WHITE MOUNTAINS INSURANCE GROUP LTD – 10-K – Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains "forward-looking statements". White Mountains
intends statements that are not historical in nature, which are hereby
identified as forward-looking statements, to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. White
Mountains cannot promise that its expectations in such forward-looking
statements will turn out to be correct. White Mountains's actual results could
be materially different from and worse than its expectations. See
"FORWARD-LOOKING STATEMENTS" on page 97 for specific important factors that
could cause actual results to differ materially from those contained in
forward-looking statements.
The following discussion also includes thirteen non-GAAP financial measures: (i)
adjusted book value per share, (ii) growth in adjusted book value per share
excluding net realized and unrealized investment losses from White Mountains's
investment in MediaAlpha, (iii) BAM's gross written premiums and MSC from new
business, (iv) Ark's adjusted loss and loss adjustment expense ratio, (v) Ark's
adjusted insurance acquisition expense ratio, (vi) Ark's adjusted other
underwriting expense ratio, (vii) Ark's adjusted combined ratio, (viii) NSM's
earnings before interest, taxes, depreciation and amortization ("EBITDA"), (ix)
NSM's adjusted EBITDA, (x) Kudu's EBITDA, (xi) Kudu's adjusted EBITDA, (xii)
total consolidated portfolio returns excluding MediaAlpha and (xiii) adjusted
capital, that have been reconciled from their most comparable GAAP financial
measures on page 71. White Mountains believes these measures to be useful in
evaluating White Mountains's financial performance and condition.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
Overview-Year Ended December 31, 2021 versus Year Ended December 31, 2020
White Mountains ended 2021 with book value per share of $1,176 and adjusted book
value per share of $1,190, a decrease of 6.5% and 5.7% in the year, including
dividends. Comprehensive (loss) income attributable to common shareholders was
$(273) million in 2021 compared to $716 million in 2020. The results in 2021
included $380 million of net realized and unrealized investment losses from
White Mountains's investment in MediaAlpha. Excluding net realized and
unrealized investment losses from White Mountains's investment in MediaAlpha,
adjusted book value per share increased 4.3% in 2021, including dividends,
reflecting strong results within White Mountains's operating businesses. The
results in 2020 included $746 million of net investment income and net realized
and unrealized investment gains from White Mountains's investment in MediaAlpha.
The results in 2020 also included $131 million from the release of a deferred
tax liability as a result of an internal reorganization in connection with the
MediaAlpha IPO.
At the December 31, 2021 closing price of $15.44 per share, which was down from
$39.07 at December 31, 2020, the value of White Mountains's investment in
MediaAlpha was $262 million, which was down from $802 million at December 31,
2020. Based on White Mountains's ownership of 16.9 million shares of MediaAlpha
as of December 31, 2021, each $1.00 per share increase or decrease in the stock
price of MediaAlpha will result in an approximate $5.65 per share increase or
decrease in White Mountains's book value per share and adjusted book value per
share. On March 23, 2021, MediaAlpha completed a secondary offering of 8.05
million shares at $46.00 per share ($44.62 per share net of underwriting fees).
In the secondary offering, White Mountains sold 3.6 million shares for net
proceeds of $160 million.
White Mountains capital base was, more or less, fully deployed at the end of
2020 with approximately $150 million of undeployed capital. During 2021, White
Mountains repurchased and retired 98,511 of its common shares for $108 million.
This was more than offset by (i) the $160 million of net proceeds from the
MediaAlpha secondary offering and (ii) the termination of White Mountains
commitment to provide up to $200 million of additional equity capital to Ark as
a result of Ark raising $163 million in new subordinated debt during the third
quarter. As a result, White Mountains finished 2021 with approximately $400
million of undeployed capital.
In the HG Global/BAM segment, gross written premiums and MSC collected totaled
$118 million in 2021 compared to $131 million in 2020. Total pricing was 67
basis points in 2021 compared to 76 basis points in 2020. BAM insured municipal
bonds with par value of $17.5 billion in 2021 compared to $17.3 billion in 2020.
During 2021, BAM completed an assumed reinsurance transaction to insure
municipal bonds with a par value of $806 million. During 2020, BAM completed an
assumed reinsurance transaction to insure municipal bonds with a par value of
$37 million.
In December 2021, BAM made a $34 million cash payment of principal and interest
on the BAM Surplus Notes held by HG Global. In December 2020, BAM made a $30
million cash payment of principal and interest on the BAM Surplus Notes held by
HG Global. In January 2020, BAM made a one-time $65 million cash payment of
principal and interest on the BAM Surplus Notes held by HG Global. BAM's total
claims paying resources were $1,192 million as of December 31, 2021 compared to
$987 million as of December 31, 2020. During 2021, BAM completed a reinsurance
agreement with Fidus Re that increased BAM's claims paying resources by $150
million.

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On January 1, 2021, White Mountains closed the Ark Transaction. Ark's GAAP
combined ratio was 87% in 2021. Ark's adjusted combined ratio, which adds back
amounts ceded to TPC Providers, was 85% in 2021. The adjusted combined ratio in
2021 included 10 points of catastrophe losses and six points of net favorable
prior year reserve development. Ark reported gross written premiums of $1,059
million, net written premiums of $859 million and net earned premiums of $637
million in 2021. Ark reported pre-tax income of $53 million in 2021, which
reflected $25 million of transaction expenses related to the Ark Transaction. In
the January 2022 renewal season, Ark wrote gross written premiums in excess of
$500 million.
NSM reported commission and other revenues of $330 million, pre-tax loss of $28
million and adjusted EBITDA of $71 million in 2021 compared to commission and
other revenues of $285 million, pre-tax loss of $13 million and adjusted EBITDA
of $59 million in 2020. On April 12, 2021, NSM sold its Fresh Insurance motor
business, which resulted in a loss of $29 million recorded in the first quarter
of 2021. Results in 2021 include the results of J.C. Taylor from August 6, 2021,
the date of its acquisition. Results in 2021 and 2020 include the results of
Kingsbridge from April 7, 2020, the date of its acquisition.
Kudu reported total revenues of $134 million, pre-tax income of $108 million and
adjusted EBITDA of $33 million in 2021 compared to total revenues of $46
million, pre-tax income of $28 million and adjusted EBITDA of $22 million in
2020. Total revenues and pre-tax income included $22 million of realized gains
and $68 million of unrealized gains on Kudu's Participation Contracts in 2021
compared to $16 million of unrealized gains on Kudu's Participation Contracts in
2020. Kudu deployed $225 million, including transaction costs, in six asset
management firms in 2021. As of December 31, 2021, Kudu had deployed $612
million in 17 asset and wealth management firms globally, including one that was
exited. As of December 31, 2021, the asset and wealth management firms have
combined assets under management of approximately $66 billion, spanning a range
of asset classes, including real estate, real assets, wealth management, hedge
funds, private equity and alternative credit strategies.
White Mountains's pre-tax total consolidated portfolio return on invested assets
was -3.4% in 2021. This return included $380 million of net realized and
unrealized investment losses from White Mountains's investment in MediaAlpha.
Excluding MediaAlpha, the total consolidated portfolio return on invested assets
was 6.4% in 2021. Excluding MediaAlpha, investment returns in 2021 were driven
primarily by favorable other long-term investments results.
White Mountains's pre-tax total consolidated portfolio return on invested assets
was 31.9% in 2020. This return included $746 million of net investment income
and net realized and unrealized investment gains from White Mountains's
investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio
return on invested assets was 4.6% in 2020. Excluding MediaAlpha, investment
returns in 2020 were impacted by White Mountains's decision to liquidate its
portfolio of common equity securities in the second half of 2020 in preparation
for funding the Ark Transaction as equity markets rallied in the fourth quarter.

Overview-Year Ended December 31, 2020 versus Year Ended December 31, 2019
White Mountains ended 2020 with book value per share of $1,259 and adjusted book
value per share of $1,264, an increase of 23.1% and 24.2% in the year, including
dividends. Comprehensive income (loss) attributable to common shareholders was
$716 million in 2020 compared to $413 million in 2019. The results in 2020
included $746 million of net investment income and net realized and unrealized
investment gains from White Mountains's investment in MediaAlpha. The results in
2020 also included $131 million from the release of a deferred tax liability as
a result of an internal reorganization in connection with the MediaAlpha IPO.
The results in 2019 included $256 million of net investment income, realized
gains and net unrealized investment gains from White Mountains's investment in
MediaAlpha, $182 million of which was from the 2019 MediaAlpha Transaction.
On October 30, 2020, MediaAlpha completed the MediaAlpha IPO. In the offering,
White Mountains sold 3.6 million shares and received total proceeds of $64
million. Following the MediaAlpha IPO, White Mountains owned 20.5 million
MediaAlpha shares. At the December 31, 2020 MediaAlpha closing price of $39.07
per share, the value of White Mountains's remaining investment in MediaAlpha was
$802 million.
On October 1, 2020, White Mountains entered into a subscription and purchase
agreement (the "Ark SPA") with Ark and certain selling shareholders
(collectively with Ark, the "Ark Sellers"). Under the terms of the Ark SPA,
White Mountains agreed to contribute $605 million of equity capital to Ark, at a
pre-money valuation of $300 million, and to purchase $41 million of shares from
the Ark Sellers. White Mountains also agreed to contribute up to an additional
$200 million of equity capital to Ark in 2021. In accordance with the Ark SPA,
in the fourth quarter of 2020 White Mountains pre-funded/placed in escrow a
total of $646 million in preparation for closing the transaction, which is
reflected on the balance sheet within the Other Operations segment as of
December 31, 2020.

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On January 1, 2021, White Mountains closed the Ark Transaction in accordance
with the terms of the Ark SPA. At closing, White Mountains owned 72.0% of Ark on
a basic shares outstanding basis (63.0% after taking account of management's
equity incentives). Management's equity incentives are subject to an 8% rate of
return threshold with no catch-up. The remaining shares are owned by employees.
In the future, management rollover shareholders could earn additional shares in
Ark if and to the extent that White Mountains achieves certain multiple of
invested capital return thresholds. These additional shares are generally
eligible to vest in three equal tranches at multiple on invested capital
("MOIC") thresholds of 2.0x, 2.5x and 3.0x. If fully earned, these additional
shares would represent 13% of the shares outstanding at closing.
In the January 2021 renewal season, Ark wrote gross written premiums in excess
of $270 million.
During 2020, White Mountains deployed approximately $1.0 billion in new business
opportunities, including commitments related to the Ark Transaction, which
closed on January 1, 2021. Also during 2020, White Mountains repurchased and
retired 99,087 of its common shares for $85 million. As a result, White
Mountains's capital base was, more or less fully deployed at the end of 2020
with approximately $150 million of undeployed capital.
Gross written premiums and MSC collected in the HG Global/BAM segment totaled
$131 million in 2020 compared to $107 million in 2019. Total pricing was 76
basis points in 2020 compared to 83 basis points in 2019. BAM insured municipal
bonds with par value of $17.3 billion in 2020 compared to $12.8 billion in 2019.
During 2020, BAM completed an assumed reinsurance transaction to insure
municipal bonds with a par value of $37 million. During 2019, BAM completed an
assumed reinsurance transaction to insure municipal bonds with a par value of
$1.1 billion.
In December 2020, BAM made a $30 million cash payment of principal and interest
on the BAM Surplus Notes held by HG Global. In January 2020, BAM made a one-time
$65 million cash payment of principal and interest on the BAM Surplus Notes held
by HG Global. In December 2019, BAM made a $32 million cash payment (which
included a one-time $10 million cash payment) of principal and interest on the
BAM Surplus Notes held by HG Global. BAM's total claims paying resources were
$987 million as of December 31, 2020 compared to $938 million as of December 31,
2019.
NSM reported commission and other revenues of $285 million, pre-tax loss of $13
million and adjusted EBITDA of $59 million in 2020 compared to commission and
other revenues of $233 million, pre-tax loss of $2 million and adjusted EBITDA
of $48 million in 2019. Results in the year ended December 31, 2020 include the
results of Kingsbridge from April 7, 2020, the date of its acquisition. Results
in the years ended December 31, 2020 and 2019 include the results of Embrace, a
nationwide provider of pet health insurance for dogs and cats, from April 1,
2019, the date of its acquisition.
Kudu reported total revenues of $46 million, pre-tax income of $28 million and
adjusted EBITDA of $22 million in 2020 compared to total revenues of $21
million, pre-tax income of $11 million and adjusted EBITDA of $9 million for the
period from April 4, 2019, the date of the Kudu Transaction, through December
31, 2019. Total revenues and pre-tax income included $16 million of unrealized
gains on Kudu's Participation Contracts in 2020 compared to $6 million in the
period from April 4, 2019 to December 31, 2019. Kudu deployed $121 million,
including transaction costs, in five asset management firms in 2020. As of
December 31, 2020, Kudu had deployed a total of $386 million, including
transaction costs, in 13 asset management firms with combined assets under
management of approximately $45 billion.
White Mountains's pre-tax total return on invested assets was 31.9% in 2020.
This return included $746 million of net investment income and net realized and
unrealized investment gains from MediaAlpha. Excluding MediaAlpha, the total
return on invested assets was 4.6% in 2020. Investment returns in 2020 were
impacted by White Mountains's decision to liquidate its portfolio of common
equity securities in the second half of 2020 in preparation for funding the Ark
Transaction as equity markets rallied in the fourth quarter.
White Mountains's pre-tax total return on invested assets was 20.4% in 2019.
This return included $188 million of net investment income and net unrealized
investment gains from MediaAlpha. Excluding MediaAlpha, the total return on
invested assets was 13.0% in 2019. Investment returns in 2019 benefited from
White Mountains's decision to increase equity exposure after markets declined
sharply at the end of 2018 ahead of the strong rally in equity markets during
2019.

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Adjusted book value per share

The following table presents White Mountains's adjusted book value per share, a
non-GAAP financial measure, as of December 31, 2021, 2020 and 2019 and
reconciles this non-GAAP measure to book value per share, the most comparable
GAAP measure. See "NON-GAAP FINANCIAL MEASURES" on page 71.

                                                                         

the 31st of December,

                                                             2021            2020            2019
Book value per share numerators (in millions):
White Mountains's common shareholders' equity -
 GAAP book value per share numerator                     $  3,548.1      $  3,906.0      $  3,261.5
Time-value of money discount on expected future
payments
  on the BAM Surplus Notes (1)                               (125.9)         (142.5)         (151.6)
HG Global's unearned premium reserve (1)                      214.6           190.0           156.7
HG Global's net deferred acquisition costs (1)                (60.8)          (52.4)          (41.5)
Adjusted book value per share numerator                  $  3,576.0      $  3,901.1      $  3,225.1
Book value per share denominators (in thousands of
shares):
Common shares outstanding - GAAP book value per share
denominator                                                 3,017.8         3,102.0         3,185.4
Unearned restricted common shares                             (13.7)          (14.8)          (18.5)
Adjusted book value per share denominator                   3,004.1         3,087.2         3,166.9
GAAP book value per share                                $ 1,175.73      $ 1,259.18      $ 1,023.91
Adjusted book value per share                            $ 1,190.39      $ 1,263.64      $ 1,018.41
Year-to-date dividends paid per share                    $     1.00      $  

1.00 $1.00

(1) Amounts reflect The White Mountains preferred shareholding in HG Global of
96.9%.

Good will and other intangible assets

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The following tables presents goodwill and other intangible assets that are
included in White Mountains's adjusted book value as of December 31, 2021, 2020
and 2019:

                                                                            December 31,
Millions                                                           2021         2020         2019
Goodwill:
Ark                                                             $  116.8      $     -      $     -
NSM                                                                503.2        506.4        381.6
Kudu                                                                 7.6          7.6          7.6
Other Operations                                                    17.9         11.5          5.5
Total goodwill                                                     645.5        525.5        394.7
Other intangible assets:
Ark                                                                175.7            -            -
NSM                                                                222.2        230.4        241.4
Kudu                                                                 1.3          1.6          2.0
Other Operations                                                    21.2         24.9         16.6
Total other intangible assets                                      420.4        256.9        260.0
Total goodwill and other intangible assets (1)                   1,065.9    

782.4 654.7

Total allocated goodwill and other intangible assets
not controlling

  interests                                                       (117.6)   

(28.1) (23.4)
Total goodwill and other intangible assets included in White
mountains

  common shareholders' equity                                   $  948.3    

$754.3 $631.3

(1) See Note 4 – “Good will and other intangible assets” on page F-32 for more details
other intangible assets.


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Summary of consolidated results

The following table shows The White Mountains consolidated financial results by
industry for years ended December 31, 20212020 and 2019:

                                                                    Year Ended December 31,
Millions                                                        2021           2020         2019
Revenues
Financial Guarantee revenues                                 $    23.0      $   68.5      $  66.6
P&C Insurance and Reinsurance revenues                           668.5             -            -
Specialty Insurance Distribution revenues                        330.4         285.1        233.1
Asset Management revenues                                        134.0          45.7         21.2
Marketing Technology revenues                                        -             -         48.8
Other Operations revenues                                       (211.1)        781.4        523.7
Total revenues                                                   944.8       1,180.7        893.4
Expenses
Financial Guarantee expenses                                      65.4          63.8         56.6
P&C Insurance and Reinsurance expenses                           615.6             -            -
Specialty Insurance Distribution expenses                        358.5         297.7        235.2
Asset Management expenses                                         26.5          18.1         10.4
Marketing Technology expenses                                        -             -         54.9
Other Operations expenses                                        180.8         155.9        131.2
Total expenses                                                 1,246.8         535.5        488.3
Pre-tax income (loss)
Financial Guarantee pre-tax income (loss)                        (42.4)          4.7         10.0
P&C Insurance and Reinsurance pre-tax income (loss)               52.9             -            -
Specialty Insurance Distribution pre-tax income (loss)           (28.1)        (12.6)        (2.1)
Asset Management, pre-tax income (loss)                          107.5          27.6         10.8
Marketing Technology pre-tax income (loss)                           -             -         (6.1)
Other Operations pre-tax income (loss)                          (391.9)        625.5        392.5
Total pre-tax income (loss)                                     (302.0)        645.2        405.1
Income tax (expense) benefit                                     (38.6)         20.5        (29.3)
Net income (loss) from continuing operations                    (340.6)     

665.7 375.8

 Gain (loss) on sale of discontinued operations, net of
tax                                                               18.7          (2.3)          .8

Net income (loss)                                               (321.9)        663.4        376.6
Net (income) loss attributable to non-controlling
interests                                                         46.5      

45.3 37.9
Net income (loss) attributable to The White Mountains
ordinary shareholders

                                             (275.4)        708.7        414.5
Other comprehensive income (loss), net of tax                      1.9      

7.3 (1.4)

Comprehensive income (loss)                                     (273.5)        716.0        413.1
Comprehensive (income) loss attributable to
non-controlling interests                                           .2           (.5)           -
Comprehensive income (loss) attributable to White
Mountains's
  common shareholders                                        $  (273.3)     $  715.5      $ 413.1





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I. Summary of operations by segment

As of December 31, 2021, White Mountains conducted its operations through five
segments: (1) HG Global/BAM, (2) Ark, (3) NSM, (4) Kudu and (5) Other
Operations. In addition, MediaAlpha was consolidated as a reportable segment
until the date of the 2019 MediaAlpha Transaction. A discussion of White
Mountains's consolidated investment operations is included after the discussion
of operations by segment. White Mountains's segment information is presented in
Note 16 - "Segment Information" on page F-68.
As a result of the Ark Transaction, White Mountains began consolidating Ark in
its financial statements as of January 1,
2021. See Note 2 - "Significant Transactions" on page F-17.
As a result of the Kudu Transaction, White Mountains began consolidating Kudu in
its financial statements in the second quarter of 2019. White Mountains's
segment disclosures for the year ended December 31, 2019 include Kudu's results
of operations for the period from April 4, 2019, the date of the Kudu
Transaction, to December 31, 2019. See Note 2 - "Significant Transactions" on
page F-17
As a result of the 2019 MediaAlpha Transaction, White Mountains no longer
consolidated MediaAlpha, and consequently it was no longer a reportable segment.
White Mountains's segment disclosures for the year ended December 31, 2019
include MediaAlpha's results of operations for the period from January 1, 2019
to February 26, 2019, the date of the 2019 MediaAlpha Transaction. See Note 2 -
"Significant Transactions" on page F-17.

HG Global/BAM

The following tables present the components of pre-tax income (loss) included in
White Mountains's HG Global/BAM segment related to the consolidation of HG
Global, which includes HG Re and its other wholly-owned subsidiaries, and BAM
for the years ended December 31, 2021, 2020 and 2019:

                                                                                     December 31, 2021
Millions                                                     HG Global            BAM            Eliminations            Total
Direct written premiums                                    $        -          $  51.2          $          -          $   51.2
Assumed written premiums                                         47.6              4.6                 (47.6)              4.6
Gross written premiums                                           47.6             55.8                 (47.6)             55.8
Ceded written premiums                                              -            (47.6)                 47.6                 -
Net written premiums                                       $     47.6          $   8.2          $          -          $   55.8

Earned insurance and reinsurance premiums                  $     22.2       

$4.7 $- $26.9

Net investment income (loss)                                      7.2             10.3                     -              17.5
Net investment income (loss) - BAM Surplus Notes                 12.0                -                 (12.0)                -
Net realized and unrealized investment gains
(losses)                                                        (13.7)            (9.2)                    -             (22.9)
Other revenues                                                     .5              1.0                     -               1.5
Total revenues                                                   28.2              6.8                 (12.0)             23.0
Insurance and reinsurance acquisition expenses                    5.7              2.6                     -               8.3

General and administrative expenses                               2.0             55.1                     -              57.1
Interest expense - BAM Surplus Notes                                -             12.0                 (12.0)                -
Total expenses                                                    7.7             69.7                 (12.0)             65.4
Pre-tax income (loss)                                      $     20.5          $ (62.9)         $          -          $  (42.4)
Supplemental information:
MSC collected (1)                                          $        -          $  62.2          $          -          $   62.2

(1) The MSCs collected are recognized directly in BAM’s equity, which is recognized in
non-controlling interest over The White Mountains balance sheet.

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                                                                                      December 31, 2020
Millions                                                      HG Global            BAM            Eliminations           Total
Direct written premiums                                     $        -          $  61.5          $          -          $  61.5
Assumed written premiums                                          53.0               .2                 (53.0)              .2
Gross written premiums                                            53.0             61.7                 (53.0)            61.7
Ceded written premiums                                               -            (53.0)                 53.0                -
Net written premiums                                        $     53.0          $   8.7          $          -          $  61.7

Earned insurance and reinsurance premiums                   $     18.7      

$4.1 $- $22.8
Net investment income (loss)

                                       7.8             11.7                     -             19.5
Net investment income (loss) - BAM Surplus Notes                  18.8                -                 (18.8)               -
Net realized and unrealized investment gains (losses)             11.8             11.9                     -             23.7
Other revenues                                                      .3              2.2                     -              2.5
Total revenues                                                    57.4             29.9                 (18.8)            68.5
Insurance and reinsurance acquisition expenses                     4.7              2.3                     -              7.0

General and administrative expenses                                2.6             54.2                     -             56.8
Interest expense - BAM Surplus Notes                                 -             18.8                 (18.8)               -
Total expenses                                                     7.3             75.3                 (18.8)            63.8
Pre-tax income (loss)                                       $     50.1          $ (45.4)         $          -          $   4.7
Supplemental information:
MSC collected (1)                                           $        -          $  68.9          $          -          $  68.9

(1) The MSCs collected are recognized directly in BAM’s equity, which is recognized in
non-controlling interest over The White Mountains balance sheet.

                                                                                     December 31, 2019
Millions                                                    HG Global            BAM             Eliminations            Total
Direct written premiums                                   $        -          $  28.1    (2)    $          -          $   28.1
Assumed written premiums                                        33.6             10.6                  (33.6)             10.6
Gross written premiums                                          33.6             38.7                  (33.6)             38.7
Ceded written premiums                                             -            (33.6)   (2)            33.6                 -
Net written premiums                                      $     33.6          $   5.1           $          -          $   38.7

Earned insurance and reinsurance premiums                 $     13.1          $   3.2           $          -          $   16.3
Net investment income (loss)                                     7.5             14.1                      -              21.6
Net investment income (loss) - BAM Surplus Notes                27.4                -                  (27.4)                -
Net realized and unrealized investment losses                   11.0             16.1                      -              27.1
Other revenues                                                     -              1.6                      -               1.6
Total revenues                                                  59.0             35.0                  (27.4)             66.6
Insurance and reinsurance acquisition expenses                   3.3              2.4                      -               5.7

General and administrative expenses                              1.6             49.3                      -              50.9
Interest expense - BAM Surplus Notes                               -             27.4                  (27.4)                -
Total expenses                                                   4.9             79.1                  (27.4)             56.6
Pre-tax income (loss)                                     $     54.1          $ (44.1)          $          -          $   10.0
Supplemental information:
MSC collected (1) (2)                                     $        -          $  68.0           $          -          $   68.0


(1) MSC collected are recorded directly to BAM's equity, which is recorded as
non-controlling interest on White Mountains's balance sheet.
(2) During 2019, BAM issued policy endorsements for certain policies issued in
periods prior to the second quarter of 2018. The impact of the policy
endorsements for the year ended December 31, 2019 was a decrease to BAM's gross
written premiums of $13.4 and an increase to MSC collected of $13.4.

