White Mountains Reports Fourth Quarter Results

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HAMILTON, Bermuda, Feb. 5, 2021 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $1,259 and adjusted book value per share of $1,264 as of December 31, 2020. Book value per share and adjusted book value per share both increased 15% in the fourth quarter of 2020. Book value per share and adjusted book value per share increased 23% and 24% in the year ended December 31, 2020, including dividends.

Manning Rountree, CEO, commented, "We had a strong fourth quarter to cap off an outstanding year. MediaAlpha completed a successful IPO, and investors drove its value higher during the quarter. BAM wrote $38 million of total premiums and member surplus contributions in the quarter, capping off a record year. NSM completed a solid year, with 3% quarter over quarter growth in pro forma controlled premiums and 8% quarter over quarter growth in pro forma adjusted EBITDA. Kudu had a strong finish to the year, benefiting from the move higher in investment markets while closing three transactions in the quarter. Our investment in Ark, which was announced on October 1, closed on January 1, 2021. Ark has hit the ground running with a good January renewal season, with gross written premium expected to be in excess of $270 million. Our investment portfolio (excluding MediaAlpha) returned 1.7% in the quarter. Our capital base is, for the time being, more or less fully deployed."

Comprehensive income attributable to common shareholders was $495 million and $716 million in the fourth quarter and year ended December 31, 2020, compared to $65 million and $413 million in the fourth quarter and year ended December 31, 2019. Results in the fourth quarter and year ended December 31, 2020 included $391 million and $746 million of net investment income and realized and unrealized investment gains from White Mountains's investment in MediaAlpha, as well as $131 million from the release of a deferred tax liability as a result of an internal reorganization in connection with the MediaAlpha IPO. Results in the fourth quarter and year ended December 31, 2019 included $33 million and $256 million of net investment income, realized gains and unrealized investment gains from White Mountains's investment in MediaAlpha, $182 million of which was from MediaAlpha's sale of a significant minority stake to Insignia Capital Group on February 26, 2019.

MediaAlpha

On October 30, 2020, MediaAlpha completed the MediaAlpha IPO. In the offering, White Mountains sold 3,609,894 shares and received total proceeds of $64 million. White Mountains owns 20,532,202 MediaAlpha shares, representing a 32% fully-diluted ownership interest. At the December 31, 2020 closing price of $39.07 per share, the value of White Mountains's remaining investment in MediaAlpha was $802 million. At the January 2021 month-end closing price of $55.00 per share, the value of White Mountains's remaining investment in MediaAlpha was $1,129 million.

HG Global/BAM

BAM's gross written premiums and member surplus contributions (MSC) collected were $38 million and $131 million in the fourth quarter and year ended December 31, 2020, compared to $23 million and $107 million in the fourth quarter and year ended December 31, 2019. BAM insured municipal bonds with par value of $5.5 billion and $17.3 billion in the fourth quarter and year ended December 31, 2020, compared to $3.9 billion and $12.8 billion in the fourth quarter and year ended December 31, 2019. Total pricing was 70 and 76 basis points in the fourth quarter and year ended December 31, 2020, compared to 58 and 83 basis points in the fourth quarter and year ended December 31, 2019. BAM's total claims paying resources were $987 million at December 31, 2020, compared to $968 million at September 30, 2020 and $938 million at December 31, 2019.

Seán McCarthy, CEO of BAM, said, "BAM completed a record year for both par insured and total premiums and MSC, driven by growing investor utilization of insurance, particularly following the period of market volatility that accompanied the spread of the COVID-19 pandemic in the Spring. In 2020, 7.5% of all new-issue municipal bonds were sold with insurance, up 27% from 2019 and the highest level since BAM's launch in 2012."

The COVID-19 pandemic is negatively impacting the finances of municipalities to varying degrees, and, over time, financial stress could emerge. To date, BAM's portfolio continues to perform as expected; all BAM-insured bond payments due through February 1 have been made by insureds. BAM continues to monitor the finances of its members and to work proactively with its members to prepare for any pandemic-related revenue challenges.

