.9
|
|
||
Contractual debt service outstanding (in millions):
|
|
|
|
|
||||
Principal
|
|
$
|
52,201.6
|
|
|
$
|
42,090.6
|
|
Interest and capital appreciation
|
|
26,560.3
|
|
|
21,057.1
|
|
||
Total debt service outstanding
|
|
$
|
78,761.9
|
|
|
$
|
63,147.7
|
|
|
|
|
|
|
||||
Gross unearned insurance premiums
|
|
$
|
176.0
|
|
|
$
|
136.8
|
|
Millions
|
|
December 31, 2018
|
||
January 1, 2019 - March 31, 2019
|
|
$
|
4.1
|
|
April 1, 2019 - June 30, 2019
|
|
4.0
|
|
|
July 1, 2019 - September 30, 2019
|
|
4.0
|
|
|
October 1, 2019 - December 31, 2019
|
|
3.8
|
|
|
|
|
15.9
|
|
|
2020
|
|
15.0
|
|
|
2021
|
|
14.0
|
|
|
2022
|
|
13.2
|
|
|
2023
|
|
12.3
|
|
|
2024 and thereafter
|
|
105.6
|
|
|
Total gross unearned insurance premiums
|
|
$
|
176.0
|
|
Millions
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
Written premiums:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
44.8
|
|
|
$
|
63.2
|
|
|
$
|
38.6
|
|
Assumed
|
|
8.1
|
|
|
—
|
|
|
—
|
|
|||
Net written premiums
|
|
$
|
52.9
|
|
|
$
|
63.2
|
|
|
$
|
38.6
|
|
Earned premiums:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
13.6
|
|
|
$
|
9.4
|
|
|
$
|
5.9
|
|
Assumed
|
|
.3
|
|
|
—
|
|
|
—
|
|
|||
Net earned premiums
|
|
$
|
13.9
|
|
|
$
|
9.4
|
|
|
$
|
5.9
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(141.2
|
)
|
|
$
|
627.2
|
|
|
$
|
401.8
|
|
Less: total (loss) income from discontinued operations, net of tax
|
|
(17.2
|
)
|
|
577.5
|
|
|
523.4
|
|
|||
Net (loss) income from continuing operations attributable to
White Mountains’s common shareholders
|
|
(124.0
|
)
|
|
49.7
|
|
|
(121.6
|
)
|
|||
Allocation of earnings (losses) to participating restricted common shares
(1)
|
|
1.4
|
|
|
(.7
|
)
|
|
1.5
|
|
|||
Basic and diluted (losses) earnings per share numerators
|
|
$
|
(122.6
|
)
|
|
$
|
49.0
|
|
|
$
|
(120.1
|
)
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
|
|
||||||
Total average common shares outstanding during the period
|
|
$
|
3,382.5
|
|
|
$
|
4,293.8
|
|
|
$
|
5,014.9
|
|
Average unvested restricted common shares
(2)
|
|
(40.1
|
)
|
|
(54.3
|
)
|
|
(64.8
|
)
|
|||
Basic (losses) earnings per share denominator
|
|
$
|
3,342.4
|
|
|
$
|
4,239.5
|
|
|
$
|
4,950.1
|
|
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
|
|
||||||
Total average common shares outstanding during the period
|
|
$
|
3,382.5
|
|
|
$
|
4,293.8
|
|
|
$
|
5,018.1
|
|
Average unvested restricted common shares
(2)
|
|
(40.1
|
)
|
|
(54.3
|
)
|
|
(64.8
|
)
|
|||
Diluted (losses) earnings per share denominator
(3)
|
|
$
|
3,342.4
|
|
|
$
|
4,239.5
|
|
|
$
|
4,953.3
|
|
Basic and diluted earnings per share (in dollars) - continuing operations:
|
|
|
|
|
|
|
||||||
Distributed earnings - dividends declared and paid
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Undistributed (losses) earnings
|
|
$
|
(37.67
|
)
|
|
$
|
10.56
|
|
|
$
|
(25.26
|
)
|
Basic and diluted (losses) earnings per share
|
|
$
|
(36.67
|
)
|
|
$
|
11.56
|
|
|
$
|
(24.26
|
)
|
(1)
|
Restricted shares issued by White Mountains receive dividends, and therefore, are considered participating securities.
|
(2)
|
Restricted shares outstanding vest either in equal annual installments or upon a stated date. See
Note 10 — “Employee Share-Based Incentive Compensation Plans”
.
|
(3)
|
The diluted earnings (loss) per share denominator for the year ended December 31, 2016, includes the impact of
40,000
common shares issuable upon exercise of the non-qualified options outstanding, which resulted in
3,217
incremental shares outstanding over the period.
|
|
Year Ended December 31,
|
|||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Undistributed net earnings - continuing operations:
|
|
|
|
|
|
|
||||||
Net (loss) income attributable to White Mountains’s common shareholders,
net of restricted common share amounts
|
|
$
|
(122.6
|
)
|
|
$
|
49.0
|
|
|
$
|
(120.1
|
)
|
Dividends declared, net of restricted common share amounts
(1)
|
|
(3.7
|
)
|
|
(4.5
|
)
|
|
(5.4
|
)
|
|||
Total undistributed net (losses) earnings, net of restricted common share amounts
|
|
$
|
(126.3
|
)
|
|
$
|
44.5
|
|
|
$
|
(125.5
|
)
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
$ in Millions
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|||||||||
Beginning of period
|
|
50,515
|
|
|
$
|
45.8
|
|
|
80,353
|
|
|
$
|
42.4
|
|
|
93,654
|
|
|
$
|
57.7
|
|
Shares paid or expired
(1)
|
|
(23,186
|
)
|
|
(28.4
|
)
|
|
(30,838
|
)
|
|
(21.9
|
)
|
|
(36,294
|
)
|
|
(41.0
|
)
|
|||
New grants
|
|
14,105
|
|
|
—
|
|
|
17,710
|
|
|
—
|
|
|
22,615
|
|
|
—
|
|
|||
Forfeitures
(2)
|
|
(818
|
)
|
|
.1
|
|
|
(16,710
|
)
|
|
(9.3
|
)
|
|
378
|
|
|
.5
|
|
|||
Expense recognized
|
|
—
|
|
|
14.2
|
|
|
—
|
|
|
34.6
|
|
|
—
|
|
|
25.2
|
|
|||
End of period
(3)
|
|
40,616
|
|
|
$
|
31.7
|
|
|
50,515
|
|
|
$
|
45.8
|
|
|
80,353
|
|
|
$
|
42.4
|
|
(1)
|
WTM performance share payments in 2018 for the 2015-2017 performance cycle, which were paid in March 2018 ranged from
145%
to
147%
of target. WTM performance share payments in 2017 for the 2014-2016 performance cycle, which were paid in March 2017 ranged from
34%
to
76%
of target. WTM performance shares payments in 2016 for the 2013-2015 performance cycle ranged from
140%
to
142%
of target.
|
(2)
|
Amounts include changes in assumed forfeitures, as required under GAAP.
|
(3)
|
Outstanding performance share awards as of
December 31, 2018, 2017 and 2016
exclude
0
,
2,195
and
7,315
unvested performance shares awards for employees of discontinued operations.
