WTM 10-K & 10-Q changes, risk factors and insider trading

As of December 31, 2024,2025, we had total goodwill and other intangible assets of $720$1,020 million on our consolidated balance sheet, $355 million of which $578 million relates to our acquisition of BambooDistinguished and $293 million of which relates to our acquisition of Ark.

Ark and WM Outrigger Re writeunderwrites insurance and reinsurance policies that cover unpredictable catastrophic events all over the world. Ark and WM Outrigger Re havehas exposure to losses caused by eventsnatural including naturaldisasters and other disastersevents such as hurricanes, windstorms, earthquakes, floods, wildfires, tornadoes, tsunamis and severe weather. Catastrophes can also include large losses driven by public health crises, terrorist attacks, war and war-like actions, explosions, infrastructure failures and cyber attacks.

The extent of a catastrophe loss is a function of both the severity of the event and the total amount of insured exposure to the event, as well as the coverage provided to customers. Increases in the value and concentration of insured property or insured employees, the effects of inflation, changes in weather patterns and increased terrorism and war and war-like actions could increase the future frequency and/or severity of claims from catastrophic events. Climate change, which is characterized by higher temperatures, sea level rise and more extreme weather events including droughts, heavy storms, wildfires and stronger hurricaneshurricanes, increases the frequency and severity of certain major natural catastrophes. There is also a growing threat of cyber risks due to the increasing interconnectivity of global systems. Claims from catastrophic events could materially adversely affect our results of operations and financial condition. Ark’sIn abilityaddition, following a large loss event, Ark could have diminished capacity to write new insurance and reinsurance policies coulddue also be impacted as a result of correspondingto reductions in its capital levels. WM Outrigger Re’s obligations under its quota share reinsurance agreement with GAIL is subject to an aggregate limit equal to the assets in the collateral trust account at any point in time.

Ark seeks to manage its exposure to catastrophic losses by limiting and monitoring the aggregate insured value of policies in geographic areas with exposure to catastrophic events and by buying reinsurance. To manage, monitor and analyze insured values and potential losses, Ark utilizes proprietary and third-party catastrophe management software to estimate potential losses for many different catastrophe scenarios. Ark incorporates the physical risk of climate change in its underwriting process through sensitivity and stress testing of its catastrophe models, including increased frequency of U.S. windstorms and the implications of storm surge. Ark’s estimates of potential losses are dependent on many variables, including assumptions about storm intensity, storm surge, loss amplification, loss adjustment expenses and insurance-to-value in the aftermath of weather-related catastrophes. In addition, Ark has to account for quality of data provided by insureds. Accordingly, if the assumptions are incorrect, the actual losses Ark and WM Outrigger Re might incur from an actuala catastrophe could be materially different than the expectation of losses generated from modeled catastrophe scenarios, which could materially adversely affect our results of operations and financial condition.

The maintenance of an “A-” or better financial strength rating is particularly important to Ark’s ability to write property and casualty insurance and reinsurance business in most markets. Ark writes insurance and reinsurance through Lloyd’s Syndicates 4020 and 3902, each of which benefits from the financial strength rating of “A+/stable” by A.M. Best and “AA-/stable” by Standard & Poor’s assigned to the Lloyd’s marketplace. Beginning in January 2021, Ark began writing certain classes of its business through GAIL, Ark’s wholly-owned Bermuda-based insurance and reinsurance company, which has an “A/stable” financial strength rating by A.M. Best. See “RATINGS” on page 28.

Ark may not successfullyadequately alleviate risk through reinsurance and retrocessional arrangements, which could materially adversely affect our results of operations and financial condition.

Ark attempts to limit its risk of loss through reinsurance and retrocessional arrangements, including through its quota share reinsurance agreement with Outrigger Re Ltd.arrangements. Retrocessional arrangements refer to reinsurance purchased by a reinsurer to cover its own risks assumed from ceding companies. The availability and cost of reinsurance and retrocessional protection is subject to market conditions, which are outside of Ark’s control. In addition, the coverage provided by Ark’s reinsurance and retrocessional arrangements may be inadequate tonot cover certain of its future liabilities. As a result, Ark may not be able to successfullyadequately alleviate risk through these arrangements, which could materially adversely affect our results of operations and financial condition.

In addition, due to factorsvarious suchfactors, asincluding the price or availability of reinsurance or retrocessional coverage, Ark sometimesmay decidesdecide to increase the amount of risk retained by purchasing less reinsurance. Such determinationsa havedetermination has the effect of increasing Ark’s financial exposure to losses associated with risks that it underwrites and, in the event of significant losses associated with a given risk, could materially adversely affect our results of operations and financial condition.

Purchasing reinsurance does not relieve Ark of its underlying obligations to policyholders or ceding companies,companies. soAs a result, any inability to collect amounts due from reinsurers could materially adversely affect our results of operations and financial condition. InabilityThe inability to collect amounts due from reinsurers, including Outrigger Re Ltd., can result from a number of scenarios, including: (i) reinsurers choosing to withholdwithholding payment due to a disputedispute, including coverage terms, adverse judicial rulings or failed arbitration, or other factors beyond Ark’s control; (ii) reinsurers becoming unable to pay amounts owed to Ark as a result of a deterioration in their financial condition; and (iii) in the case of Outrigger Re Ltd., losses exceeding amounts within the collateral trust accounts for Outrigger Re Ltd.accounts. While we currently believe the condition of Ark’s reinsurers is strong, it is possible that one or more of Ark’s reinsurers will be adversely affected by future significant losses or economic events,events causing them to be unable or unwilling to pay amounts owed.