HG Global reported pre-tax income of $8 million and $50 million in the fourth quarter and year ended December 31, 2020, compared to pre-tax income of $10 million and $54 million in the fourth quarter and year ended December 31, 2019. The decreases in HG Global's pre-tax income were driven primarily by a decrease in interest income on the BAM Surplus Notes partially offset by higher net results from insurance operations.

In December 2020, BAM made a $30 million cash payment of surplus note principal and interest.

White Mountains reported pre-tax loss related to BAM of $15 million and $45 million in the fourth quarter and year ended December 31, 2020, compared to pre-tax loss related to BAM of $18 million and $44 million in the fourth quarter and year ended December 31, 2019. The decrease in BAM's pre-tax loss in the fourth quarter of 2020, compared to the fourth quarter of 2019 was driven primarily by a higher investment results and a decrease in interest expense on the BAM Surplus Notes partially offset by higher general and administrative expenses. The increase in BAM's pre-tax loss in the year ended December 31, 2020, compared to the year ended 2019 was driven primarily by a lower investment results and higher general and administrative expenses partially offset by a decrease in interest expense on the BAM surplus notes.

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.

NSM

In the fourth quarter of 2020, NSM reported pre-tax loss of $6 million, adjusted EBITDA of $15 million, and commission and other revenues of $73 million, compared to pre-tax loss of $6 million, adjusted EBITDA of $9 million, and commission and other revenues of $58 million in the fourth quarter of 2019. In the year ended December 31, 2020, NSM reported pre-tax loss of $13 million, adjusted EBITDA of $59 million, and commission and other revenues of $285 million, compared to pre-tax loss of $2 million, adjusted EBITDA of $48 million, and commission and other revenues of $233 million in the year ended December 31, 2019. Results for the fourth quarter and year ended December 31, 2020 include the results of Kingsbridge Group Limited, a leading provider of commercial lines insurance and consulting services to the contingent workforce in the U.K., which was acquired on April 7, 2020.

Geof McKernan, CEO of NSM, said, "NSM had a good fourth quarter to close out a solid year. Trailing 12 months pro forma controlled premiums finished the year at $1,074 million, up 3% quarter over quarter, while trailing 12 months pro forma adjusted EBITDA finished at $62 million, up 8% quarter over quarter. We experienced significant growth in 2020 despite the tough global environment, led by strong performance in all U.S. specialty insurance programs."

Kudu

Kudu reported pre-tax income of $19 million and adjusted EBITDA of $8 million in the fourth quarter of 2020, compared to pre-tax income of $6 million and adjusted EBITDA of $4 million in the fourth quarter of 2019. Kudu reported pre-tax income of $28 million and adjusted EBITDA of $22 million in the year ended December 31, 2020. Pre-tax income in the fourth quarter of 2020 and for the full year ended December 31, 2020 included $14 million and $16 million, respectively, of unrealized gains on Kudu's participation contracts, as assets under management grew, markets rose across various asset classes and the forward outlook for Kudu's participation contracts improved.

In the fourth quarter of 2020, Kudu deployed $62 million in three transactions. As of December 31, 2020, Kudu has deployed a total of $386 million in 13 asset management firms with combined assets under management of approximately $45 billion, spanning a range of asset classes, including real estate, real assets, wealth management, hedge funds, private equity and alternative credit strategies. The capital deployed has generated an average gross cash yield to Kudu at inception of 10.3%.

Rob Jakacki, CEO of Kudu, said, "Amid the challenging global environment, Kudu was active in 2020, closing five transactions, including three in the fourth quarter. Fourth-quarter results showed continued growth in profitability, with Kudu's portfolio capitalizing on strong markets and benefiting from year-end incentive fees. During the quarter, we were delighted to complete our first transaction in Australia, an investment in Channel Capital, a multi-affiliate boutique platform, and an investment in Ranger Investments, a Texas-based firm focused on U.S. small and micro-cap growth strategies."

