Bermuda
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94-2708455
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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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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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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Page No.
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1
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2
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3
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4
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5
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45
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45
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61
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68
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70
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70
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70
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71
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71
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71
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71
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76
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(Millions, except share amounts)
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September 30,
2012 |
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December 31,
2011 |
||||
Assets
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Unaudited
|
|
|
|
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Fixed maturity investments, at fair value
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$
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4,912.4
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$
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6,221.9
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Short-term investments, at amortized cost (which approximates fair value)
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917.3
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846.0
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Common equity securities, at fair value
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1,004.8
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755.0
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Convertible fixed maturity investments, at fair value
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142.0
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143.8
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Other long-term investments
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307.1
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301.3
|
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Total investments
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7,283.6
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|
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8,268.0
|
|
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Cash (restricted: $341.7 and $453.5)
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549.2
|
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705.4
|
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Reinsurance recoverable on unpaid losses
|
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356.8
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2,507.3
|
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Reinsurance recoverable on paid losses
|
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14.8
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30.5
|
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Insurance and reinsurance premiums receivable
|
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678.1
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|
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489.2
|
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Funds held by ceding companies
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102.7
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106.5
|
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Investments in unconsolidated affiliates
|
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376.3
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275.3
|
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Deferred acquisition costs
|
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211.3
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187.0
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Deferred tax asset
|
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555.0
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536.9
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Ceded unearned insurance and reinsurance premiums
|
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113.6
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87.3
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Accrued investment income
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45.5
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51.4
|
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Accounts receivable on unsettled investment sales
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167.2
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4.7
|
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Other assets
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626.5
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681.9
|
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Assets held for sale
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2,388.2
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132.6
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Total assets
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$
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13,468.8
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$
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14,064.0
|
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Liabilities
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Loss and loss adjustment expense reserves
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$
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3,059.8
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$
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5,702.3
|
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Unearned insurance and reinsurance premiums
|
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1,067.1
|
|
|
846.9
|
|
||
Variable annuity benefit guarantee
|
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672.4
|
|
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768.5
|
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||
Debt
|
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676.6
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677.5
|
|
||
Deferred tax liability
|
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399.7
|
|
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365.5
|
|
||
Accrued incentive compensation
|
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144.7
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187.9
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Ceded reinsurance payable
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138.6
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134.6
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Funds held under reinsurance treaties
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33.8
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42.9
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|
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Accounts payable on unsettled investment purchases
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47.7
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34.6
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Other liabilities
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461.8
|
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527.8
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Liabilities held for sale
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2,388.2
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107.6
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Total liabilities
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9,090.4
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9,396.1
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|
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Equity
|
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White Mountains’ common shareholders’ equity
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White Mountains’ common shares at $1 par value per share - authorized 50,000,000 shares;
|
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|
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issued and outstanding 6,583,653 and 7,577,855 shares
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6.6
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|
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7.6
|
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Paid-in surplus
|
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1,095.6
|
|
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1,253.7
|
|
||
Retained earnings
|
|
2,577.4
|
|
|
2,789.7
|
|
||
Accumulated other comprehensive income, after tax:
|
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|
|
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|
|
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Equity in net unrealized gains from investments in unconsolidated affiliates
|
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59.3
|
|
|
—
|
|
||
Net unrealized foreign currency translation gains
|
|
80.8
|
|
|
46.1
|
|
||
Pension liability and other
|
|
(10.4
|
)
|
|
(9.4
|
)
|
||
Total White Mountains’ common shareholders’ equity
|
|
3,809.3
|
|
|
4,087.7
|
|
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Noncontrolling interests
|
|
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Noncontrolling interest - OneBeacon Ltd.
|
|
259.7
|
|
|
273.1
|
|
||
Noncontrolling interest - SIG Preference Shares
|
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250.0
|
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250.0
|
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Noncontrolling interest - HG Global
|
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16.6
|
|
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—
|
|
||
Noncontrolling interest - BAM
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(18.0
|
)
|
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—
|
|
||
Noncontrolling interest - other
|
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60.8
|
|
|
57.1
|
|
||
Total noncontrolling interests
|
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569.1
|
|
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580.2
|
|
||
Total equity
|
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4,378.4
|
|
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4,667.9
|
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Total liabilities and equity
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$
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13,468.8
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$
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14,064.0
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Three Months Ended
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Nine Months Ended
|
||||||||||||
|
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September 30,
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September 30,
|
||||||||||||
(Millions, except per share amounts)
|
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2012
|
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2011
|
|
2012
|
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2011
|
||||||||
Revenues:
|
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|
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|
||||||
Earned insurance and reinsurance premiums
|
|
$
|
536.8
|
|
|
$
|
491.1
|
|
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$
|
1,545.3
|
|
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$
|
1,433.5
|
|
Net investment income
|
|
37.6
|
|
|
42.8
|
|
|
119.8
|
|
|
138.1
|
|
||||
Net realized and unrealized investment gains
|
|
72.7
|
|
|
2.9
|
|
|
123.2
|
|
|
36.4
|
|
||||
Other revenue
|
|
50.3
|
|
|
(35.0
|
)
|
|
81.0
|
|
|
(28.3
|
)
|
||||
Total revenues
|
|
697.4
|
|
|
501.8
|
|
|
1,869.3
|
|
|
1,579.7
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses
|
|
308.1
|
|
|
280.2
|
|
|
821.7
|
|
|
920.4
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
107.6
|
|
|
107.0
|
|
|
326.2
|
|
|
296.6
|
|
||||
Other underwriting expenses
|
|
76.6
|
|
|
64.3
|
|
|
228.4
|
|
|
203.9
|
|
||||
General and administrative expenses
|
|
58.7
|
|
|
36.2
|
|
|
146.3
|
|
|
120.4
|
|
||||
Interest expense on debt
|
|
11.3
|
|
|
12.8
|
|
|
33.1
|
|
|
38.8
|
|
||||
Total expenses
|
|
562.3
|
|
|
500.5
|
|
|
1,555.7
|
|
|
1,580.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Pre-tax income (loss) from continuing operations
|
|
135.1
|
|
|
1.3
|
|
|
313.6
|
|
|
(.4
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax (expense) benefit
|
|
(47.8
|
)
|
|
.6
|
|
|
(85.3
|
)
|
|
(.8
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
|
|
87.3
|
|
|
1.9
|
|
|
228.3
|
|
|
(1.2
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Loss from sale of discontinued operations, net of tax
|
|
(91.0
|
)
|
|
(18.2
|
)
|
|
(91.0
|
)
|
|
(18.2
|
)
|
||||
Net loss from discontinued operations, net of tax
|
|
(15.8
|
)
|
|
(12.0
|
)
|
|
(24.5
|
)
|
|
(7.8
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
(Loss) income before equity in earnings of unconsolidated affiliates
|
|
(19.5
|
)
|
|
(28.3
|
)
|
|
112.8
|
|
|
(27.2
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Equity in earnings of unconsolidated affiliates, net of tax
|
|
7.7
|
|
|
1.5
|
|
|
24.4
|
|
|
16.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
|
(11.8
|
)
|
|
(26.8
|
)
|
|
137.2
|
|
|
(11.1
|
)
|
||||
Net (income) loss attributable to noncontrolling interests
|
|
30.9
|
|
|
11.0
|
|
|
2.0
|
|
|
(21.2
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to White Mountains’ common shareholders
|
|
19.1
|
|
|
(15.8
|
)
|
|
139.2
|
|
|
(32.3
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in equity in net unrealized gains from investments in
unconsolidated affiliates
|
|
32.3
|
|
|
55.1
|
|
|
59.3
|
|
|
77.2
|
|
||||
Change in foreign currency translation and other
|
|
39.6
|
|
|
(81.8
|
)
|
|
33.3
|
|
|
(25.3
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss)
|
|
91.0
|
|
|
(42.5
|
)
|
|
231.8
|
|
|
19.6
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
|
.4
|
|
|
—
|
|
|
.4
|
|
|
—
|
|
||||
Comprehensive income (loss) attributable to White Mountains’ common
shareholders
|
|
$
|
91.4
|
|
|
$
|
(42.5
|
)
|
|
$
|
232.2
|
|
|
$
|
19.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) per share attributable to White Mountains’ common shareholders
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic income (loss) per share
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
19.11
|
|
|
$
|
1.81
|
|
|
$
|
36.96
|
|
|
$
|
(.80
|
)
|
Discontinued operations
|
|
(16.21
|
)
|
|
(3.81
|
)
|
|
(16.77
|
)
|
|
(3.26
|
)
|
||||
Total consolidated operations
|
|
$
|
2.90
|
|
|
$
|
(2.00
|
)
|
|
$
|
20.19
|
|
|
$
|
(4.06
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per share
|
|
|
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
19.11
|
|
|
$
|
1.81
|
|
|
$
|
36.96
|
|
|
$
|
(.80
|
)
|
Discontinued operations
|
|
(16.21
|
)
|
|
(3.81
|
)
|
|
(16.77
|
)
|
|
(3.26
|
)
|
||||
Total consolidated operations
|
|
$
|
2.90
|
|
|
$
|
(2.00
|
)
|
|
$
|
20.19
|
|
|
$
|
(4.06
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per White Mountains’ common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
White Mountains’ Common Shareholders’ Equity
|
|
|
||||||||||||||||
(Millions)
|
|
Common shareholders' equity
|
|
Common shares and paid-in surplus
|
|
Retained earnings
|
|
Accum. other comprehensive income, after tax
|
|
Non-controlling interests
|
||||||||||
Balance at January 1, 2012
|
|
$
|
4,087.7
|
|
|
$
|
1,261.3
|
|
|
$
|
2,789.7
|
|
|
$
|
36.7
|
|
|
$
|
580.2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
139.2
|
|
|
—
|
|
|
139.2
|
|
|
—
|
|
|
(2.0
|
)
|
|||||
Other comprehensive income (loss), after tax
|
|
93.0
|
|
|
—
|
|
|
—
|
|
|
93.0
|
|
|
(.4
|
)
|
|||||
Dividends declared on common shares
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
—
|
|
|||||
Dividends to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.5
|
)
|
|||||
Repurchases and retirements of common shares
|
|
(517.5
|
)
|
|
(172.6
|
)
|
|
(344.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Issuances of common shares
|
|
5.8
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net contributions from noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|||||
Amortization of restricted share and option awards
|
|
9.9
|
|
|
9.9
|
|
|
—
|
|
|
—
|
|
|
.6
|
|
|||||
Allocation of fair value of net assets acquired to noncontrolling interests
|
|
(2.2
|
)
|
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at September 30, 2012
|
|
$
|
3,809.3
|
|
|
$
|
1,102.2
|
|
|
$
|
2,577.4
|
|
|
$
|
129.7
|
|
|
$
|
569.1
|
|
|
|
White Mountains’ Common Shareholders’ Equity
|
|
|
||||||||||||||||
(Millions)
|
|
Common shareholders' equity
|
|
Common shares and paid-in surplus
|
|
Retained earnings
|
|
Accum. other comprehensive income, after tax
|
|
Non-controlling interests
|
||||||||||
Balance at January 1, 2011
|
|
$
|
3,653.0
|
|
|
$
|
1,359.0
|
|
|
$
|
2,175.6
|
|
|
$
|
118.4
|
|
|
$
|
607.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
|
(32.3
|
)
|
|
—
|
|
|
(32.3
|
)
|
|
—
|
|
|
21.2
|
|
|||||
Other comprehensive income, after tax
|
|
52.0
|
|
|
—
|
|
|
—
|
|
|
52.0
|
|
|
—
|
|
|||||
Dividends declared on common shares
|
|
(8.0
|
)
|
|
—
|
|
|
(8.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Dividends to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.2
|
)
|
|||||
Repurchases and retirements of common shares
|
|
(229.8
|
)
|
|
(98.5
|
)
|
|
(131.3
|
)
|
|
—
|
|
|
—
|
|
|||||
Issuances of common shares
|
|
.9
|
|
|
.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.7
|
)
|
|||||
Amortization of restricted share and option awards
|
|
8.9
|
|
|
8.9
|
|
|
—
|
|
|
—
|
|
|
.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at September 30, 2011
|
|
$
|
3,444.7
|
|
|
$
|
1,270.3
|
|
|
$
|
2,004.0
|
|
|
$
|
170.4
|
|
|
$
|
574.4
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 30,
|
||||||
(Millions)
|
|
2012
|
|
2011
|
||||
Cash flows from operations:
|
|
|
|
|
|
|
||
Net income (loss)
|
|
$
|
137.2
|
|
|
$
|
(11.1
|
)
|
Charges (credits) to reconcile net income to net cash (used for) provided from operations:
|
|
|
|
|
|
|
||
Net realized and unrealized investment gains
|
|
(123.2
|
)
|
|
(36.4
|
)
|
||
Net loss from discontinued operations
|
|
24.5
|
|
|
7.8
|
|
||
Net loss on sale of discontinued operations
|
|
91.0
|
|
|
18.2
|
|
||
Undistributed equity in earnings from unconsolidated affiliates, net of tax
|
|
(24.4
|
)
|
|
(16.1
|
)
|
||
Deferred income tax expense (benefit)
|
|
50.4
|
|
|
(45.6
|
)
|
||
Other operating items:
|
|
|
|
|
|
|
||
Net change in loss and loss adjustment expense reserves
|
|
(241.6
|
)
|
|
46.3
|
|
||
Net change in reinsurance recoverable on paid and unpaid losses
|
|
98.1
|
|
|
102.9
|
|
||
Net change in unearned insurance and reinsurance premiums
|
|
206.6
|
|
|
190.8
|
|
||
Net change in funds held by ceding companies
|
|
5.3
|
|
|
(17.2
|
)
|
||
Net change in variable annuity benefit guarantee liabilities
|
|
(96.1
|
)
|
|
151.1
|
|
||
Net change in variable annuity benefit derivative instruments
|
|
48.3
|
|
|
(6.3
|
)
|
||
Net change in deferred acquisition costs
|
|
(21.9
|
)
|
|
(31.2
|
)
|
||
Net change in ceded unearned premiums
|
|
(22.1
|
)
|
|
(25.4
|
)
|
||
Net change in funds held under reinsurance treaties
|
|
1.9
|
|
|
(46.0
|
)
|
||
Net change in insurance and reinsurance premiums receivable
|
|
(206.9
|
)
|
|
(165.0
|
)
|
||
Net change in ceded reinsurance payable
|
|
31.5
|
|
|
44.2
|
|
||
Net change in other assets and liabilities, net
|
|
68.4
|
|
|
13.5
|
|
||
Net cash provided from operations - continuing operations
|
|
27.0
|
|
|
174.5
|
|
||
Net cash used for operations - discontinued operations
|
|
(155.6
|
)
|
|
(133.9
|
)
|
||
Net cash (used for) provided from operations
|
|
(128.6
|
)
|
|
40.6
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Net change in short-term investments
|
|
(127.3
|
)
|
|
112.6
|
|
||
Sales of fixed maturity and convertible fixed maturity investments
|
|
4,918.8
|
|
|
2,905.7
|
|
||
Maturities, calls and paydowns of fixed maturity and convertible fixed maturity investments
|
|
408.7
|
|
|
1,015.3
|
|
||
Sales of common equity securities
|
|
99.7
|
|
|
125.4
|
|
||
Distributions and redemptions of other long-term investments
|
|
20.9
|
|
|
90.0
|
|
||
Sale of unconsolidated affiliates (net of held in escrow)
|
|
9.8
|
|
|
—
|
|
||
Purchases of other long-term investments
|
|
(28.8
|
)
|
|
(30.6
|
)
|
||
Contributions to discontinued operations
|
|
(155.6
|
)
|
|
(248.5
|
)
|
||
Purchases of common equity securities
|
|
(284.2
|
)
|
|
(189.0
|
)
|
||
Purchases of fixed maturity and convertible fixed maturity investments
|
|
(4,239.0
|
)
|
|
(3,497.6
|
)
|
||
Net change in unsettled investment purchases and sales
|
|
(149.5
|
)
|
|
54.0
|
|
||
Net acquisitions of property and equipment
|
|
(1.5
|
)
|
|
(3.3
|
)
|
||
Net cash provided from investing activities - continuing operations
|
|
472.0
|
|
|
334.0
|
|
||
Net cash provided from investing activities - discontinued operations
|
|
155.6
|
|
|
325.1
|
|
||
Net cash provided from investing activities
|
|
627.6
|
|
|
659.1
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Repurchase of debt
|
|
—
|
|
|
(161.6
|
)
|
||
Cash dividends paid to the Company’s common shareholders
|
|
(6.6
|
)
|
|
(8.0
|
)
|
||
Cash dividends paid to OneBeacon Ltd.’s noncontrolling common shareholders
|
|
(14.9
|
)
|
|
(37.9
|
)
|
||
Cash dividends paid on SIG Preference Shares
|
|
(9.4
|
)
|
|
(9.4
|
)
|
||
Common shares repurchased
|
|
(517.5
|
)
|
|
(229.7
|
)
|
||
Proceeds from issuances of common shares
|
|
—
|
|
|
.9
|
|
||
Net cash used for financing activities - continuing operations
|
|
(548.4
|
)
|
|
(445.7
|
)
|
||
Net cash (used for) provided from financing activities - discontinued operations
|
|
—
|
|
|
—
|
|
||
Net cash used for financing activities
|
|
(548.4
|
)
|
|
(445.7
|
)
|
||
Effect of exchange rate changes on cash
|
|
3.0
|
|
|
(2.0
|
)
|
||
Net change in cash during the period
|
|
(46.4
|
)
|
|
252.0
|
|
||
Net change in cash from discontinued operations
|
|
—
|
|
|
(191.2
|
)
|
||
Cash reclassified from assets held for sale (net of cash sold of $3.5 and $0)
|
|
2.0
|
|
|
—
|
|
||
Cash balances at beginning of period (excludes restricted cash balances of $453.5 and $286.7 and AutoOne cash of $0 and $4.7)
|
|
251.9
|
|
|
103.6
|
|
||
Cash balances at end of period (excludes restricted cash balances of $341.7 and $393.3)
|
|
$
|
207.5
|
|
|
$
|
164.4
|
|
Supplemental cash flows information:
|
|
|
|
|
|
|
||
Interest paid
|
|
$
|
(21.4
|
)
|
|
$
|
(38.5
|
)
|
Net income tax payments to national governments
|
|
$
|
(6.5
|
)
|
|
$
|
(6.4
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Gross beginning balance
|
|
$
|
5,329.8
|
|
|
$
|
5,642.4
|
|
|
$
|
5,702.3
|
|
|
$
|
5,736.8
|
|
Less beginning reinsurance recoverable on unpaid losses
|
|
(2,369.4
|
)
|
|
(2,193.0
|
)
|
|
(2,507.3
|
)
|
|
(2,344.0
|
)
|
||||
Net loss and LAE reserves
|
|
2,960.4
|
|
|
3,449.4
|
|
|
3,195.0
|
|
|
3,392.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Less: Beginning net loss and LAE reserves for AutoOne and
OneBeacon's runoff business
(1)
|
|
(296.0
|
)
|
|
(503.2
|
)
|
|
(384.1
|
)
|
|
(620.6
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Loss and LAE incurred relating to:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current year losses
|
|
318.2
|
|
|
307.1
|
|
|
842.9
|
|
|
968.0
|
|
||||
Prior year losses
|
|
(10.1
|
)
|
|
(26.9
|
)
|
|
(21.2
|
)
|
|
(47.6
|
)
|
||||
Total incurred losses and LAE
|
|
308.1
|
|
|
280.2
|
|
|
821.7
|
|
|
920.4
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Accretion of fair value adjustment to loss and LAE reserves
|
|
1.1
|
|
|
2.1
|
|
|
9.4
|
|
|
6.2
|
|
||||
Foreign currency translation adjustment to loss and LAE reserves
|
|
12.0
|
|
|
(25.5
|
)
|
|
11.7
|
|
|
5.7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Loss and LAE paid relating to:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current year losses
|
|
(101.1
|
)
|
|
(109.7
|
)
|
|
(223.9
|
)
|
|
(226.3
|
)
|
||||
Prior year losses
|
|
(181.5
|
)
|
|
(186.9
|
)
|
|
(726.8
|
)
|
|
(571.8
|
)
|
||||
Total loss and LAE payments
|
|
(282.6
|
)
|
|
(296.6
|
)
|
|
(950.7
|
)
|
|
(798.1
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Plus: Ending net loss and LAE reserves for AutoOne and
OneBeacon's runoff business (1) |
|
—
|
|
|
394.4
|
|
|
—
|
|
|
394.4
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net ending balance
|
|
2,703.0
|
|
|
3,300.8
|
|
|
2,703.0
|
|
|
3,300.8
|
|
||||
Plus ending reinsurance recoverable on unpaid losses
|
|
356.8
|
|
|
2,581.2
|
|
|
356.8
|
|
|
2,581.2
|
|
||||
Gross ending balance
|
|
$
|
3,059.8
|
|
|
$
|
5,882.0
|
|
|
$
|
3,059.8
|
|
|
$
|
5,882.0
|
|
(1)
Loss and LAE reserve balances for OneBeacon's run-off business prior to September 30, 2012 and AutoOne prior to September 30, 2011 were not classified as held for sale. Adjustment is to present loss and LAE reserve activities from continuing operations.
