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Share Name | Share Symbol | Market | Type |
---|---|---|---|
White Moutains Insurance Group Ltd | NYSE:WTM | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1,802.57 | 0 | 09:05:17 |
Bermuda
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
94-2708455
|
23 South Main Street,
|
|
(I.R.S. Employer Identification No.)
|
Hanover,
|
|
03755-2053
|
New Hampshire
|
|
(Zip Code)
|
(Address of principal executive offices)
|
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Shares, par value $1.00
|
|
WTM
|
|
New York Stock Exchange
|
per share
|
|
|
|
Bermuda Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
||
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
Page No.
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
Consolidated Balance Sheets, March 31, 2020 and December 31, 2019
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
|
Consolidated Statements of Changes in Equity, Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
|
Consolidated Statements of Cash Flows, Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
|
||
|
|
|
|
|
|
|
Results of Operations for the Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
Critical Accounting Estimates
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Millions, except share and per share amounts
|
|
|
||||||
Assets
|
|
Unaudited
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
|
$
|
818.2
|
|
|
$
|
799.3
|
|
Short-term investments, at fair value
|
|
24.5
|
|
|
46.3
|
|
||
Total investments
|
|
842.7
|
|
|
845.6
|
|
||
Cash
|
|
10.5
|
|
|
24.2
|
|
||
Insurance premiums receivable
|
|
6.8
|
|
|
6.7
|
|
||
Deferred acquisition costs
|
|
23.3
|
|
|
22.1
|
|
||
Accrued investment income
|
|
5.5
|
|
|
5.4
|
|
||
Other assets
|
|
15.4
|
|
|
20.0
|
|
||
Total Financial Guarantee assets
|
|
904.2
|
|
|
924.0
|
|
||
|
|
|
|
|
||||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
||||
Cash (restricted $64.9 and $56.3)
|
|
89.7
|
|
|
89.7
|
|
||
Premiums and commissions receivable
|
|
71.5
|
|
|
70.8
|
|
||
Goodwill and other intangible assets
|
|
615.2
|
|
|
623.0
|
|
||
Other assets
|
|
46.5
|
|
|
41.7
|
|
||
Total Specialty Insurance Distribution assets
|
|
822.9
|
|
|
825.2
|
|
||
|
|
|
|
|
||||
Asset Management (Kudu)
|
|
|
|
|
||||
Short-term investments, at fair value
|
|
.1
|
|
|
.1
|
|
||
Other long-term investments
|
|
262.7
|
|
|
266.5
|
|
||
Total investments
|
|
262.8
|
|
|
266.6
|
|
||
Cash
|
|
7.7
|
|
|
5.8
|
|
||
Accrued investment income
|
|
5.6
|
|
|
5.8
|
|
||
Goodwill and other intangible assets
|
|
9.5
|
|
|
9.6
|
|
||
Other assets
|
|
2.8
|
|
|
2.7
|
|
||
Total Asset Management assets
|
|
288.4
|
|
|
290.5
|
|
||
|
|
|
|
|
||||
Other Operations
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
|
394.1
|
|
|
406.5
|
|
||
Short-term investments, at fair value
|
|
113.0
|
|
|
154.8
|
|
||
Common equity securities, at fair value
|
|
523.7
|
|
|
683.9
|
|
||
Other long-term investments
|
|
542.9
|
|
|
589.8
|
|
||
Total investments
|
|
1,573.7
|
|
|
1,835.0
|
|
||
Cash
|
|
28.5
|
|
|
41.3
|
|
||
Accrued investment income
|
|
7.3
|
|
|
5.7
|
|
||
Accounts receivable on unsettled investment sales
|
|
58.1
|
|
|
5.1
|
|
||
Goodwill and other intangible assets
|
|
22.1
|
|
|
22.1
|
|
||
Other assets
|
|
31.5
|
|
|
31.3
|
|
||
Assets held for sale
|
|
3.0
|
|
|
3.0
|
|
||
Total Other Operations assets
|
|
1,724.2
|
|
|
1,943.5
|
|
||
Total assets
|
|
$
|
3,739.7
|
|
|
$
|
3,983.2
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Millions, except share and per share amounts
|
|
|
||||||
Liabilities
|
|
Unaudited
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Unearned insurance premiums
|
|
$
|
202.7
|
|
|
$
|
198.4
|
|
Accrued incentive compensation
|
|
9.7
|
|
|
21.7
|
|
||
Other liabilities
|
|
26.4
|
|
|
26.7
|
|
||
Total Financial Guarantee liabilities
|
|
238.8
|
|
|
246.8
|
|
||
|
|
|
|
|
||||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
||||
Debt
|
|
218.4
|
|
|
219.2
|
|
||
Premiums payable
|
|
110.8
|
|
|
102.3
|
|
||
Contingent consideration earnout liabilities
|
|
13.4
|
|
|
20.6
|
|
||
Other liabilities
|
|
61.1
|
|
|
59.0
|
|
||
Total Specialty Insurance Distribution liabilities
|
|
403.7
|
|
|
401.1
|
|
||
|
|
|
|
|
||||
Asset Management (Kudu)
|
|
|
|
|
||||
Debt
|
|
65.7
|
|
|
53.6
|
|
||
Other liabilities
|
|
1.4
|
|
|
3.4
|
|
||
Total Asset Management liabilities
|
|
67.1
|
|
|
57.0
|
|
||
|
|
|
|
|
||||
Other Operations
|
|
|
|
|
||||
Debt
|
|
10.6
|
|
|
10.7
|
|
||
Accrued incentive compensation
|
|
11.7
|
|
|
55.1
|
|
||
Accounts payable on unsettled investment purchases
|
|
1.0
|
|
|
—
|
|
||
Other liabilities
|
|
47.7
|
|
|
67.8
|
|
||
Total Other Operations liabilities
|
|
71.0
|
|
|
133.6
|
|
||
Total liabilities
|
|
780.6
|
|
|
838.5
|
|
||
|
|
|
|
|
||||
Equity
|
|
|
|
|
||||
White Mountains’s common shareholders’ equity
|
|
|
|
|
||||
White Mountains’s common shares at $1 par value per share—authorized 50,000,000
shares; issued and outstanding 3,135,005 and 3,185,353 shares and paid-in surplus |
|
589.3
|
|
|
596.3
|
|
||
Paid-in surplus
|
|
|
|
|
||||
Retained earnings
|
|
2,498.0
|
|
|
2,672.4
|
|
||
Accumulated other comprehensive loss, after-tax:
|
|
|
|
|
||||
Net unrealized foreign currency translation and interest rate swap losses
|
|
(10.6
|
)
|
|
(7.2
|
)
|
||
Total White Mountains’s common shareholders’ equity
|
|
3,076.7
|
|
|
3,261.5
|
|
||
Non-controlling interests
|
|
(117.6
|
)
|
|
(116.8
|
)
|
||
Total equity
|
|
2,959.1
|
|
|
3,144.7
|
|
||
Total liabilities and equity
|
|
$
|
3,739.7
|
|
|
$
|
3,983.2
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Earned insurance premiums
|
|
$
|
5.4
|
|
|
$
|
4.2
|
|
Net investment income
|
|
5.5
|
|
|
5.3
|
|
||
Net realized and unrealized investment gains
|
|
6.1
|
|
|
11.8
|
|
||
Other revenues
|
|
.5
|
|
|
.6
|
|
||
Total Financial Guarantee revenues
|
|
17.5
|
|
|
21.9
|
|
||
|
|
|
|
|
||||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
||||
Commission revenues
|
|
53.0
|
|
|
43.3
|
|
||
Other revenues
|
|
12.0
|
|
|
6.0
|
|
||
Total Specialty Insurance Distribution revenues
|
|
65.0
|
|
|
49.3
|
|
||
|
|
|
|
|
||||
Asset Management (Kudu)
|
|
|
|
|
||||
Net investment income
|
|
7.3
|
|
|
—
|
|
||
Net realized and unrealized investment losses
|
|
(24.8
|
)
|
|
—
|
|
||
Other revenues
|
|
.1
|
|
|
—
|
|
||
Total Asset Management revenues
|
|
(17.4
|
)
|
|
—
|
|
||
|
|
|
|
|
||||
Marketing Technology (MediaAlpha)
|
|
|
|
|
||||
Advertising and commission revenues
|
|
—
|
|
|
48.8
|
|
||
Other revenues
|
|
—
|
|
|
—
|
|
||
Total Marketing Technology revenues
|
|
—
|
|
|
48.8
|
|
||
|
|
|
|
|
||||
Other Operations
|
|
|
|
|
||||
Net investment income
|
|
10.1
|
|
|
10.7
|
|
||
Net realized and unrealized investment (losses) gains
|
|
(138.0
|
)
|
|
119.1
|
|
||
Realized gain and unrealized investment gain from the MediaAlpha Transaction
|
|
—
|
|
|
182.2
|
|
||
Advertising and commission revenues
|
|
2.1
|
|
|
1.3
|
|
||
Other revenues
|
|
1.5
|
|
|
.3
|
|
||
Total Other Operations revenues
|
|
(124.3
|
)
|
|
313.6
|
|
||
Total revenues
|
|
$
|
(59.2
|
)
|
|
$
|
433.6
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Expenses:
|
|
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Insurance acquisition expenses
|
|
$
|
1.7
|
|
|
$
|
1.3
|
|
General and administrative expenses
|
|
14.7
|
|
|
14.4
|
|
||
Total Financial Guarantee expenses
|
|
16.4
|
|
|
15.7
|
|
||
|
|
|
|
|
||||
Specialty Insurance Distribution (NSM)
|
|
|
|
|
||||
General and administrative expenses
|
|
39.6
|
|
|
25.3
|
|
||
Broker commission expenses
|
|
18.3
|
|
|
15.5
|
|
||
Change in fair value of contingent consideration earnout liabilities
|
|
(.6
|
)
|
|
1.3
|
|
||
Amortization of other intangible assets
|
|
4.8
|
|
|
5.0
|
|
||
Interest expense
|
|
4.3
|
|
|
3.7
|
|
||
Total Specialty Insurance Distribution expenses
|
|
66.4
|
|
|
50.8
|
|
||
|
|
|
|
|
||||
Asset Management (Kudu)
|
|
|
|
|
||||
General and administrative expenses
|
|
2.5
|
|
|
—
|
|
||
Amortization of other intangible assets
|
|
.1
|
|
|
—
|
|
||
Interest expense
|
|
1.4
|
|
|
—
|
|
||
Total Asset Management expenses
|
|
4.0
|
|
|
—
|
|
||
|
|
|
|
|
||||
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
|
|
||
|
|
|
|
|
||||
Other Operations
|
|
|
|
|
||||
Cost of sales
|
|
2.0
|
|
|
1.1
|
|
||
General and administrative expenses
|
|
17.5
|
|
|
29.4
|
|
||
Amortization of other intangible assets
|
|
.2
|
|
|
—
|
|
||
Interest expense
|
|
.3
|
|
|
—
|
|
||
Total Other Operations expenses
|
|
20.0
|
|
|
30.5
|
|
||
Total expenses
|
|
106.8
|
|
|
151.9
|
|
||
|
|
|
|
|
||||
Pre-tax (loss) income from continuing operations
|
|
(166.0
|
)
|
|
281.7
|
|
||
Income tax benefit (expense)
|
|
25.5
|
|
|
(10.2
|
)
|
||
Net (loss) income from continuing operations
|
|
(140.5
|
)
|
|
271.5
|
|
||
Net gain from sale of discontinued operations, net of tax
|
|
.9
|
|
|
.7
|
|
||
Net (loss) income
|
|
(139.6
|
)
|
|
272.2
|
|
||
Net loss attributable to non-controlling interests
|
|
10.8
|
|
|
12.2
|
|
||
Net (loss) income attributable to White Mountains’s
common shareholders
|
|
$
|
(128.8
|
)
|
|
$
|
284.4
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Net (loss) income attributable to White Mountains’s common
shareholders
|
|
$
|
(128.8
|
)
|
|
$
|
284.4
|
|
Other comprehensive loss, net of tax
|
|
(3.4
|
)
|
|
(.3
|
)
|
||
Comprehensive (loss) income
|
|
(132.2
|
)
|
|
284.1
|
|
||
Comprehensive loss attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
||
Comprehensive (loss) income attributable to White Mountains’s
common shareholders
|
|
$
|
(132.2
|
)
|
|
$
|
284.1
|
|
Loss (earnings) per share attributable to White Mountains’s
common shareholders:
|
|
|
||||||
|
|
|
|
|
||||
Basic (loss) earnings per share
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(40.82
|
)
|
|
$
|
89.42
|
|
Discontinued operations
|
|
.28
|
|
|
.22
|
|
||
Total consolidated operations
|
|
$
|
(40.54
|
)
|
|
$
|
89.64
|
|
Diluted (loss) earnings per share
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(40.82
|
)
|
|
$
|
89.42
|
|
Discontinued operations
|
|
.28
|
|
|
.22
|
|
||
Total consolidated operations
|
|
$
|
(40.54
|
)
|
|
$
|
89.64
|
|
Dividends declared and paid per White Mountains’s common share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
White Mountains’s Common Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||
Millions
|
|
Common shares and paid-in surplus
|
|
Retained earnings
|
|
AOCI, after tax