Other Operations

White Mountains's Other Operations segment reported pre-tax income of $352 million and $626 million in the fourth quarter and year ended December 31, 2020, compared to pre-tax income of $65 million and $393 million in the fourth quarter and year ended December 31, 2019. The increase in pre-tax income for the fourth quarter and year ended December 31, 2020 was driven primarily by the increase in the fair value of White Mountains's investment in MediaAlpha. Net investment income was $3 million and $82 million in the fourth quarter and year ended December 31, 2020, compared to $13 million and $43 million in the fourth quarter and year ended December 31, 2019. The increase in net investment income in the year ended December 31, 2020 compared to the year ended December 31, 2019 was driven primarily by $55 million of net proceeds received in the third quarter of 2020 from a dividend recapitalization at MediaAlpha. Net realized and unrealized investment gains from White Mountains's investment in MediaAlpha were $391 million and $686 million in the fourth quarter and year ended December 31, 2020 compared to $30 million and $180 million in the fourth quarter and year ended December 31, 2019. Excluding MediaAlpha, net realized and unrealized investment gains (losses) were $9 million and $(9) million in the fourth quarter and year ended December 31, 2020 compared to $56 million and $220 million in the fourth quarter and year ended December 31, 2019. Pre-tax income for the year ended December 31, 2019 also included $68 million of realized gain from the MediaAlpha transaction with Insignia.

General and administrative expenses were $55 million and $142 million in the fourth quarter and year ended December 31, 2020, compared to $35 million and $123 million in the fourth quarter and year ended December 31, 2019. The increase in general and administrative expenses in the fourth quarter and year ended December 31, 2020 compared to the fourth quarter and year ended December 31, 2019 was driven primarily by higher incentive compensation costs.

Ark

On October 1, 2020, White Mountains entered into a subscription and purchase agreement (SPA) with Ark Insurance Holdings Limited and certain selling shareholders providing for the acquisition by White Mountains of a controlling interest in Ark. In accordance with the 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 as of December 31, 2020. On January 1, 2021, White Mountains closed the transaction in accordance with the terms of the SPA.

Share Repurchases

In the year ended December 31, 2020, White Mountains repurchased and retired 99,087 of its common shares for $85 million at an average share price of $858.81, or 68% of White Mountains's December 31, 2020 adjusted book value per share. White Mountains did not repurchase any of its common shares in the fourth quarter of 2020.

Investments

The total return on invested assets was 14.3% in the fourth quarter of 2020. This return included $391 million of net realized and unrealized investment gains from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total return on invested assets was 1.7% in the fourth quarter of 2020.

The total return on invested assets was 3.9% in the fourth quarter of 2019. This return included $33 million of net investment income and net unrealized investment gains from MediaAlpha. Excluding MediaAlpha, the total return on invested assets was 2.9% in the fourth quarter of 2019.

The total return on invested assets was 31.9% for the year ended December 31, 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% for the year ended December 31, 2020.

The total return on invested assets was 20.4% for the year ended December 31, 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% for the year ended December 31, 2019.

Mark Plourde, Managing Director of White Mountains Advisors, said, "Excluding MediaAlpha, the total portfolio was up 1.7% in the quarter and 4.6% for the year. Absolute results were good, but relative results were weak in a year that brought significant changes to our portfolio. In the quarter, we sold the balance of our common stocks and maintained an overweight position in short U.S. Treasuries in preparation of funding the Ark transaction. Our equity portfolio, now consisting solely of long-term investments, returned 4.0% in the quarter and 4.9% for the year, lagging the S&P 500 Index returns of 12.1% and 18.4%, respectively. Fixed income returned 0.5% in the quarter and 4.9% for the year, compared to the BBIA Index returns of 0.4% and 5.6%, respectively."