The property and casualty insurance and reinsurance industries are highly competitive and have historically been cyclical, experiencing periods of severe price competition and less selective underwriting standards (soft markets) followed by periods of relatively high prices and more selective underwriting standards (hard markets). Ark competes with other Lloyd’s syndicates, London market participants and major U.S., Bermuda, European and other international insurance and reinsurance companies. Many of these competitors have greater resourcesfinancial than Ark does,resources, have more established long-term and continuing business relationships throughout the insurance and reinsurance industries and may have higher financial strength ratings, which can represent significant competitive advantages for them.

Soft primary insurance market conditions could lead to a significant reduction in reinsurance premium rates, less favorable contract terms and fewer submissions for Ark’s reinsurance underwriting capacity. The supply of reinsurance is also related to the level of reinsured losses and the level of industry capital which, in turn, may fluctuate in response to changes in rates of return earned in the reinsurance industry. As a result, the reinsurance businessindustry historically has been a cyclical industrycyclical, characterized by periods of intense price competition due to excess underwriting capacity, as well as periods when shortages of capacity permitted improvements in reinsurance rate levels and terms and conditions. In addition, the ease of entry into the reinsurance sector facilitates competition from third-party capital in the property catastrophe excess reinsurance line. This alternative capital provides collateralized property catastrophe protection in the form of catastrophe bonds, industry loss warranties, sidecars and other vehicles that facilitate the ability for non-reinsurance entities, such as hedge funds and pension funds, to compete for property catastrophe excess reinsurance business outside of the traditional treaty market.

Ark/WM Outrigger’sArk’s loss and LAE reserves may be inadequate to cover the ultimate liability for losses, andwhich ascould amaterially result,adversely affect our results of operations and financial condition could be adversely affected.condition.

Ark/WM Outrigger must maintainmaintains reserves adequate to cover its estimated ultimate liabilities for loss and LAE. Loss and LAE reserves are typically comprised of (i) case reserves for reported claims and (ii) incurred but not reported (“IBNR”) reserves for losses that have occurred but for which claims have not yet been reported and for expected future development on case reserves. Loss and LAE reserves are estimates of what Ark/WM Outrigger believes the settlement and administration of claims will cost based on facts and circumstances then known. These estimates involve actuarial and claims assessments and require Ark/WM Outrigger to make a number of assumptions about future events that are subject to unexpected changes and are beyond Ark/WM Outrigger’sArk’s control, such as future trends in claim severity, emerging coverage issues, frequency, inflation, legislative and judicial changes, regulatory changes, adverse court rulings and other factors. Because of uncertainties associated with estimating ultimate loss and LAE reserves, we cannot be certain that Ark/WM Outrigger’sArk’s reserves are adequate. In the event that Ark/WM Outrigger’sArk’s reserves are insufficient to cover the actual loss and LAE, Ark/WM Outrigger may need to add to the reserves, which could havematerially aadversely material adverse effect onaffect our results of operations and financial condition. For further discussion of our loss and LAE reserves, see “CRITICAL ACCOUNTING ESTIMATES — Loss and LAE Reserves” on page 85.90.

On MayJuly 29,11, 2024,2025, Standard & Poor’s concluded its most recent review and affirmed BAM’s “AA/stable” financial strength rating. A downgrade, withdrawal or negative watch/outlook of BAM’s financial strength rating could severely limit or prevent BAM’s ability to write municipal bond insurance policies, which could materially adversely affect HG Re’s business, and, consequently, could materially adversely affect our results of operations and financial condition.

As of December 31, 2024,2025, White Mountains owned BAM Surplus Notes with a principal balance of $301$277 million and accrued interest receivable of $195$214 million, both at nominal value. The BAM Surplus Notes were carried at theira fair value of $382$339 million as of December 31, 2024.2025. No payment of principal or interest on the BAM Surplus Notes may be made without the approval of the NYDFS. Under its agreements with HG Global, BAM is required to seek regulatory approval to pay principal and interest on the BAM Surplus Notes only to the extent that its capital resources continue to support its outstanding obligations, business plan and rating. It is unlikely that BAM would pay principal and interest on the BAM Surplus Notes if such payments could lead to a rating downgrade. In 2024,2025, the NYDFS approved cash payments of principal and interest on the BAM Surplus Notes totaling $30$35 million. We cannot guarantee that the NYDFS will approve payments on the BAM Surplus Notes in the future.

If BAM does not repay some or all of the principal and interest on the BAM Surplus Notes, it could materially adversely affect our results of operations and financial condition. BAM’s ability to repay principal and interest on the BAM Surplus Notes is dependent on a number of factors, many of which are beyond BAM’s control, including primary municipal bond issuance levels, insured penetration rates, interest rate levels, credit spreads, trading value, capture rate and market share. BAM also could incur significant losses from the municipal bonds it insures. If BAM does not repay some or all of the principal and interest on the BAM Surplus Notes, it could materially adversely affect our results of operations and financial condition.

We may be subject to greater volatility from the BAM Surplus Notes, as the valuation of the BAM Surplus Notes under the discounted cash flow analysis subsequent to deconsolidation could be more volatile,Notes, which could materially adversely affect our results of operations and financial condition.

As of December 31, 2025, the fair value of the BAM Surplus Notes was $339 million using a discounted cash flow analysis. White Mountains’s reported book value per share and adjusted book value per share may be subject to greater volatility in the future, as the valuation of the BAM Surplus Notes under the discounted cash flow analysis could be morevolatile. volatile.For example, in 2025 White Mountains recognized a decrease of $38 million in the fair value of the BAM Surplus Notes. We use judgment in selecting the key inputs to the discounted cash flow analysis. With a discounted cash flow analysis, small changes to key inputs may result in significant changes to fair value. See “BAM Surplus Notes” under “CRITICAL ACCOUNTING ESTIMATES — Fair Value Measurements” on page 8288 for a description of the methodology and key inputs we use to determine the valuation of the BAM Surplus Notes. Given the inherent subjectivity and uncertainty in the methodology and inputs used to determine the fair value of the BAM Surplus Notes, the value established using this methodology may not be fully realized. Should there be a significant decrease in the valuation of the BAM Surplus Notes, it could materially adversely affect our results of operations and financial condition.