|
|
Total
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||||
Balance at January 1, 2020
|
|
$
|
596.3
|
|
|
$
|
2,672.4
|
|
|
$
|
(7.2
|
)
|
|
$
|
3,261.5
|
|
|
$
|
(116.8
|
)
|
|
$
|
3,144.7
|
|
Net loss
|
|
—
|
|
|
(128.8
|
)
|
|
—
|
|
|
(128.8
|
)
|
|
(10.8
|
)
|
|
(139.6
|
)
|
||||||
Net change in foreign currency translation and other
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|
(3.4
|
)
|
|
—
|
|
|
(3.4
|
)
|
||||||
Total comprehensive loss
|
|
—
|
|
|
(128.8
|
)
|
|
(3.4
|
)
|
|
(132.2
|
)
|
|
(10.8
|
)
|
|
(143.0
|
)
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
||||||
Dividends to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(.5
|
)
|
|
(.5
|
)
|
||||||
Repurchases and retirements of common shares
|
|
(12.1
|
)
|
|
(42.4
|
)
|
|
—
|
|
|
(54.5
|
)
|
|
—
|
|
|
(54.5
|
)
|
||||||
Capital contributions from BAM members, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|
10.0
|
|
||||||
Net contributions from other non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|
.5
|
|
||||||
Amortization of restricted share awards
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
||||||
Balance at March 31, 2020
|
|
$
|
589.3
|
|
|
$
|
2,498.0
|
|
|
$
|
(10.6
|
)
|
|
$
|
3,076.7
|
|
|
$
|
(117.6
|
)
|
|
$
|
2,959.1
|
|
|
|
White Mountains’s Common Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||
Millions
|
|
Common shares and paid-in surplus
|
|
Retained earnings
|
|
AOCI, after tax
|
|
Total
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||||
Balance at January 1, 2019
|
|
$
|
584.0
|
|
|
$
|
2,264.9
|
|
|
$
|
(5.8
|
)
|
|
$
|
2,843.1
|
|
|
$
|
(124.9
|
)
|
|
$
|
2,718.2
|
|
Net income (loss)
|
|
—
|
|
|
284.4
|
|
|
—
|
|
|
284.4
|
|
|
(12.2
|
)
|
|
272.2
|
|
||||||
Net change in foreign currency translation and other
|
|
—
|
|
|
—
|
|
|
(.3
|
)
|
|
(.3
|
)
|
|
—
|
|
|
(.3
|
)
|
||||||
Total comprehensive income (loss)
|
|
—
|
|
|
284.4
|
|
|
(.3
|
)
|
|
284.1
|
|
|
(12.2
|
)
|
|
271.9
|
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
||||||
Dividends to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(.5
|
)
|
|
(.5
|
)
|
||||||
Repurchases and retirements of common shares
|
|
(1.0
|
)
|
|
(3.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
||||||
Capital contributions from BAM members, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.8
|
|
|
6.8
|
|
||||||
Net contributions from other non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.7
|
|
|
.7
|
|
||||||
Amortization of restricted share awards
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
||||||
Recognition of equity-based units of subsidiary
|
|
.3
|
|
|
—
|
|
|
—
|
|
|
.3
|
|
|
—
|
|
|
.3
|
|
||||||
Effect of deconsolidation of MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.8
|
)
|
|
(13.8
|
)
|
||||||
Acquisition of non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
|
.2
|
|
||||||
Balance at March 31, 2019
|
|
$
|
585.8
|
|
|
$
|
2,542.3
|
|
|
$
|
(6.1
|
)
|
|
$
|
3,122.0
|
|
|
$
|
(143.7
|
)
|
|
$
|
2,978.3
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Cash flows from operations:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(139.6
|
)
|
|
$
|
272.2
|
|
Adjustments to reconcile net income to net cash used for operations:
|
|
|
|
|
|
|
||
Net realized and unrealized investment losses (gains)
|
|
156.7
|
|
|
(245.6
|
)
|
||
Realized gain from the MediaAlpha Transaction
|
|
—
|
|
|
(66.2
|
)
|
||
Deferred income tax (benefit) expense
|
|
(27.9
|
)
|
|
7.5
|
|
||
Net gain from sale of discontinued operations, net of tax
|
|
(.9
|
)
|
|
(.7
|
)
|
||
Amortization of restricted share and option awards
|
|
5.1
|
|
|
2.8
|
|
||
Amortization and depreciation
|
|
7.1
|
|
|
8.3
|
|
||
Other operating items:
|
|
|
|
|
|
|||
Net change in premiums and commissions receivable
|
|
(.7
|
)
|
|
(7.9
|
)
|
||
Net change in premiums payable
|
|
8.5
|
|
|
16.2
|
|
||
Net change in unearned insurance premiums
|
|
4.3
|
|
|
3.6
|
|
||
Net change in deferred acquisition costs
|
|
(1.2
|
)
|
|
(.6
|
)
|
||
Net change in restricted cash
|
|
8.6
|
|
|
10.8
|
|
||
Investments in asset management firms - Kudu
|
|
(21.0
|
)
|
|
—
|
|
||
Net change in other assets and liabilities, net
|
|
(58.8
|
)
|
|
(41.5
|
)
|
||
Net cash used for operations
|
|
(59.8
|
)
|
|
(41.1
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Net change in short-term investments
|
|
63.9
|
|
|
(55.3
|
)
|
||
Sales of fixed maturity and convertible investments
|
|
116.1
|
|
|
93.0
|
|
||
Maturities, calls and paydowns of fixed maturity and convertible investments
|
|
58.9
|
|
|
25.6
|
|
||
Sales of common equity securities
|
|
40.3
|
|
|
136.5
|
|
||
Distributions and redemptions of other long-term investments and settlements of forward contracts
|
|
64.1
|
|
|
1.9
|
|
||
Purchases of other long-term investments
|
|
(10.9
|
)
|
|
(60.6
|
)
|
||
Purchases of common equity securities
|
|
(20.9
|
)
|
|
(4.6
|
)
|
||
Purchases of fixed maturity and convertible investments
|
|
(180.1
|
)
|
|
(152.3
|
)
|
||
Purchases of consolidated subsidiaries, net of cash acquired of $0.4
|
|
—
|
|
|
(9.6
|
)
|
||
Other investing activities, net
|
|
(50.9
|
)
|
|
(17.4
|
)
|
||
Net cash provided from (used for) investing activities
|
|
80.5
|
|
|
(42.8
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Draw down of debt and revolving line of credit
|
|
12.0
|
|
|
106.5
|
|
||
Repayment of debt and revolving line of credit
|
|
(1.0
|
)
|
|
(14.8
|
)
|
||
Cash dividends paid to the Company’s common shareholders
|
|
(3.2
|
)
|
|
(3.2
|
)
|
||
Common shares repurchased
|
|
(47.8
|
)
|
|
—
|
|
||
Distribution to non-controlling interest shareholders
|
|
(.7
|
)
|
|
(27.6
|
)
|
||
Payments on contingent consideration earnout liability
|
|
(6.4
|
)
|
|
—
|
|
||
Repurchase of shares from non-controlling interest shareholders
|
|
—
|
|
|
(21.1
|
)
|
||
Proceeds from issuance of shares to non-controlling interest shareholders
|
|
—
|
|
|
62.7
|
|
||
Capital contributions to non-controlling interest shareholders
|
|
.4
|
|
|
.7
|
|
||
Capital contributions from BAM members
|
|
10.0
|
|
|
7.9
|
|
||
Fidus Re premium payment
|
|
(.8
|
)
|
|
(.7
|
)
|
||
Restricted share statutory withholding tax payments
|
|
(6.7
|
)
|
|
(4.9
|
)
|
||
Net cash (used for) provided from financing activities
|
|
(44.2
|
)
|
|
105.5
|
|
||
Effect of exchange rate changes on cash
|
|
(1.1
|
)
|
|
.3
|
|
||
Net change in cash during the period - continuing operations, including the effect of exchange rate changes
|
|
(24.6
|
)
|
|
21.9
|
|
||
Cash balances at beginning of period (includes restricted cash balances of $56.3 and $50.0)
|
|
161.0
|
|
|
110.3
|
|
||
Cash balances at end of period (includes restricted cash balances of $64.9 and $60.8)
|
|
$
|
136.4
|
|
|
$
|
132.2
|
|
Supplemental cash flows information:
|
|
|
|
|
|
|
||
Interest paid
|
|
$
|
(5.2
|
)
|
|
$
|
(3.7
|
)
|
Net income tax refunds
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Fixed maturity investments
|
|
$
|
8.1
|
|
|
$
|
8.1
|
|
Short-term investments
|
|
.8
|
|
|
1.3
|
|
||
Common equity securities
|
|
3.8
|
|
|
5.4
|
|
||
Other long-term investments
|
|
10.5
|
|
|
1.6
|
|
||
Total investment income
|
|
23.2
|
|
|
16.4
|
|
||
Third-party investment expenses
|
|
(.3
|
)
|
|
(.4
|
)
|
||
Net investment income, pre-tax
|
|
$
|
22.9
|
|
|
$
|
16.0
|
|
|
Three Months Ended
|
Three Months Ended
|
||||||
|
March 31, 2020
|
March 31, 2019
|
||||||
Millions
|
|
Total Net Realized and
Unrealized Gains (Losses) Reflected in Earnings
|
|
Total Net Realized and
Unrealized Gains Reflected in Earnings |
||||
Fixed maturity investments
|
|
$
|
2.2
|
|
|
$
|
21.1
|
|
Short-term investments
|
|
.4
|
|
|
—
|
|
||
Common equity securities
|
|
(140.8
|
)
|
|
111.3
|
|
||
Other long-term investments (1) (2)
|
|
(18.5
|
)
|
|
113.2
|
|
||
Net realized and unrealized investment (losses) gains, pre-tax
|
|
(156.7
|
)
|
|
245.6
|
|
||
Income tax benefit (expense) attributable
to net realized and unrealized investment (losses) gains
|
|
25.5
|
|
|
(52.2
|
)
|
||
Net realized and unrealized investment (losses) gains, after-tax
|
|
$
|
(131.2
|
)
|
|
$
|
193.4
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Other long-term investments
|
|
$
|
(9.4
|
)
|
|
$
|
114.0
|
|
Total net unrealized investment (losses) gains, pre-tax - Level 3 investments
|
|
$
|
(9.4
|
)
|
|
$
|
114.0
|
|
|
|
March 31, 2020
|
||||||||||||||
Millions
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Carrying
Value
|
||||||||
U.S. Government and agency obligations
|
|
$
|
217.5
|
|
|
$
|
6.4
|
|
|
$
|
—
|
|
|
$
|
223.9
|
|
Debt securities issued by corporations
|
|
486.2
|
|
|
9.2
|
|
|
(8.7
|
)
|
|
486.7
|
|
||||
Municipal obligations
|
|
255.2
|
|
|
14.8
|
|
|
—
|
|
|
270.0
|
|
||||
Mortgage and asset-backed securities
|
|
225.7
|
|
|
6.2
|
|
|
(.2
|
)
|
|
231.7
|
|
||||
Total fixed maturity investments
|
|
$
|
1,184.6
|
|
|
$
|
36.6
|
|
|
$
|
(8.9
|
)
|
|
$
|
1,212.3
|
|
|
|
December 31, 2019
|
||||||||||||||
Millions
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Carrying
Value
|
||||||||
U.S. Government and agency obligations
|
|
$
|
231.7
|
|
|
$
|
1.0
|
|
|
$
|
(.2
|
)
|
|
$
|
232.5
|
|
Debt securities issued by corporations
|
|
454.9
|
|
|
12.5
|
|
|
(.2
|
)
|
|
467.2
|
|
||||
Municipal obligations
|
|
284.7
|
|
|
12.5
|
|
|
(.1
|
)
|
|
297.1
|
|
||||
Mortgage and asset-backed securities
|
|
206.6
|
|
|
2.7
|
|
|
(.3
|
)
|
|
209.0
|
|
||||
Total fixed maturity investments
|
|
$
|
1,177.9
|
|
|
$
|
28.7
|
|
|
$
|
(.8
|
)
|
|
$
|
1,205.8
|
|
|
|
March 31, 2020
|
||||||||||||||||||
Millions
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net Foreign
Currency
Losses
|
|
Carrying
Value
|
||||||||||
Common equity securities
|
|
$
|
544.8
|
|
|
$
|
11.3
|
|
|
$
|
(32.4
|
)
|
|
$
|
—
|
|
|
$
|
523.7
|
|
Other long-term investments
|
|
$
|
610.1
|
|
|
$
|
265.7
|
|
|
$
|
(67.6
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
805.6
|
|
|
|
December 31, 2019
|
||||||||||||||||||
Millions
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net Foreign
Currency Losses |
|
Carrying
Value
|
||||||||||
Common equity securities
|
|
$
|
553.3
|
|
|
$
|
130.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
683.9
|
|
Other long-term investments
|
|
$
|
667.4
|
|
|
$
|
255.2
|
|
|
$
|
(64.1
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
856.3
|
|
|
|
Carrying Value at
|
||||||
Millions
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Kudu’s Participation Contracts (1)
|
|
$
|