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HG Global/BAM Results-Year Ended December 31, 2021 versus Year Ended
December 31, 2020
BAM is required to prepare its financial statements on a statutory accounting
basis for the NYDFS and does not report stand-alone GAAP financial results. BAM
is owned by its members, the municipalities that purchase BAM's insurance for
their debt issuances. BAM charges an insurance premium on each municipal bond
insurance policy it writes. A portion of the premium is MSC and the remainder is
a risk premium. In the event of a municipal bond refunding, a portion of the MSC
from original issuance can be reutilized, in effect serving as a credit against
the total insurance premium on the refunding of the municipal bond.
Gross written premiums and MSC collected in the HG Global/BAM segment totaled
$118 million and $131 million in 2021 and 2020. BAM insured $17.5 billion of
municipal bonds, $15.6 billion of which were in the primary market, in 2021
compared to $17.3 billion of municipal bonds, $15.3 billion of which were in the
primary market, in 2020. During 2021, BAM completed an assumed reinsurance
transaction to insure municipal bonds with a par value of $806 million. During
2020, BAM completed an assumed reinsurance transaction to insure municipal bonds
with a par value of $37 million. Demand remained strong for insured bonds in the
primary market, as insured penetration in the primary market was 8.1% in 2021
compared to 7.6% in 2020.
Total pricing, which reflects both gross written premiums and MSC from new
business, decreased to 67 basis points in 2021 compared to 76 basis points in
2020. See "NON-GAAP FINANCIAL MEASURES" on page 71. The decrease in total
pricing was driven primarily by a decrease in pricing and the amount of par
insured in the secondary market during 2021, partially offset by the assumed
reinsurance transaction in the first quarter of 2021. Additionally, during 2021
BAM wrote more higher credit quality business, which can pressure absolute
pricing but, at the same time, improve risk-adjusted pricing. Pricing in the
primary market decreased to 57 basis points in 2021 compared to 59 basis points
in 2020, driven primarily by a decrease in credit spreads. Pricing in the
secondary and assumed reinsurance markets, which is more transaction-specific
than pricing in the primary market, decreased to 155 basis points in 2021
compared to 197 basis points in 2020.
The following table presents the gross par value of primary and secondary market
policies issued, the gross par value of assumed reinsurance, the gross written
premiums and MSC collected and total pricing for the years ended December 31,
2021 and 2020:

                                                                        Year Ended December 31,
$ in Millions                                                           2021                 2020

Gross par value of primary market policies issued                 $    15,560.8          $ 15,279.6
Gross par value of secondary market policies issued                     1,118.9             2,022.9
Gross par value of assumed reinsurance                                    805.5                36.9
Total gross par value of market policies issued                   $    17,485.2          $ 17,339.4
Gross written premiums                                            $        55.6          $     61.7
MSC collected                                                              62.2                68.9
Total gross written premiums and MSC collected                    $       117.8          $    130.6
Present value of future installment MSC collections                           -                  .3

Adjustments to gross written premiums on existing payment
Strategies

                                                                     .2                  .4
Gross written premiums and MSC from new business (1)              $       118.0          $    131.3
Total pricing                                                               67 bps              76 bps

(1) See “NON-GAAP FINANCIAL MEASURES” on page 71.

HG Global reported pre-tax income of $21 million in 2021 compared to $50 million
in 2020. The decrease in pre-tax income was driven primarily by lower investment
returns on the HG Global investment portfolio and a decrease in interest income
on the BAM Surplus Notes. HG Global's results in 2021 included $12 million of
interest income on the BAM Surplus Notes compared to $19 million in 2020.
BAM is a mutual insurance company that is owned by its members. BAM's results
are consolidated into White Mountains's GAAP financial statements and attributed
to non-controlling interests. White Mountains reported pre-tax loss from BAM of
$63 million in 2021 compared to $45 million in 2020. The increase in the pre-tax
loss was driven primarily by lower investment returns on the BAM investment
portfolio partially offset by a decrease in interest expense on the BAM surplus
notes. BAM's results included $12 million of interest expense on the BAM Surplus
Notes and $55 million of general and administrative expenses in 2021 compared to
$19 million of interest expense on the BAM Surplus Notes and $54 million of
general and administrative expenses in 2020.

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In December 2021, BAM made a $34 million cash payment of principal and interest
on the BAM Surplus Notes held by HG Global. Of this payment, $24 million was a
repayment of principal held in the Supplemental Trust and $10 million was a
payment of accrued interest held outside the Supplemental Trust.
In December 2020, BAM made a $30 million cash payment of principal and interest
on the BAM Surplus Notes held by HG Global. Of this payment, $22 million was a
repayment of principal held in the Supplemental Trust and $8 million was a
payment of accrued interest held outside the Supplemental Trust.
In January 2020, BAM made a one-time $65 million cash payment of principal and
interest on the BAM Surplus Notes held by HG Global. Of this payment,
$48 million was a repayment of principal held in the Supplemental Trust,
$1 million was a payment of accrued interest held in the Supplemental Trust and
$16 million was a payment of accrued interest held outside the Supplemental
Trust.
As of December 31, 2021, White Mountains's debt service model indicated that the
BAM Surplus Notes would be fully repaid between six and seven years prior to
final maturity, which is generally consistent with the results of the update of
the debt service model as of December 31, 2020.
Through the COVID-19 pandemic, BAM's portfolio has performed well. All
BAM-insured bond payments due
through February 15, 2022 have been made by insureds, and there are no credits
on BAM's watchlist.

HG Global/BAM Results-Year Ended December 31, 2020 versus Year Ended
December 31, 2019
Gross written premiums and MSC collected in the HG Global/BAM segment totaled
$131 million and $107 million in 2020 and 2019. BAM insured $17.3 billion of
municipal bonds, $15.3 billion of which were in the primary market, in 2020
compared to $12.8 billion of municipal bonds, $10.4 billion of which were in the
primary market, in 2019. During 2020, BAM completed assumed reinsurance
transactions to insure municipal bonds with a par value of $37 million. During
2019, BAM completed assumed reinsurance transactions to insure municipal bonds
with a par value of $1.1 billion. Demand increased for insured bonds in the
primary market as a result of the COVID-19 pandemic, as insured penetration in
the primary market was 7.6% in 2020 compared to 5.9% in 2019.
Total pricing, which reflects both gross written premiums and MSC from new
business, decreased to 76 basis points in 2020 compared to 83 basis points in
2019. See "NON-GAAP FINANCIAL MEASURES" on page 71. The mix of business impacted
2020 total pricing as BAM wrote proportionally more lower-priced primary
business and less higher-priced secondary market and assumed reinsurance
business. Additionally, during 2020 BAM wrote more higher credit quality
business, which can pressure absolute pricing but, at the same time, improve
risk-adjusted pricing. Pricing in the primary market increased to 59 basis
points in 2020 compared to 51 basis points in 2019, driven primarily by
increased demand for insurance and wider credit spreads as a result of the
COVID-19 pandemic. Pricing in the secondary and assumed reinsurance markets,
which is more transaction-specific than pricing in the primary market, decreased
to 197 basis points in 2020 compared to 219 basis points in 2019.
The following table presents the gross par value of primary and secondary market
policies issued, the gross par value of assumed reinsurance, the gross written
premiums and MSC collected and total pricing for the years ended December 31,
2020 and 2019:

                                                                        Year Ended December 31,
$ in Millions                                                          2020                  2019

Gross par value of primary market policies issued                $    15,279.6          $  10,405.1
Gross par value of secondary market policies issued                    2,022.9              1,311.8
Gross par value of assumed reinsurance                                    36.9              1,130.7
Total gross par value of market policies issued                  $    17,339.4          $  12,847.6
Gross written premiums                                           $        61.7    (2)   $      38.7
MSC collected                                                             68.9    (2)          68.0
Total gross written premiums and MSC collected                   $       130.6          $     106.7
Present value of future installment MSC collections                         .3                   .3

Adjustments to gross written premiums on existing payment
Strategies

                                                                    .4                  (.1)
Gross written premiums and MSC from new business (1)             $       131.3          $     106.9
Total pricing                                                              76 bps               83 bps


(1) See "NON-GAAP FINANCIAL MEASURES" on page 71.
(2) During 2019, BAM issued policy endorsements for certain policies issued in
periods prior to the second quarter of 2018. The impact of the policy
endorsements for the year ended December 31, 2019 was a decrease to BAM's gross
written premiums of $13.4 and an increase to MSC collected of $13.4.

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HG Global reported pre-tax income of $50 million in 2020 compared to $54 million
in 2019. The decrease in pretax income was driven primarily by a decrease in
interest income on the BAM Surplus Notes partially offset by an increase in
income from insurance operations. HG Global's results in 2020 included $19
million of interest income on the BAM Surplus Notes compared to $27 million in
2019.
White Mountains reported pre-tax loss from BAM of $45 million in 2020 compared
to $44 million in 2019. The increase in the pre-tax loss was driven primarily by
lower investment returns on the BAM investment portfolio and higher general and
administrative expenses partially offset by a decrease in interest expense on
BAM surplus notes. BAM's results included $19 million of interest expense on the
BAM Surplus Notes and $54 million of general and administrative expenses in 2020
compared to $27 million of interest expense on the BAM Surplus Notes and $49
million of general and administrative expenses in 2019.
In December 2020, BAM made a $30 million cash payment of principal and interest
on the BAM Surplus Notes held by HG Global. Of this payment, $22 million was a
repayment of principal held in the Supplemental Trust and $8 million was a
payment of accrued interest held outside the Supplemental Trust.
In January 2020, HG Global and BAM agreed to amend the BAM Surplus Notes to
extend the end of the variable interest rate period from 2021 to 2024, to extend
the initial 10-year term of the FLRT to the end of 2022 and to enter into the
XOLT. See "HG Global/BAM - Reinsurance Treaties" on page F-58. In connection
with these actions, and reflecting changes in Standard & Poor's insurance rating
methodology, in January 2020, BAM made a one-time $65 million cash payment of
principal and interest on the BAM Surplus Notes held by HG Global. Of this
payment, $48 million was a repayment of principal held in the Supplemental
Trust, $1 million was a payment of accrued interest held in the Supplemental
Trust and $16 million was a payment of accrued interest held outside the
Supplemental Trust.
In December 2019, BAM made a $32 million cash payment (which included a one-time
$10 million cash payment) of principal and interest on the BAM Surplus Notes
held by HG Global. Of this payment, $24 million was a repayment of principal
held in the Supplemental Trust and $8 million was a payment of accrued interest
held outside the Supplemental Trust.
As of December 31, 2020, White Mountains's debt service model indicated that the
BAM Surplus Notes would be fully repaid between six and seven years prior to
final maturity, which is generally consistent with the results of the update of
the debt service model as of December 31, 2019.

Claims Paying Resources
BAM's claims paying resources represent the capital and other financial
resources BAM has available to pay claims and, as such, is a key indication of
BAM's financial strength.
BAM's claims paying resources were $1,192 million as of December 31, 2021
compared to $987 million as of December 31, 2020 and $938 million as of
December 31, 2019. The increase in claims paying resources was driven primarily
by the Fidus Re 2021 Agreement and increases in the statutory value of the
collateral trusts resulting from positive cash flow from operations, partially
offset by the portion of cash payments on the BAM surplus notes related to
accrued interest held outside the Supplemental Trust.
The following table presents BAM's total claims paying resources as of December
31, 2021, 2020 and 2019:

                                                                                      December 31,
Millions                               December 31, 2021     December 31, 2020            2019
Policyholders' surplus                 $         298.1             324.7            $        402.4
Contingency reserve                              101.8              86.4                      68.2
   Qualified statutory capital                   399.9             411.1                     470.6
Net unearned premiums                             49.5              45.2                      39.3
Present value of future installment
premiums and MSC                                  13.8              14.0                      13.7
HG Re Collateral Trusts at
statutory value                                  478.9             417.0                     314.0
Fidus Re collateral trust at
statutory value                                  250.0             100.0                     100.0
   Claims paying resources             $       1,192.1             987.3            $        937.6



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HG Global/BAM Balance Sheets
The following table presents amounts from HG Global, which includes HG Re and
its other wholly-owned subsidiaries, and BAM that are contained within White
Mountains's consolidated balance sheet as of December 31, 2021 and 2020:

                                                             December 31, 2021
                                                                 Eliminations and
 Millions                          HG Global        BAM         Segment Adjustment        Total Segment
 Assets
 Fixed maturity investments       $   461.7      $ 472.4      $                   -      $        934.1
 Short-term investments                17.8         14.6                          -                32.4
 Total investments                    479.5        487.0                          -               966.5
 Cash                                  13.4          6.4                          -                19.8
 BAM Surplus Notes                    364.6            -                     (364.6)                  -
 Accrued interest receivable
 on BAM Surplus Notes                 157.6            -                     (157.6)                  -
 Insurance premiums receivable          4.3          6.9                       (4.3)                6.9
 Deferred acquisition costs            62.7         33.1                      (62.7)               33.1

 Other assets                           2.1         16.6                        (.2)               18.5
 Total assets                     $ 1,084.2      $ 550.0      $              (589.4)     $      1,044.8
 Liabilities
 BAM Surplus Notes (1)            $       -      $ 364.6      $              (364.6)     $            -

Accrued interest payable on

 BAM Surplus Notes (2)                    -        157.6                     (157.6)                  -

Preferred dividends payable

for The White Mountains

 subsidiaries (3)                     400.5            -                          -               400.5

Preferred dividends payable

 to non-controlling interests          14.2            -                          -                14.2
 Unearned insurance premiums          221.5         44.8                          -               266.3
 Accrued incentive
 compensation                           1.1         23.6                          -                24.7

 Other liabilities                       .5         83.4                      (67.2)               16.7
 Total liabilities                    637.8        674.0                     (589.4)              722.4
 Equity

The White Mountains common

 shareholders' equity (3)             437.5            -                          -               437.5
 Non-controlling interests              8.9       (124.0)                         -              (115.1)
 Total equity                         446.4       (124.0)                         -               322.4
 Total liabilities and equity     $ 1,084.2      $ 550.0      $             

(589.4) $1,044.8

(1)  Under GAAP, the BAM Surplus Notes are classified as debt by the issuer.
Under U.S. Statutory accounting, they are classified as policyholders' surplus.
(2)  Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S.
Statutory accounting, interest is not accrued on the BAM Surplus Notes until it
has been approved for payment by insurance regulators.
(3)  HG Global preferred dividends payable to White Mountains's subsidiaries is
eliminated in White Mountains's consolidated financial statements. For segment
reporting, the HG Global preferred dividends payable to White Mountains's
subsidiaries included within the HG Global/BAM segment are eliminated against
the offsetting receivable included within the Other Operations segment, and
therefore are added back to White Mountains's common shareholders' equity within
the HG Global/BAM segment.

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                                                             December 31, 2020
                                                                 Eliminations and
 Millions                          HG Global        BAM         Segment Adjustment        Total Segment
 Assets
 Fixed maturity investments       $   415.9      $ 443.6      $                   -      $        859.5
 Short-term investments                16.5         43.9                          -                60.4
 Total investments                    432.4        487.5                          -               919.9
 Cash                                  23.8         19.0                          -                42.8
 BAM Surplus Notes                    388.2            -                     (388.2)                  -
 Accrued interest receivable
 on BAM Surplus Notes                 155.7            -                     (155.7)                  -
 Insurance premiums receivable          4.4          6.9                       (4.4)                6.9
 Deferred acquisition costs            54.1         27.8                      (54.1)               27.8

 Other assets                           2.0         18.8                        (.4)               20.4
 Total assets                     $ 1,060.6      $ 560.0      $              (602.8)     $      1,017.8
 Liabilities
 BAM Surplus Notes (1)            $       -      $ 388.2      $              (388.2)     $            -

Accrued interest payable on

 BAM Surplus Notes (2)                    -        155.7                     (155.7)                  -

Preferred dividends payable

for The White Mountains

 subsidiaries (3)                     363.9            -                          -               363.9

Preferred dividends payable

 to non-controlling interests          12.7            -                          -                12.7
 Unearned insurance premiums          196.1         41.4                          -               237.5
 Accrued incentive
 compensation                           1.2         24.5                          -                25.7

 Other liabilities                      1.0         73.5                      (58.9)               15.6
 Total liabilities                    574.9        683.3                     (602.8)              655.4
 Equity

The White Mountains common

 shareholders' equity (3)             472.2            -                          -               472.2
 Non-controlling interests             13.5       (123.3)                         -              (109.8)
 Total equity                         485.7       (123.3)                         -               362.4
 Total liabilities and equity     $ 1,060.6      $ 560.0      $             

(602.8) $1,017.8

(1)  Under GAAP, the BAM Surplus Notes are classified as debt by the issuer.
Under U.S. Statutory accounting, they are classified as policyholders' surplus.
(2)  Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S.
Statutory accounting, interest is not accrued on the BAM Surplus Notes until it
has been approved for payment by insurance regulators.
(3)  HG Global preferred dividends payable to White Mountains's subsidiaries is
eliminated in White Mountains's consolidated financial statements. For segment
reporting, the HG Global preferred dividends payable to White Mountains's
subsidiaries included within the HG Global/BAM segment are eliminated against
the offsetting receivable included within the Other Operations segment, and
therefore are added back to White Mountains's common shareholders' equity within
the HG Global/BAM segment.


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Ark

On January 1, 2021, White Mountains completed the Ark Transaction. See Note 2 -
"Significant Transactions". Ark is a specialty property and casualty insurance
and reinsurance company that offers a wide range of niche insurance and
reinsurance products, including property, marine & energy, specialty, accident &
health and casualty. Ark underwrites select coverages through its two major
subsidiaries in the United Kingdom and Bermuda.
In the third quarter of 2021, Ark issued $163 million of floating rate unsecured
subordinated notes (the "Ark 2021 Subordinated Notes") in three separate
transactions. See Note 7 - "Debt". In connection with the issuance of the Ark
2021 Subordinated Notes, White Mountains and Ark terminated White Mountains's
commitment to provide up to $200 million of additional equity capital to Ark.
The following table presents the components of pre-tax income (loss) included in
White Mountains's Ark segment for the year-ended December 31, 2021:

Millions                                                                    Year Ended December 31, 2021
Earned insurance and reinsurance premiums                                 $                           637.3
Net investment income                                                                                   2.9
Net realized and unrealized investment gains (losses)                                                  16.5
Other revenues                                                                                         11.8
Total revenues                                                                                        668.5
Losses and LAE                                                                                        314.8
Insurance and reinsurance acquisition expenses                                                        178.0

General and administrative expenses - other underwriting                                               64.6
General and administrative expenses - all other                                                        50.9
Interest expense                                                                                        7.3
Total expenses                                                                                        615.6
Pre-tax income (loss)                                                     $                            52.9



For the years of account prior to the Ark Transaction, a significant proportion
of the Syndicates' underwriting capital was provided by TPC Providers using
whole account reinsurance contracts with Ark's corporate member. The TPC
Providers' participation in the Syndicates for the 2020 and 2019 open years of
account is 43% and 58% of the total net result of the Syndicates. For the years
of account subsequent to the Ark Transaction, Ark is no longer using TPC
Providers to provide underwriting capital for the Syndicates. Captions within
Ark's results of operations are shown net of amounts relating to the TPC
Providers share of the Syndicates' results, including investment results.



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Ark Results-Year ended December 31, 2021
Ark's GAAP combined ratio was 87% in 2021. The GAAP combined ratio included 10
points of catastrophe losses, driven primarily by Hurricane Ida (five points),
Winter Storm Uri (three points) and the European floods (two points), partially
offset by three points of net favorable prior year reserve development. The net
favorable prior year reserve development was driven by positive claims
experience in several lines of business, particularly property and accident &
health.
Ark's adjusted combined ratio, which adds back amounts ceded to TPC Providers,
was 85% in 2021. The adjusted combined ratio included 10 points of catastrophe
losses, driven primarily by Hurricane Ida (four points), Winter Storm Uri (four
points) and the European floods (two points), partially offset by six points of
net favorable prior year reserve development. The net favorable prior year
reserve development was driven by positive claims experience in several lines of
business, particularly property and accident & health.
Ark reported pre-tax income of $53 million in 2021, which reflected $25 million
of transaction expenses related to the Ark Transaction.
The following table presents Ark's loss and loss adjustment expense, insurance
acquisition expense, other underwriting expense and combined ratios on both a
GAAP-basis and an adjusted basis, which adds back amounts ceded to TPC
Providers, for the year ended December 31, 2021:

                                                                       Year Ended December 31, 2021
                                                                           TPC Providers' Share
$ in Millions                                            GAAP                       (1)                    Adjusted
Insurance premiums:
Gross written premiums                             $      1,058.7          $                -          $     1,058.7
Net written premiums                               $        859.1          $             (6.5)         $       852.6
Net earned premiums                                $        637.3          $             76.3          $       713.6

Insurance expenses:
Loss and loss adjustment expenses                  $        314.8          $             39.8          $       354.6
Insurance acquisition expenses                              178.0                           -                  178.0
Other underwriting expenses                                  64.6                         9.2                   73.8
Total insurance expenses                           $        557.4          $             49.0          $       606.4

Ratios:
Loss and loss adjustment expense                             49.4  %                                            49.7  %
Insurance acquisition expense                                27.9  %                                            24.9  %
Other underwriting expense                                   10.1  %                                            10.3  %
Combined Ratio                                               87.4  %                                            84.9  %

(1) See “NON-GAAP FINANCIAL MEASURES” on page 71.

Gross Written Premiums
The following table presents Ark's gross written premiums by line of business
for the years ended December 31, 2021, 2020 and 2019, which includes periods
prior to White Mountains's ownership of Ark. White Mountains believes this is
useful in understanding the underwriting growth in the newly acquired business.
Gross written premiums increased 77% to $1,059 million in 2021 compared to 2020,
with risk adjusted rate change up approximately 8%. In 2021, in response to an
improved underwriting environment, Ark substantially increased its gross written
premiums, principally in the property, specialty and marine & energy lines of
business. Ark decreased its gross written premiums in the accident & health line
of business in response to a lack of adequate risk adjusted pricing in light of
recent market developments, including COVID-19.

                                                         Year Ended December 31,
             Millions                                2021          2020         2019
             Property                             $   438.4      $ 235.7      $ 134.4
             Specialty                                256.7        118.3        103.4
             Marine & Energy                          242.2        129.1        107.6
             Accident & Health                         67.0         90.6         86.0
             Casualty                                  54.4         24.4         40.6
               Total Gross Written Premium        $ 1,058.7      $ 598.1      $ 472.0



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NSM

NSM is a full-service MGA and program administrator with delegated binding
authorities for specialty property and casualty insurance. The company places
insurance in niche sectors such as specialty transportation, real estate, social
services and pet. On behalf of its insurance carrier partners, NSM typically
manages all aspects of the placement process, including product development,
marketing, underwriting, policy issuance and claims. NSM earns commissions based
on the volume and profitability of the insurance that it places. NSM does not
take insurance risk.
The following table presents the components of GAAP net income (loss), EBITDA
and adjusted EBITDA included in White Mountains's NSM segment for the years
ended December 31, 2021, 2020 and 2019:

                                                                  Year Ended December 31,
   Millions                                                   2021           2020         2019

   Commission revenues                                     $   258.0      $ 232.5      $ 193.4
   Broker commission expense                                    80.2         75.3         64.8
   Gross profit                                                177.8        157.2        128.6
   Other revenues                                               72.4         52.6         39.7
   General and administrative expenses                         190.1        

176.9 132.2

   Change in fair value of contingent consideration              1.0        

(3.3) 2.1

   Amortization of other intangible assets                      35.2        

26.7 19.4

   Loss on assets held for sale                                 28.7            -            -
   Interest expense                                             23.3         22.1         16.7
   GAAP pre-tax income (loss)                                  (28.1)       (12.6)        (2.1)
   Income tax (expense) benefit                                  5.6          5.7           .6
   GAAP net income (loss)                                      (22.5)        (6.9)        (1.5)
   Add back:
   Interest expense                                             23.3         22.1         16.7
   Income tax expense (benefit)                                 (5.6)       

(5.7) (.6)

   General and administrative expenses - depreciation            5.4        

4.5 2.8

   Amortization of other intangible assets                      35.2        

26.7 19.4

   EBITDA (1)                                                   35.8        

40.7 36.8

Exclude:

   Change in fair value of contingent consideration              1.0        

(3.3) 2.1

   Non-cash equity-based compensation expense                    2.0          2.4            -
   Impairments of intangible assets                                -        

6.2 2.4

   Loss on assets held for sale                                 28.7            -            -
   Transaction expenses                                          4.8        

7.2 3.2

Fair value purchase accounting adjustment for

     deferred revenue                                              -            -           .9

Investments made in the development of

     new business lines                                           .8           .9           .3
   Restructuring expenses                                        5.4          4.8          2.3
   Legal settlements                                            (7.6)           -            -
   Adjusted EBITDA (1)                                     $    70.9      $  58.9      $  48.0

(1) See “NON-GAAP FINANCIAL MEASURES” on page 71.