|
$ in Millions
|
|
Target
Performance Shares
Outstanding
|
|
Accrued Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2018 – 2020
|
|
13,450
|
|
|
$
|
3.8
|
|
2017 – 2019
|
|
14,070
|
|
|
11.9
|
|
|
2016 – 2018
|
|
13,715
|
|
|
16.5
|
|
|
Sub-total
|
|
41,235
|
|
|
32.2
|
|
|
Assumed forfeitures
|
|
(619
|
)
|
|
(.5
|
)
|
|
Total
|
|
40,616
|
|
|
$
|
31.7
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
$ 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
|
|
53,755
|
|
|
$
|
14.3
|
|
|
70,620
|
|
|
$
|
19.7
|
|
|
70,675
|
|
|
$
|
15.7
|
|
Issued
|
|
14,105
|
|
|
11.4
|
|
|
17,985
|
|
|
16.3
|
|
|
25,365
|
|
|
20.2
|
|
|||
Vested
|
|
(25,381
|
)
|
|
—
|
|
|
(28,846
|
)
|
|
—
|
|
|
(24,620
|
)
|
|
—
|
|
|||
Forfeited
|
|
(969
|
)
|
|
(.2
|
)
|
|
(6,004
|
)
|
|
(3.5
|
)
|
|
(800
|
)
|
|
(.3
|
)
|
|||
Expense recognized
|
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|
(18.2
|
)
|
|
—
|
|
|
(15.9
|
)
|
|||
End of period
(1)
|
|
41,510
|
|
|
$
|
12.5
|
|
|
53,755
|
|
|
$
|
14.3
|
|
|
70,620
|
|
|
$
|
19.7
|
|
(1)
|
Outstanding restricted share awards as of
December 31, 2018, 2017 and 2016
include
0
,
2,195
, and
5,235
unvested restricted shares for employees of Sirius Group.
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
$ in Millions
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
||||
Other, excluding BAM
|
|
|
|
|
|
|
|
|
||||
HG Global
|
|
3.1
|
%
|
$
|
14.5
|
|
|
3.1
|
%
|
$
|
15.9
|
|
NSM
|
|
4.5
|
|
13.6
|
|
|
—
|
|
—
|
|
||
MediaAlpha
|
|
39.0
|
|
16.2
|
|
|
35.7
|
|
13.1
|
|
||
Buzz
|
|
22.9
|
|
1.1
|
|
|
22.9
|
|
2.5
|
|
||
Other NSM
|
|
13.4
|
|
.3
|
|
|
—
|
|
—
|
|
||
Total other, excluding BAM
|
|
|
|
45.7
|
|
|
|
|
31.5
|
|
||
|
|
|
|
|
|
|
|
|
||||
BAM
|
|
100.0
|
|
(170.6
|
)
|
|
100.0
|
|
(163.2
|
)
|
||
Total non-controlling interests
|
|
|
|
$
|
(124.9
|
)
|
|
|
|
$
|
(131.7
|
)
|
Millions
|
|
HG Global/BAM
(1)
|
|
NSM
|
|
MediaAlpha
|
|
Other
Operations
|
|
Total
|
||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance premiums
|
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13.9
|
|
Net investment income
|
|
16.7
|
|
|
—
|
|
|
—
|
|
|
42.3
|
|
|
59.0
|
|
|||||
Net realized and unrealized investment losses
|
|
(7.5
|
)
|
|
—
|
|
|
—
|
|
|
(100.8
|
)
|
|
(108.3
|
)
|
|||||
Advertising and commission revenues
(2)
|
|
—
|
|
|
94.7
|
|
|
295.5
|
|
|
4.1
|
|
|
394.3
|
|
|||||
Other revenues
|
|
1.2
|
|
|
6.9
|
|
|
1.6
|
|
|
.5
|
|
|
10.2
|
|
|||||
Total revenues
|
|
24.3
|
|
|
101.6
|
|
|
297.1
|
|
|
(53.9
|
)
|
|
369.1
|
|
|||||
Insurance acquisition expenses
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|||||
Other underwriting expenses
|
|
.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.4
|
|
|||||
Cost of sales
|
|
—
|
|
|
—
|
|
|
245.0
|
|
|
3.7
|
|
|
248.7
|
|
|||||
General and administrative expenses
|
|
48.0
|
|
|
61.6
|
|
|
31.7
|
|
|
94.4
|
|
|
235.7
|
|
|||||
Broker commission expense
|
|
—
|
|
|
28.9
|
|
|
—
|
|
|
—
|
|
|
28.9
|
|
|||||
Amortization of other intangible assets
|
|
—
|
|
|
8.3
|
|
|
10.3
|
|
|
.2
|
|
|
18.8
|
|
|||||
Interest expense
|
|
—
|
|
|
8.0
|
|
|
1.2
|
|
|
.3
|
|
|
9.5
|
|
|||||
Total expenses
|
|
53.7
|
|
|
106.8
|
|
|
288.2
|
|
|
98.6
|
|
|
547.3
|
|
|||||
Pre-tax (loss) income
|
|
$
|
(29.4
|
)
|
|
$
|
(5.2
|
)
|
|
$
|
8.9
|
|
|
$
|
(152.5
|
)
|
|
$
|
(178.2
|
)
|
(1)
|
BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes the BAM Surplus Notes and is not reduced by accruals of interest expense on the BAM Surplus Notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the NYDFS.
|
(2)
|
As of December 31, 2018, approximately
29%
of MediaAlpha’s advertising revenue was associated with one customer.
As of December 31, 2018, approximately
33%
of NSM’s commission revenue was associated with one single carrier.
|
Millions
|
|
HG Global/BAM
(1)
|
|
MediaAlpha
|
|
Other
Operations
|
|
Total
|
||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||
Earned insurance premiums
|
|
$
|
9.4
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
10.4
|
|
Net investment income
|
|
12.3
|
|
|
—
|
|
|
43.7
|
|
|
56.0
|
|
||||
Net realized and unrealized investment gains
|
|
.6
|
|
|
—
|
|
|
132.7
|
|
|
133.3
|
|
||||
Advertising and commission revenues
(2)
|
|
—
|
|
|
163.2
|
|
|
3.8
|
|
|
167.0
|
|
||||
Other revenues
|
|
1.0
|
|
|
—
|
|
|
6.1
|
|
|
7.1
|
|
||||
Total revenues
|
|
23.3
|
|
|
163.2
|
|
|
187.3
|
|
|
373.8
|
|
||||
Losses and LAE
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
||||
Insurance acquisition expenses
|
|
4.0
|
|
|
—
|
|
|
.1
|
|
|
4.1
|
|
||||
Other underwriting expenses
|
|
.4
|
|
|
—
|
|
|
—
|
|
|
.4
|
|
||||
Cost of sales
|
|
—
|
|
|
135.9
|
|
|
3.5
|
|
|
139.4
|
|
||||
General and administrative expenses
|
|
42.9
|
|
|
16.2
|
|
|
148.9
|
|
|
208.0
|
|
||||
Amortization of other intangible assets
|
|
—
|
|
|
10.5
|
|
|
.2
|
|
|
10.7
|
|
||||
Interest expense
|
|
—
|
|
|
1.0
|
|
|
1.3
|
|
|
2.3
|
|
||||
Total expenses
|
|
47.3
|
|
|
163.6
|
|
|
155.1
|
|
|
366.0
|
|
||||
Pre-tax (loss) income
|
|
$
|
(24.0
|
)
|
|
$
|
(.4
|
)
|
|
$
|
32.2
|
|
|
$
|
7.8
|
|
(1)
|
BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes the BAM Surplus Notes and is not reduced by accruals of interest expense on the BAM Surplus Notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the NYDFS.
|
(2)
|
As of December 31, 2017, approximately
27%
of MediaAlpha’s advertising revenue was associated with one customer.