262.7
|
|
|
$
|
266.5
|
|
MediaAlpha (1)
|
|
210.0
|
|
|
180.0
|
|
||
PassportCard/DavidShield (1)
|
|
80.0
|
|
|
90.0
|
|
||
Elementum (1)
|
|
55.1
|
|
|
55.1
|
|
||
Other unconsolidated entities (1)(2)
|
|
24.8
|
|
|
31.2
|
|
||
Total unconsolidated entities (1)
|
|
632.6
|
|
|
622.8
|
|
||
Private equity funds and hedge funds
|
|
98.5
|
|
|
161.1
|
|
||
Insurance-linked securities funds
|
|
46.2
|
|
|
41.2
|
|
||
Private debt investments
|
|
25.8
|
|
|
28.7
|
|
||
Other
|
|
2.5
|
|
|
2.5
|
|
||
Total other long-term investments
|
|
$
|
805.6
|
|
|
$
|
856.3
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
Millions
|
|
Fair Value
|
|
Unfunded
Commitments
|
|
Fair Value
|
|
Unfunded
Commitments
|
||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Manufacturing/Industrial
|
|
$
|
44.5
|
|
|
$
|
4.0
|
|
|
$
|
57.7
|
|
|
$
|
4.1
|
|
Aerospace/Defense/Government
|
|
37.5
|
|
|
23.3
|
|
|
33.8
|
|
|
23.3
|
|
||||
Financial services
|
|
16.5
|
|
|
25.9
|
|
|
15.0
|
|
|
22.8
|
|
||||
Total private equity funds
|
|
98.5
|
|
|
53.2
|
|
|
106.5
|
|
|
50.2
|
|
||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long/short banks and financials
|
|
—
|
|
|
—
|
|
|
54.6
|
|
|
—
|
|
||||
Total hedge funds
|
|
—
|
|
|
—
|
|
|
54.6
|
|
|
—
|
|
||||
Total private equity funds and hedge funds
included in other long-term investments
|
|
$
|
98.5
|
|
|
$
|
53.2
|
|
|
$
|
161.1
|
|
|
$
|
50.2
|
|
Millions
|
|
1 – 3 years
|
|
3 – 5 years
|
|
5 – 10 years
|
|
>10 years
|
|
Total
|
Private equity funds — expected lock-up period remaining
|
|
$4.7
|
|
$39.3
|
|
$43.3
|
|
$11.2
|
|
$98.5
|
|
|
March 31, 2020
|
||||||||||||||
Millions
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government and agency obligations
|
|
$
|
223.9
|
|
|
$
|
223.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|||||||
Financials
|
|
151.3
|
|
|
—
|
|
|
151.3
|
|
|
—
|
|
||||
Industrial
|
|
63.4
|
|
|
—
|
|
|
63.4
|
|
|
—
|
|
||||
Healthcare
|
|
52.8
|
|
|
—
|
|
|
52.8
|
|
|
—
|
|
||||
Technology
|
|
52.7
|
|
|
—
|
|
|
52.7
|
|
|
—
|
|
||||
Consumer
|
|
47.5
|
|
|
—
|
|
|
47.5
|
|
|
—
|
|
||||
Energy
|
|
38.2
|
|
|
—
|
|
|
38.2
|
|
|
—
|
|
||||
Utilities
|
|
30.4
|
|
|
—
|
|
|
30.4
|
|
|
—
|
|
||||
Communications
|
|
29.1
|
|
|
—
|
|
|
29.1
|
|
|
—
|
|
||||
Materials
|
|
21.3
|
|
|
—
|
|
|
21.3
|
|
|
—
|
|
||||
Total debt securities issued by corporations
|
|
486.7
|
|
|
—
|
|
|
486.7
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Municipal obligations
|
|
270.0
|
|
|
—
|
|
|
270.0
|
|
|
—
|
|
||||
Mortgage and asset-backed securities
|
|
231.7
|
|
|
—
|
|
|
231.7
|
|
|
—
|
|
||||
Total fixed maturity investments
|
|
1,212.3
|
|
|
223.9
|
|
|
988.4
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments (1)
|
|
137.6
|
|
|
130.9
|
|
|
6.7
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds (2)
|
|
415.6
|
|
|
403.7
|
|
|
11.9
|
|
|
—
|
|
||||
Other (3)
|
|
108.1
|
|
|
18.0
|
|
|
90.0
|
|
|
.1
|
|
||||
Total common equity securities
|
|
523.7
|
|
|
421.7
|
|
|
101.9
|
|
|
.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other long-term investments
|
|
660.9
|
|
|
—
|
|
|
—
|
|
|
660.9
|
|
||||
Other long-term investments — NAV (4)
|
|
144.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total investments
|
|
$
|
2,679.2
|
|
|
$
|
776.5
|
|
|
$
|
1,097.0
|
|
|
$
|
661.0
|
|
|
|
December 31, 2019
|
||||||||||||||
Millions
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government and agency obligations
|
|
$
|
232.5
|
|
|
$
|
232.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financials
|
|
144.8
|
|
|
—
|
|
|
144.8
|
|
|
—
|
|
||||
Industrial
|
|
59.0
|
|
|
—
|
|
|
59.0
|
|
|
—
|
|
||||
Healthcare
|
|
52.6
|
|
|
—
|
|
|
52.6
|
|
|
—
|
|
||||
Consumer
|
|
50.9
|
|
|
—
|
|
|
50.9
|
|
|
—
|
|
||||
Energy
|
|
44.9
|
|
|
—
|
|
|
44.9
|
|
|
—
|
|
||||
Technology
|
|
41.2
|
|
|
—
|
|
|
41.2
|
|
|
—
|
|
||||
Communications
|
|
31.3
|
|
|
—
|
|
|
31.3
|
|
|
—
|
|
||||
Utilities
|
|
25.0
|
|
|
—
|
|
|
25.0
|
|
|
—
|
|
||||
Materials
|
|
17.5
|
|
|
—
|
|
|
17.5
|
|
|
—
|
|
||||
Total debt securities issued by corporations
|
|
467.2
|
|
|
—
|
|
|
467.2
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Municipal obligations
|
|
297.1
|
|
|
—
|
|
|
297.1
|
|
|
—
|
|
||||
Mortgage and asset-backed securities
|
|
209.0
|
|
|
—
|
|
|
209.0
|
|
|
—
|
|
||||
Total fixed maturity investments
|
|
1,205.8
|
|
|
232.5
|
|
|
973.3
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments (1)
|
|
201.2
|
|
|
189.4
|
|
|
11.8
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Exchange traded funds (2)
|
|
536.4
|
|
|
521.6
|
|
|
14.8
|
|
|
—
|
|
||||
Other (3)
|
|
147.5
|
|
|
25.9
|
|
|
121.5
|
|
|
.1
|
|
||||
Total common equity securities
|
|
683.9
|
|
|
547.5
|
|
|
136.3
|
|
|
.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other long-term investments
|
|
654.0
|
|
|
—
|
|
|
—
|
|
|
654.0
|
|
||||
Other long-term investments — NAV (4)
|
|
202.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total investments
|
|
$
|
2,947.2
|
|
|
$
|
969.4
|
|
|
$
|
1,121.4
|
|
|
$
|
654.1
|
|
|
|
Fair Value at
|
||||||
Millions
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
AAA
|
|
$
|
11.3
|
|
|
$
|
9.5
|
|
AA
|
|
63.6
|
|
|
73.9
|
|
||
A
|
|
304.7
|
|
|
288.5
|
|
||
BBB
|
|
106.1
|
|
|
95.3
|
|
||
BB
|
|
1.0
|
|
|
—
|
|
||
Debt securities issued by corporations (1)
|
|
$
|
486.7
|
|
|
$
|
467.2
|
|
(1)
|
Credit ratings are based upon issuer credit ratings provided by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”), or if unrated by Standard & Poor’s, long-term obligation ratings provided by Moody’s Investor Service, Inc.
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
Millions
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FNMA
|
|
$
|
90.6
|
|
|
$
|
90.6
|
|
|
$
|
—
|
|
|
$
|
88.6
|
|
|
$
|
88.6
|
|
|
$
|
—
|
|
FHLMC
|
|
72.1
|
|
|
72.1
|
|
|
—
|
|
|
60.5
|
|
|
60.5
|
|
|
—
|
|
||||||
GNMA
|
|
45.7
|
|
|
45.7
|
|
|
—
|
|
|
30.8
|
|
|
30.8
|
|
|
—
|
|
||||||
Total agency (1)
|
|
208.4
|
|
|
208.4
|
|
|
—
|
|
|
179.9
|
|
|
179.9
|
|
|
—
|
|
||||||
Total mortgage-backed securities
|
|
208.4
|
|
|
208.4
|
|
|
—
|
|
|
179.9
|
|
|
179.9
|
|
|
—
|
|
||||||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Vehicle receivables
|
|
12.2
|
|
|
12.2
|
|
|
—
|
|
|
15.1
|
|
|
15.1
|
|
|
—
|
|
||||||
Credit card receivables
|
|
11.1
|
|
|
11.1
|
|
|
—
|
|
|
14.0
|
|
|
14.0
|
|
|
—
|
|
||||||
Total other asset-backed securities
|
|
23.3
|
|
|
23.3
|
|
|
—
|
|
|
29.1
|
|
|
29.1
|
|
|
—
|
|
||||||
Total mortgage and asset-backed securities
|
|
$
|
231.7
|
|
|
$
|
231.7
|
|
|
$
|
—
|
|
|
$
|
209.0
|
|
|
$
|
209.0
|
|
|
$
|
—
|
|
(1)
|
Represents publicly traded mortgage-backed securities which carry the full faith and credit guaranty of the U.S. Government (i.e., GNMA) or are guaranteed by a government sponsored entity (i.e., FNMA, FHLMC).
|
|
|
|
Level 3
Investments
|
Other Long-term Investments Measured at NAV (2)
|
|
|
|
|||||||||||||
Millions
|
Level 1 Investments
|
Level 2
Investments
|
Common
Equity
Securities
|
Other Long-term
Investments
|
|
Total
|
|
|||||||||||||
Balance at December 31, 2019
|
$
|
780.0
|
|
$
|
1,109.6
|
|
$
|
.1
|
|
$
|
654.0
|
|
$
|
202.3
|
|
|
$
|
2,746.0
|
|
(1)
|
Net realized and unrealized (losses)
|
(98.7
|
)
|
(39.9
|
)
|
—
|
|
(9.7
|
)
|
(8.8
|
)
|
|
(157.1
|
)
|
(3)
|
||||||
Amortization/Accretion
|
—
|
|
(.8
|
)
|
—
|
|
—
|
|
—
|
|
|
(.8
|
)
|
|
||||||
Purchases
|
74.2
|
|
126.8
|
|
—
|
|
24.7
|
|
7.2
|
|
|
232.9
|
|
|
||||||
Sales
|
(109.9
|
)
|
(105.4
|
)
|
—
|
|
(8.1
|
)
|
(56.0
|
)
|
|
(279.4
|
)
|
|
||||||
Transfers in
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
||||||
Transfers out
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
||||||
Balance at March 31, 2020
|
$
|
645.6
|
|
$
|
1,090.3
|
|
$
|
.1
|
|
$
|
660.9
|
|
$
|
144.7
|
|
|
$
|
2,541.6
|
|
(1)
|
|
|
|
Level 3
Investments
|
Other Long-term Investments Measured at NAV (3)
|
|
|
||||||||||
Millions
|
Level 1 Investments
|
Level 2
Investments
|
Other Long-term
Investments
|
Total
|
|
|||||||||||
Balance at December 31, 2018
|
$
|
842.6
|
|
$
|
1,160.5
|
|
$
|
138.7
|
|
$
|
186.9
|
|
$
|
2,328.7
|
|
(1)
|
Net realized and unrealized gains (losses)
|
91.7
|
|
40.7
|
|
114.0
|
|
(.8
|
)
|
245.6
|
|
(2)
|
|||||
Amortization/Accretion
|
.1
|
|
(.4
|
)
|
—
|
|
—
|
|
(.3
|
)
|
|
|||||
Purchases
|
14.6
|
|
142.3
|
|
11.5
|
|
49.2
|
|
217.6
|
|
|
|||||
Sales
|
(149.7
|
)
|
(105.4
|
)
|
—
|
|
(1.9
|
)
|
(257.0
|
)
|
|
|||||
Transfers in
|
—
|
|
—
|
|
10.9
|
|
—
|
|
10.9
|
|
|
|||||
Transfers out
|
—
|
|
—
|
|
—
|
|
(10.9
|
)
|
(10.9
|
)
|
|
|||||
Balance at March 31, 2019
|
$
|
799.3
|
|
$
|
1,237.7
|
|
$
|
275.1
|
|
$
|
222.5
|
|
$
|
2,534.6
|
|
(1)
|
(2)
|
Includes $114.7 unrealized investment gain associated with the MediaAlpha Transaction, which is recorded in a separate line item in the statement of operations titled Realized gain and unrealized investment gain from the MediaAlpha Transaction. See Note 2 — “Significant Transactions”.
|
$ in Millions
|
|
March 31, 2020
|
||||||
Description
|
|
Valuation Technique(s)
|
|
Fair Value (2)
|
|
Unobservable Inputs
|
||
|
|
|
|
|
|
Discount Rate (2)
|
|
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (3)
|
Kudu’s Participation Contracts (1)
|
|
Discounted cash flow
|
|
$262.7
|
|
18% - 24%
|
|
6x - 12x
|
MediaAlpha
|
|
Discounted cash flow
|
|
$210.0
|
|
15%
|
|
4%
|
PassportCard/DavidShield
|
|
Discounted cash flow
|
|
$80.0
|
|
25%
|
|
4%
|
Elementum Holdings, L.P.
|
|
Discounted cash flow
|
|
$55.1
|
|
20%
|
|
4%
|
Private debt instruments
|
|
Discounted cash flow
|
|
$25.8
|
|
7% - 15%
|
|
N/A
|
All other
|
|
Discounted cash flow
|
|
$13.6
|
|
25%
|
|
4%
|
|
|
|
|
|
|
|
|
|
Noblr, Inc.
|
|
Share price of recent transaction
|
|
$8.7
|
|
Share price:
|
|
$2.17
|
Zillion Insurance Services, Inc.
|
|
Recent transaction
|
|
$2.5
|
|
Transaction price:
|
|
$2.5
|
Compare.com
|
|
Estimated net realizable value
|
|
$2.5
|
|
Net realizable value:
|
|
$2.5
|
$ in Millions
|
|
December 31, 2019
|
||||||
Description
|
|
Valuation Technique(s)
|
|
Fair Value (1)
|
|
Unobservable Inputs
|
||
|
|
|
|
|
|
Discount Rate (2)
|
|
Terminal Cash Flow Exit Multiple (x) or Terminal Revenue Growth Rate (%) (2)
|
Kudu’s Participation Contracts
|
|
Discounted cash flow
|
|
$266.5
|
|
15% - 22%
|
|
6x - 12x
|
MediaAlpha
|
|
Discounted cash flow
|
|
$180.0
|
|
15%
|
|
4%
|
PassportCard/DavidShield
|
|
Discounted cash flow
|
|
$90.0
|
|
22%
|
|
4%
|
Elementum Holdings, L.P.