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NSM Results-Year ended December 31, 2021 versus Year ended December 31, 2020
NSM reported commission and other revenues of $330 million, pre-tax loss of $28
million and adjusted EBITDA of $71 million in 2021. NSM reported commission and
other revenues of $285 million, pre-tax loss of $13 million and adjusted EBITDA
of $59 million in 2020. NSM's pre-tax loss included interest expense of $23
million and amortization of other intangible assets of $35 million in 2021
compared to $22 million and $27 million, respectively, in 2020. NSM's pre-tax
loss in 2021 also includes a loss of $29 million related to the sale of its
Fresh Insurance motor business. Results in the year ended December 31, 2021
include the results of J.C. Taylor from August 6, 2021, the date of its
acquisition. Results in the years ended December 31, 2021 and 2020 include the
results of Kingsbridge from April 7, 2020, the date of its acquisition. In
addition to the acquisitions of J.C. Taylor and Kingsbridge, commission and
other revenues, pre-tax loss and adjusted EBITDA benefited from growth in the
pet and specialty transportation verticals, partially offset by a decline in the
real estate vertical, in 2021.
Broker commission expenses and general and administrative expenses were $80
million and $190 million in 2021 compared to $75 million and $177 million,
respectively, in 2020. The increase in NSM's broker commission expenses and
general and administrative expenses in 2021 compared to 2020 was driven
primarily by the acquisitions of J.C. Taylor and Kingsbridge and increased
technology costs and professional fees related to information systems projects.

NSM Results-Year ended December 31, 2020 versus December 31, 2019
NSM reported commission and other revenues of $285 million in 2020, pre-tax loss
of $13 million and adjusted EBITDA of $59 million in 2020. NSM reported
commission and other revenues of $233 million, pre-tax loss of $2 million and
adjusted EBITDA of $48 million in 2019. NSM's pre-tax loss included interest
expense of $22 million and amortization of other intangible assets of $27
million in 2020 compared to $17 million and $19 million, respectively, in 2019.
Results in the year ended December 31, 2020 include the results of Kingsbridge
from April 7, 2020, the date of its acquisition. Results in the years ended
December 31, 2020 and 2019 include the results of Embrace from April 1, 2019,
the date of its acquisition.
Broker commission expenses and general and administrative expenses were $75
million and $177 million in 2020 compared to $65 million and $132 million,
respectively, in 2019. The increase in NSM's broker commission expenses and
general and administrative expenses in 2020 compared to 2019 was driven
primarily by the acquisitions of Kingsbridge and Embrace. In addition, NSM's
general and administrative expenses for 2020 and 2019 included a $6 million and
$2 million impairment of intangible assets related to its U.K. vertical.

NSM Business Trends
NSM's business consists of approximately 25 active programs that are broadly
categorized into six market verticals. J.C. Taylor was added to the Specialty
Transportation vertical in the third quarter of 2021 and Kingsbridge was added
to the U.K. vertical in the second quarter of 2020.
The following table presents the controlled premium and commission and other
revenues by vertical for the years ended December 31, 2021, 2020 and 2019:

                                                                       Year Ended December 31,
                                            2021                                2020                                 2019
                               Controlled      Commission and      Controlled      Commission and       Controlled       Commission and
Millions                       Premium (1)      Other Revenue      Premium (1)      Other Revenue       Premium (1)       Other Revenue
Specialty Transportation      $     344.7      $        97.2      $     310.2      $        85.5      $       290.2      $        77.6
United Kingdom                      195.2               53.1            179.5               49.4              155.5               45.9
Pet                                 184.9               76.3            131.9               55.0               67.6               30.0
Real Estate                         153.9               34.4            189.1               44.9              157.2               34.7
Social Services                     136.7               33.9            115.5               28.9              102.7               25.9
Other                               165.8               35.5            134.5               21.4              124.5               19.0
Total                         $   1,181.2      $       330.4      $   1,060.7      $       285.1      $       897.7      $       233.1

(1) Controlled premiums are the total premiums placed by NSM during the period.

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Year Ended December 31, 2021 versus Year Ended December 31, 2020
Specialty Transportation: NSM's specialty transportation controlled premium and
commission and other revenues increased 11% and 14% in 2021 compared to 2020,
driven primarily by the impact of higher commission levels and fees in the
collector car and the trucking business and the acquisition of J.C. Taylor,
partially offset by lower contingent commissions. J.C. Taylor contributed $13
million of controlled premium and $4 million of commission and other revenues
from the date of acquisition.
United Kingdom: NSM's United Kingdom controlled premium and commission and other
revenues increased 9% and 8% in 2021 compared to 2020, driven primarily by
growth in the MGA business and the Kingsbridge acquisition. Excluding
Kingsbridge, United Kingdom controlled premium increased 1% and commission and
other revenues decreased 8% in 2021 compared to 2020. Excluding Kingsbridge,
commission and other revenues decreased as a result of changes in product mix,
as the brokerage business, which has higher commission rates than the MGA
business, declined due to disruption to the travel and leisure markets resulting
from a full year impact of the COVID-19 pandemic, while the MGA business grew.
Pet: NSM's pet controlled premium and commission and other revenues increased
40% and 39% in 2021 compared to 2020, driven primarily by substantial growth in
units from continuing strong demand as a result of marketing efforts.
Real Estate: NSM's real estate controlled premium and commission and other
revenues decreased 19% and 23% in 2021 compared to 2020, driven primarily by
declines in both rates and units in the coastal condominium program, partially
offset by growth in the excess and surplus habitational program. The declines in
the coastal condominium program were driven primarily by lower insurance carrier
capacity available for the program as NSM is transitioning to a new insurance
carrier platform.
Social Services: NSM's social services controlled premium and commission and
other revenues increased 18% and 17% in 2021 compared to 2020, driven primarily
by rate increases and unit growth.
Other: NSM's other controlled premium and commission and other revenues
increased 23% and 66% in 2021 compared to 2020. The increase in controlled
premium was driven primarily by increases in the workers compensation and
staffing markets resulting from the emergence from COVID-19 lockdowns.
Commission and other revenues increased more than controlled premium driven
primarily by an increase in profit commissions and product mix shifts into
higher rate workers compensation programs.

Year ended December 31, 2020 compared to the year ended December 31, 2019

  Specialty Transportation: NSM's specialty transportation controlled premium
and commission and other revenues increased 7% and 10% in 2020 compared to 2019,
driven primarily by rate increases and unit growth in the collector car and tow
truck markets.
United Kingdom: NSM's United Kingdom controlled premium and commission and other
revenues increased 15% and 8% in 2020 compared to 2019, driven primarily by the
acquisition of Kingsbridge. Kingsbridge contributed $26 million of controlled
premium and $12 million of commission and other revenues in 2020. Excluding
Kingsbridge, United Kingdom controlled premium decreased 1% in 2020 compared to
2019, as growth in the MGA business was offset by declines in the brokerage
business caused by disruption to the travel and non-standard auto markets in the
United Kingdom resulting from the COVID-19 pandemic. Excluding Kingsbridge,
United Kingdom commission and other revenues declined 19% due to COVID-related
challenges and changes in product mix, as the brokerage business, which has
higher commission rates than the MGA business, declined while the MGA business
grew.
Pet: NSM's pet controlled premium and commission and other revenues increased
95% and 83% in 2020 compared to 2019, driven primarily by the acquisition of
Embrace in April 2019 and strong demand in 2020 as pet adoption increased
substantially as a result of the COVID-19 pandemic. The increase in commission
and other revenues was less than the increase in premium due to business mix, as
affinity business grew faster than direct market business.
Real Estate: NSM's real estate controlled premium and commission and other
revenues increased 20% and 29% in 2020 compared to 2019, driven primarily by
rate increases and strong retention rates in coverages for coastal condominium
associations combined with rate increases and unit growth in the excess and
surplus habitational program.
Social Services: NSM's social services controlled premium and commission and
other revenues both increased 12% in 2020 compared to 2019, driven primarily by
rate increases and unit growth.
Other: NSM's other controlled premium and commission and other revenues
increased 8% and 13% in 2020 compared to 2019. The increase in controlled
premium was driven primarily by rate increases. Commission and other revenues
increased as the professional liability business, which has higher commission
rates than retail, grew while the retail business declined.

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Kudu

Kudu provides capital solutions for boutique asset and wealth managers for a
variety of purposes including generational ownership transfers, management
buyouts, acquisition and growth finance and legacy partner liquidity. Kudu also
provides strategic assistance to investees from time to time.
As of December 31, 2021, Kudu has deployed a total of $612 million in 17 asset
and wealth management firms globally, including one that was exited. As of
December 31, 2021, the asset and wealth management firms have combined assets
under management of approximately $66 billion, spanning a range of asset
classes, including real estate, real assets, wealth management, hedge funds,
private equity and alternative credit strategies. Kudu's capital was deployed at
an average gross cash yield at inception of 10.1%.
On March 23, 2021, Kudu replaced the Kudu Bank Facility with the Kudu Credit
Facility. Subject to maximum loan to value ("LTV") levels, the total borrowing
capacity of the Kudu Credit Facility is $300 million (which includes the current
advanced amount of $225 million). See Note 7 - "Debt".
The following table presents the components of GAAP net income, EBITDA and
adjusted EBITDA included in White Mountains's Kudu segment for the years ended
December 31, 2021 and December 31, 2020 and for the period from April 4, 2019,
the date of the Kudu Transaction, to December 31, 2019:

                                                   Year Ended December       Year Ended December          April 4, 2019 to
Millions                                                31, 2021                   31, 2020               December 31, 2019
Net investment income                              $           43.9          $            29.5          $             14.7
Net realized and unrealized investment
gains (losses)                                                 89.9                       15.9                         6.3
Other revenues                                                   .2                         .3                          .2
Total revenues                                                134.0                       45.7                        21.2
General and administrative expenses                            14.5                       11.8                        10.1
Amortization of other intangible assets                          .3                         .3                          .2
Interest expense                                               11.7                        6.0                          .1
Total expenses                                                 26.5                       18.1                        10.4
GAAP pre-tax income (loss)                         $          107.5          $            27.6          $             10.8
Income tax (expense) benefit                                  (29.5)                      (7.0)                       (2.8)
GAAP net income (loss)                                         78.0                       20.6                         8.0
Add back:
Interest expense                                               11.7                        6.0                          .1
Income tax expense (benefit)                                   29.5                        7.0                         2.8
General and administrative expenses -
depreciation                                                      -                          -                           -
Amortization of other intangible assets                          .3                         .3                          .2
EBITDA (1)                                                    119.5                       33.9                        11.1

Exclude:

Net realized and unrealized investment
(gains) losses                                                (89.9)                     (15.9)                       (6.3)
Non-cash equity-based compensation
expense                                                         1.2                         .4                         1.3
Transaction expenses                                            2.0                        3.7                         2.9
Adjusted EBITDA (1)                                $              32.8       $               22.1       $                 9.0

(1) See “NON-GAAP FINANCIAL MEASURES” on page 71.

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Kudu Results-Year ended December 31, 2021 versus Year ended December 31, 2020
Kudu reported total revenues of $134 million, pre-tax income of $108 million and
adjusted EBITDA of $33 million in 2021 compared to total revenues of $46
million, pre-tax income of $28 million and adjusted EBITDA of $22 million in
2020. Total revenues and pre-tax income for 2021 included $22 million of
realized gains and $68 million of unrealized gains on Kudu's Participation
Contracts in 2021 compared to $16 million of unrealized gains on Kudu's
Participation Contracts in 2020. The increase in net unrealized and realized
investment gains on Kudu's Participation Contracts was driven primarily by asset
growth, the performance of Kudu's underlying asset management businesses and
proceeds received from a sale transaction. Total revenues, pre-tax income and
adjusted EBITDA in 2021 also included $44 million of net investment income
compared to $30 million in 2020. The increase in net investment income was
driven primarily by amounts earned from the $347 million (including $5 million
of transaction costs) in new deployments that Kudu made in 2021 and 2020.

Kudu Results-Year ended December 31, 2020 versus Year ended December 31, 2019
Kudu reported total revenues of $46 million, pre-tax income of $28 million and
adjusted EBITDA of $22 million for 2020 compared to total revenues of $21
million, pre-tax income of $11 million and adjusted EBITDA of $9 million for the
period from April 4, 2019, the date of the Kudu Transaction, to December 31,
2019. Total revenues and pre-tax income included $16 million of unrealized gains
on Kudu's Participation Contracts in 2020 compared to $6 million in the period
from April 4, 2019 to December 31, 2019. Total revenues, pre-tax income and
adjusted EBITDA in 2020 also included $30 million of net investment income
compared to $15 million in 2019. The increases in Kudu's total revenues, pre-tax
income and adjusted EBITDA in 2020 were driven primarily by net investment
income earned from the $121 million (including $3 million of transaction costs)
in new deployments that Kudu made in 2020 and 2019.

MediaAlpha

On February 26, 2019, MediaAlpha completed the 2019 MediaAlpha Transaction.
White Mountains deconsolidated MediaAlpha as a result of the 2019 MediaAlpha
Transaction and stopped reporting it as a segment. On October 30, 2020,
MediaAlpha completed the MediaAlpha IPO. Prior to the MediaAlpha IPO, White
Mountains's non-controlling equity interest in MediaAlpha was accounted for at
fair value within other long-term investments. Following the MediaAlpha IPO,
White Mountains's non-controlling equity interest in MediaAlpha is accounted for
at fair value based on the publicly traded share price of MediaAlpha's common
stock. See Summary of Investment Results on page 59.
The following table presents the components of pre-tax income (loss) included in
White Mountains's MediaAlpha segment for the period of January 1, 2019 to
February 26, 2019:

                                                                              January 1, 2019 to
Millions                                                                       February 26, 2019
Advertising and commission revenues                                        $                 48.8
Cost of sales                                                                                40.6
Gross profit                                                                                  8.2
Other revenue                                                                                   -
General and administrative expenses                                                           5.7

General and administrative expenses –

  the 2019 MediaAlpha Transaction related costs                                               6.8
Amortization of other intangible assets                                                       1.6
Interest expense                                                                               .2
Pre-tax income (loss)                                                      $                 (6.1)



MediaAlpha Results-For the Period from January 1, 2019 to February 26, 2019
MediaAlpha reported pre-tax loss of $6 million and revenues of $49 million from
January 1, 2019 to February 26, 2019, the date of the 2019 MediaAlpha
Transaction. During the period from January 1, 2019 to February 26, 2019,
revenues were driven primarily by the P&C and Health, Medicare and Life
verticals, which had revenues of $26 million and $17 million. During the period
from January 1, 2019 to February 26, 2019, MediaAlpha recognized $7 million of
costs related to the 2019 MediaAlpha Transaction in general and administrative
expenses.

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Other operations

The following table shows The White Mountains the financial results of its Other
Operations segment for the fiscal years ended December 31, 20212020 and 2019:

                                                                     Year Ended December 31,
Millions                                                         2021          2020         2019

Net investment income                                         $    18.2      $  82.0      $  43.4
Net realized and unrealized investment gains (losses)              50.7     

(8.8) 219.8
Net realized and unrealized investment gains (losses)
Investment in MediaAlpha

                                         (380.3)       686.0        180.0
Realized gain from the 2019 MediaAlpha Transaction                    -            -         67.5
Commission revenues                                                 9.6          8.3          6.9
Other revenues                                                     90.7         13.9          6.1
Total revenues                                                   (211.1)       781.4        523.7

Cost of sales                                                      69.3         11.3          7.5
General and administrative expenses                               105.7        141.9        122.5
Amortization of other intangible assets                             4.3          1.3           .6
Interest expense                                                    1.5          1.4           .6
Total expenses                                                    180.8        155.9        131.2
Pre-tax income (loss)                                         $  (391.9)     $ 625.5      $ 392.5


Other operating results – Year ended December 31, 2021 compared to the year ended
December 31, 2020

  White Mountains's Other Operations segment reported pre-tax (loss) income of
$(392) million in 2021 compared to $626 million in 2020. White Mountains's Other
Operations segment reported net realized and unrealized investment (losses)
gains from its investment in MediaAlpha of $(380) million in 2021 compared to
$686 million in 2020. White Mountains's Other Operations segment reported net
realized and unrealized investment gains (losses) of $51 million in 2021
compared to $(9) million in 2020. White Mountains's Other Operations segment
reported net investment income of $18 million in 2021 compared to $82 million in
2020. Net investment income in the year ended December 31, 2020 included $55
million of net proceeds received from a dividend recapitalization at MediaAlpha.
See "Summary of Investment Results" on page 59.
The Other Operations segment reported $91 million of other revenues in 2021
compared to $14 million in 2020. The Other Operations segment reported
$69 million of cost of sales in 2021 compared to $11 million in 2020. The
increases in other revenues and cost of sales were driven primarily by an
acquisition within the Other Operations segment.
The Other Operations segment reported general and administrative expenses of
$106 million in 2021 compared to $142 million in 2020. The decrease in general
and administrative expenses was driven primarily by lower incentive compensation
costs, driven primarily by a decrease in the assumed harvest percentage on
outstanding performance shares.

Share repurchases
For the year ended December 31, 2021, White Mountains repurchased and retired
98,511 of its common shares for $108 million.

Other Operations Results-Year Ended December 31, 2020 versus Year Ended
December 31, 2019
White Mountains's Other Operations segment reported pre-tax income of $626
million in 2020 compared to $393 million in 2019. White Mountains's Other
Operations segment reported net realized and unrealized investment gains from
its investment in MediaAlpha of $686 million in 2020 compared to $180 million in
2019. White Mountains's Other Operations segment reported net realized and
unrealized investment (losses) gains of $(9) million in 2020 compared to $220
million in 2019. White Mountains's Other Operations segment reported net
investment income of $82 million in 2020, which was driven primarily by $55
million of net proceeds received in the third quarter of 2020 from a dividend
recapitalization at MediaAlpha compared to net investment income of $43 million
in 2019. See "Summary of Investment Results" on page 59. Pre-tax income for the
year ended December 31, 2019 also included $68 million of realized gains from
the 2019 MediaAlpha Transaction.
The Other Operations segment reported general and administrative expenses of
$142 million in 2020 compared to $123 million in 2019. The increase was driven
primarily by higher incentive compensation costs, driven primarily by an
increase in the assumed harvest percentage on outstanding performance shares.

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Share repurchases
For the year ended December 31, 2020, White Mountains repurchased and retired
99,087 of its common shares for $85 million.

II. Summary of investment results

White Mountains's total investment results include results from all segments.
For purposes of discussing rates of return, all percentages are presented gross
of management fees and trading expenses and are calculated before any
adjustments for TPC Providers in order to produce a better comparison to
benchmark returns.

Gross investment returns and benchmark returns

Prior to the MediaAlpha IPO, White Mountains's investment in MediaAlpha was
presented within other long-term investments. Following the MediaAlpha IPO,
White Mountains presents its investment in MediaAlpha in a separate line item on
the balance sheet. Amounts for periods prior to the MediaAlpha IPO have been
reclassified to be comparable to the current period.
The following table presents the pre-tax investment returns for White
Mountains's consolidated portfolio for the years ended December 31, 2021, 2020
and 2019:

                                                               Year Ended December 31,
                                                            2021                2020         2019
Fixed income investments                                           (0.4) %       4.9  %      6.1  %
Bloomberg Barclays U.S. Intermediate Aggregate
Index                                                              (1.3) %       5.6  %      6.7  %

Common equity securities                                           11.0  %       3.6  %     29.1  %
Investment in MediaAlpha                                          (60.1) %     520.3  %     65.9  %
Other long-term investments                                        20.7  %       2.5  %      6.1  %
Total common equity securities, investment in
MediaAlpha and other long-term investments                         (7.1) %      80.0  %     36.9  %
Total common equity securities and other
long-term investments                                              19.3  %       4.9  %     20.8  %
S&P 500 Index (total return)                                       28.7  %      18.4  %     31.5  %
Total consolidated portfolio                                       (3.4) %      31.9  %     20.4  %
Total consolidated portfolio - excluding
MediaAlpha                                                          6.4  %       4.6  %     13.0  %


Investment Returns – Year End December 31, 2021 compared to the year ended The 31st of December,
2020

White Mountains's pre-tax total consolidated portfolio return on invested assets
was -3.4% in 2021. This return included $380 million of net realized and
unrealized investment losses from White Mountains's investment in MediaAlpha.
Excluding MediaAlpha, the total consolidated portfolio return on invested assets
was 6.4% in 2021. Excluding MediaAlpha, investment returns in 2021 were driven
primarily by favorable other long-term investments results. White Mountains's
pre-tax total consolidated portfolio return on invested assets was 31.9% in
2020. This return included $746 million of net investment income and net
realized and unrealized investment gains from White Mountains's investment in
MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on
invested assets was 4.6% in 2020. Excluding MediaAlpha, investment returns in
2020 were impacted by White Mountains's decision to liquidate its portfolio of
common equity securities in the second half of 2020 in preparation for funding
the Ark Transaction as equity markets rallied in the fourth quarter.

Fixed Income Results
White Mountains's fixed income portfolio, including short-term investments, was
$2.4 billion and $1.4 billion as of December 31, 2021 and 2020, which
represented 56% and 46% of total invested assets. The increase was driven
primarily by the inclusion of Ark's invested assets as a result of the Ark
Transaction. The duration of White Mountains's fixed income portfolio, including
short-term investments, was 2.6 years and 3.2 years as of December 31, 2021 and
2020. White Mountains's fixed income portfolio includes fixed maturity
investments and short-term investments in the HG Re Collateral Trusts of $480
million and $432 million as of December 31, 2021 and 2020.
White Mountains's fixed income portfolio returned -0.4% in 2021 compared to 4.9%
in 2020, outperforming and underperforming the Bloomberg Barclays U.S.
Intermediate Aggregate Index returns of -1.3% and 5.6% for the comparable
periods. The results in 2021 were driven primarily by the short duration
positioning of White Mountains's fixed income portfolio as interest rates
increased during the period, partially offset by currency losses. The results in
2020 were driven primarily by the short duration positioning of White
Mountains's fixed income portfolio as interest rates declined significantly
during the period.