Additional Information

White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM. Additional financial information and other items of interest are available at the company's website located at www.whitemountains.com. White Mountains expects to file its Form 10-K on or before March 1, 2021 with the Securities and Exchange Commission and urges shareholders to refer to that document for more complete information concerning its financial results.


CONTACT:

Todd Pozefsky


(203) 458-5807

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions)

(Unaudited)




December 31,
2020


September 30,
2020


December 31,
2019

Assets







Financial Guarantee (HG Global/BAM)







Fixed maturity investments


$

859.5



$

831.8



$

799.3


Short-term investments


60.4



56.1



46.3


Total investments


919.9



887.9



845.6


Cash


42.8



49.9



24.2


Insurance premiums receivable


6.9



7.2



6.7


Deferred acquisition costs


27.8



26.1



22.1


Accrued investment income


5.0



5.2



5.4


Accounts receivable on unsettled investment sales






3.9


Other assets


15.4



15.0



16.1


Total Financial Guarantee assets


1,017.8



991.3



924.0


Specialty Insurance Distribution (NSM)







Cash (restricted $80.6, $82.9 and $56.3)


126.5



125.0



89.7


Premium and commission receivable


76.7



67.7



70.8


Goodwill and other intangible assets


736.8



730.3



623.0


Other assets


59.6



57.2



41.7


Total Specialty Insurance Distribution assets


999.6



980.2



825.2


Asset Management (Kudu)







Short-term investments


.1



.1



.1


Other long-term investments


400.6



325.5



266.5


Total investments


400.7



325.6



266.6


Cash


7.8



8.4



5.8


Accrued investment income


9.8



6.2



5.8


Goodwill and other intangible assets


9.2



9.3



9.6


Other assets


2.7



2.4



2.7


Total Asset Management assets


430.2



351.9



290.5


Other Operations







Fixed maturity investments


347.7



389.7



406.5


Short-term investments


82.4



515.6



154.8


Common equity securities




140.7



683.9


Investment in MediaAlpha


802.2



475.0



180.0


Other long-term investments


386.2



370.7



409.8


Total investments


1,618.5



1,891.7



1,835.0


Cash


34.1



31.5



41.3


Cash pre-funded/placed in escrow for Ark transaction


646.3






Accrued investment income


2.4



2.8



5.7


Accounts receivable on unsettled investment sales


3.4



54.7



5.1


Goodwill and other intangible assets


36.4



36.7



22.1


Other assets


40.4



41.9



31.3


Assets held for sale


2.3



.7



3.0


Total Other Operations assets


2,383.8



2,060.0



1,943.5


Total assets


$

4,831.4



$

4,383.4



$

3,983.2


WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(millions)

(Unaudited)




December 31,
2020


September 30,
2020


December 31,
2019

Liabilities







Financial Guarantee (HG Global/BAM)







Unearned insurance premiums


$

237.5



$

226.9



$

198.4


Accrued incentive compensation


25.7



19.4



21.7


Accounts payable on unsettled investment purchases




6.4




Other liabilities


28.3



27.8



26.7


Total Financial Guarantee liabilities


291.5



280.5



246.8


Specialty Insurance Distribution (NSM)







Debt


272.6



270.2



219.2


Premiums payable


113.4



116.9



102.3


Contingent consideration earnout liabilities


14.6



11.8



20.6


Other liabilities


91.2



77.5



59.0


Total Specialty Insurance Distribution liabilities


491.8



476.4



401.1


Asset Management (Kudu)







Debt


86.3



71.0



53.6


Other liabilities


10.0



10.2



3.4


Total Asset Management liabilities


96.3



81.2



57.0


Other Operations







Debt


17.5



18.2



10.7


Accrued incentive compensation


...