The municipal bond industry is highly regulated at the federal and state level, and certain municipal bonds enjoy preferential tax treatment. Significant changes to these regulations or to the tax treatment of municipal bonds could affect the attractiveness of and market for BAM’s financial guarantee solutions. This could in turn materially adversely affect BAM’s and HG Re’s business and, consequently, could materially adversely affect our results of operations and financial condition.

The municipal bond market is subject to regulations at both the federal and state level, and certain municipal bonds enjoy preferential tax treatment. Changes to such regulations or to the tax treatment of municipal bonds could affect the issuance of certain municipal bonds or could reduce the attractiveness of and market for BAM’s financial guarantee solutions. This could decrease the amount of bond insurance issued by BAM and thereby reduce payments on the BAM Surplus Notes and risk premiums ceded to HG Re, both of which could materially adversely affect our results of operations and financial condition.

Kudu’s financial performance is dependent upon its clients’ asset and performance-based fees, which are subject to a variety of economic, market and other risks. Additionally, Kudu’s managers participate in a highly competitive, highly regulated industry. Kudu’s managers may not be able to compete effectively in the future, which could materially adversely affect our results of operations and financial condition.

Kudu provides capital solutions for asset and wealth management firms through Participation Contracts, which are noncontrolling equity interests in the form of revenue and earnings participation contracts.Contracts. Kudu’s investeesmanagers generate their revenues and earnings by charging asset-based fees, which are typically a percentage of the value of the assets they manage for their clients, and/or performance-based fees, which are typically a portion of actual returns achieved for their clients above a target return. TheMuch of the revenue that Kudu generates from its clients is subject to the same general economic and market risks that may affect our investment portfolio. See Risk Factors, “Our investment portfolio may suffer reduced returns or losses, which could materially adversely affect our results of operations and financial condition. Adverse changes in equity markets, interest rates, debt markets or foreign currency exchange rates could result in significant losses to the value of our investment portfolio.” on page 35.

Additionally, Kudu’s investeesmanagers participate in a highly competitive, highly regulated industry that subjects their operations to a number of other risks that are out of our control and could materially adversely affect our results of operations and financial condition,control, including (i) changes in investor preference from the actively-managed investments offered by Kudu’s investeesmanagers to passively-managed investments; (ii) the ability of Kudu’s investeesmanagers to successfully attract new clients and retain existing ones; (iii) the ability of Kudu’s investeesmanagers to avoid fee compression; (iv) the reliance of Kudu’s investeesmanagers on a small number of key personnel; and (v) future changes to regulations that make Kudu’s investees’managers’ businesses more cumbersome and expensive to operate. If Kudu’s managers are unable to compete effectively in the future, Kudu’s business may be materially adversely affected, which could materially adversely affect our results of operations and financial condition.

Risks Related to Bamboo’sDistinguished’s Business and Industry

Distinguished generates most of its revenues from commissions that are a portion of premiums charged by insurance companies to their insureds. Distinguished is an MGA and program administrator with delegated binding authorities, and as such, its carrier partners bear the insurance risk on the programs designed and underwritten by Distinguished. Should BambooDistinguished fail to meet the profitability expectations of itsthe Capacity Providerscarriers that writeunderwrite the business it places, itsthose Capacity Providerscarriers could choose to stop writingunderwriting the business or reduce the commission rate they will pay for placement services, which could materially adversely affect Distinguished’s commission revenues and, consequently, could materially adversely affect our results of operations and financial condition.

ForDistinguished placed approximately 22% of its business with its single largest carrier during the year ended December 31, 2024,2025. Distinguished placed approximately 61% of its business with its three largest carriers during the insuranceyear riskended forDecember Bamboo’s31, programs2025. wasShould concentrated, with two third-party Capacity Providers representing approximately 28%any of Bamboo’sthese managed premiums. Should its Capacity Providerscarriers reduce the volume of business accepted from BambooDistinguished or adversely change the terms and conditions,conditions of placement, we cannot guarantee that BambooDistinguished would be able to find other Capacity Providerscarriers to writeassume the business, which could materially adversely affect itsour results of operations and financial condition.

BambooDistinguished primarily relies on third-party agents and brokers to distribute its products, and any deterioration in the relationships with these parties could adversely affect Bamboo’sDistinguished’s business.business, which could materially adversely affect our results of operations and financial condition.

Substantially all of Bamboo’sDistinguished’s products are distributed through third-party agents and brokers who have the principal relationships with policyholders. Agents and brokers generallyhave ownsignificant theinfluence “renewalover rights,”renewals, and thus Bamboo’sDistinguished’s business model is dependent on its relationships with, and the success of, the agents and brokers with whom BambooDistinguished does business.

Because BambooDistinguished primarily relies on third-party agents and brokers as its sales channel, any deterioration in the relationships with these parties or failure to provide competitive compensation could lead them to place less premium with Bamboo.Distinguished. BambooDistinguished places a substantial portion of its premium through a limited number of agents and broker relationships. For the year ended December 31, 2024,2025, the top three relationships accounted for 41%10% of Distinguished’s managed premiums. Certain of these agents and brokers are affiliated with insurance entities that compete with Bamboo. These agents and brokers may favor their own insurance entities over Bamboo. Loss of all or a substantial portion of the business provided by one or more of these agents and brokers could havematerially aadversely materialaffect adverseDistinguished’s effectbusiness, onwhich Bamboo’scould business.materially adversely affect our results of operations and financial condition.