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Common Equity Securities, Investment in MediaAlpha and Other Long-Term
Investments Results
White Mountains's portfolio of common equity securities, its investment in
MediaAlpha and other long-term investments was $1.9 billion and $1.6 billion as
of December 31, 2021 and 2020, which represented 44% and 54% of total invested
assets. See Note 3 - "Investment Securities". The change was driven primarily by
an increase in the fair value of Kudu's Participation Contracts, the inclusion
of Ark's invested assets as a result of the Ark Transaction and the addition of
international listed common equity funds and a bank loan fund at Ark, partially
offset by a decline in the fair value of White Mountains's investment in
MediaAlpha.
White Mountains's portfolio of common equity securities, its investment in
MediaAlpha and other long-term investments returned -7.1% in 2021, driven
primarily by $380 million of net realized and unrealized investment losses from
its investment in MediaAlpha. White Mountains's portfolio of common equity
securities and other long-term investments returned 19.3% in 2021. White
Mountains's portfolio of common equity securities, its investment in MediaAlpha
and other long-term investments returned 80.0% in 2020, which included $746
million of net investment income and net realized and unrealized investment
gains from its investment in MediaAlpha. White Mountains's portfolio of common
equity securities and other long-term investments returned 4.9% in 2020.
During the second half of 2020, White Mountains liquidated its portfolio of
common equity securities, including its portfolio of ETFs and international
common equity securities, in preparation for funding the Ark Transaction.
Following the Ark Transaction, White Mountains's portfolio of common equity
securities consists of international listed funds held in the Ark portfolio. As
of December 31, 2021, the fair value of White Mountains's international listed
common equity funds was $251 million.
White Mountains's portfolio of common equity securities returned 11.0% in 2021
compared to 3.6% in 2020, underperforming the S&P 500 Index returns of 28.7% and
18.4% for the comparable periods. The results for 2021 were driven primarily by
relative underperformance in White Mountains's non-U.S. common equity positions
versus the S&P 500 Index. The results for 2020 were driven primarily by White
Mountains's lack of common equity exposure during the fourth quarter equity
market rally and the relative underperformance from White Mountains's
international common equity portfolios versus the S&P 500 Index prior to the
liquidation of these positions.
Historically, White Mountains's portfolio of ETFs was designed to provide
investment results that generally corresponded to the performance of the S&P 500
Index. White Mountains's portfolio of ETFs was fully liquidated in the fourth
quarter of 2020. In 2020, White Mountains's portfolio of ETFs essentially earned
the effective index return, before expenses, over the period in which White
Mountains was invested in these funds. White Mountains also maintained
relationships with a small number of third-party registered investment advisers
(the "actively managed common equity portfolio"), who primarily invested in
non-U.S. equity securities through unit trusts. At the end of the third quarter
of 2020, White Mountains fully redeemed its actively managed common equity
portfolio. White Mountains's actively managed common equity portfolio returned
-11.0% in 2020, underperforming the S&P 500 Index return of 18.4%. The results
were driven primarily by the lack of exposure to actively managed common
equities in the fourth quarter of 2020 and relative underperformance in
international stocks versus the S&P 500 Index.
White Mountains maintains a portfolio of other long-term investments that
consists primarily of unconsolidated entities, including Kudu's Participation
Contracts, a bank loan fund, private equity funds, hedge funds, Lloyd's trust
deposits, ILS funds and private debt investments. White Mountains's portfolio of
other long-term investments was $1.4 billion and $787 million as of December 31,
2021 and 2020. The change in other long-term investments was driven primarily by
an increase in the fair value of Kudu's Participation Contracts, the inclusion
of invested assets relating to the Ark Transaction and the addition of a bank
loan fund at Ark.
White Mountains's other long-term investments portfolio returned 20.7% in 2021
compared to 2.5% in 2020. Investment returns for 2021 were driven primarily by
$134 million of net investment income and realized and unrealized investment
gains from Kudu's Participation Contracts, $51 million of net investment income
and realized and unrealized investment gains from private equity funds, and a
$25 million increase in the fair value of White Mountains's investment in
PassportCard/DavidShield. Investment returns from White Mountains's investment
in PassportCard/DavidShield were driven primarily by growth in leisure travel
premiums and commission revenues as the global economy recovered from the
COVID-19 pandemic. Investment returns for 2020 were driven primarily by $45
million of net investment income and net unrealized gains from Kudu's
Participation Contracts, partially offset by a $10 million decrease in the fair
value of White Mountains's investment in PassportCard/DavidShield, where the
global slowdown in travel activity in reaction to the COVID-19 pandemic caused a
significant decline in premiums and revenues, and unrealized investment losses
from hedge funds and private debt investments.

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Investment Returns-Year Ended December 31, 2020 versus Year Ended December 31,
2019
White Mountains's pre-tax total return on invested assets was 31.9% in 2020.
This return included $746 million of net investment income and net realized and
unrealized investment gains from MediaAlpha. Excluding MediaAlpha, the total
return on invested assets was 4.6% in 2020. Investment returns in 2020 were
impacted by White Mountains's decision to liquidate its portfolio of common
equity securities in the second half of 2020 in preparation for funding the Ark
Transaction as equity markets rallied in the fourth quarter. White Mountains's
pre-tax total return on invested assets was 20.4% in 2019. This return included
$188 million of net investment income and net unrealized investment gains from
MediaAlpha. Excluding MediaAlpha, the total return on invested assets was 13.0%
in 2019. Investment returns in 2019 benefited from White Mountains's decision to
increase equity exposure after markets declined sharply at the end of 2018 ahead
of the strong rally in equity markets during 2019.

Fixed Income Results
White Mountains's fixed income portfolio, including short-term investments, was
$1.4 billion as of December 31, 2020 and 2019, which represented 46% and 48% of
total invested assets. The duration of White Mountains's fixed income portfolio,
including short-term investments, was 3.2 years and 2.8 years as of December 31,
2020 and 2019. White Mountains's fixed income portfolio included fixed maturity
investments and short-term investments in the HG Re Collateral Trusts of $432
million and $320 million as of December 31, 2020 and 2019.
White Mountains's fixed income portfolio returned 4.9% in 2020 compared to 6.1%
in 2019, underperforming the Bloomberg Barclays U.S. Intermediate Aggregate
Index returns of 5.6% and 6.7% for the comparable periods. The results for both
periods were driven primarily by the short duration positioning of White
Mountains's fixed income portfolio as interest rates declined significantly
during the periods.

Common Equity Securities, Investment in MediaAlpha and Other Long-Term
Investments Results
White Mountains's portfolio of common equity securities, its investment in
MediaAlpha and other long-term investments was $1.6 billion and $1.5 billion as
of December 31, 2020 and 2019, which represented 54% and 52% of total invested
assets. See Note 3 - "Investment Securities". The change was primarily driven by
an increase in the fair value of White Mountains's investment in MediaAlpha and
an increase in other long-term investments, partially offset by the sale of
common equity securities during the second half of 2020 in preparation for
funding the Ark Transaction.
White Mountains's portfolio of common equity securities, its investment in
MediaAlpha and other long-term investments returned 80.0% in 2020, which
included $746 million of net investment income and net realized and unrealized
investment gains from MediaAlpha. White Mountains's portfolio of common equity
securities and other long-term investments returned 4.9% in 2020. White
Mountains's portfolio of common equity securities, its investment in MediaAlpha
and other long-term investments returned 36.9% in 2019, which included $188
million of net investment income and unrealized investment gains from
MediaAlpha. White Mountains's portfolio of common equity securities and other
long-term investments returned 20.8% in 2019.
Historically, White Mountains's portfolio of common equity securities consisted
of a portfolio of ETFs and publicly-traded common equity securities actively
managed by select third-party registered investment advisers. During the second
half of 2020, White Mountains liquidated its portfolio of common equity
securities, including its portfolio of ETFs and international common equity
securities, in preparation for funding the Ark Transaction. As of December 31,
2019, White Mountains's portfolio of common equity securities was $684 million
as of December 31, 2019.
White Mountains's portfolio of common equity securities returned 3.6% in 2020
compared to 29.1% in 2019, underperforming the S&P 500 Index returns of 18.4%
and 31.5% for the comparable periods. The results for 2020 were driven primarily
by White Mountains's lack of common equity exposure during the fourth quarter
equity market rally and the relative underperformance from White Mountains's
international common equity portfolios versus the S&P 500 Index prior to the
liquidation of these positions. The results for 2019 were driven primarily by
relative underperformance in White Mountains's international common equity
portfolios versus the S&P 500 Index.
White Mountains's portfolio of ETFs was fully liquidated as of December 31, 2020
and totaled $536 million as of December 31, 2019. In 2020 and 2019, White
Mountains's portfolio of ETFs essentially earned the effective index return,
before expenses, over the period in which White Mountains was invested in these
funds. At the end of the third quarter of 2020, White Mountains fully redeemed
its actively managed common equity portfolio. White Mountains's actively managed
common equity portfolio was $147 million as of December 31, 2019. White
Mountains's actively managed common equity portfolio returned -11.0% in 2020
compared to 24.2% in 2019, underperforming the S&P 500 Index return of 18.4% and
31.5% for the comparable periods. The 2020 results were driven primarily by the
lack of exposure to actively managed common equities in the fourth quarter of
2020 and relative underperformance in international stocks versus the S&P 500
Index. The 2019 results were driven primarily by relative underperformance in
White Mountains's international common equity portfolios versus the S&P 500
Index.
White Mountains's portfolio of other long-term investments was $787 million and
$676 million as of December 31, 2020 and 2019. The change in other long-term
investments was primarily driven by an increase in the fair value of Kudu's
Participation Contracts.

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White Mountains other long-term investments portfolio returned 2.5% in 2020
compared to 6.1% in 2019. Investment returns for 2020 were driven primarily by
$45 million of net investment income and net unrealized gains from Kudu's
Participation Contracts, partially offset by a $10 million decrease in the fair
value of White Mountains's investment in PassportCard/DavidShield, where the
global slowdown in travel activity in reaction to the COVID-19 pandemic caused a
significant decline in premiums and revenues and unrealized investment losses
from hedge funds and private debt investments.
Investment returns for 2019 were driven primarily by $21 million of net
investment income and net unrealized gains from Kudu's Participation Contracts
and $15 million of net investment income and realized and unrealized investment
gains from private equity funds.

Composition of the portfolio

The following table shows the composition of The White Mountains total
portfolio of operating investments in December 31, 2021 and 2020:

                                         December 31, 2021                     December 31, 2020
$ in Millions                      Carrying Value       % of Total       Carrying Value       % of Total
Fixed maturity investments       $        1,908.9           44.8  %    $        1,207.2           41.1  %
Short-term investments                      465.9           10.9                  142.8            4.9

Common equity securities                    251.1            5.9                      -              -
Investment in MediaAlpha                    261.6            6.1                  802.2           27.3
Other long-term investments               1,377.8           32.3                  786.8           26.7
Total investments                $        4,265.3          100.0  %    $        2,939.0          100.0  %



The following table presents the breakdown of White Mountains's fixed maturity
investments as of December 31, 2021 by credit class, based upon issuer credit
ratings provided by Standard & Poor's, or if unrated by Standard & Poor's,
long-term obligation ratings provided by Moody's:

                                                                  December 31, 2021
                                               Amortized                      Carrying
 $ in Millions                                   Cost         % of Total        Value        % of Total

we government and government sponsored

 entities (1)                                 $   467.7           24.7  %    $   467.4           24.5  %
 AAA/Aaa                                          135.7            7.2           136.5            7.1
 AA/Aa                                            332.6           17.5           343.4           18.0
 A/A                                              546.5           28.8           549.1           28.7
 BBB/Baa                                          404.7           21.4           403.8           21.2

 Other/not rated                                    8.3            0.4             8.7            0.5
 Total fixed maturity investments             $ 1,895.5          100.0  %   

$1,908.9 100.0%

(1)Includes mortgage-backed securities, which carry the full faith and credit
guaranty of the U.S. government (i.e., GNMA) or are guaranteed by a government
sponsored entity (i.e., FNMA, FHLMC).

The following table presents the cost or amortized cost and carrying value of
White Mountains's fixed maturity investments by contractual maturity as of
December 31, 2021. Actual maturities could differ from contractual maturities
because borrowers may have the right to call or prepay certain obligations with
or without call or prepayment penalties.

                                                                   December 31, 2021
                                                           Cost or Amortized       Carrying
 Millions                                                         Cost               Value
 Due in one year or less                                  $            136.7      $   137.3
 Due after one year through five years                                 

866.2 865.0

 Due after five years through ten years                                

365.7 371.5

 Due after ten years                                                   

113.2 122.5

Mortgage and asset-backed securities and

 collateralized loan obligations                                       

413.7 412.6

 Total fixed maturity investments                         $          

1,895.5 $1,908.9

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The following table shows the composition of The White Mountains other
portfolio of long-term investments December 31, 2021 and 2020:

                                                 December 31, 2021               December 31, 2020
                                             Carrying                         Carrying
 $ in Millions                                 Value         % of Total        Value         % of Total
 Kudu Participation Contracts              $     669.5           48.6  %    $    400.6           50.9  %
 PassportCard/DavidShield                        120.0            8.7             95.0           12.1
 Elementum Holdings L.P.                          45.0            3.3             55.1            7.0
 Other unconsolidated entities                    34.4            2.5             42.4            5.4
 Total unconsolidated entities                   868.9                      

593.1

 Bank loan fund                                  163.0           11.8                -              -
 Private equity funds and hedge funds            153.8           11.2            121.2           15.4
 Lloyd's trust deposits                          113.8            8.3                -              -
 ILS funds                                        51.9            3.8             51.4            6.5
 Private debt investments                           14.1          1.0               21.1          2.7
 Other                                            12.3            0.8                -              -

Total other long-term investments $1,377.8 100.0% $786.8 100.0%


Foreign Currency Exposure

As of December 31, 2021, White Mountains had foreign currency exposure on $311
million of net assets primarily related to Ark's non-U.S. business, NSM's
U.K.-based operations, Kudu's non-U.S. Participation Contracts, and certain
other foreign consolidated and unconsolidated entities.
The following table presents the fair value of White Mountains's foreign
denominated net assets (net liabilities) by segment as of December 31, 2021:

Currency                                                                                                       Total Fair        % of Total Shareholders'
$ in Millions                   Ark                NSM               Kudu            Other Operations            Value                    Equity
CAD                         $    55.4          $       -          $  81.3          $               -          $   136.7                            3.7  %
GBP                               7.7              118.6                -                          -              126.3                            3.4
AUD                              23.3                  -             44.7                          -               68.0                            1.8
EUR                             (56.2)                 -                -                       32.3              (23.9)                           (.6)
All other                           -                  -                -                        3.6                3.6                             .1
Total                       $    30.2          $   118.6          $ 126.0          $            35.9          $   310.7                            8.4  %


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III. Income taxes

The Company and its Bermuda domiciled subsidiaries are not subject to Bermuda
income tax under current Bermuda law. In the event there is a change in the
current law and taxes are imposed, the Bermuda Exempted Undertakings Tax
Protection Act of 1966 states that the Company and its Bermuda domiciled
subsidiaries would be exempt from such tax until March 31, 2035. The Company has
subsidiaries and branches that operate in various other jurisdictions around the
world that are subject to tax in the jurisdictions in which they operate. As of
December 31, 2021, the primary jurisdictions in which the Company's subsidiaries
and branches were subject to tax are Ireland, Israel, Luxembourg, the United
Kingdom and the United States.
On December 14, 2021, the OECD issued a report on the Global Anti-Base Erosion
("GloBE") rules. The GloBE rules provide for a coordinated system of taxation
intended to ensure large multinational enterprise groups pay a minimum level of
tax of 15% on the income arising in each of the jurisdictions where they
operate. It would do so by imposing a top-up tax on profits arising in a
jurisdiction whenever the effective tax rate is below the minimum rate. Expanded
guidance on the GloBE rules is forthcoming. Depending on which countries
implement legislation under the GloBE rules, the income of members of the
Company's group could be subject to higher rates of tax. While the OECD is
targeting 2023 as the year for implementation, the actual implementation will
depend on each country implementing specific legislation. The timing and impact
of these rules on the Company remain uncertain.
On January 1, 2020, White Mountains adopted ASU 2019-12, Simplifying the
Accounting for Income Taxes (ASC740) ("ASU 2019-12"). For periods subsequent to
the adoption of ASU 2019-12, White Mountains has recorded both the tax expense
related to BAM's MSC and the related valuation allowance on such taxes through
non-controlling interest equity. Prior to the adoption of ASU 2019-12, White
Mountains recorded the tax expense related to BAM's MSC directly to
non-controlling interest equity, while the valuation allowance on such taxes was
recorded through the income statement.
White Mountains reported income tax expense of $39 million in 2021 on pre-tax
loss from continuing operations of $302 million. The difference between White
Mountains's effective tax rate and the current U.S. statutory rate of 21% was
driven primarily by losses generated in jurisdictions with lower tax rates than
the United States, a full valuation allowance on net deferred tax assets in
certain U.S. operations, consisting of the WM Adams Holdings, Inc. consolidated
tax group included within the Other Operations segment and BAM, and state income
taxes. The effective rate was also different from the U.S. statutory rate of 21%
due to additional tax expense related to the revaluation of U.K. deferred tax
assets and liabilities. On June 10, 2021, the U.K. enacted an increase in its
corporate tax rate from 19% to 25% for periods after April 1, 2023. During 2021,
White Mountains increased its net U.K. deferred tax liability to reflect the
higher tax rate.
White Mountains reported income tax benefit of $21 million in 2020 on pre-tax
income from continuing operations of $645 million. The difference between White
Mountains's effective tax rate and the current U.S. federal statutory rate of
21% was driven primarily by a $131 million release of a deferred tax liability
as a result of an internal reorganization in connection with the MediaAlpha IPO
and income generated in jurisdictions with lower tax rates than the United
States. Also in 2020, $43 million of tax expense was recorded for state income
taxes, withholding taxes and the establishment of a partial valuation allowance
on deferred tax assets of various companies, entities and investments that are
included in the Other Operations segment.
White Mountains reported income tax expense of $29 million in 2019 on pre-tax
income from continuing operations of $405 million. The difference between White
Mountains's effective tax rate and the current U.S. federal statutory rate of
21% was driven primarily by income generated in jurisdictions with lower tax
rates than the United States, state income taxes and a tax benefit recorded at
BAM related to its MSC collected. The effective tax rate was also different from
the U.S statutory rate of 21% due to the release of a valuation allowance on the
net deferred tax assets of the U.S. consolidated group Guilford Holdings, Inc.
and subsidiaries, which included Kudu, White Mountains's investment in
MediaAlpha, WM Capital, WM Advisors and certain other entities and investments
that are included in the Other Operations segment. In 2019, BAM recorded a tax
benefit of $10 million associated with the valuation allowance on taxes related
to MSC collected that was included in the effective tax rate.

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IV. Discontinued operations

Sirius Group
On April 18, 2016, White Mountains completed the sale of Sirius International
Insurance Group, Ltd. ("Sirius Group") to CM International Pte. Ltd. and CM
Bermuda Limited (collectively "CMI"). In connection with the sale, White
Mountains indemnified Sirius Group against the loss of certain interest
deductions claimed by Sirius Group related to periods prior to the sale of
Sirius Group to CMI that had been disputed by the Swedish Tax Agency (STA). In
late October 2018, the Swedish Administrative Court ruled against Sirius Group
on its appeal of the STA's denial of these interest deductions. As a result, in
2018 White Mountains recorded a loss of $17 million within net gain (loss) on
sale of discontinued operations reflecting the value of these interest
deductions.
In April 2021, the STA informed the Swedish Administrative Court of Appeal that
Sirius Group should prevail in its appeal and that the interest deductions
should not be disallowed. In June 2021, the Swedish Administrative Court of
Appeal ruled in Sirius Group's favor. As a result, in 2021 White Mountains
recorded a gain of $19 million in discontinued operations to reverse the accrued
liability, including foreign currency translation. See Note 21 - "Held for Sale
and Discontinued Operations" on page F-76.

CASH AND CAPITAL RESOURCES

Operating cash and short-term investments

Holding Company Level
The primary sources of cash for the Company and certain of its intermediate
holding companies are expected to be distributions from its insurance,
reinsurance and other operating subsidiaries, net investment income, proceeds
from sales, repayments and maturities of investments, capital raising activities
and, from time to time, proceeds from sales of operating subsidiaries. The
primary uses of cash are expected to be general and administrative expenses,
purchases of investments, payments to tax authorities, payments on and
repurchases/retirements of its debt obligations, dividend payments to holders of
the Company's common shares, distributions to non-controlling interest holders
of consolidated subsidiaries, contributions to operating subsidiaries and, from
time to time, purchases of operating subsidiaries and repurchases of the
Company's common shares.

Operating Subsidiary Level
The primary sources of cash for White Mountains's insurance, reinsurance and
other operating subsidiaries are expected to be premium and fee collections,
commissions, net investment income, proceeds from sales, repayments and
maturities of investments, contributions from holding companies and capital
raising activities. The primary uses of cash are expected to be claim payments,
policy acquisition costs, general and administrative expenses, broker commission
expenses, cost of sales, purchases of investments, payments to tax authorities,
payments on and repurchases/retirements of its debt obligations, distributions
made to holding companies, distributions to non-controlling interest holders
and, from time to time, purchases of operating subsidiaries.
Both internal and external forces influence White Mountains's financial
condition, results of operations and cash flows. Premium and fee collections,
investment returns, claim payments and cost of sales may be impacted by changing
rates of inflation and other economic conditions. Some time may lapse between
the occurrence of an insured loss, the reporting of the loss to White
Mountains's insurance and reinsurance operating subsidiaries and the settlement
of the liability for that loss. The exact timing of the payment of losses and
benefits cannot be predicted with certainty. White Mountains's insurance and
reinsurance operating subsidiaries maintain portfolios of invested assets with
varying maturities and a substantial amount of cash and short-term investments
to provide adequate liquidity for the payment of claims.
Management believes that White Mountains's cash balances, cash flows from
operations and routine sales and maturities of investments are adequate to meet
expected cash requirements for the foreseeable future on both a holding company
and insurance, reinsurance and other operating subsidiary level.

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Dividend capacity

Here is a description of the dividend capacity of The White Mountains
reinsurance and other operating subsidiaries:

HG Global/BAM
As of December 31, 2021, HG Global had $619 million face value of preferred
shares outstanding, of which White Mountains owned 96.9%. Holders of the HG
Global preferred shares receive cumulative dividends at a fixed annual rate of
6.0% on a quarterly basis, when and if declared by HG Global. During 2021, HG
Global declared and paid a $22 million preferred dividend, of which $21 million
was paid to White Mountains. As of December 31, 2021, HG Global had accrued $415
million of dividends payable to holders of its preferred shares, of which $401
million was payable to White Mountains and eliminated in consolidation. As of
December 31, 2021, HG Global and its subsidiaries had $3 million of cash outside
of HG Re.
HG Re is a Special Purpose Insurer subject to regulation and supervision by the
BMA but does not require regulatory approval to pay dividends. However, HG Re's
dividend capacity is limited to amounts held outside of the Collateral Trusts
pursuant to the FLRT with BAM. As of December 31, 2021, HG Re had $760 million
of statutory capital and surplus and $852 million of assets held in the
Collateral Trusts pursuant to the FLRT with BAM.
On a monthly basis, BAM deposits cash equal to ceded premiums, net of ceding
commissions, due to HG Re under the FLRT directly into the Regulation 114
Trust.  The Regulation 114 Trust target balance is equal to gross ceded unearned
premiums and unpaid ceded loss and LAE, if any.  If, at the end of any quarter,
the Regulation 114 Trust balance is below the target balance, funds will be
withdrawn from the Supplemental Trust and deposited into the Regulation 114
Trust in an amount equal to the shortfall.  If, at the end of any quarter, the
Regulation 114 Trust balance is above 102% of the target balance, funds will be
withdrawn from the Regulation 114 Trust and deposited into the Supplemental
Trust.
The Supplemental Trust Target Balance is $603 million, less the amount of cash
and securities in the Regulation 114 Trust in excess of its target balance. 

Yes,

at the end of each quarter, the Additional trust the balance exceeds the
Additional trust target balance, this excess can be distributed to HG Re.

the

distribution will be made first as an assignment of accrued interest on the BAM
Surplus Notes and second in cash and/or fixed income securities.  As the BAM
Surplus Notes are repaid over time, the BAM Surplus Notes will be replaced in
the Supplemental Trust by cash and fixed income securities.
As of December 31, 2021, the Collateral Trusts held assets of $852 million,
which included $481 million of cash and investments, $365 million of BAM Surplus
Notes and $6 million of interest receivable on the BAM Surplus Notes.
As of December 31, 2021, HG Re had $9 million of cash and investments and $117
million of accrued interest on the BAM Surplus Notes held outside the Collateral
Trusts.
Through 2024, the interest rate on the BAM Surplus Notes is a variable rate
equal to the one-year U.S. Treasury rate plus 300 basis points, set annually.
During 2022, the interest rate on the BAM Surplus Notes will be 3.2%. Beginning
in 2025, the interest rate will be fixed at the higher of the then current
variable rate or 8.0%. BAM is required to seek regulatory approval to pay
interest and principal on the BAM Surplus Notes only to the extent that its
remaining qualified statutory capital and other capital resources continue to
support its outstanding obligations, its business plan and its "AA/stable"
rating from Standard & Poor's. No payment of principal or interest on the BAM
Surplus Notes may be made without the approval of the NYDFS.
In December 2021, BAM made a $34 million cash payment of principal and interest
on the BAM Surplus Notes held by HG Global. Of this payment, $24 million was a
repayment of principal held in the Supplemental Trust and $10 million was a
payment of accrued interest held outside the Supplemental Trust.

Ark

During any 12-month period, GAIL, a class 4 licensed Bermuda insurer, has the
ability to (i) make capital distributions based on 15% of its total statutory
capital per the previous year's statutory financial statements, or (ii) make
dividend payments based on 25% of its total statutory capital and surplus per
the previous year's statutory financial statements, without prior approval of
Bermuda regulatory authorities. Accordingly, White Mountains expects GAIL will
have the ability to make capital distributions of $114 million during 2022,
which is equal to 15% of its December 31, 2021 statutory capital of $758
million, subject to meeting all appropriate liquidity and solvency requirements
and the filing of its December 31, 2021 statutory financial statements. During
2021, GAIL did not pay a dividend to its immediate parent.
As of December 31, 2021, Ark and its intermediate holding companies had $4
million of net unrestricted cash, short-term investments and fixed maturity
investments outside of its regulated and unregulated insurance and reinsurance
operating subsidiaries. During 2021, Ark did not pay any dividends to its
immediate parent.


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NSM

During 2021, NSM distributed $8 million to unitholders, substantially all of
which was paid to White Mountains. As of December 31, 2021, NSM had $22 million
of net unrestricted cash and short-term investments.

Kudu

During 2021, Kudu distributed $19 million to unitholders, substantially all of
which was paid to White Mountains. As of December 31, 2021, Kudu had $17 million
of net unrestricted cash and short-term investments.
Other Operations
During 2021, White Mountains paid a $3 million common share dividend. As of
December 31, 2021, the Company and its intermediate holding companies had
$454 million of net unrestricted cash, short-term investments and fixed maturity
investments, $262 million of MediaAlpha common stock, and $171 million of
private equity funds and ILS funds.

Funding

The following table summarizes The White Mountains capital structure at
December 31, 2021 and 2020:

                                                                         December 31,
 $ in Millions                                                       2021            2020

 Ark 2007 Subordinated Notes (1)                                 $    30.0  

$-

 Ark 2021 Subordinated Notes (1)(2)                                  155.9               -
 NSM Bank Facility (1)(2)                                            271.2           271.3
 Other NSM debt (1)                                                     .9             1.3
 Kudu Credit Facility (1)(2)                                         218.2               -

 Kudu Bank Facility (1)(2)                                               -            86.3
 Other Operations debt (1)(2)                                         16.8            17.5
 Total debt                                                          693.0           376.4
 Non-controlling interests - excluding BAM                           280.6  

35.2

 Total White Mountains's common shareholders' equity               3,548.1  

3,906.0

 Total capital                                                     4,521.7  

4,317.6

Time value discount on expected future payments on the BAM

 Surplus Notes (3)                                                  (125.9) 

(142.5)

 HG Global's unearned premium reserve (3)                            214.6  

190.0

 HG Global's net deferred acquisition costs (3)                      (60.8) 

(52.4)

 Total adjusted capital                                          $ 4,549.6  

$4,312.7

 Total debt to total adjusted capital                                 15.2  

% 8.7%

(1)See Note 7 - "Debt" for details of debt arrangements.
(2) Net of unamortized issuance costs
(3) Amount reflects White Mountains's preferred share ownership in HG Global of
96.9%.

Management believes that White Mountains has the flexibility and capacity to
obtain funds externally through debt or equity financing on both a short-term
and long-term basis. However, White Mountains can provide no assurance that, if
needed, it would be able to obtain additional debt or equity financing on
satisfactory terms, if at all.
It is possible that, in the future, one or more of the rating agencies may lower
White Mountains's existing ratings. If one or more of its ratings were lowered,
White Mountains could incur higher borrowing costs on future borrowings and its
ability to access the capital markets could be impacted.

Compliance with commitments
From December 31, 2021, White Mountains was compliant in all materials
complies with all the covenants of all its debt instruments.

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Contractual obligations and commitments

The following table shows The White Mountains important contractual obligations
and commitments from December 31, 2021:

                                            Due in Less         Due in Two to         Due in Four           Due After
Millions                                   Than One Year         Three Years         to Five Years          Five Years            Total
Loss and LAE reserves (1)                  $     326.7          $     365.7          $     122.0          $      80.3          $   894.7
Debt                                               5.7                 14.5                221.6                470.4              712.2
Interest on debt                                  42.8                 78.8                 65.9                158.7              346.2
Long-term incentive compensation                  25.9                 31.6                    -                    -               57.5
Contingent consideration (2)                      38.2                    -                    -                    -               38.2
Operating leases (3)                              10.9                 18.4                 11.1                 11.9               52.3
Total contractual obligations and
commitments                                $     450.2          $     509.0 

$420.6 $721.3 $2,101.1

(1) Represents expected future cash outflows resulting from loss and LAE
payments. The amounts presented are gross of reinsurance recoverables on unpaid
losses of $428.9 as of December 31, 2021.
(2) The contingent consideration liabilities are primarily related to White
Mountains's acquisition of Ark and NSM's previous acquisitions of KBK and its
other U.K.-based operations. See Note 2 - "Significant Transactions" on page
F-17.
(3) Amounts include BAM's operating lease amounts of $2.2, $4.0, $2.4 and $0
that are due in less than one year, two to three years, four to five years, and
due after five years, which are attributed to non-controlling interests.

The long-term incentive compensation balances included in the table above
include amounts payable for performance shares. Exact amounts to be paid for
performance shares cannot be predicted with certainty, as the ultimate amounts
of these liabilities are based on the future performance of White Mountains and
the market price of the Company's common shares at the time the payments are
made.
The estimated payments reflected in the table are based on current accrual
factors (including performance relative to targets and common share price) and
assume that all outstanding balances were 100% vested as of December 31, 2021.
There are no provisions within White Mountains's operating leasing agreements
that would trigger acceleration of future lease payments.
White Mountains does not finance its operations through the securitization of
its trade receivables, through special purpose entities or through synthetic
leases. Further, White Mountains has not entered into any material arrangements
requiring it to guarantee payment of third-party debt or lease payments or to
fund losses of an unconsolidated special purpose entity.
White Mountains also has future binding commitments to fund certain other
long-term investments. These commitments, which totaled approximately $44
million as of December 31, 2021, do not have fixed funding dates and, are
therefore, excluded from the table above.

Share buyback programs

White Mountains's board of directors has authorized the Company to repurchase
its common shares from time to time, subject to market conditions. The
repurchase authorizations do not have a stated expiration date. As of December
31, 2021, White Mountains may repurchase an additional 451,224 shares under
these board authorizations. In addition, from time to time White Mountains has
also repurchased its common shares through tender offers that were separately
approved by its board of directors.
The following table presents common shares repurchased by the Company as well as
the average price per share as a percent of December 31, 2021 adjusted book
value per share and market value per share.

                                                                                  Average Price Per       Average Price Per
                                                                                    Share as % of           Share as % of
                                                             Average              December 31, 2021       December 31, 2021
                            Shares            Cost            Price                 Adjusted Book            Market Value
     Year Ended          Repurchased       (Millions)       Per Share              Value Per Share            Per Share

December 31, 2021         98,511          $     107.5      $ 1,091.29                    92%                     108%

December 31, 2020         99,087          $      85.1      $   858.81                    72%                     85%
                                                                                 .
December 31, 2019          5,679          $       4.9      $   857.69                    72%                     85%



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Cash flow

Detailed information about The White Mountains cash flow in 2021, 2020
and 2019 follows:

Cash flow from operations for the years ended 2021, 2020 and 2019

Net cash flows provided from (used for) operations was $39 million, $(61)
million and $(121) million for the years ended December 31, 2021, 2020 and 2019.
Cash provided from operations was higher in 2021 compared to 2020, driven
primarily by the cash inflow from Ark's operations, partially offset by the
deployments in Kudu's participation contracts and Ark's transaction expenses.
Cash used for operations was lower in 2020 compared to 2019, driven primarily by
$55 million of net investment income received in 2020 from a dividend
recapitalization at MediaAlpha. White Mountains does not believe these trends
will have a meaningful impact on its future liquidity or its ability to meet its
future cash requirements. As of December 31, 2021, the Company and its
intermediate holding companies had $454 million of net unrestricted cash,
short-term investments and fixed maturity investments, $262 million of
MediaAlpha common stock, and $171 million of private equity funds and ILS funds.

Cash flow from investing and financing activities for the year ended December
31, 2021

Financing and Other Capital Activities
During 2021, the Company declared and paid a $3 million cash dividend to its
common shareholders.
During 2021, White Mountains repurchased and retired 98,511 of its common shares
for $108 million, 7,218 of which were repurchased under employee benefit plans
for statutory withholding tax payments.
During 2021, BAM received $62 million in MSC.
During 2021, BAM repaid $24 million of principal and paid $10 million of accrued
interest on the BAM Surplus Notes.
During 2021, Ark issued $163 million face value floating rate unsecured
subordinated notes at par in three transactions for proceeds of $158 million,
net of debt issuance costs, and repaid €12 million ($14 million based upon the
foreign exchange spot rate at the date of repayment) of the outstanding
principal balance on the subordinated note to Dekania Europe CDO II plc ("Ark
2007 Notes Tranche 2").
During 2021, NSM repaid $3 million in term loans, borrowed $35 million in
revolving loans to fund the acquisition of J.C. Taylor and repaid $32 million in
revolving loans under the Ares Capital Corporation secured credit facility (the
"NSM Bank Facility").
During 2021, Kudu borrowed $3 million in term loans under the Kudu Bank
Facility.
On March 23, 2021, Kudu entered into the Kudu Credit Facility with an initial
draw of $102 million, of which $92 million was used to repay the outstanding
principal balance on its term loans under the Kudu Bank Facility. During 2021,
Kudu borrowed an additional $130 million and repaid $7 million in term loans
under the Kudu Credit Facility.
During 2021, White Mountains's Other Operations segment borrowed $3 million and
repaid $8 million under its three secured credit facilities.

Acquisitions and Dispositions
On January 1, 2021 White Mountains completed the Ark Transaction, which included
contributing $605 million of equity capital to Ark, at a pre-money valuation of
$300 million, and purchasing $41 million of shares from certain selling
shareholders. In the fourth quarter of 2020, White Mountains prefunded/placed in
escrow a total of $646 million in preparation for closing the Ark Transaction.
On March 23, 2021, MediaAlpha completed a secondary offering of 8.05 million
shares. In the secondary offering, White Mountains sold 3.6 million shares at
$46.00 per share ($44.62 per share net of underwriting fees) for net proceeds of
$160 million.
On August 6, 2021, NSM acquired 100% of J.C. Taylor for $50 million of upfront
cash consideration.


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Cash flow from investing and financing activities for the year ended December
31, 2020

Financing and Other Capital Activities
During 2020, the Company declared and paid a $3 million cash dividend to its
common shareholders.
During 2020, White Mountains repurchased and retired 99,087 of its common shares
for $85 million, 5,899 of which were repurchased under employee benefit plans
for statutory withholding tax payments.
During 2020, BAM received $69 million in MSC.
During 2020, BAM repaid $70 million of principal and paid $25 million of accrued
interest on the BAM Surplus Notes.
During 2020, HG Global declared and paid $23 million of preferred dividends, of
which $22 million was paid to White Mountains.
During 2020, NSM borrowed £43 million ($52 million based upon the foreign
exchange spot rate at the date of acquisition) of term loans under the NSM Bank
Facility to fund the acquisition of Kingsbridge. Additionally, during 2020 NSM
repaid $2 million of term loans under the NSM Bank Facility.
During 2020, Kudu borrowed $32 million in term loans under the Kudu Bank
Facility.
During 2020, White Mountains's Other Operations segment made no borrowings and
repaid $2 million in term loans under its credit facilities.

Acquisitions and Dispositions
On April 7, 2020, NSM acquired 100% of Kingsbridge for £107 million ($132
million based upon the foreign exchange spot rate at the date of acquisition).
On May 7, 2020, White Mountains made an additional $15 million investment in
PassportCard/DavidShield.
On October 30, 2020, MediaAlpha completed its initial public offering. In the
offering, White Mountains sold 3,609,894 shares and received total proceeds of
$64 million. White Mountains also received $55 million of net proceeds related
to a dividend recapitalization at MediaAlpha, which was recorded as net
investment income.
In the fourth quarter of 2020, White Mountains pre-funded/placed in escrow a
total of $646 million in preparation for closing the Ark Transaction.

Cash flow from investing and financing activities for the year ended December
31, 2019

Financing and Other Capital Activities
During 2019, the Company declared and paid a $3 million cash dividend to its
common shareholders.
During 2019, White Mountains repurchased and retired 5,679 of its common shares
for $5 million, all of which were repurchased under employee benefit plans for
statutory withholding tax payments.
During 2019, BAM received $55 million in MSC.
During 2019, BAM repaid $24 million of principal and paid $8 million of accrued
interest on the BAM Surplus Notes.
During 2019, NSM borrowed $43 million of term loans under the NSM Bank Facility,
which included $20 million and $23 million to fund the acquisitions of Embrace
and the Renewal Rights from AIG, and $7 million of revolving credit loans.
Additionally, during 2019 NSM repaid $2 million of term loans and $7 million of
revolving credit loans under the NSM Bank Facility.
During 2019, Kudu borrowed $57 million in term loans under the Kudu Bank
Facility and distributed $54 million to unitholders, of which $53 million was
paid to White Mountains. As of December 31, 2019, Kudu had not made any payment
of principal on the Kudu Bank Facility.

Acquisitions and Dispositions
On February 26, 2019, White Mountains received net cash proceeds of $89 million
from the 2019 MediaAlpha Transaction.
On April 1, 2019, NSM acquired 100% of Embrace for $72 million, net of cash
acquired.
On April 4, 2019, White Mountains completed the Kudu Transaction for $81
million. In addition, White Mountains assumed all of Oaktree's unfunded capital
commitments to Kudu, increasing White Mountains's total capital commitment to
$250 million. During the fourth quarter of 2019, White Mountains increased its
total capital commitment to Kudu by an additional $100 million to $350 million.
Also during the fourth quarter of 2019, Kudu obtained a committed $124 million
credit facility.
On May 31, 2019, White Mountains completed the Elementum Transaction for $55
million. As part of the Elementum Transaction, White Mountains also committed to
invest $50 million in ILS funds managed by Elementum.
On June 28, 2019, NSM acquired the Renewal Rights from AIG for $83 million.

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TRANSACTIONS WITH RELATED PARTIES

White Mountains has no related party transactions to report to the
December 31, 2021.

NON-GAAP FINANCIAL MEASURES

This report includes thirteen non-GAAP financial measures that have been
reconciled to their most comparable GAAP financial measures.

Adjusted book value per share
Adjusted book value per share is a non-GAAP financial measure which is derived
by adjusting (i) the GAAP book value per share numerator and (ii) the common
shares outstanding denominator, as described below.
The GAAP book value per share numerator is adjusted (i) to include a discount
for the time value of money arising from the modeled timing of cash payments of
principal and interest on the BAM Surplus Notes and (ii) to add back the
unearned premium reserve, net of deferred acquisition costs, at HG Global.
Under GAAP, White Mountains is required to carry the BAM Surplus Notes,
including accrued interest, at nominal value with no consideration for time
value of money. Based on a debt service model that forecasts operating results
for BAM through maturity of the BAM Surplus Notes, the present value of the BAM
Surplus Notes, including accrued interest and using an 8.0% discount rate, was
estimated to be $130 million, $147 million and $157 million less than the
nominal GAAP carrying values as of December 31, 2021, 2020 and 2019,
respectively.
The value of HG Global's unearned premium reserve, net of deferred acquisition
costs, was $159 million, $142 million and $119 million as of December 31, 2021,
2020 and 2019, respectively.
White Mountains believes these adjustments are useful to management and
investors in analyzing the intrinsic value of HG Global, including the value of
the BAM Surplus Notes and the value of the in-force business at HG Re, HG
Global's reinsurance subsidiary.
The denominator used in the calculation of adjusted book value per share equals
the number of common shares outstanding adjusted to exclude unearned restricted
common shares, the compensation cost of which, at the date of calculation, has
yet to be amortized. Restricted common shares are earned on a straight-line
basis over their vesting periods. The reconciliation of GAAP book value per
share to adjusted book value per share is included on page 42.

Growth in adjusted book value per share excluding MediaAlpha
The growth in adjusted book value per share excluding net realized and
unrealized investment losses from White Mountains's investment in MediaAlpha on
page 42 is a non-GAAP financial measure. White Mountains believes this measure
to be useful to management and investors by showing the underlying performance
of White Mountains in 2021 without regard to the impact of changes in
MediaAlpha's share price. A reconciliation from GAAP to the reported percentages
is as follows:

                                                                                      Year Ended
                                                                                   December 31, 2021
Growth in GAAP book value per share                                                     (6.5)%

Adjustments to book value per share (see reconciliation page 42)

              0.8%

Eliminate net realized and unrealized investment losses

   White Mountains's investment in MediaAlpha                                            10.0%

Growth in adjusted book value per share excluding net realized and

   unrealized investment losses from White Mountains's investment
   in MediaAlpha                                                                         4.3%



BAM's gross written premiums and MSC from new business
BAM's gross written premiums and MSC from new business is a non-GAAP financial
measure, which is derived by adjusting gross written premiums and MSC collected
(i) to include the present value of future installment MSC not yet collected and
(ii) to exclude the impact of gross written premium adjustments related to
policies closed in prior periods. White Mountains believes these adjustments are
useful to management and investors in evaluating the volume and pricing of new
business closed during the period. The reconciliation from GAAP gross written
premiums to gross written premiums and MSC from new business is included on page
46.

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Ark's adjusted loss and loss adjustment expense, adjusted insurance acquisition
expense, adjusted other underwriting expense and adjusted combined ratios
Ark's adjusted loss and loss adjustment expense ratio, adjusted insurance
acquisition expense ratio, adjusted other underwriting expense ratio and
adjusted combined ratio are non-GAAP financial measures, which are derived by
adjusting the GAAP ratios to add back the impact of whole-account quota-share
reinsurance arrangements related to TPC Providers for the Syndicates. The impact
of these reinsurance arrangements relates to years of account prior to the Ark
Transaction. White Mountains believes these adjustments are useful to management
and investors in evaluating Ark's results on a fully aligned basis (i.e., 100%
of the Syndicates' results). The reconciliation from the GAAP ratios to the
adjusted ratios is included on page 52.

NSM's EBITDA and NSM's adjusted EBITDA
NSM's EBITDA and adjusted EBITDA are non-GAAP financial measures. EBITDA is a
non-GAAP financial measure that excludes interest expense on debt, income tax
(expense) benefit, depreciation and amortization of other intangible assets from
GAAP net income (loss). Adjusted EBITDA is a non-GAAP financial measure that
excludes certain other items in GAAP net income (loss) in addition to those
excluded from EBITDA. The adjustments relate to (i) change in fair value of
contingent consideration liabilities, (ii) non-cash equity-based compensation
expense, (iii) impairments of intangible assets, (iv) loss on assets held for
sale, (v) transaction expenses, (vi) fair value purchase accounting adjustment
for deferred revenue, (vii) investments made in the development of new business
lines, (viii) restructuring expenses and (ix) legal settlements. A description
of each follows:
•Change in fair value of contingent consideration liabilities - Contingent
consideration liabilities are amounts payable to the sellers of businesses
purchased by NSM that are contingent on the earnings of such businesses in
periods subsequent to their acquisition. Under GAAP, contingent consideration
liabilities are initially recorded at fair value as part of purchase accounting,
with the periodic change in the fair value of these liabilities recorded as
income or an expense.
•Non-cash equity-based compensation expense - Represents non-cash expenses
related to NSM's management compensation emanating from the grants of equity
units.
•Impairments of intangible assets - Represents expense related to NSM's
write-off of intangible assets. For the periods presented, the impairments
related primarily to NSM's write-off of intangible assets in its U.K. vertical.
The impairments related to lower premium volumes, including due to the impact of
the COVID-19 pandemic, and certain reorganization initiatives in the U.K.
vertical.
• Loss on assets held for sale - Represents the loss on net assets held for sale
related to the Fresh Insurance motor business.
•Transaction expenses - Represents costs directly related to NSM's mergers and
acquisitions activity, such as transaction-related compensation, banking,
accounting and external lawyer fees, which are not capitalized and are expensed
under GAAP.
•Fair value purchase accounting adjustment for deferred revenue - Represents the
amount of deferred revenue that had already been collected but subsequently
written down in connection with establishing the fair value of deferred revenue
as part of NSM's purchase accounting for Embrace.
•Investments made in the development of new business lines - Represents the net
loss related to the start-up of newly established lines of business, which NSM
views as investments.
•Restructuring expenses - Represents expenses associated with eliminating
redundant work force and facilities that often arise as a result of NSM's
post-acquisition integration strategies. For the periods presented, this
adjustment relates primarily to NSM's expenses incurred in certain
reorganization initiatives in the U.K. vertical.
•Legal settlements - Represents amounts recognized from legal settlements.
White Mountains believes that these non-GAAP financial measures are useful to
management and investors in evaluating NSM's performance. See page 53 for the
reconciliation of NSM's GAAP net income (loss) to EBITDA and adjusted EBITDA.


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Kudu's EBITDA and Kudu's adjusted EBITDA
Kudu's EBITDA and adjusted EBITDA are non-GAAP financial measures. EBITDA is a
non-GAAP financial measure that excludes interest expense on debt, income tax
(expense) benefit, depreciation and amortization of other intangible assets from
GAAP net income (loss). Adjusted EBITDA is a non-GAAP financial measure that
excludes certain other items in GAAP net income (loss) in addition to those
excluded from EBITDA. The adjustments relate to (i) net realized and unrealized
investment gains (losses) on Kudu's Participation Contracts, (ii) non-cash
equity-based compensation expense and (iii) transaction expenses. A description
of each adjustment follows:
•Net realized and unrealized investment gains (losses) - Represents net
unrealized investment gains and losses on Kudu's Participation Contracts, which
are recorded at fair value under GAAP, and realized investment gains and losses
on Kudu's Participation Contracts sold during the period.
•Non-cash equity-based compensation expense - Represents non-cash expenses
related to Kudu's management compensation that are settled with equity units in
Kudu.
•Transaction expenses - Represents costs directly related to Kudu's mergers and
acquisitions activity, such as external lawyer, banker, consulting and placement
agent fees, which are not capitalized and are expensed under GAAP.
White Mountains believes that these non-GAAP financial measures are useful to
management and investors in evaluating Kudu's performance. The reconciliation of
Kudu's GAAP net income (loss) to EBITDA and adjusted EBITDA is included on page
56.

Total consolidated portfolio returns excluding MediaAlpha
Total consolidated portfolio return excluding MediaAlpha is a non-GAAP financial
measure that removes the net investment income and net realized and unrealized
investment gains (losses) from White Mountains's investment in MediaAlpha. White
Mountains believes this measure to be useful to management and investors by
showing the underlying performance of White Mountains's investment portfolio
without regard to MediaAlpha. The following tables present reconciliations from
GAAP to the reported percentages:

                                                For the Year Ended December 31, 2021                                  For the Year Months Ended December 31, 2020
                                                                                 Returns - Excluding                                                     Returns - Excluding
                                  GAAP Returns          Remove MediaAlpha            MediaAlpha             GAAP Returns        Remove MediaAlpha            MediaAlpha
Total consolidated
portfolio
  returns                                (3.4) %                    9.8  %                    6.4  %              31.9  %                 (27.3) %                    4.6  %



Adjusted capital
Total capital at White Mountains is comprised of White Mountains's common
shareholders' equity, debt and non-controlling interests other than
non-controlling interests attributable to BAM. Total adjusted capital is a
non-GAAP financial measure, which is derived by adjusting total capital (i) to
include a discount for the time value of money arising from the expected timing
of cash payments of principal and interest on the BAM Surplus Notes and (ii) to
add back the unearned premium reserve, net of deferred acquisition costs, at HG
Global. The reconciliation of total capital to total adjusted capital is
included on page 67.

CRITICAL ACCOUNTING ESTIMATES

Management's Discussion and Analysis of Financial Condition and Results of
Operations discuss the Company's consolidated financial statements, which have
been prepared in accordance with GAAP. The financial statements presented herein
include all adjustments considered necessary by management to fairly present the
financial condition, results of operations and cash flows of White Mountains.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Certain
of these estimates are considered critical in that they involve a higher degree
of judgment and are subject to a significant degree of variability. On an
ongoing basis, management evaluates its estimates and bases its estimates on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources.