70.1



41.9



55.1


Other liabilities


46.3



176.0



67.8


Total Other Operations liabilities


133.9



236.1



133.6


Total liabilities


1,013.5



1,074.2



838.5









Equity







White Mountains's common shareholder's equity







White Mountains's common shares and paid-in surplus


595.2



592.1



596.3


Retained earnings


3,311.2



2,822.1



2,672.4


Accumulated other comprehensive loss, after tax:







Net unrealized losses from foreign currency translation and
interest rate swap


(.4)



(6.5)



(7.2)


Total White Mountains's common shareholders' equity


3,906.0



3,407.7



3,261.5


Non-controlling interests


(88.1)



(98.5)



(116.8)


Total equity


3,817.9



3,309.2



3,144.7


Total liabilities and equity


$

4,831.4



$

4,383.4



$

3,983.2



WHITE MOUNTAINS INSURANCE GROUP, LTD.

BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE

(Unaudited)




December 31,
2020


September 30,
2020


December 31,
2019


September 30,
2019


Book value per share numerators (in millions):










White Mountains's common shareholders' equity -
GAAP book value per share numerator


$

3,906.0



$

3,407.7



$

3,261.5



$

3,193.4



Time value of money discount on expected future payments on the

BAM Surplus Notes (1)


(142.5)



(144.3)



(151.6)



(132.8)



HG Global's unearned premium reserve (1)


190.0



181.0



156.7



160.4



HG Global's net deferred acquisition costs (1)


(52.4)



(49.5)



(41.5)



(42.0)



Adjusted book value per share numerator


$

3,901.1



$

3,394.9



$

3,225.1



$

3,179.0



Book value per share denominators (in thousands of shares):










Common shares outstanding - GAAP book value per share denominator


3,102.0



3,102.0



3,185.4



3,185.4



Unearned restricted common shares


(14.8)



(19.3)



(18.5)



(21.5)



Adjusted book value per share denominator


3,087.2



3,082.7



3,166.9



3,163.9



GAAP book value per share


$

1,259.18



$

1,098.56



$

1,023.91



$

1,002.53



Adjusted book value per share


$

1,263.64



$

1,101.28



$

1,018.41



$

1,004.76



(1) Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%.




December 31,
2020


September 30,
2020


December 31,
2019


September 30,
2019


Quarter-to-date change in GAAP book value per share,
including dividends:


14.6

%


7.6

%


2.1

%


1.6

%


Quarter-to-date change in adjusted book value per share,
including dividends:


14.7

%


7.8

%


1.4

%


1.9

%


Year-to-date change in GAAP book value per share,
including dividends:


23.1

%


7.4

%


14.4

%


12.0

%


Year-to-date change in adjusted book value per share,
including dividends:


24.2

%


8.2

%


14.8

%


13.3

%


Year-to-date dividends per share


$

1.00



$

1.00



$

1.00



$

1.00





December 31,
2020


September 30,
2020


December 31,
2019


September 30,
2019


Summary of goodwill and other intangible assets (in millions):










Goodwill:










NSM


$

506.4



$

511.8


(1)

$

381.6



$

397.0


(2)

Kudu


7.6



7.6



7.6



7.6



Other Operations


11.5



20.7


(1)

5.5



20.2


(2)

Total goodwill


525.5



540.1



394.7



424.8



Other intangible assets:










NSM


230.4



218.5



241.4



233.6



Kudu


1.6



1.7



2.0



2.0



Other Operations


24.9



16.0



16.6



.5



Total other intangible assets


256.9



236.2



260.0



236.1



Total goodwill and other intangible assets


782.4



776.3



654.7



660.9



Goodwill and other intangible assets attributed to
non-controlling interests


(28.1)



(27.1)



(23.4)



(25.0)



Goodwill and other intangible assets included in
White Mountains's common shareholders' equity


$

754.3



$

749.2



$

631.3



$

635.9





(1)

The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisitions of Kingsbridge and in Other Operations had not yet been finalized at September 30, 2020.

(2)

The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisitions of Embrace and in Other Operations had not yet been finalized at September 30, 2019.