Our investment portfolio primarily consists of fixed maturity investments, short-term investments, common equity securities, our investment in MediaAlpha and other long-term investments. Other long-term investments consist primarily of Kudu’s Participation Contracts, the Bamboo SPV, PassportCard/DavidShield, the BroadStreet SPV, private equity funds and hedge funds, a bank loan fund and Lloyd’s trust deposits. We invest to maximize long-term after-tax total returns while taking prudent levels of risk and maintaining a diversified portfolio subject to our investment guidelines and various regulatory restrictions. However, investing entails substantial risks. We may not achieve our investment objectives, and our investment performance may vary substantially over time. Losses or volatility in the equity or fixed income markets could materially adversely affect our results of operations and financial condition.

The fair market value of our investment portfolio is affected by general economic and market conditions that are outside of our control, including (i) fluctuations in equity market levels, interest rates, debt market levels and foreign currency exchange rates; (ii) public health crises, natural disasters, terrorist attacks, war and war-like actions and other outside events; and (iii) credit losses sustained by issuers. A significant decline in the equity markets such as that experienced from September 2008 to March 2009 could materially adversely affect our results of operations and financial condition. In addition to causing declines in the fair value of securities that we own in our investment portfolio, public health crises, natural disasters, terrorist attacks and other outside events can adversely affect general commercial activity and the economies of many countries, which could materially adversely affect the business, financial condition and results of operations of the entities in which we have invested. For example, reductions of leisure travel, due to (i) travel restrictions imposed by governments due to the COVID-19 pandemic and (ii) fewer international flights in and out of Israel as a result of the regional conflict in the Middle East negatively impacted revenues at PassportCard/DavidShield. We are also exposed to changes in debt markets. Interest rates are highly sensitive to many factors, including governmental monetary policies, economic and political conditions and other factors beyond our control. In particular, a significant increase in interest rates, as experienced in 2022, could result in significant losses in the fair value of our investment portfolio. A significant increase in interest rates that causes severe losses could materially adversely affect our results of operations and financial condition. We also hold investments, such as unconsolidated entities, including Kudu’s Participation Contracts, private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits, ILS funds and private debt instruments, that are not regularly traded in active investment markets and may be illiquid. These investments can experience volatility in their returns or valuation, which could materially adversely affect our results of operations and financial condition.

White Mountains’s investment in MediaAlpha is valued based on the publicly-traded share price of MediaAlpha’s common stock, which at the December 31, 20242025 closing price of $11.29$12.95 per share was $202$231 million. As a result, White Mountains’s reported book value per share and adjusted book value per share may be subject to future volatility, as the valuation of its investment in MediaAlpha is based on the publicly-traded share price of MediaAlpha’s common stock. Should there be a significant decrease in the publicly-traded share price of MediaAlpha’s common stock, it could materially adversely affect our results of operations and financial condition.

As of December 31, 2024,2025, White Mountains owned $1,263$1,814 million in securities, including our investments in Kudu’s Participation ContractsContracts, the Bamboo SPV and PassportCard/DavidShield, that are not actively traded in public markets, do not have readily observable market prices and are classified as Level 3 investments in the GAAP fair value hierarchy. On a quarterly basis, we make a good faith determination of the fair value of our Level 3 investments in our GAAP financial statements using valuation techniques that are inherently subjective and uncertain.

On December 27, 2023, Bermuda enacted a 15% corporate income tax that became effective on January 1, 2025. The Bermuda legislation defers the effective date untilfor Januaryfive 1, 2030,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 Income Inclusion Rule of Pillar Two in any jurisdiction. White Mountains expects to meet the requirements to be exempt from the Bermuda corporate income tax until January 1, 2030.

On December 15, 2022, European Union Member States voted to adopt the European Union Minimum Tax Directive (the “EU Minimum Tax Directive”) in conformity with the Organization for Economic Cooperation and Development (“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 Undertaxed Profits Rule (“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.

On DecemberJuly 20,11, 2023, Luxemburgthe United Kingdom enacted conforming Pillar Two legislation.legislation Theincluding Luxembourgthe IIR and QDMTT. On March 20, 2025, the United Kingdom enacted legislation defersadopting the Pillar Two UTPR. Under the legislation, the effective date of the UTPR untilis deferred for five years to fiscal years beginning on or after December 31, 2029 for LuxembourgU.K. companies in consolidated groups with a non-EU parent company 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,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 LuxembourgU.K. UTPR until January 1, 2030.

IfThe failure by White Mountains fails to meet the requirements of the five-year deferral under the Bermuda corporate income tax or the OECD Pillar Two UTPR,UTPR itscould materially adversely affect our results of operations and financial condition could be materially adversely affected.condition.

The income of our U.S. subsidiaries is subject to U.S. federal, state and local income tax and other taxes. The income of our non-U.S. subsidiaries is generally subject to a lower tax rate than that imposed by the United States. Certain of our non-U.S. subsidiaries are eligible for the benefits of tax treaties between the United States and other countries. We believe our non-U.S. subsidiaries will continue to be eligible for treaty benefits. However, it is possible that factual changes or changes to U.S. tax laws or changes to tax treaties that presently apply to our non-U.S. subsidiaries could increase income subject to tax, or the tax rate on income, in the United States. Similarly, changes to the applicable tax laws, treaties or regulations of other countries could subject the income of members of our group to higher rates of tax outside the United States. Additionally, the base erosion and profit shifting (“BEPS”) project currently being undertaken by the OECD and the European Commission’s investigation into illegal state aid may result in changes to long standing tax principles, which could materially adversely affect our results of operations and financial condition.principles. The recently enacted Bermuda corporate income tax and the Pillar Two worldwide minimum tax currently being enacted around the world are examples of the effects of the BEPS project. Such changes in tax laws or tax treaties could materially adversely affect our results of operations and financial condition.