|
Top Reinsurers (Millions)
|
|
Balance at September 30, 2012
|
|
% of Total
|
|
A.M. Best
Rating (1) |
|||
Hannover Ruckversich
|
|
$
|
6.4
|
|
|
15
|
%
|
|
A+
|
Hartford Steam Boiler
|
|
4.6
|
|
|
11
|
%
|
|
A++
|
|
Munich Reinsurance America
|
|
4.5
|
|
|
10
|
%
|
|
A+
|
|
Platinum Underwriters Re
|
|
4.1
|
|
|
9
|
%
|
|
A
|
|
Transatlantic Reinsurance
|
|
2.0
|
|
|
5
|
%
|
|
A
|
Top Reinsurers (Millions)
|
|
Balance at September 30, 2012
|
|
% of Total
|
|
A.M. Best
Rating (1) |
|
% Collateralized
|
||||
General Reinsurance Corporation
|
|
$
|
42.3
|
|
|
13
|
%
|
|
A++
|
|
1
|
%
|
Swiss Re Group
|
|
33.7
|
|
|
10
|
%
|
|
A+
|
|
5
|
%
|
|
Lloyds of London
(2)
|
|
29.9
|
|
|
9
|
%
|
|
A
|
|
4
|
%
|
|
Olympus
(3)
|
|
28.8
|
|
|
9
|
%
|
|
NR-5
|
|
100
|
%
|
|
Michigan Catastrophic Claims Association
(4)
|
|
14.6
|
|
|
4
|
%
|
|
N/A
|
|
—
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Investment income:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
$
|
33.0
|
|
|
$
|
38.5
|
|
|
$
|
105.1
|
|
|
$
|
127.0
|
|
Short-term investments
|
.5
|
|
|
.9
|
|
|
2.3
|
|
|
3.2
|
|
||||
Common equity securities
|
4.8
|
|
|
3.6
|
|
|
13.8
|
|
|
10.1
|
|
||||
Convertible fixed maturity investments
|
2.0
|
|
|
1.3
|
|
|
5.9
|
|
|
3.9
|
|
||||
Other long-term investments
|
.7
|
|
|
1.2
|
|
|
2.2
|
|
|
1.9
|
|
||||
Interest on funds held under reinsurance treaties
|
—
|
|
|
.2
|
|
|
—
|
|
|
(.6
|
)
|
||||
Total investment income
|
41.0
|
|
|
45.7
|
|
|
129.3
|
|
|
145.5
|
|
||||
Less third-party investment expenses
|
(3.4
|
)
|
|
(2.9
|
)
|
|
(9.5
|
)
|
|
(7.4
|
)
|
||||
Net investment income, pre-tax
|
$
|
37.6
|
|
|
$
|
42.8
|
|
|
$
|
119.8
|
|
|
$
|
138.1
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net realized investment gains, pre-tax
|
$
|
23.7
|
|
|
$
|
38.3
|
|
|
$
|
40.5
|
|
|
$
|
67.7
|
|
Net unrealized investment (losses) gains, pre-tax
|
49.0
|
|
|
(35.4
|
)
|
|
82.7
|
|
|
(31.3
|
)
|
||||
Net realized and unrealized investment gains, pre-tax
|
72.7
|
|
|
2.9
|
|
|
123.2
|
|
|
36.4
|
|
||||
Income tax expense attributable to net realized and unrealized
investment gains (losses)
|
(12.3
|
)
|
|
(1.4
|
)
|
|
(28.3
|
)
|
|
(12.7
|
)
|
||||
Net realized and unrealized investment gains, after tax
|
$
|
60.4
|
|
|
$
|
1.5
|
|
|
$
|
94.9
|
|
|
$
|
23.7
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Fixed maturity investments
|
$
|
29.0
|
|
|
$
|
14.1
|
|
|
$
|
69.5
|
|
|
$
|
3.3
|
|
Short-term investments
|
(3.4
|
)
|
|
.4
|
|
|
(3.9
|
)
|
|
(10.9
|
)
|
||||
Common equity securities
|
3.9
|
|
|
23.1
|
|
|
(2.2
|
)
|
|
41.0
|
|
||||
Convertible fixed maturity investments
|
1.1
|
|
|
(.7
|
)
|
|
3.2
|
|
|
6.3
|
|
||||
Other long-term investments
|
(7.2
|
)
|
|
1.4
|
|
|
(26.4
|
)
|
|
28.0
|
|
||||
Forward contracts
|
.3
|
|
|
—
|
|
|
.3
|
|
|
—
|
|
||||
Net realized investment gains, pre-tax
|
23.7
|
|
|
38.3
|
|
|
40.5
|
|
|
67.7
|
|
||||
Income tax expense attributable to net
realized investment gains
|
(7.4
|
)
|
|
(8.3
|
)
|
|
(12.8
|
)
|
|
(20.7
|
)
|
||||
Net realized investment gains, after tax
|
$
|
16.3
|
|
|
$
|
30.0
|
|
|
$
|
27.7
|
|
|
$
|
47.0
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
September 30, 2012
|
|
September 30, 2012
|
||||||||||||||||||||
Millions
|
Net
unrealized gains (losses) |
|
Net
foreign exchange gains (losses) |
|
Total
changes in fair value reflected in earnings |
|
Net
unrealized gains (losses) |
|
Net
foreign exchange gains (losses) |
|
Total
changes in fair value reflected in earnings |
||||||||||||
Fixed maturity investments
|
$
|
27.2
|
|
|
$
|
(40.6
|
)
|
|
$
|
(13.4
|
)
|
|
$
|
35.5
|
|
|
$
|
(36.9
|
)
|
|
$
|
(1.4
|
)
|
Short-term investments
|
—
|
|
|
.1
|
|
|
.1
|
|
|
—
|
|
|
.1
|
|
|
.1
|
|
||||||
Common equity securities
|
65.1
|
|
|
(.1
|
)
|
|
65.0
|
|
|
71.5
|
|
|
(.1
|
)
|
|
71.4
|
|
||||||
Convertible fixed maturity investments
|
(.6
|
)
|
|
—
|
|
|
(.6
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(2.9
|
)
|
||||||
Other long-term investments
|
1.6
|
|
|
(3.7
|
)
|
|
(2.1
|
)
|
|
18.2
|
|
|
(2.7
|
)
|
|
15.5
|
|
||||||
Net unrealized investment gains (losses), pre-tax
|
93.3
|
|
|
(44.3
|
)
|
|
49.0
|
|
|
122.3
|
|
|
(39.6
|
)
|
|
82.7
|
|
||||||
Income tax expense attributable to net
unrealized investment (losses) gains
|
(16.7
|
)
|
|
11.8
|
|
|
(4.9
|
)
|
|
(25.9
|
)
|
|
10.4
|
|
|
(15.5
|
)
|
||||||
Net unrealized investment gains (losses), after tax
|
$
|
76.6
|
|
|
$
|
(32.5
|
)
|
|
$
|
44.1
|
|
|
$
|
96.4
|
|
|
$
|
(29.2
|
)
|
|
$
|
67.2
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
September 30, 2011
|
|
September 30, 2011
|
||||||||||||||||||||
Millions
|
Net
unrealized gains (losses) |
|
Net
foreign exchange gains (losses) |
|
Total
changes in fair value reflected in earnings |
|
Net
unrealized gains (losses) |
|
Net
foreign exchange gains (losses) |
|
Total
changes in fair value reflected in earnings |
||||||||||||
Fixed maturity investments
|
$
|
3.5
|
|
|
$
|
67.5
|
|
|
$
|
71.0
|
|
|
$
|
12.6
|
|
|
$
|
77.7
|
|
|
$
|
90.3
|
|
Short-term investments
|
(.1
|
)
|
|
(.4
|
)
|
|
(.5
|
)
|
|
(.1
|
)
|
|
(1.4
|
)
|
|
(1.5
|
)
|
||||||
Common equity securities
|
(101.0
|
)
|
|
(.9
|
)
|
|
(101.9
|
)
|
|
(95.1
|
)
|
|
(1.8
|
)
|
|
(96.9
|
)
|
||||||
Convertible fixed maturity investments
|
(11.2
|
)
|
|
—
|
|
|
(11.2
|
)
|
|
(19.3
|
)
|
|
—
|
|
|
(19.3
|
)
|
||||||
Other long-term investments
|
(1.2
|
)
|
|
8.4
|
|
|
7.2
|
|
|
(8.4
|
)
|
|
4.5
|
|
|
(3.9
|
)
|
||||||
Net unrealized investment (losses) gains, pre-tax
|
(110.0
|
)
|
|
74.6
|
|
|
(35.4
|
)
|
|
(110.3
|
)
|
|
79.0
|
|
|
(31.3
|
)
|
||||||
Income tax benefit (expense) attributable to net unrealized investment gains (losses)
|
26.4
|
|
|
(19.5
|
)
|
|
6.9
|
|
|
28.5
|
|
|
(20.5
|
)
|
|
8.0
|
|
||||||
Net unrealized investment (losses) gains, after tax
|
$
|
(83.6
|
)
|
|
$
|
55.1
|
|
|
$
|
(28.5
|
)
|
|
$
|
(81.8
|
)
|
|
$
|
58.5
|
|
|
$
|
(23.3
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Fixed maturity investments
|
$
|
(1.0
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
7.3
|
|
|
$
|
(14.9
|
)
|
Common equity securities
|
.8
|
|
|
(17.5
|
)
|
|
1.8
|
|
|
(17.0
|
)
|
||||
Convertible fixed maturities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other long-term investments
|
2.9
|
|
|
(3.2
|
)
|
|
11.3
|
|
|
(6.5
|
)
|
||||
Total unrealized investment losses, pre-tax - Level 3 investments
|
$
|
2.7
|
|
|
$
|
(34.2
|
)
|
|
$
|
20.4
|
|
|
$
|
(38.4
|
)
|
|
|
September 30, 2012
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
gains (losses)
|
|
Carrying
value
|
||||||||||
U.S. Government and agency obligations
|
|
$
|
393.7
|
|
|
$
|
1.2
|
|
|
$
|
(.1
|
)
|
|
$
|
(.1
|
)
|
|
$
|
394.7
|
|
Debt securities issued by corporations
|
|
2,213.8
|
|
|
91.6
|
|
|
(3.0
|
)
|
|
(21.1
|
)
|
|
2,281.3
|
|
|||||
Municipal obligations
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|||||
Mortgage-backed and asset-backed securities
|
|
2,023.3
|
|
|
30.3
|
|
|
(1.1
|
)
|
|
(5.1
|
)
|
|
2,047.4
|
|
|||||
Foreign government, agency and provincial obligations
|
|
475.2
|
|
|
8.0
|
|
|
(.4
|
)
|
|
(6.4
|
)
|
|
476.4
|
|
|||||
Preferred stocks
|
|
79.8
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
86.1
|
|
|||||
Total fixed maturity investments including assets
held for sale
|
|
$
|
5,189.6
|
|
|
$
|
137.4
|
|
|
$
|
(4.6
|
)
|
|
$
|
(32.7
|
)
|
|
$
|
5,289.7
|
|
Fixed maturity investments reclassified to assets
held for sale related the Runoff Transaction
|
|
|
|
|
|
|
|
|
|
(377.3
|
)
|
|||||||||
Total fixed maturity investments
|
|
|
|
|
|
|
|
|
|
$
|
4,912.4
|
|
|
|
December 31, 2011
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
gains (losses)
|
|
Carrying
value
|
||||||||||
U.S. Government and agency obligations
|
|
$
|
299.4
|
|
|
$
|
5.3
|
|
|
$
|
(.1
|
)
|
|
$
|
.4
|
|
|
$
|
305.0
|
|
Debt securities issued by corporations
|
|
2,072.1
|
|
|
73.7
|
|
|
(7.8
|
)
|
|
(2.9
|
)
|
|
2,135.1
|
|
|||||
Municipal obligations
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|||||
Mortgage-backed and asset-backed securities
|
|
3,190.5
|
|
|
25.9
|
|
|
(3.9
|
)
|
|
10.4
|
|
|
3,222.9
|
|
|||||
Foreign government, agency and provincial obligations
|
|
581.2
|
|
|
11.0
|
|
|
(.1
|
)
|
|
(2.9
|
)
|
|
589.2
|
|
|||||
Preferred stocks
|
|
82.3
|
|
|
3.2
|
|
|
(6.7
|
)
|
|
—
|
|
|
78.8
|
|
|||||
Total fixed maturity investments including assets
held for sale
|
|
$
|
6,228.2
|
|
|
$
|
119.1
|
|
|
$
|
(18.6
|
)
|
|
$
|
5.0
|
|
|
$
|
6,333.7
|
|
Fixed maturity investments reclassified to assets
held for sale related to AutoOne
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(111.8
|
)
|
|||||
Total fixed maturity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,221.9
|
|
|
|
September 30, 2012
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
losses
|
|
Carrying
value
|
||||||||||
Common equity securities
|
|
$
|
870.0
|
|
|
$
|
139.7
|
|
|
$
|
(4.9
|
)
|
|
$
|
—
|
|
|
$
|
1,004.8
|
|
Convertible fixed maturity investments
|
|
$
|
140.2
|
|
|
$
|
7.6
|
|
|
$
|
(5.8
|
)
|
|
$
|
—
|
|
|
$
|
142.0
|
|
Other long-term investments
|
|
$
|
264.8
|
|
|
$
|
57.1
|
|
|
$
|
(8.6
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
307.1
|
|
|
|
December 31, 2011
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
losses
|
|
Carrying
value
|
||||||||||
Common equity securities
|
|
$
|
691.7
|
|
|
$
|
72.0
|
|
|
$
|
(8.7
|
)
|
|
$
|
—
|
|
|
$
|
755.0
|
|
Convertible fixed maturity investments
|
|
$
|
139.2
|
|
|
$
|
6.2
|
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
143.8
|
|
Other long-term investments
|
|
$
|
274.4
|
|
|
$
|
55.5
|
|
|
$
|
(25.2
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
301.3
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||||||||||
Millions
|
Fair Value
|
|
Unfunded
Commitments
|
|
Fair Value
|
|
Unfunded
Commitments
|
||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long/short equity
|
$
|
58.6
|
|
|
$
|
—
|
|
|
$
|
48.8
|
|
|
$
|
—
|
|
Long/short credit & distressed
|
33.8
|
|
|
—
|
|
|
32.3
|
|
|
—
|
|
||||
Long diversified strategies
|
2.3
|
|
|
—
|
|
|
16.9
|
|
|
—
|
|
||||
Long/short equity REIT
|
15.2
|
|
|
—
|
|
|
14.5
|
|
|
—
|
|
||||
Long/short equity activist
|
14.0
|
|
|
—
|
|
|
12.3
|
|
|
—
|
|
||||
Long bank loan
|
.4
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
||||
Total hedge funds
|
124.3
|
|
|
—
|
|
|
125.3
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
|
||||
Multi-sector
|
29.3
|
|
|
6.4
|
|
|
26.9
|
|
|
8.2
|
|
||||
Energy infrastructure & services
|
32.9
|
|
|
11.7
|
|
|
28.0
|
|
|
9.9
|
|
||||
Distressed residential real estate
|
19.2
|
|
|
—
|
|
|
27.4
|
|
|
—
|
|
||||
Real estate
|
12.2
|
|
|
3.3
|
|
|
9.5
|
|
|
3.3
|
|
||||
Private equity secondaries
|
11.0
|
|
|
3.2
|
|
|
11.3
|
|
|
4.0
|
|
||||
International multi-sector, Europe
|
4.3
|
|
|
4.9
|
|
|
7.8
|
|
|
4.7
|
|
||||
Manufacturing/Industrial
|
10.6
|
|
|
29.1
|
|
|
6.2
|
|
|
—
|
|
||||
Healthcare
|
4.3
|
|
|
5.4
|
|
|
2.3
|
|
|
7.0
|
|
||||
International multi-sector, Asia
|
.4
|
|
|
2.7
|
|
|
3.6
|
|
|
2.6
|
|
||||
Insurance
|
3.2
|
|
|
41.3
|
|
|
3.5
|
|
|
41.3
|
|
||||
Venture capital
|
2.4
|
|
|
.5
|
|
|
2.4
|
|
|
.5
|
|
||||
Total private equity funds
|
129.8
|
|
|
108.5
|
|
|
128.9
|
|
|