|
|
Discounted cash flow
|
|
$55.1
|
|
20%
|
|
4%
|
Private debt instruments
|
|
Discounted cash flow
|
|
$23.7
|
|
4% - 9%
|
|
N/A
|
All other
|
|
Discounted cash flow
|
|
$23.7
|
|
25% - 32%
|
|
4%
|
|
|
|
|
|
|
|
|
|
Noblr, Inc.
|
|
Share price of recent transaction
|
|
$5.0
|
|
Share price:
|
|
$2.17
|
Zillion Insurance Services, Inc.
|
|
Recent transaction
|
|
$2.5
|
|
Transaction price:
|
|
$2.5
|
Compare.com
|
|
Estimated net realizable value
|
|
$2.5
|
|
Net realizable value:
|
|
$2.5
|
$ in Millions
|
|
Weighted Average Economic
Life
(in years)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||||||
|
Acquisition Date Fair Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Acquisition Date Fair Value
|
|
Accumulated Amortization
|
|
Impairments
|
|
Net Carrying Value
|
|||||||||||||||||
Goodwill:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
NSM (1)
|
|
N/A
|
|
$
|
379.1
|
|
|
$
|
—
|
|
|
$
|
379.1
|
|
|
$
|
381.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
381.6
|
|
Kudu
|
|
N/A
|
|
7.6
|
|
|
—
|
|
|
7.6
|
|
|
7.6
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|||||||
Other Operations
|
|
N/A
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
|
13.1
|
|
|
—
|
|
|
7.6
|
|
|
5.5
|
|
|||||||
Total goodwill
|
|
|
|
392.4
|
|
|
—
|
|
|
392.4
|
|
|
402.3
|
|
|
—
|
|
|
7.6
|
|
|
394.7
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
NSM (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Customer relationships
|
|
9
|
|
120.1
|
|
|
23.5
|
|
|
96.6
|
|
|
121.7
|
|
|
19.8
|
|
|
1.4
|
|
|
100.5
|
|
|||||||
Trade names
|
|
19
|
|
61.2
|
|
|
5.8
|
|
|
55.4
|
|
|
61.9
|
|
|
5.3
|
|
|
.4
|
|
|
56.2
|
|
|||||||
Information
technology platform
|
|
5
|
|
3.1
|
|
|
1.3
|
|
|
1.8
|
|
|
3.9
|
|
|
1.4
|
|
|
.6
|
|
|
1.9
|
|
|||||||
Renewal rights
|
|
12
|
|
82.5
|
|
|
1.0
|
|
|
81.5
|
|
|
82.5
|
|
|
.7
|
|
|
—
|
|
|
81.8
|
|
|||||||
Other
|
|
3
|
|
1.7
|
|
|
.9
|
|
|
.8
|
|
|
1.7
|
|
|
.7
|
|
|
—
|
|
|
1.0
|
|
|||||||
Subtotal
|
|
|
|
268.6
|
|
|
32.5
|
|
|
236.1
|
|
|
271.7
|
|
|
27.9
|
|
|
2.4
|
|
|
241.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Kudu
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Trade names
|
|
7
|
|
2.2
|
|
|
.3
|
|
|
1.9
|
|
|
2.2
|
|
|
.2
|
|
|
—
|
|
|
2.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Trade names
|
|
10
|
|
1.0
|
|
|
.1
|
|
|
.9
|
|
|
1.7
|
|
|
.5
|
|
|
.2
|
|
|
1.0
|
|
|||||||
Customer relationships
|
|
11
|
|
7.2
|
|
|
.5
|
|
|
6.7
|
|
|
7.2
|
|
|
.4
|
|
|
—
|
|
|
6.8
|
|
|||||||
Information
technology platform
|
|
5
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|
.3
|
|
|
.2
|
|
|
—
|
|
|||||||
Insurance Licenses
|
|
N/A
|
|
8.6
|
|
|
—
|
|
|
8.6
|
|
|
8.6
|
|
|
—
|
|
|
—
|
|
|
8.6
|
|
|||||||
Other
|
|
5
|
|
.2
|
|
|
—
|
|
|
.2
|
|
|
.2
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
|||||||
Subtotal
|
|
|
|
17.0
|
|
|
.6
|
|
|
16.4
|
|
|
18.2
|
|
|
1.2
|
|
|
.4
|
|
|
16.6
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total other intangible assets
|
|
287.8
|
|
|
33.4
|
|
|
254.4
|
|
|
292.1
|
|
|
29.3
|
|
|
2.8
|
|
|
260.0
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total goodwill and other
intangible assets
|
|
$
|
680.2
|
|
|
$
|
33.4
|
|
|
646.8
|
|
|
$
|
694.4
|
|
|
$
|
29.3
|
|
|
10.4
|
|
|
654.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Goodwill and other intangible assets attributed to
non-controlling interests
|
|
(23.5
|
)
|
|
|
|
|
|
|
|
(23.4
|
)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Goodwill and other intangible assets included in
White Mountains’s common shareholders’ equity
|
|
$
|
623.3
|
|
|
|
|
|
|
|
|
$
|
631.3
|
|
$ in Millions
|
|
|
|
|
||
Acquisition of subsidiary/ asset
|
|
Goodwill and
Other intangible asset (1)
|
|
Acquisition Date
|
||
Embrace (2)
|
|
$
|
67.6
|
|
|
April 1, 2019
|
Renewal Rights (3)
|
|
82.5
|
|
|
June 28, 2019
|
|
Total NSM segment
|
|
$
|
150.1
|
|
|
|
Kudu Transaction
|
|
$
|
9.8
|
|
|
April 4, 2019
|
Other Operations
|
|
$
|
22.6
|
|
|
Various
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||||||||||
Millions
|
|
Goodwill
|
|
Other Intangible Assets
|
|
Total Goodwill and Other Intangible Assets
|
|
Goodwill
|
|
Other Intangible Assets
|
|
Total Goodwill and Other Intangible Assets
|
||||||||||||
Beginning balance
|
|
$
|
394.7
|
|
|
$
|
260.0
|
|
|
654.7
|
|
|
$
|
379.9
|
|
|
$
|
157.6
|
|
|
$
|
537.5
|
|
|
Deconsolidation of MediaAlpha
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.3
|
)
|
|
(23.5
|
)
|
|
(41.8
|
)
|
||||||
Attribution of acquisition date fair value estimates
between goodwill and other intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.8
|
)
|
|
26.8
|
|
|
—
|
|
||||||
Acquisitions of businesses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.4
|
|
|
—
|
|
|
13.4
|
|
||||||
Foreign currency translation
|
|
(2.5
|
)
|
|
(.5
|
)
|
|
(3.0
|
)
|
|
1.2
|
|
|
.3
|
|
|
1.5
|
|
||||||
Adjustments to reflect acquisition date fair value
|
|
.2
|
|
|
—
|
|
|
.2
|
|
|
.3
|
|
|
5.9
|
|
|
6.2
|
|
||||||
Amortization
|
|
—
|
|
|
(5.1
|
)
|
|
(5.1
|
)
|
|
—
|
|
|
(6.6
|
)
|
|
(6.6
|
)
|
||||||
Ending balance
|
|
$
|
392.4
|
|
|
$
|
254.4
|
|
|
$
|
646.8
|
|
|
$
|
349.7
|
|
|
$
|
160.5
|
|
|
$
|
510.2
|
|
Millions
|
|
March 31,
2020 |
|
Effective
Rate (1)
|
|
December 31,
2019 |
|
Effective
Rate (1)
|
||||
NSM Bank Facility
|
|
$
|
220.7
|
|
|
6.8%
|
|
$
|
221.3
|
|
|
7.5%
|
Unamortized issuance cost
|
|
(3.6
|
)
|
|
|
|
(3.9
|
)
|
|
|
||
NSM Bank Facility, carrying value
|
|
217.1
|
|
|
|
|
217.4
|
|
|
|
||
Other NSM debt
|
|
1.3
|
|
|
2.2%
|
|
1.8
|
|
|
3.0%
|
||
Kudu Bank Facility
|
|
69.0
|
|
|
9.1%
|
|
57.0
|
|
|
8.3%
|
||
Unamortized issuance cost
|
|
(3.3
|
)
|
|
|
|
(3.4
|
)
|
|
|
||
Kudu Bank Facility, carrying value
|
|
65.7
|
|
|
|
|
53.6
|
|
|
|
||
Other Operations debt
|
|
11.0
|
|
|
8.2%
|
|
11.1
|
|
|
8.3%
|
||
Unamortized issuance cost
|
|
(.4
|
)
|
|
|
|
(.4
|
)
|
|
|
||
Other Operations, carrying value
|
|
10.6
|
|
|
|
|
10.7
|
|
|
|
||
Total debt
|
|
$
|
294.7
|
|
|
|
|
$
|
283.5
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Contracts outstanding
|
|
9,312
|
|
|
8,987
|
|
||
Remaining weighted average contract period outstanding (in years)
|
|
10.6
|
|
|
10.7
|
|
||
Contractual debt service outstanding (in millions):
|
|
|
|
|
||||
Principal
|
|
$
|
64,481.2
|
|
|
$
|
62,250.5
|
|
Interest
|
|
32,449.1
|
|
|
31,799.7
|
|
||
Total debt service outstanding
|
|
$
|
96,930.3
|
|
|
$
|
94,050.2
|
|
|
|
|
|
|
||||
Gross unearned insurance premiums (in millions)
|
|
$
|
202.7
|
|
|
$
|
198.4
|
|
Millions
|
|
March 31, 2020
|
||
April 1, 2020 - December 31, 2020
|
|
$
|
14.3
|
|
|
|
|
||
January 1, 2021 - March 31, 2021
|
|
4.6
|
|
|
April 1, 2021 - June 30, 2021
|
|
4.5
|
|
|
July 1, 2021 - September 30, 2021
|
|
4.5
|
|
|
October 1, 2021 - December 31, 2021
|
|
4.4
|
|
|
Total 2021
|
|
18.0
|
|
|
|
|
|
||
2022
|
|
16.9
|
|
|
2023
|
|
15.9
|
|
|
2024
|
|
14.8
|
|
|
2025
|
|
13.8
|
|
|
2026 and thereafter
|
|
109.0
|
|
|
Total gross unearned insurance premiums
|
|
$
|
202.7
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Written premiums:
|
|
|
|
|
||||
Direct
|
|
$
|
9.7
|
|
|
$
|
7.9
|
|
Assumed
|
|
—
|
|
|
—
|
|
||
Gross written premiums
|
|
$
|
9.7
|
|
|
$
|
7.9
|
|
Earned premiums:
|
|
|
|
|
||||
Direct
|
|
$
|
4.5
|
|
|
$
|
3.7
|
|
Assumed
|
|
.9
|
|
|
.5
|
|
||
Gross earned premiums
|
|
$
|
5.4
|
|
|
$
|
4.2
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
|
|||
Net (loss) income attributable to White Mountains’s
common shareholders
|
|
$
|
(128.8
|
)
|
|
$
|
284.4
|
|
Less: total income from discontinued operations, net of tax
|
|
.9
|
|
|
.7
|
|
||
Net (loss) income from continuing operations attributable to
White Mountains’s common shareholders
|
|
$
|
(129.7
|
)
|
|
$
|
283.7
|
|
Allocation of losses (earnings) to participating restricted common shares(1)
|
|
1.3
|
|
|
(2.9
|
)
|
||
Basic and diluted (losses) earnings per share numerators
|
|
$
|
(128.4
|
)
|
|
$
|
280.8
|
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
3,178.0
|
|
|
3,172.2
|
|
||
Average unvested restricted common shares(2)
|
|
(33.8
|
)
|
|
(32.5
|
)
|
||
Basic (losses) earnings per share denominator
|
|
3,144.2
|
|
|
3,139.7
|
|
||
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
3,178.0
|
|
|
3,172.2
|
|
||
Average unvested restricted common shares(2)
|
|
(33.8
|
)
|
|
(32.5
|
)
|
||
Diluted (losses) earnings per share denominator
|
|
3,144.2
|
|
|
3,139.7
|
|
||
Basic and diluted earnings per share (in dollars) - continuing operations:
|
|
|
|
|
||||
Distributed earnings - dividends declared and paid
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Undistributed (losses) earnings
|
|
(41.82
|
)
|
|
88.42
|
|
||
Basic and diluted (losses) earnings per share
|
|
$
|
(40.82
|
)
|
|
$
|
89.42
|
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
Millions
|
|
|
2020
|
|
2019
|
||||
Undistributed net earnings - continuing operations:
|
|
|
|
|
|
||||
Net (loss) income attributable to White Mountains’s common shareholders,
net of restricted common share amounts
|
|
|
$
|
(128.4
|
)
|
|
$
|
280.8
|
|
Dividends declared, net of restricted common share amounts (1)
|
|
|
(3.1
|
)
|
|
(3.2
|
)
|
||
Total undistributed net (losses) earnings, net of restricted common share amounts
|
|
|
$
|
(131.5
|
)
|
|
$
|
277.6
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2020
|
|
2019
|
||||||||||
Millions, except share amounts
|
|
Target Performance
Shares Outstanding |
|
Accrued
Expense
|
|
Target Performance
Shares Outstanding |
|
Accrued
Expense
|
||||||
Beginning of period
|
|
42,473
|
|
|
$
|
43.7
|
|
|
40,616
|
|
|
$
|
31.7
|
|
Shares paid (1)
|
|
(14,070
|
)
|
|
(27.7
|
)
|
|
(13,715
|
)
|
|
(18.1
|
)
|
||
New grants
|
|
14,055
|
|
|
—
|
|
|
13,700
|
|
|
—
|
|
||
Forfeitures and cancellations(2)
|
|
—
|
|
|
.4
|
|
|
1
|
|
|
.2
|
|
||
Expense recognized
|
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
9.3
|
|
||
End of period
|
|
42,458
|
|
|
$
|
9.8
|
|
|
40,602
|
|
|
$
|
23.1
|
|
|
|
Three Months Ended March 31, 2020
|
|||||
Millions, except share amounts
|
|
Target Performance
Shares Outstanding
|
|
Accrued
Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2018 – 2020
|
|
13,450
|
|
|
$
|
5.1
|
|
2019 – 2021
|
|
15,600
|
|
|
3.8
|
|
|
2020 – 2022
|
|
14,055
|
|
|
1.1
|
|
|
Sub-total
|
|
43,105
|
|
|
10.0
|
|
|
Assumed forfeitures
|
|
(647
|
)
|
|
(.2
|
)
|
|
March 31, 2020
|
|
42,458
|
|
|
$
|
9.8
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2020
|
|
2019
|
||||||||||
Millions,
except share amounts
|
|
Restricted
Shares |
|
Unamortized
Issue Date
Fair Value
|
|
Restricted
Shares |
|
Unamortized
Issue Date Fair Value |
||||||
Non-vested,
|
|
|
|
|
|
|
|
|
||||||
Beginning of period
|
|
43,395
|
|
|
$
|
16.7
|
|
|
41,510
|
|
|
$
|
12.5
|
|
Issued
|
|
14,055
|
|
|
15.1
|
|
|
13,700
|
|
|
12.8
|
|
||
Vested
|
|
(14,345
|
)
|
|
—
|
|
|
(13,715
|
)
|
|
—
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Expense recognized
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
(2.5
|
)
|
||
End of period
|
|
43,105
|
|
|
$
|
26.6
|
|
|
41,495
|
|
|
$
|
22.8
|
|
Millions
Lease Cost
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Lease cost
|
|
$
|
2.0
|
|
|
$
|
1.7
|
|
Less: sublease income
|
|
.1
|
|
|
.1
|
|
||
Net lease cost
|
|
$
|
1.9
|
|
|
$
|
1.6
|
|
Millions
|
|
As of March 31, 2020
|
||
Remainder of 2020
|
|
$
|
4.6
|
|
2021
|
|
5.4
|
|
|
2022
|
|
5.0
|
|
|
2023
|
|
4.2
|
|
|
2024
|
|
3.1
|
|
|
Thereafter
|
|
3.4
|
|
|
Total undiscounted lease payments
|
|
25.7
|
|
|
Less: present value adjustment
|
|
2.5
|
|
|
Operating lease liability
|
|
$
|
23.2
|
|
|
|
As of March 31, 2020
|
||||||||||||||||||||
Millions
|
|
HG/BAM
|
|
NSM
|
|
Kudu
|
|
Other Operations
|
|
Total
|
|
Weighted Average Incremental Borrowing Rate (1)
|
||||||||||
ROU lease asset
|
|
$
|
10.0
|
|
|
$
|
6.2
|
|
|
$
|
2.2
|
|
|
$
|
4.5
|
|
|
$
|
22.9
|
|
|
4.7%
|
Lease liability
|
|
$
|
10.0
|
|
|
$
|
6.2
|
|
|
$
|
2.2
|
|
|
$
|
4.8
|
|
|
$
|
23.2
|
|
|
|
|
As of December 31, 2019
|
||||||||||||||||||||
Millions
|
|
HG/BAM
|
|
NSM
|
|
Kudu
|
|
Other Operations
|
|
Total
|
|
Weighted Average Incremental Borrowing Rate (1)
|
||||||||||
ROU lease asset
|
|
$
|
10.4
|
|
|
$
|
4.8
|
|
|
$
|
2.3
|
|
|
$
|
5.1
|
|
|
$
|
22.6
|
|
|
4.6%
|
Lease liability
|
|
$
|
10.4
|
|
|
$
|
4.8
|
|
|
$
|
2.3
|
|
|
$
|
5.3
|
|
|
$
|
22.8
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||
$ in Millions
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
||||||
Non-controlling interests, excluding BAM
|
|
|
|
|
|
|
|
|
||||||
HG Global
|
|
3.1
|
%
|
|
$
|
14.0
|
|
|
3.1
|
%
|
|
$
|
14.4
|
|
NSM
|
|
3.6
|
|
|
15.0
|
|
|
3.6
|
|
|
14.9
|
|
||
Other NSM
|
|
13.4
|
|
|
(.1
|
)
|
|
13.4
|
|
|
(.1
|
)
|
||
Kudu
|
|
.9
|
|
|
2.0
|
|
|
.9
|
|
|
2.2
|
|
||
Other Operations
|
|
various
|
|
|
(1.6
|
)
|
|
various
|
|
|
(1.5
|
)
|
||
Total, excluding BAM
|
|
|
|
29.3
|
|
|
|
|
29.9
|
|
||||
BAM
|
|
100.0
|
|
|
(146.9
|
)
|
|
100.0
|
|
|
(146.7
|
)
|
||
Total non-controlling interests
|
|
|
|
|
$
|
(117.6
|
)
|
|
|
|
$
|
(116.8
|
)
|
Millions
|
|
HG Global/ BAM
|
|
NSM
|
|
Kudu
|
|
Other Operations
|
|
Total
|
||||||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earned insurance premiums
|
|
$
|
5.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
Net investment income
|
|
5.5
|
|
|
—
|
|
|
7.3
|
|
|
10.1
|
|
|
22.9
|
|
|||||
Net realized and unrealized investment gains
(loss)
|
|
6.1
|
|
|
—
|
|
|
(24.8
|
)
|
|
(138.0
|
)
|
|
(156.7
|
)
|
|||||
Advertising and commission revenues
|
|
—
|
|
|
53.0
|
|
|
—
|
|
|
2.1
|
|
|
55.1
|
|
|||||
Other revenue
|
|
.5
|
|
|
12.0
|
|
|
.1
|
|
|
1.5
|
|
|
14.1
|
|
|||||
Total revenues
|
|
17.5
|
|
|
65.0
|
|
|
(17.4
|
)
|
|
(124.3
|
)
|
|
(59.2
|
)
|
|||||
Insurance acquisition expenses
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|||||
Cost of sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
|||||
General and administrative expenses
|
|
14.7
|
|
|
39.6
|
|
|
2.5
|
|
|
17.5
|
|
|
74.3
|
|
|||||
Broker commission expense
|
|
—
|
|
|
18.3
|
|
|
—
|
|
|
—
|
|
|
18.3
|
|
|||||
Change in fair value of contingent consideration
earnout liabilities |
|
—
|
|
|
(.6
|
)
|
|
—
|
|
|
—
|
|
|
(.6
|
)
|
|||||
Amortization of other intangible assets
|
|
—
|
|
|
4.8
|
|
|
.1
|
|
|
.2
|
|
|
5.1
|
|
|||||
Interest expense
|
|
—
|
|
|
4.3
|
|
|
1.4
|
|
|
.3
|
|
|
6.0
|
|
|||||
Total expenses
|
|
16.4
|
|
|
66.4
|
|
|
4.0
|
|
|
20.0
|
|
|
106.8
|
|
|||||
Pre-tax income (loss)
|
|
$
|
1.1
|
|
|
$
|
(1.4
|
)
|
|
$
|
(21.4
|
)
|
|
$
|
(144.3
|
)
|
|
$
|
(166.0
|
)
|
Millions
|
|
HG Global/BAM
|
|
NSM
|
|
MediaAlpha
|
|
Other Operations
|
|
Total
|
||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earned insurance premiums
|
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Net investment income
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|
16.0
|
|
|||||
Net realized and unrealized investment gains
|
|
11.8
|
|
|
—
|
|
|
—
|
|
|
119.1
|
|
|
130.9
|
|
|||||
Realized and unrealized gains from the MediaAlpha
Transaction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
182.2
|
|
|
182.2
|
|
|||||
Advertising and commission revenues (1)
|
|
—
|
|
|
43.3
|
|
|
48.8
|
|
|
1.3
|
|
|
93.4
|
|
|||||
Other revenue
|
|
.6
|
|
|
6.0
|
|
|
—
|
|
|
.3
|
|
|
6.9
|
|
|||||
Total revenues
|
|
21.9
|
|
|
49.3
|
|
|
48.8
|
|
|
313.6
|
|
|
433.6
|
|
|||||
Insurance acquisition expenses
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|||||
Cost of sales
|
|
—
|
|
|
—
|
|
|
40.6
|
|
|
1.1
|
|
|
41.7
|
|
|||||
General and administrative expenses
|
|
14.4
|
|
|
25.3
|
|
|
12.5
|
|
|
29.4
|
|
|
81.6
|
|
|||||
Broker commission expense
|
|
—
|
|
|
15.5
|
|
|
—
|
|
|
—
|
|
|
15.5
|
|
|||||
Change in fair value of contingent consideration
earnout liabilities |
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|||||
Amortization of other intangible assets
|
|
—
|
|
|
5.0
|
|
|
1.6
|
|
|
—
|
|
|
6.6
|
|
|||||
Interest expense
|
|
—
|
|
|
3.7
|
|
|
.2
|
|
|
—
|
|
|
3.9
|
|
|||||
Total expenses
|
|
15.7
|
|
|
50.8
|
|
|
54.9
|
|
|
30.5
|
|
|
151.9
|
|
|||||
Pre-tax income (loss)
|
|
$
|
6.2
|
|
|
$
|
(1.5
|
)
|
|
$
|
(6.1
|
)
|
|
$
|
283.1
|
|
|
$
|
281.7
|
|
Millions
|
|
HG Global/BAM
|
|
NSM
|
|
Kudu
|
|
Other
Operations
|
|
Total
|
||||||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commission and other revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Specialty Transportation
|
|
$
|
—
|
|
|
$
|
20.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.3
|
|
Real Estate
|
|
—
|
|
|
11.3
|
|
|
—
|
|
|
—
|
|
|
11.3
|
|
|||||
Social Services
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|||||
Pet
|
|
—
|
|
|
11.8
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|||||
United Kingdom
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|||||
Other
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
1.4
|
|
|
6.7
|
|
|||||
Total commission and other revenue
|
|
—
|
|
|
65.0
|
|
|
—
|
|
|
1.4
|
|
|
66.4
|
|
|||||
Product revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|||||
Revenues from contracts with customers
|
|
—
|
|
|
65.0
|
|
|
—
|
|
|
3.5
|
|
|
68.5
|
|
|||||
Other revenues (1)
|
|
17.5
|
|
|
—
|
|
|
(17.4
|
)
|
|
(127.8
|
)
|
|
(127.7
|
)
|
|||||
Total revenues
|
|
$
|
17.5
|
|
|
$
|
65.0
|
|
|
$
|
(17.4
|
)
|
|
$
|
(124.3
|
)
|
|
$
|
(59.2
|
)
|
(1)
|
Other revenues consist of premiums, investment income, investment gains and losses and other revenues outside the scope of ASC 606, Revenues from Contracts with Customers.
|
Millions
|
|
HG Global/BAM
|
|
NSM
|
|
MediaAlpha (2)
|
|
Other
Operations
|
|
Total
|
||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commission and other revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Specialty Transportation
|
|
$
|
—
|
|
|
$
|
17.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.9
|
|
Real Estate
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|||||
Social Services
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|||||
United Kingdom
|
|
—
|
|
|
12.1
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
|||||
Other
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
1.3
|
|
|
5.8
|
|
|||||
Total commission and other revenue
|
|
—
|
|
|
49.3
|
|
|
—
|
|
|
1.3
|
|
|
50.6
|
|
|||||
Advertising revenues
|
|
—
|
|
|
—
|
|
|
48.8
|
|
|
—
|
|
|
48.8
|
|
|||||
Revenues from contracts with customers
|
|
—
|
|
|
49.3
|
|
|
48.8
|
|
|
1.3
|
|
|
99.4
|
|
|||||
Other revenues (1)
|
|
21.9
|
|
|
—
|
|
|
—
|
|
|
312.3
|
|
|
334.2
|
|
|||||
Total revenues
|
|
$
|
21.9
|
|
|
$
|
49.3
|
|
|
$
|
48.8
|
|
|
$
|
313.6
|
|
|
$
|
433.6
|
|
(1)
|
Other revenues consist of premiums, investment income, investment gains and losses and other revenues outside the scope of ASC 606, Revenues from Contracts with Customers.
|
(2)
|
MediaAlpha’s results are from January 1, 2019 to February 26, 2019, the date of the MediaAlpha Transaction.
|
Millions
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Equity method eligible investments, at fair value
|
|
$
|
718.0
|
|
|
$
|
761.7
|
|
Other (1)
|
|
87.6
|
|
|
94.6
|
|
||
Total other long-term investments
|
|
$
|
805.6
|
|
|
$
|
856.3
|
|
|
|
Basic Ownership Interest
|
|
|
||
Investee
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Instrument Held
|
PassportCard/DavidShield
|
|
50.0%
|
|
50.0%
|
|
Common shares
|
MediaAlpha
|
|
48.3%
|
|
48.3%
|
|
Units
|
durchblicker
|
|
45.0%
|
|
45.0%
|
|
Common shares
|
Elementum
|
|
30.0%
|
|
30.0%
|
|
Limited partnership interest
|
Compare.com
|
|
18.4%
|
|
18.4%
|
|
Common shares
|
Tuckerman Capital Funds
|
|
16.1 - 61.3%
|
|
17.5 - 62.4%
|
|
Limited and general partnership interests
|
Enlightenment Capital Funds
|
|
9.6 - 36.5%
|
|
10.0 - 38.4%
|
|
Limited and general partnership interests
|
JAM Partners L.P.