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1. Fair value measurements

General

White Mountains records certain assets and liabilities at fair value in its
consolidated financial statements, with changes therein recognized in current
period earnings. In addition, White Mountains discloses estimated fair value for
certain liabilities measured at historical or amortized cost. Fair value is
defined as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants (an exit
price) at a particular measurement date. Fair value measurements are categorized
into a hierarchy that distinguishes between inputs based on market data from
independent sources (observable inputs) and a reporting entity's internal
assumptions based upon the best information available when external market data
is limited or unavailable (unobservable inputs). Quoted prices in active markets
for identical assets have the highest priority ("Level 1"), followed by
observable inputs other than quoted prices including prices for similar but not
identical assets or liabilities ("Level 2"), and unobservable inputs, including
the reporting entity's estimates of the assumptions that market participants
would use, having the lowest priority ("Level 3").
Assets and liabilities carried at fair value include substantially all of the
investment portfolio, and derivative instruments, both exchange-traded and over
the counter instruments. Valuation of assets and liabilities measured at fair
value require management to make estimates and apply judgment to matters that
may carry a significant degree of uncertainty. In determining its estimates of
fair value, White Mountains uses a variety of valuation approaches and inputs.
Whenever possible, White Mountains estimates fair value using valuation methods
that maximize the use of quoted market prices or other observable inputs. Where
appropriate, assets and liabilities measured at fair value have been adjusted
for the effect of counterparty credit risk.

Invested assets

White Mountains uses outside pricing services and brokers to assist in
determining fair values. The outside pricing services White Mountains uses have
indicated that they will only provide prices where observable inputs are
available. As of December 31, 2021, approximately 68% of the investment
portfolio recorded at fair value was priced based upon quoted market prices or
other observable inputs.

Level 1 Measurements
Investments valued using Level 1 inputs include White Mountains's fixed maturity
investments, primarily investments in U.S. Treasuries and short-term
investments, which include U.S. Treasury Bills, common equity securities, and
its investment in MediaAlpha following the MediaAlpha IPO. For investments in
active markets, White Mountains uses the quoted market prices provided by
outside pricing services to determine fair value.

Level 2 Measurements
Investments valued using Level 2 inputs include fixed maturity investments which
have been disaggregated into classes, including debt securities issued by
corporations, municipal obligations, mortgage and asset-backed securities and
collateralized loan obligations. Investments valued using Level 2 inputs also
include certain common equity listed funds traded on foreign exchanges, which
White Mountains values using the fund manager's published NAV to account for the
difference in market close times.
In circumstances where quoted market prices are unavailable or are not
considered reasonable, White Mountains estimates the fair value using industry
standard pricing methodologies and observable inputs such as benchmark yields,
reported trades, broker-dealer quotes, issuer spreads, benchmark securities,
bids, offers, credit ratings, prepayment speeds, reference data including
research publications and other relevant inputs. Given that many fixed maturity
investments do not trade on a daily basis, the outside pricing services evaluate
a wide range of fixed maturity investments by regularly drawing parallels from
recent trades and quotes of comparable securities with similar features. The
characteristics used to identify comparable fixed maturity investments vary by
asset type and take into account market convention.

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White Mountains's process to assess the reasonableness of the market prices
obtained from the outside pricing sources covers substantially all of its fixed
maturity investments and includes, but is not limited to, the evaluation of
pricing methodologies and a review of the pricing services' quality control
procedures on at least an annual basis, a comparison of its invested asset
prices obtained from alternate independent pricing vendors on at least a
semi-annual basis, monthly analytical reviews of certain prices and a review of
the underlying assumptions utilized by the pricing services for select
measurements on an ad hoc basis throughout the year. White Mountains also
performs back-testing of selected investment sales activity to determine whether
there are any significant differences between the market price used to value the
security prior to sale and the actual sale price of the security on an ad hoc
basis throughout the year. Prices provided by the pricing services that vary by
more than $0.5 million and 5% from the expected price based on these assessment
procedures are considered outliers, as are prices that have not changed from
period to period and prices that have trended unusually compared to market
conditions. In circumstances where the results of White Mountains's review
process does not appear to support the market price provided by the pricing
services, White Mountains challenges the vendor provided price. If White
Mountains cannot gain satisfactory evidence to support the challenged price,
White Mountains will rely upon its own internal pricing methodologies to
estimate the fair value of the security in question.
The valuation process described above is generally applicable to all of White
Mountains's fixed maturity investments. The techniques and inputs specific to
asset classes within White Mountains's fixed maturity investments for Level 2
securities that use observable inputs are as follows:

Debt Securities Issued by Corporations:
The fair value of debt securities issued by corporations is determined from a
pricing evaluation technique that uses information from market sources and
integrates relative credit information, observed market movements, and sector
news. Key inputs include benchmark yields, reported trades, broker-dealer
quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers,
and reference data including sector, coupon, credit quality ratings, duration,
credit enhancements, early redemption features and market research publications.

Municipal Obligations:
The fair value of municipal obligations is determined from a pricing evaluation
technique that uses information from market makers, brokers-dealers, buy-side
firms, and analysts along with general market information. Key inputs include
benchmark yields, reported trades, issuer financial statements, material event
notices and new issue data, as well as broker-dealer quotes, issuer spreads,
two-sided markets, benchmark securities, bids, offers, and reference data
including type, coupon, credit quality ratings, duration, credit enhancements,
geographic location and market research publications.

Mortgage and Asset-Backed Securities and Collateralized Loan Obligations:
The fair value of mortgage and asset-backed securities and collateralized loan
obligations is determined from a pricing evaluation technique that uses
information from market sources and leveraging similar securities. Key inputs
include benchmark yields, reported trades, underlying tranche cash flow data,
collateral performance, plus new issue data, as well as broker-dealer quotes,
issuer spreads, two-sided markets, benchmark securities, bids, offers, and
reference data including issuer, vintage, loan type, collateral attributes,
prepayment speeds, default rates, recovery rates, cash flow stress testing,
credit quality ratings and market research publications.


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Level 3 Measurements
Fair value estimates for investments that trade infrequently and have few or no
quoted market prices or other observable inputs are classified as Level 3
measurements. Investments valued using Level 3 fair value estimates are based
upon unobservable inputs and include investments in certain fixed maturity
investments, common equity securities and other long-term investments where
quoted market prices or other observable inputs are unavailable or are not
considered reliable or reasonable.
Level 3 valuations are generated from techniques that use assumptions not
observable in the market. These unobservable inputs reflect White Mountains's
assumptions of what market participants would use in valuing the investment. In
certain circumstances, investment securities may start out as Level 3 when they
are originally issued, but as observable inputs become available in the market,
they may be reclassified to Level 2. Transfers of securities between levels are
based on investments held as of the beginning of the period.

Other Long-Term Investments
As of December 31, 2021, White Mountains owned a portfolio of other long-term
investments valued at $1.4 billion, that consisted primarily of unconsolidated
entities, including Kudu's Participation Contracts, a bank loan fund, private
equity funds, a hedge fund, Lloyd's trust deposits, ILS funds and private debt
investments. As of December 31, 2021, $891 million of White Mountains's other
long-term investments consisting primarily of unconsolidated entities, including
Kudu's Participation Contracts and private debt investments, were classified as
Level 3 investments in the GAAP fair value hierarchy, were not actively traded
in public markets, and did not have readily observable market prices. The
determination of the fair value of these securities involves significant
management judgment and the use of valuation models and assumptions that are
inherently subjective and uncertain. See Item 1A. Risk Factors, "Our investment
portfolio includes securities that do not have readily observable market prices.
We use valuation methodologies that are inherently subjective and uncertain to
value these securities. The values of securities established using these
methodologies may never be realized, which could materially adversely affect our
results of operations and financial condition." on page 27. As of December 31,
2021, $483 million of White Mountains's other long-term investments, consisting
of a bank loan fund, private equity funds, a hedge fund, Lloyd's trust deposits,
and ILS funds, were valued at fair value using NAV as a practical expedient.
Investments for which fair value is measured at NAV using the practical
expedient are not classified within the fair value hierarchy.
White Mountains may use a variety of valuation techniques to determine fair
value depending on the nature of the investment, including a discounted cash
flow analysis, market multiple approach, cost approach and/or liquidation
analysis. On an ongoing basis, White Mountains also considers qualitative
changes in facts and circumstances, which may impact the valuation of its
unconsolidated entities, including economic and market changes in relevant
industries, changes to the entity's capital structure, business strategy and key
personnel, and any recent transactions relating to the unconsolidated entity. On
a quarterly basis, White Mountains evaluates the most recent qualitative and
quantitative information of the business and completes a fair valuation analysis
for all Level 3 other long-term investments. Periodically, and at least on an
annual basis, White Mountains uses a third-party valuation firm to complete an
independent valuation analysis of significant unconsolidated entities.
As of December 31, 2021, White Mountains's most significant other long-term
investments that are valued using Level 3 measurements include Kudu's
Participation Contracts and PassportCard/DavidShield.


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Valuation of Kudu participation contracts

Kudu's Participation Contracts comprise non-controlling equity interests in the
form of revenue and earnings participation contracts. As of December 31, 2021,
the combined fair value of Kudu's Participation Contracts was $670 million. On a
quarterly basis, White Mountains values each of Kudu's Participation Contracts
using discounted cash flow models. As of December 31, 2021, one of Kudu's
Participation Contracts with a total fair value of $79 million was valued using
a probability weighted expected return method, which was based on a discounted
cash flow analysis and the expected value to be received in a pending sale
transaction.

The discounted cash flow models include key inputs such as projections of future
revenues and earnings of Kudu's clients, a discount rate and a terminal cash
flow exit multiple. The expected future cash flows are based on management
judgment, considering current performance, budgets and projected future results.
The discount rates reflect the weighted average cost of capital, considering
comparable public company data, adjusted for risks specific to the business and
industry. The terminal exit multiple is generally based on expectations of
annual cash flow to Kudu from each of its clients in the terminal year of the
cash flow model. In determining fair value, White Mountains considers factors
such as performance of underlying products and vehicles, expected client growth
rates, new fund launches, fee rates by products, capacity constraints, operating
cash flow of underlying manager and other qualitative factors, including the
assessment of key personnel. The inputs to each discounted cash flow analysis
vary depending on the nature of each client. As of December 31, 2021, White
Mountains concluded that pre-tax discount rates in the range of 18% to 23%, and
terminal cash flow exit multiples in the range of 7 to 13 times were appropriate
for the valuations of Kudu's Participation Contracts.

With a discounted cash flow analysis, small changes to inputs in a valuation
model may result in significant changes to fair value. The following table
presents the estimated effect on the fair value of Kudu's Participation
Contracts as of December 31, 2021, resulting from increases and decreases to the
discount rates and terminal cash flow exit multiples used in the discounted cash
flow analysis:

             Millions                                          Discount Rate(1)
             Terminal Exit Multiple          -2%        -1%       18% - 23%        +1%        +2%

                         +2                $ 782      $ 741      $      705      $ 670      $ 638
                         +1                $ 758      $ 720      $      685      $ 652      $ 621
                     7x to 13x             $ 739      $ 703      $      670      $ 638      $ 609
                         -1                $ 712      $ 677      $      646      $ 616      $ 588
                         -2                $ 689      $ 657      $      628      $ 600      $ 574

(1) As Kudu Participation Agreements are not subject to corporation tax
in Kudu Investment Management, LLCpre-tax discount rates are applied
pre-tax cash flows in determining fair values.

Valuation of PassportCard/DavidShield

On a quarterly basis, White Mountains values its investment in
PassportCard/DavidShield using a discounted cash flow model. The discounted cash
flow valuation model includes key inputs such as projections of future revenues
and earnings, a discount rate and a terminal revenue growth rate. The expected
future cash flows are based on management judgment, considering current
performance, budgets and projected future results. The discount rate reflects
the weighted average cost of capital, considering comparable public company
data, adjusted for risks specific to the business and industry. The terminal
revenue growth rate is based on company, industry and macroeconomic expectations
of perpetual revenue growth subsequent to the end of the discrete period in the
discounted cash flow analysis.

When making its fair value selection, which is within a range of reasonable
values derived from the discounted cash flow model, White Mountains considers
all available information, including any relevant market multiples and multiples
implied by recent transactions, facts and circumstances specific to
PassportCard/DavidShield's businesses and industries, and any infrequent or
unusual results for the period.

White Mountains concluded that an after-tax discount rate of 23% and a terminal
revenue growth rate of 4% was appropriate for the valuation of its investment in
PassportCard/DavidShield as of December 31, 2021. Utilizing these assumptions,
White Mountains determined that the fair value of its investment in
PassportCard/DavidShield was $120 million as of December 31, 2021.
Premiums and commission revenues from leisure travel insurance placed by
PassportCard declined dramatically in the year ended December 31, 2020 due to
the COVID-19 pandemic. This decline was modestly offset by increased premiums
and commission revenues from international private medical insurance placed by
DavidShield. During the third quarter of 2020, PassportCard/DavidShield
curtailed its global expansion efforts in response to the impact of the COVID-19
pandemic.

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Sustained progress with COVID-19 vaccinations in Israel and abroad led to the
Israeli airport reopening in March 2021. The reopening resulted in steadily
improving leisure travel and the placement of leisure travel insurance by
PassportCard. PassportCard's premiums and commission revenues continued to
recover significantly. In the fourth quarter of 2021, PassportCard's written
premium exceeded pre-pandemic premium levels. Premiums and commission revenues
from international private medical insurance placed by DavidShield continued to
grow in 2021.
With a discounted cash flow analysis, small changes to inputs in a valuation
model may result in significant changes to fair value. The following table
presents the estimated effect on the fair value of White Mountains's investment
in PassportCard/DavidShield as of December 31, 2021, resulting from changes in
key inputs to the discounted cash flow analysis, including the discount rate and
terminal revenue growth rate:

            Millions                                               Discount Rate
            Terminal Revenue Growth Rate          21%        22%        23%        24%        25%
                          4.5%                  $ 142      $ 131      $ 122      $ 113      $ 106
                          4.0%                  $ 139      $ 129      $ 120      $ 111      $ 104
                          3.5%                  $ 136      $ 126      $ 117      $ 110      $ 102



Other Long-term Investments - NAV
White Mountains's portfolio of other long-term investments includes investments
in a bank loan fund, private equity funds, hedge funds, Lloyd's trust deposits
and ILS funds, which are valued at fair value using NAV as a practical
expedient. White Mountains employs a number of procedures to assess the
reasonableness of the fair value measurements for other long-term investments
measured at NAV, including obtaining and reviewing periodic and audited annual
financial statements as well as periodically discussing each fund's pricing with
the fund manager. However, since the fund managers do not provide sufficient
information to evaluate the pricing methods and inputs for each underlying
investment, White Mountains considers the valuation inputs to be unobservable.
The fair value of White Mountains's other long-term investments measured at NAV
are generally determined using the fund manager's NAV. In the event that White
Mountains believes the fair value differs from the NAV reported by the fund
manager due to illiquidity or other factors, White Mountains will adjust the
reported NAV to more appropriately represent the fair value of its investment.

Sensitivity Analysis on Other Long-term Investments - NAV
The underlying investments of White Mountains's bank loan fund consist primarily
of U.S. dollar-denominated, non-investment grade, floating-rate senior secured
loans and may consist of other financial instruments, such as secured and
unsecured corporate debt, credit default swaps, reverse repurchase agreements,
and synthetic indices. These investments are subject to credit spread risk and
interest rate risk, and may be affected by the creditworthiness of the issuer,
prepayment options, relative values of alternative investments, the liquidity of
the instrument and various other market factors.
The underlying investments of White Mountains's private equity funds typically
consist of private securities whose exit strategies often depend on equity
market conditions. These investments are based on quoted market prices or
management's estimates of fair value, which could cause the amount realized upon
sale to differ from current reported fair values. The fluctuations in fair value
may result from a variety of risks, such as changes in the economic
characteristics, the relative price of alternative investments, supply and
demand, and other equity market factors.
The underlying investments of White Mountains's multi-investor ILS funds consist
primarily of catastrophe bonds, collateralized reinsurance investments and
industry loss warranties. In addition to catastrophe event risk, the underlying
investments are also subject to a variety of other risks including modeling,
liquidity, market, collateral credit quality, counterparty financial strength,
interest rate and currency risks.
See Note 3 - "Investment Securities" on page F-21 for tables that summarize the
changes in White Mountains's fair value measurements by level for the years
ended December 31, 2021 and 2020 and for amount of total gains (losses) included
in earnings attributable to net unrealized investment gains (losses) for Level 3
investments for years ended December 31, 2021, 2020 and 2019.

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2. Valuation of excess tickets

BAM Excess Tickets

As of December 31, 2021, White Mountains owned $365 million of BAM Surplus Notes
and has accrued $158 million in interest due thereon. In December 2021, BAM made
a $34 million cash payment of principal and interest on the BAM Surplus Notes
held by HG Global. In December 2020, BAM made a $30 million cash payment of
principal and interest on the BAM Surplus Notes held by HG Global. In January
2020, BAM made a one-time $65 million cash payment of principal and interest on
the BAM Surplus Notes held by HG Global. During 2019, BAM made a $32 million
cash payment (which included a one-time $10 million cash payment) of principal
and interest on the BAM Surplus Notes.
Because BAM is consolidated in White Mountains's financial statements, the BAM
Surplus Notes and accrued interest are classified as intercompany notes, carried
at face value and eliminated in consolidation. However, the BAM Surplus Notes
and accrued interest are carried as assets at HG Global, of which White
Mountains owns 96.9% of the preferred equity, while the BAM Surplus Notes are
carried as liabilities at BAM, which White Mountains has no ownership interest
in and is completely attributed to non-controlling interests.
Any write-down of the carried amount of the BAM Surplus Notes and/or the accrued
interest thereon could adversely impact White Mountains's results of operations
and financial condition. See Item 1A., Risk Factors, "If BAM does not pay some
or all of the principal and interest due on the BAM Surplus Notes, it could
materially adversely affect our results of operations and financial condition."
on page 28.
Periodically, White Mountains's management reviews the recoverability of amounts
recorded from the BAM Surplus Notes. As of December 31, 2021, White Mountains
believes such notes and interest thereon to be fully recoverable. White
Mountains's review is based on a debt service model that forecasts operating
results for BAM, and related payments on the BAM Surplus Notes, through maturity
of the BAM Surplus Notes in 2042. The model depends on assumptions regarding
future trends for the issuance of municipal bonds, interest rates, credit
spreads, insured market penetration, competitive activity in the market for
municipal bond insurance and other factors affecting the demand for and price of
BAM's municipal bond insurance.
As of December 31, 2021, White Mountains debt service model indicated that the
BAM Surplus Notes would be fully repaid between six and seven years prior to
final maturity, which is generally consistent with the results of the update of
the debt service model as of December 31, 2020. The debt service model assumes
both par insured and total pricing gradually increase from 2022 to 2025, and
flatten thereafter. Assumptions regarding future trends for these factors are a
matter of significant judgment, and whether actual results will follow the model
is subject to a number of risks and uncertainties.
In January 2020, White Mountains updated its debt service model to reflect (i)
the cash payments of principal and interest on the BAM Surplus Notes made in
December 2019 and January 2020, (ii) the amendments made to the terms of the BAM
Surplus Notes in January 2020, including an extension of the variable interest
rate period, and (iii) in light of the current interest rate environment, a more
conservative forecast of future operating results for BAM. The changes to the
debt service model resulted in a $20 million increase to the time value of money
discount on the BAM Surplus Notes as reflected in adjusted book value per share
as of December 31, 2019.
BAM is required to seek regulatory approval to pay interest and principal on the
BAM Surplus Notes to the extent that its remaining qualified statutory capital
and other capital resources continue to support its outstanding obligations, its
business plan and its "AA/stable" rating from Standard & Poor's. No payment of
principal or interest on the BAM Surplus Notes may be made without the approval
of the NYDFS.
Interest payments on the BAM Surplus Notes are due quarterly but are subject to
deferral, without penalty or default and without compounding, for payment in the
future. Payments made to the BAM Surplus Notes are applied pro rata between
outstanding principal and interest. Deferred interest is due on the stated
maturity date in 2042.

3. Loss and LAE Reserves

General
Ark establishes loss and LAE reserves that are estimates of amounts needed to
pay claims and related expenses in the future for insured events that have
already occurred. The process of estimating loss and LAE reserves involves a
considerable degree of judgment by management and, as of any given date, is
inherently uncertain. See Note 5 - "Losses and Loss Adjustment Expense Reserves"
on page F-35 for a description of Ark's loss and LAE reserves and actuarial
methods.
Ark performs an actuarial review of its recorded loss and LAE reserves each
quarter, using several generally accepted actuarial methods to evaluate its loss
reserves, each of which has its own strengths and weaknesses. Management places
more or less reliance on a particular method based on the facts and
circumstances at the time the reserve estimates are made.

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As part of Ark's quarterly actuarial review, Ark compares the previous quarter's
projections of incurred, paid and case reserve activity, including amounts
incurred but not reported, to actual amounts experienced in the quarter.
Differences between previous estimates and actual experience are evaluated to
determine whether a given actuarial method for estimating loss and LAE reserves
should be relied upon to a greater or lesser extent than it had been in the
past. While some variance is expected each quarter due to the inherent
uncertainty in estimating loss and LAE reserves, persistent or large variances
would indicate that prior assumptions and/or reliance on certain actuarial
methods may need to be revised going forward.
Upon completion of each quarterly review, Ark selects indicated loss and LAE
reserve levels based on the results of the relevant actuarial methods, which are
the primary consideration in determining management's best estimate of required
loss and LAE reserves. However, in making its best estimate, management also
considers other qualitative factors that may lead to a difference between held
reserves and actuarially indicated reserve levels. Typically, these qualitative
factors are considered when management and Ark's actuaries conclude that there
is insufficient historical incurred and paid loss information or that there is
particular uncertainty about whether trends included in the historical incurred
and paid loss information are likely to repeat in the future. Such qualitative
factors include, among others, recent entry into new markets or new products,
improvements in the claims department that are expected to lessen future
ultimate loss costs, legal and regulatory developments, or other uncertainties
that may arise.
The process of establishing loss and LAE reserves, including amounts incurred
but not reported, is complex and imprecise as it must consider many variables
that are subject to the outcome of future events. As a result, informed
subjective estimates and judgments as to Ark's ultimate exposure to losses are
an integral component of the loss and LAE reserving process. Ark categorizes and
tracks insurance and reinsurance reserves by "reserving class of business" for
each underwriting office, London and Bermuda, and then aggregates the reserving
classes by line of business, which are summarized herein as property and
accident & health, marine & energy, specialty, casualty - active and casualty -
runoff.
Ark regularly reviews the appropriateness of its loss and LAE reserves at the
reserving class of business level, considering a variety of trends that impact
the ultimate settlement of claims for the subsets of claims in each particular
reserving class. Losses and LAE are categorized by the year in which the policy
is underwritten (the year of account, or underwriting year) for purposes of
Ark's claims management and estimation of the ultimate loss and LAE reserves.
For purposes of Ark's reporting under GAAP, losses and LAE are categorized by
the accident year.

Impact of Third-Party Capital
For the years of account prior to the Ark Transaction, a significant proportion
of the Syndicates' underwriting capital was provided by TPC Providers using
whole account reinsurance contracts with Ark's corporate member. The TPC
Providers' participation in the Syndicates for the 2020 and 2019 open years of
account is 42.8% and 58.3% of the total net result of the Syndicates. For the
years of account subsequent to the Ark Transaction, Ark is no longer using TPC
Providers to provide underwriting capital for the Syndicates.
A Reinsurance to Close ("RITC") agreement is generally put in place after the
third year of operations for a year of account such that the outstanding loss
and LAE reserves, including future development thereon, are reinsured into the
next year of account. As a result, and in combination with the changing
participation provided by TPC Providers, Ark's participation on the outstanding
loss and LAE reserves reinsured into the next year of account may change,
perhaps significantly. For example, during 2021, an RITC was executed such that
the outstanding loss and LAE reserves for claims arising out of the 2018 year of
account, for which the TPC Providers' participation in the total net results of
the Syndicates was 57.6%, were reinsured into the 2019 year of account, for
which the TPC Providers' participation in the total net results of the
Syndicates is 58.3%.

Loss and LAE Reserves by Line of Business
The following table summarizes Ark's loss and LAE reserves, net of reinsurance
recoverables on unpaid losses, as of December 31, 2021:

                                                                           December 31, 2021
Millions                                                       Case              IBNR              Total
Property and Accident & Health                              $   81.1          $   93.9          $  175.0
Marine & Energy                                                 23.4              75.9              99.3
Specialty                                                       13.4              71.8              85.2
Casualty - Active                                               11.9              25.5              37.4
Casualty - Runoff                                               42.4              26.0              68.4
Other                                                             .2        .       .3                .5
Total loss and LAE reserves, net of reinsurance
recoverables (1)                                            $  172.4        

$293.4 $465.8

(1) Provisions for claims and LAE, net of reinsurance, are net of the amounts
attributable to TPC suppliers of $276.8including $141.5 case reserves and
$135.3 IBNR reservations.

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For loss and LAE reserves as of December 31, 2021, Ark considers that the impact
of the various reserving factors, as described in Note 5 - "Losses and Loss
Adjustment Expense Reserves" on page F-35, on future paid losses would be
similar to the impact of those factors on historical paid losses.
The major causes of material uncertainty (i.e., reserving factors) generally
will vary for each line of business, as well as for each separately analyzed
reserving class of business within the line of business. Also, reserving factors
can have offsetting or compounding effects on estimated loss and LAE reserves.
In most cases, it is not possible to discretely measure the effect of a single
reserving factor and construct a meaningful sensitivity expectation. Actual
results will likely vary from expectations for each of these assumptions,
resulting in an ultimate claim liability that is different from that being
estimated currently.
Additional causes of material uncertainty exist in most product lines and may
impact the types of claims that could occur within a particular line of business
or reserving class of business. Examples where reserving factors, within a line
of business or reserving class of business, are subject to change include
changing types of insured (e.g., type of insured vehicle, size of account,
industry insured, jurisdiction), changing underwriting standards, or changing
policy provisions (e.g., deductibles, policy limits, endorsements).

Loss of the arch and EAS development

See Note 5 – “Loss reserves and loss adjustment expenses” on page F-35 for
prior year losses and LAE development discussions for the year ended The 31st of December,
2021
.

Range of Reserves
The following table shows the recorded loss and LAE reserves and the high and
low ends of Ark's range of reasonable loss and LAE reserve estimates, net of
reinsurance recoverables on unpaid losses, as of December 31, 2021. See Note 5 -
"Losses and Loss Adjustment Expense Reserves" on page F-35 for a description of
Ark's loss and LAE reserves and actuarial methods.

                                                                                 December 31, 2021
Millions                                                          Low                  Recorded               High
Total loss and LAE reserves, net of reinsurance                 $388.8                  $465.8               $505.6

recoverable (1)

(1) The provisions for recorded claims and LAE and the upper and lower limits of the range of
Estimates of LAE losses and reserves, net of reinsurance recoverables on defaults
losses, are net of amounts attributable to TPC suppliers of $276.8.

The recorded reserves represent management's best estimate of unpaid loss and
LAE reserves. Management's best estimate of reserves is in the upper portion of
the actuarial range of estimates in response to potential volatility in the
actuarial indications and estimates for large claims. Ark uses the results of
several different generally accepted actuarial methods to develop its best
estimate of ultimate loss and LAE reserves. While it has not determined the
statistical probability of actual ultimate paid losses falling within the range,
Ark believes that it is reasonably likely that actual ultimate paid losses will
fall within the ranges noted above.
Although Ark believes its loss and LAE reserves are reasonably stated, ultimate
losses may deviate, perhaps materially, from the recorded reserve amounts and
could be above the high end of the range of actuarial projections. This is
because ranges are developed based on known events as of the valuation date,
whereas the ultimate disposition of losses is subject to the outcome of events
and circumstances that may be unknown as of the valuation date.


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Sensitivity Analysis
Below is a discussion of possible variations from current estimates of loss and
LAE reserves due to changes in certain key assumptions. Each of the impacts
described below is estimated individually, without consideration for any
correlation among key assumptions. Further, there is uncertainty around other
assumptions not explicitly quantified in the discussion below. Therefore, it
would be inappropriate to take each of the amounts described below and add them
together in an attempt to estimate volatility for Ark's reserves in total. It is
important to note that the volatilities and variations discussed below are not
meant to be worst-case scenarios or an all-inclusive list, and therefore it is
possible that future volatilities and variations may be more than amounts
discussed below.

•Sustained elevated levels of inflation: Elevated levels of inflation have been
observed during 2021, and recent economic forecasts suggest this trend will
continue at least in the short term. This has been particularly observed in the
casualty lines of business with key social inflation drivers being court awards,
changes in technology, and the legal environment. For example, a hypothetical
increase in inflation rates by 4% per annum would increase the recorded loss and
LAE reserves, net of reinsurance recoverables on unpaid losses, for the casualty
lines of business by approximately $7 million, or approximately 7% of the
recorded casualty loss and LAE reserves of $106 million. The property line of
business has also been impacted by elevated levels of inflation in relation to
many elements of construction costs. While the impact on construction costs
could be viewed as a short-term measure, there is uncertainty over how long it
will take for the current elevated level of costs to reduce back to historic
norms given COVID-19 disruption and worldwide supply chain issues.

•Catastrophe losses: The years 2017 through 2021 have been active for major loss
events, including natural catastrophes. As time has passed, the emerging claims
information for major loss events has been better than expected. As of December
31, 2021, Ark has recorded $64 million of loss and LAE reserves, net of
reinsurance recoverables on unpaid losses, for major loss events, of which $26
million is held as IBNR reserves. Some, but perhaps not all, of the IBNR
reserves may be needed to handle adverse reporting from clients.

•Ark new business: In January 2021, in response to an improved underwriting
environment, Ark converted GAIL into a Class 4 Bermuda-based insurance and
reinsurance company and began to underwrite third-party business. GAIL now
underwrites a range of third-party business including property, marine & energy,
specialty and casualty lines from Bermuda. GAIL's initial expected loss ratios
selected for reserving purposes were based on market benchmarks, supplemented
based on discussions with underwriters, policy details, views at time of pricing
the risk and emerging experience during 2021. As actual losses develop, Ark will
revise its initial expectations with its actual experience. However, it could be
a few years before Ark has sufficient internal data to rely on and possibly
longer for the longer-tailed lines of business, such as casualty. In 2021, GAIL
reported gross written premiums of $363 million. A 10% error in Ark's initial
loss ratio estimates could result in approximately $36 million of adverse
variance in loss and LAE reserves.

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Loss and LAE Reserve Summary
The following table summarizes the loss and LAE reserve activity of Ark's
insurance and reinsurance subsidiaries for the year ended December 31, 2021:

                                                                                            Year Ended
Millions                                                                                 December 31, 2021
Gross beginning balance                                                                $            696.0
Less: beginning reinsurance recoverable on unpaid losses (1)                                       (433.4)
Net loss and LAE reserves                                                                           262.6

Losses and LAE incurred relating to:
Current year losses gross of amounts attributable to TPC Providers                                  397.5
  Less: Current year losses attributable to TPC Providers                                           (61.2)
   Net current year losses                                                                          336.3

  Prior year losses gross of amounts attributable to TPC Providers                                  (42.9)
  Less: Prior year losses attributable to TPC Providers                                              21.4
   Net prior year losses                                                                            (21.5)
Net incurred losses and LAE                                                                         314.8

Loss and LAE paid relating to:
Current year losses gross of amounts attributable to TPC Providers                                  (56.2)
Less: Current year losses attributable to TPC Providers                                              12.3
Net current year losses                                                                             (43.9)

Prior year losses gross of amounts attributable to TPC Providers                                   (132.0)
Less: Prior year losses attributable to TPC Providers                                                70.4
  Net prior year losses                                                                             (61.6)
Net paid losses and LAE                                                                            (105.5)

Change in TPC Providers' participation (2)                                                           (2.2)
Foreign currency translation and other adjustments to loss and LAE
reserves                                                                                             (3.9)

Net ending balance                                                                                  465.8
Plus: ending reinsurance recoverable on unpaid losses (1)                                           428.9
Gross ending balance                                                                   $            894.7


(1) The beginning reinsurance recoverable on unpaid losses and ending
reinsurance recoverable on unpaid losses includes amounts attributable to TPC
Providers of $319.2 and $276.8.
(2) Amount represents a decrease in net loss and LAE reserves due to a change in
the TPC Providers' participation during 2021, related to the RITC for the 2018
year of account.

During the year ended December 31, 2021, Ark experienced $22 million of net
favorable loss reserve development. Ark's net favorable loss reserve development
was driven primarily by the property and accident & health ($9 million),
casualty - ongoing ($4 million), specialty ($3 million) and casualty - runoff
($3 million) reserving lines of business. The favorable loss reserve development
in the property and accident & health reserving line of business was driven
primarily by positive claims experience within the 2018 and 2019 accident years.

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The following table summarizes unpaid losses and LAE reserves, net of
reinsurance recoveries on unpaid losses, for each of Ark’s major reserves
sectors of activity from December 31, 2021:

                                                                                         As of
Millions                                                                           December 31, 2021
Property and Accident & Health                                                   $            175.0
Marine & Energy                                                                                99.3
Specialty                                                                                      85.2
Casualty - Active                                                                              37.4
Casualty - Runoff                                                                              68.4
Other                                                                                              0.5

Provisions for unpaid losses and LAE, net of unpaid reinsurance receivables
losses

                                                                                        465.8

Plus: Reinsurance receivables on unsettled claims (1)
Property and Accident & Health

                  145.2
Marine & Energy                                                                                70.2
Specialty                                                                                      68.9
Casualty - Active                                                                              41.4
Casualty - Runoff                                                                             103.2
  Total Reinsurance recoverables on unpaid losses (1)                                         428.9
Total unpaid loss and LAE reserves                                               $            894.7


(1) Amounts to be recovered from reinsurance on unpaid claims include amounts attributable
to TPC suppliers of $276.8.

The following ten tables include two tables each for the property and accident &
health, marine & energy, specialty, casualty-active and casualty-runoff
reserving lines of business. The first table for each reserving line of business
is presented net of reinsurance, which includes the impact of whole-account
quota-share reinsurance arrangements related to TPC Providers. Through the
annual RITC process, Ark's participation on outstanding loss and LAE reserves on
prior years of account can fluctuate. Depending on the change in the TPC
Providers' participation from one year of account to the next, the impact could
be significant and is reflected in the tables on an accident year basis. The
second table for each reserving line of business excludes the impact of amounts
attributable to TPC Providers. White Mountains believes this information is
useful to management and investors in evaluating Ark's loss and LAE reserves on
a fully aligned basis (i.e., 100% of the Syndicates' results), by excluding the
impact of changing levels of TPC Providers' participation from one year of
account to the next. The following table summarizes the participation of Ark's
TPC Providers by year of account:

                   2012   2013    2014     2015     2016     2017     2018     2019     2020    2021
TPC Providers'
  Participation     -  %   -  %  66.2  %  70.0  %  59.6  %  60.0  %  57.6  %  58.3  %  42.8  %   -  %



Each of the ten tables includes three sections.
The top section of the table presents, for each of the previous 10 accident
years (1) cumulative total undiscounted incurred loss and LAE as of each of the
previous 10 year-end evaluations, (2) total IBNR plus expected development on
reported claims as of December 31, 2021, and (3) the cumulative number of
reported claims as of December 31, 2021.
The middle section of the table presents cumulative paid loss and LAE for each
of the previous 10 accident years as of each of the previous 10 year-end
evaluations. Also included in this section is a calculation of the loss and LAE
reserves as of December 31, 2021 which is then included in the reconciliation to
the consolidated balance sheet presented above. The total unpaid loss and LAE
reserves as of December 31, 2021 is calculated as the cumulative incurred loss
and LAE from the top section less the cumulative paid loss and LAE from the
middle section, plus any outstanding liabilities from accident years prior to
2012.
The bottom section of the table is supplementary information about the average
historical claims duration as of December 31, 2021. It shows the weighted
average annual percentage payout of incurred loss and LAE by accident year as of
each age. For example, the first column is calculated as the incremental paid
loss and LAE in the first calendar year for each given accident year (e.g.
calendar year 2020 for accident year 2020, calendar year 2021 for accident year
2021) divided by the cumulative incurred loss and LAE as of December 31, 2021
for that accident year. The resulting ratios are weighted together using
cumulative incurred loss and LAE as of December 31, 2021.

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Property and Accident & Health
$ in Millions
                                                   Incurred Loss and LAE, Net of Reinsurance
                                                        For the Years Ended December 31,                                                   As of December 31, 2021
                                                                                                                                    Total IBNR plus
                                                                                                                                       expected
  Accident                                                                                                                          development on   Cumulative number of
    Year             2012      2013      2014      2015      2016      2017
     2018      2019      2020             2021          reported claims   

reported complaints

    2012           $ 84.1    $ 68.4    $ 65.1    $ 65.7    $ 60.2    $ 60.0    $ 60.4    $ 60.2    $ 60.2          $  60.0          $          -                     2,710
    2013                       74.6      66.9      66.6      62.1      61.6      61.7      61.6      61.6             61.6                    .4                     2,586
    2014                                 34.8      31.3      29.4      28.6      28.6      28.5      28.5             28.5                     -                     2,963
    2015                                           19.8      17.4      16.2      16.0      15.9      15.9             15.9                    .4                     2,884
    2016                                                     21.7      16.9      17.9      18.0      17.9             18.0                   (.3)                    3,478
    2017                                                               22.6      29.9      37.4      36.7             36.0                   3.6                     4,610
    2018                                                                         37.5      44.2      46.3             44.5                   1.5                     4,270
    2019                                                                                   30.4      27.8             23.4                   2.1                     4,073
    2020                                                                                             62.9             61.5                  15.2                     4,532
    2021                                                                                                             162.1                  70.8                     2,860
                                                                                                       Total       $ 511.5


Property and Accident & Health
Millions
                                                 Cumulative Paid Loss and LAE, Net of Reinsurance
                                                         For the Years Ended December 31,
Accident Year         2012      2013      2014      2015      2016      2017      2018      2019      2020             2021
    2012            $ 14.2    $ 45.0    $ 53.6    $ 57.3    $ 58.2    $ 58.6    $ 58.7    $ 59.3    $ 59.4          $  59.5
    2013                        15.8      40.3      60.0      61.1      61.1      61.3      61.3      61.3             61.2
    2014                                  13.9      25.4      27.6      28.0      28.1      28.2      28.4             28.3
    2015                                             7.0      12.4      13.7      14.9      14.8      15.1             15.3
    2016                                                       8.6      13.4      16.8      17.1      17.2             17.5
    2017                                                                17.0      26.3      32.1      33.3             30.2
    2018                                                                          15.8      32.8      40.7             40.7
    2019                                                                                     6.9      17.1             19.1
    2020                                                                                              11.4             34.5
    2021                                                                                                               30.8
                                                                                                        Total         337.1
                                                  All outstanding liabilities before 2012, net of reinsurance            .6
                                                                    Loss 

and LAE reserves, net of reinsurance $175.0

Property and Accident & Health

                                                 Average Annual Percentage 

Payment of incurred losses and LAE by age, net of reinsurance

   Years                1                       2                   3                   4                5            6            7            8           9          10
                      31.5%                   33.4%               19.2%                5.7%             1.2%         1.4%         0.8%         0.3%         -%        0.1%



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Property and Accident & Health
$ in Millions
                                       Incurred Loss and LAE, Gross of 

Amounts attributable to OTT suppliers

                                                          For the Years Ended December 31,                                                    As of December 31, 2021
                                                                                                                                       Total IBNR plus
                                                                                                                                          expected
                                                                                                                                       development on  

Cumulative number of
Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020

             2021          reported 

claims reported claims

    2012            $   84.1    $ 68.4    $ 65.1    $ 65.7    $ 65.9    $ 66.0    $ 65.7    $ 65.5    $ 65.2          $  64.8          $          -                     2,710
    2013                          74.6      66.9      66.6      66.3      65.0      64.8      64.5      64.5             64.5                    .9                     2,586
    2014                                    55.6      53.4      53.3      51.2      50.8      50.6      50.6             50.6                    .1                     2,963
    2015                                              54.7      51.8      48.7      46.2      46.0      45.8             45.8                    .9                     2,884
    2016                                                        60.6      48.5      50.0      50.3      50.0             50.1                   (.7)                    3,478
    2017                                                                  57.6      75.1      93.8      91.4             89.8                   8.6                     4,610
    2018                                                                            89.8     105.7     110.4            106.4                   3.5                     4,270
    2019                                                                                      72.5      66.2             55.8                   5.5                     4,073
    2020                                                                                               125.1            122.1                  29.1                     4,532
    2021                                                                                                                191.2                  83.1                     2,860
                                                                                                          Total       $ 841.1


Property and Accident & Health
Millions
                                    Cumulative Paid Loss and LAE, Gross of 

Amounts attributable to OTT suppliers

                                                          For the Years Ended December 31,
Accident Year           2012       2013      2014      2015      2016      2017      2018      2019      2020             2021
    2012            $    14.2    $ 45.0    $ 53.6    $ 57.3    $ 60.1    $ 61.4    $ 61.7    $ 63.2    $ 63.3          $  63.5
    2013                           15.8      40.3      60.0      63.3      63.2      63.9      63.7      63.7             63.6
    2014                                     19.1      41.3      48.0      49.2      49.4      49.9      50.2             50.1
    2015                                               19.0      36.3      40.4      43.3      43.2      43.8             44.3
    2016                                                         24.7      38.9      47.3      48.2      48.4             49.1
    2017                                                                   43.1      66.2      80.6      83.5             75.9
    2018                                                                             38.0      78.5      97.1             97.1
    2019                                                                                       16.5      40.7             45.3
    2020                                                                                                 24.5             69.2
    2021                                                                                                                  39.0
                                                                                                           Total         597.1
                         All outstanding liabilities before 2012, gross of amounts attributable to TPC Providers           1.5
                                           Loss and LAE reserves, gross of 

amounts attributable to TPC suppliers $245.5

Property and Accident & Health

                                  Average Annual Percentage Payout of Incurred Losses and LAE by Age, Gross of Amounts Attributable to TPC Providers
   Years             1                  2                    3                    4              5            6            7            8             9            10
                   32.0%              33.6%                17.5%                5.0%            0.5%         1.8%         1.9%         0.5%         (0.1)%        0.1%



                                       86
--------------------------------------------------------------------------------
Marine & Energy
$ in Millions
                                                    Incurred Loss and LAE, Net of Reinsurance
                                                         For the Years Ended December 31,                                                   As of December 31, 2021
                                                                                                                                     Total IBNR plus
                                                                                                                                        expected
                                                                                                                                     development on   Cumulative number of
Accident Year         2012      2013      2014      2015      2016      2017      2018      2019      2020             2021          reported claims    reported claims
    2012            $ 64.7    $ 55.1    $ 46.0    $ 42.8    $ 33.6    $ 32.8    $ 32.6    $ 32.0    $ 32.0          $  32.1          $         .1               2,428
    2013                        64.9      50.8      41.9      31.6      31.0      29.9      29.7      29.6             29.9                   (.2)              2,641
    2014                                  41.3      27.2      17.4      16.2      14.7      14.3      14.4             14.4                    .5               2,581
    2015                                            25.3      15.4      13.6      12.7      12.0      12.0             12.2                    .2               3,390
    2016                                                      22.3      18.1      16.0      15.1      14.9             15.1                    .7               4,117
    2017                                                                23.9      18.6      16.9      16.4             16.5                   1.1               4,470
    2018                                                                          24.5      18.9      16.7             17.0                    .5               3,487
    2019                                                                                    19.3      17.3             17.2                    .6               2,562
    2020                                                                                              24.4             21.7                   2.9               1,668
    2021                                                                                                               83.7                  69.9               1,091
                                                                                                        Total       $ 259.8


Marine & Energy
Millions
                                          Cumulative Paid Loss and LAE, Net of Reinsurance
                                                  For the Years Ended December 31,
  Accident Year       2012     2013     2014     2015     2016     2017     2018     2019     2020        2021
      2012           $ 8.1   $ 24.0   $ 27.4   $ 30.2   $ 30.6   $ 31.3   $ 31.7   $ 31.4   $ 31.3      $ 31.0
      2013                      7.9     22.6     28.1     29.1     29.7     29.9     29.9     29.7        29.9
      2014                               6.0     12.4     13.5     14.4     14.5     13.7     14.0        13.8
      2015                                        4.0      8.0      9.8     11.3     10.7     10.8        11.2
      2016                                                 5.6     10.1     12.8     13.3     13.4        14.0
      2017                                                          5.2     11.3     13.1     14.4        14.4
      2018                                                                   2.7     12.9     14.5        15.2
      2019                                                                            3.4     10.9        12.9
      2020                                                                                     3.2        12.9
      2021                                                                                                 6.4
                                                                                               Total     161.7
                                         All outstanding liabilities before 2012, net of reinsurance       1.2
                                                           Loss and LAE

provisions net of reinsurance $99.3

Marine & Energy

                                                     Average Annual 

Payout as a percentage of incurred losses and LAE by age, net of reinsurance

  Years                1                       2                   3                   4                5             6             7             8              9            10
                     19.8%                   37.7%               20.2%               5.7%             4.3%          7.2%          0.4%          0.1%          (0.4)%         0.2%


                                       87
--------------------------------------------------------------------------------

Marine & Energy
$ in Millions
                                       Incurred Loss and LAE, Gross of 

Amounts attributable to OTT suppliers

                                                          For the Years Ended December 31,                                                    As of December 31, 2021
                                                                                                                                       Total IBNR plus
                                                                                                                                          expected
                                                                                                                                       development on  

Cumulative number of
Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020

             2021          reported 

claims reported claims

    2012            $   64.7    $ 55.1    $ 46.0    $ 42.8    $ 40.4    $ 38.8    $ 37.0    $ 35.6    $ 35.4          $  35.6          $         .3               2,428
    2013                          64.9      50.8      41.9      38.4      37.2      33.5      33.0      32.8             33.4                   (.5)              2,641
    2014                                    59.8      40.3      32.5      30.0      24.8      23.9      23.8             24.1                   1.3               2,581
    2015                                              60.4      46.1      41.8      36.2      34.4      34.4             34.9                    .5               3,390
    2016                                                        63.1      52.0      43.5      41.3      40.7             41.2                   1.6               4,117
    2017                                                                  62.6      46.5      42.4      40.8             41.0                   2.5               4,470
    2018                                                                            59.3      46.0      40.6             41.3                   1.1               3,487
    2019                                                                                      46.4      41.2             41.0                   1.4               2,562
    2020                                                                                                47.4             42.6                   5.6               1,668
    2021                                                                                                                 95.0                  77.5               1,091
                                                                                                          Total       $ 430.1



Marine & Energy
Millions
                                        Cumulative Paid Loss and LAE, Gross

amounts attributable to TPC suppliers

                                                              For the Years Ended December 31,
  Accident Year            2012       2013      2014      2015      2016      2017      2018      2019      2020             2021
      2012              $    8.1    $ 24.0    $ 27.4    $ 30.2    $ 31.4    $ 33.7    $ 34.8    $ 34.0    $ 33.6          $  33.1
      2013                             7.9      22.6      28.1      31.1      32.8      33.3      33.5      32.9             33.3
      2014                                       8.0      17.9      21.2      24.0      24.2      22.3      22.9             22.5
      2015                                                10.2      23.1      29.2      32.9      31.3      31.4             32.4
      2016                                                          16.7      29.1      35.7      36.8      37.2             38.6
      2017                                                                    13.3      28.5      32.9      36.0             36.0
      2018                                                                               6.7      31.5      35.5             37.2
      2019                                                                                         8.1      25.9             30.7
      2020                                                                                                   6.9             26.5
      2021                                                                                                                    7.8
                                                                                                              Total         298.1
                            All outstanding liabilities before 2012, gross of amounts attributable to TPC Providers           3.2
                                              Loss and LAE reserves, gross 

amounts attributable to TPC suppliers $135.2

Marine & Energy

                                    Average Annual Percentage Payout of Incurred Losses and LAE by Age, Gross of Amounts Attributable to TPC Providers
  Years             1                      2                       3                    4              5            6            7            8             9            10
                  20.7%                  37.9%                   18.0%                6.3%            3.7%         6.5%         1.1%         0.3%         (0.2)%        0.4%


                                       88
--------------------------------------------------------------------------------
Specialty
$ in Millions
                                                       Incurred Loss and LAE, Net of Reinsurance
                                                            For the Years Ended December 31,                                                   As of December 31, 2021
                                                                                                                                        Total IBNR plus
                                                                                                                                           expected
                                                                                                                                        development on   Cumulative number of
 Accident Year           2012      2013      2014      2015      2016      2017      2018      2019      2020             2021          reported 

claims reported claims

      2012             $ 43.1    $ 36.1    $ 31.8    $ 30.8    $ 26.7    $ 25.8    $ 26.3    $ 26.6    $ 26.8          $  26.8          $        2.1                       887
      2013                         48.6      34.9      25.6      17.5      16.9      17.1      16.9      17.3             17.3                   1.3                     1,122
      2014                                   51.1      51.1      41.9      41.3      41.5      42.9      43.5             43.5                   (.3)                    1,409
      2015                                             21.3      13.0      10.4      10.1      10.6      10.7             10.8                   1.7                     1,876
      2016                                                       15.9      11.7       8.7       9.2       9.0              9.3                  (1.3)                    1,941
      2017                                                                 16.0      11.9      10.9      10.5             10.6                   1.5                     2,179
      2018                                                                           12.1      13.9      14.8             13.7                   2.4                     2,090
      2019                                                                                     16.6      14.6             13.5                   2.8                     2,315
      2020                                                                                               20.7             19.7                   6.2                     1,925
      2021                                                                                                                67.3                  57.4                     1,341
                                                                                                           Total       $ 232.5


Specialty
Millions
                                           Cumulative Paid Loss and LAE, Net of Reinsurance
                                                   For the Years Ended December 31,

Accident Year 2012 2013 2014 2015 2016 2017

2018 2019 2020 2021

      2012           $ 16.3   $ 25.2   $ 22.2   $ 22.6   $ 23.2   $ 23.3  
$ 24.2   $ 24.4   $ 24.4      $ 24.5
      2013                      17.1     13.6     15.2     15.8     15.8     16.0     16.0     16.0        16.0
      2014                               26.8     39.7     40.4     40.8     41.5     42.8     43.6        43.5
      2015                                         4.1      7.2      7.8      8.2      8.2      8.3         8.3
      2016                                                  3.2      8.0      9.2     10.0     10.4        10.5
      2017                                                           3.3      6.8      8.4      8.5         8.5
      2018                                                                    2.9      8.1      9.8        10.3
      2019                                                                             4.9      7.1         7.6
      2020                                                                                      5.4        10.9
      2021                                                                                                  5.2
                                                                                                Total     145.3
                                          All outstanding liabilities

before 2012, net of reinsurance (2.0)

                                                            Loss and LAE 

provisions net of reinsurance $85.2

Speciality

                               Average Annual Percentage Payout of Incurred 

Claims and LAE by age, less reinsurance

  Years         1          2           3            4            5            6            7            8             9            10
              34.0%      33.8%        7.3%         0.5%         4.6%         4.4%         4.6%         3.1%         (3.5)%       (1.0)%


                                       89
--------------------------------------------------------------------------------

Speciality

$ in millions

                                       Incurred Loss and LAE, Gross of 

Amounts attributable to OTT suppliers

                                                          For the Years Ended December 31,                                                    As of December 31, 2021
                                                                                                                                       Total IBNR plus
                                                                                                                                          expected
                                                                                                                                       development on  

Cumulative number of
Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020

             2021          reported 

claims reported claims

    2012            $   43.1    $ 36.1    $ 31.8    $ 30.8    $ 34.6    $ 33.2    $ 32.3    $ 33.1    $ 33.2          $  33.2          $        5.1                       887
    2013                          48.6      34.9      25.6      21.8      20.7      20.2      19.7      20.6             20.5                   3.1                     1,122
    2014                                    66.1      65.8      56.7      55.4      55.4      59.0      60.3             60.2                   (.7)                    1,409
    2015                                              47.3      40.4      32.8      29.8      31.1      31.1             31.5                   4.0                     1,876
    2016                                                        46.4      34.1      26.3      27.5      27.3             27.9                  (3.1)                    1,941
    2017                                                                  42.5      30.1      27.6      26.4             26.6                   3.7                     2,179
    2018                                                                            29.5      33.7      35.3             33.1                   5.6                     2,090
    2019                                                                                      39.7      34.8             32.3                   6.7                     2,315
    2020                                                                                                43.5             42.2                  11.9                     1,925
    2021                                                                                                                 81.7                  69.3                     1,341
                                                                                                          Total       $ 389.2



Specialty
Millions
                                        Cumulative Paid Loss and LAE, Gross

amounts attributable to TPC suppliers

                                                              For the Years Ended December 31,
  Accident Year             2012       2013      2014      2015      2016      2017      2018      2019      2020             2021
      2012              $    16.3    $ 25.2    $ 22.2    $ 22.6    $ 24.4    $ 24.8    $ 27.0    $ 27.5    $ 27.6          $  27.8
      2013                             17.1      13.6      15.2      16.8      17.0      17.5      17.5      17.5             17.4
      2014                                       31.2      50.1      52.4      53.7      55.3      58.6      60.4             60.4
      2015                                                 12.3      22.1      24.2      25.1      25.3      25.4             25.4
      2016                                                           10.1      24.7      27.6      29.5      30.6             30.7
      2017                                                                      8.7      17.3      21.3      21.7             21.7
      2018                                                                                7.0      19.8      23.8             24.8
      2019                                                                                         11.8      16.9             18.0
      2020                                                                                                   12.4             25.0
      2021                                                                                                                     6.1
                                                                                                               Total         257.3
                             All outstanding liabilities before 2012, gross

amounts attributable to TPC Service Providers (4.7)

                                               Loss and LAE reserves, gross 

amounts attributable to TPC suppliers $127.2

Speciality

                  Average Annual Percentage Payout of Incurred Losses and 

LAE by age, gross of amounts attributable to CPT providers

  Years         1           2           3            4            5            6            7            8             9            10
              32.5%       33.7%        7.8%         1.7%         4.5%         4.9%         4.5%         3.2%         (4.4)%       (2.4)%


                                       90
--------------------------------------------------------------------------------
Casualty - Active
$ in Millions
                                                    Incurred Loss and LAE, Net of Reinsurance
                                                         For the Years Ended December 31,                                                  As of December 31, 2021
                                                                                                                                    Total IBNR plus
                                                                                                                                       expected
                                                                                                                                    development on  

Cumulative number of
Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020

            2021          reported claims  

reported complaints

     2012            $ 22.6    $ 21.1    $ 17.7    $ 16.2    $ 10.1    $ 9.9    $ 11.0    $ 11.0    $ 11.3          $ 11.1          $         .8               1,016
     2013                        23.2      18.8      15.0       8.3      8.1       8.9       8.8       9.0             8.9                   1.3               1,134
     2014                                  17.1      13.8       7.5      7.0       8.0       7.8       7.8             7.7                   1.2               1,359
     2015                                            12.3       7.7      6.0       7.0       6.5       6.4             6.2                    .6               1,247
     2016                                                       5.7      5.0       6.3       6.6       7.0             6.9                    .1               1,483
     2017                                                                7.4       7.8       7.2       6.2             5.9                    .7               1,489
     2018                                                                          8.7       9.0       7.3             7.1                    .9                 961
     2019                                                                                    8.0       7.4             6.3                   1.7                 742
     2020                                                                                              7.6             6.2                   3.9                 420
     2021                                                                                                             15.9                  14.2                 452
                                                                                                        Total       $ 82.2


Casualty - Active
Millions
                                     Cumulative Paid Loss and LAE, Net of Reinsurance
                                             For the Years Ended December 31,
 Accident Year       2012    2013    2014    2015    2016    2017    2018    2019    2020        2021
      2012          $ 1.3   $ 3.3   $ 4.8   $ 6.4   $ 7.4   $ 8.0   $ 8.5   $ 9.1   $ 8.9      $  9.1
      2013                    1.5     3.6     5.3     5.7     6.3     6.7     7.0     7.0         7.2
      2014                            1.3     3.5     4.2     4.7     5.2     5.5     5.9         6.0
      2015                                    1.8     2.4     3.2     4.4     4.7     4.9         5.1
      2016                                             .2     1.0     2.3     4.0     4.6         5.3
      2017                                                     .8     1.7     2.8     3.4         4.2
      2018                                                             .3     1.4     3.5         4.3
      2019                                                                     .3     1.4         2.3
      2020                                                                             .5         1.0
      2021                                                                                         .5
                                                                                      Total      45.0
                                All outstanding liabilities before 2012, 

net of reinsurance .2

                                                  Loss and LAE reserves, 

net of reinsurance $37.4

Victim – Active

                                  Average Annual Percentage Payout of 

Incurred losses and LAE by age, net of reinsurance

   Years          1            2            3             4            5             6            7            8            9           10
                9.1%         14.7%        18.5%         14.2%         9.6%         10.7%         3.9%         3.1%         1.0%        3.1%


                                       91
--------------------------------------------------------------------------------

Casualty - Active
$ in Millions
                                       Incurred Loss and LAE, Gross of 

Amounts attributable to OTT suppliers

                                                          For the Years Ended December 31,                                                    As of December 31, 2021
                                                                                                                                       Total IBNR plus
                                                                                                                                          expected
                                                                                                                                       development on  

Cumulative number of
Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020

             2021          reported 

claims reported claims

    2012            $   22.6    $ 21.1    $ 17.7    $ 16.2    $ 17.3    $ 17.6    $ 18.6    $ 18.7    $ 19.2          $  19.0          $        1.9               1,016
    2013                          23.2      18.8      15.0      14.2      14.5      15.0      14.7      14.9             14.7                   3.2               1,134
    2014                                    20.6      17.6      15.6      15.1      15.8      15.3      15.0             14.7                   2.9               1,359
    2015                                              19.7      20.2      15.8      15.7      14.5      14.0             13.7                   1.4               1,247
    2016                                                        16.3      15.0      16.3      17.0      17.5             17.5                    .2               1,483
    2017                                                                  20.4      20.1      18.5      15.6             15.1                   1.6               1,489
    2018                                                                            21.2      22.0      17.3             17.0                   2.1                 961
    2019                                                                                      19.5      17.5             15.1                   4.2                 742
    2020                                                                                                16.6             13.5                   8.3                 420
    2021                                                                                                                 22.1                  19.0                 452
                                                                                                          Total       $ 162.4



Casualty - Active
Millions
                                  Cumulative Paid Loss and LAE, Gross of

Amounts attributable to OTT suppliers

                                                        For the Years Ended December 31,
  Accident
    Year              2012       2013      2014      2015      2016      2017      2018      2019      2020            2021
    2012           $    1.3    $  3.3    $  4.8    $  6.4    $  9.3    $ 11.4    $ 12.7    $ 14.1    $ 13.6          $ 14.2
    2013                          1.5       3.6       5.3       6.6       8.5       9.5      10.2      10.3            10.8
    2014                                    1.3       3.6       5.9       7.6       8.7       9.5      10.5            10.7
    2015                                              2.0       3.6       6.3       9.2      10.0      10.5            11.1
    2016                                                         .7       3.2       6.4      10.6      11.9            13.7
    2017                                                                  2.6       4.8       7.5       9.1            10.9
    2018                                                                             .8       3.5       8.5            10.3
    2019                                                                                       .8       3.3             5.5
    2020                                                                                                1.1             2.4
    2021                                                                                                                1.0
                                                                                                         Total         90.6
                       All outstanding liabilities before 2012, gross of amounts attributable to TPC Providers           .8
                                         Loss and LAE reserves, gross of 

amounts attributable to OTT suppliers $72.6

Victim – Active

                     Average Annual Percentage Payout of Incurred Losses 

and LAE by age, gross of amounts attributable to CPT providers

   Years          1            2             3             4             5             6            7            8            9           10
                7.4%         12.5%         16.9%         13.5%         10.2%         12.1%         5.6%         4.1%         1.9%        5.4%


                                       92
--------------------------------------------------------------------------------
Casualty - Runoff
$ in Millions
                                                      Incurred Loss and LAE, Net of Reinsurance
                                                          For the Years Ended December 31,                                                   As of December 31, 2021
                                                                                                                                      Total IBNR plus
                                                                                                                                         expected
                                                                                                                                      development on   Cumulative number of

Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020

            2021          reported claims 

reported complaints

     2012             $ 44.3    $ 44.6    $ 37.8    $ 34.4    $ 22.3    $ 21.7    $ 22.3    $ 22.8    $ 22.7          $ 23.1          $        (.2)              1,430
     2013                         65.7      75.8      70.1      49.2      47.0      49.8      49.8      49.8            49.9                   3.1               1,810
     2014                                   46.9      67.5      46.8      46.0      55.9      55.6      56.0            55.0                   1.9               1,932
     2015                                             26.9      23.9      26.4      35.7      33.0      33.2            32.0                   1.4               2,009
     2016                                                       19.1      25.3      38.8      35.4      35.3            34.1                   3.8               2,141
     2017                                                                 17.4      27.2      26.7      28.0            26.7                   2.5               1,597
     2018                                                                           13.5      18.2      20.2            20.0                   2.9               1,265
     2019                                                                                     10.8      14.3            15.4                   3.7                 961
     2020                                                                                                4.2             6.0                   3.6                 552
     2021                                                                                                                1.7                    .4                 260
                                                                                                          Total        263.9


Casualty - Runoff
$ in millions
                                        Cumulative Paid Loss and LAE, Net of Reinsurance
                                                For the Years Ended December 31,
 Accident Year      2012     2013     2014     2015     2016     2017     2018     2019     2020        2021
     2012          $ 3.5   $ 10.4   $ 13.6   $ 16.5   $ 17.8   $ 19.3   $ 20.5   $ 20.8   $ 21.2      $ 21.8
     2013                     7.2     19.5     35.9     41.0     42.7     44.3     45.0     45.6        46.0
     2014                              6.5     23.2     29.1     36.5     43.1     47.0     48.7        49.5
     2015                                       4.3      7.9     14.0     20.3     23.9     26.5        28.2
     2016                                                3.8      9.7     16.8     21.8     24.5        26.8
     2017                                                         3.1      9.1     14.2     18.3        21.1
     2018                                                                  3.3      7.2     12.2        14.3
     2019                                                                           3.2      5.6         7.4
     2020                                                                                     .8         1.3
     2021                                                                                                 .5
                                                                                             Total     216.9
                                       All outstanding liabilities before 2012, net of reinsurance      21.4
                                                         Loss and LAE reserves, net of reinsurance    $ 68.4


Casualty - Runoff
                                 Average Annual Percentage Payout of 

Incurred losses and LAE by age, net of reinsurance

   Years          1            2            3             4            5            6            7            8            9           10
                9.4%         15.3%        17.0%         15.9%         9.7%         8.1%         7.0%         3.6%         2.5%        1.7%


                                       93
--------------------------------------------------------------------------------

Casualty - Runoff
$ in Millions
                                       Incurred Loss and LAE, Gross of 

Amounts attributable to OTT suppliers

                                                         For the Years Ended December 31,                                                    As of December 31, 2021
                                                                                                                                      Total IBNR plus
                                                                                                                                         expected
                                                                                                                                      development on  

Cumulative number of
Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020

            2021          reported claims 

reported complaints

    2012            $   44.3    $ 44.6    $ 37.8    $ 34.4    $ 33.8    $ 

$33.2 $32.7 $34.0 $33.6 $34.4 $(0.4)

            1,430
    2013                          65.7      75.8      70.1      75.3      70.9      74.3      74.4      73.8            74.0                   7.5               1,810
    2014                                    63.5      94.4      97.1     101.0     117.4     117.0     116.7           114.4                   4.5               1,932
    2015                                              59.2      68.7      80.3      92.7      86.4      85.5            82.9                   3.4               2,009
    2016                                                        56.4      75.6     101.9      94.0      91.9            89.4                   9.2               2,141
    2017                                                                  45.6      68.9      68.0      69.3            66.4                   6.0               1,597
    2018                                                                            33.1      44.6      48.3            48.1                   7.0               1,265
    2019                                                                                      26.0      34.1            37.0                   8.8                 961
    2020                                                                                                 8.8            12.4                   7.1                 552
    2021                                                                                                                 3.6                    .5                 260
                                                                                                          Total        562.6



Casualty - Runoff
Millions
                                        Cumulative Paid Loss and LAE, Gross 

amounts attributable to TPC suppliers

                                                              For the Years Ended December 31,
  Accident Year            2012       2013      2014      2015      2016      2017      2018      2019      2020             2021
      2012              $    3.5    $ 10.4    $ 13.6    $ 16.5    $ 20.3    $ 25.3    $ 28.4    $ 29.0    $ 30.0          $  31.4
      2013                             7.2      19.5      35.9      50.8      56.7      60.6      62.3      63.9             64.7
      2014                                       7.4      27.4      44.8      69.3      85.8      95.4      99.4            101.3
      2015                                                 7.5      18.7      38.9      54.6      63.5      69.7             73.7
      2016                                                          11.6      30.1      47.5      60.1      66.5             71.9
      2017                                                                     9.2      24.0      36.7      46.4             53.1
      2018                                                                               8.3      17.8      29.5             34.6
      2019                                                                                         7.9      13.5             17.8
      2020                                                                                                   1.8              3.0
      2021                                                                                                                    1.2
                                                                                                              Total         452.7
                            All outstanding liabilities before 2012, gross

amounts attributable to TPC Service Providers 51.7

                                              Loss and LAE reserves, gross 

amounts attributable to TPC suppliers $161.6

Victim – runoff

                    Average Annual Percentage Payout of Incurred Losses and 

LAE by age, gross of amounts attributable to CPT providers

   Years          1            2             3             4            5            6            7            8            9           10
                8.7%         13.5%         15.9%         15.7%         9.6%         7.7%         6.2%         5.1%         4.8%        3.0%






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The following table provides a reconciliation from the first grouping of tables
above presented net of reinsurance and the second table grouping above presented
gross of amounts attributable to TPC Service Providers:

December 31, 2021

Cumulative incurred loss and LAE

                                                                                         Amounts               Gross of Amounts
                                                                                   Attributable to TPC       Attributable to TPC
Millions                                                 Net of Reinsurance             Providers                 Providers
Property and Accident & Health                          $       511.5              $          329.6          $           841.1
Marine & Energy                                                 259.8                         170.3                      430.1
Specialty                                                       232.5                         156.7                      389.2
Casualty - Active                                                82.2                          80.2                      162.4
Casualty - Runoff                                               263.9                         298.7                      562.6
Total                                                   $     1,349.9              $        1,035.5          $         2,385.4



                                                                                    December 31, 2021
                                                                               Cumulative Paid Loss and LAE
                                                                                                                Gross of Amounts
                                                                                   Amounts Attributable       Attributable to TPC
Millions                                                 Net of Reinsurance          to TPC Providers              Providers
Property and Accident & Health                          $       337.1              $           260.0          $           597.1
Marine & Energy                                                 161.7                          136.4                      298.1
Specialty                                                       145.3                          112.0                      257.3
Casualty - Active                                                45.0                           45.6                       90.6
Casualty - Runoff                                               216.9                          235.8                      452.7
Total                                                   $       906.0              $           789.8          $         1,695.8



                                                                                   December 31, 2021
                                                                                 Loss and LAE Reserves
                                                                                                            Gross of Amounts
                                                             Net of            Amounts Attributable        Attributable to TPC
Millions                                                  Reinsurance            to TPC Providers               Providers
Property and Accident & Health                          $       175.0          $            70.5          $            245.5
Marine & Energy                                                  99.3                       35.9                       135.2
Specialty                                                        85.2                       42.0                       127.2
Casualty - Active                                                37.4                       35.2                        72.6
Casualty - Runoff                                                68.4                       93.2                       161.6
Total                                                   $       465.3          $           276.8          $            742.1



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4. Good will and other intangible assets

As of December 31, 2021, goodwill and other intangible assets recognized in
connection with business and asset acquisitions totaled $1,066 million, of which
$948 million was attributable to White Mountains's common shareholders. Goodwill
and other intangible assets are recorded at their acquisition date fair values.
The determination of the acquisition date fair values of goodwill and other
intangible assets involves significant management judgment, the use of valuation
models and assumptions that are inherently subjective. Goodwill and
indefinite-lived intangible assets are not amortized but rather reviewed for
potential impairment on an annual basis, or whenever indications of potential
impairment exist. In the absence of any indications of potential impairment, the
evaluation of goodwill and indefinite-lived intangible assets is performed no
later than the interim period in which the anniversary of the acquisition date
falls. Finite-lived intangible assets, which are amortized over their estimated
economic lives, are reviewed for impairment only when events occur or there are
changes in circumstances indicating that their carrying value may exceed fair
value. Impairment exists when the carrying value of goodwill or other intangible
assets exceeds fair value.
White Mountains's annual review first assesses whether qualitative factors
indicate that the carrying value of goodwill or other intangible assets may be
impaired. If White Mountains determines based on this qualitative review that it
is more likely than not that an impairment may exist, then White Mountains
performs a quantitative analysis to compare the fair value of a reporting unit
with its carrying value. If the carrying value exceeds the estimated fair value,
then an impairment charge is recognized through current period pre-tax income
(loss). Both the annual qualitative assessment of potential impairment as well
as the quantitative comparison of carrying value to estimated fair value involve
management judgment, the use of discounted cash flow models, market comparisons
and other valuation techniques and assumptions, including customer retention
rates and revenue growth rates, that are inherently subjective.
Most of White Mountains's total goodwill and other intangible assets of $1,066
million relates to the acquisition of Ark and NSM and NSM's subsequent
acquisitions of KBK, Embrace, the Renewal Rights from AIG, Kingsbridge and J.C.
Taylor. As of December 31, 2021, goodwill and other intangible assets related to
Ark and NSM were $293 million and $725 million. During 2021, White Mountains
performed its periodic reviews for potential impairment, including a
quantitative review of the goodwill associated with NSM. During 2021, White
Mountains did not recognize any impairments of goodwill and other intangible
assets. During 2021, White Mountains recognized a loss on assets held for sale
of $29 million that was primarily related to the goodwill associated with the
Fresh Insurance motor business. During 2020, White Mountains recognized
impairments of other intangible assets of $6 million related to Fresh Insurance.
The impairments related to lower premium volumes, including due to the impact of
the COVID-19 pandemic, and certain reorganization initiatives at Fresh
Insurance. During 2020, White Mountains did not recognize any goodwill
impairments.
See Item 1A. Risk Factors, "If we are required to write down goodwill and other
intangible assets, it could materially adversely affect our results of
operations and financial condition." on page 26.

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FORWARD-LOOKING STATEMENTS

This report may contain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of historical facts,
included or referenced in this report which address activities, events or
developments which White Mountains expects or anticipates will or may occur in
the future are forward-looking statements. The words "could", "will", "believe",
"intend", "expect", "anticipate", "project", "estimate", "predict" and similar
expressions are also intended to identify forward-looking statements. These
forward-looking statements include, among others, statements with respect to
White Mountains's:

•change in book value or adjusted book value per share or return on equity;
•business strategy;
•financial and operating targets or plans;
•incurred loss and loss adjustment expenses and the adequacy of its loss and
loss adjustment expense reserves and related reinsurance;
•projections of revenues, income (or loss), earnings (or loss) per share,
EBITDA, adjusted EBITDA, dividends, market share or other financial forecasts of
White Mountains or its businesses;
•expansion and growth of its business and operations; and
•future capital expenditures.

These statements are based on certain assumptions and analyses made by White
Mountains in light of its experience and perception of historical trends,
current conditions and expected future developments, as well as other factors
believed to be appropriate in the circumstances. However, whether actual results
and developments will conform to its expectations and predictions is subject to
risks and uncertainties that could cause actual results to differ materially
from expectations, including:

•the risks associated with Item 1A of this Report on Form 10-K;
•claims arising from catastrophic events, such as hurricanes, earthquakes,
floods, fires, terrorist attacks or severe winter weather;
•recorded loss reserves subsequently proving to have been inadequate;
•the market value of White Mountains's investment in MediaAlpha;
•the trends and uncertainties from the COVID-19 pandemic, including judicial
interpretations on the extent of insurance coverage provided by insurers for
COVID-19 pandemic related claims;
•business opportunities (or lack thereof) that may be presented to it and
pursued;
•actions taken by rating agencies, such as financial strength or credit ratings
downgrades or placing ratings on negative watch;
•the continued availability of capital and financing;
•deterioration of general economic, market or business conditions, including due
to outbreaks of contagious disease (including the COVID-19 pandemic) and
corresponding mitigation efforts;
•competitive forces, including the conduct of other insurers;
•changes in domestic or foreign laws or regulations, or their interpretation,
applicable to White Mountains, its competitors or its customers; and
•other factors, most of which are beyond White Mountains's control.

Consequently, all of the forward-looking statements made in this report are
qualified by these cautionary statements, and there can be no assurance that the
actual results or developments anticipated by White Mountains will be realized
or, even if substantially realized, that they will have the expected
consequences to, or effects on, White Mountains or its business or operations.
White Mountains assumes no obligation to publicly update any such
forward-looking statements, whether as a result of new information, future
events or otherwise.


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