The Tax Cuts and Jobs Act of 2017 (“TCJA”) modified certain U.S. tax rules that apply to controlled foreign corporations (“CFCs”). As a result of these changes, each of our non-U.S. subsidiaries is treated as a CFC. If any of our shareholders is a “U.S. 10% shareholder” (as described below) that directly or indirectly owns stock in White Mountains, that shareholder must include in its taxable income each year its pro rata share of our CFC subsidiaries’ “subpart F income” and global intangible low-taxed income (“GILTI”) for that year, even if no distributions are received by the U.S. 10% shareholder.

Due to changes made by the TCJA, a shareholder is treated as a U.S. 10% shareholder if the shareholder is a U.S. person who owns directly, indirectly or through constructive ownership rules 10% or more of either the voting power or the total value of our shares. As a result, a U.S. person that owns (directly, indirectly or through constructive ownership rules) 10% or more of our shares will generally be treated as a U.S. 10% shareholder of our CFC subsidiaries, notwithstanding the voting power restrictions of our shares. However, a person that is a U.S. 10% shareholder solely as a result of constructive ownership rules (i.e., such person does not directly or indirectly own stock of White Mountains) should not have a subpart F income inclusion or globalGILTI intangible low-taxed incomeinclusion with respect to our CFC subsidiaries.

If you are a U.S. person who might be a U.S. 10% shareholder or a FCUS shareholder, we encourage you to consult your own tax advisor concerning the CFCthese rules.

We are subject to supervision and regulation by regulatory authorities in the various jurisdictions in which we conduct business, including state and national insurance regulators. Regulatory authorities have broad regulatory, supervisory and administrative powers relating to, among other things, data protection and data privacy, solvency standards, licensing, coverage requirements, policy rates and forms and the form and content of financial reports. Regulatory authorities continue to implement new or enhanced regulatory requirements. Regulatory authorities also may seek to exercise their supervisory or enforcement authority in new or more extensive ways. These actions, if they occur, could affect the competitive market and the way in which we conduct our business and manage our capital and could result in lower revenues and higher costs. As a result, such actions could havematerially aadversely material adverse effect onaffect our results of operations and financial condition.

The following discussion also includes 1112 non-GAAP financial measures: (i) adjustedArk’s tangible book value per share,value, (ii) valueArk’s oftangible BAM Surplus Notes for adjusted book value purposes,capital, (iii) Kudu’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), (iv) Kudu’s adjusted EBITDA, (v) Bamboo’s MGA pre-tax income (loss), (vi) Bamboo’s MGA net income (loss), (vii) Bamboo’s MGA EBITDA, (viii) Bamboo’s MGA adjusted EBITDA, (ix) Distinguished’s ScaleCo net income (loss), (x) Distinguished’s ScaleCo EBITDA, (xi) Distinguished’s ScaleCo adjusted EBITDA and (xii) total consolidated portfolio return excluding MediaAlpha, (x) total adjusted capital and (xi) total debt to total adjusted capital,MediaAlpha that have been reconciled from their most comparable GAAP financial measures on page 79.85. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.

White Mountains ended 2024 with book value per share of $1,746$1,746, andan adjusted book value per shareincrease of $1,834. During 2024, book value per share and adjusted book value per share increased 6% andfor 8%,the year, including dividends. Comprehensive income attributable to common shareholders was $230 million in 2024 compared to $511 million in 2023.

As of July 1, 2024, White Mountains no longer consolidates BAM. Upon deconsolidation, the BAM Surplus Notes, including accrued interest receivable, were fair valued in accordance with GAAP at $387 million, which resulted in an unrealized loss on deconsolidation of $115 million. As of December 31, 2024, the BAM Surplus Notes were fair valued at $382 million. The decrease in fair value of $5 million was driven by a $22 million cash payment of principal and interest, partially offset by $16 million of accrued interest and a $1 million increase in fair value as a result of lower market interest rates. As of June 30, 2024, for adjusted book value purposes, the BAM Surplus Notes were valued at $415 million, including an $87 million time value discount.

As of December 31, 2024, White Mountains owned 17.9 million shares of MediaAlpha, representing a 27%26.6% basic ownership interest (25% on a fully-diluted/fully-converted basis).interest. As of December 31, 2024, MediaAlpha’s share price was $11.29, which increased from $11.15 per share as of December 31, 2023. The carrying value of White Mountains’s investment in MediaAlpha was $202 million as of December 31, 2024, which decreased from $255 million as of December 31, 2023 as a result of the secondary offering. Based on White Mountains’s ownership as of December 31, 2024, each $1.00 per share increase or decrease in the stock price of MediaAlpha will result in an approximate $7.00 per share increase or decrease in White Mountains’s book value per share and adjusted book value per share.

White Mountains’s total consolidated portfolio return on invested assets, both including and excluding White Mountains’s investment in MediaAlpha, was 11.4% in 2023. The total consolidated portfolio return included $27 million of net unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, investment returns in 2023 were driven primarily by net investment income and net realized and unrealized investment gains from the other long-term investments and fixed income portfolios.