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(millions)

(Unaudited)




Three Months Ended December 31,


Twelve Months Ended December 31,




2020


2019


2020


2019


Revenues:










Financial Guarantee (HG Global/BAM)










Earned insurance premiums


$

5.6



$

2.6



$

22.8



$

16.3



Net investment income


4.4



5.5



19.5



21.6



Net realized and unrealized investment (losses) gains




(3.3)



23.7



27.1



Other revenues


.4



.3



2.5



1.6



Total Financial Guarantee revenues


10.4



5.1



68.5



66.6



Specialty Insurance Distribution (NSM)










Commission revenues


58.3



45.8



232.5



193.4



Other revenues


15.0



12.0



52.6



39.7



Total Specialty Insurance Distribution revenues


73.3



57.8



285.1



233.1



Asset Management (Kudu)










Net investment income


10.2



6.1



29.5



14.7



Net realized and unrealized investment gains


14.4



3.2



15.9



6.3



Other revenues


.1





.3



.2



Total Asset Management revenues


24.7



9.3



45.7



21.2


(1)

Marketing Technology (MediaAlpha)










Advertising and commission revenues








48.8



Total Marketing Technology revenues








48.8


(2)

Other Operations










Net investment income


2.7



12.7



82.0



43.4



Net realized and unrealized investment gains (losses)


8.6



55.5



(8.8)



219.8



Net realized and unrealized investment gains from
investment in MediaAlpha


391.0



30.0



686.0



180.0



Realized gain from the MediaAlpha transaction
with Insignia








67.5



Advertising and commission revenues


2.2



2.4



8.3



6.9



Other revenues


7.9



2.5



13.9



6.1



Total Other Operations revenues


412.4



103.1



781.4



523.7



Total revenues


$

520.8



$

175.3



$

1,180.7



$

893.4





(1)

Kudu's results are from April 4, 2019, the date White Mountains began consolidating Kudu, to December 31, 2019.

(2)

MediaAlpha's results are from January 1, 2019 to February 26, 2019, the date of the MediaAlpha transaction with Insignia.

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

(millions)

(Unaudited)




Three Months Ended December 31,


Twelve Months Ended December 31,




2020


2019


2020


2019


Expenses:










Financial Guarantee (HG Global/BAM)










Insurance acquisition expenses


$

1.6



$

1.6



$

7.0



$

5.7



Other underwriting expenses


.1



.1



.4



.4



General and administrative expenses


15.3



11.4



56.4



50.5



Total Financial Guarantee expenses


17.0



13.1



63.8



56.6



Specialty Insurance Distribution (NSM)










General and administrative expenses


45.9



40.8



176.9



132.2



Broker commission expenses


18.9



15.9



75.3



64.8



Change in fair value of contingent consideration
earnout liabilities


(1.7)



(3.5)



(3.3)



2.1



Amortization of other intangible assets


10.5



5.9



26.7



19.4



Interest expense


6.0



4.5



22.1



16.7



Total Specialty Insurance Distribution expenses


79.6



63.6



297.7



235.2



Asset Management (Kudu)










General and administrative expenses


4.3



3.4



11.8



10.1



Amortization of other intangible assets






.3



.2



Interest expense


1.7



.1



6.0



.1



Total Asset Management expenses


6.0



3.5



18.1



10.4


(1)

Marketing Technology (MediaAlpha)










Cost of sales








40.6



General and administrative expenses








12.5



Amortization of other intangible assets








1.6



Interest expense








.2



Total Marketing Technology expenses








54.9


(2)

Other Operations










Cost of sales


4.8



2.5



11.3



7.5



General and administrative expenses


54.8



35.3



141.9



122.5



Amortization of other intangible assets


.7



.5



1.3



.6



Interest expense


.6



.3



1.4



.6



Total Other Operations expenses


60.9



38.6



155.9



131.2



Total expenses


163.5



118.8



535.5



488.3



Pre-tax income from continuing operations


357.3



56.5



645.2



405.1



Income tax benefit (expense)


117.6



(10.4)



20.5



(29.3)



Net income from continuing operations


474.9



46.1



665.7



375.8



Net (loss) income from sale of discontinued operations,
net of tax


(1.5)



(.8)



(2.3)



.8



Net income


473.4



45.3



663.4



376.6



Net loss attributable to non-controlling interests


15.8



15.6



45.3



37.9



Net income attributable to
White Mountains's common shareholders


$

489.2



$

60.9



$

708.7



$

414.5





(1)

Kudu's results are from April 4, 2019, the date White Mountains began consolidating Kudu, to December 31, 2019.