81.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total hedge and private equity funds included in
other long-term investments
|
$
|
254.1
|
|
|
$
|
108.5
|
|
|
$
|
254.2
|
|
|
$
|
81.5
|
|
|
Notice Period
|
||||||||||||||||||
Millions
Redemption frequency
|
30-59 days
notice
|
|
60-89 days
notice
|
|
90-119 days
notice
|
|
120+ days
notice
|
|
Total
|
||||||||||
Monthly
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.8
|
|
|
$
|
6.8
|
|
Quarterly
|
27.1
|
|
|
29.3
|
|
|
19.9
|
|
|
9.4
|
|
|
85.7
|
|
|||||
Semi-annual
|
—
|
|
|
20.6
|
|
|
—
|
|
|
—
|
|
|
20.6
|
|
|||||
Annual
|
2.3
|
|
|
—
|
|
|
8.5
|
|
|
.4
|
|
|
11.2
|
|
|||||
Total
|
$
|
29.4
|
|
|
$
|
49.9
|
|
|
$
|
28.4
|
|
|
$
|
16.6
|
|
|
$
|
124.3
|
|
Millions
|
1-3 years
|
3 – 5 years
|
5 – 10 years
|
>10 years
|
Total
|
Private Equity Funds —
expected lock-up period remaining
|
$27.7
|
$15.6
|
$75.9
|
$10.6
|
$129.8
|
|
September 30, 2012
|
||||||||||||||
Millions
|
Fair value
|
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
US Government and agency obligations
|
$
|
394.7
|
|
|
$
|
340.5
|
|
|
$
|
54.2
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|||||||
Consumer
|
597.2
|
|
|
—
|
|
|
597.2
|
|
|
—
|
|
||||
Industrial
|
488.1
|
|
|
—
|
|
|
488.1
|
|
|
—
|
|
||||
Financials
|
405.4
|
|
|
1.1
|
|
|
404.3
|
|
|
—
|
|
||||
Communications
|
217.1
|
|
|
—
|
|
|
217.1
|
|
|
—
|
|
||||
Basic materials
|
175.1
|
|
|
—
|
|
|
175.1
|
|
|
—
|
|
||||
Energy
|
172.9
|
|
|
—
|
|
|
172.9
|
|
|
—
|
|
||||
Utilities
|
204.4
|
|
|
—
|
|
|
204.4
|
|
|
—
|
|
||||
Technology
|
21.1
|
|
|
—
|
|
|
21.1
|
|
|
—
|
|
||||
Diversified
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total debt securities issued by corporations:
|
2,281.3
|
|
|
1.1
|
|
|
2,280.2
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Municipal obligations
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
||||
Mortgage-backed and asset-backed securities
|
2,047.4
|
|
|
—
|
|
|
2,041.9
|
|
|
5.5
|
|
||||
Foreign government, agency and provincial
obligations
|
476.4
|
|
|
56.9
|
|
|
419.5
|
|
|
—
|
|
||||
Preferred stocks
|
86.1
|
|
|
—
|
|
|
15.5
|
|
|
70.6
|
|
||||
Total fixed maturity investments
(1)
|
5,289.7
|
|
|
398.5
|
|
|
4,815.1
|
|
|
76.1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
917.3
|
|
|
917.3
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financials
|
316.1
|
|
|
277.9
|
|
|
2.3
|
|
|
35.9
|
|
||||
Consumer
|
249.7
|
|
|
249.6
|
|
|
.1
|
|
|
—
|
|
||||
Basic materials
|
118.2
|
|
|
118.2
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
96.8
|
|
|
96.8
|
|
|
—
|
|
|
—
|
|
||||
Technology
|
51.6
|
|
|
51.6
|
|
|
—
|
|
|
—
|
|
||||
Utilities
|
42.9
|
|
|
42.7
|
|
|
.2
|
|
|
—
|
|
||||
Other
|
129.5
|
|
|
73.2
|
|
|
56.3
|
|
|
—
|
|
||||
Total common equity securities
|
1,004.8
|
|
|
910.0
|
|
|
58.9
|
|
|
35.9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Convertible fixed maturity investments
|
142.0
|
|
|
—
|
|
|
142.0
|
|
|
—
|
|
||||
Other long-term investments
(2)
|
272.6
|
|
|
—
|
|
|
—
|
|
|
272.6
|
|
||||
Total investments
|
$
|
7,626.4
|
|
|
$
|
2,225.8
|
|
|
$
|
5,016.0
|
|
|
$
|
384.6
|
|
|
December 31, 2011
|
||||||||||||||
Millions
|
Fair value
|
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
US Government and agency obligations
|
$
|
305.0
|
|
|
$
|
296.2
|
|
|
$
|
8.8
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer
|
790.7
|
|
|
—
|
|
|
790.7
|
|
|
—
|
|
||||
Industrial
|
359.4
|
|
|
—
|
|
|
359.4
|
|
|
—
|
|
||||
Financials
|
239.6
|
|
|
3.8
|
|
|
235.8
|
|
|
—
|
|
||||
Communications
|
225.8
|
|
|
—
|
|
|
225.8
|
|
|
—
|
|
||||
Basic materials
|
195.7
|
|
|
—
|
|
|
195.7
|
|
|
—
|
|
||||
Energy
|
155.8
|
|
|
—
|
|
|
155.8
|
|
|
—
|
|
||||
Utilities
|
140.1
|
|
|
—
|
|
|
140.1
|
|
|
—
|
|
||||
Technology
|
24.5
|
|
|
—
|
|
|
24.5
|
|
|
—
|
|
||||
Diversified
|
3.5
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
||||
Total debt securities issued by corporations:
|
2,135.1
|
|
|
3.8
|
|
|
2,131.3
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Municipal obligations
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
Mortgage-backed and asset-backed securities
|
3,222.9
|
|
|
—
|
|
|
3,207.8
|
|
|
15.1
|
|
||||
Foreign government, agency and provincial
obligations
|
589.2
|
|
|
65.7
|
|
|
523.5
|
|
|
—
|
|
||||
Preferred stocks
|
78.8
|
|
|
—
|
|
|
15.0
|
|
|
63.8
|
|
||||
Total fixed maturity investments
(1)
|
6,333.7
|
|
|
365.7
|
|
|
5,889.1
|
|
|
78.9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
846.0
|
|
|
846.0
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financials
|
219.2
|
|
|
185.8
|
|
|
1.5
|
|
|
31.9
|
|
||||
Consumer
|
188.8
|
|
|
188.5
|
|
|
.3
|
|
|
—
|
|
||||
Basic materials
|
121.0
|
|
|
119.9
|
|
|
1.1
|
|
|
—
|
|
||||
Energy
|
72.6
|
|
|
72.6
|
|
|
—
|
|
|
—
|
|
||||
Utilities
|
42.0
|
|
|
41.8
|
|
|
.2
|
|
|
—
|
|
||||
Technology
|
25.8
|
|
|
25.8
|
|
|
—
|
|
|
—
|
|
||||
Other
|
85.6
|
|
|
33.0
|
|
|
52.2
|
|
|
.4
|
|
||||
Total common equity securities
|
755.0
|
|
|
667.4
|
|
|
55.3
|
|
|
32.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Convertible fixed maturity investments
|
143.8
|
|
|
—
|
|
|
143.8
|
|
|
—
|
|
||||
Other long-term investments
(2)
|
268.3
|
|
|
—
|
|
|
—
|
|
|
268.3
|
|
||||
Total investments
|
$
|
8,346.8
|
|
|
$
|
1,879.1
|
|
|
$
|
6,088.2
|
|
|
$
|
379.5
|
|
Millions
|
September 30, 2012
|
|
December 31, 2011
|
||||
AAA
|
$
|
—
|
|
|
$
|
—
|
|
AA
|
165.5
|
|
|
206.8
|
|
||
A
|
992.8
|
|
|
802.8
|
|
||
BBB
|
1,108.5
|
|
|
1,110.8
|
|
||
BB
|
7.6
|
|
|
6.2
|
|
||
Other
|
6.9
|
|
|
8.5
|
|
||
Debt securities issued by corporations
(1)
|
$
|
2,281.3
|
|
|
$
|
2,135.1
|
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||||||||||||||||||
Millions
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
GNMA
|
|
$
|
1,165.5
|
|
|
$
|
1,165.5
|
|
|
$
|
—
|
|
|
$
|
1,365.8
|
|
|
$
|
1,365.8
|
|
|
$
|
—
|
|
FNMA
|
|
97.2
|
|
|
97.2
|
|
|
—
|
|
|
712.6
|
|
|
712.6
|
|
|
—
|
|
||||||
FHLMC
|
|
37.6
|
|
|
37.6
|
|
|
—
|
|
|
35.9
|
|
|
35.9
|
|
|
—
|
|
||||||
Total Agency
(1)
|
|
1,300.3
|
|
|
1,300.3
|
|
|
—
|
|
|
2,114.3
|
|
|
2,114.3
|
|
|
—
|
|
||||||
Non-agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential
|
|
160.5
|
|
|
160.5
|
|
|
—
|
|
|
83.1
|
|
|
68.0
|
|
|
15.1
|
|
||||||
Commercial
|
|
389.3
|
|
|
383.8
|
|
|
5.5
|
|
|
276.7
|
|
|
276.7
|
|
|
—
|
|
||||||
Total Non-agency
|
|
549.8
|
|
|
544.3
|
|
|
5.5
|
|
|
359.8
|
|
|
344.7
|
|
|
15.1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total mortgage-backed securities
|
|
1,850.1
|
|
|
1,844.6
|
|
|
5.5
|
|
|
2,474.1
|
|
|
2,459.0
|
|
|
15.1
|
|
||||||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit card receivables
|
|
80.8
|
|
|
80.8
|
|
|
—
|
|
|
380.6
|
|
|
380.6
|
|
|
—
|
|
||||||
Vehicle receivables
|
|
80.3
|
|
|
80.3
|
|
|
—
|
|
|
345.6
|
|
|
345.6
|
|
|
—
|
|
||||||
Other
|
|
36.2
|
|
|
36.2
|
|
|
—
|
|
|
22.6
|
|
|
22.6
|
|
|
—
|
|
||||||
Total other asset-backed
securities
|
|
197.3
|
|
|
197.3
|
|
|
—
|
|
|
748.8
|
|
|
748.8
|
|
|
—
|
|
||||||
Total mortgage and asset-
backed securities
|
|
$
|
2,047.4
|
|
|
$
|
2,041.9
|
|
|
$
|
5.5
|
|
|
$
|
3,222.9
|
|
|
$
|
3,207.8
|
|
|
$
|
15.1
|
|
|
|
Security Issuance Year
|
||||||||||||||||||||||
Millions
|
Fair Value
|
2003
|
2006
|
2007
|
2009
|
2010
|
2011
|
2012
|
||||||||||||||||
Non-agency RMBS
|
$
|
160.5
|
|
$
|
2.2
|
|
$
|
21.4
|
|
$
|
7.1
|
|
$
|
1.7
|
|
$
|
53.2
|
|
$
|
74.9
|
|
$
|
—
|
|
Non-agency CMBS
|
389.3
|
|
—
|
|
4.5
|
|
15.3
|
|
11.9
|
|
6.1
|
|
127.4
|
|
224.1
|
|
||||||||
Total
|
$
|
549.8
|
|
$
|
2.2
|
|
$
|
25.9
|
|
$
|
22.4
|
|
$
|
13.6
|
|
$
|
59.3
|
|
$
|
202.3
|
|
$
|
224.1
|
|
Millions
|
Fair Value
|
|
Super Senior
(1)
|
|
Senior
(2)
|
|
Subordinate
(3)
|
||||||||
Prime
|
$
|
160.0
|
|
|
$
|
13.0
|
|
|
$
|
147.0
|
|
|
$
|
—
|
|
Non-prime
|
.5
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
||||
Sub-prime
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
160.5
|
|
|
$
|
13.0
|
|
|
$
|
147.5
|
|
|
$
|
—
|
|
Millions
|
Fair Value
|
|
Super Senior
(1)
|
|
Senior
(2)
|
|
Subordinate
(3)
|
||||||||
Fixed rate CMBS
|
$
|
367.1
|
|
|
$
|
253.0
|
|
|
$
|
109.6
|
|
|
$
|
4.5
|
|
Floating rate CMBS
|
22.2
|
|
|
15.3
|
|
|
1.4
|
|
|
5.5
|
|
||||
Total
|
$
|
389.3
|
|
|
$
|
268.3
|
|
|
$
|
111.0
|
|
|
$
|
10.0
|
|
|
|
|
Level 3 Investments
|
|
|
|
|||||||||||||||||
Millions
|
Level 1
Investments
|
Level 2
Investments
|
Fixed
Maturities
|
Common
equity
securities
|
Convertible
fixed
maturities
|
Other long-term
investments
|
|
Total
|
|
||||||||||||||
Balance at January 1, 2012
|
$
|
1,879.1
|
|
$
|
6,088.2
|
|
$
|
78.9
|
|
$
|
32.3
|
|
$
|
—
|
|
$
|
268.3
|
|
|
$
|
8,346.8
|
|
(1)(2)
|
Total realized and unrealized
gains (losses)
|
57.8
|
|
53.8
|
|
8.4
|
|
11.4
|
|
—
|
|
(8.2
|
)
|
|
123.2
|
|
|
|||||||
Foreign currency gains
(losses) through OCI
|
13.2
|
|
75.5
|
|
.7
|
|
.1
|
|
—
|
|
3.1
|
|
|
92.6
|
|
|
|||||||
Amortization/Accretion
|
(.7
|
)
|
(34.0
|
)
|
(.7
|
)
|
—
|
|
—
|
|
—
|
|
|
(35.4
|
)
|
|
|||||||
Purchases
|
6,712.0
|
|
3,823.7
|
|
144.3
|
|
2.5
|
|
—
|
|
40.6
|
|
|
10,723.1
|
|
|
|||||||
Sales
|
(6,435.6
|
)
|
(5,048.1
|
)
|
(99.2
|
)
|
(9.8
|
)
|
—
|
|
(31.2
|
)
|
|
(11,623.9
|
)
|
|
|||||||
Transfers in
|
—
|
|
56.9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
56.9
|
|
|
|||||||
Transfers out
|
—
|
|
—
|
|
(56.3
|
)
|
(.6
|
)
|
—
|
|
—
|
|
|
(56.9
|
)
|
|
|||||||
Balance at September 30, 2012
|
$
|
2,225.8
|
|
$
|
5,016.0
|
|
$
|
76.1
|
|
$
|
35.9
|
|
$
|
—
|
|
$
|
272.6
|
|
|
$
|
7,626.4
|
|
(1)(2)
|
|
|
|
Level 3 Investments
|
|
||||||||||||||||||||
Millions
|
Level 1
Investments
|
Level 2
Investments
|
Fixed
Maturities
|
Common
equity
securities
|
Convertible
fixed
maturities
|
Other long-term
investments
|
|
|
Total
|
|
||||||||||||||
Balance at January 1, 2011
|
$
|
1,894.4
|
|
$
|
5,477.4
|
|
$
|
128.4
|
|
$
|
71.2
|
|
$
|
—
|
|
$
|
330.2
|
|
(1)
|
|
$
|
7,901.6
|
|
(1)
|
Total realized and unrealized
gains (losses)
|
(50.5
|
)
|
115.9
|
|
(10.6
|
)
|
(4.9
|
)
|
—
|
|
22.5
|
|
|
|
72.4
|
|
|
|||||||
Foreign currency gains (losses)
through OCI
|
.3
|
|
(84.4
|
)
|
(4.4
|
)
|
1.6
|
|
—
|
|
(5.0
|
)
|
|
|
(91.9
|
)
|
|
|||||||
Amortization/Accretion
|
2.4
|
|
(40.7
|
)
|
(.1
|
)
|
—
|
|
—
|
|
—
|
|
|
|
(38.4
|
)
|
|
|||||||
Purchases
|
6,690.7
|
|
3,987.4
|
|
212.8
|
|
19.7
|
|
—
|
|
27.9
|
|
|
|
10,938.5
|
|
|
|||||||
Sales
|
(6,782.1
|
)
|
(4,596.9
|
)
|
1.6
|
|
(55.5
|
)
|
—
|
|
(83.4
|
)
|
|
|
(11,516.3
|
)
|
|
|||||||
Transfers in
|
—
|
|
111.8
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
|
|
112.8
|
|
|
|||||||
Transfers out
|
—
|
|
(1.0
|
)
|
(111.8
|
)
|
—
|
|
—
|
|
—
|
|
|
|
(112.8
|
)
|
|
|||||||
Balance at September 30, 2011
|
$
|
1,755.2
|
|
$
|
4,969.5
|
|
$
|
216.9
|
|
$
|
32.1
|
|
$
|
—
|
|
$
|
292.2
|
|
(1)
|
|
$
|
7,265.9
|
|
(1)
|
($ in Millions)
|
September 30, 2012
|
|
|||||
Description
|
Fair Value
|
Rating
(1)
|
Valuation Technique(s)
|
Unobservable Input
|
Range
(1)
|
|
|
Non-agency commercial mortgage-backed securities
|
$5.5
|
A2
|
Discounted cash flow
|
Prepayment Rate
|
0.0
|
%
|
CPY
(2)
|
|
|
|
|
Discount Margin over LIBOR
|
2.1
|
%
|
|
Preferred Stock
|
$70.6
|
NR
|
Discounted cash flow
|
Discount yield
|
8.0
|
%
|
|
Millions
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
OBH Senior Notes, at face value
|
|
$
|
269.9
|
|
|
$
|
269.9
|
|
Unamortized original issue discount
|
|
(.1
|
)
|
|
(.1
|
)
|
||
OBH Senior Notes, carrying value
|
|
269.8
|
|
|
269.8
|
|
||
SIG Senior Notes, at face value
|
|
400.0
|
|
|
400.0
|
|
||
Unamortized original issue discount
|
|
(.6
|
)
|
|
(.7
|
)
|
||
SIG Senior Notes, carrying value
|
|
399.4
|
|
|
399.3
|
|
||
WTM Bank Facility
|
|
—
|
|
|
—
|
|
||
Old Lyme
|
|
2.1
|
|
|
2.1
|
|
||
Other debt
(1)
|
|
5.3
|
|
|
6.3
|
|
||
Total debt
|
|
$
|
676.6
|
|
|
$
|
677.5
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Fees, included in other revenues
|
|
$
|
8.1
|
|
|
$
|
8.4
|
|
|
$
|
24.1
|
|
|
$
|
24.3
|
|
Change in fair value of variable annuity liability, included in
other revenues
|
|
(11.3
|
)
|
|
(164.4
|
)
|
|
89.4
|
|
|
(148.0
|
)
|
||||
Change in fair value of derivatives, included in other revenues
|
|
(11.0
|
)
|
|
148.9
|
|
|
(122.0
|
)
|
|
105.4
|
|
||||
Foreign exchange, included in other revenues
|
|
9.0
|
|
|
14.8
|
|
|
(6.4
|
)
|
|
17.1
|
|
||||
Other investment income and gains (losses)
|
|
3.8
|
|
|
.5
|
|
|
2.9
|
|
|
(.1
|
)
|
||||
Total revenues
|
|
(1.4
|
)
|
|
8.2
|
|
|
(12.0
|
)
|
|
(1.3
|
)
|
||||
Change in fair value of variable annuity death benefit liabilities,
included in other expenses
|
|
.7
|
|
|
(5.6
|
)
|
|
6.7
|
|
|
(3.1
|
)
|
||||
Death benefit claims paid, included in other expenses
|
|
(1.5
|
)
|
|
(.7
|
)
|
|
(4.9
|
)
|
|
(2.4
|
)
|
||||
General and administrative expenses
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|
(3.8
|
)
|
|
(3.2
|
)
|
||||
Pre-tax (loss) income
|
|
$
|
(3.3
|
)
|
|
$
|
.8
|
|
|
$
|
(14.0
|
)
|
|
$
|
(10.0
|
)
|
|
|
Three Months Ended September 30, 2012
|
||||||||||||||||||
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Beginning of period
|
|
$
|
(661.8
|
)
|
|
$
|
213.0
|
|
|
$
|
61.0
|
|
|
$
|
(23.7
|
)
|
|
$
|
250.3
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Realized and unrealized (losses) gains
|
|
(10.6
|
)
|
|
6.7
|
|
|
(15.3
|
)
|
|
(2.4
|
)
|
|
(11.0
|
)
|
|||||
Transfers in
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(6.7
|
)
|
|
(12.5
|
)
|
|
22.0
|
|
|
2.8
|
|
|||||
End of period
|
|
$
|
(672.4
|
)
|
|
$
|
213.0
|
|
|
$
|
33.2
|
|
|
$
|
(4.1
|
)
|
|
$
|
242.1
|
|
|
|
Nine Months Ended September 30, 2012
|
||||||||||||||||||
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Beginning of period
|
|
$
|
(768.5
|
)
|
|
$
|
247.1
|
|
|
$
|
39.2
|
|
|
$
|
4.1
|
|
|
$
|
290.4
|
|
Purchases
|
|
—
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|||||
Realized and unrealized gains (losses)
|
|
96.1
|
|
|
(24.1
|
)
|
|
(71.8
|
)
|
|
(26.1
|
)
|
|
(122.0
|
)
|
|||||
Transfers in
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(16.1
|
)
|
|
65.8
|
|
|
17.9
|
|
|
67.6
|
|
|||||
End of period
|
|
$
|
(672.4
|
)
|
|
$
|
213.0
|
|
|
$
|
33.2
|
|
|
$
|
(4.1
|
)
|
|
$
|
242.1
|
|
|
|
Three Months Ended September 30, 2011
|
||||||||||||||||||
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Beginning of period
|
|
$
|
(591.3
|
)
|
|
$
|
232.7
|
|
|
$
|
48.2
|
|
|
$
|
(11.9
|
)
|
|
$
|
269.0
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Realized and unrealized (losses) gains
|
|
(170.0
|
)
|
|
45.6
|
|
|
75.7
|
|
|
27.6
|
|
|
148.9
|
|
|||||
Transfers in
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
—
|
|
|
(48.4
|
)
|
|
(15.7
|
)
|
|
(64.1
|
)
|
|||||
End of period
|
|
$
|
(761.3
|
)
|
|
$
|
278.3
|
|
|
$
|
75.5
|
|
|
$
|
—
|
|
|
$
|
353.8
|
|
|
|
Nine Months Ended September 30, 2011
|
||||||||||||||||||
|
|
Variable Annuity
(Liabilities)
|
|
Derivative Instruments
|
||||||||||||||||
Millions
|
|
Level 3
|
|
Level 3
(1)
|
|
Level 2
(1)(2)
|
|
Level 1
(3)
|
|
Total
(4)
|
||||||||||
Beginning of period
|
|
$
|
(610.2
|
)
|
|
$
|
275.3
|
|
|
$
|
72.2
|
|
|
$
|
—
|
|
|
$
|
347.5
|
|
Purchases
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|||||
Realized and unrealized (losses) gains
|
|
(151.1
|
)
|
|
27.1
|
|
|
67.5
|
|
|
10.8
|
|
|
105.4
|
|
|||||
Transfers in
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales/settlements
|
|
—
|
|
|
(29.1
|
)
|
|
(64.2
|
)
|
|
(10.8
|
)
|
|
(104.1
|
)
|
|||||
End of period
|
|
$
|
(761.3
|
)
|
|
$
|
278.3
|
|
|
$
|
75.5
|
|
|
$
|
—
|
|
|
$
|
353.8
|
|
|
|
September 30, 2012
|
|||||||||||||||
($ in Millions)
Description
|
|
Fair
Value
|
|
Valuation
Technique(s)
|
|
Unobservable Input
|
|
Range
|
|
Weighted Average
|
|||||||
Variable annuity benefit guarantee liabilities
|
|
$
|
672.4
|
|
|
Discounted cash flows
|
|
Surrenders
|
|
0.1
|
%
|
-
|
3.0
|
%
|
|
0.4
|
%
|
|
|
|
|
|
Mortality
|
|
0.0
|
%
|
-
|
6.4
|
%
|
|
0.9
|
%
|
|||
|
|
|
|
|
Foreign exchange volatilities
|
|
10.8
|
%
|
-
|
17.4
|
%
|
|
12.8
|
%
|
|||
|
|
|
|
|
Index volatilities
|
|
13.1
|
%
|
-
|
23.9
|
%
|
|
19.5
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign exchange and equity index options
|
|
$
|
213.0
|
|
|
Black-Scholes option pricing model
|
|
Expected equity dividends
|
|
1.9
|
%
|
-
|
5.2
|
%
|
|
3.1
|
%
|
|
|
|
Foreign exchange volatilities
|
|
10.8
|
%
|
-
|
17.4
|
%
|
|
12.8
|
%
|
|||||
|
|
|
|
|
Index volatilities
|
|
13.1
|
%
|
-
|
23.9
|
%
|
|
19.5
|
%
|
|
|
Gains (Losses)
|
|
Carrying Value
|
||||||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
As of
|
||||||||||||||||||
|
|
Sept 30,
|
|
Sept 30,
|
|
Sept 30, 2012
|
|
Dec 31, 2011
|
||||||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
||||||||||||||
Fixed income/Interest rate
|
|
$
|
(22.6
|
)
|
|
$
|
29.8
|
|
|
$
|
(73.1
|
)
|
|
$
|
17.3
|
|
|
$
|
29.1
|
|
|
$
|
31.1
|
|
Foreign exchange
|
|
6.5
|
|
|
63.0
|
|
|
(21.0
|
)
|
|
32.8
|
|
|
127.9
|
|
|
161.3
|
|
||||||
Equity
|
|
5.1
|
|
|
56.1
|
|
|
(27.9
|
)
|
|
55.3
|
|
|
85.1
|
|
|
98.0
|
|
||||||
Total
|
|
$
|
(11.0
|
)
|
|
$
|
148.9
|
|
|
$
|
(122.0
|
)
|
|
$
|
105.4
|
|
|
$
|
242.1
|
|
|
$
|
290.4
|
|
Millions
|
|
September 30, 2012
|
|
December 31, 2011
|
||||
Short-term investments
|
|
$
|
63.3
|
|
|
$
|
73.2
|
|
Fixed maturity securities
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
63.3
|
|
|
$
|
73.2
|
|
Millions
|
|
September 30, 2012
|
|
December 31, 2011
|
||||
OTC derivative instruments
(1)
|
|
$
|
251.4
|
|
|
$
|
295.4
|
|
Collateral held
|
|
(63.3
|
)
|
|
(73.2
|
)
|
||
Collateral provided
|
|
85.6
|
|
|
83.0
|
|
||
Net exposure to credit losses on fair value of OTC instruments
|
|
$
|
273.7
|
|
|
$
|
305.2
|
|
|
Uncollateralized
balance as of
|
|
|
||
Millions
|
September 30, 2012
|
|
S&P Rating
(1)
|
||
Citigroup
(2)
|
$
|
63.4
|
|
|
A
|
Royal Bank of Scotland
|
58.5
|
|
|
A
|
|
Bank of America
|
50.3
|
|
|
A
|
|
JP Morgan
(2)
|
40.8
|
|
|
A+
|
|
Nomura
(2)
|
35.9
|
|
|
BBB+
|
|
Barclays
|
20.7
|
|
|
A+
|
|
Goldman Sachs
(2)
|
4.1
|
|
|
A-
|
|
Total
|
$
|
273.7
|
|
|
|
Millions
|
|
September 30, 2012
|
|
December 31, 2011
|
||||
Cash
|
|
$
|
341.7
|
|
|
$
|
453.5
|
|
Short-term investments
|
|
14.6
|
|
|
.6
|
|
||
Fixed maturity investments
|
|
121.2
|
|
|
31.2
|
|
||
Total
|
|
$
|
477.5
|
|
|
$
|
485.3
|
|
|
|
Forward contracts
|
|
||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||
Millions
|
|
September 30,
2012 |
|
September 30,
2012 |
|
||||
Beginning of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
||
Realized and unrealized gains(losses)
|
|
.3
|
|
|
.3
|
|
|
||
Sales/settlements
|
|
—
|
|
|
—
|
|
|
||
End of period
|
|
$
|
.3
|
|
|
$
|
.3
|
|
|
|
|
Gains (Losses)
|
|
|
|
||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Carrying Value
As of
|
|
||||||
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
||||||
Millions
|
|
2012
|
|
2012
|
|
2012
|
|
||||||
USD
|
|
$
|
.4
|
|
|
$
|
.4
|
|
|
$
|
.4
|
|
|
SEK
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
EUR
|
|
(.1
|
)
|
|
(.1
|
)
|
|
(.1
|
)
|
|
|||
GBP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Currency Translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Total
|
|
$
|
.3
|
|
|
$
|
.3
|
|
|
$
|
.3
|
|
|
|
|
Uncollateralized
balance as of |
||||
Millions
|
|
September 30,
2012 |
|
S&P Rating(1)
|
||
Deutsche Bank
|
|
$
|
5.5
|
|
|
A+
|
Royal Bank of Canada
|
|
8.0
|
|
|
A+
|
|
HSBC Bank plc
|
|
12.4
|
|
|
AA-
|
|
JP Morgan
|
|
7.3
|
|
|
A
|
|
Goldman Sachs
|
|
5.6
|
|
|
AA-
|
|
Total
|
|
$
|
38.8
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Basic and diluted earnings (loss) per share numerators (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) from continuing operations attributable to
White Mountains’ common shareholders
|
|
$
|
125.9
|
|
|
$
|
14.3
|
|
|
$
|
254.6
|
|
|
$
|
(6.3
|
)
|
Allocation of (income) loss for unvested restricted common shares
|
|
(1.8
|
)
|
|
(.1
|
)
|
|
(3.3
|
)
|
|
.1
|
|
||||
Dividends declared on participating restricted common shares
(1)
|
|
—
|
|
|
—
|
|
|
(.1
|
)
|
|
(.1
|
)
|
||||
Total allocation to restricted common shares
|
|
(1.8
|
)
|
|
(.1
|
)
|
|
(3.4
|
)
|
|
—
|
|
||||
Net income (loss) attributable to White Mountains’ common shareholders, net of
restricted common share amounts
|
|
$
|
124.1
|
|
|
$
|
14.2
|
|
|
$
|
251.2
|
|
|
$
|
(6.3
|
)
|
Undistributed net earnings (loss) (in millions):
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to White Mountains’ common shareholders, net of
restricted common share amounts
|
|
$
|
124.1
|
|
|
$
|
14.2
|
|
|
$
|
251.2
|
|
|
$
|
(6.3
|
)
|
Dividends declared net of participating restricted common share amounts
(1)
|
|
—
|
|
|
—
|
|
|
(6.5
|
)
|
|
(7.9
|
)
|
||||
Total undistributed net earnings (loss), net of restricted common share
amounts
|
|
$
|
124.1
|
|
|
$
|
14.2
|
|
|
$
|
244.7
|
|
|
$
|
(14.2
|
)
|
Basic earnings (loss) per share denominators (in thousands):
|
|
|
|
|
|
|
|
|
||||||||
Total average common shares outstanding during the period
|
|
6,590.4
|
|
|
7,919.3
|
|
|
6,885.9
|
|
|
7,970.0
|
|
||||
Average unvested restricted shares
(2)
|
|
(96.5
|
)
|
|
(73.5
|
)
|
|
(89.5
|
)
|
|
(68.0
|
)
|
||||
Basic earnings (loss) per share denominator
|
|
6,493.9
|
|
|
7,845.8
|
|
|
6,796.4
|
|
|
7,902.0
|
|
||||
Diluted earnings (loss) per share denominator (in thousands):
|
|
|
|
|
|
|
|
|
||||||||
Total average common shares outstanding during the period
|
|
6,590.4
|
|
|
7,919.3
|
|
|
6,885.9
|
|
|
7,970.0
|
|
||||
Average unvested restricted common shares
(2)
|
|
(96.5
|
)
|
|
(73.5
|
)
|
|
(89.5
|
)
|
|
(68.0
|
)
|
||||
Average outstanding dilutive options to acquire common shares
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted earnings (loss) per share denominator
|
|
6,493.9
|
|
|
7,845.8
|
|
|
6,796.4
|
|
|
7,902.0
|
|
||||
Basic earnings (loss) per share (in dollars):
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) attributable to White Mountains’ common shareholders
|
|
$
|
19.11
|
|
|
$
|
1.81
|
|
|
$
|
36.96
|
|
|
$
|
(.80
|
)
|
Dividends declared
|
|
—
|
|
|
—
|
|
|
(1.00
|
)
|
|
(1.00
|
)
|
||||
Undistributed earnings (loss)
|
|
$
|
19.11
|
|
|
$
|
1.81
|
|
|
$
|
35.96
|
|
|
$
|
(1.80
|
)
|
Diluted earnings (loss) per share (in dollars)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to White Mountains’ common shareholders
|
|
$
|
19.11
|
|
|
$
|
1.81
|
|
|
$
|
36.96
|
|
|
$
|
(.80
|
)
|
Dividends declared
|
|
—
|
|
|
—
|
|
|
(1.00
|
)
|
|
(1.00
|
)
|
||||
Undistributed earnings (loss)
|
|
$
|
19.11
|
|
|
$
|
1.81
|
|
|
$
|
35.96
|
|
|
$
|
(1.80
|
)
|
Millions
|
|
OneBeacon
|
|
Sirius Group