|
Millions
|
|
HG Global/BAM
(1)
|
|
MediaAlpha
|
|
Other
Operations
|
|
Total
|
||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||
Earned insurance premiums
|
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
|
$
|
13.4
|
|
Net investment income
|
|
9.0
|
|
|
—
|
|
|
23.1
|
|
|
32.1
|
|
||||
Net realized and unrealized investment gains (losses)
|
|
.7
|
|
|
—
|
|
|
(28.1
|
)
|
|
(27.4
|
)
|
||||
Advertising and commission revenues
(2)
|
|
—
|
|
|
116.5
|
|
|
1.8
|
|
|
118.3
|
|
||||
Other revenues
|
|
1.1
|
|
|
—
|
|
|
20.2
|
|
|
21.3
|
|
||||
Total revenues
|
|
16.7
|
|
|
116.5
|
|
|
24.5
|
|
|
157.7
|
|
||||
Losses and LAE
|
|
—
|
|
|
—
|
|
|
8.0
|
|
|
8.0
|
|
||||
Insurance acquisition expenses
|
|
3.4
|
|
|
—
|
|
|
2.2
|
|
|
5.6
|
|
||||
Other underwriting expenses
|
|
.4
|
|
|
—
|
|
|
—
|
|
|
.4
|
|
||||
Cost of sales
|
|
—
|
|
|
97.8
|
|
|
4.2
|
|
|
102.0
|
|
||||
General and administrative expenses
|
|
39.6
|
|
|
11.8
|
|
|
124.1
|
|
|
175.5
|
|
||||
Amortization of other intangible assets
|
|
—
|
|
|
10.1
|
|
|
.4
|
|
|
10.5
|
|
||||
Interest expense
|
|
—
|
|
|
.9
|
|
|
2.1
|
|
|
3.0
|
|
||||
Total expenses
|
|
43.4
|
|
|
120.6
|
|
|
141.0
|
|
|
305.0
|
|
||||
Pre-tax loss
|
|
$
|
(26.7
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(116.5
|
)
|
|
$
|
(147.3
|
)
|
(1)
|
BAM manages its affairs on a statutory accounting basis. BAM’s statutory surplus includes the BAM Surplus Notes and is not reduced by accruals of interest expense on the BAM Surplus Notes. BAM’s statutory surplus is reduced only after a payment of principal or interest has been approved by the NYDFS.
|
(2)
|
As of December 31, 2016, approximately
24%
of MediaAlpha’s advertising revenue was associated with one customer.
|
Millions
Selected Balance Sheet Data
|
|
HG Global/BAM
|
|
NSM
|
|
MediaAlpha
|
|
Other
Operations
|
|
Held for Sale
|
|
Total
|
||||||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments
|
|
$
|
768.3
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
1,772.9
|
|
|
$
|
—
|
|
|
$
|
2,542.9
|
|
Total assets
|
|
$
|
816.2
|
|
(1)
|
$
|
627.0
|
|
|
$
|
88.4
|
|
|
$
|
1,827.7
|
|
(2)
|
$
|
3.3
|
|
|
$
|
3,362.6
|
|
Total liabilities
|
|
$
|
212.5
|
|
(2)
|
$
|
314.8
|
|
|
$
|
46.9
|
|
|
$
|
70.2
|
|
|
$
|
—
|
|
|
$
|
644.4
|
|
Total White Mountains’s common
shareholders’ equity
|
|
$
|
759.8
|
|
(2)
|
$
|
298.3
|
|
|
$
|
25.3
|
|
|
$
|
1,756.4
|
|
(2)
|
$
|
3.3
|
|
|
$
|
2,843.1
|
|
Non-controlling interest
|
|
$
|
(156.1
|
)
|
|
$
|
13.9
|
|
|
$
|
16.2
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
(124.9
|
)
|
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total investments
|
|
$
|
693.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,687.3
|
|
|
$
|
—
|
|
|
$
|
3,380.7
|
|
Total assets
|
|
$
|
747.4
|
|
(1)
|
$
|
—
|
|
|
$
|
96.5
|
|
|
$
|
2,812.0
|
|
(2)
|
$
|
3.3
|
|
|
$
|
3,659.2
|
|
Total liabilities
|
|
$
|
167.0
|
|
(2)
|
$
|
—
|
|
|
$
|
59.8
|
|
|
$
|
71.6
|
|
|
$
|
—
|
|
|
$
|
298.4
|
|
Total White Mountains’s common
shareholders’ equity |
|
$
|
727.7
|
|
(2)
|
$
|
—
|
|
|
$
|
23.6
|
|
|
$
|
2,737.9
|
|
(2)
|
$
|
3.3
|
|
|
$
|
3,492.5
|
|
Non-controlling interest
|
|
$
|
(147.3
|
)
|
|
$
|
—
|
|
|
$
|
13.1
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
(131.7
|
)
|
(1)
|
As of December 2018 and 2017,
BAM’s total assets reflected the elimination of
$481.3
and
$499.0
of BAM Surplus Notes issued to HG Global and its subsidiaries, and
$143.7
and
$126.0
in accrued interest related to the BAM Surplus Notes.
|
(2)
|
HG Global preferred dividends payable to White Mountains’s subsidiaries is eliminated in White Mountains’s consolidated financial statements. For segment reporting, the HG Global preferred dividends payable to White Mountains’s subsidiaries included within the HG Global/BAM segment are eliminated against the offsetting receivable included within the Other Operations segment and therefore added back to White Mountains’s common shareholders’ equity within the HG Global/BAM segment. As of December 31, 2018 and 2017, the HG Global preferred dividends payable to White Mountains’s subsidiaries was
$278.5
and
$227.9
.
|
|
|
December 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Equity method eligible unconsolidated entities, at fair value
|
|
$
|
138.1
|
|
|
$
|
58.0
|
|
Investments accounted for under the equity method
|
|
1.3
|
|
|
4.6
|
|
||
Total investments in equity method eligible unconsolidated entities
|
|
139.4
|
|
|
62.6
|
|
||
Other unconsolidated investments
(1)
|
|
186.2
|
|
|
146.2
|
|
||
Total other long-term investments
|
|
$
|
325.6
|
|
|
$
|
208.8
|
|
|
|
Ownership Interest
|
|
|
||
Investee
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Instrument Held
|
PassportCard/DavidShield
(1)
|
|
50.0%
|
|
50% / 0%
|
|
Common shares
|
Kudu
|
|
49.5%
|
|
—
|
|
Units
|
durchblicker
|
|
45.0%
|
|
45.0%
|
|
Common shares
|
Tuckerman Capital Fund III, L.P.
