White Mountains Insurance Group Ltd.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 07:18
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion contains "forward-looking statements." White Mountains intends statements that are not historical in nature, which are hereby identified as forward-looking statements, to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. White Mountains cannot promise that its expectations in such forward-looking statements will turn out to be correct. White Mountains's actual results could be materially different from and worse than its expectations. See "FORWARD-LOOKING STATEMENTS" on page 87 for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.
The following discussion also includes eleven non-GAAP financial measures: (i) Ark's tangible book value, (ii) Ark's growth in tangible book value, (iii) Ark's tangible capital, (iv) Kudu's earnings before interest, taxes, depreciation and amortization ("EBITDA"), (v) Kudu's adjusted EBITDA, (vi) Distinguished's ScaleCo net income (loss), (vii) Distinguished's ScaleCo EBITDA, (viii) Distinguished's ScaleCo adjusted EBITDA, (ix) WTM Partners's EBITDA, (x) WTM Partners's adjusted EBITDA and (xi) total consolidated portfolio return excluding MediaAlpha. These non-GAAP financial measures have been reconciled from their most comparable GAAP financial measures on page 85. White Mountains believes these measures to be useful in evaluating White Mountains's financial performance and condition.
RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 and 2025
Overview
White Mountains reported book value per share of $2,243 as of September 30, 2026, a decrease of 1% for the third quarter of 2026 and an increase of 3% for the first nine months of 2026, including dividends. Results in the third quarter were impacted by higher interest rates and a decline in the MediaAlpha share price, which led to unrealized losses that offset an otherwise solid quarter for operating results. Results in the first nine months of 2026 were driven by solid operating company results, partially offset by unrealized losses due to the impact of higher interest rates and a decline in the MediaAlpha share price.
White Mountains reported book value per share of $1,851 as of September 30, 2025, an increase of 3% in the third quarter of 2025 and 6% for the first nine months of 2025, including dividends. Results in the third quarter and first nine months of 2025 were driven primarily by good operating company results and investment returns.
Comprehensive income (loss) attributable to common shareholders was $(39) million and $134 million in the third quarter and first nine months of 2026 compared to $114 million and $272 million in the third quarter and first nine months of 2025. Results in the third quarter and first nine months of 2026 included $(69) million and $92 million of net realized and unrealized investment gains (losses) compared to $76 million and $250 million in the third quarter and first nine months of 2025. Results in the third quarter and first nine months of 2026 also included $(54) million and $(60) million of unrealized investment gains (losses) from White Mountains's investment in MediaAlpha compared to $8 million and $2 million in the third quarter and first nine months of 2025.
In the first nine months of 2026, White Mountains repurchased and retired 103,827 of its common shares for $217
million at an average share price of $2,088.39, or 93% of White Mountains's September 30, 2026 book value per share. As of September 30, 2026, White Mountains's undeployed capital is roughly $0.8 billion.
Ark's combined ratio was 75% and 83% in the third quarter and first nine months of 2026 compared to 76% and 84% in the third quarter and first nine months of 2025. Ark's combined ratio in the third quarter and first nine months of 2026 included two points and four points of catastrophe losses, driven primarily by losses related to the war in Iran. This compares to minimal catastrophe losses in the third quarter of 2025 and seven points of catastrophe losses in the first nine months of 2025, driven primarily by losses related to the California wildfires. Ark's combined ratio included four points and five points of net favorable prior year development in the third quarter and first nine months of 2026, driven by the property and specialty lines of business. This compares to zero points and five points of net favorable prior year development in the third quarter and first nine months of 2025, also driven primarily by the property and specialty lines of business. Ark has ongoing exposure to the war in Iran, primarily through the specialty and marine & energy lines of business. In the third quarter and first nine months of 2026, Ark recorded estimated losses of $10 million and $52 million (net of reinsurance and reinstatement premiums) related to the Iran war. Hurricane Isaias made U.S. landfall in October 2026. Ark does not expect its losses related to the storm to be significant.
Ark reported gross written premiums of $386 million and $2,254 million, net written premiums of $338 million and $1,466 million and net earned premiums of $510 million and $1,256 million in the third quarter and first nine months of 2026 compared to gross written premiums of $366 million and $2,289 million, net written premiums of $283 million and $1,510 million and net earned premiums of $499 million and $1,202 million in the third quarter and first nine months of 2025. The increase in gross written premiums in the third quarter of 2026 was driven primarily by a change in the timing of recognition of certain delegated authority business as well as growth in the specialty and accident & health lines of business, partially offset by reduced writings in property as a result of softening market conditions. The timing of recognition of certain delegated authority business had no impact on the timing of recognition of Ark's earned premiums. The decrease in gross written premiums in the first nine months of 2026 was driven primarily by reduced writings in property as a result of the softening market conditions, partially offset by growth in the specialty, casualty and accident & health lines of business.
Ark reported pre-tax income of $64 million and $149 million in the third quarter and first nine months of 2026 compared to $97 million and $240 million in the third quarter and first nine months of 2025. Ark's results included net realized and unrealized investment gains (losses) of $(40) million and $(43) million in the third quarter and first nine months of 2026 compared to $18 million and $99 million in the third quarter and first nine months of 2025.
Ark reported book value of $1,673 million as of September 30, 2026, an increase of 4% in the third quarter of 2026 and 8% in the first nine months of 2026, including dividends. Ark reported tangible book value of $1,825 million as of September 30, 2026, an increase of 5% in the third quarter of 2026 and 12% in the first nine months of 2026, including dividends. Ark's book value includes goodwill and other intangible assets, net of tax, and White Mountains's contingent consideration liability, which are excluded from Ark's tangible book value.
During the fourth quarter of 2025, Ark renewed Outrigger Re Ltd. for the 2026 underwriting year, but WM Outrigger Re did not participate. Accordingly, WM Outrigger Re's results are not material to White Mountains's consolidated financial statements for the third quarter and first nine months of 2026.
Kudu reported total revenues of $(5) million and $127 million, pre-tax income (loss) of $(15) million and $93 million and adjusted EBITDA of $18 million and $50 million in the third quarter and first nine months of 2026 compared to total revenues of $54 million and $139 million, pre-tax income of $44 million and $108 million and adjusted EBITDA of $15 million and $47 million in the third quarter and first nine months of 2025. Total revenues, pre-tax income (loss) and adjusted EBITDA included $21 million and $61 million of net investment income in the third quarter and first nine months of 2026 compared to $18 million and $57 million in the third quarter and first nine months of 2025. Total revenues and pre-tax income (loss) also included $(26) million and $66 million of net realized and unrealized investment gains (losses) in the third quarter and first nine months of 2026 compared to $36 million and $81 million in the third quarter and first nine months of 2025. The decrease in net realized and unrealized investment gains in the third quarter of 2026 was driven by a decrease in the fair value of Kudu's Participation Contracts, primarily due to the impact of higher discount rates, partially offset by growth in assets under management at several managers. The decrease in net realized and unrealized investment gains in the first nine months of 2026 was driven primarily by the impact of higher discount rates and foreign currency movements on the fair value of Kudu's Participation Contracts, partially offset by step-ups in valuation related to certain sale transactions.
Kudu deployed a total of $36 million, including transaction costs, into two new asset management firms in 2026. As of September 30, 2026, Kudu had deployed a total of $1.2 billion, including transaction costs, into 32 asset and wealth management firms globally, including three that have been exited. As of September 30, 2026, the asset and wealth management firms have combined assets under management of approximately $166 billion, spanning a range of asset classes.
HG Global reported gross written premiums of $19 million and $39 million and earned premiums of $9 million and $24 million in the third quarter and first nine months of 2026 compared to gross written premiums of $16 million and $42 million and earned premiums of $8 million and $23 million in the third quarter and first nine months of 2025. HG Global's total par value of policies assumed was $929 million and $2,264 million in the third quarter and first nine months of 2026 compared to $850 million and $2,208 million in the third quarter and first nine months of 2025. HG Global's total gross pricing was 208 and 170 basis points in the third quarter and first nine months of 2026 compared to 187 and 189 basis points in the third quarter and first nine months of 2025. HG Global reported pre-tax income (loss) of $(28) million and $(7) million in the third quarter and first nine months of 2026 compared to $22 million and $64 million in the third quarter and first nine months of 2025. HG Global's results included net realized and unrealized investment gains (losses) of $(29) million and $(36) million in the third quarter and first nine months of 2026 compared to $7 million and $20 million in the third quarter and first nine months of 2025. Investment losses in the third quarter and first nine months of 2026 were driven by the impact of higher interest rates leading to unrealized losses on HG Global's fixed income portfolio.
The fair value of the BAM Surplus Notes decreased to $336 million as of September 30, 2026 compared to $353 million as of June 30, 2026. The decrease was driven by a $16 million decrease in fair value and an $8 million cash payment of principal and interest, partially offset by $7 million of accrued interest. The decrease in fair value was driven primarily by the impact of higher interest rates on the discount rate.
Distinguished reported managed premiums of $159 million and $480 million, commission and fee revenues of $55 million and $151 million, pre-tax loss of $13 million and $41 million and ScaleCo adjusted EBITDA of $5 million and $22 million for the third quarter and first nine months of 2026. Distinguished reported commission and fee revenues of $14 million, pre-tax loss of $3 million, and ScaleCo adjusted EBITDA of $1 million for the period from September 2, 2025, the date of acquisition, through September 30, 2025. Distinguished's managed premiums increased 20% in the third quarter of 2026 compared to the third quarter of 2025 and 14% in the first nine months of 2026 compared to the first nine months of 2025. These figures include periods prior to White Mountains's ownership of Distinguished, which White Mountains believes is useful in understanding Distinguished's performance.
WTM Partners reported total revenues of $107 million and $243 million, pre-tax income of $1 million and $3 million and adjusted EBITDA of $9 million and $19 million in the third quarter and first nine months of 2026 compared to total revenues of $54 million and $97 million, pre-tax loss of $1 million and $3 million and adjusted EBITDA of $2 million and $4 million in the third quarter and first nine months of 2025. The increases were driven by organic growth at Enterprise Solutions and the acquisitions of Basesix and Hawkeye Electric in the second quarter of 2026.
As of September 30, 2026, White Mountains owned 17.9 million shares of MediaAlpha, representing a 29% basic ownership interest based on the total class A and class B common shares outstanding. As of September 30, 2026, MediaAlpha's share price was $9.57 per share, which decreased from $12.57 per share as of June 30, 2026. The carrying value of White Mountains's investment in MediaAlpha was $171 million as of September 30, 2026 compared to $225 million as of June 30, 2026.
On November 4, 2026, White Mountains agreed to sell 5.5 million shares of MediaAlpha for $13.90 per share. White Mountains will own 12.4 million shares of MediaAlpha after the sale, representing a 21% ownership interest based on the class A and class B common shares outstanding as of October 26, 2026. At this level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $5.00 per share increase or decrease in White Mountains's book value per share.
White Mountains's total consolidated portfolio return on invested assets was -0.6% in the third quarter of 2026, which included $54 million of unrealized investment losses from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was flat in the third quarter of 2026, driven primarily by net unrealized losses on the fixed income portfolio, offset by net investment income. White Mountains's total consolidated portfolio return on invested assets was 2.1% in the third quarter of 2025, which included $8 million of unrealized investment gains from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 2.0% in the third quarter of 2025, driven primarily by net investment income and net unrealized investment gains from the other long-term investments and fixed income portfolios.
White Mountains's total consolidated portfolio return on invested assets was 3.0% in the first nine months of 2026, which included $60 million of unrealized investment losses from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.9% in the first nine months of 2026, driven primarily by net investment income and net realized and unrealized investment gains from other long-term investments, partially offset by net unrealized investment losses from the fixed income portfolio. White Mountains's total consolidated portfolio return on invested assets was 6.6% in the first nine months of 2025, which included $2 million of unrealized investment gains from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.8% in the first nine months of 2025, driven primarily by net investment income and net unrealized investment gains from the other long-term investments and fixed income portfolios.
Book Value Per Share
The following table presents White Mountains's book value per share as of September 30, 2026, June 30, 2026, December 31, 2025 and September 30, 2025:
| September 30, 2026 | June 30, 2026 | December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||
| Book value per share numerator (in millions): | ||||||||||||||||||||||||||
| White Mountains's common shareholders' equity | $ | 5,353.1 | $ | 5,388.3 | $ | 5,425.4 | $ | 4,767.6 | ||||||||||||||||||
| Book value per share denominator (in thousands): | ||||||||||||||||||||||||||
| Common shares outstanding | 2,386.8 | 2,386.7 | 2,479.7 | 2,575.2 | ||||||||||||||||||||||
| Book value per share | $ | 2,242.76 | $ | 2,257.60 | $ | 2,187.97 | $ | 1,851.33 | ||||||||||||||||||
|
Quarter-to-date change in book value per share, including dividends: |
(0.7) | % | 4.1 | % | 18.2 | % | 2.6 | % | ||||||||||||||||||
|
Year-to-date change in book value per share, including dividends: |
2.6 | % | 3.2 | % | 25.4 | % | 6.1 | % | ||||||||||||||||||
| Year-to-date dividends paid per share | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||||||||
Goodwill and Other Intangible Assets
The following table presents goodwill and other intangible assets that are included in White Mountains's book value as of September 30, 2026, June 30, 2026, December 31, 2025 and September 30, 2025:
|
Millions
|
September 30, 2026 | June 30, 2026 | December 31, 2025 | September 30, 2025 | ||||||||||||||||||||||
|
Goodwill:
|
||||||||||||||||||||||||||
|
Ark
|
$ | 116.8 | $ | 116.8 | $ | 116.8 | $ | 116.8 | ||||||||||||||||||
|
Kudu
|
7.6 | 7.6 | 7.6 | 7.6 | ||||||||||||||||||||||
| Distinguished | 397.9 | 397.9 | 396.7 | 595.4 | ||||||||||||||||||||||
| WTM Partners | 163.1 | 238.3 | 57.7 | 57.7 | ||||||||||||||||||||||
|
Bamboo
|
- | - | - | 270.4 | ||||||||||||||||||||||
|
Other Operations
|
35.3 | 35.3 | 35.3 | 44.4 | ||||||||||||||||||||||
|
Total goodwill
|
720.7 | 795.9 | 614.1 | 1,092.3 | ||||||||||||||||||||||
|
Other intangible assets:
|
||||||||||||||||||||||||||
|
Ark
|
175.7 | 175.7 | 175.7 | 175.7 | ||||||||||||||||||||||
|
Kudu
|
- | - | .1 | .1 | ||||||||||||||||||||||
| Distinguished | 160.8 | 167.2 | 181.0 | - | ||||||||||||||||||||||
| WTM Partners | 99.6 | 31.3 | 33.8 | 35.1 | ||||||||||||||||||||||
|
Bamboo
|
- | - | - | 72.6 | ||||||||||||||||||||||
|
Other Operations
|
12.6 | 13.6 | 15.5 | 17.1 | ||||||||||||||||||||||
|
Total other intangible assets
|
448.7 | 387.8 | 406.1 | 300.6 | ||||||||||||||||||||||
|
Total goodwill and other intangible assets (1)
|
1,169.4 | 1,183.7 | 1,020.2 | 1,392.9 | ||||||||||||||||||||||
|
Goodwill and other intangible assets attributed to
noncontrolling interests (2)
|
(423.5) | (428.3) | (378.6) | (482.9) | ||||||||||||||||||||||
|
Goodwill and other intangible assets included in
White Mountains's common shareholders' equity
|
$ | 745.9 | $ | 755.4 | $ | 641.6 | $ | 910.0 | ||||||||||||||||||
(1) See Note 4 - "Goodwill and Other Intangible Assets."
(2) Amounts reflect the basic ownership percentage of the noncontrolling shareholders.