|
|
Other Operations
|
|
Total
|
||||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earned insurance and reinsurance premiums
|
|
$
|
293.9
|
|
|
$
|
242.9
|
|
|
$
|
—
|
|
|
$
|
536.8
|
|
Net investment income
|
|
12.8
|
|
|
16.7
|
|
|
8.1
|
|
|
37.6
|
|
||||
Net realized and unrealized investment gains (losses)
|
|
40.0
|
|
|
(8.9
|
)
|
|
41.6
|
|
|
72.7
|
|
||||
Other revenue
|
|
(.4
|
)
|
|
48.2
|
|
|
2.5
|
|
|
50.3
|
|
||||
Total revenues
|
|
346.3
|
|
|
298.9
|
|
|
52.2
|
|
|
697.4
|
|
||||
Losses and loss adjustment expenses
|
|
164.7
|
|
|
143.4
|
|
|
—
|
|
|
308.1
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
66.6
|
|
|
41.0
|
|
|
—
|
|
|
107.6
|
|
||||
Other underwriting expenses
|
|
47.4
|
|
|
29.1
|
|
|
.1
|
|
|
76.6
|
|
||||
General and administrative expenses
|
|
4.4
|
|
|
10.2
|
|
|
44.1
|
|
|
58.7
|
|
||||
Interest expense on debt
|
|
4.1
|
|
|
6.5
|
|
|
.7
|
|
|
11.3
|
|
||||
Total expenses
|
|
287.2
|
|
|
230.2
|
|
|
44.9
|
|
|
562.3
|
|
||||
Pre-tax income
|
|
$
|
59.1
|
|
|
$
|
68.7
|
|
|
$
|
7.3
|
|
|
$
|
135.1
|
|
Millions
|
|
OneBeacon
|
|
Sirius Group
|
|
Other Operations
|
|
Total
|
||||||||
Three Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earned insurance and reinsurance premiums
|
|
$
|
259.1
|
|
|
$
|
232.0
|
|
|
$
|
—
|
|
|
$
|
491.1
|
|
Net investment income
|
|
16.1
|
|
|
22.1
|
|
|
4.6
|
|
|
42.8
|
|
||||
Net realized and unrealized investment gains (losses)
|
|
(47.4
|
)
|
|
65.9
|
|
|
(15.6
|
)
|
|
2.9
|
|
||||
Other revenue
|
|
.1
|
|
|
(29.3
|
)
|
|
(5.8
|
)
|
|
(35.0
|
)
|
||||
Total revenues
|
|
227.9
|
|
|
290.7
|
|
|
(16.8
|
)
|
|
501.8
|
|
||||
Losses and loss adjustment expenses
|
|
149.7
|
|
|
130.5
|
|
|
—
|
|
|
280.2
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
58.6
|
|
|
48.4
|
|
|
—
|
|
|
107.0
|
|
||||
Other underwriting expenses
|
|
36.0
|
|
|
28.3
|
|
|
—
|
|
|
64.3
|
|
||||
General and administrative expenses
|
|
2.5
|
|
|
7.4
|
|
|
26.3
|
|
|
36.2
|
|
||||
Interest expense on debt
|
|
4.1
|
|
|
6.5
|
|
|
2.2
|
|
|
12.8
|
|
||||
Total expenses
|
|
250.9
|
|
|
221.1
|
|
|
28.5
|
|
|
500.5
|
|
||||
Pre-tax (loss) income
|
|
$
|
(23.0
|
)
|
|
$
|
69.6
|
|
|
$
|
(45.3
|
)
|
|
$
|
1.3
|
|
Millions
|
|
OneBeacon
|
|
Sirius Group
|
|
Other Operations
|
|
Total
|
||||||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earned insurance and reinsurance premiums
|
|
$
|
846.0
|
|
|
$
|
699.3
|
|
|
$
|
—
|
|
|
$
|
1,545.3
|
|
Net investment income
|
|
41.5
|
|
|
50.9
|
|
|
27.4
|
|
|
119.8
|
|
||||
Net realized and unrealized investment gains (losses)
|
|
57.9
|
|
|
22.9
|
|
|
42.4
|
|
|
123.2
|
|
||||
Other revenue
|
|
(.1
|
)
|
|
48.9
|
|
|
32.2
|
|
|
81.0
|
|
||||
Total revenues
|
|
945.3
|
|
|
822.0
|
|
|
102.0
|
|
|
1,869.3
|
|
||||
Losses and loss adjustment expenses
|
|
452.5
|
|
|
369.2
|
|
|
—
|
|
|
821.7
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
185.6
|
|
|
140.6
|
|
|
—
|
|
|
326.2
|
|
||||
Other underwriting expenses
|
|
146.2
|
|
|
82.1
|
|
|
.1
|
|
|
228.4
|
|
||||
General and administrative expenses
|
|
9.6
|
|
|
35.4
|
|
|
101.3
|
|
|
146.3
|
|
||||
Interest expense on debt
|
|
12.2
|
|
|
19.6
|
|
|
1.3
|
|
|
33.1
|
|
||||
Total expenses
|
|
806.1
|
|
|
646.9
|
|
|
102.7
|
|
|
1,555.7
|
|
||||
Pre-tax income (loss)
|
|
$
|
139.2
|
|
|
$
|
175.1
|
|
|
$
|
(.7
|
)
|
|
$
|
313.6
|
|
Millions
|
|
OneBeacon
|
|
Sirius Group
|
|
Other Operations
|
|
Total
|
||||||||
Nine Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earned insurance and reinsurance premiums
|
|
$
|
748.0
|
|
|
$
|
685.5
|
|
|
$
|
—
|
|
|
$
|
1,433.5
|
|
Net investment income
|
|
55.8
|
|
|
68.3
|
|
|
14.0
|
|
|
138.1
|
|
||||
Net realized and unrealized investment gains (losses)
|
|
(13.3
|
)
|
|
60.7
|
|
|
(11.0
|
)
|
|
36.4
|
|
||||
Other revenue
|
|
(12.2
|
)
|
|
(13.8
|
)
|
|
(2.3
|
)
|
|
(28.3
|
)
|
||||
Total revenues
|
|
778.3
|
|
|
800.7
|
|
|
.7
|
|
|
1,579.7
|
|
||||
Losses and loss adjustment expenses
|
|
421.3
|
|
|
499.1
|
|
|
—
|
|
|
920.4
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
161.5
|
|
|
135.1
|
|
|
—
|
|
|
296.6
|
|
||||
Other underwriting expenses
|
|
124.5
|
|
|
79.4
|
|
|
—
|
|
|
203.9
|
|
||||
General and administrative expenses
|
|
7.4
|
|
|
23.3
|
|
|
89.7
|
|
|
120.4
|
|
||||
Interest expense on debt
|
|
16.4
|
|
|
19.6
|
|
|
2.8
|
|
|
38.8
|
|
||||
Total expenses
|
|
731.1
|
|
|
756.5
|
|
|
92.5
|
|
|
1,580.1
|
|
||||
Pre-tax income (loss)
|
|
$
|
47.2
|
|
|
$
|
44.2
|
|
|
$
|
(91.8
|
)
|
|
$
|
(.4
|
)
|
Millions
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
Symetra common shares
|
|
$
|
284.0
|
|
|
$
|
261.0
|
|
Unrealized gains from Symetra's fixed maturity portfolio
|
|
64.6
|
|
|
—
|
|
||
GAAP Carrying value of Symetra common shares
|
|
348.6
|
|
|
261.0
|
|
||
Symetra warrants
|
|
26.2
|
|
|
12.6
|
|
||
Total investment in Symetra
|
|
374.8
|
|
|
273.6
|
|
||
Pentelia Capital Management
|
|
1.5
|
|
|
1.7
|
|
||
Total investments in unconsolidated affiliates
|
|
$
|
376.3
|
|
|
$
|
275.3
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
|
|
September 30, 2012
|
|
September 30, 2011
|
||||||||||||||||||||
Millions
|
|
Common Shares
|
|
Warrants
|
|
Total
|
|
Common Shares
|
|
Warrants
|
|
Total
|
||||||||||||
Carrying value of investment in Symetra as of June 30
|
|
$
|
305.9
|
|
|
$
|
29.8
|
|
|
$
|
335.7
|
|
|
$
|
388.5
|
|
|
$
|
32.5
|
|
|
$
|
421.0
|
|
Equity in earnings
(1)(2)
|
|
8.8
|
|
|
—
|
|
|
8.8
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio
(3)
|
|
35.2
|
|
|
—
|
|
|
35.2
|
|
|
59.9
|
|
|
—
|
|
|
59.9
|
|
||||||
Dividends received
|
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
||||||
Increase (decrease) in value of warrants
|
|
—
|
|
|
(3.6
|
)
|
|
(3.6
|
)
|
|
—
|
|
|
(24.8
|
)
|
|
(24.8
|
)
|
||||||
Carrying value of investment in Symetra as September 30
(4)(5)
|
|
$
|
348.6
|
|
|
$
|
26.2
|
|
|
$
|
374.8
|
|
|
$
|
449.0
|
|
|
$
|
7.7
|
|
|
$
|
456.7
|
|
|
|
Nine Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
|
September 30, 2012
|
|
September 30, 2011
|
||||||||||||||||||||
Millions
|
|
Common Shares
|
|
Warrants
|
|
Total
|
|
Common Shares
|
|
Warrants
|
|
Total
|
||||||||||||
Carrying value of investment in Symetra as of January 1
|
|
$
|
261.0
|
|
|
$
|
12.6
|
|
|
$
|
273.6
|
|
|
$
|
350.4
|
|
|
$
|
37.1
|
|
|
$
|
387.5
|
|
Equity in earnings
(1)(2)
|
|
26.7
|
|
|
—
|
|
|
26.7
|
|
|
17.5
|
|
|
—
|
|
|
17.5
|
|
||||||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio
(3)
|
|
64.6
|
|
|
—
|
|
|
64.6
|
|
|
84.0
|
|
|
—
|
|
|
84.0
|
|
||||||
Dividends received
|
|
(3.7
|
)
|
|
—
|
|
|
(3.7
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(2.9
|
)
|
||||||
Increase (decrease) in value of warrants
|
|
—
|
|
|
13.6
|
|
|
13.6
|
|
|
—
|
|
|
(29.4
|
)
|
|
(29.4
|
)
|
||||||
Carrying value of investment in Symetra as September 30
(4)(5)
|
|
$
|
348.6
|
|
|
$
|
26.2
|
|
|
$
|
374.8
|
|
|
$
|
449.0
|
|
|
$
|
7.7
|
|
|
$
|
456.7
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||||||||||
Millions, except share
amounts
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
||||||||||||
Beginning of period
|
|
118,450
|
|
|
$
|
32.7
|
|
|
150,064
|
|
|
$
|
56.5
|
|
|
150,064
|
|
|
$
|
66.1
|
|
|
163,184
|
|
|
$
|
29.4
|
|
Shares paid or expired
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68,357
|
)
|
|
(48.4
|
)
|
|
(51,131
|
)
|
|
—
|
|
||||
New grants
|
|
2,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,432
|
|
|
—
|
|
|
37,675
|
|
|
—
|
|
||||
Assumed forfeitures and
cancellations
(2)
|
|
(1,359
|
)
|
|
(.4
|
)
|
|
—
|
|
|
—
|
|
|
(548
|
)
|
|
.4
|
|
|
336
|
|
|
(.6
|
)
|
||||
Expense recognized
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
20.8
|
|
|
—
|
|
|
26.7
|
|
||||
Ending September 30,
|
|
119,591
|
|
|
$
|
38.9
|
|
|
150,064
|
|
|
$
|
55.5
|
|
|
119,591
|
|
|
$
|
38.9
|
|
|
150,064
|
|
|
$
|
55.5
|
|
Millions, except share amounts
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2010 – 2012
|
|
42,320
|
|
|
$
|
19.0
|
|
2011 – 2013
|
|
37,255
|
|
|
12.9
|
|
|
2012 – 2014
|
|
38,092
|
|
|
5.4
|
|
|
Sub-total
|
|
117,667
|
|
|
37.3
|
|
|
Assumed forfeitures
|
|
(2,941
|
)
|
|
(1.0
|
)
|
|
Total at September 30, 2012
|
|
114,726
|
|
|
$
|
36.3
|
|
Millions, except share amounts
|
|
Target WTM
Phantom
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2010 – 2012
|
|
4,990
|
|
|
$
|
2.7
|
|
2011 – 2013
(1)
|
|
—
|
|
|
—
|
|
|
2012 – 2014
(1)
|
|
—
|
|
|
—
|
|
|
Sub-total
|
|
4,990
|
|
|
2.7
|
|
|
Assumed forfeitures
|
|
(125
|
)
|
|
(.1
|
)
|
|
Total at September 30, 2012
|
|
4,865
|
|
|
$
|
2.6
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||||||||||
Millions, except share amounts
|
|
Restricted
Shares
|
|
Unamortized
Issue Date
Fair Value
|
|
Restricted
Shares
|
|
Unamortized
Issue Date
Fair Value
|
|
Restricted
Shares
|
|
Unamortized
Issue Date
Fair Value
|
|
Restricted
Shares
|
|
Unamortized
Issue Date
Fair Value
|
||||||||||||
Non-vested,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
93,460
|
|
|
$
|
21.5
|
|
|
73,500
|
|
|
$
|
18.9
|
|
|
72,000
|
|
|
$
|
13.3
|
|
|
46,250
|
|
|
$
|
14.1
|
|
Issued
|
|
3,700
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
32,160
|
|
|
15.7
|
|
|
27,250
|
|
|
9.9
|
|
||||
Vested
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Forfeited
|
|
(1,065
|
)
|
|
(.2
|
)
|
|
—
|
|
|
—
|
|
|
(1,065
|
)
|
|
(.2
|
)
|
|
—
|
|
|
—
|
|
||||
Expense recognized
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
—
|
|
|
(8.7
|
)
|
|
—
|
|
|
(7.9
|
)
|
||||
Non-vested at September 30,
|
|
96,095
|
|
|
$
|
20.1
|
|
|
73,500
|
|
|
$
|
16.1
|
|
|
96,095
|
|
|
$
|
20.1
|
|
|
73,500
|
|
|
$
|
16.1
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||||||||||
Millions, except share amounts
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
|
Target
Performance
Shares
Outstanding
|
|
Accrued
Expense
|
||||||||||||
Beginning of period
|
|
560,577
|
|
|
$
|
3.1
|
|
|
671,727
|
|
|
$
|
10.0
|
|
|
642,667
|
|
|
$
|
9.7
|
|
|
1,464,295
|
|
|
$
|
18.5
|
|
Payments and deferrals
(1)(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(258,901
|
)
|
|
(7.8
|
)
|
|
(936,150
|
)
|
|
(10.5
|
)
|
||||
New awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181,290
|
|
|
—
|
|
|
194,900
|
|
|
—
|
|
||||
Assumed forfeitures and cancellations
(3)
|
|
(3,354
|
)
|
|
—
|
|
|
(19,583
|
)
|
|
.1
|
|
|
(7,833
|
)
|
|
—
|
|
|
(70,901
|
)
|
|
(.2
|
)
|
||||
Expense recognized
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
(.5
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
1.8
|
|
||||
Ending September 30,
|
|
557,223
|
|
|
$
|
.9
|
|
|
652,144
|
|
|
$
|
9.6
|
|
|
557,223
|
|
|
$
|
.9
|
|
|
652,144
|
|
|
$
|
9.6
|
|
Millions, except share amounts
|
|
Target OneBeacon Performance Shares Outstanding
|
|
Accrued Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2010 – 2012
|
|
238,658
|
|
|
$
|
—
|
|
2011 – 2013
|
|
151,563
|
|
|
.4
|
|
|
2012 – 2014
|
|
181,290
|
|
|
.5
|
|
|
Sub-total
|
|
571,511
|
|
|
.9
|
|
|
Assumed forfeitures
|
|
(14,288
|
)
|
|
—
|
|
|
Total at September 30, 2012
|
|
557,223
|
|
|
$
|
.9
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||||||||||
Millions, except share
amounts
|
|
Restricted
Shares
|
|
Unamortized
Issue Date
Fair Value
|
|
Restricted
Shares |
|
Unamortized
Issue Date Fair Value |
|