|
|
—
|
|
11.1%
|
|
Limited partnership interest
|
Kudu Participation Contracts
|
|
3.2 - 30.0%
|
|
3.2 - 30.0%
|
|
Revenue and earnings participation contracts
|
Millions
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|||
Balance sheet data:
|
|
|
|
|
||||
Total assets
|
|
$
|
108.4
|
|
|
$
|
106.9
|
|
Total liabilities
|
|
$
|
137.5
|
|
|
$
|
144.6
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Income statement data:
|
|
|
|
|
||||
Total revenues
|
|
$
|
119.5
|
|
|
$
|
48.8
|
|
Total expenses
|
|
109.5
|
|
|
54.9
|
|
||
Net income (loss)
|
|
$
|
10.0
|
|
|
$
|
(6.1
|
)
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
NSM Bank Facility
|
|
$
|
208.7
|
|
|
$
|
217.1
|
|
|
$
|
221.2
|
|
|
$
|
217.4
|
|
Other NSM debt
|
|
$
|
1.6
|
|
|
$
|
1.3
|
|
|
$
|
1.7
|
|
|
$
|
1.8
|
|
Kudu Bank Facility
|
|
$
|
63.4
|
|
|
$
|
65.7
|
|
|
$
|
53.6
|
|
(1)
|
$
|
53.6
|
|
Other Operations debt
|
|
$
|
11.3
|
|
|
$
|
10.6
|
|
|
$
|
11.3
|
|
|
$
|
10.7
|
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
|
|
2020
|
|
2019
|
||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
|
||||
Net (loss) income attributable to White Mountains’s
common shareholders
|
|
|
$
|
(128.8
|
)
|
|
$
|
284.4
|
|
Less: total (loss) income from continuing operations, net of tax
|
|
|
(129.7
|
)
|
|
283.7
|
|
||
Net income from discontinued operations attributable to White Mountains’s common shareholders
|
|
|
$
|
.9
|
|
|
$
|
.7
|
|
Allocation of earnings to participating restricted common shares (1)
|
|
|
—
|
|
|
—
|
|
||
Basic and diluted earnings per share numerators (2)
|
|
|
$
|
.9
|
|
|
$
|
.7
|
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
|
|
|||
Total average common shares outstanding during the period
|
|
|
3,178.0
|
|
|
3,172.2
|
|
||
Average unvested restricted common shares (3)
|
|
|
(33.8
|
)
|
|
(32.5
|
)
|
||
Basic earnings per share denominator
|
|
|
3,144.2
|
|
|
3,139.7
|
|
||
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
|
|
|||
Total average common shares outstanding during the period
|
|
|
3,178.0
|
|
|
3,172.2
|
|
||
Average unvested restricted common shares (3)
|
|
|
(33.8
|
)
|
|
(32.5
|
)
|
||
Diluted earnings per share denominator
|
|
|
3,144.2
|
|
|
3,139.7
|
|
||
Basic and diluted earnings per share (in dollars) - discontinued operations:
|
|
|
$
|
.28
|
|
|
$
|
.22
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
BAM experienced strong investor demand for insured bonds throughout the first quarter of 2020, even as market conditions shifted dramatically during the quarter.
|
•
|
Although primary market activity came to an effective halt in March due to municipal bond market dislocation in reaction to the pandemic, BAM saw good opportunities in the secondary market throughout the quarter, particularly in March as credit fundamentals came back into focus.
|
•
|
In April, primary market activity began to reopen, while the secondary market remained active.
|
•
|
BAM expects that market volatility should give rise, over time, to both increased insured penetration in the primary market and opportunities in the secondary market.
|
•
|
The pandemic is negatively impacting the finances of municipalities to varying degrees, and, over time, financial stress could emerge. BAM’s existing credit portfolio is of high quality and structured to be resilient during economic slowdowns. Through May 1, 2020, all BAM-insured bond payments were made by insureds. BAM currently has no insured bonds on its insured credit watchlist.
|
•
|
BAM views consumption-based tax-backed credits (sales, hotel, excise), transportation-related credits (airports, mass transportation, ports and toll roads) and higher education-related credits as those most likely to be affected by pandemic-related impacts on the economy. Combined, these sectors total approximately 13% of BAM’s outstanding insured par.
|
•
|
During the first quarter of 2020, NSM’s results were not materially impacted by the pandemic. Early data in April suggests changes in customer behavior in response to the pandemic have had both positive impacts (e.g., higher volumes in pet health insurance) and negative impacts (e.g., lower volumes in non-standard auto and outdoor leisure businesses in the United Kingdom, and sports programs and staffing lines in the United States).
|
•
|
NSM’s business has some correlation with the broader macroeconomic cycle, primarily in the direct-to-consumer businesses (collector car, pet, nonstandard auto and outdoor leisure) and in the specialty transportation and social services businesses. Results at NSM could soften in the coming quarters, but White Mountains does not currently anticipate dramatic impacts over the fullness of time.
|
•
|
Many insurers, particularly auto insurers, have announced insurance premium refunds and payment grace periods for their customers. In addition, regulators in certain states have ordered insurers to issue partial premium refunds for insurance lines where the risk of loss has fallen substantially as a result of the pandemic, including private passenger automobile, commercial automobile, workers' compensation, commercial multi-peril, and commercial liability. Other state insurance departments could issue similar orders. To the extent NSM’s insurance partners issue such refunds or grace periods, it could affect NSM’s commissions and/or cashflow.
|
•
|
During the first quarter of 2020, on a same store basis, Kudu estimated that it experienced a decline in AUM of 7% and a decline in modeled annualized revenue of 12%. The decline in Kudu’s modeled annualized revenue was a result of the decline in AUM as well as reductions in fees at certain underlying asset management businesses.
|
•
|
Over time, Kudu’s revenues will fluctuate with increases and decreases in AUM and fee levels at Kudu’s underlying asset management business. Kudu’s conscious portfolio diversification, in particular its emphasis on private capital and its de-emphasis on long-only, should continue to provide some downside protection.
|
•
|
During the first quarter of 2020, MediaAlpha’s results were not significantly impacted by the pandemic, as a continued increase in profitability was driven primarily by higher volumes in its insurance verticals, partially offset by a significant decline in volume in its much smaller travel vertical.
|
•
|
MediaAlpha’s business has some correlation with the broader macroeconomic cycle, primarily to advertising spend levels in its core verticals. Results at MediaAlpha could soften in the coming quarters, but White Mountains does not currently anticipate dramatic impacts over the fullness of time.
|
•
|
During the first quarter of 2020, premiums and commission revenues from travel insurance placed by PassportCard declined dramatically. This decline was modestly offset by increased revenues from international private medical insurance placed by DavidShield. PassportCard/DavidShield expects these trends to continue until global travel resumes.
|
•
|
To date, claims from policies placed by PassportCard/DavidShield have been modest.
|
•
|
In May, White Mountains invested $15 million into the business in order to support operations and to continue global expansion without interruption.
|
•
|
During the first quarter of 2020, Elementum's business was not significantly impacted by the pandemic and is expected to have low correlation with the broader macroeconomic cycle and financial markets.
|
•
|
In the near term, Elementum’s AUM and revenues may increase or decrease as institutional investors rebalance portfolios or seek liquidity as they assess the ILS and investment markets more broadly.
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2019
|
||||||
Book value per share numerators (in millions):
|
|
|
|
|
|
|
||||||
White Mountains’s common shareholders’ equity -
GAAP book value per share numerator
|
|
$
|
3,076.7
|
|
|
$
|
3,261.5
|
|
|
$
|
3,122.0
|
|
Time value of money discount on expected future payments
on the BAM Surplus Notes (1)
|
|
(149.2
|
)
|
|
(151.6
|
)
|
|
(138.6
|
)
|
|||
HG Global’s unearned premium reserve (1)
|
|
160.5
|
|
|
156.7
|
|
|
140.2
|
|
|||
HG Global’s net deferred acquisition costs (1)
|
|
(42.9
|
)
|
|
(41.5
|
)
|
|
(35.7
|
)
|
|||
Adjusted book value per share numerator
|
|
$
|
3,045.1
|
|
|
$
|
3,225.1
|
|
|
$
|
3,087.9
|
|
Book value per share denominators
(in thousands of shares):
|
|
|
|
|
|
|
||||||
Common shares outstanding - GAAP book value per share denominator
|
|
3,135.0
|
|
|
3,185.4
|
|
|
3,181.2
|
|
|||
Unearned restricted common shares
|
|
(26.9
|
)
|
|
(18.5
|
)
|
|
(25.5
|
)
|
|||
Adjusted book value per share denominator
|
|
3,108.1
|
|
|
3,166.9
|
|
|
3,155.7
|
|
|||
GAAP book value per share
|
|
$
|
981.39
|
|
|
$
|
1,023.91
|
|
|
$
|
981.39
|
|
Adjusted book value per share
|
|
$
|
979.74
|
|
|
$
|
1,018.41
|
|
|
$
|
978.51
|
|
Year-to-date dividends paid per share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Millions
|
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2019
|
||||||
Goodwill:
|
|
|
|
|
|
|
||||||
NSM
|
|
$
|
379.1
|
|
|
$
|
381.6
|
|
|
$
|
328.8
|
|
Kudu
|
|
7.6
|
|
|
7.6
|
|
|
—
|
|
|||
Other Operations
|
|
5.7
|
|
|
5.5
|
|
|
20.9
|
|
|||
Total goodwill
|
|
392.4
|
|
|
394.7
|
|
|
349.7
|
|
|||
Other intangible assets:
|
|
|
|
|
|
|
||||||
NSM
|
|
236.1
|
|
|
241.4
|
|
|
159.9
|
|
|||
Kudu
|
|
1.9
|
|
|
2.0
|
|
|
—
|
|
|||
Other Operations
|
|
16.4
|
|
|
16.6
|
|
|
.6
|
|
|||
Total other intangible assets
|
|
254.4
|
|
|
260.0
|
|
|
160.5
|
|
|||
Total goodwill and other intangible assets (1)
|
|
646.8
|
|
|
654.7
|
|
|
510.2
|
|
|||
Goodwill and other intangible assets attributed to non-controlling interests
|
|
(23.5
|
)
|
|
(23.4
|
)
|
|
(24.1
|
)
|
|||
Goodwill and other intangible assets included in
White Mountains’s common shareholders’ equity |
|
$
|
623.3
|
|
|
$
|
631.3
|
|
|
$
|
486.1
|
|
|
|
Three Months Ended
|
|
||||||
|
|
March 31,
|
|
||||||
Millions
|
|
2020
|
|
2019
|
|
||||
Revenues
|
|
|
|
|
|
||||
Financial Guarantee revenues
|
|
$
|
17.5
|
|
|
$
|
21.9
|
|
|
Specialty Insurance Distribution revenues
|
|
65.0
|
|
|
49.3
|
|
|
||
Asset Management revenues
|
|
(17.4
|
)
|
|
—
|
|
|
||
Marketing Technology revenues (1)
|
|
—
|
|
|
48.8
|
|
|
||
Other Operations revenues
|
|
(124.3
|
)
|
|
313.6
|
|
|
||
Total revenues
|
|
(59.2
|
)
|
|
433.6
|
|
|
||
Expenses
|
|
|
|
|
|
||||
Financial Guarantee expenses
|
|
16.4
|
|
|
15.7
|
|
|
||
Specialty Insurance Distribution expenses
|
|
66.4
|
|
|
50.8
|
|
|
||
Asset Management expenses
|
|
4.0
|
|
|
—
|
|
|
||
Marketing Technology expenses (1)
|
|
—
|
|
|
54.9
|
|
|
||
Other Operations expenses
|
|
20.0
|
|
|
30.5
|
|
|
||
Total expenses
|
|
106.8
|
|
|
151.9
|
|
|
||
Pre-tax (loss) income
|
|
|
|
|
|
||||
Financial Guarantee pre-tax income
|
|
1.1
|
|
|
6.2
|
|
|
||
Specialty Insurance Distribution pre-tax loss
|
|
(1.4
|
)
|
|
(1.5
|
)
|
|
||
Asset Management pre-tax loss
|
|
(21.4
|
)
|
|
—
|
|
|
||
Marketing Technology pre-tax loss (1)
|
|
—
|
|
|
(6.1
|
)
|
|
||
Other Operations pre-tax (loss) income
|
|
(144.3
|
)
|
|
283.1
|
|
|
||
Total pre-tax (loss) income
|
|
(166.0
|
)
|
|
281.7
|
|
|
||
Income tax benefit (expense)
|
|
25.5
|
|
|
(10.2
|
)
|
|
||
Net (loss) income from continuing operations
|
|
(140.5
|
)
|
|
271.5
|
|
|
||
Net gain on sale of discontinued operations, net of tax
|
|
.9
|
|
|
.7
|
|
|
||
Net (loss) income
|
|
(139.6
|
)
|
|
272.2
|
|
|
||
Net loss attributable to non-controlling interests
|
|
10.8
|
|
|
12.2
|
|
|
||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
(128.8
|
)
|
|
284.4
|
|
|
||
Other comprehensive loss, net of tax
|
|
(3.4
|
)
|
|
(.3
|
)
|
|
||
Comprehensive (loss) income
|
|
(132.2
|
)
|
|
284.1
|
|
|
||
Comprehensive income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
||
Comprehensive (loss) income attributable to White Mountains’s
common shareholders
|
|
$
|
(132.2
|
)
|
|
$
|
284.1
|
|
|
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
|||||||||
Direct written premiums
|
|
$
|
—
|
|
|
$
|
9.7
|
|
|
$
|
—
|
|
|
$
|
9.7
|
|
|
Assumed written premiums
|
|
8.3
|
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
|||||
Gross written premiums
|
|
8.3
|
|
|
9.7
|
|
|
(8.3
|
)
|
|
9.7
|
|
|||||
Ceded written premiums
|
|
—
|
|
|
(8.3
|
)
|
|
8.3
|
|
|
—
|
|
|||||
Net written premiums
|
|
$
|
8.3
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earned insurance premiums
|
|
$
|
4.4
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
|
Net investment income
|
|
2.3
|
|
|
3.2
|
|
|
—
|
|
|
5.5
|
|
|||||
Net investment income - BAM Surplus Notes
|
|
4.8
|
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|||||
Net realized and unrealized investment gains
|
|
1.4
|
|
|
4.7
|
|
|
—
|
|
|
6.1
|
|
|||||
Other revenue
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
.5
|
|
|||||
Total revenues
|
|
12.9
|
|
|
9.4
|
|
|
(4.8
|
)
|
|
17.5
|
|
|||||
Insurance acquisition expenses
|
|
1.0
|
|
—
|
|
.7
|
|
|
—
|
|
|
1.7
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
General and administrative expenses
|
|
.5
|
|
|
14.2
|
|
|
—
|
|
|
14.7
|
|
|||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
4.8
|
|
|
(4.8
|
)
|
|
—
|
|
|||||
Total expenses
|
|
1.5
|
|
|
19.7
|
|
|
(4.8
|
)
|
|
16.4
|
|
|||||
Pre-tax income (loss)
|
|
$
|
11.4
|
|
|
$
|
(10.3
|
)
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|||||||||
MSC collected (1)
|
|
$
|
—
|
|
|
$
|
10.0
|
|
|
$
|
—
|
|
|
$
|
10.0
|
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Direct written premiums
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
Assumed (ceded) written premiums
|
|
6.7
|
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
||||
Gross written premiums
|
|
6.7
|
|
|
7.9
|
|
|
(6.7
|
)
|
|
7.9
|
|
||||
Ceded written premiums
|
|
—
|
|
|
(6.7
|
)
|
|
6.7
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
6.7
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earned insurance premiums
|
|
$
|
3.4
|
|
|
$
|
.8
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Net investment income
|
|
1.9
|
|
|
3.4
|
|
|
—
|
|
|
5.3
|
|
||||
Net investment income - BAM Surplus Notes
|
|
6.9
|
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
||||
Net realized and unrealized investment losses
|
|
5.1
|
|
|
6.7
|
|
|
—
|
|
|
11.8
|
|
||||
Other revenue
|
|
—
|
|
|
.6
|
|
|
—
|
|
|
.6
|
|
||||
Total revenues
|
|
17.3
|
|
|
11.5
|
|
|
(6.9
|
)
|
|
21.9
|
|
||||
Insurance acquisition expenses
|
|
.8
|
|
|
.5
|
|
|
—
|
|
|
1.3
|
|
||||
General and administrative expenses
|
|
.5
|
|
|
13.9
|
|
|
—
|
|
|
14.4
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
6.9
|
|
|
(6.9
|
)
|
|
—
|
|
||||
Total expenses
|
|
1.3
|
|
|
21.3
|
|
|
(6.9
|
)
|
|
15.7
|
|
||||
Pre-tax income (loss)
|
|
$
|
16.0
|
|
|
$
|
(9.8
|
)
|
|
$
|
—
|
|
|
$
|
6.2
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
||||||||
MSC collected (1)
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
|
Three Months Ended March 31,
|
||||||
$ in Millions
|
|
2020
|
|
2019
|
||||
Gross par value of primary market policies issued
|
|
$
|
2,508.1
|
|
|
$
|
1,385.8
|
|
Gross par value of secondary market policies issued
|
|
468.5
|
|
|
539.2
|
|
||
Total gross par value of market policies issued
|
|
$
|
2,976.6
|
|
|
$
|
1,925.0
|
|
Gross written premiums
|
|
$
|
9.7
|
|
|
$
|
7.9
|
|
MSC collected
|
|
10.0
|
|
|
7.9
|
|
||
Total gross written premiums and MSC collected
|
|
$
|
19.7
|
|
|
$
|
15.8
|
|
Present value of future installment MSC collections
|
|
—
|
|
|
.2
|
|
||
Gross written premium adjustments on existing installment policies
|
|
—
|
|
|
(.1
|
)
|
||
Gross written premiums and MSC from new business
|
|
$
|
19.7
|
|
|
$
|
15.9
|
|
Total pricing
|
|
66 bps
|
|
|
83 bps
|
|
Millions
|
|
March 31, 2020
|
|
December 31, 2019
|
|
||||
Policyholders’ surplus
|
|
$
|
333.5
|
|
|
$
|
402.4
|
|
|
Contingency reserve
|
|
72.4
|
|
|
68.2
|
|
|
||
Qualified statutory capital
|
|
405.9
|
|
|
470.6
|
|
|
||
Net unearned premiums
|
|
40.1
|
|
|
39.3
|
|
|
||
Present value of future installment premiums and MSC
|
|
13.8
|
|
|
13.7
|
|
|
||
HG Re, Ltd. collateral trusts at statutory value
|
|
370.3
|
|
|
314.0
|
|
|
||
Fidus Re, Ltd. collateral trust at statutory value
|
|
100.0
|
|
|
100.0
|
|
|
||
Claims paying resources
|
|
$
|
930.1
|
|
|
$
|
937.6
|
|
|
|
|
March 31, 2020
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
370.4
|
|
|
$
|
447.8
|
|
|
$
|
—
|
|
|
$
|
818.2
|
|
Short-term investments
|
|
6.5
|
|
|
18.0
|
|
|
—
|
|
|
24.5
|
|
||||
Total investments
|
|
376.9
|
|
|
465.8
|
|
|
—
|
|
|
842.7
|
|
||||
Cash
|
|
2.9
|
|
|
7.6
|
|
|
—
|
|
|
10.5
|
|
||||
BAM Surplus Notes
|
|
409.8
|
|
|
—
|
|
|
(409.8
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
150.4
|
|
|
—
|
|
|
(150.4
|
)
|
|
—
|
|
||||
Deferred acquisition costs
|
|
44.2
|
|
|
23.3
|
|
|
(44.2
|
)
|
|
23.3
|
|
||||
Insurance premiums receivable
|
|
4.2
|
|
|
6.8
|
|
|
(4.2
|
)
|
|
6.8
|
|
||||
Accrued investment income
|
|
2.1
|
|
|
3.4
|
|
|
—
|
|
|
5.5
|
|
||||
Other assets
|
|
—
|
|
|
15.5
|
|
|
(.1
|
)
|
|
15.4
|
|
||||
Total assets
|
|
$
|
990.5
|
|
|
$
|
522.4
|
|
|
$
|
(608.7
|
)
|
|
$
|
904.2
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes(1)
|
|
$
|
—
|
|
|
$
|
409.8
|
|
|
$
|
(409.8
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes(2)
|
|
—
|
|
|
150.4
|
|
|
(150.4
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains’s subsidiaries(3)
|
|
321.9
|
|
|
—
|
|
|
—
|
|
|
321.9
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
11.2
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Unearned insurance premiums
|
|
165.6
|
|
|
37.1
|
|
|
—
|
|
|
202.7
|
|
||||
Accrued incentive compensation
|
|
.3
|
|
|
9.4
|
|
|
—
|
|
|
9.7
|
|
||||
Accounts payable on unsettled investment purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other liabilities
|
|
1.1
|
|
|
62.6
|
|
|
(48.5
|
)
|
|
15.2
|
|
||||
Total liabilities
|
|
500.1
|
|
|
669.3
|
|
|
(608.7
|
)
|
|
560.7
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
|
|
476.4
|
|
|
—
|
|
|
—
|
|
|
476.4
|
|
||||
Non-controlling interests
|
|
14.0
|
|
|
(146.9
|
)
|
|
—
|
|
|
(132.9
|
)
|
||||
Total equity
|
|
490.4
|
|
|
(146.9
|
)
|
|
—
|
|
|
343.5
|
|
||||
Total liabilities and equity
|
|
$
|
990.5
|
|
|
$
|
522.4
|
|
|
$
|
(608.7
|
)
|
|
$
|
904.2
|
|
(1)
|
Under GAAP, the BAM Surplus Notes are classified as debt by the issuer. Under statutory accounting principles, they are classified as policyholders’ surplus.
|
(2)
|
Under GAAP, interest accrues daily on the BAM Surplus Notes. Under statutory accounting principles, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
|
(3)
|
HG Global preferred dividends payable to White Mountains’s subsidiaries is eliminated in White Mountains’s consolidated financial statements. For segment reporting, the HG Global preferred dividends payable to White Mountains’s subsidiaries included within the HG Global/BAM segment are eliminated against the offsetting receivable included within the Other Operations segment, and therefore are added back to White Mountains’s common shareholders’ equity within the HG Global/BAM segment.
|
|
|
December 31, 2019
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total Segment
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
304.2
|
|
|
$
|
495.1
|
|
|
$
|
—
|
|
|
$
|
799.3
|
|
Short-term investments
|
|
15.7
|
|
|
30.6
|
|
|
—
|
|
|
46.3
|
|
||||
Total investments
|
|
319.9
|
|
|
525.7
|
|
|
—
|
|
|
845.6
|
|
||||
Cash
|
|
9.8
|
|
|
14.4
|
|
|
—
|
|
|
24.2
|
|
||||
BAM Surplus Notes
|
|
457.6
|
|
|
—
|
|
|
(457.6
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
162.7
|
|
|
—
|
|
|
(162.7
|
)
|
|
—
|
|
||||
Deferred acquisition costs
|
|
42.8
|
|
|
22.1
|
|
|
(42.8
|
)
|
|
22.1
|
|
||||
Insurance premiums receivable
|
|
4.2
|
|
|
6.7
|
|
|
(4.2
|
)
|
|
6.7
|
|
||||
Accrued investment income
|
|
1.7
|
|
|
3.7
|
|
|
—
|
|
|
5.4
|
|
||||
Other assets
|
|
—
|
|
|
20.2
|
|
|
(.2
|
)
|
|
20.0
|
|
||||
Total assets
|
|
$
|
998.7
|
|
|
$
|
592.8
|
|
|
$
|
(667.5
|
)
|
|
$
|
924.0
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes(1)
|
|
$
|
—
|
|
|
$
|
457.6
|
|
|
$
|
(457.6
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes(2)
|
|
—
|
|
|
162.7
|
|
|
(162.7
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains’s subsidiaries(3)
|
|
330.3
|
|
|
—
|
|
|
—
|
|
|
330.3
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
11.4
|
|
|
—
|
|
|
—
|
|
|
11.4
|
|
||||
Unearned insurance premiums
|
|
161.7
|
|
|
36.7
|
|
|
—
|
|
|
198.4
|
|
||||
Accrued incentive compensation
|
|
.7
|
|
|
21.0
|
|
|
—
|
|
|
21.7
|
|
||||
Other liabilities
|
|
1.0
|
|
|
61.5
|
|
|
(47.2
|
)
|
|
15.3
|
|
||||
Total liabilities
|
|
505.1
|
|
|
739.5
|
|
|
(667.5
|
)
|
|
577.1
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
|
|
479.2
|
|
|
—
|
|
|
—
|
|
|
479.2
|
|
||||
Non-controlling interests
|
|
14.4
|
|
|
(146.7
|
)
|
|
—
|
|
|
(132.3
|
)
|
||||
Total equity
|
|
493.6
|
|
|
(146.7
|
)
|
|
—
|
|
|
346.9
|
|
||||
Total liabilities and equity
|
|
$
|
998.7
|
|
|
$
|
592.8
|
|
|
$
|
(667.5
|
)
|
|
$
|
924.0
|
|
(1)
|
Under GAAP, the BAM Surplus Notes are classified as debt by the issuer. Under statutory accounting principles, they are classified as policyholders’ surplus.
|
(2)
|
Under GAAP, interest accrues daily on the BAM Surplus Notes. Under statutory accounting principles, 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.
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Commission revenues
|
|
$
|
53.0
|
|
|
$
|
43.3
|
|
Broker commission expenses
|
|
18.3
|
|
|
15.5
|
|
||
Gross profit
|
|
34.7
|
|
|
27.8
|
|
||
Other revenues
|
|
12.0
|
|
|
6.0
|
|
||
General and administrative expenses
|
|
39.6
|
|
|
25.3
|
|
||
Change in fair value of contingent consideration earnout liabilities
|
|
(.6
|
)
|
|
1.3
|
|
||
Amortization of other intangible assets
|
|
4.8
|
|
|
5.0
|
|
||
Interest expense
|
|
4.3
|
|
|
3.7
|
|
||
GAAP pre-tax loss
|
|
(1.4
|
)
|
|
(1.5
|
)
|
||
Income tax benefit
|
|
(.7
|
)
|
|
(.3
|
)
|
||
GAAP net loss
|
|
(.7
|
)
|
|
(1.2
|
)
|
||
Add back:
|
|
|
|
|
||||
Interest expense
|
|
4.3
|
|
|
3.7
|
|
||
Income tax benefit
|
|
(.7
|
)
|
|
(.3
|
)
|
||
General and administrative expenses — depreciation
|
|
.9
|
|
|
.5
|
|
||
Amortization of other intangible assets
|
|
4.8
|
|
|
5.0
|
|
||
EBITDA (1)
|
|
8.6
|
|
|
7.7
|
|
||
Add back:
|
|
|
|
|
||||
Change in fair value of contingent consideration earnout liabilities
|
|
(.6
|
)
|
|
1.3
|
|
||
Acquisition-related transaction expenses
|
|
1.7
|
|
|
.5
|
|
||
Fair value purchase accounting adjustment for deferred revenue
|
|
—
|
|
|
—
|
|
||
Investments made in the development of new business lines
|
|
—
|
|
|
.2
|
|
||
Restructuring expenses
|
|
.8
|
|
|
.1
|
|
||
Adjusted EBITDA (1)
|
|
$
|
10.5
|
|
|
$
|
9.8
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||
$ in Millions
|
|
Controlled Premium (1)
|
|
Commission and Other Revenues
|
|
Controlled Premium (1)
|
|
Commission and Other Revenues
|
||||||||
Specialty Transportation
|
|
$
|
74.2
|
|
|
$
|
20.3
|
|
|
$
|
65.9
|
|
|
$
|
17.9
|
|
Real Estate
|
|
48.4
|
|
|
11.3
|
|
|
38.8
|
|
|
9.0
|
|
||||
Social Services
|
|
24.5
|
|
|
6.3
|
|
|
22.9
|
|
|
5.8
|
|
||||
Pet
|
|
29.3
|
|
|
11.8
|
|
|
—
|
|
|
—
|
|
||||
United Kingdom
|
|
38.8
|
|
|
10.0
|
|
|
41.8
|
|
|
12.1
|
|
||||
Other
|
|
35.8
|
|
|
5.3
|
|
|
27.2
|
|
|
4.5
|
|
||||
Total
|
|
$
|
251.0
|
|
|
$
|
65.0
|
|
|
$
|
196.6
|
|
|
$
|
49.3
|
|
|
|
Three Months Ended
March 31, 2020
|
||
|
|
|||
Millions
|
|
|||
Net investment income
|
|
$
|
7.3
|
|
Net unrealized investment losses
|
|
(24.8
|
)
|
|
Other revenues
|
|
.1
|
|
|
Total revenues
|
|
(17.4
|
)
|
|
General and administrative expenses
|
|
2.5
|
|
|
Amortization of other intangible assets
|
|
.1
|
|
|
Interest expense
|
|
1.4
|
|
|
Total expenses
|
|
4.0
|
|
|
GAAP pre-tax loss
|
|
(21.4
|
)
|
|
Income tax benefit
|
|
5.4
|
|
|
GAAP net loss
|
|
(16.0
|
)
|
|
Add back:
|
|
|
||
Interest expense
|
|
1.4
|
|
|
Income tax benefit
|
|
5.4
|
|
|
Amortization of other intangible assets
|
|
.1
|
|
|
EBITDA (1)
|
|
(19.9
|
)
|
|
Add back:
|
|
|
||
Net unrealized investment losses
|
|
(24.8
|
)
|
|
Acquisition-related transaction expenses
|
|
.6
|
|
|
Adjusted EBITDA (1)
|
|
$
|
5.5
|
|
Millions
|
|
January 1, 2019 to February 26, 2019
|
||
Advertising and commission revenues
|
|
$
|
48.8
|
|
Cost of sales
|
|
40.6
|
|
|
Gross profit
|
|
8.2
|
|
|
General and administrative expenses
|
|
5.7
|
|
|
General and administrative expenses -
MediaAlpha Transaction related costs
|
|
6.8
|
|
|
Amortization of other intangible assets
|
|
1.6
|
|
|
Interest expense
|
|
.2
|
|
|
GAAP pre-tax loss
|
|
$
|
(6.1
|
)
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2020
|
|
2019
|
||||
Net investment income
|
|
$
|
10.1
|
|
|
$
|
10.7
|
|
Net realized and unrealized investment (losses) gains
|
|
(138.0
|
)
|
|
119.1
|
|
||
Realized gain and unrealized investment gain from the MediaAlpha Transaction
|
|
—
|
|
|
182.2
|
|
||
Advertising and commission revenues
|
|
2.1
|
|
|
1.3
|
|
||
Other revenues
|
|
1.5
|
|
|
.3
|
|
||
Total revenues
|
|
(124.3
|
)
|
|
313.6
|
|
||
Cost of sales
|
|
2.0
|
|
|
1.1
|
|
||
General and administrative expenses
|
|
17.5
|
|
|
29.4
|
|
||
Amortization of other intangible assets
|
|
.2
|
|
|
—
|
|
||
Interest expense
|
|
.3
|
|
|
—
|
|
||
Total expenses
|
|
20.0
|
|
|
30.5
|
|
||
Pre-tax (loss) income
|
|
$
|
(144.3
|
)
|
|
$
|
283.1
|
|
|
|
Three Months Ended
|
||||
|
|
March 31,
|
||||
|
|
2020
|
|
2019
|
||
|
|
|
|
|
||
Common equity securities
|
|
(20.9
|
)%
|
|
13.0
|
%
|
Other long-term investments
|
|
(0.9
|
)%
|
|
32.6
|
%
|
Other long-term investments - excluding MediaAlpha Transaction
|
|
(0.9
|
)%
|
|
0.2
|
%
|
Total common equity securities and other long-term investments
|
|
(9.6
|
)%
|
|
19.0
|
%
|
Total common equity securities and other long-term investments -
excluding MediaAlpha Transaction
|
|
(9.6
|
)%
|
|
9.3
|
%
|
S&P 500 Index (total return)
|
|
(19.6
|
)%
|
|
13.6
|
%
|
|
|
|
|
|
||
Fixed income investments
|
|
0.7
|
%
|
|
2.3
|
%
|
Bloomberg Barclays U.S. Intermediate Aggregate Index
|
|
2.5
|
%
|
|
2.3
|
%
|
|
|
|
|
|
||
Total consolidated portfolio
|
|
(4.6
|
)%
|
|
10.1
|
%
|
Total consolidated portfolio - excluding MediaAlpha Transaction
|
|
(4.6
|
)%
|
|
5.7
|
%
|
Currency
$ in Millions
|
|
Fair Value
|
|
% of Common Shareholders’ Equity
|
|||
GBP
|
|
$
|
59.9
|
|
|
1.9
|
%
|
JPY
|
|
31.5
|
|
|
1.0
|
|
|
EUR
|
|
31.4
|
|
|
1.0
|
|
|
All other
|
|
31.9
|
|
|
1.1
|
|
|
Total
|
|
$
|
154.7
|
|
|
5.0
|
%
|
$ in Millions
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
NSM Bank Facility, net of unamortized issuance costs
|
|
$
|
217.1
|
|
|
$
|
217.4
|
|
Other NSM debt
|
|
1.3
|
|
|
1.8
|
|
||
Kudu Bank Facility, net of unamortized issuance costs
|
|
65.7
|
|
|
53.6
|
|
||
Other Operations debt
|
|
10.6
|
|
|
10.7
|
|
||
Total debt
|
|
294.7
|
|
|
283.5
|
|
||
Non-controlling interests—excluding BAM
|
|
29.3
|
|
|
29.9
|
|
||
Total White Mountains’s common shareholders’ equity
|
|
3,076.7
|
|
|
3,261.5
|
|
||
Total capital
|
|
3,400.7
|
|
|
3,574.9
|
|
||
Time-value discount on expected future payments on the BAM Surplus Notes (1)
|
|
(149.2
|
)
|
|
(151.6
|
)
|
||
HG Global’s unearned premium reserve (1)
|
|
160.5
|
|
|
156.7
|
|
||
HG Global’s net deferred acquisition costs (1)
|
|
(42.9
|
)
|
|
(41.5
|
)
|
||
Total adjusted capital
|
|
$
|
3,369.1
|
|
|
$
|
3,538.5
|
|
|
|
|
|
|
||||
Total debt to total adjusted capital
|
|
8.7
|
%
|
|
8.0
|
%
|
•
|
Change in fair value of contingent consideration earnout liabilities - Earnout 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, earnout liabilities are not capitalized as part of the purchase price. Earnout liabilities are recorded at fair value, with the periodic change in the fair value of these liabilities recorded as income or an expense.
|
•
|
Acquisition-related transaction expenses -Represents costs directly related to NSM’s transactions to acquire businesses, such as transaction-related compensation, impairments of intangible assets, 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. For the periods presented, this adjustment relates primarily to NSM’s investment expenditures, net of revenues generated, in the organic development of (i) its pet insurance line and (ii) its MGA in the United Kingdom. NSM has recently decided to cease investment in the organic development of its pet insurance line and, instead, to acquire Embrace, which closed in April 2019.
|
•
|
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.
|
•
|
Acquisition-related transaction expenses - Represents costs directly related to Kudu's transactions to acquire Participation Contracts, such as external lawyer, banker, consulting and placement agent fees, which are not capitalized and are expensed under GAAP.
|
•
|
Non-cash equity-based compensation - Represents non-cash expenses related to Kudu's management compensation that are settled with equity units in Kudu.
|
•
|
Unrealized (gains) and losses - Represents unrealized gains and losses recorded on Kudu's Participation Contracts, which are recorded at fair value under GAAP.
|
|
|
For the Three Months Ended March 31, 2019
|
|||||||
|
|
GAAP Returns
|
|
Remove MediaAlpha Transaction
|
|
Returns - Excluding MediaAlpha Transaction
|
|||
Total consolidated portfolio returns
|
|
10.1
|
%
|
|
(4.4
|
)%
|
|
5.7
|
%
|
Common equity securities and
other long-term investments returns
|
|
19.0
|
%
|
|
(9.7
|
)%
|
|
9.3
|
%
|
Other long-term investments returns
|
|
32.6
|
%
|
|
(32.4
|
)%
|
|
0.2
|
%
|
$ in Millions
|
|
Discount Rate
|
||||||||||||||||||
Terminal Exit Multiple
|
|
-2%
|
|
-1%
|
|
18% - 24%
|
|
+1%
|
|
+2%
|
||||||||||
+2
|
|
$
|
316
|
|
|
$
|
298
|
|
|
$
|
281
|
|
|
$
|
266
|
|
|
$
|
252
|
|
+1
|
|
$
|
305
|
|
|
$
|
288
|
|
|
$
|
272
|
|
|
$
|
258
|
|
|
$
|
245
|
|
6x - 12x
|
|
$
|
295
|
|
|
$
|
279
|
|
|
$
|
263
|
|
|
$
|
250
|
|
|
$
|
237
|
|
-1
|
|
$
|
284
|
|
|
$
|
269
|
|
|
$
|
254
|
|
|
$
|
242
|
|
|
$
|
229
|
|
-2
|
|
$
|
273
|
|
|
$
|
259
|
|
|
$
|
246
|
|
|
$
|
235
|
|
|
$
|
223
|
|
$ in Millions
|
|
Discount Rate
|
||||||||||||||||||
Terminal Revenue Growth Rate
|
|
13%
|
|
14%
|
|
15%
|
|
16%
|
|
17%
|
||||||||||
4.5%
|
|
$
|
275
|
|
|
$
|
241
|
|
|
$
|
215
|
|
|
$
|
193
|
|
|
$
|
175
|
|
4.0%
|
|
$
|
266
|
|
|
$
|
235
|
|
|
$
|
210
|
|
|
$
|
189
|
|
|
$
|
172
|
|
3.5%
|
|
$
|
258
|
|
|
$
|
229
|
|
|
$
|
205
|
|
|
$
|
185
|
|
|
$
|
169
|
|
$ in Millions
|
|
Discount Rate
|
||||||||||||||||||
Terminal Revenue Growth Rate
|
|
23%
|
|
24%
|
|
25%
|
|
26%
|
|
27%
|
||||||||||
4.5%
|
|
$
|
93
|
|
|
$
|
87
|
|
|
$
|
81
|
|
|
$
|
76
|
|
|
$
|
71
|
|
4.0%
|
|
$
|
92
|
|
|
$
|
86
|
|
|
$
|
80
|
|
|
$
|
75
|
|
|
$
|
70
|
|
3.5%
|
|
$
|
91
|
|
|
$
|
84
|
|
|
$
|
79
|
|
|
$
|
74
|
|
|
$
|
69
|
|
•
|
changes in adjusted book value per share or return on equity;
|
•
|
business strategy;
|
•
|
financial and operating targets or plans;
|
•
|
projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts;
|
•
|
expansion and growth of its business and operations; and
|
•
|
future capital expenditures.
|
•
|
the risks that are described from time to time in White Mountains’s filings with the Securities and Exchange Commission, including but not limited to White Mountains’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019;
|
•
|
the trends and uncertainties from COVID-19 included on page 42 of this report on Form 10-Q;
|
•
|
business opportunities (or lack thereof) that may be presented to it and pursued;
|
•
|
actions taken by ratings agencies from time to time, such as financial strength or credit ratings downgrades or placing ratings on negative watch;
|
•
|
the continued availability of capital and financing;
|
•
|
deterioration of general economic, market or business conditions, including due to outbreaks of contagious disease (including COVID-19) 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;
|
•
|
an economic downturn or other economic conditions adversely affecting its financial position; and
|
•
|
other factors, most of which are beyond White Mountains’s control.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Part II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings.
|
Item 2.
|
Issuer Purchases of Equity Securities.
|
Months
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans (1)
|
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans (1)
|
|||||
January 1 - January 31, 2020
|
|
5,899
|
|
|
$
|
1,115.51
|
|
|
—
|
|
|
635,705
|
|
February 1 - February 29, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
635,705
|
|
March 1 - March 31, 2020
|
|
58,504
|
|
|
$
|
816.39
|
|
|
58,504
|
|
|
577,201
|
|
Total
|
|
64,403
|
|
|
$
|
843.79
|
|
|
58,504
|
|
|
577,201
|
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits.
|
|
|
|
WHITE MOUNTAINS INSURANCE GROUP, LTD.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
May 8, 2020
|
|
|
By: /s/ J. Brian Palmer
|
|
|
|
|
J. Brian Palmer
|
|
|
|
|
Managing Director and Chief Accounting Officer
|
1 Year White Moutains Insurance Chart |
1 Month White Moutains Insurance Chart |
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