|
|
18.5%
|
|
21.3%
|
|
Limited partnership interest
|
Compare.com
|
|
18.4%
|
|
22.1%
|
|
Common shares
|
|
|
December 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Balance sheet data
(1)
:
|
|
|
|
|
||||
Total assets
|
|
$
|
218.8
|
|
|
$
|
75.4
|
|
Total liabilities
|
|
$
|
46.7
|
|
|
$
|
24.2
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income statement data
(1)
:
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
134.1
|
|
|
$
|
60.0
|
|
|
$
|
32.9
|
|
Expenses
|
|
$
|
(110.1
|
)
|
|
$
|
(66.8
|
)
|
|
$
|
(76.4
|
)
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
NSM Bank Facility
|
|
$
|
176.1
|
|
|
$
|
176.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
MediaAlpha Bank Facility
|
|
$
|
14.6
|
|
|
$
|
14.2
|
|
|
$
|
23.9
|
|
|
$
|
23.8
|
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
Millions
|
|
OneBeacon
|
|
Sirius Group
|
|
Tranzact
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|||||||
Earned insurance premiums
|
|
$
|
807.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
807.6
|
|
Net investment income
|
|
39.7
|
|
|
—
|
|
|
—
|
|
|
39.7
|
|
||||
Net realized and unrealized investment gains
|
|
38.8
|
|
|
—
|
|
|
—
|
|
|
38.8
|
|
||||
Other revenues
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
||||
Total revenues
|
|
893.8
|
|
|
—
|
|
|
—
|
|
|
893.8
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses
|
|
546.0
|
|
|
—
|
|
|
—
|
|
|
546.0
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
145.6
|
|
|
—
|
|
|
—
|
|
|
145.6
|
|
||||
Other underwriting expenses
|
|
156.2
|
|
|
—
|
|
|
—
|
|
|
156.2
|
|
||||
General and administrative expenses
|
|
21.2
|
|
|
—
|
|
|
—
|
|
|
21.2
|
|
||||
Interest expense
|
|
10.0
|
|
|
|
|
|
|
10.0
|
|
||||||
Total expenses
|
|
879.0
|
|
|
—
|
|
|
—
|
|
|
879.0
|
|
||||
Pre-tax income
|
|
14.8
|
|
|
—
|
|
|
—
|
|
|
14.8
|
|
||||
Income tax benefit
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
||||
Net income from discontinued operations
|
|
20.5
|
|
|
—
|
|
|
—
|
|
|
20.5
|
|
||||
Gain (loss) from sale of discontinued operations, net of tax
|
|
554.5
|
|
|
(.7
|
)
|
|
3.2
|
|
|
557.0
|
|
||||
Total income (loss) from discontinued operations
|
|
575.0
|
|
|
(.7
|
)
|
|
3.2
|
|
|
577.5
|
|
||||
Change in foreign currency translation and other comprehensive
income from discontinued operations, net of tax
|
|
.3
|
|
|
—
|
|
|
—
|
|
|
.3
|
|
||||
Recognition of benefit plan assets and obligations from the sale of
OneBeacon, net of tax
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
||||
Comprehensive income (loss) from discontinued operations
|
|
$
|
578.2
|
|
|
$
|
(.7
|
)
|
|
$
|
3.2
|
|
|
$
|
580.7
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
Millions
|
|
OneBeacon
|
|
Sirius Group
|
|
Tranzact
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|||||||
Earned insurance premiums
|
|
$
|
1,100.6
|
|
|
$
|
240.1
|
|
|
$
|
—
|
|
|
$
|
1,340.7
|
|
Net investment income
|
|
50.6
|
|
|
14.4
|
|
|
—
|
|
|
65.0
|
|
||||
Net realized and unrealized investment gains (losses)
|
|
37.7
|
|
|
(1.5
|
)
|
|
—
|
|
|
36.2
|
|
||||
Other revenues
|
|
5.5
|
|
|
.6
|
|
|
119.6
|
|
|
125.7
|
|
||||
Total revenues
|
|
1,194.4
|
|
|
253.6
|
|
|
119.6
|
|
|
1,567.6
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses
|
|
656.0
|
|
|
154.9
|
|
|
—
|
|
|
810.9
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
206.0
|
|
|
59.0
|
|
|
—
|
|
|
265.0
|
|
||||
Other underwriting expenses
|
|
209.0
|
|
|
30.9
|
|
|
—
|
|
|
239.9
|
|
||||
General and administrative expenses
|
|
14.2
|
|
|
10.4
|
|
|
116.7
|
|
|
141.3
|
|
||||
Interest expense
|
|
13.1
|
|
|
7.9
|
|
|
3.2
|
|
|
24.2
|
|
||||
Total expenses
|
|
1,098.3
|
|
|
263.1
|
|
|
119.9
|
|
|
1,481.3
|
|
||||
Pre-tax income (loss)
|
|
96.1
|
|
|
(9.5
|
)
|
|
(.3
|
)
|
|
86.3
|
|
||||
Income tax benefit
|
|
12.5
|
|
|
3.1
|
|
|
6.4
|
|
|
22.0
|
|
||||
Net income (loss) from discontinued operations
|
|
108.6
|
|
|
(6.4
|
)
|
|
6.1
|
|
|
108.3
|
|
||||
Gain from sale of discontinued operations, net of tax
|
|
—
|
|
|
363.2
|
|
|
51.9
|
|
|
415.1
|
|
||||
Total income from discontinued operations
|
|
108.6
|
|
|
356.8
|
|
|
58.0
|
|
|
523.4
|
|
||||
Change in foreign currency translation and other comprehensive
income from discontinued operations, net of tax |
|
1.0
|
|
|
32.0
|
|
|
—
|
|
|
33.0
|
|
||||
Recognition of foreign currency translation from sale of
Sirius Group, net of tax
|
|
—
|
|
|
113.3
|
|
|
—
|
|
|
113.3
|
|
||||
Comprehensive income from discontinued operations
|
|
$
|
109.6
|
|
|
$
|
502.1
|
|
|
$
|
58.0
|
|
|
$
|
669.7
|
|
|
|
Year Ended December 31,
|
||||||
Millions
|
|
2017
|
|
2016
|
||||
Net cash provided from operations
|
|
$
|
157.0
|
|
|
$
|
23.6
|
|
Net cash provided from (used for) investing activities
|
|
3.0
|
|
|
241.4
|
|
||
Net cash used for financing activities
|
|
(61.9
|
)
|
|
(93.8
|
)
|
||
Net change in cash during the period
|
|
98.1
|
|
|
171.2
|
|
||
Cash balances at beginning of period
|
|
70.5
|
|
|
245.4
|
|
||
Net change in cash held for sale
|
|
(.9
|
)
|
|
(.3
|
)
|
||
Cash sold as part of sale of consolidated subsidiaries
|
|
(167.7
|
)
|
|
(345.8
|
)
|
||
Cash balances at end of period
|
|
$
|
—
|
|
|
$
|
70.5
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
|
|
|
|
||||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(141.2
|
)
|
|
$
|
627.2
|
|
|
$
|
401.8
|
|
Less: total (loss) income from continuing operations, net of tax
|
|
(124.0
|
)
|
|
49.7
|
|
|
(121.6
|
)
|
|||
Net (loss) income from discontinued operations attributable to
White Mountains’s common shareholders
|
|
(17.2
|
)
|
|
577.5
|
|
|
523.4
|
|
|||
Allocation of earnings (losses) to participating restricted common shares
(1)
|
|
0.2
|
|
|
(7.3
|
)
|
|
(6.8
|
)
|
|||
Basic and diluted (losses) earnings per share numerators
|
|
$
|
(17.0
|
)
|
|
$
|
570.2
|
|
|
$
|
516.6
|
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
$
|
3,382.5
|
|
|
$
|
4,293.8
|
|
|
$
|
5,014.9
|
|
Average unvested restricted common shares
(3)
|
|
(40.1
|
)
|
|
(54.3
|
)
|
|
(64.8
|
)
|
|||
Basic earnings (losses) per share denominator
|
|
$
|
3,342.4
|
|
|
$
|
4,239.5
|
|
|
$
|
4,950.1
|
|
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
$
|
3,382.5
|
|
|
$
|
4,293.8
|
|
|
$
|
5,018.1
|
|
Average unvested restricted common shares
(3)
|
|
(40.1
|
)
|
|
(54.3
|
)
|
|
(64.8
|
)
|
|||
Diluted earnings (losses) per share denominator
(4)
|
|
$
|
3,342.4
|
|
|
$
|
4,239.5
|
|
|
$
|
4,953.3
|
|
Basic (losses) earnings per share (in dollars) - discontinued operations:
|
|
$
|
(5.09
|
)
|
|
$
|
134.50
|
|
|
$
|
104.37
|
|
Diluted (losses) earnings per share (in dollars) - discontinued operations:
|
|
$
|
(5.09
|
)
|
|
$
|
134.50
|
|
|
$
|
104.32
|
|
(1)
|
Restricted shares issued by White Mountains contain dividend participation features, and therefore, are considered participating securities.