Restricted
Shares |
|
Unamortized
Issue Date Fair Value |
|
Restricted
Shares |
|
Unamortized
Issue Date Fair Value |
||||||||||||
Non-vested,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
930,000
|
|
|
$
|
11.2
|
|
|
630,000
|
|
|
$
|
8.5
|
|
|
630,000
|
|
|
$
|
7.7
|
|
|
630,000
|
|
|
$
|
8.6
|
|
Issued
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
4.6
|
|
|
—
|
|
|
—
|
|
||||
Vested
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Expense recognized
|
|
—
|
|
|
(.8
|
)
|
|
—
|
|
|
(.4
|
)
|
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
(.5
|
)
|
||||
Non-vested at
September 30,
|
|
930,000
|
|
|
$
|
10.4
|
|
|
630,000
|
|
|
$
|
8.1
|
|
|
930,000
|
|
|
$
|
10.4
|
|
|
630,000
|
|
|
$
|
8.1
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2012
|
2011
|
2012
|
2011
|
|||||||
Millions, except share amounts
|
|
Target
Options
Outstanding
|
|
Target
Options
Outstanding
|
|
Target
Options
Outstanding
|
|
Target
Options
Outstanding
|
||||
Beginning of period
|
|
—
|
|
|
750,130
|
|
|
740,870
|
|
|
768,652
|
|
New awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Forfeitures and cancellations
|
|
—
|
|
|
(9,260
|
)
|
|
—
|
|
|
(27,782
|
)
|
Vested and expired
|
|
—
|
|
|
—
|
|
|
(740,870
|
)
|
|
—
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Expense recognized
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Ending September 30,
|
|
—
|
|
|
740,870
|
|
|
—
|
|
|
740,870
|
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
OBH Senior Notes
|
|
$
|
276.3
|
|
|
$
|
269.8
|
|
|
$
|
277.4
|
|
|
$
|
269.8
|
|
SIG Senior Notes
|
|
442.9
|
|
|
399.4
|
|
|
418.6
|
|
|
399.3
|
|
||||
SIG Preference Shares
|
|
257.5
|
|
|
250.0
|
|
|
217.5
|
|
|
250.0
|
|
Millions
|
September 30,
2012 |
December 31,
2011 |
||||
Assets held for sale
|
|
|
|
|||
Fixed maturity investments, at fair value
|
$
|
377.3
|
|
$
|
111.8
|
|
Cash
|
—
|
|
5.5
|
|
||
Reinsurance recoverable on unpaid losses
|
1,956.6
|
|
—
|
|
||
Reinsurance recoverable on paid losses
|
17.6
|
|
—
|
|
||
Insurance premiums receivable
|
13.6
|
|
8.8
|
|
||
Deferred acquisition costs
|
—
|
|
2.2
|
|
||
Deferred tax asset
|
6.1
|
|
1.9
|
|
||
Other assets
|
17.0
|
|
2.4
|
|
||
Total assets held for sale
|
$
|
2,388.2
|
|
$
|
132.6
|
|
Liabilities held for sale
|
|
|
|
|||
Loss and loss adjustment expense reserves
|
$
|
2,212.9
|
|
$
|
64.7
|
|
Unearned insurance premiums
|
.6
|
|
34.1
|
|
||
Ceded reinsurance payable
|
19.5
|
|
—
|
|
||
Other liabilities
|
155.2
|
|
8.8
|
|
||
Total liabilities held for sale
|
2,388.2
|
|
107.6
|
|
||
Net assets held for sale
|
$
|
—
|
|
$
|
25.0
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Millions, except per share amounts
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earned insurance premiums
|
|
$
|
(.4
|
)
|
|
$
|
233.3
|
|
|
$
|
10.0
|
|
|
$
|
701.9
|
|
Net investment income
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
11.8
|
|
||||
Net realized and unrealized investment gains (losses)
|
|
—
|
|
|
(6.4
|
)
|
|
—
|
|
|
1.4
|
|
||||
Other revenue
|
|
—
|
|
|
17.5
|
|
|
—
|
|
|
54.0
|
|
||||
Total revenues
|
|
(.4
|
)
|
|
248.2
|
|
|
10.0
|
|
|
769.1
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss and loss adjustment expenses
|
|
27.7
|
|
|
177.4
|
|
|
48.4
|
|
|
512.3
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
(.8
|
)
|
|
51.4
|
|
|
(1.3
|
)
|
|
154.1
|
|
||||
Other underwriting expenses
|
|
(1.1
|
)
|
|
35.0
|
|
|
1.1
|
|
|
83.9
|
|
||||
General and administrative expenses
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
37.5
|
|
||||
Total expenses
|
|
25.8
|
|
|
265.5
|
|
|
48.2
|
|
|
787.8
|
|
||||
Pre-tax loss
|
|
(26.2
|
)
|
|
(17.3
|
)
|
|
(38.2
|
)
|
|
(18.7
|
)
|
||||
Income tax benefit
|
|
10.4
|
|
|
5.3
|
|
|
13.7
|
|
|
10.9
|
|
||||
Loss from discontinued operations
|
|
(15.8
|
)
|
|
(12.0
|
)
|
|
(24.5
|
)
|
|
(7.8
|
)
|
||||
Loss from sale of discontinued operations
|
|
(91.0
|
)
|
|
(18.2
|
)
|
|
(91.0
|
)
|
|
(18.2
|
)
|
||||
Net loss from discontinued operations
|
|
$
|
(106.8
|
)
|
|
$
|
(30.2
|
)
|
|
$
|
(115.5
|
)
|
|
$
|
(26.0
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Basic and diluted loss per share numerators (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to White Mountains’ common shareholders
|
|
$
|
(106.8
|
)
|
|
$
|
(30.2
|
)
|
|
$
|
(115.5
|
)
|
|
$
|
(26.0
|
)
|
Allocation of income for participating unvested restricted common shares
(1)
|
|
1.5
|
|
|
.3
|
|
|
1.5
|
|
|
.2
|
|
||||
Net loss attributable to White Mountains’ common shareholders, net of
restricted common share amounts
(2)
|
|
$
|
(105.3
|
)
|
|
$
|
(29.9
|
)
|
|
$
|
(114.0
|
)
|
|
$
|
(25.8
|
)
|
Basic loss per share denominators (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
6,590.4
|
|
|
7,919.3
|
|
|
6,885.9
|
|
|
7,970.0
|
|
||||
Average unvested restricted common shares
(3)
|
|
(96.5
|
)
|
|
(73.5
|
)
|
|
(89.5
|
)
|
|
(68.0
|
)
|
||||
Basic loss per share denominator
|
|
6,493.9
|
|
|
7,845.8
|
|
|
6,796.4
|
|
|
7,902.0
|
|
||||
Diluted loss per share denominator (in thousands):
|
|
|
|
|
|
|
|
|
||||||||
Total average common shares outstanding during the period
|
|
6,590.4
|
|
|
7,919.3
|
|
|
6,885.9
|
|
|
7,970.0
|
|
||||
Average unvested restricted common shares
|
|
(96.5
|
)
|
|
(73.5
|
)
|
|
(89.5
|
)
|
|
(68.0
|
)
|
||||
Average outstanding dilutive options to acquire common shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted loss per share denominator
|
|
6,493.9
|
|
|
7,845.8
|
|
|
6,796.4
|
|
|
7,902.0
|
|
||||
Basic and diluted loss per share (in dollars):
|
|
$
|
(16.21
|
)
|
|
$
|
(3.81
|
)
|
|
$
|
(16.77
|
)
|
|
$
|
(3.26
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
September 30,
2012 |
|
June 30,
2012 |
|
December 31, 2011
|
|
September 30,
2011 |
||||||||
Book value per share numerators (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|||||
White Mountains’ common shareholders’ equity
|
|
$
|
3,809.3
|
|
|
$
|
3,742.5
|
|
|
$
|
4,087.7
|
|
|
$
|
3,444.7
|
|
Equity in net unrealized gains from Symetra’s fixed
maturity portfolio
|
|
(59.3
|
)
|
|
(27.0
|
)
|
|
—
|
|
|
(135.7
|
)
|
||||
Adjusted book value per share numerator
(1)
|
|
$
|
3,750.0
|
|
|
$
|
3,715.5
|
|
|
$
|
4,087.7
|
|
|
$
|
3,309.0
|
|
Book value per share denominators (in thousands of shares):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common shares outstanding
|
|
6,583.7
|
|
|
6,630.3
|
|
|
7,577.9
|
|
|
7,630.7
|
|
||||
Unearned restricted shares
|
|
(46.8
|
)
|
|
(51.6
|
)
|
|
(37.6
|
)
|
|
(44.5
|
)
|
||||
Adjusted book value per share denominator
(1)
|
|
6,536.9
|
|
|
6,578.7
|
|
|
7,540.3
|
|
|
7,586.2
|
|
||||
Book value per share
(2)
|
|
$
|
578.60
|
|
|
$
|
564.45
|
|
|
$
|
539.43
|
|
|
$
|
451.42
|
|
Adjusted book value per share
(2)
|
|
$
|
573.66
|
|
|
$
|
564.77
|
|
|
$
|
542.11
|
|
|
$
|
436.18
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Gross written premiums
|
|
$
|
608.0
|
|
|
$
|
559.2
|
|
|
$
|
1,977.4
|
|
|
$
|
1,813.3
|
|
Net written premiums
|
|
$
|
559.1
|
|
|
$
|
511.2
|
|
|
$
|
1,729.9
|
|
|
$
|
1,588.9
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earned insurance and reinsurance premiums
|
|
$
|
536.8
|
|
|
$
|
491.1
|
|
|
$
|
1,545.3
|
|
|
$
|
1,433.5
|
|
Net investment income
|
|
37.6
|
|
|
42.8
|
|
|
119.8
|
|
|
138.1
|
|
||||
Net realized and unrealized investment gains
|
|
72.7
|
|
|
2.9
|
|
|
123.2
|
|
|
36.4
|
|
||||
Other revenue — foreign currency translation gains (losses)
|
|
33.1
|
|
|
(30.4
|
)
|
|
33.1
|
|
|
(16.0
|
)
|
||||
Other revenue — Hamer and Bri-Mar
|
|
8.6
|
|
|
8.0
|
|
|
24.1
|
|
|
18.9
|
|
||||
Other revenue — Symetra warrants
|
|
(3.6
|
)
|
|
(24.7
|
)
|
|
13.6
|
|
|
(29.3
|
)
|
||||
Other revenue — other
|
|
12.2
|
|
|
12.1
|
|
|
10.2
|
|
|
(1.9
|
)
|
||||
Total revenues
|
|
697.4
|
|
|
501.8
|
|
|
1,869.3
|
|
|
1,579.7
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Losses and LAE
|
|
308.1
|
|
|
280.2
|
|
|
821.7
|
|
|
920.4
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
107.6
|
|
|
107.0
|
|
|
326.2
|
|
|
296.6
|
|
||||
Other underwriting expenses
|
|
76.6
|
|
|
64.3
|
|
|
228.4
|
|
|
203.9
|
|
||||
General and administrative expenses
|
|
39.0
|
|
|
27.1
|
|
|
104.7
|
|
|
97.5
|
|
||||
General and administrative expenses — BAM
|
|
11.2
|
|
|
—
|
|
|
11.2
|
|
|
—
|
|
||||
General and administrative expenses — Hamer and Bri-Mar
|
|
7.4
|
|
|
7.0
|
|
|
21.0
|
|
|
16.7
|
|
||||
Accretion of fair value adjustment to loss and LAE reserves
|
|
1.1
|
|
|
2.1
|
|
|
9.4
|
|
|
6.2
|
|
||||
Interest expense on debt
|
|
11.3
|
|
|
12.8
|
|
|
33.1
|
|
|
38.8
|
|
||||
Total expenses
|
|
562.3
|
|
|
500.5
|
|
|
1,555.7
|
|
|
1,580.1
|
|
||||
Pre-tax income (loss)
|
|
135.1
|
|
|
1.3
|
|
|
313.6
|
|
|
(.4
|
)
|
||||
Income tax (expense) benefit
|
|
(47.8
|
)
|
|
.6
|
|
|
(85.3
|
)
|
|
(.8
|
)
|
||||
Net income (loss) from continuing operations
|
|
87.3
|
|
|
1.9
|
|
|
228.3
|
|
|
(1.2
|
)
|
||||
Loss income from sale of discontinued operations, net of tax
|
|
(91.0
|
)
|
|
(18.2
|
)
|
|
(91.0
|
)
|
|
(18.2
|
)
|
||||
Net loss from discontinued operations, net of tax
|
|
(15.8
|
)
|
|
(12.0
|
)
|
|
(24.5
|
)
|
|
(7.8
|
)
|
||||
Equity in earnings of unconsolidated affiliates, net of tax
|
|
7.7
|
|
|
1.5
|
|
|
24.4
|
|
|
16.1
|
|
||||
Net income (loss)
|
|
(11.8
|
)
|
|
(26.8
|
)
|
|
137.2
|
|
|
(11.1
|
)
|
||||
Net income (loss) attributable to noncontrolling interests
|
|
30.9
|
|
|
11.0
|
|
|
2.0
|
|
|
(21.2
|
)
|
||||
Net income (loss) attributable to White Mountains’ common shareholders
|
|
19.1
|
|
|
(15.8
|
)
|
|
139.2
|
|
|
(32.3
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
71.9
|
|
|
(26.7
|
)
|
|
92.6
|
|
|
51.9
|
|
||||
Comprehensive income (loss)
|
|
91.0
|
|
|
(42.5
|
)
|
|
231.8
|
|
|
19.6
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
|
.4
|
|
|
—
|
|
|
.4
|
|
|
—
|
|
||||
Comprehensive income (loss) attributable to White Mountains’ common
shareholders
|
|
91.4
|
|
|
(42.5
|
)
|
|
232.2
|
|
|
19.6
|
|
||||
Change in equity in net unrealized gains from Symetra’s fixed maturity
portfolio
|
|
(32.3
|
)
|
|
(55.1
|
)
|
|
(59.3
|
)
|
|
(77.2
|
)
|
||||
Adjusted comprehensive income (loss)
|
|
$
|
59.1
|
|
|
$
|
(97.6
|
)
|
|
$
|
172.9
|
|
|
$
|
(57.6
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Gross written premiums
|
|
$
|
353.4
|
|
|
$
|
308.8
|
|
|
$
|
983.8
|
|
|
$
|
869.1
|
|
Net written premiums
|
|
$
|
335.2
|
|
|
$
|
297.2
|
|
|
$
|
930.4
|
|
|
$
|
821.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
293.9
|
|
|
$
|
259.1
|
|
|
$
|
846.0
|
|
|
$
|
748.0
|
|
Net investment income
|
|
12.8
|
|
|
16.1
|
|
|
41.5
|
|
|
55.8
|
|
||||
Net realized and unrealized investment (losses) gains
|
|
40.0
|
|
|
(47.4
|
)
|
|
57.9
|
|
|
(13.3
|
)
|
||||
Other revenue
|
|
(.4
|
)
|
|
.1
|
|
|
(.1
|
)
|
|
(12.2
|
)
|
||||
Total revenues
|
|
346.3
|
|
|
227.9
|
|
|
945.3
|
|
|
778.3
|
|
||||
Losses and LAE
|
|
164.7
|
|
|
149.7
|
|
|
452.5
|
|
|
421.3
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
66.6
|
|
|
58.6
|
|
|
185.6
|
|
|
161.5
|
|
||||
Other underwriting expenses
|
|
47.4
|
|
|
36.0
|
|
|
146.2
|
|
|
124.5
|
|
||||
General and administrative expenses
|
|
4.4
|
|
|
2.5
|
|
|
9.6
|
|
|
7.4
|
|
||||
Interest expense on debt
|
|
4.1
|
|
|
4.1
|
|
|
12.2