(2)

MediaAlpha's results are from January 1, 2019 to February 26, 2019, the date of the MediaAlpha transaction with Insignia.

WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(Unaudited)




Three Months Ended
December 31,


Twelve Months Ended
December 31,



2020


2019


2020


2019

Net income attributable to
White Mountains's common shareholders


$

489.2



$

60.9



$

708.7



$

414.5


Other comprehensive income (loss), net of tax


6.3



4.4



7.3



(1.4)


Comprehensive income


495.5



65.3



716.0



413.1


Other comprehensive income attributable to non-controlling interests


(.2)



(.3)



(.5)




Comprehensive income attributable to White Mountains's
common shareholders


$

495.3



$

65.0



$

715.5



$

413.1


WHITE MOUNTAINS INSURANCE GROUP, LTD.

EARNINGS PER SHARE

(Unaudited)


Income (loss) per share attributable to White Mountains's common
shareholders


Three Months Ended
December 31,


Twelve Months Ended
December 31,



2020


2019


2020


2019

Basic earnings (loss) per share









Continuing operations


$

158.19



$

19.37



$

227.72



$

130.02


Discontinued operations


(.49)



(.25)



(.75)



.25


Total consolidated operations


$

157.70



$

19.12



$

226.97



$

130.27











Diluted earnings (loss) per share









Continuing operations


$

158.19



$

19.37



$

227.72



$

130.02


Discontinued operations


(.49)



(.25)



(.75)



.25


Total consolidated operations


$

157.70



$

19.12



$

226.97



$

130.27


Dividends declared per White Mountains's common share


$



$



$

1.00



$

1.00











WHITE MOUNTAINS INSURANCE GROUP, LTD.

QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)

(millions)

(Unaudited)


For the Three Months Ended December 31, 2020


HG Global/BAM











HG Global


BAM


NSM


Kudu


Other
Operations


Total

Revenues:













Earned insurance premiums


$

4.6



$

1.0



$



$



$



$

5.6


Net investment income


1.7



2.7





10.2



2.7



17.3


Net investment income (expense) -
BAM surplus note interest


4.7



(4.7)










Net realized and unrealized investment (losses) gains


(.3)



.3





14.4



8.6



23.0


Net realized and unrealized investment gains from
investment in MediaAlpha










391.0



391.0


Advertising and commission revenues






58.3





2.2



60.5


Other revenues




.4



15.0



.1



7.9



23.4


Total revenues


10.7



(.3)



73.3



24.7



412.4



520.8


Expenses:













Insurance acquisition expenses


1.4



.2









1.6


Other underwriting expenses




.1









.1


Cost of sales










4.8



4.8


General and administrative expenses


1.0



14.3



45.9



4.3



54.8



120.3


Broker commission expenses






18.9







18.9


Change in fair value of contingent consideration
earnout liabilities






(1.7)







(1.7)


Amortization of other intangible assets






10.5





.7



11.2


Interest expense






6.0



1.7



.6



8.3


Total expenses


2.4



14.6



79.6



6.0



60.9



163.5


Pre-tax income (loss)


$

8.3



$

(14.9)



$

(6.3)



$

18.7



$

351.5



$

357.3


WHITE MOUNTAINS INSURANCE GROUP, LTD.

QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)

(millions)

(Unaudited)


For the Three Months Ended December 31, 2019


HG Global/BAM











HG Global


BAM


NSM


Kudu


Other
Operations


Total

Revenues:













Earned insurance premiums


$

2.1



$

.5



$



$



$



$

2.6


Net investment income


1.9



3.6





6.1



12.7



24.3


Net investment income (expense) -
BAM surplus note interest


6.8



(6.8)










Net realized and unrealized investment (losses) gains


(.1)



(3.2)





3.2



55.5



55.4


Net unrealized investment gains from
investment in MediaAlpha










30.0



30.0


Advertising and commission revenues






45.8





2.4



48.2


Other revenues




.3



12.0





2.5



14.8















Total revenues


10.7



(5.6)



57.8



9.3



103.1



175.3


Expenses:













Insurance acquisition expenses


.5



1.1









1.6


Other underwriting expenses




.1









.1


Cost of sales










2.5



2.5


General and administrative expenses


.4



11.0



40.8



3.4



35.3



90.9


Broker commission expenses






15.9







15.9


Change in fair value of contingent consideration
earnout liabilities






(3.5)







(3.5)


Amortization of other intangible assets






5.9





.5



6.4


Interest expense






4.5



.1



.3



4.9















Total expenses


.9



12.2



63.6



3.5



38.6



118.8















Pre-tax income (loss)


$

9.8



$

(17.8)



$

(5.8)



$

5.8



$

64.5



$

56.5


WHITE MOUNTAINS INSURANCE GROUP, LTD.

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)

(millions)

(Unaudited)


For the Twelve Months Ended December 31, 2020


HG Global/BAM











HG Global


BAM


NSM


Kudu


Other
Operations


Total

Revenues:













Earned insurance premiums


$

18.7



$

4.1



$



$



$



$

22.8


Net investment income


7.8



11.7





29.5



82.0



131.0


Net investment income (expense) -
BAM surplus note interest


18.8



(18.8)










Net realized and unrealized investment gains (losses)


11.8



11.9





15.9



(8.8)



30.8


Net realized and unrealized investment gains from
investment in MediaAlpha










686.0



686.0


Advertising and commission revenues






232.5





8.3



240.8


Other revenue


.3



2.2



52.6



.3



13.9



69.3















Total revenues


57.4



11.1



285.1



45.7



781.4



1,180.7


Expenses:













Insurance acquisition expenses


4.7



2.3









7.0


Other underwriting expenses




.4









.4


Cost of sales










11.3



11.3


General and administrative expenses


2.6



53.8



176.9



11.8



141.9



387.0


Broker commission expenses






75.3







75.3


Change in fair value of contingent
consideration earnout liabilities






(3.3)







(3.3)


Amortization of other intangible assets






26.7



.3



1.3



28.3


Interest expense






22.1



6.0



1.4



29.5


Total expenses


7.3



56.5



297.7



18.1



155.9



535.5















Pre-tax income (loss)


$

50.1



$

(45.4)



$

(12.6)



$

27.6



$

625.5



$

645.2


WHITE MOUNTAINS INSURANCE GROUP, LTD.

YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)

(millions)

(Unaudited)


For the Twelve Months Ended December 31, 2019


HG Global/BAM













HG Global


BAM


NSM


Kudu (1)


MediaAlpha (2)


Other
Operations


Total

Revenues:















Earned insurance premiums


$

13.1



$

3.2



$



$



$



$



$

16.3


Net investment income


7.5



14.1





14.7





43.4



79.7


Net investment income (expense) -
BAM surplus note interest


27.4



(27.4)












Net realized and unrealized investment gains


11.0



16.1





6.3





219.8



253.2


Net unrealized investment gains from
investment in MediaAlpha












180.0



180.0


Realized gain from the MediaAlpha transaction
with Insignia












67.5



67.5


Advertising and commission revenues






193.4





48.8



6.9



249.1


Other revenue




1.6



39.7



.2





6.1



47.6

















Total revenues


59.0



7.6



233.1



21.2



48.8



523.7



893.4


Expenses:















Insurance acquisition expenses


3.3



2.4











5.7


Other underwriting expenses




.4











.4


Cost of sales










40.6



7.5