Summary of Consolidated Results
The following table presents White Mountains's consolidated financial results by industry for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| Millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| P&C Insurance and Reinsurance revenues | $ | 500.8 | $ | 589.5 | $ | 1,316.7 | $ | 1,450.6 | ||||||||||||||||||
| Asset Management revenues | (5.0) | 54.4 | 126.9 | 138.6 | ||||||||||||||||||||||
| Financial Guarantee revenues | (21.5) | 29.3 | 16.1 | 85.6 | ||||||||||||||||||||||
| Specialty Insurance Distribution revenues | 56.0 | 14.3 | 153.7 | 14.3 | ||||||||||||||||||||||
| Services, Industrial and Consumer revenues | 106.8 | 54.0 | 243.3 | 96.8 | ||||||||||||||||||||||
| P&C Insurance Distribution revenues | - | 71.4 | - | 195.3 | ||||||||||||||||||||||
| Other Operations revenues | 4.0 | 51.3 | 146.8 | 150.0 | ||||||||||||||||||||||
| Total revenues | 641.1 | 864.2 | 2,003.5 | 2,131.2 | ||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| P&C Insurance and Reinsurance expenses | 436.9 | 463.6 | 1,163.5 | 1,180.8 | ||||||||||||||||||||||
| Asset Management expenses | 10.3 | 10.8 | 33.5 | 30.9 | ||||||||||||||||||||||
| Financial Guarantee expenses | 6.3 | 7.3 | 22.7 | 21.9 | ||||||||||||||||||||||
| Specialty Insurance Distribution expenses | 68.7 | 17.0 | 194.5 | 17.0 | ||||||||||||||||||||||
| Services, Industrial and Consumer expenses | 105.4 | 55.2 | 240.3 | 100.1 | ||||||||||||||||||||||
| P&C Insurance Distribution expenses | - | 56.4 | - | 157.9 | ||||||||||||||||||||||
| Other Operations expenses | 36.7 | 75.1 | 141.7 | 194.9 | ||||||||||||||||||||||
| Total expenses | 664.3 | 685.4 | 1,796.2 | 1,703.5 | ||||||||||||||||||||||
| Pre-tax income (loss): | ||||||||||||||||||||||||||
| P&C Insurance and Reinsurance pre-tax income (loss) | 63.9 | 125.9 | 153.2 | 269.8 | ||||||||||||||||||||||
| Asset Management pre-tax income (loss) | (15.3) | 43.6 | 93.4 | 107.7 | ||||||||||||||||||||||
| Financial Guarantee pre-tax income (loss) | (27.8) | 22.0 | (6.6) | 63.7 | ||||||||||||||||||||||
| Specialty Insurance Distribution pre-tax income (loss) | (12.7) | (2.7) | (40.8) | (2.7) | ||||||||||||||||||||||
| Services, Industrial and Consumer pre-tax income (loss) | 1.4 | (1.2) | 3.0 | (3.3) | ||||||||||||||||||||||
| P&C Insurance Distribution pre-tax income (loss) | - | 15.0 | - | 37.4 | ||||||||||||||||||||||
| Other Operations pre-tax income (loss) | (32.7) | (23.8) | 5.1 | (44.9) | ||||||||||||||||||||||
| Total pre-tax income (loss) | (23.2) | 178.8 | 207.3 | 427.7 | ||||||||||||||||||||||
| Net income (loss): | ||||||||||||||||||||||||||
| Income tax (expense) benefit | (6.4) | (17.1) | (32.0) | (39.6) | ||||||||||||||||||||||
| Net income (loss) | (29.6) | 161.7 | 175.3 | 388.1 | ||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | (9.4) | (47.9) | (42.0) | (117.5) | ||||||||||||||||||||||
|
Net income (loss) attributable to White Mountains's common shareholders |
(39.0) | 113.8 | 133.3 | 270.6 | ||||||||||||||||||||||
| Comprehensive income (loss): | ||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | .1 | (.6) | .6 | 2.5 | ||||||||||||||||||||||
| Comprehensive income (loss) | (38.9) | 113.2 | 133.9 | 273.1 | ||||||||||||||||||||||
| Other comprehensive (income) loss attributable to noncontrolling interests | (.1) | .3 | (.1) | (.8) | ||||||||||||||||||||||
|
Comprehensive income (loss) attributable to White Mountains's common shareholders |
$ | (39.0) | $ | 113.5 | $ | 133.8 | $ | 272.3 | ||||||||||||||||||
I. SUMMARY OF OPERATIONS BY SEGMENT
As of September 30, 2026, White Mountains conducted its operations through five reportable segments: (1) Ark/WM Outrigger, (2) Kudu, (3) HG Global, (4) Distinguished and (5) WTM Partners, with its remaining operating businesses, holding companies and other assets included in Other Operations. White Mountains has made its segment determination based on consideration of the following criteria: (i) the nature of the business activities of each of the Company's subsidiaries and affiliates; (ii) the manner in which the Company's subsidiaries and affiliates are organized; (iii) the existence of primary managers responsible for specific subsidiaries and affiliates; and (iv) the organization of information provided to the Company's CODM and the Board of Directors. Significant intercompany transactions among White Mountains's segments have been eliminated herein. White Mountains's segment information is presented in Note 14 - "Segment Information" on page 43.
A discussion of White Mountains's consolidated investment operations is included after the discussion of operations by segment.
Ark/WM Outrigger
Ark is a specialty property and casualty insurance and reinsurance company that offers a wide range of niche insurance and reinsurance products, including property, specialty, marine & energy, casualty and accident & health. Ark underwrites select coverages through its two major subsidiaries in the United Kingdom and Bermuda.
Ark sponsored the formation of Outrigger Re Ltd., a Bermuda company registered as a special purpose insurer and segregated accounts company, to provide collateralized reinsurance protection on Ark's Bermuda global property catastrophe excess of loss portfolio. White Mountains consolidates its segregated account of Outrigger Re Ltd., WM Outrigger Re, in its financial statements. During the fourth quarter of 2025, Ark renewed Outrigger Re Ltd. for the 2026 underwriting year, but WM Outrigger Re did not participate.
The following tables present the components of pre-tax income (loss) included in the Ark/WM Outrigger segment for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Millions | Ark |
WM Outrigger Re |
Eliminations | Total | ||||||||||||||||||||||
| Direct written premiums | $ | 302.4 | $ | - | $ | - | $ | 302.4 | ||||||||||||||||||
| Assumed written premiums | 83.6 | (.8) | .8 | 83.6 | ||||||||||||||||||||||
| Gross written premiums | 386.0 | (.8) | .8 | 386.0 | ||||||||||||||||||||||
| Ceded written premiums | (48.1) | - | (.8) | (48.9) | ||||||||||||||||||||||
| Net written premiums | $ | 337.9 | $ | (.8) | $ | - | $ | 337.1 | ||||||||||||||||||
| Earned insurance premiums | $ | 509.6 | $ | (.8) | $ | - | $ | 508.8 | ||||||||||||||||||
| Net investment income | 27.2 | .6 | - | 27.8 | ||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | (40.3) | - | - | (40.3) | ||||||||||||||||||||||
| Other revenues | 4.5 | - | - | 4.5 | ||||||||||||||||||||||
| Total revenues | 501.0 | (.2) | - | 500.8 | ||||||||||||||||||||||
| Loss and LAE | 230.1 | - | - | 230.1 | ||||||||||||||||||||||
| Insurance acquisition expenses | 113.4 | (.3) | - | 113.1 | ||||||||||||||||||||||
| General and administrative expenses - other underwriting | 40.4 | - | - | 40.4 | ||||||||||||||||||||||
| General and administrative expenses - all other | 19.1 | - | - | 19.1 | ||||||||||||||||||||||
| Change in fair value of contingent consideration | 30.0 | - | - | 30.0 | ||||||||||||||||||||||
| Interest expense | 4.2 | - | - | 4.2 | ||||||||||||||||||||||
| Total expenses | 437.2 | (.3) | - | 436.9 | ||||||||||||||||||||||
| Pre-tax income (loss) | $ | 63.8 | $ | .1 | $ | - | $ | 63.9 | ||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Millions | Ark |
WM Outrigger Re |
Eliminations | Total | ||||||||||||||||||||||
| Direct written premiums | $ | 240.0 | $ | - | $ | - | $ | 240.0 | ||||||||||||||||||
| Assumed written premiums | 126.4 | 3.6 | (3.6) | 126.4 | ||||||||||||||||||||||
| Gross written premiums | 366.4 | 3.6 | (3.6) | 366.4 | ||||||||||||||||||||||
| Ceded written premiums | (83.0) | - | 3.6 | (79.4) | ||||||||||||||||||||||
| Net written premiums | $ | 283.4 | $ | 3.6 | $ | - | $ | 287.0 | ||||||||||||||||||
| Earned insurance premiums | $ | 498.6 | $ | 43.6 | $ | - | $ | 542.2 | ||||||||||||||||||
| Net investment income | 24.8 | 2.4 | - | 27.2 | ||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | 17.8 | - | - | 17.8 | ||||||||||||||||||||||
| Other revenues | 2.3 | - | - | 2.3 | ||||||||||||||||||||||
| Total revenues | 543.5 | 46.0 | - | 589.5 | ||||||||||||||||||||||
| Loss and LAE | 252.4 | 2.2 | - | 254.6 | ||||||||||||||||||||||
| Insurance acquisition expenses | 92.4 | 14.4 | - | 106.8 | ||||||||||||||||||||||
| General and administrative expenses - other underwriting | 33.6 | - | - | 33.6 | ||||||||||||||||||||||
| General and administrative expenses - all other | 28.1 | - | - | 28.1 | ||||||||||||||||||||||
| Change in fair value of contingent consideration | 36.1 | - | - | 36.1 | ||||||||||||||||||||||
| Interest expense | 4.4 | - | - | 4.4 | ||||||||||||||||||||||
| Total expenses | 447.0 | 16.6 | - | 463.6 | ||||||||||||||||||||||
| Pre-tax income (loss) | $ | 96.5 | $ | 29.4 | $ | - | $ | 125.9 | ||||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Millions | Ark |
WM Outrigger Re |
Eliminations | Total | ||||||||||||||||||||||
| Direct written premiums | $ | 1,033.3 | $ | - | $ | - | $ | 1,033.3 | ||||||||||||||||||
| Assumed written premiums | 1,221.1 | (1.2) | 1.2 | 1,221.1 | ||||||||||||||||||||||
| Gross written premiums | 2,254.4 | (1.2) | 1.2 | 2,254.4 | ||||||||||||||||||||||
| Ceded written premiums | (788.6) | - | (1.2) | (789.8) | ||||||||||||||||||||||
| Net written premiums | $ | 1,465.8 | $ | (1.2) | $ | - | $ | 1,464.6 | ||||||||||||||||||
| Earned insurance premiums | $ | 1,256.1 | $ | 2.7 | $ | - | $ | 1,258.8 | ||||||||||||||||||
| Net investment income | 81.5 | 3.0 | - | 84.5 | ||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | (42.6) | (.1) | - | (42.7) | ||||||||||||||||||||||
| Other revenues | 16.1 | - | - | 16.1 | ||||||||||||||||||||||
| Total revenues | 1,311.1 | 5.6 | - | 1,316.7 | ||||||||||||||||||||||
| Loss and LAE | 612.2 | .2 | - | 612.4 | ||||||||||||||||||||||
| Insurance acquisition expenses | 314.7 | .9 | - | 315.6 | ||||||||||||||||||||||
| General and administrative expenses - other underwriting | 111.6 | - | - | 111.6 | ||||||||||||||||||||||
| General and administrative expenses - all other | 39.8 | - | - | 39.8 | ||||||||||||||||||||||
| Change in fair value of contingent consideration | 71.7 | - | - | 71.7 | ||||||||||||||||||||||
| Interest expense | 12.4 | - | - | 12.4 | ||||||||||||||||||||||
| Total expenses | 1,162.4 | 1.1 | - | 1,163.5 | ||||||||||||||||||||||
| Pre-tax income (loss) | $ | 148.7 | $ | 4.5 | $ | - | $ | 153.2 | ||||||||||||||||||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Millions | Ark |
WM Outrigger Re |
Eliminations | Total | ||||||||||||||||||||||
| Direct written premiums | $ | 1,013.4 | $ | - | $ | - | $ | 1,013.4 | ||||||||||||||||||
| Assumed written premiums | 1,275.8 | 83.7 | (83.7) | 1,275.8 | ||||||||||||||||||||||
| Gross written premiums | 2,289.2 | 83.7 | (83.7) | 2,289.2 | ||||||||||||||||||||||
| Ceded written premiums | (779.6) | - | 83.7 | (695.9) | ||||||||||||||||||||||
| Net written premiums | $ | 1,509.6 | $ | 83.7 | $ | - | $ | 1,593.3 | ||||||||||||||||||
| Earned insurance premiums | $ | 1,201.7 | $ | 62.7 | $ | - | $ | 1,264.4 | ||||||||||||||||||
| Net investment income | 70.2 | 6.8 | - | 77.0 | ||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | 98.5 | (.1) | - | 98.4 | ||||||||||||||||||||||
| Other revenues | 10.8 | - | - | 10.8 | ||||||||||||||||||||||
| Total revenues | 1,381.2 | 69.4 | - | 1,450.6 | ||||||||||||||||||||||
| Loss and LAE | 628.0 | 24.1 | - | 652.1 | ||||||||||||||||||||||
| Insurance acquisition expenses | 272.0 | 15.5 | - | 287.5 | ||||||||||||||||||||||
| General and administrative expenses - other underwriting | 108.4 | - | - | 108.4 | ||||||||||||||||||||||
| General and administrative expenses - all other | 45.6 | .1 | - | 45.7 | ||||||||||||||||||||||
| Change in fair value of contingent consideration | 74.2 | - | - | 74.2 | ||||||||||||||||||||||
| Interest expense | 12.9 | - | - | 12.9 | ||||||||||||||||||||||
| Total expenses | 1,141.1 | 39.7 | - | 1,180.8 | ||||||||||||||||||||||
| Pre-tax income (loss) | $ | 240.1 | $ | 29.7 | $ | - | $ | 269.8 | ||||||||||||||||||
Ark/WM Outrigger Results-Three Months Ended September 30, 2026 versus Three Months Ended September 30, 2025
The Ark/WM Outrigger segment's combined ratio was 75% and 73% in the third quarter of 2026 and 2025. The Ark/WM Outrigger segment reported gross written premiums of $386 million, net written premiums of $337 million and net earned premiums of $509 million in the third quarter of 2026 compared to gross written premiums of $366 million, net written premiums of $287 million and net earned premiums of $542 million in the third quarter of 2025. The Ark/WM Outrigger segment reported pre-tax income of $64 million in the third quarter of 2026 compared to $126 million in the third quarter of 2025.
Ark's combined ratio was 75% and 76% in the third quarter of 2026 and 2025. Ark's combined ratio in the third quarter of 2026 included two points of catastrophe losses, driven primarily by losses related to the war in Iran, compared to minimal catastrophe losses in the third quarter of 2025. Ark's combined ratio in the third quarter of 2026 included four points of net favorable prior year loss reserve development, driven primarily by the specialty and property lines of business. This compares to zero points of net favorable prior year loss reserve development in the third quarter of 2025, driven primarily by four points of favorable development in the property and specialty lines of business, offset by four points of unfavorable development related to aviation losses from the conflict in Ukraine and Russia.
Ark has ongoing exposure to the war in Iran, primarily through the specialty and marine & energy lines of business. In the third quarter of 2026, Ark recorded estimated losses of $10 million (net of reinsurance and reinstatement premiums) related to the war.
Ark reported gross written premiums of $386 million, net written premiums of $338 million and net earned premiums of $510 million in the third quarter of 2026 compared to gross written premiums of $366 million, net written premiums of $283 million and net earned premiums of $499 million in the third quarter of 2025. The increase in gross written premiums in the third quarter of 2026 was driven primarily by a change in the timing of recognition of certain delegated authority business as well as growth in the specialty and accident & health lines of business, partially offset by reduced writings in property as a result of softening market conditions. The timing of recognition of certain delegated authority business had no impact on the timing of recognition of Ark's earned premiums.
Ark reported pre-tax income of $64 million in the third quarter of 2026 compared to $97 million in the third quarter of 2025. Ark's results included net realized and unrealized investment gains (losses) of $(40) million in the third quarter of 2026, driven primarily by net unrealized investment losses from fixed maturity investments due to higher interest rates, compared to $18 million in the third quarter of 2025, driven primarily by net realized and unrealized investment gains from common equity securities and fixed maturity investments. Ark's results also included a $30 million expense related to the increase in fair value of White Mountains's contingent consideration liability in the third quarter of 2026 compared to $36 million in the third quarter of 2025.
WM Outrigger Re's combined ratio was 38% in both the third quarter of 2026 and 2025. Catastrophe losses were minimal in both periods. WM Outrigger Re reported gross written premiums of $(1) million and net earned premiums of $(1) million in the third quarter of 2026 compared to gross written premiums of $4 million and net earned premiums of $44 million in the third quarter of 2025. WM Outrigger Re reported pre-tax income of $0 million in the third quarter of 2026 compared to $29 million in the third quarter of 2025. WM Outrigger Re did not participate in the renewal of Outrigger Re Ltd. for the 2026 underwriting year.
The following tables present the Ark/WM Outrigger segment's insurance premiums, insurance expenses and insurance ratios for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| $ in Millions | Ark | WM Outrigger Re | Eliminations | Total | ||||||||||||||||||||||
| Insurance premiums: | ||||||||||||||||||||||||||
| Gross written premiums | $ | 386.0 | $ | (.8) | $ | .8 | $ | 386.0 | ||||||||||||||||||
| Net written premiums | $ | 337.9 | $ | (.8) | $ | - | $ | 337.1 | ||||||||||||||||||
| Net earned premiums | $ | 509.6 | $ | (.8) | $ | - | $ | 508.8 | ||||||||||||||||||
| Insurance expenses: | ||||||||||||||||||||||||||
| Loss and LAE | $ | 230.1 | $ | - | $ | - | $ | 230.1 | ||||||||||||||||||
| Insurance acquisition expenses | 113.4 | (.3) | - | 113.1 | ||||||||||||||||||||||
|
Other underwriting expenses (1)
|
40.4 | - | - | 40.4 | ||||||||||||||||||||||
| Total insurance expenses | $ | 383.9 | $ | (.3) | $ | - | $ | 383.6 | ||||||||||||||||||
| Insurance ratios: | ||||||||||||||||||||||||||
| Loss and LAE | 45.2 | % | - | % | - | % | 45.2 | % | ||||||||||||||||||
| Insurance acquisition expenses | 22.3 | 37.5 | - | 22.2 | ||||||||||||||||||||||
| Other underwriting expense | 7.8 | - | - | 8.0 | ||||||||||||||||||||||
| Combined Ratio | 75.3 | % | 37.5 | % | - | % | 75.4 | % | ||||||||||||||||||
(1) Included within general and administrative expenses in the consolidated statement of operations.