|
|
|
16.4
|
|
||||
Total expenses
|
|
287.2
|
|
|
250.9
|
|
|
806.1
|
|
|
731.1
|
|
||||
Pre-tax income (loss)
|
|
$
|
59.1
|
|
|
$
|
(23.0
|
)
|
|
$
|
139.2
|
|
|
$
|
47.2
|
|
(Millions, except per share amounts)
|
|
September 30,
2012 |
|
June 30, 2012
|
|
December 31,
2011 |
|
September 30,
2011 |
||||||||
OneBeacon book value per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OneBeacon's common shareholders’ equity
|
|
$
|
1,048.4
|
|
|
$
|
1,131.8
|
|
|
$
|
1,099.8
|
|
|
$
|
1,100.2
|
|
OneBeacon common shares outstanding
|
|
95.4
|
|
|
95.4
|
|
|
95.1
|
|
|
95.1
|
|
||||
OneBeacon book value per common share
(1)
|
|
$
|
10.99
|
|
|
$
|
11.86
|
|
|
$
|
11.56
|
|
|
$
|
11.57
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Gross written premiums
|
|
$
|
254.6
|
|
|
$
|
250.4
|
|
|
$
|
993.6
|
|
|
$
|
944.2
|
|
Net written premiums
|
|
$
|
223.9
|
|
|
$
|
214.0
|
|
|
$
|
799.5
|
|
|
$
|
767.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance and reinsurance premiums
|
|
$
|
242.9
|
|
|
$
|
232.0
|
|
|
$
|
699.3
|
|
|
$
|
685.5
|
|
Net investment income
|
|
16.7
|
|
|
22.1
|
|
|
50.9
|
|
|
68.3
|
|
||||
Net realized and unrealized investment (losses) gains
|
|
(8.9
|
)
|
|
65.9
|
|
|
22.9
|
|
|
60.7
|
|
||||
Other revenue - foreign currency translation gains (losses)
|
|
33.1
|
|
|
(30.4
|
)
|
|
33.1
|
|
|
(16.0
|
)
|
||||
Other revenue
|
|
15.1
|
|
|
1.1
|
|
|
15.8
|
|
|
2.2
|
|
||||
Total revenues
|
|
298.9
|
|
|
290.7
|
|
|
822.0
|
|
|
800.7
|
|
||||
Losses and LAE
|
|
143.4
|
|
|
130.5
|
|
|
369.2
|
|
|
499.1
|
|
||||
Insurance and reinsurance acquisition expenses
|
|
41.0
|
|
|
48.4
|
|
|
140.6
|
|
|
135.1
|
|
||||
Other underwriting expenses
|
|
29.1
|
|
|
28.3
|
|
|
82.1
|
|
|
79.4
|
|
||||
General and administrative expenses
|
|
9.1
|
|
|
5.3
|
|
|
26.0
|
|
|
17.1
|
|
||||
Accretion of fair value adjustment to loss and LAE reserves
|
|
1.1
|
|
|
2.1
|
|
|
9.4
|
|
|
6.2
|
|
||||
Interest expense on debt
|
|
6.5
|
|
|
6.5
|
|
|
19.6
|
|
|
19.6
|
|
||||
Total expenses
|
|
230.2
|
|
|
221.1
|
|
|
646.9
|
|
|
756.5
|
|
||||
Pre-tax income
|
|
$
|
68.7
|
|
|
$
|
69.6
|
|
|
$
|
175.1
|
|
|
$
|
44.2
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Losses and LAE
|
|
59
|
%
|
|
56
|
%
|
|
53
|
%
|
|
73
|
%
|
||||
Expense
|
|
29
|
%
|
|
33
|
%
|
|
32
|
%
|
|
31
|
%
|
||||
Combined
|
|
88
|
%
|
|
89
|
%
|
|
85
|
%
|
|
104
|
%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net investment income
|
|
$
|
8.1
|
|
|
$
|
4.6
|
|
|
$
|
27.4
|
|
|
$
|
14.0
|
|
Net realized and unrealized investment (losses) gains
|
|
41.6
|
|
|
(15.6
|
)
|
|
42.4
|
|
|
(11.0
|
)
|
||||
Other revenue - Hamer and Bri-Mar
(1)
|
|
8.6
|
|
|
8.0
|
|
|
24.1
|
|
|
18.9
|
|
||||
Other revenue — Symetra warrants
|
|
(3.6
|
)
|
|
(24.7
|
)
|
|
13.6
|
|
|
(29.3
|
)
|
||||
Other revenue
|
|
(2.5
|
)
|
|
10.9
|
|
|
(5.5
|
)
|
|
8.1
|
|
||||
Total revenues
|
|
52.2
|
|
|
(16.8
|
)
|
|
102.0
|
|
|
.7
|
|
||||
Other underwriting expenses
|
|
.1
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
||||
General and admin expenses - Hamer and Bri-mar
(1)
|
|
7.4
|
|
|
7.0
|
|
|
21.0
|
|
|
16.7
|
|
||||
General and admin expenses - BAM
|
|
11.2
|
|
|
—
|
|
|
11.2
|
|
|
—
|
|
||||
General and admin expenses
|
|
25.5
|
|
|
19.3
|
|
|
69.1
|
|
|
73.0
|
|
||||
Interest expense — debt
|
|
.7
|
|
|
2.2
|
|
|
1.3
|
|
|
2.8
|
|
||||
Total expenses
|
|
44.9
|
|
|
28.5
|
|
|
102.7
|
|
|
92.5
|
|
||||
Pre-tax income (loss)
|
|
$
|
7.3
|
|
|
$
|
(45.3
|
)
|
|
$
|
(.7
|
)
|
|
$
|
(91.8
|
)
|
|
|
Three and Nine Months Ended
|
||||||||||
|
|
September 30, 2012
|
||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Other Operations
|
||||||
|
|
|
|
|
|
|
||||||
Net investment income
|
|
$
|
0.1
|
|
|
$
|
0.6
|
|
|
$
|
0.7
|
|
Net investment income - surplus note interest
|
|
8.3
|
|
|
(8.3
|
)
|
|
—
|
|
|||
Net realized and unrealized investment gains
|
|
0.2
|
|
|
1.0
|
|
|
1.2
|
|
|||
Total revenues
|
|
8.6
|
|
|
(6.7
|
)
|
|
1.9
|
|
|||
Other underwriting expenses
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
General and admin expenses - BAM
|
|
—
|
|
|
11.2
|
|
|
11.2
|
|
|||
General and admin expenses - HG Global
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|||
Total expenses
|
|
3.8
|
|
|
11.3
|
|
|
15.1
|
|
|||
Pre-tax income (loss)
|
|
$
|
4.8
|
|
|
$
|
(18.0
|
)
|
|
$
|
(13.2
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Pre-tax investment results
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net investment income
|
|
$
|
37.6
|
|
|
$
|
42.8
|
|
|
$
|
119.8
|
|
|
$
|
138.1
|
|
Net realized and unrealized investment gains
(1)
|
|
72.7
|
|
|
2.9
|
|
|
123.2
|
|
|
36.4
|
|
||||
Net unrealized foreign currency gains (losses) on investments
(2)
|
|
92.5
|
|
|
(172.2
|
)
|
|
80.6
|
|
|
(52.8
|
)
|
||||
Pre-tax investment gains included in discontinued operations
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
13.2
|
|
||||
Total GAAP pre-tax investment gains (losses)
|
|
$
|
202.8
|
|
|
$
|
(129.1
|
)
|
|
$
|
323.6
|
|
|
$
|
134.9
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
Sept 30,
|
|
Sept 30,
|
||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Fixed maturity investments
|
|
2.4
|
%
|
|
(0.5
|
)%
|
|
4.4
|
%
|
|
2.7
|
%
|
Short-term investments
|
|
0.7
|
%
|
|
(0.2
|
)%
|
|
0.7
|
%
|
|
0.8
|
%
|
Total fixed income
|
|
2.2
|
%
|
|
(0.5
|
)%
|
|
3.9
|
%
|
|
2.5
|
%
|
Barclay’s U.S. Intermediate Aggregate Index
|
|
1.4
|
%
|
|
2.3
|
%
|
|
3.4
|
%
|
|
5.0
|
%
|
Common equity securities
|
|
7.7
|
%
|
|
(11.3
|
)%
|
|
9.4
|
%
|
|
(6.7
|
)%
|
Convertible fixed maturity investments
|
|
(0.8
|
)%
|
|
(8.5
|
)%
|
|
1.8
|
%
|
|
(6.8
|
)%
|
Other long-term investments
|
|
—
|
%
|
|
(0.1
|
)%
|
|
(0.4
|
)%
|
|
6.8
|
%
|
Total equities, convertibles and other long-term investments
|
|
5.2
|
%
|
|
(7.8
|
)%
|
|
6.3
|
%
|
|
(2.8
|
)%
|
S&P 500 Index (total return)
|
|
6.3
|
%
|
|
(13.9
|
)%
|
|
16.4
|
%
|
|
(8.7
|
)%
|
Total consolidated portfolio
|
|
2.8
|
%
|
|
(1.5
|
)%
|
|
4.3
|
%
|
|
1.7
|
%
|
|
Periods ending September 30, 2012
|
|||||||||||
Annualized returns
|
|
1-year
|
|
3-years
|
|
5-years
|
|
7-years
|
||||
Prospector separate accounts
|
|
15.6
|
%
|
|
9.5
|
%
|
|
(0.1
|
)%
|
|
4.6
|
%
|
S&P 500 Index
|
|
30.2
|
%
|
|
13.2
|
%
|
|
1.1
|
%
|
|
4.5
|
%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
Sept 30,
|
|
Sept 30,
|
||||||||||||
Millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net unrealized investment (losses) gains — foreign currency
|
|
$
|
(44.3
|
)
|
|
$
|
74.6
|
|
|
$
|
(39.6
|
)
|
|
$
|
79.0
|
|
Net realized investment (losses) gains — foreign currency
|
|
(7.8
|
)
|
|
3.7
|
|
|
(9.5
|
)
|
|
(39.3
|
)
|
||||
Net realized and unrealized investment (losses) gains — foreign currency
|
|
(52.1
|
)
|
|
78.3
|
|
|
(49.1
|
)
|
|
39.7
|
|
||||
Other revenue — foreign currency translation gains (losses)
|
|
33.1
|
|
|
(30.4
|
)
|
|
33.1
|
|
|
(16.0
|
)
|
||||
Total foreign currency translation (losses) gains recognized through
net income, pre-tax
|
|
(19.0
|
)
|
|
47.9
|
|
|
(16.0
|
)
|
|
23.7
|
|
||||
Income tax benefit expense
|
|
(.7
|
)
|
|
(9.9
|
)
|
|
(2.0
|
)
|
|
(5.7
|
)
|
||||
Total foreign currency translation (losses) gains recognized through net income after tax
|
|
(19.7
|
)
|
|
38.0
|
|
|
(18.0
|
)
|
|
18.0
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency translation on investments
|
|
92.5
|
|
|
(172.2
|
)
|
|
80.6
|
|
|
(52.8
|
)
|
||||
Change in foreign currency translation on non-investment net liabilities
|
|
(51.1
|
)
|
|
90.2
|
|
|
(45.9
|
)
|
|
27.1
|
|
||||
Total foreign currency translation gains (losses) recognized through other
comprehensive income
|
|
41.4
|
|
|
(82.0
|
)
|
|
34.7
|
|
|
(25.7
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total foreign currency gains (losses) recognized through comprehensive income
|
|
$
|
21.7
|
|
|
$
|
(44.0
|
)
|
|
$
|
16.7
|
|
|
$
|
(7.7
|
)
|
|
September 30, 2012
|
||
Millions
|
Fair value
|
||
Debt securities issued by corporations:
|
|
|
|
Non-financial
|
|
|
|
Australia
|
$
|
44.9
|
|
Canada
|
166.9
|
|
|
France
|
56.1
|
|
|
Greece
|
—
|
|
|
Ireland
|
—
|
|
|
Italy
|
13.8
|
|
|
Netherlands
|
80.4
|
|
|
Portugal
|
—
|
|
|
Spain
|
8.3
|
|
|
Sweden
|
30.3
|
|
|
United Kingdom
|
115.9
|
|
|
United States
|
1,294.4
|
|
|
Other
|
64.9
|
|
|
Total non-financial debt
|
1,875.9
|
|
|
Financial
|
|
||
Australia
|
15.8
|
|
|
Greece
|
—
|
|
|
Ireland
|
—
|
|
|
Italy
|
—
|
|
|
Netherlands
|
47.6
|
|
|
Portugal
|
—
|
|
|
Spain
|
—
|
|
|
United Kingdom
|
17.3
|
|
|
United States
|
303.6
|
|
|
Other
|
21.1
|
|
|
Total financial debt
|
405.4
|
|
|
Debt securities issued by corporations
|
2,281.3
|
|
|
Mortgage-backed and asset-backed securities
|
|
||
France
|
13.0
|
|
|
Sweden
|
31.2
|
|
|
United Kingdom
|
164.8
|
|
|
United States
|
1,838.4
|
|
|
Total mortgage-backed and asset-backed securities
|
2,047.4
|
|
|
Foreign government, agency and provincial obligations
|
|
||
Canada
|
57.9
|
|
|
Germany
|
18.9
|
|
|
Greece
|
—
|
|
|
France
|
49.4
|
|
|
Ireland
|
—
|
|
|
Italy
|
—
|
|
|
Japan
|
30.9
|
|
|
New Zealand
|
50.9
|
|
|
Portugal
|
—
|
|
|
Spain
|
—
|
|
|
Sweden
|
246.8
|
|
|
Other
|
21.6
|
|
|
Total foreign government, agency and provincial obligations
|
476.4
|
|
|
US Government and agency obligations
(1)
|
394.7
|
|
|
Municipal obligations
(1)
|
3.8
|
|
|
Preferred stocks
(1)
|
86.1
|
|
|
Total fixed maturity investments
|
$
|
5,289.7
|
|
|
September 30, 2012
|
||
Millions
|
Fair value
|
||
Common equity securities:
|
|
|
|
Non-financial
|
|
||
Canada
|
$
|
54.1
|
|
Greece
|
—
|
|
|
Ireland
|
8.3
|
|
|
Italy
|
—
|
|
|
Japan
|
14.5
|
|
|
Portugal
|
—
|
|
|
South Africa
|
23.7
|
|
|
Spain
|
5.0
|
|
|
Switzerland
|
8.7
|
|
|
United States
|
539.9
|
|
|
Other
|
34.5
|
|
|
Total non-financial common equity securities
|
688.7
|
|
|
|
|
|
|
Financial
|
|
||
Bermuda
|
62.1
|
|
|
United States
|
251.7
|
|
|
Other
|
2.3
|
|
|
Total financial common equity securities
|
316.1
|
|
|
Total common equity securities
|
$
|
1,004.8
|
|
|
|
|
|
Convertible fixed maturities:
|
|
|
|
Canada
|
$
|
6.4
|
|
United Kingdom
|
13.6
|
|
|
United States
|
122.0
|
|
|
Total convertible fixed maturity investments
|
$
|
142.0
|
|
($ in millions)
|
|
September 30,
2012 |
|
December 31,
2011
|
|
|||
Total investments
|
|
$
|
7,283.6
|
|
|
$
|
8,268.0
|
|
Consolidated limited partnership investments
(1)
|
|
(84.8
|
)
|
|
(77.2
|
)
|
||
Cash
|
|
549.2
|
|
|
705.4
|
|
||
Investments in unconsolidated affiliates
|
|
376.3
|
|
|
275.3
|
|
||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio
|
|
(64.6
|
)
|
|
—
|
|
||
WM Life Re net derivative positions
(2)
|
|
(493.6
|
)
|
|
(551.3
|
)
|
||
Net investment assets classified within assets held for sale
|
|
377.3
|
|
|
117.3
|
|
||
Accounts receivable on unsettled investment sales
|
|
167.2
|
|
|
4.7
|
|
||
Accounts payable on unsettled investment purchases
|
|
(47.7
|
)
|
|
(34.6
|
)
|
||
Interest-bearing funds held by ceding companies
(3)
|
|
71.4
|
|
|
73.6
|
|
||
Interest-bearing funds held under reinsurance treaties
(4)
|
|
(14.8
|
)
|
|
(12.7
|
)
|
||
Net investment assets
|
|
$
|
8,119.5
|
|
|
$
|
8,768.5
|
|
Total White Mountains’ common shareholders’ equity
|
|
$
|
3,809.3
|
|
|
$
|
4,087.7
|
|
Noncontrolling interest—OneBeacon Ltd.