|
(2)
|
Net earnings attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the years ended
December 31, 2018, 2017 and 2016
.
|
(3)
|
Restricted common shares outstanding vest either in equal annual installments or upon a stated date. See
Note 10 — “Employee Share-Based Compensation Plans”
.
|
(4)
|
The diluted earnings per share denominator for the year ended December 31, 2016 includes the impact of
40,000
common shares issuable upon exercise of the non-qualified options outstanding, which resulted in
3,217
incremental shares outstanding over the period.
|
/s/ G. MANNING ROUNTREE
|
|
/s/ REID T. CAMPBELL
|
Chief Executive Officer
(Principal Executive Officer)
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
/s/ PricewaterhouseCoopers LLP
|
|
Boston, Massachusetts
|
|
February 27, 2019
|
|
We have served as the Company’s auditor since 1999.
|
|
|
|
2018 Three Months Ended
|
|
2017 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
|
|
$
|
6.0
|
|
|
$
|
198.7
|
|
|
$
|
122.3
|
|
|
$
|
42.1
|
|
|
$
|
114.0
|
|
|
$
|
87.5
|
|
|
$
|
83.5
|
|
|
$
|
88.8
|
|
Expenses
|
|
150.1
|
|
|
154.4
|
|
|
134.7
|
|
|
108.1
|
|
|
108.8
|
|
|
79.1
|
|
|
85.7
|
|
|
92.4
|
|
||||||||
Pre-tax income (loss)
|
|
(144.1
|
)
|
|
44.3
|
|
|
(12.4
|
)
|
|
(66.0
|
)
|
|
5.2
|
|
|
8.4
|
|
|
(2.2
|
)
|
|
(3.6
|
)
|
||||||||
Tax benefit (expense)
|
|
3.6
|
|
|
3.6
|
|
|
(2.5
|
)
|
|
(.7
|
)
|
|
2.5
|
|
|
4.0
|
|
|
1.0
|
|
|
0.3
|
|
||||||||
Income (loss) from continuing operations
|
|
(140.5
|
)
|
|
47.9
|
|
|
(14.9
|
)
|
|
(66.7
|
)
|
|
7.7
|
|
|
12.4
|
|
|
(1.2
|
)
|
|
(3.3
|
)
|
||||||||
Income (loss) from discontinued operations, net of tax
|
|
—
|
|
|
(17.3
|
)
|
|
—
|
|
|
.1
|
|
|
4.3
|
|
|
539.1
|
|
|
2.8
|
|
|
31.3
|
|
||||||||
Non-controlling interest in consolidated subsidiaries
|
|
3.0
|
|
|
10.2
|
|
|
18.4
|
|
|
18.6
|
|
|
10.5
|
|
|
10.6
|
|
|
12.0
|
|
|
1.0
|
|
||||||||
Income (loss) attributable to White Mountains’s common shareholders
|
|
$
|
(137.5
|
)
|
|
$
|
40.8
|
|
|
$
|
3.5
|
|
|
$
|
(48.0
|
)
|
|
$
|
22.5
|
|
|
$
|
562.1
|
|
|
$
|
13.6
|
|
|
$
|
29.0
|
|
Income (loss) attributable to White Mountains’s common shareholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
|
$
|
(43.24
|
)
|
|
$
|
18.27
|
|
|
$
|
1.02
|
|
|
$
|
(12.85
|
)
|
|
$
|
4.85
|
|
|
$
|
5.36
|
|
|
$
|
2.36
|
|
|
$
|
(0.52
|
)
|
Discontinued operations
|
|
—
|
|
|
(5.44
|
)
|
|
—
|
|
|
.03
|
|
|
1.15
|
|
|
125.45
|
|
|
.61
|
|
|
6.86
|
|
||||||||
Total consolidated operations
|
|
$
|
(43.24
|
)
|
|
$
|
12.83
|
|
|
$
|
1.02
|
|
|
$
|
(12.82
|
)
|
|
$
|
6.00
|
|
|
$
|
130.81
|
|
|
$
|
2.97
|
|
|
$
|
6.34
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(43.24
|
)
|
|
$
|
18.27
|
|
|
$
|
1.02
|
|
|
$
|
(12.85
|
)
|
|
$
|
4.85
|
|
|
$
|
5.36
|
|
|
$
|
2.36
|
|
|
$
|
(0.52
|
)
|
Discontinued operations
|
|
—
|
|
|
(5.44
|
)
|
|
—
|
|
|
.03
|
|
|
1.15
|
|
|
125.45
|
|
|
.61
|
|
|
6.86
|
|
||||||||
Total consolidated operations
|
|
$
|
(43.24
|
)
|
|
$
|
12.83
|
|
|
$
|
1.02
|
|
|
$
|
(12.82
|
)
|
|
$
|
6.00
|
|
|
$
|
130.81
|
|
|
$
|
2.97
|
|
|
$
|
6.34
|
|
Millions
|
|
Cost
|
|
Carrying
Value
|
|
Fair
Value
|
||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|||
U.S. Government and government agencies and authorities
|
|
$
|
154.0
|
|
|
$
|
153.2
|
|
|
$
|
153.2
|
|
Debt securities issued by corporations
|
|
519.0
|
|
|
510.5
|
|
|
510.5
|
|
|||
States, municipalities and political subdivisions
|
|
279.0
|
|
|
280.3
|
|
|
280.3
|
|
|||
Mortgage and asset-backed securities
|
|
136.1
|
|
|
133.5
|
|
|
133.5
|
|
|||
Total fixed maturity investments
|
|
1,088.1
|
|
|
1,077.5
|
|
|
1,077.5
|
|
|||
Short-term investments
|
|
214.2
|
|
|
214.2
|
|
|
214.2
|
|
|||
Common equity securities:
|
|
|
|
|
|
|
||||||
Exchange traded funds
|
|
681.8
|
|
|
675.3
|
|
|
675.3
|
|
|||
Banks, trust and insurance companies
|
|
11.8
|
|
|
13.5
|
|
|
13.5
|
|
|||
Industrial, miscellaneous and other
|
|
211.1
|
|
|
236.8
|
|
|
236.8
|
|
|||
Total common equity securities
|
|
904.7
|
|
|
925.6
|
|
|
925.6
|
|
|||
Other long-term investments
|
|
330.3
|
|
|
325.6
|
|
|
325.6
|
|
|||
Total investments
|
|
$
|
2,537.3
|
|
|
$
|
2,542.9
|
|
|
$
|
2,542.9
|
|
|
|
December 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
|
|
|
||
Cash
|
|
$
|
.7
|
|
|
$
|
14.9
|
|
Fixed maturity investments, at fair value
|
|
—
|
|
|
869.6
|
|
||
Common equity securities, at fair value
|
|
335.6
|
|
|
641.8
|
|
||
Other long-term investments
(2)
|
|
—
|
|
|
(3.7
|
)
|
||
Short-term investments, at amortized cost
|
|
28.0
|
|
|
57.2
|
|
||
Other assets
|
|
1.8
|
|
|
30.9
|
|
||
Investments in consolidated subsidiaries
|
|
2,533.2
|
|
|
1,914.8
|
|
||
Total assets
|
|
$
|
2,899.3
|
|
|
$
|
3,525.5
|
|
Liabilities:
|
|
|
|
|
|
|
||
Payable to subsidiary
|
|
$
|
15.8
|
|
|
$
|
11.8
|
|
Other liabilities
|
|
25.9
|
|
|
21.2
|
|
||
Total liabilities
(3)
|
|
41.7
|
|
|
33.0
|
|
||
White Mountains’s common shareholders’ equity
|
|
2,843.1
|
|
|
3,492.5
|
|
||
Non-controlling interests
|
|
14.5
|
|
|
—
|
|
||
Total liabilities and equity
|
|
$
|
2,899.3
|
|
|
$
|
3,525.5
|
|
|
|
Year Ended December 31,
|
|||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
Revenues (loss) (including realized and unrealized gains and losses)
|
|
$
|
(47.7
|
)
|
|
$
|
27.3
|
|
|
$
|
(1.0
|
)
|
|
Expenses
|
|
45.9
|
|
|
99.7
|
|
|
68.2
|
|
|
|||
Pre-tax loss
|
|
(93.6
|
)
|
|
(72.4
|
)
|
|
(69.2
|
)
|
|
|||
Income tax expense
|
|
(2.5
|
)
|
|
(1.4
|
)
|
|
(.5
|
)
|
|
|||
Net loss
|
|
(96.1
|
)
|
|
(73.8
|
)
|
|
(69.7
|
)
|
|
|||
Net loss from discontinued operations, net of tax
(2)
|
|
(17.2
|
)
|
(2)
|
—
|
|
(3)
|
—
|
|
(4)
|
|||
Equity in earnings from consolidated and unconsolidated subsidiaries,
net of tax
|
|
(27.4
|
)
|
|
701.0
|
|
(3)
|
471.5
|
|
(4)
|
|||
Net loss (income) attributable to non-controlling interests
|
|
(.5
|
)
|
|
—
|
|
|
—
|
|
|
|||
Net (loss) income attributable to White Mountains’s
common shareholders
|
|
(141.2
|
)
|
|
627.2
|
|
|
401.8
|
|
|
|||
Other comprehensive (loss) income items, net of tax
|
|
(4.5
|
)
|
|
3.3
|
|
|
145.3
|
|
|
|||
Comprehensive (loss) income attributable to White Mountains’s
common shareholders
|
|
$
|
(145.7
|
)
|
|
$
|
630.5
|
|
|
$
|
547.1
|
|
|
|
|
Year Ended December 31,
|
||||||||||
Millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income attributable to White Mountains’s common shareholders
|
|
$
|
(141.2
|
)
|
|
$
|
627.2
|
|
|
$
|
401.8
|
|
Charges (credits) to reconcile net income to net cash from operations:
|
|
|
|
|
|
|
||||||
Net realized and unrealized investment (gains) losses on sales of investments
|
|
57.8
|
|
|
(18.5
|
)
|
|
1.1
|
|
|||
Undistributed earnings from subsidiaries
|
|
27.4
|
|
|
(701.0
|
)
|
|
(471.5
|
)
|
|||
Net loss on sale of other discontinued operations
(3)
|
|
17.2
|
|
|
—
|
|
|
—
|
|
|||
Other non-cash reconciling items, primarily amortization of restricted share and option awards
(4)
|
|
34.6
|
|
|
31.1
|
|
|
17.9
|
|
|||
Accumulated earnings distributed from subsidiary in cash
(5)
|
|
—
|
|
|
1,256.7
|
|
|
—
|
|
|||
Net change in other assets and liabilities
(6)
|
|
16.7
|
|
|
(4.9
|
)
|
|
(5.6
|
)
|
|||
Net cash provided from (used for) operations
|
|
12.5
|
|
|
1,190.6
|
|
|
(56.3
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Net change in short-term investments
(7)
|
|
134.0
|
|
|
(24.7
|
)
|
|
10.9
|
|
|||
Purchases of investment securities
(8)
|
|
(321.2
|
)
|
|
(474.7
|
)
|
|
—
|
|
|||
Sales and maturities of investment securities
(9)
|
|
967.6
|
|
|
367.1
|
|
|
—
|
|
|||
Issuance of debt (to) from subsidiaries
(10)
|
|
(55.2
|
)
|
|
382.0
|
|
|
992.0
|
|
|||
Repayment of debt to (from) subsidiaries
(11)
|
|
31.0
|
|
|
—
|
|
|
(5.0
|
)
|
|||
(Contributions to) distributions from subsidiaries
(12)(13)
|
|
(258.2
|
)
|
|
(700.0
|
)
|
|
—
|
|
|||
Net cash provided from (used for) investing activities
|
|
498.0
|
|
|
(450.3
|
)
|
|
997.9
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Draw down of revolving line of credit
(14)
|
|
—
|
|
|
350.0
|
|
|
350.0
|
|
|||
Repayment of revolving line of credit
(14)
|
|
—
|
|
|
(350.0
|
)
|
|
(400.0
|
)
|
|||
Proceeds from issuances of common shares
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||
Repurchases and retirement of common shares
(10)
|
|
(510.9
|
)
|
|
(714.6
|
)
|
|
(881.3
|
)
|
|||
Dividends paid on common shares
|
|
(3.8
|
)
|
|
(4.6
|
)
|
|
(5.4
|
)
|
|||
Payments of restricted shares withholding taxes
|
|
(10.0
|
)
|
|
(9.3
|
)
|
|
(5.8
|
)
|
|||
Net cash used for financing activities
|
|
(524.7
|
)
|
|
(728.5
|
)
|
|
(938.8
|
)
|
|||
Net (decrease) increase in cash during the year
|
|
(14.2
|
)
|
|
11.8
|
|
|
2.8
|
|
|||
Cash balance at beginning of year
|
|
14.9
|
|
|
3.1
|
|
|
.3
|
|
|||
Cash balance at end of year
|
|
$
|
.7
|
|
|
$
|
14.9
|
|
|
$
|
3.1
|
|
Supplemental cash flow information: interest paid
|
|
$
|
—
|
|
|
$
|
(.6
|
)
|
|
$
|
(1.2
|
)
|
(1)
|
These condensed unconsolidated financial statements reflect the results of operations, financial condition and cash flows for the Company. Investments in which White Mountains holds a controlling financial interest are accounted for using the equity method. Under the equity method, investments in subsidiaries are recorded on the condensed balance sheets at the amount of the Company’s ownership percentage of the subsidiary’s GAAP book value. The income from subsidiaries is reported on a net of tax basis as equity in earnings of subsidiaries on the condensed statements of operations and comprehensive income. Capital contributions to and distributions from subsidiaries are presented within investing activities on the condensed statements of cash flows.
|
(2)
|
During 2017, Lone Tree Holdings, Ltd. (“LTH”), a wholly-owned subsidiary of the Company, merged into the Company. The merger was treated as a liquidation for financial statement purposes. As part of the liquidation, significant non-cash balances that were transferred from LTH to the Company included ending net equity of
$2,810.4
, intercompany balances of
$1,863.1
, investments in its subsidiaries of
$964.4
, short-term investments of
$13.0
and other liabilities of
$14.1
.
|
(3)
|
During 2018, Net loss from discontinued operations includes
$17.3
arising from the tax contingency on the sale of Sirius Group. See
Note 18 — “Commitments and Contingencies”
.
|
(4)
|
For the years ended
December 31, 2018, 2017 and 2016
, amortization of restricted share and option awards was $
13.0
, $
14.8
and $
18.5
.
|
(5)
|
During 2017, as part of its liquidation into the Company, LTH transferred
$1,256.7
of cash, which included
$1,037.6
of the proceeds from the sale of OneBeacon, to the Company.
|
(6)
|
For
2018, 2017 and 2016
, net change in other assets and liabilities also included a
$4.0
,
$11.6
, and $
0.2
net change in payables to the Company’s subsidiaries.
|
(7)
|
During 2018, the Company had non-cash (purchases) and sales of short-term investments of (
$284.6
) and
$179.2
.
|
(8)
|
During 2018, the Company had non-cash purchases of investment securities of
$603.9
, which included
$170.5
of fixed maturity securities,
$148.8
of common equity securities and
$22.7
of other long term investments.
|
(9)
|
During 2018, the Company had non-cash sales of investment securities of
$1,065.4
, which included
$373.4
of fixed maturity securities,
$490.1
of common equity securities and
$22.7
of other long term investments.
|
(10)
|
During 2018, the Company had non-cash issuance of debt of
$349.5
to its wholly-owned subsidiary, Guilford Holding, Inc. (“GHI”). Proceeds of the debt, which included
$170.4
of fixed maturity securities and
$179.2
of short-term investments, were transferred to GHI. During 2017, the Company had non-cash issuance of debt from LTH of $
94.2
. During 2017 and 2016, the Company used cash proceeds received from the issuance of debt from LTH, primarily to fund repurchases of its common shares.
|
(13)
|
During 2017, the Company received non-cash distributions of
$1,238.9
from LTH, prior to its liquidation. The distribution was completed through the transfer of fixed maturity investments and common equity securities. During 2016, the Company received a non-cash distribution of
$80.0
from LTH. The distribution was completed through the transfer of fixed maturity investments.
|
(14)
|
The WTM Bank Facility was a direct obligation of the Registrant as of December 31, 2017 and was terminated on May 8, 2018. See
Note 5 — “Debt”.
|
|
Column
A
|
|
Column
B
|
|
Column C
|
|
Column
D
|
|
Column E
|
|
Column
F
|
|
Column
G
|
|
Column
H
|
|
Column
I
|
|
Column
J
|
|
Column
K
|
||||||||||||||||||||
|
Millions
Segment
|
|
Deferred
Acqui-
sition
Costs
|
|
Future
Policy
Benefits,
Losses,
Claims
and Loss
Expenses
|
|
Unearned
Premiums
|
|
Other Policy
Claims and
Benefits
Payable
|
|
Premiums
Earned
|
|
Net
Investment
Income
(2)
|
|
Benefits,
Claims,
Losses and
Settlement
Expenses
|
|
Amortization
of Deferred
Policy
Acquisition
Costs
|
|
Other Operating
Expenses
|
|
Premiums
Written
|
||||||||||||||||||||
Years ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
December 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
HG Global/
BAM
|
|
$
|
19.0
|
|
|
$
|
—
|
|
|
$
|
176.0
|
|
|
$
|
—
|
|
|
$
|
13.9
|
|
|
$
|
16.7
|
|
|
$
|
—
|
|
|
$
|
5.3
|
|
|
$
|
.4
|
|
|
$
|
52.9
|
|
|
Other
Operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
December 31,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
HG Global/
BAM
|
|
14.8
|
|
|
—
|
|
|
136.8
|
|
|
—
|
|
|
9.4
|
|
|
12.3
|
|
|
—
|
|
|
4.0
|
|
|
.4
|
|
|
63.2
|
|
||||||||||
|
Other
Operations
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.1
|
|
|
.1
|
|
|
—
|
|
|
.9
|
|
||||||||||
December 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
HG Global/
BAM
|
|
10.6
|
|
|
—
|
|
|
82.9
|
|
|
—
|
|
|
5.9
|
|
|
9.0
|
|
|
—
|
|
|
3.4
|
|
|
.4
|
|
|
38.6
|
|
||||||||||
|
Other
Operations
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
.2
|
|
|
8.0
|
|
|
2.2
|
|
|
.1
|
|
|
6.5
|
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
|||||||||
$ in Millions
Premiums Earned
|
|
Gross Amount
|
|
Ceded to Other
Companies
|
|
Assumed from
Other Companies
|
|
Net Amount
|
|
Percentage of
Amount Assumed
to Net
|
|||||||||
Year ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
HG Global/BAM
|
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
.3
|
|
|
$
|
13.9
|
|
|
2.2
|
%
|
Other Operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
HG Global/BAM
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
||||
Other Operations
(2)
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HG Global/BAM
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
|
—
|
|
||||
Other Operations
(2)
|
|
15.2
|
|
|
(7.7
|
)
|
|
—
|
|
|
7.5
|
|
|
—
|
|
(1)
|
Schedule excludes activity related to OneBeacon and Sirius Group for the years ended December 31, 2017 and 2016. See
Note 19 — “Held for Sale and Discontinued Operations”
.
|
(2)
|
The Other Operations amounts shown relate to SSIE. White Mountains completed the sale of SSIE on March 7, 2017. See
Note 19 — “Held for Sale and Discontinued Operations”
.
|
SECTION 1.
|
Deposit of Assets into the Supplemental Trust Account
.
|
SECTION 2.
|
Withdrawal or Transfer of Assets from the Supplemental Trust Account
.
|
SECTION 3.
|
Redemption, Investment and Substitution of Assets
.
|
SECTION 4.
|
Trust Income
.
|
SECTION 5.
|
Right to Vote Assets
.
|
SECTION 6.
|
Additional Rights and Duties of the Trustee
.
|
SECTION 7.
|
The Trustee’s Compensation; Expenses.
|
SECTION 8.
|
Resignation or Removal of the Trustee
.
|
SECTION 9.
|
Termination of the Supplemental Trust Account
.
|
SECTION 10.
|
Definitions
.
|
SECTION 11.
|
Governing Law
.
|
SECTION 12.
|
Successors and Assigns
.
|
SECTION 13.
|
Severability
.
|
SECTION 14.
|
Entire Agreement
.
|
SECTION 15.
|
Amendments
.
|
SECTION 16.
|
Notices
.
|
SECTION 17.
|
Headings
.
|
SECTION 18.
|
Counterparts
.
|
SECTION 19.
|
No Third Party Beneficiaries
.
|
SECTION 20.
|
PATRIOT ACT; SANCTIONS
.
|
i.
|
All the Investable Assets of the Regulation 114 Trust; and
|
ii.
|
All the Investable Assets of the Supplemental Trust.
|
i.
|
To preserve claims paying resources;
|
ii.
|
To provide for sufficient liquidity to pay claims;
|
iii.
|
To generally avoid realized capital losses;
|
iv.
|
To ensure compliance with the limitations set forth in Section 1404 of the New York Insurance Law, the Regulation 114 Trust Agreement, the Supplemental Trust Agreement and these Guidelines; and
|
v.
|
Subject to the foregoing, to maximize risk adjusted returns.
|
i.
|
Cash and certificates of deposit issued by a U.S. bank;
|
ii.
|
Obligations issued or guaranteed by the U.S. Government or an agency thereof;
|
iii.
|
Obligations issued by a Government Sponsored Enterprise;
|
iv.
|
Obligations issued or guaranteed by U.S. states, U.S. municipalities and any agency or instrumentality thereof, limited to the following insurable sectors:
|
a.
|
General Obligation (States, Counties, Cities, School Districts, Special Districts, and Community College Districts)
|
b.
|
Special Tax Secured (Income, Ad Valorem, Sales, Excise, Public Service Tax, Income, Motor Vehicle Tax)
|
c.
|
Public Colleges and Universities
|
d.
|
Water, Sewer & Solid Waste Utility Revenue (without landfill or mass burn facilities)
|
e.
|
General Fund, Non Ad Valorem or Appropriation
|
f.
|
Electric and Gas Utility Revenue (retail and wholesale)
|
g.
|
Transportation Facilities with 3 or more years of operating history (Airports, Ports, Toll Roads and Bridges, Parking, Mass Transit)
|
h.
|
Municipal Pools (secured by loans from the categories listed above);
|
v.
|
Obligations issued by U.S. companies that are registered under the Securities Exchange Act of 1934 provided that such obligations are not issued by an institution that is the parent, a subsidiary or an affiliate of either the Grantor or the Beneficiary; and
|
vi.