Adjusted Book Value Per Share

The following table presents White Mountains’s adjusted book value per share, a non-GAAP financial measure,share as of December 31, 2024,2025, 20232024 and 2022 and reconciles this non-GAAP measure from book value per share, the most comparable GAAP measure. See “NON-GAAP FINANCIAL MEASURES” on page 79.2023:

The following table presents goodwill and other intangible assets that are included in White Mountains’s adjusted book value as of December 31, 2024,2025, 20232024 and 20222023:

As of December 31, 2024,2025, White Mountains conducted its operations through four reportable segments: (1) Ark/WM Outrigger, (2) HG Global, (3) Kudu and (4) Bamboo,Distinguished, with our 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 chief operating decision makers and its Board of Directors. Significant intercompany transactions among White Mountains’s segments have been eliminated herein. White Mountains’s segment information is presented in Note 15 — “Segment Information” on page F-65.F-70.

During the fourth quarter of 2022, Ark sponsored the formation of Outrigger Re Ltd. to provide collateralized reinsurance protection on Ark’s Bermuda global property catastrophe excess of loss portfolio written in the 2023 underwriting year. Ark renewed its quota share reinsurance agreement with Outrigger Re Ltd. for the 20242024, 2025 and 20252026 underwriting years. White Mountains consolidates its segregated account of Outrigger Re Ltd., WM Outrigger Re, in its financial statements. WM Outrigger Re’s quota share reinsurance agreement with GAIL eliminates in White Mountains’s consolidated financial statements. WM Outrigger Re exclusively provides reinsurance protection to Ark. As a result, WM Outrigger Re was aggregated with Ark within the Ark/WM Outrigger segment starting in 2023. See Note 2 — “Significant Transactions” on page F-19.

Effective July 1, 2024, White Mountains no longer consolidates BAM. Through June 30, 2024, BAM’s assets, liabilities and noncontrolling interests, as well as its results of operations, are presented within the HG Global segment. See Note 2 — “Significant Transactions” on page F-19.

On September 2, 2025, White Mountains completed the Distinguished Transaction. As a result of the Bamboo Transaction,result, White Mountains began consolidating BambooDistinguished in its financial statements ason of JanuarySeptember 2, 2024.2025. See Note 2 — “Significant Transactions” on page F-19.

During the fourth quarter of 2022, 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 written in the 2023 underwriting year. Ark renewed its quota share reinsurance agreement with Outrigger Re Ltd. for the 2024 and 2025 underwriting years.portfolio. White Mountains consolidates its segregated account of Outrigger Re Ltd., WM Outrigger Re, in its financial statements.

The following table presents WM Outrigger Re’s insurance premiums, combined ratio and pre-tax income by underwriting year for the years ended December 31, 2025, 2024 and 2023:

The following discussion also includes eighteleven non-GAAP financial measures: (i) Ark’s tangible book value, (ii) Ark’s growth in tangible book value, (iii) Ark’s tangible capital, (iiiiv) Kudu’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), (ivv) Kudu’s adjusted EBITDA, (vvi) Distinguished’s ScaleCo net income (loss), (vivii) Distinguished’s ScaleCo EBITDAEBITDA, (viiviii) Distinguished’s ScaleCo adjusted EBITDA, (ix) WTM Partners’s EBITDA, (x) WTM Partners’s adjusted EBITDA and (viiixi) total consolidated portfolio return excluding MediaAlpha. These non-GAAP financial measures have been reconciled from their most comparable GAAP financial measures on page 70.87. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCHJUNE 31,30, 2026 and 2025

White Mountains reported book value per share of $1,752$2,258 as of MarchJune 31,30, 2025,2026, an increase of 0.4%4% in the second quarter of 2026 and 3% in the first quartersix months of 2025,2026, including dividends. Results in the firstsecond quarter and first six months of 20252026 were driven primarily by solidstrong operating company results from White Mountains’s operating businesses and goodsolid investment returns, mostly offset by a decline in the MediaAlpha share price.returns.

Comprehensive income (loss) attributable to common shareholders was $(27)$199 million and $173 million in the second quarter and first quartersix months of 2026 compared to $35$124 million and $159 million in the second quarter and first quartersix months of 2025. Results in the second quarter and first quartersix months of 2026 included $11$151 million and $161 million of net realized and unrealized investment gains compared to $87 million and $173 million in the second quarter and first quartersix months of 2025. Results in the second quarter and first quartersix months of 2026 also included $65$58 million and $(7) million of unrealized investment gains (losses) from White Mountains’s investment in MediaAlpha compared to $37$31 million and $(6) million in the second quarter and first quartersix months of 2025.

In the second quarter of 2026, WTM Partners closed two new acquisitions. The acquisition of BaseSix Systems LLC,Basesix, a low voltage electricalcontracting systems integrator,platform, closed on April 1, 20262026. andWTM representedPartners an equity investment of approximatelydeployed $97 million.million Theinto Basesix. Enterprise Solutions’s bolt-on acquisition of Hawkeye Electric, LLC, a provider of specialty electrical contracting services, closed on May 1, 20262026. WTM Partners deployed $35 million into Enterprise Solutions to fund the acquisition of Hawkeye Electric. Beginning in the second quarter of 2026, in conjunction with the acquisitions of Basesix and representedHawkeye anElectric, equityWTM investmentPartners ofhas approximatelybeen $35presented million.as a separate reportable segment. Prior period amounts have been reclassified to conform to the current period presentation.

