White Mountains Insurance Group

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White Mountains Insurance Group (NYSEWTM) ) is a financial services holding company with primary business interests in property and casualty insurance and reinsurance. The company's corporate headquarters and its registered office are located in Hamilton, Bermuda and its principal executive office is located in Hanover, New Hampshire. The company conducts its principal businesses through:

• OneBeacon - specialty insurance (NYSE: OB). White Mountains owns 75% of OneBeacon.

• Sirius Group - global reinsurance.

• HG Global/BAM - U.S. municipal bond reinsurance.

• White Mountains Advisors - investment management with $34 billion of assets under management.

White Mountains' common shares are listed on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol "WTM." Market capitalization as of December 31, 2013 was approximately $3.7 billion; total assets of $12.1 billion, adjusted shareholders’ equity of $3.9 billion, and adjusted book value per Share of $642.

Raymond Barrette has served as Chairman and CEO since January 2007.

Company History

The company was founded in 1985 by Jack Byrne. Jack previously served as GEICO's Chairman, President, and CEO for a decade. In 1985, he was recruited to help American Express take Fireman's Fund public. After a successful sale of the insurance operations to Allianz in 1990, the remaining holding company assets became White Mountains Insurance Group. Jack retired from White Mountains in 2007, having compounded book value 15% annually since the company’s 1985 IPO.

White Mountains strives to operate within the spirit of four operating principles. These are:

Underwriting Comes First An insurance enterprise must respect the fundamentals of insurance. There must be a realistic expectation of underwriting profit on all business written, and demonstrated fulfillment of that expectation over time, with focused attention to the loss ratio and to all the professional insurance disciplines of pricing, underwriting, and claims management.

Maintain a Disciplined Balance Sheet The first concern here is that insurance liabilities must always be fully recognized. Loss reserves and expense reserves must be solid before any other aspect of the business can be solid. Pricing, marketing, and underwriting all depend on informed judgment of ultimate loss costs and that can be managed effectively only with a disciplined balance sheet.

Invest for Total Return Historical insurance accounting has tended to hide unrealized gains and losses in the investment portfolio and over reward reported investment income (interest and dividends). Regardless of the accounting, the group must invest for the best growth in value over time. In addition to investing our bond portfolios for total after-tax return, that will mean prudent investment in equities consistent with leverage and insurance risk considerations.

Think Like Owners Thinking like owners has a value all its own. There are other stakeholders in a business enterprise and doing good work requires more than this quarter's profit. But thinking like an owner embraces all that without losing the touchstone of a capitalist enterprise.


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