|
|
259.7
|
|
|
273.1
|
|
||
Noncontrolling interest— SIG Preference Shares
|
|
250.0
|
|
|
250.0
|
|
||
Debt
|
|
676.6
|
|
|
677.5
|
|
||
Total capital
(1)
|
|
4,995.6
|
|
|
5,288.3
|
|
||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio, net of
applicable taxes
|
|
(59.3
|
)
|
|
—
|
|
||
Total adjusted capital
|
|
4,936.3
|
|
|
$
|
5,288.3
|
|
|
Insurance float
|
|
$
|
3,183.2
|
|
|
$
|
3,480.2
|
|
Insurance float as a multiple of total adjusted capital
|
|
0.6x
|
|
|
0.7x
|
|
||
Net investment assets as a multiple of total adjusted capital
|
|
1.6x
|
|
|
1.7x
|
|
||
Insurance float as a multiple of White Mountains’ common shareholders’ equity
|
|
0.8x
|
|
|
0.9x
|
|
||
Net investment assets as a multiple of White Mountains’ common shareholders’ equity
|
|
2.1x
|
|
|
2.1x
|
|
($ in millions)
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
OBH Senior Notes, carrying value
|
|
$
|
269.8
|
|
|
$
|
269.8
|
|
SIG Senior Notes, carrying value
|
|
399.4
|
|
|
399.3
|
|
||
WTM Bank Facility
|
|
—
|
|
|
—
|
|
||
Old Lyme Note
|
|
2.1
|
|
|
2.1
|
|
||
Other debt
(1)
|
|
5.3
|
|
|
6.3
|
|
||
Total debt
|
|
676.6
|
|
|
677.5
|
|
||
Noncontrolling interest—OneBeacon Ltd.
|
|
259.7
|
|
|
273.1
|
|
||
Noncontrolling interest—SIG Preference Shares
|
|
250.0
|
|
|
250.0
|
|
||
Total White Mountains’ common shareholders’ equity
|
|
3,809.3
|
|
|
4,087.7
|
|
||
Total capital
(2)
|
|
4,995.6
|
|
|
5,288.3
|
|
||
Equity in net unrealized gains from Symetra’s fixed maturity portfolio
|
|
(59.3
|
)
|
|
—
|
|
||
Total adjusted capital
|
|
$
|
4,936.3
|
|
|
$
|
5,288.3
|
|
|
|
|
|
|
||||
Total debt to total adjusted capital
|
|
14
|
%
|
|
13
|
%
|
||
Total debt and preference shares to total adjusted capital
|
|
19
|
%
|
|
18
|
%
|
||
|
|
|
|
|
||||
Deferred tax on safety reserve ("DTSR")
(3)
|
|
$
|
388.0
|
|
|
$
|
370.0
|
|
|
|
|
|
|
||||
Total debt to total adjusted capital, including DTSR
(3)
|
|
13
|
%
|
|
12
|
%
|
||
Total debt and preference shares to total adjusted capital, including DTSR
(3)
|
|
17
|
%
|
|
16
|
%
|
|
|
Increase in fair value of liability
|
||
Millions
|
|
September 30, 2012
|
|
December 31, 2011
|
Decrease 50%
|
|
$3
|
|
$5
|
Decrease 100% (to zero surrenders)
|
|
$6
|
|
$10
|
•
|
changes in adjusted book value per share or return on equity;
|
•
|
business strategy;
|
•
|
financial and operating targets or plans;
|
•
|
incurred losses and the adequacy of its loss and LAE reserves and related reinsurance;
|
•
|
projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts;
|
•
|
expansion and growth of its business and operations; and
|
•
|
future capital expenditures.
|
•
|
the risks associated with Item 1A of White Mountains’ 2011 Annual Report on Form 10-K and
Risk Factors
on
|
•
|
claims arising from catastrophic events, such as hurricanes, earthquakes, floods or terrorist attacks;
|
•
|
the continued availability of capital and financing;
|
•
|
general economic, market or business conditions;
|
•
|
business opportunities (or lack thereof) that may be presented to it and pursued;
|
•
|
competitive forces, including the conduct of other property and casualty insurers and reinsurers;
|
•
|
changes in domestic or foreign laws or regulations, or their interpretation, applicable to White Mountains, its competitors or its clients;
|
•
|
an economic downturn or other economic conditions adversely affecting its financial position;
|
•
|
recorded loss reserves subsequently proving to have been inadequate;
|
•
|
actions taken by ratings agencies from time to time, such as financial strength or credit ratings downgrades or placing ratings on negative watch; and
|
•
|
other factors, most of which are beyond White Mountains’ control.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures
.
|
Part II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Issuer Purchases of Equity Securities.
|
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)
|
|||||
July 1- 30, 2012
|
|
50,000
|
|
|
|
$
|
528.45
|
|
|
50,000
|
|
|
970,496
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
50,000
|
|
|
|
$
|
528.45
|
|
|
50,000
|
|
|
970,496
|
|
Item 3.
|
Defaults Upon Senior Securities
.
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
.
|
Item 6.
|
Exhibits
.
|
(a)
|
|
Exhibits
|
|||||
|
|
11
|
|
—
|
|
|
Statement Re Computation of Per Share Earnings. **
|
|
|
10.1
|
|
—
|
|
|
Stock Purchase Agreement by and among the OneBeacon Insurance Group Ltd., OneBeacon Insurance Group LLC, Trebuchet and Armour Group Holdings Limited dated as of October 18, 2012. *
|
|
|
10.2
|
|
—
|
|
|
Regulation 114 Trust Agreement by and among Build America Mutual Assurance Company, HG Re Ltd. and The Bank of New York Mellon, dated as of July 20, 2012. *
|
|
|
10.3
|
|
—
|
|
|
Supplemental Trust Agreement by and among Build America Mutual Assurance Company, HGR Patton (Luxembourg) S.à r.l., United States of America Branch,
and The Bank of New York Mellon, dated as of July 20, 2012. *
|
|
|
10.4
|
|
—
|
|
|
Surplus Note Purchase Agreement between Build America Mutual Assurance Company, as Issuer and HG Holdings Ltd. and HG Re Ltd. as Purchasers dated as of July 17, 2012. *
|
|
|
31.1
|
|
—
|
|
|
Principal Executive Officer Certification Pursuant to Rule 13a-14 (a) of the Securities Exchange Act of 1934, as Amended. *
|
|
|
31.2
|
|
—
|
|
|
Principal Financial Officer Certification Pursuant to Rule 13a-14 (a) of the Securities Exchange Act of 1934, as Amended. *
|
|
|
32.1
|
|
—
|
|
|
Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
|
|
|
32.2
|
|
—
|
|
|
Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
|
|
|
101.1
|
|
—
|
|
|
The following financial information from White Mountains’ Quarterly Report on Form 10Q for the quarter ended September 30, 2012 formatted in XBRL: (i) Consolidated Balance Sheets, September 30, 2012 and December 31, 2011; (ii) Consolidated Statements of Operations and Comprehensive Income, Three Months and Nine Months Ended September 30, 2012 and 2011; (iii) Consolidated Statements of Changes in Equity, Nine Months Ended September 30, 2012 and 2011; (iv) Consolidated Statements of Cash Flows, Nine Months Ended September 30, 2012 and 2011; and (v) Notes to Consolidated Financial Statements.*
|
*
|
Included herein
|
**
|
Not included as an exhibit as the information is contained elsewhere within this report. See
Note 9
of the Notes to Consolidated Financial Statements.
|
|
|
|
WHITE MOUNTAINS INSURANCE GROUP, LTD.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
October 30, 2012
|
|
|
By: /s/ J. Brian Palmer
|
|
|
|
|
J. Brian Palmer
|
|
|
|
|
Vice President and Chief Accounting Officer
|
ARTICLE I
|
DEFINITIONS AND TERMS 1
|
Section 1.1
|
Definitions 1
|
Section 1.2
|
Interpretation 14
|
ARTICLE II
|
PURCHASE AND SALE 16
|
Section 2.1
|
Purchase and Sale 16
|
Section 2.2
|
Closing 17
|
Section 2.3
|
Post-Closing Adjustment of the Closing Purchase Price 18
|
Section 2.4
|
No Set-off 22
|
ARTICLE III
|
REPRESENTATIONS AND WARRANTIES OF SELLER 22
|
Section 3.1
|
Organization and Authority 22
|
Section 3.2
|
Binding Effect 22
|
Section 3.3
|
Organization, Qualification and Authority of the Acquired Companies 23
|
Section 3.4
|
Capital Structure; Ownership of the Acquired Companies 23
|
Section 3.5
|
Filings and Consents 24
|
Section 3.6
|
No Violations 24
|
Section 3.7
|
Financial and Statutory Statements; No Undisclosed Liabilities 24
|
Section 3.8
|
Absence of Certain Changes 25
|
|
1
|
|
Section 3.9
|
Litigation; Governmental Orders 26
|
Section 3.10
|
Taxes. 26
|
Section 3.11
|
Employee Benefits 28
|
Section 3.12
|
Compliance with Laws; Governmental Authorizations 30
|
Section 3.13
|
Intellectual Property. 30
|
Section 3.14
|
Material Contracts 32
|
Section 3.15
|
Assets; Real Property 33
|
Section 3.16
|
Finders’ Fees 34
|
Section 3.17
|
Insurance Contracts 34
|
Section 3.18
|
Reinsurance 35
|
Section 3.19
|
Investment Assets 35
|
Section 3.20
|
Labor Matters 35
|
Section 3.21
|
Intercompany Agreements 35
|
Section 3.22
|
Environmental Laws 36
|
Section 3.23
|
Insurance 36
|
Section 3.24
|
Bank Accounts 36
|
ARTICLE IV
|
REPRESENTATIONS AND WARRANTIES OF PURCHASER 36
|
Section 4.1
|
Organization and Authority 36
|
|
2
|
|
Section 4.2
|
Binding Effect 36
|
Section 4.3
|
Governmental Filings and Consents 37
|
Section 4.4
|
No Violations 37
|
Section 4.5
|
Compliance with Laws 37
|
Section 4.6
|
Purchaser Impediments 37
|
Section 4.7
|
Finders’ Fees 38
|
Section 4.8
|
Financial Capability 38
|
Section 4.9
|
Purchase for Own Account 38
|
ARTICLE V
|
COVENANTS 38
|
Section 5.1
|
Access; Confidentiality 38
|
Section 5.2
|
Conduct of Business 39
|
Section 5.3
|
Commercially Reasonable Efforts; Regulatory Matters; Quarterly Balance Sheets 41
|
Section 5.4
|
Tax Matters. 43
|
Section 5.5
|
Employee Matters 50
|
Section 5.6
|
Transfers of Intellectual Property; Use of Names and Marks 52
|
Section 5.7
|
Intercompany Agreements and Accounts 53
|
Section 5.8
|
Further Assurances 53
|
Section 5.9
|
Resignations 53
|
|
3
|
|
Section 5.10
|
Insurance 53
|
Section 5.11
|
Release of Guarantees 54
|
Section 5.12
|
Notification of Certain Matters 54
|
Section 5.13
|
Restructuring 54
|
Section 5.14
|
Run-Off Business Consulting Engagement Agreement 55
|
Section 5.15
|
Investment Assets 55
|
Section 5.16
|
Business Activities 57
|
Section 5.17
|
Available Ceded Reinsurance 57
|
Section 5.18
|
Closing Date Capital Contribution 58
|
Section 5.19
|
Additional Required Capital 58
|
Section 5.20
|
Certain Restrictions 59
|
Section 5.21
|
Non-Solicitation 60
|
Section 5.22
|
Actuarial Fees 61
|
Section 5.23
|
Fronting Matters 61
|
Section 5.24
|
Gen Re Cessions 62
|
Section 5.25
|
Collection and Sharing of Allocated Balances 62
|
ARTICLE VI
|
CONDITIONS TO CLOSING 63
|
Section 6.1
|
Conditions to the Obligations of Purchaser and Seller 63
|
|
4
|
|
Section 6.2
|
Conditions to the Obligations of Purchaser 63
|
Section 6.3
|
Conditions to the Obligations of Seller 64
|
ARTICLE VII
|
SURVIVAL; INDEMNIFICATION 64
|
Section 7.1
|
Survival 64
|
Section 7.2
|
Indemnification by Purchaser 65
|
Section 7.3
|
Indemnification by Seller 65
|
Section 7.4
|
Claims 66
|
Section 7.5
|
Characterization of Indemnification Payments 68
|
Section 7.6
|
Certain Indemnification Matters 68
|
Section 7.7
|
Exclusive Remedy 70
|
Section 7.8
|
Reserves 70
|
ARTICLE VIII
|
TERMINATION 70
|
Section 8.1
|
Termination 70
|
Section 8.2
|
Effect of Termination 71
|
ARTICLE IX
|
MISCELLANEOUS 71
|
Section 9.1
|
Notices 71
|
Section 9.2
|
Amendment; Modification and Waiver 72
|
Section 9.3
|
Assignment 73
|
|
5
|
|
Section 9.4
|
Entire Agreement 73
|
Section 9.5
|
No Third Party Beneficiaries 73
|
Section 9.6
|
Public Disclosure 73
|
Section 9.7
|
No Other Representations and Warranties; Due Investigation 73
|
Section 9.8
|
Expenses 74
|
Section 9.9
|
Disclosure Schedules 75
|
Section 9.10
|
Governing Law 75
|
Section 9.11
|
Submission to Jurisdiction 76
|
Section 9.12
|
WAIVER OF JURY TRIAL 76
|
Section 9.13
|
Counterparts 76
|
Section 9.14
|
Severability 77
|
Section 9.15
|
Specific Performance 77
|
Section 9.16
|
Seller Parent Guaranty 77
|
Section 9.17
|
Purchaser Parent Guaranty 77
|
|
6
|
|
SECTION 1.
|
Deposit of Assets into the Regulation 114 Trust Account
.
|
SECTION 2.
|
Withdrawal or Transfer of Assets from the Regulation 114 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 Regulation 114 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 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
.
|
ARTICLE I
|
DEFINITIONS 1
|
Section 1.01
|
Definitions 1
|
Section 1.02
|
Other Definitional Provisions. 3
|
ARTICLE II
|
PURCHASE AND SALE OF SURPLUS NOTES 4
|
Section 2.01
|
Purchase and Sale of Surplus Notes 4
|
Section 2.02
|
Delivery and Payment 4
|
Section 2.03
|
Forms of Surplus Notes 4
|
ARTICLE III
|
TERMS AND CONDITIONS OF REPAYMENT; MATURITY 5
|
Section 3.01
|
Interest 5
|
Section 3.02
|
Principal 5
|
Section 3.03
|
Payments by the Issuer. 5
|
Section 3.04
|
Priority of Payment 6
|
Section 3.05
|
Pre-Payment 6
|
ARTICLE IV
|
REGISTRATION OF SURPLUS NOTES; TRANSFER AND EXCHANGE 6
|
Section 4.01
|
Surplus Note Register 6
|
Section 4.02
|
Exchanges and Transfers 6
|
ARTICLE V
|
PURCHASERS' REPRESENTATIONS 7
|
Section 5.01
|
Investment Intent 7
|
ARTICLE VI
|
EVENTS OF DEFAULT 7
|
Section 6.01
|
Events of Default 7
|
Section 6.02
|
Remedies Upon an Event of Default 7
|
ARTICLE VII
|
REPRESENTATIONS AND WARRANTIES 7
|
Section 7.01
|
Representations and Warranties 7
|
ARTICLE VIII
|
COVENANTS OF THE ISSUER 8
|
Section 8.01
|
Covenants 8
|
ARTICLE IX
|
SUBORDINATION 9
|
Section 9.01
|
Subordination 9
|
ARTICLE X
|
REDEMPTION 9
|
Section 10.01
|
Redemption of Surplus Notes. 9
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Section 10.02
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Effect of Redemption Notice 10
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Section 10.03
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No Other Redemption 10
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ARTICLE XI
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MISCELLANEOUS 10
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Section 11.01
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Notices 10
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Section 11.02
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IRS Forms. 10
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Section 11.03
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Amendments, Waivers. 10
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Section 11.04
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Successors and Assigns; Third Party Beneficiaries 11
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Section 11.05
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Severability 11
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Section 11.06
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Binding Effect 11
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Section 11.07
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GOVERNING LAW; CONSENT TO JURISDICTION 11
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Section 11.08
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Execution in Counterparts 11
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Section 11.09
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Entire Agreement 11
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Section 11.10
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Limited Recourse 11
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Section 11.11
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Headings 12
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(1)
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the Redemption Date, which shall be a Business Day;
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(2)
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that Surplus Notes must be surrendered to the Issuer to collect payment of the Redemption Price;
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(3)
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that the Redemption Price for the Surplus Notes as to which a Redemption Notice has been duly given, as set forth in such Redemption Notice, will be paid promptly following the later of the Redemption Date and the time of surrender of Surplus Notes as described in clause (2); and
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(4)
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that, unless the Issuer defaults in making payment of such Redemption Price on the Surplus Notes surrendered for purchase, interest on the Surplus Notes surrendered for purchase will cease to accrue on and after the Redemption Date.
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Address for Notices to Issuer:
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By:
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Name: Title: |
By:
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Name: Title: |
/s/ Raymond Barrette
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Chairman and Chief Executive Officer
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(Principal Executive Officer)
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/s/ David T. Foy
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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•
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and,
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•
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report.
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/s/ Raymond Barrette
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Chairman and Chief Executive Officer
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(Principal Executive Officer)
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•
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and,
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•
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report.
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/s/ David T. Foy
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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