The Ark/WM Outrigger segment’s combined ratio was 91%84% and 88% in the second quarter and first quartersix months of 2026 compared to 97%84% and 90% in the second quarter and first quartersix months of 2025. The Ark/WM Outrigger segment reported gross written premiums of $1,091$778 million and $1,868 million, net written premiums of $590$537 million and $1,128 million and net earned premiums of $374$376 million and $750 million in the second quarter and first quartersix months of 2026 compared to gross written premiums of $1,108$815 million and $1,923 million, net written premiums of $728$579 million and $1,306 million and net earned premiums of $358$364 million and $722 million in the second quarter and first quartersix months of 2025. The Ark/WM Outrigger segment reported pre-tax income of $9$80 million and $89 million in the second quarter and first quartersix months of 2026 compared to $46$98 million and $144 million in the second quarter and first quartersix months of 2025.

Ark’s combined ratio was 91%84% and 88% in the second quarter and first quartersix months of 2026 compared to 94%85% and 90% in the second quarter and first quartersix months of 2025. Ark’s combined ratio in the second quarter and first quartersix months of 2026 included seventhree points and five points of catastrophe losses, driven primarily by losses related to the war in Iran. This compares to 25minimal catastrophe losses in the second quarter of 2025 and thirteen points of catastrophe losses in the first quartersix months of 2025, driven by losses related to the California wildfires. Ark’s combined ratio included fiveeight points and six points of net favorable prior year development in the second quarter and first quartersix months of 2026, driven primarily by the specialtyproperty and propertyspecialty lines of business. This compares to 14five points and nine points of net favorable prior year development in the second quarter and first quartersix months of 2025, driven primarily by the property, marine & energy and propertyspecialty lines of business.business, partially offset by six points of unfavorable development in the second quarter related to aviation losses from the conflict in Ukraine. Ark has ongoing exposure to the war in Iran, primarily through the specialty and marine & energy lines of business. In the second quarter and first quartersix months of 2026, Ark recorded estimated losses of $25$17 million and $42 million (net of reinsurance and reinstatement premiums). However,related losses could increase asto the war is ongoing.war.

KuduArk reported total revenues of $63 million, pre-tax income of $52$78 million and adjusted EBITDA of $17$85 million in the second quarter and first quartersix months of 2026 compared to total revenues of $64 million, pre-tax income of $53$91 million and adjusted EBITDA of $16$144 million in the second quarter and first quartersix months of 2025. TotalArk’s revenues, pre-tax income and adjusted EBITDAresults included $21 million of net investment income in the first quarter of 2026 compared to $19 million in the first quarter of 2025. Total revenues and pre-tax income also included $42 million of net realized and unrealized investment gains (losses) of $31 million and $(2) million in the second quarter and first quartersix months of 2026 compared to $44$51 million and $81 million in the second quarter and first quartersix months of 2025.

Kudu deployed a total of $21$36 million, including transaction costs, into onetwo new asset management firmfirms in the first quarter of 2026. As of MarchJune 31,30, 2026, Kudu hashad deployed a total of $1.2 billion, including transaction costs, into 3132 asset and wealth management firms globally, including three that have been exited. As of MarchJune 31,30, 2026, the asset and wealth management firms have combined assets under management (“AUM”) of approximately $155$164 billion, spanning a range of asset classes.

HG Global reported gross written premiums of $8$11 million and $19 million and earned premiums of $8 million and $15 million in the second quarter and first quartersix months of 2026 compared to gross written premiums of $7$19 million and $26 million and earned premiums of $8$7 million and $15 million in the second quarter and first quartersix months of 2025. HG Global’s total par value of policies assumed was $518$818 million and $1,335 million in the second quarter and first quartersix months of 2026 compared to $427$931 million and $1,358 million in the second quarter and first quartersix months of 2025. HG Global’s total gross pricing was 160135 and 145 basis points in the second quarter and first quartersix months of 2026 compared to 157206 and 191 basis points in the second quarter and first quartersix months of 2025. HG Global reported pre-tax income of $11$10 million and $21 million in the second quarter and first quartersix months of 2026 compared to $25$17 million and $42 million in the second quarter and first quartersix months of 2025. HG Global’s results included net realized and unrealized investment gains (losses) of $(52) million and $(7) million in the second quarter and first quartersix months of 2026 compared to $10$3 million and $13 million in the second quarter and first quartersix months of 2025, driven by movements in interest rates.

The fair value of the BAM Surplus Notes was $353 million as of June 30, 2026 compared to $346 million as of March 31, 2026 compared to $339 million as of December 31, 2025.2026. The increase was driven by $7 million of accrued interest. On July 28, 2026, HG Global received a cash payment of principal and interest on the BAM Surplus Notes of $8 million.

Distinguished reported managed premiums of $132$189 million and $321 million, commission and fee revenues of $40$57 million and $96 million, pre-tax loss of $18$11 million and $28 million and ScaleCo adjusted EBITDA of $4$12 million and $17 million for the second quarter and first quartersix months of 2026. Distinguished’s managed premiums increased by 7%13% in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 and 10% in the first six months of 2026 compared to the first six months of 2025. ThisThese includesfigures include periods prior to White Mountains’s ownership of Distinguished, which White Mountains believebelieves is useful in understanding Distinguished’s performance.

As of MarchJune 31,30, 2026, White Mountains owned 17.9 million shares of MediaAlpha, representing a 28%29% basic ownership interest based on the total class A and class B common shares outstanding. As of MarchJune 31,30, 2026, MediaAlpha’s share price was $9.30$12.57 per share, which decreasedincreased from $12.95$9.30 per share as of DecemberMarch 31, 2025.2026. The carrying value of White Mountains’s investment in MediaAlpha was $225 million as of June 30, 2026 compared to $166 million as of March 31, 2026 compared to $231 million as of December 31, 2025.2026. At White Mountains’s currentJune 30, 2026 level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $7.00$7.50 per share increase or decrease in White Mountains’s book value per share.