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| $ in Millions | Ark | WM Outrigger Re | Eliminations | Total | ||||||||||||||||||||||
| Insurance premiums: | ||||||||||||||||||||||||||
| Gross written premiums | $ | 366.4 | $ | 3.6 | $ | (3.6) | $ | 366.4 | ||||||||||||||||||
| Net written premiums | $ | 283.4 | $ | 3.6 | $ | - | $ | 287.0 | ||||||||||||||||||
| Net earned premiums | $ | 498.6 | $ | 43.6 | $ | - | $ | 542.2 | ||||||||||||||||||
| Insurance expenses: | ||||||||||||||||||||||||||
| Loss and LAE | $ | 252.4 | $ | 2.2 | $ | - | $ | 254.6 | ||||||||||||||||||
| Insurance acquisition expenses | 92.4 | 14.4 | - | 106.8 | ||||||||||||||||||||||
|
Other underwriting expenses (1)
|
33.6 | - | - | 33.6 | ||||||||||||||||||||||
| Total insurance expenses | $ | 378.4 | $ | 16.6 | $ | - | $ | 395.0 | ||||||||||||||||||
| Insurance ratios: | ||||||||||||||||||||||||||
| Loss and LAE | 50.6 | % | 5.0 | % | - | % | 47.0 | % | ||||||||||||||||||
| Insurance acquisition expenses | 18.5 | 33.1 | - | 19.7 | ||||||||||||||||||||||
| Other underwriting expense | 6.7 | - | - | 6.2 | ||||||||||||||||||||||
| Combined Ratio | 75.8 | % | 38.1 | % | - | % | 72.9 | % | ||||||||||||||||||
(1) Included within general and administrative expenses in the consolidated statement of operations.
The following table presents WM Outrigger Re's insurance premiums, combined ratio and pre-tax income by underwriting year for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| $ in Millions |
2025 Underwriting Year |
2025 Underwriting Year |
2024 Underwriting Year |
Total | ||||||||||||||||||||||
| Insurance premiums: | ||||||||||||||||||||||||||
| Gross written premiums | $ | (.8) | $ | 4.9 | $ | (1.3) | $ | 3.6 | ||||||||||||||||||
| Net written premiums | $ | (.8) | $ | 4.9 | $ | (1.3) | $ | 3.6 | ||||||||||||||||||
| Net earned premiums | $ | (.8) | $ | 44.9 | $ | (1.3) | $ | 43.6 | ||||||||||||||||||
| Combined Ratio | 37.5 | % | 40.2 | % | 98.8 | % | 38.1 | % | ||||||||||||||||||
| Pre-tax income | $ | .1 | $ | 29.4 | $ | - | $ | 29.4 | ||||||||||||||||||
Gross Written Premiums
Gross written premiums increased 5% to $386 million in the third quarter of 2026 compared to $366 million in the third quarter of 2025, with risk adjusted rate change of -7%. The increase in gross written premiums in the third quarter of 2026 was driven primarily by a change in the timing of recognition of certain delegated authority business as well as growth in the specialty and accident & health lines of business, partially offset by reduced writings in property as a result of softening market conditions.
The following table presents the Ark/WM Outrigger segment's gross written premiums by line of business for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||
| Millions | 2026 | 2025 | ||||||||||||
| Property | $ | 120.4 | $ | 150.4 | ||||||||||
| Specialty | 111.1 | 78.9 | ||||||||||||
| Casualty | 59.4 | 53.2 | ||||||||||||
| Marine & Energy | 57.9 | 67.6 | ||||||||||||
| Accident & Health | 37.2 | 16.3 | ||||||||||||
| Total Gross Written Premiums | $ | 386.0 | $ | 366.4 | ||||||||||
Ark/WM Outrigger Results-Nine Months Ended September 30, 2026 versus Nine Months Ended September 30, 2025
The Ark/WM Outrigger segment's combined ratio was 83% in both the first nine months of 2026 and 2025. The Ark/WM Outrigger segment reported gross written premiums of $2,254 million, net written premiums of $1,465 million and net earned premiums of $1,259 million in the first nine months of 2026 compared to gross written premiums of $2,289 million, net written premiums of $1,593 million and net earned premiums of $1,264 million in the first nine months of 2025. The Ark/WM Outrigger segment reported pre-tax income of $153 million in the first nine months of 2026 compared to $270 million in the first nine months of 2025.
Ark's combined ratio was 83% in the first nine months of 2026 compared to 84% in the first nine months of 2025. Ark's combined ratio in the first nine months of 2026 included four points of catastrophe losses, driven primarily by losses related to the war in Iran, compared to seven points of catastrophe losses in the first nine months of 2025, driven primarily by losses related to the California wildfires. Ark's combined ratio in the first nine months of 2026 included five points of net favorable prior year loss reserve development, driven primarily by the property and specialty lines of business. This compares to five points of net favorable prior year loss reserve development in the first nine months of 2025, driven primarily by nine points of favorable development in the property and specialty lines of business, partially offset by four points of unfavorable development related to aviation losses from the conflict in Ukraine and Russia.
Ark has ongoing exposure to the war in Iran, primarily through the specialty and marine & energy lines of business. In the first nine months of 2026, Ark recorded estimated losses of $52 million (net of reinsurance and reinstatement premiums) related to the war.
Ark reported gross written premiums of $2,254 million, net written premiums of $1,466 million and net earned premiums of $1,256 million in the first nine months of 2026 compared to gross written premiums of $2,289 million, net written premiums of $1,510 million and net earned premiums of $1,202 million in the first nine months of 2025. The decrease in gross written premiums in the first nine months of 2026 was driven primarily by reduced writings in property as a result of the softening market conditions, partially offset by growth in the specialty, casualty and accident & health lines of business.
Ark reported pre-tax income of $149 million in the first nine months of 2026 compared to $240 million in the first nine months of 2025. Ark's results included net realized and unrealized investment gains (losses) of $(43) million in the first nine months of 2026, driven primarily by net unrealized investment losses from fixed maturity investments and foreign currency, compared to $99 million in the first nine months of 2025, driven primarily by net unrealized investment gains from other long-term investments, common equity securities and foreign currency. Ark's results also included a $72 million expense related to the increase in fair value of White Mountains's contingent consideration liability in the first nine months of 2026 compared to $74 million in the first nine months of 2025.
WM Outrigger Re's combined ratio was 41% in the first nine months of 2026 compared to 63% in the first nine months of 2025. Catastrophe losses were minimal in the first nine months of 2026. Catastrophe losses in the first nine months of 2025 included $19 million of losses related to the California wildfires (net of reinstatement premiums). WM Outrigger Re reported gross written premiums of $(1) million and net earned premiums of $3 million in the first nine months of 2026 compared to gross written premiums of $84 million and net earned premiums of $63 million in the first nine months of 2025. WM Outrigger Re reported pre-tax income of $5 million in the first nine months of 2026, compared to $30 million in the first nine months of 2025. WM Outrigger Re did not participate in the renewal of Outrigger Re Ltd. for the 2026 underwriting year.
The following tables present the Ark/WM Outrigger segment's insurance premiums, insurance expenses and insurance ratios for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| $ in Millions | Ark | WM Outrigger Re | Eliminations | Total | ||||||||||||||||||||||
| Insurance premiums: | ||||||||||||||||||||||||||
| Gross written premiums | $ | 2,254.4 | $ | (1.2) | $ | 1.2 | $ | 2,254.4 | ||||||||||||||||||
| Net written premiums | $ | 1,465.8 | $ | (1.2) | $ | - | $ | 1,464.6 | ||||||||||||||||||
| Net earned premiums | $ | 1,256.1 | $ | 2.7 | $ | - | $ | 1,258.8 | ||||||||||||||||||
| Insurance expenses: | ||||||||||||||||||||||||||
| Loss and LAE | $ | 612.2 | $ | .2 | $ | - | $ | 612.4 | ||||||||||||||||||
| Insurance acquisition expenses | 314.7 | .9 | - | 315.6 | ||||||||||||||||||||||
|
Other underwriting expenses (1)
|
111.6 | - | - | 111.6 | ||||||||||||||||||||||
| Total insurance expenses | $ | 1,038.5 | $ | 1.1 | $ | - | $ | 1,039.6 | ||||||||||||||||||
| Insurance ratios: | ||||||||||||||||||||||||||
| Loss and LAE | 48.7 | % | 7.4 | % | - | % | 48.6 | % | ||||||||||||||||||
| Insurance acquisition expenses | 25.1 | 33.3 | - | 25.1 | ||||||||||||||||||||||
| Other underwriting expense | 8.9 | - | - | 8.9 | ||||||||||||||||||||||
| Combined Ratio | 82.7 | % | 40.7 | % | - | % | 82.6 | % | ||||||||||||||||||
(1) Included within general and administrative expenses in the consolidated statement of operations.
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| $ in Millions | Ark | WM Outrigger Re | Eliminations | Total | ||||||||||||||||||||||
| Insurance premiums: | ||||||||||||||||||||||||||
| Gross written premiums | $ | 2,289.2 | $ | 83.7 | $ | (83.7) | $ | 2,289.2 | ||||||||||||||||||
| Net written premiums | $ | 1,509.6 | $ | 83.7 | $ | - | $ | 1,593.3 | ||||||||||||||||||
| Net earned premiums | $ | 1,201.7 | $ | 62.7 | $ | - | $ | 1,264.4 | ||||||||||||||||||
| Insurance expenses: | ||||||||||||||||||||||||||
| Loss and LAE | $ | 628.0 | $ | 24.1 | $ | - | $ | 652.1 | ||||||||||||||||||
| Insurance acquisition expenses | 272.0 | 15.5 | - | 287.5 | ||||||||||||||||||||||
|
Other underwriting expenses (1)
|
108.4 | - | - | 108.4 | ||||||||||||||||||||||
| Total insurance expenses | $ | 1,008.4 | $ | 39.6 | $ | - | $ | 1,048.0 | ||||||||||||||||||
| Insurance ratios: | ||||||||||||||||||||||||||
| Loss and LAE | 52.3 | % | 38.4 | % | - | % | 51.6 | % | ||||||||||||||||||
| Insurance acquisition expenses | 22.6 | 24.8 | - | 22.7 | ||||||||||||||||||||||
| Other underwriting expense | 9.0 | - | - | 8.6 | ||||||||||||||||||||||
| Combined Ratio | 83.9 | % | 63.2 | % | - | % | 82.9 | % | ||||||||||||||||||
(1) Included within general and administrative expenses in the consolidated statement of operations.
The following table presents WM Outrigger Re's insurance premiums, combined ratio and pre-tax income by underwriting year for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| $ in Millions | 2025 Underwriting Year | 2025 Underwriting Year | 2024 Underwriting Year | Total | ||||||||||||||||||||||
| Insurance premiums: | ||||||||||||||||||||||||||
| Gross written premiums | $ | (1.2) | $ | 82.5 | $ | 1.2 | $ | 83.7 | ||||||||||||||||||
| Net written premiums | $ | (1.2) | $ | 82.5 | $ | 1.2 | $ | 83.7 | ||||||||||||||||||
| Net earned premiums | $ | 2.7 | $ | 57.1 | $ | 5.6 | $ | 62.7 | ||||||||||||||||||
| Combined Ratio | 40.7 | % | 42.3 | % | 279.2 | % | 63.2 | % | ||||||||||||||||||
| Pre-tax income | $ | 4.5 | $ | 39.7 | $ | (10.0) | $ | 29.7 | ||||||||||||||||||
White Mountains's capital commitments to WM Outrigger Re were $0 for the 2026 underwriting year, $150 million for the 2025 underwriting year, $130 million for the 2024 underwriting year and $205 million for the 2023 underwriting year. Ark renewed Outrigger Re Ltd. for the 2026 underwriting year with $70 million of unaffiliated third-party capital. Ark's increased use of traditional quota share reinsurance for 2026 reduced the need for capacity from Outrigger Re Ltd.
Through September 30, 2026, WM Outrigger Re has generated pre-tax income of $59 million from the 2025 underwriting year, $29 million from the 2024 underwriting year and $76 million from the 2023 underwriting year.
In the first nine months of 2026, White Mountains received $222 million of distributions from WM Outrigger Re, primarily a return of accumulated profits as well as capital related to its non-renewal for the 2026 underwriting year. As of September 30, 2026, investments of $48 million were held in the collateral trust account to fund WM Outrigger Re's remaining obligations under the reinsurance agreements with GAIL for the 2024 and 2025 underwriting years. WM Outrigger Re has loss and LAE reserves outstanding of $25 million as of September 30, 2026.
Gross Written Premiums
Ark's gross written premiums decreased 2% to $2,254 million in the first nine months of 2026 compared to $2,289 million in the first nine months of 2025, with risk adjusted rate change of -8%. The decrease in gross written premiums in the first nine months of 2026 was driven primarily by reduced writings in property as a result of the softening market conditions, partially offset by growth in the specialty, casualty and accident & health lines of business.
The following table presents the Ark/WM Outrigger segment's gross written premiums by line of business for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||
| Millions | 2026 | 2025 | ||||||||||||
| Property | $ | 978.9 | $ | 1,092.2 | ||||||||||
| Specialty | 583.8 | 530.5 | ||||||||||||
| Marine & Energy | 401.1 | 424.3 | ||||||||||||
| Casualty | 159.5 | 137.6 | ||||||||||||
| Accident & Health | 131.1 | 104.6 | ||||||||||||
| Total Gross Written Premium | $ | 2,254.4 | $ | 2,289.2 | ||||||||||
Ark's Book Value and Tangible Book Value
Ark reported book value of $1,673 million as of September 30, 2026, an increase of 4% in the third quarter of 2026 and 8% in the first nine months of 2026, including dividends. Ark reported tangible book value of $1,825 million as of September 30, 2026, an increase of 5% in the third quarter of 2026 and 12% in the first nine months of 2026, including dividends. Ark's book value includes goodwill and other intangible assets, net of tax, and White Mountains's contingent consideration liability, which are excluded from Ark's tangible book value. See "NON-GAAP FINANCIAL MEASURES" on page 85.
Ark/WM Outrigger Balance Sheets
The following tables present amounts from Ark and WM Outrigger Re that are contained within White Mountains's consolidated balance sheets as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | ||||||||||||||||||||||||||
| Millions | Ark | WM Outrigger Re | Eliminations and Segment Adjustments | Total | ||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Fixed maturity investments, at fair value | $ | 1,971.4 | $ | - | $ | - | $ | 1,971.4 | ||||||||||||||||||
| Common equity securities, at fair value | 345.0 | - | - | 345.0 | ||||||||||||||||||||||
| Short-term investments, at fair value | 585.1 | 48.0 | - | 633.1 | ||||||||||||||||||||||
| Other long-term investments | 868.0 | - | - | 868.0 | ||||||||||||||||||||||
| Total investments | 3,769.5 | 48.0 | - | 3,817.5 | ||||||||||||||||||||||
| Cash | 129.7 | - | - | 129.7 | ||||||||||||||||||||||
| Reinsurance recoverables | 1,101.1 | - | (25.0) | 1,076.1 | ||||||||||||||||||||||
| Insurance premiums receivable | 1,222.1 | - | - | 1,222.1 | ||||||||||||||||||||||
| Deferred acquisition costs | 264.8 | - | - | 264.8 | ||||||||||||||||||||||
| Goodwill and other intangible assets | 292.5 | - | - | 292.5 | ||||||||||||||||||||||
| Other assets | 344.6 | - | - | 344.6 | ||||||||||||||||||||||
| Total assets | $ | 7,124.3 | $ | 48.0 | $ | (25.0) | $ | 7,147.3 | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
|
Loss and LAE
|
$ | 2,747.4 | $ | 25.0 | $ | (25.0) | $ | 2,747.4 | ||||||||||||||||||
| Unearned insurance premiums | 1,427.4 | - | - | 1,427.4 | ||||||||||||||||||||||
| Debt | 159.0 | - | - | 159.0 | ||||||||||||||||||||||
| Reinsurance payable | 483.7 | - | 8.6 | 492.3 | ||||||||||||||||||||||
| Contingent consideration | 400.0 | - | - | 400.0 | ||||||||||||||||||||||
| Other liabilities | 233.6 | 8.7 | (8.6) | 233.7 | ||||||||||||||||||||||
| Total liabilities | 5,451.1 | 33.7 | (25.0) | 5,459.8 | ||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||
| White Mountains's common shareholders' equity | 1,183.3 | 14.3 | - | 1,197.6 | ||||||||||||||||||||||
| Noncontrolling interests | 489.9 | - | - | 489.9 | ||||||||||||||||||||||
| Total equity | 1,673.2 | 14.3 | - | 1,687.5 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 7,124.3 | $ | 48.0 | $ | (25.0) | $ | 7,147.3 | ||||||||||||||||||
| Tangible book value and tangible capital: | ||||||||||||||||||||||||||
| Total equity | $ | 1,673.2 | $ | 14.3 | $ | - | $ | 1,687.5 | ||||||||||||||||||
|
Less: goodwill and other intangible assets, net (1)
|
(248.6) | - | - | (248.6) | ||||||||||||||||||||||
|
Plus: contingent consideration
|
400.0 | - | - | 400.0 | ||||||||||||||||||||||
|
Total tangible book value (2)
|
1,824.6 | 14.3 | - | 1,838.9 | ||||||||||||||||||||||
|
Plus: debt
|
159.0 | - | - | 159.0 | ||||||||||||||||||||||
|
Total tangible capital (2)
|
$ | 1,983.6 | $ | 14.3 | $ | - | $ | 1,997.9 | ||||||||||||||||||
(1) Amount is net of $43.9 in deferred tax liabilities related to the other intangible assets.
(2) See "NON-GAAP FINANCIAL MEASURES" on page 85.
| December 31, 2025 | ||||||||||||||||||||||||||
| Millions | Ark | WM Outrigger Re | Eliminations and Segment Adjustments | Total | ||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Fixed maturity investments, at fair value | $ | 1,917.9 | $ | - | $ | - | $ | 1,917.9 | ||||||||||||||||||
| Common equity securities, at fair value | 452.3 | - | - | 452.3 | ||||||||||||||||||||||
| Short-term investments, at fair value | 620.9 | 245.7 | - | 866.6 | ||||||||||||||||||||||
| Other long-term investments | 689.7 | - | - | 689.7 | ||||||||||||||||||||||
| Total investments | 3,680.8 | 245.7 | - | 3,926.5 | ||||||||||||||||||||||
| Cash | 104.7 | .1 | - | 104.8 | ||||||||||||||||||||||
| Reinsurance recoverables | 874.7 | - | (38.6) | 836.1 | ||||||||||||||||||||||
| Insurance premiums receivable | 848.4 | 23.9 | (23.9) | 848.4 | ||||||||||||||||||||||
| Deferred acquisition costs | 210.4 | .7 | - | 211.1 | ||||||||||||||||||||||
| Goodwill and other intangible assets | 292.5 | - | - | 292.5 | ||||||||||||||||||||||
| Other assets | 134.7 | - | - | 134.7 | ||||||||||||||||||||||
| Total assets | $ | 6,146.2 | $ | 270.4 | $ | (62.5) | $ | 6,354.1 | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
|
Loss and LAE
|
$ | 2,481.0 | $ | 34.7 | $ | (34.7) | $ | 2,481.0 | ||||||||||||||||||
| Unearned insurance premiums | 1,026.1 | 3.9 | (3.9) | 1,026.1 | ||||||||||||||||||||||
| Debt | 159.7 | - | - | 159.7 | ||||||||||||||||||||||
| Reinsurance payable | 310.1 | - | (23.9) | 286.2 | ||||||||||||||||||||||
| Contingent consideration | 328.3 | - | - | 328.3 | ||||||||||||||||||||||
| Other liabilities | 247.1 | .1 | - | 247.2 | ||||||||||||||||||||||
| Total liabilities | 4,552.3 | 38.7 | (62.5) | 4,528.5 | ||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||
| White Mountains's common shareholders' equity | 1,128.7 | 231.7 | - | 1,360.4 | ||||||||||||||||||||||
| Noncontrolling interests | 465.2 | - | - | 465.2 | ||||||||||||||||||||||
| Total equity | 1,593.9 | 231.7 | - | 1,825.6 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 6,146.2 | $ | 270.4 | $ | (62.5) | $ | 6,354.1 | ||||||||||||||||||
| Tangible book value and tangible capital: | ||||||||||||||||||||||||||
| Total equity | $ | 1,593.9 | $ | 231.7 | $ | - | $ | 1,825.6 | ||||||||||||||||||
|
Less: goodwill and other intangible assets, net (1)
|
(248.6) | - | - | (248.6) | ||||||||||||||||||||||
|
Plus: contingent consideration
|
328.3 | - | - | 328.3 | ||||||||||||||||||||||
|
Total tangible book value (2)
|
1,673.6 | 231.7 | - | 1,905.3 | ||||||||||||||||||||||
|
Plus: debt
|
159.7 | - | - | 159.7 | ||||||||||||||||||||||
|
Total tangible capital (2)
|
$ | 1,833.3 | $ | 231.7 | $ | - | $ | 2,065.0 | ||||||||||||||||||
(1) Amount is net of $43.9 in deferred tax liabilities related to the other intangible assets.
(2) See "NON-GAAP FINANCIAL MEASURES" on page 85.
Kudu
Kudu provides capital solutions for boutique asset and wealth managers for a variety of purposes including generational ownership transfers, management buyouts, acquisition and growth finance and legacy partner liquidity. Kudu also provides strategic advice to managers from time to time.
Kudu deployed a total of $36 million, including transaction costs, into two new asset management firms in 2026. As of September 30, 2026, Kudu had deployed a total of $1.2 billion, including transaction costs, into 32 asset and wealth management firms globally, including three that have been exited. As of September 30, 2026, the asset and wealth management firms have combined assets under management of approximately $166 billion, spanning a range of asset classes, including real estate, real assets, wealth management, hedge funds, private equity and alternative credit strategies. Since inception, Kudu's capital was deployed at an initial average gross cash yield at inception of approximately 9.3% based on expected cash flows in the first year following deployment.
The following table presents the components of GAAP net income (loss), EBITDA and adjusted EBITDA included in the Kudu segment for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| Millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
|
Net investment income (1)
|
$ | 20.7 | $ | 18.0 | $ | 60.5 | $ | 56.7 | ||||||||||||||||||
| Net realized and unrealized investment gains (losses) | (25.7) | 36.1 | 66.0 | 80.9 | ||||||||||||||||||||||
| Other revenues | - | .3 | .4 | 1.0 | ||||||||||||||||||||||
| Total revenues | (5.0) | 54.4 | 126.9 | 138.6 | ||||||||||||||||||||||
| General and administrative expenses | 2.9 | 4.7 | 11.8 | 12.3 | ||||||||||||||||||||||
| Interest expense | 7.4 | 6.1 | 21.7 | 18.6 | ||||||||||||||||||||||
| Total expenses | 10.3 | 10.8 | 33.5 | 30.9 | ||||||||||||||||||||||
| GAAP pre-tax income (loss) | (15.3) | 43.6 | 93.4 | 107.7 | ||||||||||||||||||||||
| Income tax (expense) benefit | (6.1) | (1.9) | (34.9) | (12.5) | ||||||||||||||||||||||
| GAAP net income (loss) | (21.4) | 41.7 | 58.5 | 95.2 | ||||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||
| Interest expense | 7.4 | 6.1 | 21.7 | 18.6 | ||||||||||||||||||||||
| Income tax expense (benefit) | 6.1 | 1.9 | 34.9 | 12.5 | ||||||||||||||||||||||
| Depreciation | - | .1 | .1 | .1 | ||||||||||||||||||||||
| Amortization of other intangible assets | - | - | .1 | .2 | ||||||||||||||||||||||
|
EBITDA (2)
|
(7.9) | 49.8 | 115.3 | 126.6 | ||||||||||||||||||||||
| Exclude: | ||||||||||||||||||||||||||
| Net realized and unrealized investment (gains) losses | 25.7 | (36.1) | (66.0) | (80.9) | ||||||||||||||||||||||
| Transaction expenses | - | 1.0 | 1.1 | 1.0 | ||||||||||||||||||||||
|
Adjusted EBITDA (2)
|
$ | 17.8 | $ | 14.7 | $ | 50.4 | $ | 46.7 | ||||||||||||||||||
(1) Net investment income includes revenues from Participation Contracts and income from short-term and other long-term investments.
(2) See "NON-GAAP FINANCIAL MEASURES" on page 85.
The following table presents the changes to the fair value of Kudu's Participation Contracts for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| Millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
|
Beginning balance of Kudu's Participation Contracts (1)
|
$ | 1,344.6 | $ | 1,121.1 | $ | 1,285.0 | $ | 1,008.4 | ||||||||||||||||||
|
Contributions to Participation Contracts (2) (3)
|
.2 | 51.1 | 43.5 | 119.3 | ||||||||||||||||||||||
|
Proceeds from Participation Contracts sold (3)
|
- | - | (75.1) | - | ||||||||||||||||||||||
|
Net realized and unrealized investment gains (losses) on
Participation Contracts sold and pending sale (4)
|
1.3 | .8 | 27.8 | 9.9 | ||||||||||||||||||||||
|
Net unrealized investment gains (losses) on Participation
Contracts - all other (5)
|
(27.0) | 35.2 | 37.9 | 70.6 | ||||||||||||||||||||||
|
Ending balance of Kudu's Participation Contracts (6)
|
$ | 1,319.1 | $ | 1,208.2 | $ | 1,319.1 | $ | 1,208.2 | ||||||||||||||||||
(1) As of June 30, 2025, December 31, 2025 and 2024, Kudu's other long-term investments also include $6.1, $6.4 and $5.6 related to a private debt instrument.
(2) Includes contributions to new and existing Participation Contracts.
(3) Includes $3.5 of non-cash contributions to (proceeds from) Participation Contracts for the nine months ended September 30, 2026.
(4) Includes net realized and unrealized investment gains (losses) recognized from Participation Contracts beginning in the quarter a contract is classified as pending sale.
(5) Includes net unrealized investment gains (losses) recognized from (i) ongoing Participation Contracts and (ii) Participation Contracts prior to classification as pending sale.
(6) As of September 30, 2025, Kudu's other long-term investments also include $6.2 related to a private debt instrument.
Kudu Results-Three Months Ended September 30, 2026 versus Three Months Ended September 30, 2025
Kudu reported total revenues of $(5) million, pre-tax loss of $15 million and adjusted EBITDA of $18 million in the third quarter of 2026 compared to total revenues of $54 million, pre-tax income of $44 million and adjusted EBITDA of $15 million in the third quarter of 2025. Total revenues, pre-tax income (loss) and adjusted EBITDA included $21 million of net investment income in the third quarter of 2026 compared to $18 million in the third quarter of 2025. Total revenues and pre-tax income (loss) also included $(26) million of net realized and unrealized investment gains (losses) in the third quarter of 2026 compared to $36 million in the third quarter of 2025. Net realized and unrealized investment losses in the third quarter of 2026 were driven by a decrease in the fair value of Kudu's Participation Contracts, primarily due to the impact of higher interest rates on discount rates across the portfolio, partially offset by growth in assets under management at several managers. Net realized and unrealized investment gains in the third quarter of 2025 were driven by an increase in the fair value of Kudu's Participation Contracts, primarily due to lower discount rates across the portfolio and growth in assets under management at several managers.
Kudu Results-Nine Months Ended September 30, 2026 versus Nine Months Ended September 30, 2025
Kudu reported total revenues of $127 million, pre-tax income of $93 million and adjusted EBITDA of $50 million in the first nine months of 2026 compared to total revenues of $139 million, pre-tax income of $108 million and adjusted EBITDA of $47 million in the first nine months of 2025. Total revenues, pre-tax income and adjusted EBITDA included $61 million of net investment income in the first nine months of 2026 compared to $57 million in the first nine months of 2025. Total revenues and pre-tax income also included $66 million of net realized and unrealized investment gains in the first nine months of 2026 compared to $81 million in the first nine months of 2025. Net realized and unrealized investment gains in the first nine months of 2026 were driven by an increase in the fair value of Kudu's Participation Contracts, primarily due to growth in assets under management at several managers and step-ups in valuation related to certain sale transactions, partially offset by the impact of higher interest rates on discount rates across the portfolio. Net realized and unrealized investment gains in the first nine months of 2025 were driven by an increase in the fair value of Kudu's Participation Contracts, primarily due to growth in assets under management at several managers and foreign currency gains resulting from the weakening of the U.S. dollar.
HG Global
HG Global was established to fund the startup of BAM and, through its reinsurance subsidiary HG Re, to provide up to 15%-of-par, first-loss reinsurance protection for policies underwritten by BAM.
The following table presents the components of pre-tax income (loss) included in the HG Global segment for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| Millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Direct written premiums | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
| Assumed written premiums | 19.3 | 15.9 | 38.6 | 41.8 | ||||||||||||||||||||||
| Gross written premiums | 19.3 | 15.9 | 38.6 | 41.8 | ||||||||||||||||||||||
| Ceded written premiums | - | - | - | - | ||||||||||||||||||||||
| Net written premiums | $ | 19.3 | $ | 15.9 | $ | 38.6 | $ | 41.8 | ||||||||||||||||||
| Earned insurance premiums | $ | 8.6 | $ | 7.5 | $ | 24.0 | $ | 22.8 | ||||||||||||||||||
| Net investment income | 7.9 | 7.0 | 23.4 | 19.8 | ||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | (28.8) | 7.2 | (36.0) | 20.3 | ||||||||||||||||||||||
| Interest income from BAM Surplus Notes | 6.8 | 7.5 | 20.6 | 22.5 | ||||||||||||||||||||||
| Change in fair value of BAM Surplus Notes | (16.1) | - | (16.1) | - | ||||||||||||||||||||||
| Other revenues | .1 | .1 | .2 | .2 | ||||||||||||||||||||||
| Total revenues | (21.5) | 29.3 | 16.1 | 85.6 | ||||||||||||||||||||||
| Insurance acquisition expenses | 2.1 | 2.0 | 6.3 | 5.9 | ||||||||||||||||||||||
|
General and administrative expenses
|
.4 | 1.0 | 5.3 | 2.6 | ||||||||||||||||||||||
| Interest expense | 3.8 | 4.3 | 11.1 | 13.4 | ||||||||||||||||||||||
| Total expenses | 6.3 | 7.3 | 22.7 | 21.9 | ||||||||||||||||||||||
| Pre-tax income (loss) | $ | (27.8) | $ | 22.0 | $ | (6.6) | $ | 63.7 | ||||||||||||||||||
HG Global Results-Three Months Ended September 30, 2026 versus Three Months Ended September 30, 2025
HG Global reported gross written premiums of $19 million and earned premiums of $9 million in the third quarter of 2026 compared to gross written premiums of $16 million and earned premiums of $8 million in the third quarter of 2025. HG Global reported gross written premiums net of ceding commission paid of $14 million in the third quarter of 2026 compared to $11 million in the third quarter of 2025. HG Global's total par value of policies assumed, which represents its first-loss exposure on policies assumed from BAM, was $929 million in the third quarter of 2026, of which $756 million was in the primary market and $173 million was in the secondary market. This compares to $850 million in the third quarter of 2025, of which $693 million was in the primary market and $158 million was in the secondary market. The increase in primary and secondary market par assumed was driven by higher issuances in the primary municipal bond market.
HG Global's total gross pricing was 208 basis points in the third quarter of 2026, compared to 187 basis points in the third quarter of 2025. Pricing in the primary market increased to 204 basis points in the third quarter of 2026 compared to 128 basis points in the third quarter of 2025, due primarily to a higher number of large, high-priced issuances insured by BAM in the third quarter of 2026. Pricing in the secondary market, which is more transaction specific than pricing in the primary market, was 225 basis points in the third quarter of 2026 compared to 444 basis points in the third quarter of 2025. Total pricing net of ceding commission paid increased to 146 basis points in the third quarter of 2026 compared to 131 basis points in the third quarter of 2025.
The following table presents HG Global's par value assumed, reinsurance premiums and pricing for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||
|
$ in Millions
|
2026 | 2025 | ||||||||||||
| Par value assumed: | ||||||||||||||
|
Par value of primary market policies assumed (1)
|
$ | 755.5 | $ | 692.9 | ||||||||||
|
Par value of secondary market policies assumed (1)
|
173.4 | 157.5 | ||||||||||||
| Total par value of policies assumed | $ | 928.9 | $ | 850.4 | ||||||||||
| Reinsurance premiums: | ||||||||||||||
| Gross written premiums from primary market | $ | 15.4 | $ | 8.9 | ||||||||||
| Gross written premiums from secondary market | 3.9 | 7.0 | ||||||||||||
| Total gross written premiums | 19.3 | 15.9 | ||||||||||||
| Ceding commission paid | 5.7 | 4.8 | ||||||||||||
| Total gross written premiums net of ceding commission paid | $ | 13.6 | $ | 11.1 | ||||||||||
| Earned premiums | $ | 8.6 | $ | 7.5 | ||||||||||
| Pricing: | ||||||||||||||
| Gross pricing from primary market | 204 | bps | 128 | bps | ||||||||||
| Gross pricing from secondary market | 225 | bps | 444 | bps | ||||||||||
| Total gross pricing | 208 | bps | 187 | bps | ||||||||||
| Total pricing net of ceding commission paid | 146 | bps | 131 | bps | ||||||||||
(1) For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds.
HG Global reported pre-tax income (loss) of $(28) million in the third quarter of 2026 compared to $22 million in the third quarter of 2025. HG Global's results in the third quarter of 2026 included net realized and unrealized investment gains (losses) on its fixed income portfolio of $(29) million compared to $7 million in the third quarter of 2025, driven by the movement of interest rates in each period. HG Global's results included interest income on the BAM Surplus Notes of $7 million in the third quarter of 2026 compared to $8 million in the third quarter of 2025.
The fair value of the BAM Surplus Notes decreased to $336 million as of September 30, 2026 compared to $353 million as of June 30, 2026. The decrease was driven by a $16 million decrease in fair value and an $8 million cash payment of principal and interest, partially offset by $7 million of accrued interest. The decrease in fair value was driven primarily by the impact of higher interest rates on the discount rate. During the third quarter of 2026, HG Global received a cash payment of principal and interest on the BAM Surplus Notes of $8 million. Of this payment, $5 million was a repayment of principal held in the Supplemental Trust, less than $1 million was a payment of accrued interest held in the Supplemental Trust and $3 million was a payment of accrued interest held outside the Supplemental Trust. During the third quarter of 2025, HG Global received a cash payment of principal and interest on the BAM Surplus Notes totaling $8 million. Of this payment, $6 million was a repayment of principal held in the Supplemental Trust, less than $1 million was a payment of accrued interest held in the Supplemental Trust and $2 million was a payment of accrued interest held outside the Supplemental Trust.
During the third quarter of 2026, HG Re received a distribution from the Supplemental Trust of $14 million, which consisted of an assignment of accrued interest on the BAM Surplus Notes of $7 million and a cash distribution of $7 million. During the third quarter of 2025, HG Re received a distribution from the Supplemental Trust of $15 million, which
consisted of an assignment of accrued interest on the BAM Surplus Notes of $7 million and a cash distribution of $8 million.
HG Global Results-Nine Months Ended September 30, 2026 versus Nine Months Ended September 30, 2025
HG Global reported gross written premiums of $39 million and earned premiums of $24 million in the first nine months of 2026 compared to gross written premiums of $42 million and earned premiums of $23 million in the first nine months of 2025. HG Global reported gross written premiums net of ceding commission paid of $27 million in the first nine months of 2026 compared to $29 million in the first nine months of 2025. HG Global's total par value of policies assumed, which represents its first-loss exposure on policies assumed from BAM, was $2,264 million in the first nine months of 2026, of which $1,915 million was in the primary market and $349 million was in the secondary market. This compares to $2,208 million in the first nine months of 2025, of which $1,860 million was in the primary market and $348 million was in the secondary market. The increase in primary market par assumed was driven by higher issuances in the primary municipal bond market.
HG Global's total gross pricing was 170 basis points in the first nine months of 2026 compared to 189 basis points in the first nine months of 2025. Pricing in the primary market decreased to 148 basis points in the first nine months of 2026 compared to 158 basis points in the first nine months of 2025, due primarily to tighter municipal bond spreads and a smaller number of large, high-priced issuances insured by BAM in the first nine months of 2026. Pricing in the secondary market, which is more transaction specific than pricing in the primary market, decreased to 292 basis points in the first nine months of 2026 compared to 356 basis points in the first nine months of 2025. Total pricing net of ceding commission paid decreased to 120 basis points in the first nine months of 2026 compared to 133 basis points in the first nine months of 2025.
The following table presents HG Global's par value assumed, reinsurance premiums and pricing for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||
|
$ in Millions
|
2026 | 2025 | ||||||||||||
| Par value assumed: | ||||||||||||||
|
Par value of primary market policies assumed (1)
|
$ | 1,914.9 | $ | 1,860.0 | ||||||||||
|
Par value of secondary market policies assumed (1)
|
349.2 | 348.2 | ||||||||||||
| Total par value of policies assumed | $ | 2,264.1 | $ | 2,208.2 | ||||||||||
| Reinsurance premiums: | ||||||||||||||
| Gross written premiums from primary market | $ | 28.4 | $ | 29.4 | ||||||||||
| Gross written premiums from secondary market | 10.2 | 12.4 | ||||||||||||
| Total gross written premiums | 38.6 | 41.8 | ||||||||||||
| Ceding commission paid | 11.4 | 12.5 | ||||||||||||
| Total gross written premiums net of ceding commission paid | $ | 27.2 | $ | 29.3 | ||||||||||
| Earned premiums | $ | 24.0 | $ | 22.8 | ||||||||||
| Pricing: | ||||||||||||||
| Gross pricing from primary market | 148 | bps | 158 | bps | ||||||||||
| Gross pricing from secondary market | 292 | bps | 356 | bps | ||||||||||
| Total gross pricing | 170 | bps | 189 | bps | ||||||||||
| Total pricing net of ceding commission paid | 120 | bps | 133 | bps | ||||||||||
(1) For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds.
HG Global reported pre-tax income (loss) of $(7) million in the first nine months of 2026 compared to $64 million in the first nine months of 2025. HG Global's results in the first nine months of 2026 included net realized and unrealized investment gains (losses) on its fixed income portfolio of $(36) million compared to $20 million in the first nine months of 2025, driven by movements in interest rates in each period. HG Global's results in the first nine months of 2026 included interest income on the BAM Surplus Notes of $21 million compared to $23 million in the first nine months of 2025.
The fair value of the BAM Surplus Notes decreased to $336 million as of September 30, 2026 compared to $339 million as of December 31, 2025. The decrease was driven by a $16 million decrease in fair value and an $8 million cash payment of principal and interest, partially offset by $21 million of accrued interest. The decrease in fair value was driven primarily by the impact of higher interest rates on the discount rate. During the first nine months of 2026, HG Global received a cash payment of principal and interest on the BAM Surplus Notes of $8 million. Of this payment, $5 million was a repayment of principal held in the Supplemental Trust, less than $1 million was a payment of accrued interest held in the Supplemental Trust and $3 million was a payment of accrued interest held outside the Supplemental Trust. During the first nine months of 2025, HG Global received a cash payment of principal and interest on the BAM Surplus Notes of $8 million. Of this payment, $6 million was a repayment of principal held in the Supplemental Trust, less than $1 million was a payment of accrued interest held in the Supplemental Trust and $2 million was a payment of accrued interest held outside the Supplemental Trust.
During the first nine months of 2026, HG Re received a distribution from the Supplemental Trust of $42 million, which consisted of an assignment of accrued interest on the BAM Surplus Notes of $21 million and a cash distribution of $21 million. During the first nine months of 2025, HG Re received a distribution from the Supplemental Trust of $38 million, which consisted of an assignment of accrued interest on the BAM Surplus Notes of $23 million and a cash distribution of $15 million.
On May 14, 2026, HG Global refinanced its senior debt facility, upsizing the facility to $200 million and lowering the interest rate to a fixed rate of 7.4%. In turn, on May 26, 2026, HG Global paid a $93 million cash dividend to shareholders, of which $90 million was paid to White Mountains. In connection with the extinguishment of its prior senior debt facility, HG Global recognized a $4 million loss within general and administrative expenses.
HG Global Balance Sheets
The following table presents amounts for the HG Global segment that are presented within White Mountains's consolidated balance sheets as of September 30, 2026 and December 31, 2025:
| Millions | September 30, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Fixed maturity investments, at fair value | $ | 707.6 | $ | 693.4 | ||||||||||
| Short-term investments, at fair value | 40.7 | 90.8 | ||||||||||||
| Total investments | 748.3 | 784.2 | ||||||||||||
| Cash | .6 | .1 | ||||||||||||
|
BAM Surplus Notes, at fair value (1)
|
335.5 | 339.0 | ||||||||||||
| Insurance premiums receivable | 13.6 | 11.4 | ||||||||||||
| Deferred acquisition costs | 102.0 | 96.9 | ||||||||||||
| Other assets | 5.7 | 5.2 | ||||||||||||
| Total assets | $ | 1,205.7 | $ | 1,236.8 | ||||||||||
| Liabilities | ||||||||||||||
|
Preferred dividends payable to White Mountains (2)
|
$ | 486.8 | $ | 527.2 | ||||||||||
| Preferred dividends payable to noncontrolling interests | 14.9 | 16.3 | ||||||||||||
| Unearned insurance premiums | 342.5 | 327.9 | ||||||||||||
| Debt | 197.4 | 147.8 | ||||||||||||
| Accrued incentive compensation | 1.1 | 1.8 | ||||||||||||
| Other liabilities | 10.7 | 5.7 | ||||||||||||
| Total liabilities | 1,053.4 | 1,026.7 | ||||||||||||
| Equity | ||||||||||||||
| White Mountains's common shareholders' equity | 177.4 | 228.5 | ||||||||||||
| Noncontrolling interests | (25.1) | (18.4) | ||||||||||||
| Total equity | 152.3 | 210.1 | ||||||||||||
| Total liabilities and equity | $ | 1,205.7 | $ | 1,236.8 | ||||||||||
| HG Global equity after intercompany eliminations: | ||||||||||||||
| White Mountains's common shareholders' equity | $ | 177.4 | $ | 228.5 | ||||||||||
|
Preferred dividends payable to White Mountains (2)
|
486.8 | 527.2 | ||||||||||||
|
HG Global equity attributable to White Mountains's common shareholders after intercompany eliminations |
$ | 664.2 | $ | 755.7 | ||||||||||
|
Quarter-to-date growth in HG Global's book value attributable to White Mountains, including dividends (3)
|
(3.4) | % | ||||||||||||
|
Year-to-date growth in HG Global's book value attributable to White Mountains, including dividends (3)
|
(0.2) | % | ||||||||||||
(1) The fair value of the BAM Surplus Notes includes accrued interest receivable.
(2) HG Global's preferred dividends payable to White Mountains are eliminated in White Mountains's consolidated financial statements. For segment reporting, these amounts are included within the HG Global segment and are eliminated against the offsetting receivables included within Other Operations.
(3) HG Global's growth in book value attributable to White Mountains is based on the change in HG Global's total equity attributable to White Mountains's common shareholders after intercompany eliminations for the period. The year-to-date growth in book value attributable to White Mountains includes the $90.1 dividend paid to White Mountains on May 26, 2026.
For the third quarter of 2026, HG Global book value attributable to White Mountains decreased by 3%. For the first nine months of 2026, HG Global book value attributable to White Mountains decreased slightly, including the $90 million dividend paid to White Mountains in the second quarter. The decreases in book value were driven by the impact of higher interest rates on the fair value of HG Global's fixed income portfolio and the BAM Surplus Notes.
Distinguished
On September 2, 2025, White Mountains acquired a controlling financial interest in Distinguished. See Note 2 - "Significant Transactions" on page 12. Distinguished is a full-service MGA and program administrator for specialty property and casualty insurance. Distinguished places insurance across a diversified portfolio of programs grouped into two verticals. The ScaleCo vertical consists of established programs, primarily focused on real estate and hospitality end markets. The GrowthCo vertical consists of start-up programs, focused on a diversified set of specialty property and casualty insurance products across multiple industries. On behalf of its insurance carrier partners, Distinguished manages various aspects of the placement process, including product development, marketing, underwriting and policy issuance. Distinguished earns commissions based on the volume and profitability of the insurance that it places. Distinguished does not retain insurance risk.
The following table presents the components of GAAP net income (loss), ScaleCo net income (loss), ScaleCo EBITDA and ScaleCo adjusted EBITDA included in White Mountains's Distinguished segment for the three and nine months ended September 30, 2026 and for the period from September 2, 2025 to September 30, 2025:
| Millions | Three Months Ended September 30, 2026 |
Nine Months Ended September 30, 2026
|
September 2, 2025 - September 30, 2025 | |||||||||||||||||
| Commission and fee revenues | $ | 55.2 | $ | 151.4 | $ | 14.1 | ||||||||||||||
| Other revenues | .8 | 2.3 | .2 | |||||||||||||||||
| Total revenues | 56.0 | 153.7 | 14.3 | |||||||||||||||||
| Broker commission expenses | 22.0 | 62.5 | 5.5 | |||||||||||||||||
| General and administrative expenses | 43.3 | 121.5 | 10.2 | |||||||||||||||||
| Interest expense | 3.4 | 10.5 | 1.3 | |||||||||||||||||
| Total expenses | 68.7 | 194.5 | 17.0 | |||||||||||||||||
| GAAP pre-tax income (loss) | (12.7) | (40.8) | (2.7) | |||||||||||||||||
| Income tax (expense) benefit | .7 | 4.6 | - | |||||||||||||||||
| GAAP net income (loss) | (12.0) | (36.2) | (2.7) | |||||||||||||||||
| Exclude: | ||||||||||||||||||||
| Net (income) loss, GrowthCo | 5.6 | 23.8 | 1.2 | |||||||||||||||||
|
ScaleCo net income (loss) (1)
|
(6.4) | (12.4) | (1.5) | |||||||||||||||||
| Add back: | ||||||||||||||||||||
| Interest expense | 3.4 | 10.5 | 1.3 | |||||||||||||||||
| Income tax expense (benefit) | (.7) | (4.6) | - | |||||||||||||||||
| Depreciation | .2 | .4 | .1 | |||||||||||||||||
| Amortization of other intangible assets | 6.4 | 20.2 | - | |||||||||||||||||
|
ScaleCo EBITDA (1)
|
2.9 | 14.1 | (.1) | |||||||||||||||||
| Exclude: | ||||||||||||||||||||
| Non-cash equity-based compensation expense | 1.6 | 6.3 | .8 | |||||||||||||||||
| Restructuring expenses | .1 | .9 | - | |||||||||||||||||
| Software impairment | .1 | .1 | - | |||||||||||||||||
| Legal settlement expenses | - | .1 | - | |||||||||||||||||
|
ScaleCo adjusted EBITDA (1)
|
$ | 4.7 | $ | 21.5 | $ | .7 | ||||||||||||||
(1) See "NON-GAAP FINANCIAL MEASURES" on page 85.
Distinguished Results - Three Months Ended September 30, 2026
Distinguished reported commission and fee revenues of $55 million, pre-tax loss of $13 million, and ScaleCo adjusted EBITDA of $5 million in the third quarter of 2026.
Distinguished Results - Nine Months Ended September 30, 2026
Distinguished reported commission and fee revenues of $151 million, pre-tax loss of $41 million, and ScaleCo adjusted EBITDA of $22 million in the first nine months of 2026.
Distinguished Results - Period From September 2, 2025 through September 30, 2025
Distinguished reported commission and fee revenues of $14 million, pre-tax loss of $3 million, and ScaleCo adjusted EBITDA of $1 million for the period from September 2, 2025, the date of acquisition, through September 30, 2025.
Managed Premiums and Commission and Fee Revenues
The following table presents the managed premiums, which represent the total premiums placed by Distinguished, and commission and fee revenues by vertical for the three and nine months ended September 30, 2026:
| Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||
| Millions | Managed Premiums |
Commission and Fee Revenues |
Managed Premiums |
Commission and Fee Revenues |
||||||||||||||||||||||
|
ScaleCo
|
$ | 118.2 | $ | 40.7 | $ | 382.5 | $ | 116.3 | ||||||||||||||||||
|
GrowthCo
|
41.1 | 14.5 | 97.7 | 35.1 | ||||||||||||||||||||||
|
Total
|
$ | 159.3 | $ | 55.2 | $ | 480.2 | $ | 151.4 | ||||||||||||||||||
Distinguished's managed premiums increased 20% in the third quarter of 2026 compared to the third quarter of 2025 and 14% in the first nine months of 2026 compared to the first nine months of 2025. Distinguished had strong growth in the environmental, surety, inland marine and excess property programs, partially offset by a decline in the umbrella program. As of September 30, 2026, on a trailing 12 months basis, Distinguished reported total managed premiums of $625 million, which increased 5% quarter-over-quarter. These figures include periods prior to White Mountains's ownership of Distinguished, which White Mountains believes is useful in understanding Distinguished's performance.
WTM Partners
WTM Partners acquires and manages businesses on behalf of White Mountains in non-financial services sectors including essential services, light industrial and specialty consumer. In the second quarter of 2026, WTM Partners closed two new acquisitions. The acquisition of Basesix, a low voltage systems integration platform, closed on April 1, 2026. WTM Partners deployed $96 million into Basesix. Enterprise Solutions's bolt-on acquisition of Hawkeye Electric, a provider of specialty electrical contracting services, closed on May 1, 2026. WTM Partners deployed $35 million into Enterprise Solutions to fund the acquisition of Hawkeye Electric. As of September 30, 2026, WTM Partners has deployed roughly $200 million of equity capital across three acquisitions. See Note 2 - "Significant Transactions."
Beginning in the second quarter of 2026, in conjunction with the acquisitions of Basesix and Hawkeye Electric, WTM Partners is presented as a separate reportable segment. Prior period amounts have been reclassified to conform to the current period presentation.
The following table presents the components of GAAP net income (loss), EBITDA and adjusted EBITDA included in the WTM Partners segment for the three and nine months ended September 30, 2026 and 2025. These figures include results for periods subsequent to the acquisitions of Enterprise Solutions on April 1, 2025, Basesix on April 1, 2026 and Hawkeye Electric on May 1, 2026.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| Millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Product and service revenues | $ | 106.8 | $ | 54.0 | $ | 243.3 | $ | 96.8 | ||||||||||||||||||
| Total revenues | 106.8 | 54.0 | 243.3 | 96.8 | ||||||||||||||||||||||
| Cost of sales | 84.1 | 47.1 | 192.8 | 82.3 | ||||||||||||||||||||||
| General and administrative expenses | 20.1 | 7.8 | 45.4 | 17.2 | ||||||||||||||||||||||
| Interest expense | 1.2 | .3 | 2.1 | .6 | ||||||||||||||||||||||
| Total expenses | 105.4 | 55.2 | 240.3 | 100.1 | ||||||||||||||||||||||
| GAAP pre-tax income (loss) | 1.4 | (1.2) | 3.0 | (3.3) | ||||||||||||||||||||||
| Income tax (expense) benefit | (.6) | - | (1.3) | .2 | ||||||||||||||||||||||
| GAAP net income (loss) | .8 | (1.2) | 1.7 | (3.1) | ||||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||
| Interest expense | 1.2 | .3 | 2.1 | .6 | ||||||||||||||||||||||
| Income tax expense (benefit) | .6 | - | 1.3 | (.2) | ||||||||||||||||||||||
| Depreciation | .5 | .3 | 1.3 | .6 | ||||||||||||||||||||||
| Amortization of other intangible assets | 5.1 | 2.5 | 7.6 | 2.5 | ||||||||||||||||||||||
|
EBITDA (1)
|
8.2 | 1.9 | 14.0 | .4 | ||||||||||||||||||||||
| Exclude: | ||||||||||||||||||||||||||
| Transaction expenses | .4 | .3 | 5.0 | 3.3 | ||||||||||||||||||||||
| Restructuring and integration expenses | .2 | - | .3 | - | ||||||||||||||||||||||
|
Adjusted EBITDA (1)
|
$ | 8.8 | $ | 2.2 | $ | 19.3 | $ | 3.7 | ||||||||||||||||||
(1) See "NON-GAAP FINANCIAL MEASURES" on page 85.
WTM Partners Results-Three Months Ended September 30, 2026 versus Three Months Ended September 30, 2025
WTM Partners reported total revenues of $107 million, pre-tax income of $1 million and adjusted EBITDA of $9 million in the third quarter of 2026 compared to total revenues of $54 million, pre-tax loss of $1 million and adjusted EBITDA of $2 million in the third quarter of 2025. The increases were driven by organic growth at Enterprise Solutions and the acquisitions of Basesix and Hawkeye Electric in the second quarter of 2026.
WTM Partners Results-Nine Months Ended September 30, 2026 versus Nine Months Ended September 30, 2025
WTM Partners reported total revenues of $243 million, pre-tax income of $3 million and adjusted EBITDA of $19 million in the first nine months of 2026 compared to total revenues of $97 million, pre-tax loss of $3 million and adjusted EBITDA of $4 million in the first nine months of 2025. The increases were driven by organic growth at Enterprise Solutions and the acquisitions of Basesix and Hawkeye Electric in the second quarter of 2026.
Other Operations
The following table presents the components of pre-tax income (loss) included in White Mountains's Other Operations for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| Millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
|
Earned insurance premiums (1)
|
$ | .3 | $ | 2.9 | $ | 4.4 | $ | 19.1 | ||||||||||||||||||
| Net investment income | 13.5 | 6.2 | 42.5 | 24.5 | ||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | 25.4 | 14.9 | 104.7 | 49.5 | ||||||||||||||||||||||
|
Net realized and unrealized investment gains (losses) from investment in MediaAlpha |
(53.6) | 7.7 | (60.4) | 1.6 | ||||||||||||||||||||||
|
Commission and fee revenues (1)
|
4.1 | 4.3 | 11.5 | 12.4 | ||||||||||||||||||||||
| Product and services revenues | 14.3 | 14.8 | 41.8 | 41.9 | ||||||||||||||||||||||
|
Net gain on sale of the Bamboo Group
|
- | - | 2.4 | - | ||||||||||||||||||||||
|
Other revenues (1)
|
- | .5 | (.1) | 1.0 | ||||||||||||||||||||||
| Total revenues | 4.0 | 51.3 | 146.8 | 150.0 | ||||||||||||||||||||||
|
Loss and LAE (2)
|
.3 | .6 | .7 | 18.8 | ||||||||||||||||||||||
|
Insurance acquisition expenses (2)
|
.1 | 1.0 | 1.7 | 7.0 | ||||||||||||||||||||||
| Cost of sales | 7.7 | 8.2 | 21.8 | 22.9 | ||||||||||||||||||||||
|
Amortization of other intangible assets (2)
|
1.0 | 1.3 | 2.9 | 3.4 | ||||||||||||||||||||||
|
General and administrative expenses (2)
|
26.9 | 63.3 | 112.6 | 141.1 | ||||||||||||||||||||||
| Interest expense | .7 | .7 | 2.0 | 1.7 | ||||||||||||||||||||||
| Total expenses | 36.7 | 75.1 | 141.7 | 194.9 | ||||||||||||||||||||||
| Pre-tax income (loss) | $ | (32.7) | $ | (23.8) | $ | 5.1 | $ | (44.9) | ||||||||||||||||||
(1) Other Operations's earned insurance premiums and commission and fee revenues are included in other revenues in the consolidated statement of operations.
(2) Other Operations's loss and LAE, insurance acquisition expenses and amortization of other intangible assets are included in general and administrative expenses in the consolidated statement of operations.
Other Operations Results-Three Months Ended September 30, 2026 versus Three Months Ended September 30, 2025
White Mountains's Other Operations reported pre-tax loss of $33 million in the third quarter of 2026 compared to $24 million in the third quarter of 2025. White Mountains's Other Operations reported unrealized investment gains (losses) from its investment in MediaAlpha of $(54) million in the third quarter of 2026 compared to $8 million in the third quarter of 2025. Excluding MediaAlpha, White Mountains's Other Operations reported net realized and unrealized investment gains of $25 million in the third quarter of 2026 compared to $15 million in the third quarter of 2025. The increase in net realized and unrealized investment gains was driven primarily by other long-term investments. White Mountains's Other Operations reported net investment income of $14 million in the third quarter of 2026 compared to $6 million in the third quarter of 2025. The increase in net investment income was driven primarily by income and dividend distributions from other long-term investments. See Summary of Investment Results on page 76.
White Mountains's Other Operations reported general and administrative expenses of $27 million in the third quarter of 2026 compared to $63 million in the third quarter of 2025. Other Operations general and administrative expenses in the third quarter of 2026 included $11 million of parent company compensation and benefits costs compared to $44 million in the third quarter of 2025. The decrease in parent company compensation and benefits costs was driven primarily by higher incentive compensation in 2025, largely in connection with the Bamboo Sale Transaction.
Other Operations Results-Nine Months Ended September 30, 2026 versus Nine Months Ended September 30, 2025
White Mountains's Other Operations reported pre-tax income (loss) of $5 million in the first nine months of 2026 compared to $(45) million in the first nine months of 2025. White Mountains's Other Operations reported unrealized investment gains (losses) from its investment in MediaAlpha of $(60) million in the first nine months of 2026 compared to $2 million in the first nine months of 2025. Excluding MediaAlpha, White Mountains's Other Operations reported net realized and unrealized investment gains of $105 million in the first nine months of 2026 compared to $50 million in the first nine months of 2025. The increase in net realized and unrealized investment gains was driven primarily by other long-term investments. White Mountains's Other Operations reported net investment income of $43 million in the first nine months of 2026 compared to $25 million in the first nine months of 2025. The increase in net investment income was driven primarily by income and dividend distributions from other long-term investments. See Summary of Investment Results on page 76.
White Mountains's Other Operations reported general and administrative expenses of $113 million in the first nine months of 2026 compared to $141 million in the first nine months of 2025. Other Operations general and administrative expenses in the first nine months of 2026 included $58 million for parent company compensation and benefits costs compared to $81 million in the first nine months of 2025. The decrease in parent company compensation and benefits costs was driven primarily by higher incentive compensation in 2025, largely in connection with the Bamboo Sale Transaction.
Share Repurchases
In the first nine months of 2026, White Mountains repurchased and retired 103,827 of its common shares for $217 million at an average share price of $2,088.39, or 93% of White Mountains's September 30, 2026 book value per share.
II. Summary of Investment Results
White Mountains's total investment results include results from all segments. For purposes of discussing rates of return, percentages are presented gross of management fees and trading expenses.
Effective December 5, 2025, White Mountains no longer consolidates Bamboo. Through December 5, 2025, White Mountains's consolidated financial statements included Bamboo's investment results. See Note 2 - "Significant Transactions."
Gross Investment Returns and Benchmark Returns
The following table presents the pre-tax time-weighted investment returns for White Mountains's consolidated portfolio, for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Fixed income investments | (0.7) | % | 1.5 | % | 0.7 | % | 4.8 | % | ||||||||||||||||||
|
Bloomberg Intermediate U.S. Aggregate Index
|
(2.6) | % | 1.8 | % | (2.0) | % | 6.0 | % | ||||||||||||||||||
| Common equity securities | 0.4 | % | 0.6 | % | 3.6 | % | 7.0 | % | ||||||||||||||||||
| Investment in MediaAlpha | (23.9) | % | 3.9 | % | (26.1) | % | 0.8 | % | ||||||||||||||||||
| Other long-term investments | 0.9 | % | 3.1 | % | 8.0 | % | 9.7 | % | ||||||||||||||||||
|
Total common equity securities, investment in MediaAlpha and other long-term investments |
(0.5) | % | 2.8 | % | 5.3 | % | 8.9 | % | ||||||||||||||||||
| Total common equity securities and other long-term investments | 0.8 | % | 2.7 | % | 7.4 | % | 9.5 | % | ||||||||||||||||||
| S&P 500 Index (total return) | 2.3 | % | 8.1 | % | 12.7 | % | 14.8 | % | ||||||||||||||||||
| Total consolidated portfolio | (0.6) | % | 2.1 | % | 3.0 | % | 6.6 | % | ||||||||||||||||||
|
Total consolidated portfolio - excluding MediaAlpha (1)
|
- | % | 2.0 | % | 3.9 | % | 6.8 | % | ||||||||||||||||||
(1) See "NON-GAAP FINANCIAL MEASURES" on page 85.
Investment Returns-Three and Nine Months Ended September 30, 2026 versus Three and Nine Months Ended September 30, 2025
White Mountains's total consolidated portfolio return on invested assets was -0.6% in the third quarter of 2026, which included $54 million of unrealized investment losses from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was flat in the third quarter of 2026, driven primarily by net unrealized losses on the fixed income portfolio, offset by net investment income. White Mountains's total consolidated portfolio return on invested assets was 2.1% in the third quarter of 2025, which included $8 million of unrealized investment gains from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 2.0% in the third quarter of 2025, driven primarily by net investment income and net unrealized investment gains from the other long-term investments and fixed income portfolios.
White Mountains's total consolidated portfolio return on invested assets was 3.0% in the first nine months of 2026, which included $60 million of unrealized investment losses from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 3.9% in the first nine months of 2026, driven primarily by net investment income and net realized and unrealized investment gains from other long-term investments, partially offset by net unrealized investment losses from the fixed income portfolio. White Mountains's total consolidated portfolio return on invested assets was 6.6% in the first nine months of 2025, which included $2 million of unrealized investment gains from White Mountains's investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 6.8% in the first nine months of 2025, driven primarily by net investment income and net unrealized investment gains from the other long-term investments and fixed income portfolios.
Fixed Income Results
White Mountains's fixed income portfolio, including short-term investments, totaled $4.1 billion and $4.7 billion as of September 30, 2026 and December 31, 2025, which represented 50% and 56% of total invested assets for each period. The duration of White Mountains's fixed income portfolio, including short-term investments, was 2.0 years and 1.5 years as of September 30, 2026 and December 31, 2025. The change in the fair value and duration of the fixed income portfolio was driven primarily by the sale of short-term investments to fund new capital deployments, share repurchases and the purchase of common equity ETFs. White Mountains's fixed income portfolio includes fixed maturity and short-term investments held on deposit or as collateral. See Note 3 - "Investment Securities."
White Mountains's fixed income portfolio returned -0.7% in the third quarter of 2026 compared to 1.5% in the third quarter of 2025, outperforming and underperforming the Bloomberg Intermediate U.S. Aggregate Index returns of -2.6% and 1.8% for the comparable periods. Results in the third quarter of 2026 were driven primarily by net unrealized investment losses due to the impact of higher interest rates on White Mountains's short duration fixed income portfolio, partially offset by net investment income. Results in the third quarter of 2025 were driven primarily by net investment income and net unrealized investment gains due to the impact of lower interest rates on White Mountains's short duration fixed income portfolio.
White Mountains's fixed income portfolio returned 0.7% in the first nine months of 2026 compared to 4.8% in the first nine months of 2025, outperforming and underperforming the Bloomberg Intermediate U.S. Aggregate Index returns of -2.0% and 6.0% for the comparable periods. Results in the first nine months of 2026 were driven primarily by net investment income, partially offset by net unrealized investment losses due to the impact of higher interest rates on White Mountains's short duration fixed income portfolio. Results in the first nine months of 2025 were driven primarily by net investment income and net unrealized investment gains due to the impact of lower interest rates on White Mountains's short duration fixed income portfolio.
Common Equity Securities, Investment in MediaAlpha and Other Long-Term Investments Results
White Mountains's portfolio of common equity securities, its investment in MediaAlpha and other long-term investments totaled $4.1 billion and $3.7 billion as of September 30, 2026 and December 31, 2025, which represented 50% and 44% of total invested assets for each period. The change in fair value was driven primarily by increased exposure to other long-term investments and common equity securities, principally due to new unconsolidated entities, an increase in the fair value of Kudu's Participation Contracts and the purchase of common equity ETFs. See Note 3 - "Investment Securities."
White Mountains's portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned -0.5% in the third quarter of 2026, which included $54 million of unrealized investment losses from White Mountains's investment in MediaAlpha. White Mountains's portfolio of common equity securities and other long-term investments returned 0.8% in the third quarter of 2026. White Mountains's portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 2.8% in the third quarter of 2025, which included $8 million of unrealized investment gains from White Mountains's investment in MediaAlpha. White Mountains's portfolio of common equity securities and other long-term investments returned 2.7% in the third quarter of 2025.
White Mountains's portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 5.3% in the first nine months of 2026, which included $60 million of unrealized investment losses from White Mountains's investment in MediaAlpha. White Mountains's portfolio of common equity securities and other long-term investments returned 7.4% in the first nine months of 2026. White Mountains's portfolio of common equity securities, its investment in MediaAlpha and other long-term investments returned 8.9% in the first nine months of 2025, which included $2 million of unrealized investment gains from White Mountains's investment in MediaAlpha. White Mountains's portfolio of common equity securities and other long-term investments returned 9.5% in the first nine months of 2025.
White Mountains's portfolio of common equity securities generally consists of international listed equity funds, primarily held at Ark, and passive common equity ETFs. White Mountains's common equity ETFs seek to provide investment results generally corresponding to the performance of the S&P 500 Index. White Mountains's portfolio of common equity securities was $549 million and $483 million as of September 30, 2026 and December 31, 2025. The increase in common equity securities was driven primarily by the reallocation of a portion of the sale proceeds from the Bamboo Sale Transaction into common equity ETFs, partially offset by a reduction in the international listed equity funds.
White Mountains's portfolio of common equity securities returned 0.4% in the third quarter of 2026 compared to 0.6% in the third quarter of 2025, underperforming the S&P 500 Index returns of 2.3% and 8.1% for the comparable periods. White Mountains's portfolio of common equity securities returned 3.6% in the first nine months of 2026 compared to 7.0% in the first nine months of 2025, underperforming the S&P 500 Index returns of 12.7% and 14.8% for the comparable periods. The underperformance in each period was driven primarily by certain international listed equity funds that employ a market neutral strategy.
White Mountains maintains a portfolio of other long-term investments that consists primarily of unconsolidated entities, including Kudu's Participation Contracts, the Bamboo SPV, the BroadStreet SPV, PassportCard/DavidShield and Bishop Street, as well as private equity funds and hedge funds, a bank loan fund, Lloyd's trust deposits and an equity infrastructure fund. White Mountains's portfolio of other long-term investments totaled $3.4 billion and $3.0 billion as of September 30, 2026 and December 31, 2025.
White Mountains's portfolio of other long-term investments returned 0.9% in the third quarter of 2026 compared to 3.1% in the third quarter of 2025. Investment returns for the third quarter of 2026 were driven primarily by net realized and unrealized investment gains from certain unconsolidated entities and private equity funds and net investment income, partially offset by net unrealized investment losses from Kudu's Participation Contracts due to higher interest rates. Investment returns for the third quarter of 2025 were driven primarily by net investment income and net unrealized investment gains from Kudu's Participation Contracts, as well as net investment income and net realized and unrealized investment gains from private equity funds and hedge funds.
White Mountains's portfolio of other long-term investments returned 8.0% in the first nine months of 2026 compared to 9.7% in the first nine months of 2025. Investment returns for the first nine months of 2026 were driven primarily by net investment income and net realized and unrealized investment gains from Kudu's Participation Contracts, as well as net unrealized investment gains from certain unconsolidated entities. Investment returns for the first nine months of 2025 were driven primarily by net investment income and net unrealized investment gains from Kudu's Participation Contracts, as well as net investment income and net realized and unrealized investment gains from certain unconsolidated entities, private equity funds, hedge funds and ILS funds.
Foreign Currency Exposure
As of September 30, 2026, White Mountains had foreign currency exposure on $440 million of net assets, primarily related to Ark/WM Outrigger's non-U.S. contracts, Kudu's non-U.S. Participation Contracts and a non-U.S. Other Operating Business.
The following table presents the fair value of White Mountains's foreign denominated net assets (liabilities) by segment as of September 30, 2026:
|
$ in Millions Currency |
Ark/
WM Outrigger
|
Kudu | Other Operations | Total Fair Value | % of Total Shareholders' Equity | |||||||||||||||||||||||||||
| CAD | $ | 123.0 | $ | 38.7 | $ | - | $ | 161.7 | 2.7 | % | ||||||||||||||||||||||
| AUD | 63.4 | 57.9 | - | 121.3 | 2.0 | |||||||||||||||||||||||||||
| EUR | 32.2 | 67.0 | - | 99.2 | 1.6 | |||||||||||||||||||||||||||
| GBP | 56.6 | - | - | 56.6 | 0.9 | |||||||||||||||||||||||||||
| All other | - | - | 1.2 | 1.2 | - | |||||||||||||||||||||||||||
| Total | $ | 275.2 | $ | 163.6 | $ | 1.2 | $ | 440.0 | 7.2 | % | ||||||||||||||||||||||
III. Income Taxes
As of September 30, 2026, the primary jurisdictions in which the Company's subsidiaries and branches operated and were subject to tax include the United States, the United Kingdom, Luxembourg and Israel.
On December 15, 2022, European Union Member States voted to adopt the EU Minimum Tax Directive in conformity with the OECD Pillar Two initiative. The Pillar Two initiative includes a set of model rules that are generally designed to impose a top-up tax on a large multinational enterprise group to the extent that the group is not subject to an effective tax rate of at least 15% in each jurisdiction in which the group has a consolidated affiliate or permanent establishment. The EU Minimum Tax Directive required European Union Member States to enact conforming law by December 31, 2023. The main rule of the EU Minimum Tax Directive, the Income Inclusion Rule ("IIR"), was to become effective for fiscal years beginning on or after December 31, 2023, while the UTPR was to become effective for fiscal years beginning on or after December 31, 2024. The EU Minimum Tax Directive also permits European Union Member States to elect to apply a Qualified Domestic Minimum Top-up Tax ("QDMTT") for fiscal years beginning on or after December 31, 2023. As of September 30, 2026, White Mountains does not expect that it will be subject to a top-up tax for the year ending December 31, 2026.
On July 11, 2023, the United Kingdom enacted conforming Pillar Two legislation including the IIR and QDMTT, which became effective for fiscal years beginning on or after December 31, 2023. On March 20, 2025, the United Kingdom enacted legislation adopting the Pillar Two UTPR effective for fiscal years beginning on or after December 31, 2024. Under the legislation, the effective date of the UTPR is deferred until fiscal years beginning on or after December 31, 2029 for U.K. companies in consolidated groups that meet certain requirements. To qualify for the deferral, generally the group must (i) have consolidated affiliates and permanent establishments in six or fewer countries and (ii) have no more than €50 million of net tangible assets outside of the country where the group has the largest amount of net tangible assets. White Mountains expects to meet the requirements to be exempt from the U.K. UTPR until January 1, 2030.
On December 20, 2023, Luxembourg enacted conforming Pillar Two legislation including the IIR and QDMTT, which became effective for fiscal years beginning on or after December 31, 2023, and the UTPR, which became effective for fiscal years beginning on or after December 31, 2024. The Luxembourg Pillar Two legislation defers the effective date of the QDMTT and UTPR until fiscal years beginning on or after December 31, 2028 and 2029, respectively, for Luxembourg companies in consolidated groups that meet certain requirements. To qualify for the deferral, generally the group must (i) have consolidated affiliates and permanent establishments in six or fewer countries and (ii) have no more than €50 million of net tangible assets outside of the country where the group has the largest amount of net tangible assets. White Mountains expects to meet the requirements to be exempt from the Luxembourg QDMTT and UTPR until January 1, 2029 and 2030, respectively.
On December 30, 2025, Israel enacted conforming Pillar Two legislation that adopts a QDMTT, which became effective for fiscal years beginning on or after January 1, 2026.
On December 27, 2023, Bermuda enacted a 15% corporate income tax that became effective on January 1, 2025. The Bermuda tax legislation defers the effective date for five years, for Bermuda companies in consolidated groups that meet certain requirements. To qualify for the deferral, generally the group must (i) have consolidated affiliates and permanent establishments in six or fewer countries, (ii) have no more than €50 million of net tangible assets outside of the country where the group has the largest amount of net tangible assets and (iii) not have a consolidated Bermuda affiliate or Bermuda permanent establishment directly or indirectly owned by a parent entity that is subject to the Pillar Two IIR in any jurisdiction. White Mountains expects to meet the requirements to be exempt from the Bermuda corporate income tax until January 1, 2030.
The Bermuda tax legislation also provides for an optional economic transition adjustment that can decrease or increase future years' taxable income. Under GAAP, this economic transition adjustment was required to be recorded as a deferred tax asset or liability as of December 31, 2023 if a company intended to apply the adjustment to compute its taxable income. Accordingly, White Mountains recognized a net deferred tax benefit of $68 million in 2023, of which $51 million was recognized at Ark and $17 million was recognized at HG Global. As of July 1, 2024, White Mountains no longer consolidates BAM. As a result of the deconsolidation, the BAM Surplus Notes are recorded at fair value, which resulted in the reversal of a $5 million deferred tax liability related to the economic transition adjustment, generating a $5 million deferred tax benefit in 2024. On December 11, 2025, Bermuda enacted legislation that changed the scope of assets and liabilities subject to the economic transition adjustment. This legislation resulted in the reversal of a $5 million deferred tax liability related to the economic transition adjustment, generating a $5 million deferred tax benefit in 2025.
On January 15, 2025, the OECD released administrative guidance on its Pillar Two model rules (the "January 2025 OECD Administrative Guidance"). The January 2025 OECD Administrative Guidance provides that, subject to limited exceptions, deferred tax expense attributable to deferred tax assets resulting from the introduction of a new corporate income tax after November 30, 2021 is to be excluded when assessing whether a multinational enterprise group has an effective tax rate of at least 15% in the jurisdiction that adopted the corporate income tax. Deferred tax assets associated with the economic transition adjustment recorded under the Bermuda corporate income tax are expected to be within the scope of the January 2025 OECD Administrative Guidance.
On December 17, 2025, Luxembourg enacted legislation that adopts the January 2025 OECD Administrative Guidance. On March 18, 2026, the United Kingdom enacted legislation that adopts the January 2025 OECD Administrative Guidance. Accordingly, in any future year in which the economic transition adjustment deferred tax asset is utilized, White Mountains expects to incur a top-up tax under the Luxembourg and United Kingdom UTPR equal to the amount of the deferred tax expense for that year associated with the economic transition adjustment. Consequently, White Mountains expects to derive no economic benefit from the Bermuda economic transition adjustment and intends to opt out of the economic transition adjustment upon becoming subject to Bermuda corporate income tax. Accordingly, White Mountains recognized a deferred tax expense of $78 million in 2025 to reverse the net deferred tax asset related to the Bermuda economic transition adjustment.
On December 11, 2025, the Bermuda government enacted legislation providing certain incentives for Bermuda-based employment, training, local expenditure and community development. The incentives are based on qualifying expenditures of eligible Bermuda entities and are provided in the form of a refundable tax credit. A Bermuda entity may be eligible for the incentives regardless of whether it is subject to the Bermuda corporate income tax. For the nine months ended September 30, 2026, White Mountains recognized a $13 million benefit for the incentives as a reduction to general and administrative expenses.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA"). White Mountains does not expect the OBBBA to have a material impact on its financial statements.
White Mountains's income tax expense related to pre-tax loss from continuing operations for the three months ended September 30, 2026, represented an effective tax rate of (28)%. The effective tax rate was different from the U.S. statutory rate of 21%, driven primarily by (i) pre-tax income from continuing operations being near break-even, which allows small tax amounts to dramatically change the effective tax rate, (ii) unrealized gains on U.S. investments held by a U.K. company, which are subject to U.S. tax but not U.K. tax, and (iii) full valuation allowances on deferred tax assets at certain U.S. operations, partially offset by full year forecasted income in jurisdictions with lower tax rates than the United States.
White Mountains's income tax expense related to pre-tax income from continuing operations for the nine months ended September 30, 2026, represented an effective tax rate of 15%. The effective tax rate was different from the U.S. statutory rate of 21%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States, partially offset by (i) tax expense on unrealized gains of U.S. investments held by a U.K. company, which are subject to U.S. tax but not U.K. tax and (ii) full valuation allowances on deferred tax assets at certain U.S. operations.
White Mountains's income tax expense related to pre-tax income from continuing operations for the three and nine months ended September 30, 2025, represented an effective tax rate of 10% and 9%. The effective tax rate was different from the U.S. statutory rate of 21%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States.
LIQUIDITY AND CAPITAL RESOURCES
Operating Cash and Short-term Investments
Holding Company Level
The primary sources of cash for the Company and certain of its intermediate holding companies are expected to be distributions from its insurance, reinsurance and other operating subsidiaries, net investment income, proceeds from sales, repayments and maturities of investments, borrowings from credit facilities, capital raising activities and, from time to time, proceeds from sales of operating subsidiaries. The primary uses of cash are expected to be general and administrative expenses, purchases of investments, payments to tax authorities, payments on and repurchases/retirements of debt obligations, dividend payments to holders of the Company's common shares, distributions to noncontrolling interest holders of consolidated subsidiaries, contributions to operating subsidiaries and, from time to time, purchases of operating subsidiaries and repurchases of the Company's common shares.
Operating Subsidiary Level
The primary sources of cash for White Mountains's insurance, reinsurance and other operating subsidiaries are expected to be (i) collections of premiums, commissions and fees and product and services revenues, (ii) net investment income, (iii) proceeds from sales, repayments and maturities of investments, (iv) contributions from holding companies, (v) borrowings from credit facilities and (vi) capital raising activities. The primary uses of cash are expected to be claim payments, policy acquisition costs, general and administrative expenses, broker commission expenses, cost of sales, purchases of investments, payments to tax authorities, payments on and repurchases/retirements of debt obligations, distributions to holding companies, distributions to noncontrolling interest holders and, from time to time, purchases of operating subsidiaries.
Both internal and external forces influence White Mountains's financial condition, results of operations and cash flows. Collections of premiums, commissions and fees, product and services revenues, investment returns, claim payments and cost of sales may be impacted by changing rates of inflation and other economic conditions. Some time may lapse between the occurrence of an insured loss, the reporting of the loss to White Mountains's insurance and reinsurance operating subsidiaries and the settlement of the liability for that loss. The exact timing of the payment of losses cannot be predicted with certainty. White Mountains's insurance and reinsurance operating subsidiaries maintain portfolios of invested assets with varying maturities and a substantial amount of cash and short-term investments to provide adequate liquidity for the payment of claims.
Management believes that White Mountains's cash balances, cash flows from operations and routine sales and maturities of investments are adequate to meet expected cash requirements for the foreseeable future at both a holding company and insurance, reinsurance and other operating subsidiary level.
Dividend Capacity
Following is a description of the dividend capacity of White Mountains's insurance and reinsurance and other operating subsidiaries:
Ark/WM Outrigger
During any 12-month period, GAIL, a class 4 licensed Bermuda insurer, has the ability to (i) make capital distributions of up to 15% of its total statutory capital per the previous year's statutory financial statements or (ii) make dividend payments of up to 25% of its total statutory capital and surplus per the previous year's statutory financial statements, without prior approval of Bermuda regulatory authorities. Accordingly, GAIL will have the ability to pay a dividend of up to $425 million during 2026, which is equal to 25% of its statutory capital and surplus of $1,700 million as of December 31, 2025, subject to meeting all appropriate liquidity and solvency requirements. During the first nine months of 2026, GAIL did not pay any dividends to its immediate parent.
During the first nine months of 2026, Ark paid a $51 million dividend to shareholders, including $36 million that was paid to White Mountains. As of September 30, 2026, Ark and its intermediate holding companies had less than $1 million of net unrestricted cash and short-term investments outside of its regulated and unregulated insurance and reinsurance operating subsidiaries.
WM Outrigger Re is a special purpose insurer subject to regulation and supervision by the BMA. WM Outrigger Re does not require regulatory approval to pay dividends; however, its dividend capacity is limited to amounts held outside of the collateral trust pursuant to its reinsurance agreement with GAIL. As of September 30, 2026, WM Outrigger Re had less than $1 million of net unrestricted cash held outside the collateral trust. As of September 30, 2026, WM Outrigger Re had $14 million of statutory capital and surplus and $48 million of assets held in the collateral trusts pursuant to the reinsurance agreement with GAIL. During the first nine months of 2026, White Mountains received $222 million of distributions from WM Outrigger Re.
Kudu
During the first nine months of 2026, Kudu distributed $12 million to unitholders, substantially all of which was paid to White Mountains. As of September 30, 2026, Kudu had $112 million of net unrestricted cash and short-term investments.
HG Global
As of September 30, 2026, HG Global had $619 million face value of preferred shares outstanding, of which White Mountains owned 96.9%. Holders of the HG Global preferred shares are entitled to receive cumulative dividends at a fixed annual rate of 6.0% on a quarterly basis, payable when and if declared by HG Global. As of September 30, 2026, HG Global has accrued $502 million of dividends payable to holders of its preferred shares, $487 million of which is payable to White Mountains and is eliminated in consolidation. As of September 30, 2026, HG Global and its subsidiaries had $16 million of net unrestricted cash and short-term investments outside of HG Re.
HG Re is a special purpose insurer subject to regulation and supervision by the BMA. HG Re does not require regulatory approval to pay dividends; however, its dividend capacity is limited to amounts held outside of the Collateral Trusts. As of September 30, 2026, HG Re had $2 million of net unrestricted cash and short-term investments. As of September 30, 2026, HG Re had $197 million of accrued interest on the BAM Surplus Notes held outside the Collateral Trusts. As of September 30, 2026, HG Re had $711 million of statutory capital and surplus and $993 million of assets held in the Collateral Trusts.
HG Global has two primary sources of cash flows: (i) interest payments on the BAM Surplus Notes that are made outside the Collateral Trusts and (ii) releases of excess balances from the Collateral Trusts. During the first nine months of 2026, HG Global received a cash payment of principal and interest on the BAM Surplus Notes of $8 million. Of this payment, $5 million was a repayment of principal held in the Supplemental Trust, less than $1 million was a payment of accrued interest held in the Supplemental Trust and $3 million was a payment of accrued interest held outside the Supplemental Trust. During the first nine months of 2026, HG Re received a distribution from the Supplemental Trust of $42 million, which consisted of an assignment of accrued interest on the BAM Surplus Notes of $21 million and a cash distribution of $21 million. See Note 10 - "Municipal Bond Guarantee Reinsurance."
On May 14, 2026, HG Global refinanced its senior debt facility under a private placement transaction. In turn, on May 26, 2026, HG Global paid a $93 million cash dividend to shareholders, of which $90 million was paid to White Mountains.
Distinguished
During the first nine months of 2026, Distinguished did not make any distributions to its unitholders. As of September 30, 2026, Distinguished had $13 million of net unrestricted cash and short-term investments.
WTM Partners
During the first nine months of 2026, WTM Partners distributed $8 million to unitholders, of which $6 million was paid to White Mountains. As of September 30, 2026, WTM Partners had $11 million of net unrestricted cash and short-term investments.
Other Operations
During the first nine months of 2026, White Mountains paid a $2 million common share dividend. As of September 30, 2026, the Company and its intermediate holding companies had $601 million of net unrestricted cash, short-term investments and fixed maturity investments, $171 million of MediaAlpha common stock, $204 million of common equity securities and $344 million of private equity and hedge funds, ILS funds and certain unconsolidated entities.
During the first nine months of 2026, White Mountains received a distribution of $26 million from the Bamboo SPV, of which $21 million was a return of capital and $5 million was a dividend.
Financing
The following table presents White Mountains's capital structure as of September 30, 2026 and December 31, 2025:
| $ in Millions | September 30, 2026 | December 31, 2025 | ||||||||||||
| Ark 2021 Subordinated Notes | $ | 159.0 | $ | 159.7 | ||||||||||
| Kudu Credit Facility | 350.9 | 350.4 | ||||||||||||
| HG Global 2026 Senior Notes | 197.4 | - | ||||||||||||
| HG Global 2022 Senior Notes | - | 147.8 | ||||||||||||
| Distinguished Credit Facility | 129.1 | 129.9 | ||||||||||||
|
Distinguished other debt
|
11.8 | 10.9 | ||||||||||||
| WTM Partners Debt | 63.1 | 19.4 | ||||||||||||
| Other Operations Debt | 17.3 | 18.9 | ||||||||||||
|
Total debt (1) (2)
|
928.6 | 837.0 | ||||||||||||
|
Redeemable noncontrolling interests
|
131.5 | 131.5 | ||||||||||||
|
Nonredeemable noncontrolling interests
|
741.7 | 698.2 | ||||||||||||
| Total White Mountains's common shareholders' equity | 5,353.1 | 5,425.4 | ||||||||||||
| Total capital | $ | 7,154.9 | $ | 7,092.1 | ||||||||||
| Total debt to total capital | 13.0 | % | 11.8 | % | ||||||||||
(1) See Note 7 - "Debt."
(2) Net of unamortized issuance costs and original issue discount, where applicable.
On July 16, 2025, the Company entered into the WTM Credit Facility, a senior unsecured revolving credit facility of up to $250 million that matures on July 16, 2028. As of September 30, 2026, the WTM Credit Facility was undrawn.
Management believes that White Mountains has the flexibility and capacity to obtain funds externally through debt or equity financing on both a short-term and long-term basis. However, White Mountains can provide no assurance that, if needed, it would be able to obtain additional debt or equity financing on satisfactory terms, if at all.
It is possible that the existing ratings for one or more of White Mountains's subsidiaries may be lowered in the future, which could result in higher borrowing costs and impact White Mountains's ability to access the capital markets.
Covenant Compliance
As of September 30, 2026, White Mountains was in compliance in all material respects with all of the covenants under its debt instruments.
Share Repurchase Programs
The Company's Board of Directors has authorized the Company to repurchase its common shares from time to time, subject to market conditions. Shares may be repurchased on the open market or through privately negotiated transactions. The repurchase authorizations do not have a stated expiration date. As of September 30, 2026, White Mountains may repurchase an additional 169,996 shares under these Board authorizations. In addition, from time to time, White Mountains has also repurchased its common shares through self-tender offers that were separately authorized by its Board of Directors.
During the first nine months of 2026, White Mountains repurchased and retired 103,827 of its common shares for $217 million at an average share price of $2,088, which was approximately 93% of White Mountains's book value per share as of September 30, 2026. Of the shares White Mountains repurchased in the first nine months of 2026, 4,229 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the amount available under the Board repurchase authorizations.
During the first nine months of 2025, White Mountains repurchased and retired 5,097 of its common shares for $10 million at an average share price of $1,945, which was approximately 105% of White Mountains's book value per share as of September 30, 2025. All of the shares White Mountains repurchased in the first nine months of 2025 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the amount available under the Board repurchase authorizations.
Cash Flows
Detailed information concerning White Mountains's cash flows from continuing operations during the nine months ended September 30, 2026 and 2025 follows:
Cash flows from operations for the nine months ended September 30, 2026 and September 30, 2025
Net cash provided from operations was $332 million for the first nine months of 2026 compared to $497 million for the first nine months of 2025. The decrease in net cash provided from operations was driven primarily by an increase in cash used for operations at Ark/WM Outrigger as well as a decrease in cash provided from operations as a result of the sale of Bamboo in 2025, partially offset by proceeds from a sale transaction at Kudu in 2026. As of September 30, 2026, the Company and its intermediate holding companies had $601 million of net unrestricted cash, short-term investments and fixed maturity investments, $171 million of MediaAlpha common stock, $204 million of common equity securities and $344 million of private equity funds, hedge funds, ILS funds and certain unconsolidated entities.
Cash flows from investing and financing activities for the nine months ended September 30, 2026
Financing and Other Capital Activities
During the first nine months of 2026, the Company declared and paid a $2 million cash dividend to its common shareholders.
During the first nine months of 2026, White Mountains repurchased and retired 103,827 of its common shares for $217 million, of which 4,229 were to satisfy employee income tax withholding pursuant to employee benefit plans.
On May 14, 2026, HG Global refinanced the HG Global 2022 Senior Notes under a private placement transaction. In the refinancing, HG Global issued $200 million face value fixed rate secured senior notes with a maturity date of May 14, 2036 and received net proceeds of $197 million. HG Global used $150 million of these proceeds to repay the outstanding principal on the HG Global 2022 Senior Notes.
During the first nine months of 2026, Kudu repurchased $19 million of management equity incentives.
During the first nine months of 2026, Distinguished repaid $1 million of the Distinguished Credit Facility.
Acquisitions and Dispositions
On April 1, 2026, WTM Partners closed the Basesix Transaction. WTM Partners paid $96 million of cash consideration, which included a post-acquisition capital contribution of $1 million and a post-closing purchase price reduction of $1 million. In addition, Basesix borrowed $20 million in new debt as part of the transaction.
On May 1, 2026, Enterprise Solutions closed the Hawkeye Electric Transaction. Enterprise Solutions paid $67 million of cash consideration, which included net debt financing of $26 million and a post-closing purchase price reduction of less than $1 million. In addition, Hawkeye Electric utilized $6 million of cash on hand as part of the transaction.
Cash flows from investing and financing activities for the nine months ended September 30, 2025
Financing and Other Capital Activities
During the first nine months of 2025, the Company declared and paid a $3 million cash dividend to its common shareholders.
During the first nine months of 2025, White Mountains repurchased and retired 5,097 of its common shares for $10 million, all of which were to satisfy employee income tax withholding pursuant to employee benefit plans.
During the first nine months of 2025, Kudu borrowed $37 million in term loans under the Kudu Credit Facility.
During the first nine months of 2025, White Mountains contributed $15 million to Kudu, which was used to repurchase certain management equity incentives that were then replaced with new equity incentive units.
During the first nine months of 2025, Bamboo borrowed $110 million in term loans under the Bamboo Credit Facility.
Acquisitions and Dispositions
On April 1, 2025, WTM Partners closed the Enterprise Solutions Transaction. WTM Partners paid $58 million of cash consideration, which included a post-acquisition capital contribution of $2 million and a post-closing purchase price reduction of less than $1 million. In addition, Enterprise Solutions borrowed $15 million in new debt as part of the transaction.
On July 18, 2025, White Mountains deployed $150 million into BroadStreet through the BroadStreet SPV.
On September 2, 2025, White Mountains closed its acquisition of Distinguished. White Mountains paid $224 million of cash consideration and Distinguished borrowed $50 million of incremental debt as part of the transaction.
NON-GAAP FINANCIAL MEASURES
This report includes eleven non-GAAP financial measures that have been reconciled from their most comparable GAAP financial measures.
Ark's tangible book value, growth in tangible book value and tangible capital
Ark's tangible book value, growth in tangible book value and tangible capital are non-GAAP financial measures. Tangible book value is a non-GAAP financial measure derived by adjusting GAAP book value to exclude (i) goodwill and other intangible assets, (ii) the deferred tax liability on other intangible assets and (iii) the contingent consideration liability. The contingent consideration liability represents the estimated fair value of the additional shares that could be earned by management rollover shareholders if and to the extent that White Mountains achieves certain MOIC return thresholds. If earned, these additional shares would result in a reallocation of economics among Ark's shareholders, which is reflected in the fair value of the contingent consideration liability recorded by White Mountains, but would have no impact on Ark's stand-alone book value or tangible book value. Growth in tangible book value equals the change in tangible book value plus dividends for the period divided by beginning tangible book value. Ark's tangible capital is a non-GAAP financial measure derived by adding debt to tangible book value. White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating Ark's enterprise value.
The following table presents the reconciliation of Ark's GAAP book value to tangible book value and tangible capital:
| $ in Millions | September 30, 2026 |
June 30, 2026 |
December 31, 2025 | |||||||||||||||||
| Ark's GAAP book value | $ | 1,673.2 | $ | 1,615.0 | $ | 1,593.9 | ||||||||||||||
|
Less: goodwill and other intangible assets, net (1)
|
(248.6) | (248.6) | (248.6) | |||||||||||||||||
| Plus: contingent consideration | 400.0 | 370.0 | 328.3 | |||||||||||||||||
| Ark's tangible book value | 1,824.6 | 1,736.4 | 1,673.6 | |||||||||||||||||
| Plus: debt | 159.0 | 159.0 | 159.7 | |||||||||||||||||
| Ark's tangible capital | $ | 1,983.6 | $ | 1,895.4 | $ | 1,833.3 | ||||||||||||||
| Year-to-date dividends declared | $ | 50.5 | $ | 50.5 | $ | 41.5 | ||||||||||||||
| Quarter-to-date growth in GAAP book value, including dividends: | 3.6 | % | 4.4 | % | (2.1) | % | ||||||||||||||
| Quarter-to-date growth in tangible book value, including dividends: | 5.1 | % | 6.1 | % | 4.0 | % | ||||||||||||||
| Year-to-date growth in GAAP book value, including dividends: | 8.1 | % | 4.5 | % | 13.7 | % | ||||||||||||||
| Year-to-date growth in tangible book value, including dividends: | 12.0 | % | 6.8 | % | 27.6 | % | ||||||||||||||
(1) Amounts are net of deferred tax liabilities related to other intangible assets of $43.9.
Kudu's EBITDA and adjusted EBITDA
Kudu's EBITDA and adjusted EBITDA are non-GAAP financial measures. EBITDA is a non-GAAP financial measure that adds back interest expense on debt, income tax (expense) benefit, depreciation and amortization of other intangible assets to GAAP net income (loss). Adjusted EBITDA is a non-GAAP financial measure that excludes certain other items in GAAP net income (loss) in addition to those added back to calculate EBITDA. The items relate to (i) net realized and unrealized investment gains (losses) on Kudu's Participation Contracts and (ii) transaction expenses. A description of each item follows:
•Net realized and unrealized investment gains (losses) - Represents net unrealized investment gains and losses recorded on Kudu's Participation Contracts, which are recorded at fair value under GAAP, and realized investment gains and losses on Kudu's Participation Contracts sold during the period.
•Transaction expenses - Represents costs directly related to Kudu's mergers and acquisitions activity, such as external lawyer, banker, consulting and placement agent fees, which are not capitalized and are expensed under GAAP.
White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating Kudu's underlying performance. See page 67 for the reconciliation of Kudu's GAAP net income (loss) to EBITDA and adjusted EBITDA.
Distinguished's ScaleCo net income (loss), ScaleCo EBITDA and ScaleCo adjusted EBITDA
Distinguished's ScaleCo net income (loss), ScaleCo EBITDA and ScaleCo adjusted EBITDA are non-GAAP financial measures. ScaleCo net income (loss) is a non-GAAP financial measure that excludes the results of the GrowthCo vertical, which is consolidated under GAAP, from Distinguished's consolidated GAAP net income (loss). ScaleCo EBITDA is a non-GAAP financial measure that adds back interest expense on debt, income tax (expense) benefit, depreciation and amortization of other intangible assets to ScaleCo net income (loss). ScaleCo adjusted EBITDA is a non-GAAP financial measure that excludes certain other items in GAAP net income (loss) in addition to those items added back to calculate ScaleCo EBITDA. The items relate to (i) non-cash equity-based compensation expense, (ii) restructuring expenses, (iii) software impairment and (iv) legal settlement expenses. A description of each item follows:
•Non-cash equity-based compensation expense - Represents non-cash expenses related to Distinguished's management compensation that are settled with equity units in Distinguished.
•Restructuring expenses - Represents costs related to Distinguished's corporate restructuring and capital planning activities.
•Software impairment - Represents expense related to Distinguished's write-off of capitalized software that is no longer in use.
•Legal settlement expenses - Represents amounts incurred related to legal settlements.
White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating Distinguished's underlying performance. White Mountains also believes that excluding the results of the GrowthCo vertical, which Distinguished views as an investment in start-up programs, is useful to understanding the underlying performance of Distinguished's established programs. See page 73 for the reconciliation of Distinguished's consolidated GAAP net income (loss) to ScaleCo net income (loss), ScaleCo EBITDA and ScaleCo adjusted EBITDA.
WTM Partners's EBITDA and adjusted EBITDA
WTM Partners's EBITDA and adjusted EBITDA are non-GAAP financial measures. EBITDA is a non-GAAP financial measure that adds back interest expense on debt, income tax (expense) benefit, depreciation and amortization of other intangible assets to GAAP net income (loss). Adjusted EBITDA is a non-GAAP financial measure that excludes certain other items in GAAP net income (loss) in addition to those added back to calculate EBITDA. The items relate to (i) transaction expenses and (ii) restructuring and integration expenses. A description of each item follows:
•Transaction expenses - Represents costs directly related to WTM Partners's mergers and acquisitions activity, such as external lawyer, banker, consulting and placement agent fees, which are not capitalized and are expensed under GAAP.
•Restructuring and integration expenses - Represents costs related to WTM Partners's corporate restructuring and mergers and acquisitions integration activities.
White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating WTM Partners's underlying performance. See page 74 for the reconciliation of WTM Partners's GAAP net income (loss) to EBITDA and adjusted EBITDA.
Total consolidated portfolio return excluding MediaAlpha
Total consolidated portfolio return excluding MediaAlpha is a non-GAAP financial measure that removes the net investment income and net realized and unrealized investment gains (losses) from White Mountains's investment in MediaAlpha. White Mountains believes this measure to be useful to management and investors by showing the underlying performance of White Mountains's investment portfolio without regard to White Mountains's investment in MediaAlpha.
The following table presents return reconciliations from GAAP to the reported percentages for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Total consolidated portfolio return | (0.6) | % | 2.1 | % | 3.0 | % | 6.6 | % | ||||||||||||||||||
| Remove MediaAlpha | 0.6 | (0.1) | 0.9 | 0.2 | ||||||||||||||||||||||
| Total consolidated portfolio return excluding MediaAlpha | - | % | 2.0 | % | 3.9 | % | 6.8 | % | ||||||||||||||||||
CRITICAL ACCOUNTING ESTIMATES
Refer to the Company's 2025 Annual Report on Form 10-K for a complete discussion regarding White Mountains's critical accounting estimates.
FORWARD-LOOKING STATEMENTS
This report may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this report which address activities, events or developments which White Mountains expects or anticipates will or may occur in the future are forward-looking statements. The words "may," "could," "will," "believe," "intend," "expect," "anticipate," "project," "estimate," "predict" and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to White Mountains's:
•change in book value per share or return on equity;
•business strategy;
•financial and operating targets or plans;
•incurred loss and LAE and the adequacy of its loss and LAE reserves and related reinsurance;
•projections of revenues, income (or loss), earnings (or loss) per share, EBITDA, adjusted EBITDA, dividends, market share or other financial forecasts of White Mountains or its businesses;
•expansion and growth of its business and operations; and
•future capital expenditures.
These statements are based on certain assumptions and analyses made by White Mountains in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to its expectations and predictions is subject to risks and uncertainties that could cause actual results to differ materially from expectations, including:
•the risks 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 2025 Annual Report on Form 10-K;
•claims arising from catastrophic events, such as hurricanes, windstorms, earthquakes, floods, wildfires, tornadoes, tsunamis, severe weather, public health crises, terrorist attacks, war and war-like actions, explosions, infrastructure failures or cyber attacks;
•recorded loss reserves subsequently proving to have been inadequate;
•the market value of White Mountains's investment in MediaAlpha;
•business opportunities (or lack thereof) that may be presented to it and pursued;
•actions taken by rating agencies, such as financial strength or credit ratings downgrades or placing ratings on negative watch;
•the continued availability of capital and financing;
•the continued availability of fronting and reinsurance capacity;
•deterioration of general economic, market or business conditions, including due to war and war-like actions and outbreaks of contagious disease and corresponding mitigation efforts;
•competitive forces, including the conduct of other insurers;
•changes in domestic or foreign laws or regulations, or their interpretation, applicable to White Mountains, its competitors or its customers; and
•other factors, most of which are beyond White Mountains's control.
Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by White Mountains will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, White Mountains or its business or operations. White Mountains assumes no obligation to publicly update any such forward-looking statements, whether as a result of new information, future events or otherwise.
White Mountains Insurance Group Ltd. published this content on November 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 05, 2026 at 13:18 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]