|
Securities of any investment company registered under the Investment Company Act of 1940, if such company invests at least 90% of its assets in the eligible investments set forth above.
|
i.
|
At all times, Investable Assets with a term at purchase of 12 months or more shall have a Rating of A/A3 or higher;
|
ii.
|
At all times, Investable Assets with a term at purchase of less than 12 months must have a short term Rating of A1/P1 (MIG1-VMIG1 for tax-exempts);
|
iii.
|
At all times, the Regulation 114 Trust shall have an average Rating of at least AA-/Aa3 on a stand-alone basis without the benefit of insurance; and
|
iv.
|
At all times, the Supplemental Trust shall have an average Rating of at least AA-/Aa3 on a stand-alone basis without the benefit of insurance.
|
i.
|
The total investment in any one issuer’s securities having a Rating of AAA/Aaa shall not exceed 5% of the respective Portfolio;
|
ii.
|
The total investment in any one issuer’s securities having a Rating of AA/Aa shall not exceed 3% of the respective Portfolio;
|
iii.
|
The total investment in any one issuer’s securities having a Rating of A/A shall not exceed 2% of the respective Portfolio;
|
iv.
|
The total investment in obligations issued by entities in a single state shall be limited to:
|
a.
|
15% of the tax-exempt portion of the respective Portfolio for California, New York and Texas; and
|
b.
|
10% of the tax-exempt portion of the respective Portfolio for all other states;
|
v.
|
The total investment in obligations of companies within any one Industry shall not exceed 15% of the taxable portion of the respective Portfolio.
|
i.
|
A list of all Investable Assets in the Portfolio,
|
ii.
|
The market value on the last business day of such calendar quarter of each Investable Asset in the Portfolio, and
|
iii.
|
Certification that the Investable Assets in the Portfolio comply with these Guidelines.
|
|
|
Year Ended
|
||||||||||||||||||
|
|
2018
(1)
|
|
2017
|
|
2016
(2)
|
|
2015
|
|
2014
(3)
|
||||||||||
Consolidated pre-tax income (loss) from continuing operations before equity in earnings of affiliates, accounting changes and extraordinary items
|
|
$
|
(178.2
|
)
|
|
$
|
7.8
|
|
|
$
|
(147.3
|
)
|
|
$
|
129.2
|
|
|
$
|
(78.8
|
)
|
Interest expense on debt
|
|
9.5
|
|
|
2.3
|
|
|
3.0
|
|
|
1.6
|
|
|
1.2
|
|
|||||
Interest portion of rental expense
|
|
1.8
|
|
|
1.2
|
|
|
1.1
|
|
|
.7
|
|
|
.6
|
|
|||||
Earnings (loss)
|
|
$
|
(166.9
|
)
|
|
$
|
11.3
|
|
|
$
|
(143.2
|
)
|
|
$
|
131.5
|
|
|
$
|
(77.0
|
)
|
Interest expense on debt
|
|
$
|
9.5
|
|
|
$
|
2.3
|
|
|
$
|
3.0
|
|
|
$
|
1.6
|
|
|
$
|
1.2
|
|
Interest portion of rental expense
|
|
1.8
|
|
|
1.2
|
|
|
1.1
|
|
|
.7
|
|
|
.6
|
|
|||||
Fixed charges
|
|
$
|
11.3
|
|
|
$
|
3.5
|
|
|
$
|
4.1
|
|
|
$
|
2.3
|
|
|
$
|
1.8
|
|
Ratio of earnings to fixed charges
|
|
(14.8
|
)
|
|
3.2
|
|
|
(34.9
|
)
|
|
57.2
|
|
|
(42.8
|
)
|
FULL NAME OF SUBSIDIARY
|
PLACE OF INCORPORATION
|
WTM (BARBADOS) INTERNATIONAL SRL
|
BARBADOS
|
BRIDGE HOLDINGS (BERMUDA) LTD
|
BERMUDA
|
HG GLOBAL LTD
|
BERMUDA
|
HG HOLDINGS LTD
|
BERMUDA
|
HG RE LTD
|
BERMUDA
|
HG SERVICES LTD
|
BERMUDA
|
PSC HOLDINGS LTD.
|
BERMUDA
|
WHITE MOUNTAINS INVESTMENTS BERMUDA LTD.
|
BERMUDA
|
ATTORNEY'S & PROFESSIONAL INSURANCE SERVICES, INC.
|
CALIFORNIA, USA
|
NSM ADMINISTRATION, INC
|
CALIFORNIA, USA
|
AMERICAN COLLECTOR'S INSURANCE, LLC
|
DELAWARE, USA
|
GUILFORD HOLDINGS, INC.
|
DELAWARE, USA
|
NSM INSURANCE HOLDING CO, LLC
|
DELAWARE, USA
|
NSM INSURANCE GROUP, LLC
|
DELAWARE, USA
|
QL HOLDINGS LLC
|
DELAWARE, USA
|
QUOTELAB, LLC
|
DELAWARE, USA
|
WHITE MOUNTAINS ADVISORS LLC
|
DELAWARE, USA
|
WHITE MOUNTAINS CAPITAL, INC
|
DELAWARE, USA
|
WHITE MOUNTAINS CATSKILL HOLDINGS, INC
|
DELAWARE, USA
|
WM PORTFOLIO HOLDINGS, LLC
|
DELAWARE, USA
|
WHITE MOUNTAINS SERVICES LLC
|
DELAWARE, USA
|
WM PORTFOLIO SOLUTIONS ICAV
|
IRELAND
|
HGR PORTFOLIO SOLUTIONS ICAV
|
IRELAND
|
TNUVA FINANCIT LTD
|
ISRAEL
|
WOBI INSURANCE AGENCY, LTD
|
ISRAEL
|
WHITE MOUNTAINS HOLDINGS (LUXEMBOURG) S.A.R.L.
|
LUXEMBOURG
|
WHITE MOUNTAINS INVESTMENTS (LUXEMBOURG) S.A.R.L
|
LUXEMBOURG
|
CARE PROVIDERS INSURANCE SERVICES, LLC
|
TEXAS, USA
|
AUTOSAINT LIMITED
|
UNITED KINGDOM
|
CLASSIC INSURANCE SERVICES LIMITED
|
UNITED KINGDOM
|
FIRST INSURANCE SERVICES LIMITED
|
UNITED KINGDOM
|
FRESH INSURANCE SERVICES GROUP LIMITED
|
UNITED KINGDOM
|
LADYBIRD INSURANCE BROKER LIMITED
|
UNITED KINGDOM
|
MAYBURY JAMES LIMITED
|
UNITED KINGDOM
|
PETER D. JAMES LIMITED
|
UNITED KINGDOM
|
REMOVAL STARS LIMITED
|
UNITED KINGDOM
|
STEWART MILLER MCCULLOCH & CO. LIMITED
|
UNITED KINGDOM
|
STEWART MILLER MCCULLOCH (HOLDINGS) LIMITED
|
UNITED KINGDOM
|
VANTAGE HOLDINGS LIMITED
|
UNITED KINGDOM
|
VANTAGE INSURANCE SERVICES LIMITED
|
UNITED KINGDOM
|
|
/s/ Yves Brouillette
|
|
/s/ Reid T. Campbell
|
|
/s/ Mary C. Choksi
|
|
/s/ Morgan W. Davis
|
|
/s/ Philip A. Gelston
|
|
/s/ Edith E. Holiday
|
|
/s/ J. Brian Palmer
|
|
/s/ G. Manning Rountree
|
|
/s/ Lowndes A. Smith
|
|
/s/ David A. Tanner
|
(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.
|
/s/ G. Manning Rountree
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
February 27, 2019
|
|
/s/ Reid T. Campbell
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
February 27, 2019
|
|