White Mountains’s total consolidated portfolio return on invested assets was 1.7%3.5% in the firstsecond quarter of 2026, which included $58 million of unrealized investment gains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 2.8% in the second quarter of 2026. Excluding MediaAlpha, investment results were driven primarily by net realized and unrealized investment gains from other long-term investments, net unrealized gains from common equity securities and net investment income from the other long-term investments and fixed income portfolios. White Mountains’s total consolidated portfolio return on invested assets was 2.7% in the second quarter of 2025, which included $37$31 million of unrealized investment lossesgains from White Mountains’s investment in MediaAlpha. Excluding MediaAlpha, the total consolidated portfolio return on invested assets was 2.3% in the firstsecond quarter of 2025. Excluding MediaAlpha, investment results in the first quarter of 2025 were driven primarily by net investment income and net unrealized investment gains from the other long-term investments and fixed income portfolios.

The following table presents White Mountains’s book value per share as of June 30, 2026, March 31, 2026, December 31, 2025 and MarchJune 31,30, 2025:

The following table presents goodwill and other intangible assets that are included in White Mountains’s book value as of June 30, 2026, March 31, 2026, December 31, 2025 and MarchJune 31,30, 2025:

(1) The relative fair values of goodwill and other intangible assets recognized in connection with the Distinguishedacquisitions Transactionof haveBasesix and Hawkeye Electric had not yet been finalized. See Note 2 — “Significant Transactions.”

(2) See Note 4 — “Goodwill and Other Intangible Assets” on page 24 for details of other intangible assets.

The following table presents White Mountains’s consolidated financial results by industry for the three and six months ended MarchJune 31,30, 2026 and 2025:

As of MarchJune 31,30, 2026, White Mountains conducted its operations through fourfive reportable segments: (1) Ark/WM Outrigger, (2) Kudu, (3) HG Global andGlobal, (4) Distinguished,Distinguished and (5) WTM Partners, with ourits 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 chief operating decision makerCODM and itsthe 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 41.43.

The following tables present the components of pre-tax income (loss) included in the Ark/WM Outrigger segment for the three and six months ended MarchJune 31,30, 2026 and 2025:

Ark/WM Outrigger Results—Three Months Ended MarchJune 31,30, 2026 versus Three Months Ended MarchJune 31,30, 2025

The Ark/WM Outrigger segment’s combined ratio was 91%84% in both the firstsecond quarter of 2026 compared to 97% in the first quarter ofand 2025. The Ark/WM Outrigger segment reported gross written premiums of $1,091$778 million, net written premiums of $590$537 million and net earned premiums of $374$376 million in the firstsecond quarter of 2026 compared to gross written premiums of $1,108$815 million, net written premiums of $728$579 million and net earned premiums of $358$364 million in the firstsecond quarter of 2025. The Ark/WM Outrigger segment reported pre-tax income of $9$80 million in the firstsecond quarter of 2026 compared to $46$98 million in the firstsecond quarter of 2025.

Ark’s combined ratio was 91%84% and 85% in the firstsecond quarter of 2026 compared to 94% in the first quarter ofand 2025. Ark’s combined ratio in the firstsecond quarter of 2026 included seventhree points of catastrophe losses, driven primarily by losses related to the war in Iran, compared to 25 points ofminimal catastrophe losses in the firstsecond quarter of 2025, driven by losses related to the California wildfires.2025. Ark’s combined ratio in the firstsecond quarter of 2026 included eight points of net favorable prior year development, driven by the property and specialty lines of business. This compares to five points of net favorable prior year lossdevelopment reservein development,the second quarter of 2025, driven primarily by the specialtyproperty and propertyspecialty lines of business.business, Thispartially comparesoffset toby fourteensix points of net favorable prior year loss reserveunfavorable development inrelated to aviation losses from the firstconflict quarterin of 2025, driven by the marine & energy and property lines of business.Ukraine.

Ark has ongoing exposure to the war in Iran, primarily through the specialty and marine & energy lines of business. In the firstsecond quarter of 2026, Ark recorded estimated losses of $25$17 million (net of reinsurance and reinstatement premiums). However,related losses could increase asto the war is ongoing.war.

WM Outrigger ReArk reported gross written premiums of $0$778 million, net written premiums of $538 million and net earned premiums of $3$375 million in the firstsecond quarter of 2026 compared to gross written premiums of $38$815 million, net written premiums of $536 million and net earned premiums of $12$357 million in the firstsecond quarter of 2025. WMThe Outriggerdecline Rein reportedgross pre-taxwritten income of $3 millionpremiums in the firstsecond quarter of 2026,2026 allwas relateddriven toprimarily theby 2025softening underwritingmarket year. WM Outrigger Re reported pre-tax income (loss) of $(6) millionconditions in theproperty first quarter of 2025, oflines, which $4was millionpartially relatedoffset toby thegrowth 2024in underwritingspecialty year and $(10) million related to the 2024 underwriting year.lines.

Ark’s grossGross written premiums decreased 2%5% to $1,091$778 million in the firstsecond quarter of 2026 compared to $1,108$815 million in the firstsecond quarter of 2025, with risk adjusted rate change of -6%.-10%. The decline in Ark’s gross written premiums in the second quarter of 2026 was driven primarily by asoftening changemarket conditions in theproperty timing of recognition of certain delegated authority business. This change had no impact on the timing of recognition of Ark’s earned premiums,lines, which increasedwas 7%partially in the first quarter of 2026 compared to the first quarter of 2025, driven primarilyoffset by continued growth in the specialty and property lines of business.lines.

The following table presents the Ark/WM Outrigger segment’s gross written premiums by line of business for the three months ended MarchJune 31,30, 2026 and 2025: