White Mountains Insurance Group WTM Form 10-Q filing Q2 FY2026

Page No.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Consolidated Balance Sheets,June 30, 2026andDecember 31, 2025 1

Consolidated Statements of Operations, Three and Six Months Ended June 30, 2026 and 2025 3

Consolidated Statements of Comprehensive Income, Three and Six Months Ended June 30, 2026 and 2025 5

Consolidated Statements of Changes in Equity,Three and Six Months Ended June 30, 2026 and 2025 6

Consolidated Statements of Cash Flows,Six Months Ended June 30, 2026and2025 8

Notes to Consolidated Financial Statements 9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53

Results of Operations for theThree and Six Months Ended June 30, 2026and2025 53

Liquidity and Capital Resources 83

Non-GAAP Financial Measures 87

Critical Accounting Estimates 88

Item 1. Financial Statements (Unaudited)

Item 1.Financial Statements

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements including Note 13 — “Noncontrolling Interests” and Note 18 — “Commitments and Contingencies.”

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

White Mountains Insurance Group, Ltd. (the “Company” or the “Registrant”) is an exempted Bermuda limited liability company whose principal businesses are conducted through its subsidiaries and other affiliates. The Company’s headquarters is located at 26 Reid Street, Hamilton, Bermuda HM 11, its principal executive office is located at 23 South Main Street, Suite 3B, Hanover, New Hampshire 03755-2053 and its registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda HM 11. The Company’s website is www.whitemountains.com. The information contained on the Company’s website is not incorporated by reference into, and is not a part of, this report.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company, its subsidiaries (collectively with the Company, “White Mountains”) and other entities required to be consolidated under GAAP. Intercompany transactions have been eliminated in consolidation. Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

These interim financial statements include all adjustments considered necessary by management to fairly state the financial position, results of operations and cash flows of White Mountains. These interim financial statements may not be indicative of financial results for the full year and should be read in conjunction with the Company’s 2025 Annual Report on Form 10-K.

Reportable Segments

As of June 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. Beginning in second quarter of 2026, in conjunction with its recent acquisitions, WTM Partners is presented as a separate reportable segment. 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 maker (“CODM”) and its Board of Directors. See Note 14 — “Segment Information.”

The Ark/WM Outrigger segment consists of Ark Insurance Holdings Limited and its subsidiaries (collectively, “Ark”) and Outrigger Re Ltd. Segregated Account 2023-1 (“WM Outrigger Re”) (collectively with Ark, “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 Lloyd’s Syndicates 4020 and 3902 and Additional Central Settlement Number (“ACSN”) 3832 (collectively, the “Syndicates”) and its wholly-owned subsidiary Group Ark Insurance Limited (“GAIL”). As of June 30, 2026 and December 31, 2025, White Mountains owned 72.1% and 72.1% of Ark on a basic shares outstanding basis (62.4% and 61.9% after taking account of management’s equity incentives). The remaining shares are owned by current and former employees of Ark. In the future, management rollover shareholders could earn additional shares in Ark if and to the extent that White Mountains achieves certain thresholds for its multiple of invested capital (“MOIC”) return. If fully earned, these shares would represent an additional 12.4% of the shares outstanding as of June 30, 2026, and White Mountains would own 53.5% of Ark on a fully-diluted/fully-converted basis. The liability related to these additional shares is recorded as contingent consideration.

Outrigger Re Ltd. is a Bermuda special purpose insurer and segregated accounts company that provides collateralized reinsurance protection on Ark’s Bermuda global property catastrophe excess of loss portfolio for underwriting years beginning in 2023. As of June 30, 2026 and December 31, 2025, White Mountains owned 100.0% of the preferred equity of its segregated cell, WM Outrigger Re, which participated in the 2023 through 2025 underwriting years. White Mountains consolidates WM Outrigger Re in its financial statements. During the fourth quarter of 2025, Ark renewed Outrigger Re Ltd. for the 2026 underwriting year with $70.0 million of unaffiliated third-party capital. Ark increased its use of traditional quota share reinsurance for 2026, reducing the need for capacity from Outrigger Re Ltd. For the first six months of 2026, White Mountains received $144.9 million of distributions, primarily a return of capital related to its non-renewal for the 2026 underwriting year.

The Kudu segment consists of Kudu Investment Management, LLC and its subsidiaries (collectively, “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’s capital solutions are generally structured as noncontrolling equity interests in the form of revenue and earnings participation contracts (“Participation Contracts”) and designed to generate immediate cash yields. As of June 30, 2026 and December 31, 2025, White Mountains owned 91.3% and 91.2% of Kudu’s basic units outstanding (78.4% and 77.9% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives).

The HG Global segment consists of HG Global Ltd. and its wholly-owned subsidiaries (collectively, “HG Global”). HG Global was established to fund the startup of Build America Mutual Assurance Company (“BAM”) and, through its reinsurance subsidiary, HG Re Ltd. (“HG Re”), to provide first-loss reinsurance protection of up to 15%-of-par outstanding for each policy assumed from BAM. HG Global, together with its subsidiaries, funded the initial capitalization of BAM through the purchase of $503.0 million of surplus notes issued by BAM (the “BAM Surplus Notes”). As of June 30, 2026 and December 31, 2025, White Mountains owned 96.9% of HG Global’s preferred equity and 88.4% of its common equity.

The Distinguished segment consists of WM Phoenix Parent L.P. and its subsidiaries d/b/a Distinguished Programs (collectively, “Distinguished”). Distinguished is a full-service managing general agent (“MGA”) and program administrator for specialty property and casualty insurance. Distinguished places insurance across a diversified portfolio of programs broadly 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. On September 2, 2025, White Mountains acquired a controlling financial interest in Distinguished. As of June 30, 2026 and December 31, 2025, White Mountains owned 55.3% and 55.5% of Distinguished on a basic units outstanding basis (43.3% and 43.6% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives). See Note 2 — “Significant Transactions.”

The WTM Partners segment consists of White Mountains Partners LLC and its operating companies (collectively, “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. WTM Partners’s operating companies include (i) Enterprise Electric, LLC and its subsidiary (collectively, “Enterprise Solutions”) and (ii) BaseSix Systems LLC and its subsidiary (collectively, “Basesix”). On April 1, 2025, WTM Partners acquired a controlling financial interest in Enterprise Solutions, a provider of specialty electrical contracting services. On April 1, 2026, WTM Partners acquired a controlling financial interest in Basesix, a low voltage electrical systems integrator. See Note 2 — “Significant Transactions.” As of June 30, 2026 and December 31, 2025, WTM Partners owned 71.9% and 65.5% of Enterprise Solutions on a basic units outstanding basis (66.8% and 59.0% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives). As of June 30, 2026, WTM Partners owned 84.4% of Basesix on both a basic units outstanding and fully-diluted/fully-converted basis.

White Mountains’s other operations consist of the Company and its wholly-owned subsidiary, White Mountains Capital LLC (“WM Capital”), its other intermediate holding companies, its wholly-owned investment management subsidiary, White Mountains Advisors LLC (“WM Advisors”), investment assets managed by WM Advisors, its interests in Bamboo Ide8 Insurance Services LLC (“Bamboo MGA”) and its subsidiaries (collectively, “Bamboo”) through a special purpose vehicle (the “Bamboo SPV”), MediaAlpha, Inc. (“MediaAlpha”), DavidShield PassportCard Ltd. and its subsidiaries (collectively, “PassportCard/DavidShield”), BroadStreet Partners, Inc. (“BroadStreet”) through a special purpose vehicle (the “BroadStreet SPV”), Bishop Street Underwriters LLC (“Bishop Street”), Elementum Holdings LP (“Elementum”), certain other consolidated and unconsolidated entities (“Other Operating Businesses”) and certain other assets (collectively, “Other Operations”).

On December 5, 2025, White Mountains completed the sale of a controlling financial interest in WM Pierce Holdings, Inc. and its subsidiaries, including Bamboo MGA (collectively, the “Bamboo Group”). See Note 2 — “Significant Transactions.” As a result of the sale, White Mountains deconsolidated the Bamboo Group on December 5, 2025, and Bamboo is no longer a reportable segment. Through December 5, 2025, Bamboo’s results of operations were presented within the Bamboo segment. See Note 14 — “Segment Information.” Bamboo is a capital-light, tech- and data-enabled insurance distribution platform providing homeowners’ insurance and related products to the residential property market in California and, beginning in the third quarter of 2025, in Texas. Bamboo operates primarily through Bamboo MGA, its full-service MGA business, where the company manages all aspects of the placement process on behalf of its fronting and reinsurance carrier partners, including product development, marketing, underwriting, policy issuance and claims oversight, and it earns commissions based on the volume and profitability of the insurance that it places. Bamboo MGA offers both admitted and non-admitted products.

Significant Accounting Policies

In addition to the following, refer to the Notes to Consolidated Financial Statements in the Company’s 2025 Annual Report on Form 10-K for a complete discussion regarding White Mountains’s significant accounting policies.

Revenue Recognition

WTM Partners recognizes product and service revenues, consisting of construction revenues from specialty electrical contracting services and low voltage electrical systems integration services provided to commercial and institutional customers, when it has satisfied its performance obligations and control of the promised goods or services has been transferred to the customer. Product and service revenues are recognized over time using the cost-to-cost percentage of completion input method, based on the ratio of contract costs incurred to date compared to total estimated contract costs. Contract costs incurred to date and expected total contract costs are monitored during the term of the contract. WTM Partners’s billings are generally based on contractual terms and may not coincide with its progress in a project. WTM Partners records accounts receivable for amounts billed to the customer, net of a provision for amounts estimated to be uncollectible. If the recognized revenue is greater than the amount billed to the customer, a contract asset is recorded. Contract assets also include amounts billed under retainage provisions that cannot be collected until the contract work has been completed and approved. If the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded.

Cost of Sales

WTM Partners incurs various expenses directly related to the performance of its construction contracts, which are recorded in cost of sales. These costs consist primarily of materials, salaries and related expenses, costs paid to subcontractors and other job-related costs. These expenses are recognized as incurred.

Note 2. Significant Transactions

Bamboo

On December 5, 2025, White Mountains completed the sale of a controlling financial interest in the Bamboo Group to affiliates of funds advised by CVC Capital Partners (“CVC”), pursuant to the terms of the securities purchase agreement dated October 2, 2025 (the “Bamboo SPA”). Under the terms of the Bamboo SPA, White Mountains sold approximately 77.3% of its equity interest in the Bamboo Group for net cash proceeds at closing of $847.9 million and retained an indirect equity interest valued at closing at $250.0 million (the “Bamboo Sale Transaction”). In the first quarter of 2026, White Mountains received $6.0 million of incremental proceeds, including $3.6 million of proceeds held in escrow and $2.4 million of purchase price adjustments. As a result, White Mountains recognized an incremental gain on sale of the Bamboo Group of $2.4 million in the first quarter of 2026, bringing the total net transaction gain to $818.7 million. The total net transaction gain is comprised of an $851.7 million net gain on sale of the Bamboo Group, partially offset by $33.0 million of parent compensation costs recorded within general and administrative expenses during 2025.

At closing, White Mountains had a 27.9% limited partnership interest in the Bamboo SPV and a 17.2% basic ownership interest in Bamboo on a look-through basis (14.6% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives). White Mountains has taken the fair value option for its noncontrolling equity interest in the Bamboo SPV, which is accounted for at fair value in other long-term investments within Other Operations. See Note 3 — “Investment Securities” and Note 15 — “Variable Interest Entities.”

Distinguished

On September 2, 2025, White Mountains acquired a controlling financial interest in Distinguished (the “Distinguished Transaction”). White Mountains funded the Distinguished Transaction through a combination of cash on hand and new borrowings by Distinguished. White Mountains paid $224.8 million of cash consideration, including a post-closing purchase price adjustment of $0.5 million. In addition, Distinguished borrowed $50.0 million of incremental debt and utilized $6.8 million of cash on hand as part of the transaction. At closing, White Mountains owned 55.5%, inclusive of its 1.7% previously-held interest, of Distinguished on a basic units outstanding basis (43.6% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives). At closing, 4.2% of the basic units outstanding are owned by Distinguished management (24.7% on a fully-diluted/fully-converted basis). As part of the Distinguished Transaction, WM Phoenix GP, LLC, an indirect wholly-owned subsidiary of the Company, became the general partner of Distinguished. As the general partner, White Mountains has control over all activities of Distinguished subject to consent rights held by certain limited partners. As a result, White Mountains will continue to control Distinguished even if its economic interest falls below 50.0%. See Note 15 — “Variable Interest Entities.”

On September 5, 2028, the third anniversary of the closing of the Distinguished Transaction, certain noncontrolling unitholders will have the option to sell additional units representing 31.3% of Distinguished’s basic units outstanding as of June 30, 2026 to White Mountains at the same unit price paid in the Distinguished Transaction less aggregate per unit distributions. As of June 30, 2026, the redemption value would be $131.5 million if exercised in full. Noncontrolling interests with optional redemption features that are not within White Mountains’s control are classified as redeemable noncontrolling interests. See Note 13 — “Noncontrolling Interests.” In addition, White Mountains will have the parallel option to purchase such units at 1.35 times the unit price paid in the Distinguished Transaction less aggregate per unit distributions.

White Mountains recognized total assets acquired related to the Distinguished Transaction of $745.1 million, including goodwill and other intangible assets of $620.0 million, total liabilities assumed of $250.9 million, redeemable noncontrolling interests of $133.5 million and nonredeemable noncontrolling interest of $73.8 million, reflecting provisional acquisition date fair values. The goodwill and other intangible assets acquired and total liabilities assumed include a $1.2 million measurement period adjustment recognized in the first quarter of 2026. In connection with the acquisition, White Mountains incurred transaction costs of $6.8 million in Other Operations.

The following presents additional details of the net assets acquired as of the September 2, 2025 acquisition date:

Under the acquisition method, White Mountains recognizes and measures the assets acquired, including other intangible assets, and liabilities assumed at their estimated fair values as of the acquisition date. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values, as their carrying values approximated fair value due to their short-term nature. The fair values of other intangible assets represent management’s best estimates utilizing certain unobservable inputs and are considered to be Level 3 measurements. The valuations are based upon: (i) established valuation techniques, including the income approach, (ii) reasonable assumptions and, (iii) where appropriate, valuations performed by independent third parties. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. White Mountains developed internal estimates for the expected future cash flows and discount rates used in the present value calculations. See Note 4 — “Goodwill and Other Intangible Assets.”

The value of the redeemable noncontrolling interests was recorded at the acquisition date fair value based on the valuation implied in the Distinguished Transaction, adjusted for the value of the embedded put and call rights. The value of the embedded put and call rights was estimated using an option pricing approach, incorporating assumptions for expected volatility, time to exercise, risk-free interest rates and other contractual terms of the instruments.

The value of the nonredeemable noncontrolling interests was recorded at the acquisition date fair value based on the valuation implied in the Distinguished Transaction.

Distinguished’s segment revenue and earnings since acquisition are presented in Note 14 — “Segment Information.”

On November 1, 2025, Distinguished sold a non-core, sports and prize indemnity program for net proceeds of $33.6 million. Goodwill of $23.6 million and other intangible assets of $9.3 million were attributed to the business sold and derecognized as a result of the sale.

BroadStreet

On July 18, 2025, White Mountains deployed $150.0 million into BroadStreet through the BroadStreet SPV. BroadStreet is an insurance brokerage company with a presence in all 50 U.S. states and ten Canadian provinces. BroadStreet focuses on commercial and personal property & casualty insurance and employee benefits. White Mountains has taken the fair value option for its noncontrolling equity interest in the BroadStreet SPV, which is accounted for at fair value using net asset value (“NAV”) as a practical expedient and is included in other long-term investments within Other Operations. At closing, White Mountains had a 10.9% limited partnership interest in the BroadStreet SPV and a less than 5.0% ownership interest in BroadStreet on a look-through basis. See Note 3 — “Investment Securities” and Note 15 — “Variable Interest Entities.”

Bishop Street

On February 26, 2026, White Mountains deployed $125.0 million into Bishop Street. Bishop Street is a diversified platform of MGAs and niche underwriting teams focused on the property and casualty insurance sector. White Mountains has taken the fair value option for its noncontrolling structured capital investment in Bishop Street, which is accounted for at fair value in other long-term investments within Other Operations. See Note 3 — “Investment Securities.”

Enterprise Solutions

On April 1, 2025, WTM Partners acquired a controlling financial interest in Enterprise Solutions (the “Enterprise Solutions Transaction”). This was the first acquisition by WTM Partners. Enterprise Solutions provides specialty electrical contracting services to commercial and institutional customers. WTM Partners funded the Enterprise Solutions Transaction through a combination of cash on hand and new borrowings by Enterprise Solutions. WTM Partners paid $58.3 million of cash consideration, which included a post-acquisition capital contribution of $1.5 million, and Enterprise Solutions borrowed $15.0 million in new debt as part of the transaction. At closing, WTM Partners owned 65.5% of Enterprise Solutions on a basic units outstanding basis (59.0% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives).

WTM Partners recognized total assets acquired related to Enterprise Solutions of $176.4 million, total liabilities assumed of $74.4 million and noncontrolling interests of $30.6 million. Total assets acquired included $57.7 million of goodwill and $37.6 million of other intangible assets. In connection with the acquisition, WTM Partners incurred transaction costs of $3.0 million.

On May 1, 2026, Enterprise Solutions acquired a controlling financial interest in Hawkeye Electric, LLC (“Hawkeye Electric”) (the “Hawkeye Electric Transaction”). Hawkeye Electric provides specialty electrical contracting services to commercial and institutional customers. Enterprise Solutions funded the Hawkeye Electric Transaction through a combination of equity contributions of $34.9 million from WTM Partners and $6.0 million from noncontrolling interest holders as well as new borrowings. Enterprise Solutions paid $67.2 million of cash consideration, including net debt financing of $26.3 million. In addition, Hawkeye Electric utilized $5.9 million of cash on hand as part of the transaction. At closing, Enterprise Solutions owned 100% of Hawkeye Electric.

WTM Partners recognized total assets acquired related to Hawkeye Electric of $85.5 million and total liabilities assumed of $12.4 million, reflecting provisional acquisition date fair values. Total assets acquired included $54.6 million of goodwill and other intangible assets, reflecting provisional acquisition date fair values. In connection with the acquisition, WTM Partners incurred transaction costs of $2.1 million.

Basesix

On April 1, 2026, WTM Partners acquired a controlling financial interest in Basesix (the “Basesix Transaction”). Basesix provides low voltage electrical systems integration services to commercial and institutional customers. WTM Partners funded the Basesix Transaction through a combination of cash on hand and new borrowings by Basesix. WTM Partners paid $96.8 million of cash consideration, which included a post-acquisition capital contribution of $1.0 million, and Basesix borrowed $20.0 million in new debt as part of the transaction. At closing, WTM Partners owned 84.4% of Basesix on both a basic units outstanding and fully-diluted/fully-converted basis.

WTM Partners recognized total assets acquired related to Basesix of $158.9 million, total liabilities assumed of $17.7 million and noncontrolling interests of $17.8 million, reflecting provisional acquisition date fair values. Total assets acquired included $126.0 million of goodwill and other intangible assets, reflecting provisional acquisition date fair values. In connection with the acquisition, WTM Partners incurred transaction costs of $2.6 million.

Unaudited supplemental pro forma information

White Mountains’s unaudited pro forma revenues were $851.8 million and $1,409.8 million for the three and six months ended June 30, 2026 compared to $777.0 million and $1,469.3 million for the three and six months ended June 30, 2025. The pro forma revenues include revenues from Distinguished, Enterprise Solutions, Basesix and Hawkeye Electric as if the acquisitions had occurred on January 1, 2025. The pro forma revenues are presented for comparative purposes only and are not necessarily indicative of the operating results that White Mountains would have recognized had the acquisitions actually been completed on January 1, 2025. The pro forma revenues have been calculated after applying White Mountains’s accounting policies and do not include any material, nonrecurring pro forma adjustments. Impacts to White Mountains’s unaudited pro forma earnings were not material to the amounts previously reported.

Note 3. Investment Securities

White Mountains’s portfolio of investment securities held for general investment purposes consists of fixed maturity investments, short-term investments, common equity securities, its investment in MediaAlpha and other long-term investments. White Mountains’s portfolio of fixed maturity investments, including those within short-term investments, is classified as trading securities. Trading securities are reported at fair value as of the balance sheet date. Short-term investments also include interest-bearing money market funds and certificates of deposit that are carried at fair value. White Mountains’s portfolio of common equity securities, its investment in MediaAlpha and other long-term investments are measured at fair value. Other long-term investments consist 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 and Lloyd’s trust deposits. White Mountains has generally taken the fair value option for its equity method eligible investments. See Note 16 — “Equity Method Eligible Investments.” Net realized and unrealized investment gains (losses) are reported in pre-tax revenues.

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.”

White Mountains’s portfolio of investment securities includes investments classified as assets held for sale. See Note 19 — “Held for Sale.”

Net Investment Income

White Mountains’s net investment income is comprised primarily of interest income associated with White Mountains’s fixed maturity investments and short-term investments, dividend income from common equity securities and distributions from other long-term investments.

The following table presents pre-tax net investment income for the three and six months ended June 30, 2026 and 2025:

Net Realized and Unrealized Investment Gains (Losses)

The following table presents net realized and unrealized investment gains (losses) for the three and six months ended June 30, 2026 and 2025:

(1) For the three months ended June 30, 2026 and 2025, White Mountains recognized gross realized investment gains of $38.3 and $40.6 and gross realized investment losses of $(3.8) and $(2.8) on sales of investment securities. For the six months ended June 30, 2026 and 2025, White Mountains recognized gross realized investment gains of $57.7 and $82.0 and gross realized investment losses of $(8.9) and $(3.9) on sales of investment securities.

(2) For the three months ended June 30, 2026 and 2025, includes $1.0 and $30.1 of net realized and unrealized investment gains (losses) related to foreign currency exchange. For the six months ended, June 30, 2026 and 2025, includes $(5.4) and $37.3 of net realized and unrealized investment gains (losses) related to foreign currency exchange.

The following table presents total net unrealized gains (losses) attributable to Level 3 investments for the three and six months ended June 30, 2026 and 2025 for investments still held at the end of the period:

Investment Holdings

The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses) and carrying value of White Mountains’s fixed maturity investments as of June 30, 2026 and December 31, 2025:

The following table presents the cost or amortized cost and carrying value of White Mountains’s fixed maturity investments by contractual maturity as of June 30, 2026 and December 31, 2025. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without penalties.

The weighted average duration of White Mountains’s fixed maturity investments was 2.8 years and 2.5 years as of June 30, 2026 and December 31, 2025. Including short-term investments, the weighted average duration was 2.1 years and 1.5 years as of June 30, 2026 and December 31, 2025.

The following tables present the cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses) and carrying value of common equity securities, White Mountains’s investment in MediaAlpha and other long-term investments as of June 30, 2026 and December 31, 2025:

Fair Value Measurements

Fair value measurements are categorized into a hierarchy that distinguishes between inputs based on market data from independent sources (observable inputs) and a reporting entity’s internal assumptions based upon the best information available when external market data is limited or unavailable (unobservable inputs). Quoted prices in active markets for identical assets or liabilities have the highest priority (Level 1), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities (Level 2) and unobservable inputs, including the reporting entity’s estimates of the assumptions that market participants would use, having the lowest priority (Level 3).

Fair Value Measurements By Level

White Mountains classifies its portfolio of investment securities by major security type based on the legal form of the securities. White Mountains disaggregates its fixed maturity investments based on the issuing entity type, which impacts credit quality, with debt securities issued by U.S. government entities carrying minimal credit risk, while the credit and other risks associated with other issuers, such as corporations, foreign governments and agencies, entities issuing mortgage and asset-backed securities or entities issuing collateralized loan obligations vary depending on the nature of the issuing entity type. White Mountains further disaggregates debt securities issued by corporations by industry sector because investors often reference commonly used benchmarks and their subsectors to monitor risk and performance. Accordingly, White Mountains further disaggregates this asset class into subclasses based on the similar sectors and industry classifications it uses to evaluate investment risk and performance against commonly used benchmarks, such as the Bloomberg Intermediate U.S. Aggregate Index.

The following tables present White Mountains’s fair value measurements for investments by security type and level as of June 30, 2026 and December 31, 2025:

(1) Consists of investments in listed funds that predominantly invest in international equities.

(2) Consists of investments in Kudu’s Participation Contracts, the Bamboo SPV, PassportCard/DavidShield, Bishop Street, certain other unconsolidated entities, as well as private debt and other instruments.

(3) Consists of investments in the BroadStreet SPV, private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and insurance-linked securities (“ILS”) funds for which fair value is measured using NAV as a practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.

(1) Consists of investments in listed funds that predominantly invest in international equities.

(2) Consists of investments in Kudu’s Participation Contracts, the Bamboo SPV, PassportCard/DavidShield, certain other unconsolidated entities, as well as private debt and other instruments.

(3) Consists of investments in the BroadStreet SPV, private equity funds and hedge funds, a bank loan fund, Lloyd’s trust deposits and ILS funds for which fair value is measured using NAV as a practical expedient. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.

Investments Held on Deposit or as Collateral

Lloyd’s trust deposits are generally required of Lloyd's syndicates to protect policyholders in non-U.K. markets and are pledged into Lloyd’s trust accounts to provide a portion of the capital needed to support obligations at Lloyd’s. As of June 30, 2026 and December 31, 2025, Ark held Lloyd’s trust deposits with a fair value of $196.0 million and $180.4 million.

The underwriting capacity of a member of Lloyd’s must be supported by providing a deposit (“Funds at Lloyd’s”) in the form of cash, securities or letters of credit in an amount determined by Lloyd’s. The amount of such deposit is calculated for each member through an annual capital adequacy determination by Lloyd’s. As of June 30, 2026 and December 31, 2025, the fair value of Ark’s Funds at Lloyd’s cash and investment deposits totaled $517.9 million and $361.6 million.

As of June 30, 2026 and December 31, 2025, Ark held additional investments on deposit or as collateral for insurance regulators and reinsurance counterparties of $326.0 million and $257.2 million.

As of June 30, 2026 and December 31, 2025, investments of $122.6 million and $245.7 million were held in a collateral trust account required to be maintained in relation to WM Outrigger Re’s reinsurance agreement with GAIL.

Ark is required to pledge collateral under its standby letters of credit. See Note 7 — “Debt.”

Kudu is required to maintain an interest reserve account in connection with its credit facility. See Note 7 — “Debt.”

HG Re is required to maintain assets, including investments, in collateral trusts under the first-loss reinsurance treaty (“FLRT”) with BAM. See Note 10 — “Municipal Bond Guarantee Reinsurance.”

HG Global is required to maintain an interest reserve account in connection with its senior notes. See Note 7 — “Debt.”

As of June 30, 2026 and December 31, 2025, investments of $67.9 million and $56.8 million were held on deposit, primarily related to amounts held on behalf of Distinguished’s insurance carrier partners and certain insureds.

Debt Securities Issued by Corporations

The following table presents the fair values for credit ratings of debt securities issued by corporations held in White Mountains’s investment portfolio as of June 30, 2026 and December 31, 2025:

(1) Credit ratings are based upon issuer credit ratings provided by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”), or if unrated by Standard & Poor’s, long-term obligation ratings provided by Moody’s Investors Service, Inc.

Mortgage and Asset-backed Securities and Collateralized Loan Obligations

The following table presents the fair value of White Mountains’s mortgage and asset-backed securities and collateralized loan obligations as of June 30, 2026 and December 31, 2025:

(1) Represents publicly traded mortgage-backed securities which carry the full faith and credit guarantee of the U.S. Government (i.e., GNMA) or are guaranteed by a government sponsored entity (i.e., FNMA, FHLMC).

As of June 30, 2026 and December 31, 2025, White Mountains’s investment portfolio included $337.7 million and $347.0 million of collateralized loan obligations that are within the senior tranches of their respective fund securitization structures. All of White Mountains’s collateralized loan obligations were rated AAA or AA as of June 30, 2026 and December 31, 2025.

Investment in MediaAlpha

White Mountains’s investment in MediaAlpha is accounted for at fair value based on the publicly traded share price of MediaAlpha’s common stock and is presented as a separate line item on the balance sheet.

As of June 30, 2026, White Mountains owned 17.9 million shares of MediaAlpha, representing a 29.1% basic ownership interest based on the total class A and class B common shares outstanding. At the June 30, 2026 share price of $12.57, the fair value of White Mountains’s investment in MediaAlpha was $224.5 million. At White Mountains’s June 30, 2026 level of ownership, each $1.00 per share increase or decrease in the share price of MediaAlpha will result in an approximate $7.50 per share increase or decrease in White Mountains’s book value per share.

As of December 31, 2025, White Mountains owned 17.9 million shares of MediaAlpha, representing a 27.7% basic ownership interest based on the total class A and class B common shares outstanding. At the December 31, 2025 share price of $12.95, the fair value of White Mountains’s investment in MediaAlpha was $231.2 million.

Other Long-Term Investments

The following tables present the carrying values of White Mountains’s other long-term investments by reportable segment as of June 30, 2026 and December 31, 2025:

(1) Includes White Mountains’s noncontrolling equity interests in certain preferred securities, common shares, limited partnership units and limited liability company units.

(1) Includes White Mountains’s noncontrolling equity interests in certain preferred securities, common shares, limited partnership units and limited liability company units.

Private Equity Funds and Hedge Funds

White Mountains invests in private equity funds and hedge funds, which are included in other long-term investments. The fair value of these investments is generally estimated using the NAV of the funds. As of June 30, 2026, White Mountains held investments in or commitments to eighteen private equity funds and two hedge funds. The largest investment in a single private equity fund or hedge fund was $170.0 million and $110.6 million as of June 30, 2026 and December 31, 2025.

The following table presents the fair value of investments and unfunded commitments in private equity funds and hedge funds by investment objective and sector as of June 30, 2026 and December 31, 2025:

Investments in private equity funds are generally subject to a lock-up period during which investors may not request a redemption. Distributions prior to the expected termination date of the fund may be limited to dividends or proceeds arising from the liquidation of the fund’s underlying investments. In addition, certain private equity funds have the option to extend the lock-up period.

The following table presents the fair value of investments in private equity funds that were subject to lock-up periods as of June 30, 2026:

Investors in private equity funds are generally subject to indemnification obligations outside of the capital commitment period and prior to the winding up of the fund. As of June 30, 2026 and December 31, 2025, White Mountains is not aware of any indemnification claims relating to its investments in private equity funds.

Redemption of investments in most hedge funds is subject to restrictions, including lock-up periods where no redemptions or withdrawals are allowed, restrictions on redemption frequency and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. White Mountains’s hedge fund investments are subject to monthly and quarterly restrictions on redemptions and advance written redemption notice period requirements that range between 45 and 90 calendar days.

Bank Loan Fund

White Mountains’s other long-term investments include a bank loan fund with a fair value of $313.4 million and $308.5 million as of June 30, 2026 and December 31, 2025. The fair value of this investment is estimated using the NAV of the fund. The bank loan fund’s investment objective is to provide, on an unleveraged basis, high current income consistent with preservation of capital and low duration. The bank loan fund primarily invests in a broad portfolio of U.S. dollar-denominated, non-investment grade, floating-rate senior secured loans and may invest in other financial instruments, such as secured and unsecured corporate debt, credit default swaps, reverse repurchase agreements, synthetic indices and cash and cash equivalents.

The investment in the bank loan fund is subject to restrictions on redemption frequency and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. White Mountains may redeem all or a portion of its bank loan fund investment as of any calendar month-end upon 15 calendar days advanced written notice.

Lloyd’s Trust Deposits

White Mountains’s other long-term investments include Lloyd’s trust deposits, which consist of non-U.K. deposits and Canadian commingled pooled funds. The Lloyd’s trust deposits invest primarily in short-term government securities, agency securities and corporate bonds held in trusts that are managed by Lloyd's of London. These investments are generally required of Lloyd's syndicates to protect policyholders in non-U.K. markets and are pledged into Lloyd’s trust accounts to provide a portion of the capital needed to support obligations at Lloyd’s. The fair value of the Lloyd’s trust deposits is generally estimated using the NAV of the funds. As of June 30, 2026 and December 31, 2025, White Mountains held Lloyd’s trust deposits with a fair value of $196.0 million and $180.4 million.

ILS Funds

White Mountains’s other long-term investments include ILS fund investments. The fair value of these investments is generally estimated using the NAV of the funds. As of June 30, 2026 and December 31, 2025, White Mountains held investments in ILS funds with a fair value of $52.2 million and $50.1 million.

Investments in ILS funds are generally subject to restrictions, including lock-up periods where no redemptions or withdrawals are allowed, non-renewal clauses, restrictions on redemption frequency and advance notice periods for redemptions. From time to time, natural catastrophe, liquidity, market or other events will occur that make the determination of fair value for underlying investments in ILS funds less certain due to the potential for loss development. In such circumstances, the impacted investments may be subject to additional lock-up provisions.

ILS funds are typically subject to monthly and annual restrictions on redemptions and advance redemption notice period requirements that range between 30 and 90 calendar days. Amounts requested for redemption remain subject to market fluctuations until the redemption effective date, which is generally at the end of the defined redemption period or when the underlying investment has fully matured or been commuted.

Infrastructure Funds

Ark invests in open-ended, pooled infrastructure funds focused on making investments in infrastructure assets, which White Mountains classifies as other long-term investments. As of June 30, 2026, Ark has committed a total of $300.0 million across three infrastructure funds. In the second quarter of 2026, Ark satisfied one of its commitments by pre-funding $100.0 million into its first infrastructure fund, with an investment date of July 1, 2026. The $100.0 million pre-funding is recorded as a receivable within other assets as of June 30, 2026. Ark anticipates satisfying its remaining commitments to the other infrastructure funds in the fourth quarter of 2026.

Investments in infrastructure funds are generally subject to restrictions, such as lock-up periods during which no redemptions or withdrawals are allowed, restrictions on redemption frequency and advance notice periods for redemptions. The funds in which Ark invests have lock-up periods ranging from zero to four years, subject to the discretion of the individual managers. Redemption of all or a portion of Ark’s infrastructure funds is allowable on a quarterly or semi-annual basis, subject to liquidity and an advanced written notice period of 90 calendar days.

Rollforward of Level 3 Investments

Level 3 measurements as of June 30, 2026 and 2025 consist of securities for which the estimated fair value has not been determined based upon quoted market price inputs for identical or similar securities. The following table presents the changes in White Mountains’s fair value measurements for Level 3 investments for the six months ended June 30, 2026 and 2025:

Significant Unobservable Inputs

The following tables present significant unobservable inputs used in estimating the fair value of White Mountains’s other long-term investments, classified within Level 3 as of June 30, 2026 and December 31, 2025. The tables below exclude $10.4 million and $250.4 million of Level 3 other long-term investments generally valued based on recent or expected transaction prices. As of December 31, 2025, the Bamboo SPV was measured at fair value based on the value implied in the Bamboo Sale Transaction. See Note 2 — “Significant Transactions.” The fair value of investments in the BroadStreet SPV, private equity funds and hedge funds, bank loan funds, Lloyd’s trust deposits and ILS funds are generally estimated using NAV. Investments for which fair value is measured at NAV are not classified within the fair value hierarchy.

(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates.

(2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs.

(3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts was 18% and 14x.

(4) In the first six months of 2026, Kudu contributed $43.3 into new and existing Participation Contracts.

(5) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.

(1) Key inputs to the discounted cash flow analysis generally include projections of future revenue and earnings, discount rates and terminal exit multiples or growth rates.

(2) Includes the net unrealized investment gains (losses) associated with foreign currency; foreign currency effects based on observable inputs.

(3) Since Kudu’s Participation Contracts are not subject to corporate taxes within Kudu Investment Management, LLC, pre-tax discount rates are applied to pre-tax cash flows in determining fair values. The weighted average discount rate and weighted average terminal cash flow exit multiple applied to Kudu’s Participation Contracts was 19% and 14x.

(4) In 2025, Kudu contributed $201.7 into new and existing Participation Contracts.

(5) Increases (decreases) to the discount rates in isolation would result in lower (higher) fair value measurements, while increases (decreases) to the terminal cash flow exit multiples or terminal revenue growth rates in isolation would result in higher (lower) fair value measurements.

Note 4. Goodwill and Other Intangible Assets

White Mountains accounts for business combinations using the acquisition method. Under the acquisition method, White Mountains recognizes and measures the assets acquired, including other intangible assets, and liabilities assumed, including contingent consideration liabilities, at their estimated fair values as of the acquisition date. Goodwill represents the excess of the amount paid to acquire a business over the fair value of identifiable net assets at the acquisition date. The estimated acquisition date fair values, generally consisting of other intangible assets and contingent consideration liabilities, may be recorded at provisional amounts in circumstances where the information necessary to complete the acquisition accounting is not available at the reporting date. Any such provisional amounts are finalized as measurement period adjustments within one year of the acquisition date.

The following tables present the economic life, acquisition date fair value, accumulated amortization, impairments and net carrying value for goodwill and other intangible assets as of June 30, 2026 and December 31, 2025:

(1) Impairments, which represent inception-to-date amounts, relate to an Other Operating Business.

(2) The relative fair values of goodwill and other intangible assets recognized in connection with the acquisitions of Basesix and Hawkeye Electric had not yet been finalized. All amounts were reflected as goodwill as of June 30, 2026. See Note 2 — “Significant Transactions.”

(1) Impairments, which represent inception-to-date amounts, relate to an Other Operating Business.

(2) The relative fair values of goodwill and other intangible assets recognized in connection with the acquisitions of Distinguished and Enterprise Solutions had not yet been finalized. See Note 2 — “Significant Transactions.”

Rollforward of Goodwill and Other Intangible Assets

The following tables present the change in goodwill and other intangible assets for the three and six months ended June 30, 2026 and 2025:

(1) During the three months ended June 30, 2026, amounts relate to the acquisitions of Basesix and Hawkeye Electric, for which the relative fair values of goodwill and other intangible assets had not yet been finalized. All amounts were reflected as goodwill as of June 30, 2026. See Note 2 — “Significant Transactions.”

(2) During the three months ended June 30, 2025, amounts relate to the acquisition of Enterprise Solutions, for which the relative fair values of goodwill and other intangible assets had not yet been finalized. All amounts were reflected as goodwill as of June 30, 2025. See Note 2 — “Significant Transactions.”

(1) During the six months ended June 30, 2026, amounts relate to the acquisitions of Basesix and Hawkeye Electric, for which the relative fair values of goodwill and other intangible assets had not yet been finalized. All amounts were reflected as goodwill as of June 30, 2026. See Note 2 — “Significant Transactions.”

(2) During the six months ended June 30, 2025, amounts relate to the acquisition of Enterprise Solutions, for which the relative fair values of goodwill and other intangible assets had not yet been finalized. All amounts were reflected as goodwill as of June 30, 2025. See Note 2 — “Significant Transactions.”

(3) Measurement period adjustments relate to updated information about acquisition date fair values of assets acquired and liabilities assumed. Adjustments relate to the Distinguished Transaction.

During the three and six months ended June 30, 2026 and 2025, White Mountains did not recognize any impairments to goodwill and other intangible assets.

Note 5. Loss and Loss Adjustment Expense Reserves

Ark/WM Outrigger

The following table summarizes the loss and loss adjustment expense (“LAE”) reserve activity of the Ark/WM Outrigger segment for the three and six months ended June 30, 2026 and 2025:

For the three and six months ended June 30, 2026, the Ark/WM Outrigger segment experienced $28.5 million and $46.8 million of net favorable prior year loss reserve development, driven primarily by favorable development in the property and specialty lines of business. For the three and six months ended June 30, 2025, the Ark/WM Outrigger segment experienced $17.1 million and $69.9 million of net favorable prior year loss reserve development, driven primarily by favorable development in the property, marine & energy and specialty lines of business, partially offset by unfavorable development related to aviation losses from the conflict in Ukraine.

HG Global

As of June 30, 2026 and December 31, 2025, HG Re did not have any outstanding loss and LAE reserves. For the three and six months ended June 30, 2026 and 2025, HG Re did not recognize any incurred loss and LAE.

Note 6. Third-Party Reinsurance

Ark/WM Outrigger

In the normal course of business, Ark may seek to limit losses that arise from catastrophes or other events by reinsuring certain risks with third-party reinsurers. Ark remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts.

The following table summarizes the effects of reinsurance on written and earned premiums and loss and LAE for the Ark/WM Outrigger segment for the three and six months ended June 30, 2026 and 2025:

(1) The three months ended June 30, 2026 and 2025 exclude written premiums of $(0.4) and $42.6, and the six months ended June 30, 2026 and 2025 exclude written premiums of $(0.4) and $80.1 ceded by Ark to WM Outrigger Re, which eliminate in White Mountains’s consolidated financial statements.

(2) The three months ended June 30, 2026 and 2025 exclude earned premiums of $0.8 and $7.1, and the six months ended June 30, 2026 and 2025 exclude earned premiums of $3.5 and $19.1 ceded by Ark to WM Outrigger Re, which eliminate in White Mountains’s consolidated financial statements.

(3) The three months ended June 30, 2026 and 2025 exclude loss and LAE of $(0.1) and $1.7, and the six months ended June 30, 2026 and 2025 exclude $0.2 and $21.9 ceded by Ark to WM Outrigger Re, which eliminate in White Mountains’s consolidated financial statements.

The following table presents the Ark/WM Outrigger segment’s reinsurance recoverables as of June 30, 2026 and December 31, 2025:

(1) The reinsurance recoverables on unpaid losses exclude $25.0 and $29.5 ceded by Ark to WM Outrigger Re as of June 30, 2026 and December 31, 2025, which eliminate in White Mountains’s consolidated financial statements.

(2) The reinsurance recoverables on paid losses exclude $2.6 and $5.2 ceded by Ark to WM Outrigger Re as of June 30, 2026 and December 31, 2025, which eliminate in White Mountains’s consolidated financial statements.

(3) The ceded unearned premiums exclude $0.0 and $3.9 ceded by Ark to WM Outrigger Re as of June 30, 2026 and December 31, 2025, which eliminate in White Mountains’s consolidated financial statements.

As reinsurance contracts do not relieve Ark of its obligation to its policyholders, Ark seeks to reduce the credit risk associated with reinsurance balances by avoiding over-reliance on specific reinsurers through the application of concentration limits and thresholds. Ark is selective with its reinsurers, placing reinsurance with only those having a strong financial condition. Ark monitors the financial strength of its reinsurers on an ongoing basis.

The following table presents the Ark/WM Outrigger segment’s gross and net reinsurance recoverables by the reinsurers’ A.M. Best Company, Inc (“A.M. Best”) ratings as of June 30, 2026:

(1) A.M. Best financial strength ratings as detailed above are: “A+ or better” (Superior) “A- to A” (Excellent), “B++” (Good).

(2) Excludes $27.6 ceded by Ark to WM Outrigger Re as of June 30, 2026, which eliminates in White Mountains’s consolidated financial statements.

Note 7. Debt

The following table presents White Mountains’s debt outstanding as of June 30, 2026 and December 31, 2025:

(1) The effective rate includes the effect of the amortization of debt issuance costs and original issue discount but excludes the effect of the interest rate caps, where applicable. See Note 9 — “Derivatives.”

Ark Subordinated Notes

In the third quarter of 2021, GAIL issued $163.3 million face value floating rate unsecured subordinated notes at par in three separate transactions for proceeds of $157.8 million, net of debt issuance costs (collectively, the “Ark 2021 Subordinated Notes”). The Ark 2021 Subordinated Notes were issued in private placement offerings that were exempt from the registration requirements of the Securities Act of 1933.

On July 13, 2021, Ark issued €39.1 million ($46.3 million based upon the foreign currency exchange spot rate as of the date of the transaction) face value floating rate unsecured subordinated notes (“Ark 2021 Subordinated Notes Tranche 1”). The Ark 2021 Subordinated Notes Tranche 1, which mature on July 13, 2041, accrue interest at a floating rate equal to the three-month Euro Interbank Offered Rate (“EURIBOR”) plus 5.75% per annum.

On August 11, 2021, Ark issued $47.0 million face value floating rate unsecured subordinated notes (“Ark 2021 Subordinated Notes Tranche 2”). The Ark 2021 Subordinated Notes Tranche 2, which mature on August 11, 2041, accrue interest at a floating rate equal to the three-month Secured Overnight Financing Rate (“SOFR”) plus a SOFR benchmark adjustment of 0.26% and a stated margin of 5.75% per annum.

On September 8, 2021, Ark issued $70.0 million face value floating rate unsecured subordinated notes (“Ark 2021 Subordinated Notes Tranche 3”). The Ark 2021 Subordinated Notes Tranche 3, which mature on September 8, 2041, accrue interest at a floating rate equal to the three-month SOFR plus a SOFR benchmark adjustment of 0.26% and a stated margin of 6.1% per annum.

On the ten-year anniversary of the issue dates, the interest rate for the Ark 2021 Subordinated Notes will increase by 1.0% per annum. Ark has the option to redeem, in whole or in part, the Ark 2021 Subordinated Notes ahead of contractual maturity at the outstanding principal amounts plus accrued interest at the ten-year anniversary or any subsequent interest payment date.

All payments of principal and interest under the Ark 2021 Subordinated Notes are conditional upon GAIL’s solvency and compliance with the enhanced capital requirements of the Bermuda Monetary Authority (“BMA”). The deferral of payments of principal and interest under these conditions does not constitute a default by Ark and does not give the noteholders any rights to accelerate repayment of the Ark 2021 Subordinated Notes or take any enforcement action under the Ark 2021 Subordinated Notes.

If the payments of principal and interest under the Ark 2021 Subordinated Notes become subject to tax withholding in Bermuda, the Ark 2021 Subordinated Notes require the payment of additional amounts such that the amount received by the noteholders is the same as would have been received absent the tax withholding being imposed. The Ark 2021 Subordinated Notes Tranche 3 require the payment of additional interest of 1.0% per annum upon the occurrence of a premium load event until such event is remedied. Premium load events include the failure to meet payment obligations of the Ark 2021 Subordinated Notes Tranche 3 when due, failure of GAIL to maintain an investment grade credit rating, failure to maintain 120% of GAIL’s Bermuda solvency capital requirement, failure of GAIL to maintain a debt to capital ratio below 40%, late filing of GAIL’s or Ark’s financial information, and making a restricted payment or distribution on GAIL’s common stock or other securities that rank junior or pari passu with the Ark 2021 Subordinated Notes Tranche 3 when a different premium load event exists or will be caused by the restricted payment. As of June 30, 2026, there were no premium load events.

As of June 30, 2026, the Ark 2021 Subordinated Notes Tranche 1 had an outstanding balance of €39.1 million ($44.9 million based upon the foreign exchange spot rate as of June 30, 2026), the Ark 2021 Subordinated Notes Tranche 2 had an outstanding balance of $47.0 million, and the Ark 2021 Subordinated Notes Tranche 3 had an outstanding balance of $70.0 million.

The Ark Subordinated Notes contain various affirmative and negative covenants that White Mountains considers to be customary for such borrowings.

Ark Standby Letter of Credit Facilities

In December 2021, Ark entered into an uncommitted secured standby letter of credit facility agreement with Citibank Europe Plc (the “Citibank LOC Facility”), with capacity of $125.0 million on a collateralized basis. In September 2022, Ark entered into an additional uncommitted standby letter of credit facility agreement with Lloyds Bank Corporate Markets PLC (the “Lloyds LOC Facility”), with capacity of $100.0 million on a collateralized basis.

As of June 30, 2026, the Citibank LOC Facility had an outstanding balance of $67.4 million and cash and investments pledged as collateral of $76.0 million. As of June 30, 2026, the Lloyds LOC Facility had an outstanding balance of $24.0 million and cash and investments pledged as collateral of $31.2 million. Ark’s uncommitted secured standby letter of credit facility agreements contain various representations, warranties and affirmative and negative covenants that White Mountains considers to be customary for such borrowings.

Kudu Credit Facility

On March 23, 2021, Kudu entered into a secured revolving credit facility (the “Kudu Credit Facility”) with Mass Mutual. The Kudu Credit Facility has a total commitment of $500.0 million, an availability period through July 21, 2030 and a maturity date of July 21, 2038.

From July 1, 2024 through July 21, 2025, interest on the Kudu Credit Facility accrued at a floating rate equal to the three-month SOFR plus a stated margin of 4.45% per annum with no SOFR benchmark adjustment. Effective July 21, 2025, the Kudu Credit Facility accrues interest at the greater of (i) the fixed rate equal to the interpolated yield on U.S. Treasuries at the time of each future borrowing plus a stated margin of 3.10% or (ii) 7.25%. The interest rate on the $253.3 million outstanding balance as of July 21, 2025 was reduced from a then floating rate of 8.75% to a fixed rate of 7.65%. In 2024, Kudu entered into an interest rate cap to limit its exposure to the risk of interest rate increases on the Kudu Credit Facility, which was cancelled in July 2026. See Note 9 — “Derivatives.”

The Kudu Credit Facility requires Kudu to maintain an interest reserve account of two times the interest accrued for the most recent quarterly interest period. As of June 30, 2026 and December 31, 2025, the interest reserve account held short-term investments of $9.8 million and $7.6 million.

The Kudu Credit Facility requires Kudu to maintain a maximum loan-to-value ratio of the outstanding balance to the sum of the fair market value of Kudu’s other long-term investments and cash held in certain accounts (the “LTV Percentage”) for annual periods beginning on July 21, 2025 as follows: 40% in years 0-6, 25% in years 7-8, 15% in years 9-11 and 0% thereafter. As of June 30, 2026, Kudu had a 26.5% LTV Percentage.

The Kudu Credit Facility requires Kudu to maintain a minimum debt service coverage ratio of 2.5 times for 2025 and thereafter. As of June 30, 2026, Kudu had a debt service coverage ratio of 4.0 times.

Kudu may borrow undrawn balances until July 21, 2030, subject to customary terms and conditions, to the extent that the amount borrowed under the Kudu Credit Facility does not exceed the borrowing base, which is equal to 35% of the fair value of Kudu’s other long-term investments.

The following table presents the change in debt under the Kudu Credit Facility for the three and six months ended June 30, 2026 and 2025:

The Kudu Credit Facility is secured by all property of the loan parties and contains various representations, warranties and affirmative and negative covenants that White Mountains considers to be customary for such borrowings.

HG Global Senior Notes

On April 29, 2022, HG Global issued $150.0 million face value floating rate secured senior notes with a maturity date of April 29, 2032 (the “HG Global 2022 Senior Notes”). On May 14, 2026, HG Global refinanced the HG Global 2022 Senior Notes in a private placement transaction, upsizing the facility and improving the terms and conditions. In the refinancing, HG Global issued $200.0 million face value fixed rate secured senior notes with a maturity date of May 14, 2036 (the "HG Global 2026 Senior Notes"). In connection with the extinguishment of the HG Global 2022 Senior Notes, HG Global recognized a $3.6 million loss within general and administrative expenses.

The HG Global 2026 Senior Notes accrue interest at a fixed rate of 7.39% per annum. Prior to the extinguishment on May 14, 2026, the HG Global 2022 Senior Notes accrued interest at a floating rate of 9.93%, based on the three-month SOFR plus a SOFR benchmark adjustment of 0.26% and a stated margin of 6.0% per annum. In 2024, HG Global entered into an interest rate cap to limit its exposure to the risk of interest rate increases on the HG Global 2022 Senior Notes, which was cancelled in July 2026. See Note 9 — “Derivatives.”

The HG Global 2026 Senior Notes require HG Global to maintain an interest reserve account equal to the annual interest expense. Prior to extinguishment, the HG Global 2022 Senior Notes required HG Global to maintain an interest reserve account equal to two years of annual interest expense. As of June 30, 2026 and December 31, 2025, the interest reserve account held short-term investments of $14.9 million and $30.4 million.

Under the HG Global 2026 Senior Notes, if payments of principal and interest become subject to tax withholding on behalf of a relevant governmental authority for certain indemnified taxes, the HG Global 2026 Senior Notes require the payment of additional amounts such that the amount received by the noteholders is the same as would have been received absent the tax withholding being imposed. The HG Global 2026 Senior Notes require the payment of additional interest of 2.0% per annum if certain conditions of default are met, including failing to make payments or violating any affirmative or negative covenants.

The HG Global 2026 Senior Notes are secured by the capital stock and other equity interests of HG Global’s subsidiaries, the interest reserve account and all cash and non-cash proceeds from such collateral. The HG Global 2026 Senior Notes contain various affirmative and negative covenants that White Mountains considers to be customary for such borrowings.

As of June 30, 2026, the HG Global 2026 Senior Notes had an outstanding balance of $200.0 million.

Distinguished Credit Facility

On July 4, 2025, Distinguished entered into an amended credit facility (the “Distinguished Credit Facility”). The amendment waived certain change of control prepayment provisions and provided $50.0 million of incremental term loan principal for purposes of consummating the Distinguished Transaction. The $50.0 million of incremental term loan principal was subsequently drawn on September 2, 2025 in connection with the closing of the Distinguished Transaction. The Distinguished Credit Facility is comprised of a term loan of $141.0 million, a delayed-draw term loan of $40.0 million and a revolving credit loan commitment of $15.0 million. The Distinguished Credit Facility matures on October 10, 2029.

Distinguished was required to make payments of principal on a quarterly basis totaling $0.4 million for 2025, increasing to $1.4 million annually thereafter. On an annual basis, Distinguished may also be required to use a percentage of excess cash flows to repay outstanding principal plus accrued interest if Distinguished’s total leverage ratio, calculated as total indebtedness less unrestricted cash over bank adjusted EBITDA, rises above 3.75 times. To date, no repayments have been required under this provision. The next annual determination will occur in the second quarter of 2027. Distinguished has the option to prepay, in whole or in part, the Distinguished Credit Facility at the outstanding principal plus accrued interest. The delayed draw term loan may be drawn on or before October 10, 2026. As of June 30, 2026, the revolving credit and delayed draw term loans were undrawn.

Interest on the Distinguished Credit Facility accrues at a floating rate equal to the three-month SOFR plus a stated margin ranging from 5.25% to 5.5% per annum based on Distinguished’s total leverage ratio. As of June 30, 2026, the stated margin was 5.5%. On September 16, 2025, Distinguished entered into an interest rate cap to limit its exposure to the risk of interest rate increases on the Distinguished Credit Facility. See Note 9 — “Derivatives.”

The following table presents the change in debt under the Distinguished Credit Facility for the three and six months ended June 30, 2026:

The Distinguished Credit Facility is secured by all property of the loan parties and contains various representations, warranties and affirmative and negative covenants that White Mountains considers to be customary for such borrowings, including a maximum total leverage ratio of 5.5 times. As of June 30, 2026, Distinguished’s total leverage ratio was 4.8 times.

WTM Partners Debt

As of June 30, 2026, WTM Partners had debt with an outstanding balance of $67.5 million, which consisted of two secured credit facilities (collectively, “WTM Partners Debt”).

Other Operations Debt

As of June 30, 2026, White Mountains’s Other Operations had debt with an outstanding balance of $18.3 million, which consisted of four secured credit facilities (collectively, “Other Operations Debt”).

WTM Credit Facility

On July 16, 2025, the Company entered into a credit agreement, which established a senior unsecured revolving credit facility of up to $250.0 million that matures on July 16, 2028 (the “WTM Credit Facility”). As of June 30, 2026, the WTM Credit Facility was undrawn. White Mountains may borrow undrawn balances until July 16, 2028, subject to customary terms and conditions, including key covenants tied to White Mountains’s minimum net worth and debt to total capital ratio. Interest on any future borrowings under the WTM Credit Facility will accrue at a floating rate generally equal to the SOFR term rate plus a stated margin ranging from 1.1% to 1.5% per annum.

The WTM Credit Facility contains various representations, warranties and affirmative and negative covenants that White Mountains considers to be customary for such borrowings.

Compliance

As of June 30, 2026, White Mountains was in compliance, in all material respects, with all of the covenants under its debt instruments.

Note 8. Income Taxes

The Company has subsidiaries and branches that operate in various jurisdictions around the world and are subject to tax in the jurisdictions in which they operate.

As of June 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.

Certain of the Company’s subsidiaries are subject to the global minimum tax regime of the Organization for Economic Cooperation and Development (“OECD”) Pillar Two initiative, as enacted by Luxembourg, the United Kingdom and Israel in their respective domestic laws. 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 Company and its Bermuda-domiciled subsidiaries were not subject to income tax in Bermuda in 2025 and prior years. 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. 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 recognized 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 recorded a net deferred tax asset of $68.0 million in 2023, of which $51.0 million was attributable to Ark and $17.0 million was attributable to HG Global. As of July 1, 2024, White Mountains no longer consolidates BAM. As a result of the deconsolidation of BAM, the BAM Surplus Notes were recorded at fair value, which resulted in the reversal of a $5.0 million deferred tax liability related to the economic transition adjustment, generating a $5.0 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 $5.1 million deferred tax liability related to the economic transition adjustment, generating a $5.1 million deferred tax benefit in 2025.

As a result of legislation enacted by Luxembourg on December 17, 2025 and the United Kingdom on March 18, 2026, White Mountains expects to incur a top-up tax under the Luxembourg and United Kingdom Undertaxed Profits Rule (“UTPR”) equal to the amount of the deferred tax benefit for the year associated with the Bermuda economic transition adjustment. Consequently, White Mountains expects to derive no economic benefit from the 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 $78.1 million in 2025 to reverse the net deferred tax asset related to the Bermuda economic transition adjustment.

White Mountains’s income tax expense related to pre-tax income from continuing operations for the three and six months ended June 30, 2026, represented an effective tax rate of 9.7% and 11.1%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States and 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 six months ended June 30, 2025, represented an effective tax rate of 7.3% and 9.0%. The effective tax rate was different from the U.S. statutory rate of 21.0%, driven primarily by full year forecasted income in jurisdictions with lower tax rates than the United States.

In arriving at the effective tax rate for the three and six months ended June 30, 2026 and 2025, White Mountains forecasted all income and expense items, including the change in net realized and unrealized investment gains (losses), for the years ending December 31, 2026 and 2025.

White Mountains records a valuation allowance against deferred tax assets if it becomes more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in income tax expense in the period of change. In determining whether or not a valuation allowance, or change therein, is warranted, White Mountains considers factors such as prior earnings history, expected future earnings, carryback and carryforward periods and strategies that if executed would result in the realization of a deferred tax asset. It is possible that certain planning strategies or projected earnings in certain subsidiaries may not be sufficient to utilize the entire deferred tax asset, which could result in changes to White Mountains’s deferred tax assets and tax expense.

With few exceptions, White Mountains is no longer subject to U.S. federal, state or non-U.S. income tax examinations by tax authorities for years before 2019.

Note 9. Derivatives

Kudu Interest Rate Cap

On September 17, 2024, Kudu entered into an interest rate cap agreement, effective on September 30, 2024, to limit its exposure to the risk of interest rate increases on the Kudu Credit Facility (the “Kudu Interest Rate Cap”). The notional amount of the Kudu Interest Rate Cap was $150.0 million, and the termination date was September 30, 2027. Kudu paid an initial premium of $0.9 million for the Kudu Interest Rate Cap. Effective July 23, 2026, Kudu cancelled the Kudu Interest Rate Cap and received $0.1 million.

HG Global Interest Rate Cap

On August 22, 2024, HG Global entered into an interest rate cap agreement, effective July 25, 2025, to limit its exposure to the risk of interest rate increases on the HG Global 2022 Senior Notes (the “HG Global 2024 Interest Rate Cap”). The notional amount of the HG Global 2024 Interest Rate Cap was $150.0 million, and the termination date was July 25, 2028. HG Global paid an initial premium of $1.3 million for the HG Global 2024 Interest Rate Cap. Effective July 23, 2026, HG Global cancelled the HG Global 2024 Interest Rate Cap and received $0.4 million.

Distinguished Interest Rate Cap

On September 16, 2025, Distinguished entered into an interest rate cap agreement to limit its exposure to the risk of interest rate increases on the Distinguished Credit Facility (the “Distinguished Interest Rate Cap”). The notional amount of the Distinguished Interest Rate Cap is $70.0 million, and the termination date is September 16, 2028. Distinguished paid an initial premium of $0.2 million for the Distinguished Interest Rate Cap.

Under the Distinguished Interest Rate Cap, if the one-month SOFR on a monthly determination date exceeds 5.0%, Distinguished will receive a payment from the counterparty for the difference on the subsequent settlement date. As of June 30, 2026, the one-month SOFR was 3.7%. For the three and six months ended June 30, 2026, Distinguished did not receive any payments related to the periodic settlement of the Distinguished Interest Rate Cap.

Distinguished accounts for the Distinguished Interest Rate Cap as a derivative at fair value within other assets, with changes in fair value recognized in current period earnings within interest expense.

For the three and six months ended June 30, 2026, Distinguished recognized a net unrealized gain of $0.1 million and $0.1 million related to the change in fair value on the Distinguished Interest Rate Cap within interest expense. As of June 30, 2026 and December 31, 2025, the fair value of the Distinguished Interest Rate Cap was $0.2 million and $0.1 million. White Mountains classifies the Distinguished Interest Rate Cap as a Level 2 measurement.

Note 10. Municipal Bond Guarantee Reinsurance

HG Global was established to fund the startup of BAM, a mutual municipal bond insurer. HG Global, together with its subsidiaries, provided the initial capitalization of BAM through the purchase of $503.0 million of the BAM Surplus Notes.

Reinsurance Treaties

FLRT

HG Re is a party to the FLRT with BAM, under which HG Re provides first-loss reinsurance protection of up to 15%-of-par outstanding for each policy assumed from BAM. For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds. HG Re is only required to provide reinsurance on policies that fall within the FLRT underwriting guidelines agreed upon by HG Re.

BAM charges an insurance premium on each municipal bond insurance policy it underwrites. Historically, approximately 55% of the total insurance premium charged by BAM has been a member surplus contribution, and the remainder is a risk premium. In return for the reinsurance provided, HG Re receives approximately 60% of the risk premium charged, which is net of a ceding commission.

The FLRT is a perpetual agreement with terms that can be renegotiated every five years. For the next renegotiation period, either party may provide notice during 2028 to trigger a renegotiation that would take effect on January 1, 2030.

For the three and six months ended June 30, 2026, HG Re recognized gross written premiums of $11.0 million and $19.3 million and earned premiums of $7.7 million and $15.4 million. For the three and six months ended June 30, 2025, HG Re recognized gross written premiums of $19.2 million and $25.9 million and earned premiums of $7.1 million and $15.3 million.

XOLT

HG Re is party to an excess of loss reinsurance agreement (the “XOLT”) with BAM, under which HG Re provides last-dollar protection for exposures on municipal bonds insured by BAM in excess of the New York State Department of Financial Services (“NYDFS”) single issuer limits. As of June 30, 2026, the XOLT is subject to an aggregate limit equal to the lesser of $125.0 million or the assets held in the supplemental collateral trust (the “Supplemental Trust”) at any point in time. The XOLT is accounted for using deposit accounting, as the agreement does not meet the risk transfer requirements necessary to be accounted for as reinsurance. Accordingly, any financing revenues related to the XOLT are recorded in other revenues.

For the three and six months ended June 30, 2026 and 2025, other revenues recognized by HG Re related to the XOLT were insignificant.

Collateral Trusts

HG Re’s obligations under the FLRT are subject to an aggregate limit equal to the assets in two collateral trusts, the Supplemental Trust and the Regulation 114 Trust (together, the “Collateral Trusts”), at any point in time.

On a monthly basis, BAM deposits cash equal to ceded premiums net of ceding commissions, due to HG Re under the FLRT directly into the Regulation 114 Trust. The Regulation 114 Trust target balance is equal to HG Re’s unearned premiums and unpaid loss and LAE reserves, if any. If, at the end of any quarter, the Regulation 114 Trust balance is below the target balance, funds will be withdrawn from the Supplemental Trust and deposited into the Regulation 114 Trust in an amount equal to the shortfall. If, at the end of any quarter, the Regulation 114 Trust balance is above 102% of the target balance, funds will be withdrawn from the Regulation 114 Trust and deposited into the Supplemental Trust. The Regulation 114 Trust balance as of June 30, 2026 and December 31, 2025 was $409.3 million and $399.4 million, which consisted of cash, investments and accrued investment income.

The Supplemental Trust target balance is $603.0 million, less the amount of cash and securities in the Regulation 114 Trust in excess of its target balance (the “Supplemental Trust Target Balance”). If, at the end of any quarter, the Supplemental Trust balance exceeds the Supplemental Trust Target Balance, such excess may be distributed to HG Re. The distribution will be made first as an assignment of accrued interest on the BAM Surplus Notes and second in cash and/or fixed income securities. For the three and six months ended June 30, 2026, HG Re received a distribution from the Supplemental Trust of $13.8 million and $28.8 million, which consisted of an assignment of $6.9 million and $14.0 million of accrued interest on the BAM Surplus Notes and a cash distribution of $6.9 million and $14.8 million. For the three and six months ended June 30, 2025, HG Re received a distribution from the Supplemental Trust of $22.2 million, which consisted of an assignment of accrued interest on the BAM Surplus Notes of $15.2 million and a cash distribution of $7.0 million.

As the BAM Surplus Notes are repaid over time, the BAM Surplus Notes will be replaced in the Supplemental Trust by cash and fixed income securities. The Supplemental Trust balance as of June 30, 2026 and December 31, 2025 was $604.4 million and $607.1 million, which included $320.7 million and $323.3 million of cash, investments and accrued investment income, $276.8 million and $276.8 million of BAM Surplus Notes at nominal value and $6.9 million and $7.0 million of accrued interest receivable on the BAM Surplus Notes at nominal value.

As of June 30, 2026 and December 31, 2025, the Collateral Trusts held total assets of $1,013.7 million and $1,006.5 million.

BAM Surplus Notes

Through June 30, 2024, the interest rate on the BAM Surplus Notes was a variable rate equal to the one-year U.S. Treasury rate plus 300 basis points, set annually, with each payment applied pro rata between outstanding principal and interest. Accordingly, in 2024, the interest rate on the BAM Surplus Notes was 8.2% through June 30, 2024. Effective July 1, 2024 and through maturity, HG Global and BAM amended the interest rate on the BAM Surplus Notes to be 10.0%, with a higher proportion of each payment to be applied to outstanding principal.

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 remaining qualified statutory capital and other capital resources continue to support its outstanding obligations, its business plan and its “AA/stable” rating from Standard & Poor’s. No payment of principal or interest on the BAM Surplus Notes may be made without the approval of the NYDFS.

During the three and six months ended June 30, 2026 and 2025, HG Global did not receive any payments of principal or interest on the BAM Surplus Notes.

As of June 30, 2026 and December 31, 2025, the principal balance on the BAM Surplus Notes was $276.8 million for both periods, and total interest receivable on the BAM Surplus Notes was $227.5 million and $213.7 million, all at nominal value. For three and six months ended June 30, 2026, White Mountains accrued $6.9 million and $13.8 million of interest income on the BAM Surplus Notes. For three and six months ended June 30, 2025, White Mountains accrued $7.5 million and $15.0 million of interest income on the BAM Surplus Notes.

White Mountains elected the fair value option for the BAM Surplus Notes. The BAM Surplus Notes are classified as a Level 3 measurement. White Mountains values the BAM Surplus Notes each quarter using a discounted cash flow analysis.

The discounted cash flow analysis used to value the BAM Surplus Notes depends on key inputs, such as projections of future revenues and earnings for BAM, expected payments on the BAM Surplus Notes through maturity and a discount rate to reflect time value and related uncertainty of the repayment pattern. The expected payments on the BAM Surplus Notes are based on management judgment, considering current performance, budgets and projected future results. These expected payments depend on BAM’s ability to generate excess cash flows from its operations, driven primarily by assumptions regarding future trends for the issuance of municipal bonds, interest rates, credit spreads, insured market penetration, competitive activity in the market for municipal bond insurance and other factors affecting the demand for and pricing of BAM’s municipal bond insurance, as well as BAM’s investment returns. The discount rate considers comparably-rated companies and instruments, adjusted for risks specific to BAM and the BAM Surplus Notes. As of June 30, 2026 and December 31, 2025, White Mountains concluded that a discount rate, which is a significant unobservable input used in estimating the fair value of the BAM Surplus Notes, of 8.20% and 8.05% was appropriate. The change in the discount rate was driven primarily by an increase in market interest rates.

When making its fair value selection, White Mountains considers all available information, facts and circumstances specific to BAM’s business and industry and any infrequent or unusual results for the period. As of June 30, 2026 and December 31, 2025, White Mountains recognized the BAM Surplus Notes at a fair value of $352.8 million and $339.0 million. The increase was driven primarily by accrued interest during the six months ended June 30, 2026. The recorded fair values represent management's best estimate and are within the range of reasonable values derived from the discounted cash flow analysis.

The following table presents the changes in the nominal value and fair value of the BAM Surplus Notes for the three and six months ended June 30, 2026 and 2025:

Insured Obligations and Premiums

The following table presents the HG Global segment’s insured obligations as of June 30, 2026 and December 31, 2025:

(1) The remaining weighted average contract period was calculated using total contractual debt service outstanding, including principal and interest.

(2) Under the FLRT, HG Re provides first-loss reinsurance protection of up to 15%-of-par outstanding for each policy assumed from BAM. For capital appreciation bonds, par is adjusted to the estimated equivalent par value for current interest paying bonds.

The following table presents the HG Global segment’s future premium revenues as of June 30, 2026:

The following table presents gross written premiums and gross earned premiums included in the HG Global segment for the three and six months ended June 30, 2026 and 2025:

Note 11. Earnings Per Share

White Mountains calculates earnings per share using the two-class method, which allocates earnings between common shares and unvested restricted common shares. Both classes of shares participate equally in dividends and earnings on a per share basis. Basic earnings per share amounts are based on the weighted average number of common shares outstanding adjusted for unvested restricted common shares.

The following table presents the Company’s computation of earnings per share for the three and six months ended June 30, 2026 and 2025.

(1) White Mountains recognizes an adjustment to the carrying value of the redeemable noncontrolling interests to the extent that the carrying value is below the redemption value. When calculating basic and diluted earnings per share, the adjustment for redeemable noncontrolling interests is treated as being akin to a dividend and presented as an adjustment to net income (loss) attributable to White Mountains’s common shareholders.

(2) Restricted shares issued by White Mountains receive dividends, and therefore, are considered participating securities.

(3) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.”

The following table presents the undistributed net earnings (losses) for the three and six months ended June 30, 2026 and 2025.

(1) Restricted shares issued by White Mountains receive dividends, and therefore, are considered participating securities.

Note 12. Employee Share-Based Incentive Compensation Plans

White Mountains’s share-based incentive compensation plans are designed to incentivize key employees to maximize shareholder value over long periods of time. White Mountains believes that this is best pursued by utilizing a pay-for-performance program that closely aligns the financial interests of management with those of its shareholders while rewarding appropriate risk taking. White Mountains accomplishes this by emphasizing variable long-term compensation that is contingent on performance over a number of years rather than fixed entitlements. White Mountains expenses all its share-based compensation. As a result, White Mountains’s calculation of its owners’ returns includes the expense of all outstanding share-based compensation awards.

The WTM Incentive Plan provides for grants of various types of share-based and non-share-based incentive awards to key employees and directors of White Mountains. As of June 30, 2026 and 2025, White Mountains’s share-based incentive compensation awards consist of performance shares and restricted shares.

Performance Shares

Performance shares are designed to reward employees for meeting company-wide performance targets. Performance shares are conditional grants of a specified maximum number of common shares or an equivalent amount of cash. Awards generally vest at the end of a three-year service period, are subject to the attainment of pre-specified performance goals and are valued based on the market value of common shares at the time awards are paid. Performance shares earned under the WTM Incentive Plan are typically paid in cash but may be paid in common shares. Compensation expense is recognized for the vested portion of the awards over the related service periods. The level of payout ranges from zero to two times the number of shares initially granted, depending on White Mountains’s financial performance. Performance shares become payable at the conclusion of a performance cycle (typically three years) if pre-defined financial targets are met.

The performance measure used for determining performance share payouts is the growth in compensation value per share (“CVPS”). Prior to 2025, CVPS was calculated as the average of the growth in adjusted book value per share and the growth in intrinsic value per share. Intrinsic value per share is calculated by adjusting White Mountains’s book value per share for differences between the book value of certain assets and liabilities and White Mountains’s estimate of their underlying intrinsic value. For calendar years beginning with 2025, White Mountains has replaced growth in adjusted book value per share with growth in book value per share in the calculation of CVPS. For example, for the 2024-2026 performance cycle, adjusted book value per share growth would be used in the calculation of CVPS for calendar year 2024, and book value per share growth would be used for calendar years 2025 and 2026.

The following table presents performance share activity for the three and six months ended June 30, 2026 and 2025 for performance shares granted under the WTM Incentive Plan:

(1) WTM performance share payments for the 2023-2025 performance cycle were made in March 2026 at 184% of target. WTM performance share payments for the 2022-2024 performance cycle were made in March 2025 at 200% of target.

(2) Amounts include changes in assumed forfeitures, as required under GAAP.

During the six months ended June 30, 2026, White Mountains granted 9,615 performance shares for the 2026-2028 performance cycle. During the six months ended June 30, 2025, White Mountains granted 10,645 performance shares for the 2025-2027 performance cycle.

For the 2023-2025 performance cycle, all performance shares earned were settled in cash. For the 2022-2024 performance cycle, the Company issued common shares for 30 performance shares earned, and all other performance shares earned were settled in cash. If all outstanding performance shares had vested on June 30, 2026, the total additional compensation cost to be recognized would have been $41.6 million, based on accrual factors as of June 30, 2026 (common share price and payout assumptions).

The following table presents performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan as of June 30, 2026 for each performance cycle:

Restricted Shares

Restricted shares are grants of a specified number of common shares that generally vest at the end of a 34-month service period. The following table presents the unrecognized compensation cost associated with the outstanding restricted share awards under the WTM Incentive Plan for the three and six months ended June 30, 2026 and 2025:

During the six months ended June 30, 2026, White Mountains issued 9,615 restricted shares that vest on January 1, 2029. During the six months ended June 30, 2025, White Mountains issued 10,645 restricted shares that vest on January 1, 2028. The unamortized issue date fair value as of June 30, 2026 is expected to be recognized ratably over the remaining vesting periods.

Note 13. Noncontrolling Interests

Noncontrolling interests consist of the ownership interests of noncontrolling shareholders in consolidated entities. White Mountains has both redeemable and nonredeemable noncontrolling interests. Noncontrolling interests with optional redemption features that are not within White Mountains’s control are classified as redeemable noncontrolling interests, which are considered temporary equity and presented as mezzanine equity on the balance sheet. Noncontrolling interests that do not have any redemption features are classified as nonredeemable noncontrolling interests, which are considered permanent equity and included in White Mountains’s total equity on the balance sheet. Nonredeemable noncontrolling interests are presented separately from White Mountains’s common shareholders’ equity.

Redeemable Noncontrolling Interests

On September 5, 2028, the third anniversary of the closing of the Distinguished Transaction, certain noncontrolling unitholders will have the option to sell additional units representing 31.3% of Distinguished’s basic units outstanding as of June 30, 2026 to White Mountains at the same unit price paid in the Distinguished Transaction less aggregate per unit distributions. As of both June 30, 2026 and December 31, 2025, the carrying value of the redeemable noncontrolling interests was $131.5 million, and the redemption value would have been $131.5 million if exercised in full.

Nonredeemable Noncontrolling Interests

The following table presents the nonredeemable noncontrolling interests included in White Mountains’s total equity and the related percentage of each consolidated entity’s total equity owned by noncontrolling shareholders as of June 30, 2026 and December 31, 2025:

(1) The nonredeemable noncontrolling percentage represents the basic ownership interests held by noncontrolling shareholders with the exception of HG Global, for which the nonredeemable noncontrolling percentage represents the preferred share ownership held by noncontrolling shareholders.

(2) As of June 30, 2026 and December 31, 2025, Ark’s nonredeemable noncontrolling interests include $59.2 and $58.6 related to management’s equity incentives.

(3) As of June 30, 2026 and December 31, 2025, Kudu’s nonredeemable noncontrolling interests include $47.6 and $52.3 related to management’s equity incentives.

(4) As of June 30, 2026 and December 31, 2025, Distinguished’s nonredeemable noncontrolling interests include $38.5 and $33.3 related to management’s equity incentives.

Note 14. Segment Information

As of June 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. The Company’s CODM is its Chief Executive Officer. The CODM utilizes each segment’s pre-tax income (loss) in assessing each segment’s performance and allocating resources. Other measures of segment profitability are also reviewed by the CODM. Significant intercompany transactions among White Mountains’s segments have been eliminated herein.

White Mountains consolidates its segregated account of Outrigger Re Ltd., WM Outrigger Re, in its financial statements. WM Outrigger Re exclusively provides reinsurance protection to Ark, and WM Outrigger Re’s quota share reinsurance agreement with GAIL eliminates in White Mountains’s consolidated financial statements. As a result, WM Outrigger Re is aggregated with Ark within the Ark/WM Outrigger segment.

On September 2, 2025, White Mountains completed the Distinguished Transaction. As a result, White Mountains began consolidating Distinguished in its financial statements on September 2, 2025. See Note 2 — “Significant Transactions.”

In the second quarter of 2026, WTM Partners completed the acquisitions of Hawkeye Electric and Basesix. As a result, WTM Partners is presented as a separate reportable segment. The CODM assesses the performance of WTM Partners’s operating companies and allocates resources in the aggregate to the WTM Partners segment. Prior period amounts have been reclassified to conform to the current period’s presentation.

On December 5, 2025, White Mountains completed the Bamboo Sale Transaction. As a result, White Mountains deconsolidated the Bamboo Group on December 5, 2025, and Bamboo is no longer a reportable segment. Through December 5, 2025, Bamboo’s results of operations are presented within the Bamboo segment. White Mountains’s noncontrolling equity interest in the Bamboo SPV is accounted for at fair value in other long-term investments within Other Operations. See Note 2 — “Significant Transactions.”

The following tables present White Mountains’s pre-tax financial results by segment for the three and six months ended June 30, 2026 and 2025:

(1) Other Operations’s earned insurance premiums and commission and fee revenues are included in other revenues in the consolidated statement of operations.

(2) Distinguished’s net investment income is included in other revenues in the consolidated statement of operations.

(3) Other Operations’s loss and LAE and insurance acquisition expenses are included in general and administrative expenses in the consolidated statement of operations.

(4) Amortization of other intangible assets is included in general and administrative expenses in the consolidated statement of operations.

(5) Ark’s general and administrative expenses include $36.3 of other underwriting expenses.

(1) Other Operations’s earned insurance premiums and commission and fee revenues are included in other revenues in the consolidated statement of operations.

(2) Bamboo’s net investment income is included in other revenues in the consolidated statement of operations.

(3) Other Operations’s loss and LAE and insurance acquisition expenses are included in general and administrative expenses in the consolidated statement of operations.

(4) Amortization of other intangible assets is included in general and administrative expenses in the consolidated statement of operations.

(5) Ark’s general and administrative expenses include $46.3 of other underwriting expenses.

(1) Other Operations’s earned insurance premiums and commission and fee revenues are included in other revenues in the consolidated statement of operations.

(2) Distinguished’s net investment income is included in other revenues in the consolidated statement of operations.

(3) Other Operations’s loss and LAE and insurance acquisition expenses are included in general and administrative expenses in the consolidated statement of operations. (4) Amortization of other intangible assets is included in general and administrative expenses in the consolidated statement of operations.

(5) Ark’s general and administrative expenses include $71.2 of other underwriting expenses.

(1) Other Operations’s earned insurance premiums and commission and fee revenues are included in other revenues in the consolidated statement of operations.

(2) Bamboo’s net investment income and net realized and unrealized investment gains (losses) are included in other revenues in the consolidated statement of operations.

(3) Other Operations’s loss and LAE and insurance acquisition expenses are included in general and administrative expenses in the consolidated statement of operations.

(4) Amortization of other intangible assets is included in general and administrative expenses in the consolidated statement of operations.

(5) Ark’s general and administrative expenses include $74.8 of other underwriting expenses.

The following tables present White Mountains’s revenues from external customers by country for three and six months ended June 30, 2026 and 2025:

The following table presents White Mountains’s balance sheet information by segment as of June 30, 2026 and December 31, 2025:

(1) Total investments as of June 30, 2026 and December 31, 2025 exclude $1.6 and $1.0 related to an Other Operating Business that was reclassified to assets held for sale. See Note 19 — “Held for Sale.”

(2) HG Global preferred dividends payable to White Mountains’s subsidiaries are eliminated in White Mountains’s consolidated financial statements. For segment reporting, the HG Global preferred dividends payable to White Mountains’s subsidiaries included within the HG Global segment are eliminated against the offsetting receivable included within Other Operations and therefore added back to White Mountains’s common shareholders’ equity within the HG Global segment. As of June 30, 2026 and December 31, 2025, the HG Global preferred dividends payable to White Mountains’s subsidiaries were $470.7 and $527.2.

(3) Amounts include held for sale balances. See Note 19 — “Held for Sale.”

Note 15. Variable Interest Entities

Under GAAP, White Mountains is required to consolidate any entity in which it holds a controlling financial interest. A controlling financial interest is usually in the form of an investment representing the majority of the subsidiary’s voting interests. However, a controlling financial interest may also arise from a financial interest in a variable interest entity (“VIE”) through arrangements that do not involve ownership of voting interests. A VIE is a legal entity that (i) does not have sufficient equity at risk to finance its activities without additional financial support; (ii) is structured such that equity investors, as a group, lack the power, through voting or similar rights, to direct the activities that most significantly impact the entity’s economic performance; (iii) is structured such that the equity investors lack the obligation to absorb losses of, or the right to receive returns from, the entity; or (iv) is structured with non-substantive voting rights. White Mountains determines whether an entity is a VIE at the inception of its variable interest in the entity and upon the occurrence of certain reconsideration events.

White Mountains consolidates a VIE if it determines that it is the primary beneficiary. The primary beneficiary is defined as the entity that holds a variable interest that gives it both the power to direct the VIE’s activities that most significantly impact its economic performance and the obligation to absorb losses of, or the right to receive returns from, the VIE that could potentially be significant to the VIE. The identification of the primary beneficiary of a VIE may require significant assumptions and judgment. When White Mountains determines it has a variable interest in a VIE, it determines whether it is the primary beneficiary of that VIE by performing an analysis that principally considers: (i) the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders; (ii) the VIE’s capital structure; (iii) the identification of the activities that most significantly impact the VIE’s economic performance; (iv) the governance provisions and other contractual arrangements between the VIE and its variable interest holders and other parties involved with the VIE; and (v) related party relationships. At inception of its variable interest in the VIE as well as on an ongoing basis, White Mountains performs qualitative assessments of each VIE to determine whether White Mountains is the primary beneficiary of a VIE.

WM Outrigger Re

As of June 30, 2026, White Mountains owned 100.0% of WM Outrigger Re’s preferred equity. White Mountains has determined that Outrigger Re Ltd. and its segregated accounts, including WM Outrigger Re, are VIEs. White Mountains is not the primary beneficiary of Outrigger Re Ltd. or its third-party segregated accounts. White Mountains is the primary beneficiary of WM Outrigger Re, as it has both the power to direct the activities that most significantly impact WM Outrigger Re’s economic performance and the obligation to absorb losses, or the right to receive returns, that could potentially be significant to WM Outrigger Re. As a result, White Mountains consolidates WM Outrigger Re’s results in its financial statements. The assets of WM Outrigger Re can only be used to settle the liabilities of WM Outrigger Re, and there is no recourse to the Company for any creditors of WM Outrigger Re. WM Outrigger Re’s obligations under its reinsurance agreement with GAIL are subject to an aggregate limit equal to the assets in its collateral trust at any point in time. As of June 30, 2026, investments of $122.6 million were held in its collateral trust account.

BAM

BAM is the first and only mutual municipal bond insurance company in the United States. HG Global, together with its subsidiaries, funded the initial capitalization of BAM through the purchase of $503.0 million of BAM Surplus Notes and, through its reinsurance subsidiary HG Re, provides first-loss reinsurance protection of up to 15%-of-par outstanding for each policy assumed from BAM. As a mutual insurance company, BAM is owned by and operated for the benefit of its members, the municipalities whose debt issuances are insured by BAM. White Mountains has determined that BAM is a VIE.

BAM’s underwriting process was determined to be the activity that most significantly impacts BAM’s economic performance. BAM’s underwriting guidelines define the types of credits that BAM may insure. BAM has the ability to change its underwriting guidelines without HG Re’s approval. Pursuant to the FLRT, HG Re is only required to provide reinsurance on policies that fall within a separate set of FLRT underwriting guidelines. Changes to these FLRT underwriting guidelines require HG Re’s approval. However, because BAM may amend the BAM underwriting guidelines without the consent of HG Re, White Mountains does not have the power to direct BAM’s activities that most significantly impact its economic performance and is not BAM’s primary beneficiary. Accordingly, White Mountains does not consolidate BAM.

BAM’s assets can only be used to settle BAM’s obligations, and general creditors of BAM have no recourse to the Company or HG Global. HG Re’s obligations to BAM under the FLRT are subject to an aggregate limit equal to the assets in the Collateral Trusts at any point in time. As of June 30, 2026, the Collateral Trusts held assets of $1,013.7 million.

Distinguished

As of June 30, 2026, White Mountains had a 55.3% limited partnership interest in Distinguished. White Mountains has determined that Distinguished is a VIE. As a limited partnership, Distinguished is a VIE because the limited partnership interests do not have substantive kick-out rights or participating rights. White Mountains is the primary beneficiary of Distinguished, as it has both the power to direct the activities that most significantly impact Distinguished’s economic performance through its control of Distinguished’s general partner and the obligation to absorb losses, or the right to receive returns, that could potentially be significant to Distinguished through its basic units owned. As a result, White Mountains consolidates Distinguished’s results in its financial statements. The assets of Distinguished can only be used to settle the liabilities of Distinguished, and there is no recourse to the Company for any creditors of Distinguished.

Bamboo SPV

As of June 30, 2026, White Mountains had a 27.9% limited partnership interest in the Bamboo SPV. White Mountains has determined that the Bamboo SPV is a VIE but that White Mountains is not the primary beneficiary and therefore does not consolidate the Bamboo SPV. White Mountains’s ownership interest gives White Mountains the ability to exert significant influence over the significant financial and operating activities of the Bamboo SPV. Accordingly, the Bamboo SPV meets the criteria to be accounted for under the equity method. White Mountains has taken the fair value option for its investment in the Bamboo SPV. Changes in the fair value of the Bamboo SPV are recorded in net realized and unrealized investment gains (losses). As of June 30, 2026, White Mountains’s maximum exposure to loss on its limited partnership interest in the Bamboo SPV is the carrying value of $280.0 million.

PassportCard/DavidShield

As of June 30, 2026, White Mountains’s ownership interest in PassportCard/DavidShield was 53.8%. White Mountains has determined that PassportCard/DavidShield is a VIE but that White Mountains is not the primary beneficiary and therefore does not consolidate PassportCard/DavidShield. The governance structure for PassportCard/DavidShield was designed to give White Mountains and its co-investor equal power to make the decisions that most significantly impact its operations. White Mountains does not have the unilateral power to direct the operations of PassportCard/DavidShield and does not hold a controlling financial interest. White Mountains’s ownership interest gives White Mountains the ability to exert significant influence over the significant financial and operating activities of PassportCard/DavidShield. Accordingly, White Mountains’s investment in PassportCard/DavidShield meets the criteria to be accounted for under the equity method. White Mountains has taken the fair value option for its investment in PassportCard/DavidShield. Changes in the fair value of PassportCard/DavidShield are recorded in net realized and unrealized investment gains (losses).

As of June 30, 2026, White Mountains’s maximum exposure to loss on its interests in PassportCard/DavidShield is the total carrying value of $190.0 million, which includes its equity investment valued at $170.0 million and two private debt instruments valued at $20.0 million.

BroadStreet

As of June 30, 2026, White Mountains’s had a 10.9% limited partnership interest in the BroadStreet SPV. White Mountains has determined that the BroadStreet SPV is a VIE but that White Mountains is not the primary beneficiary and therefore does not consolidate the BroadStreet SPV. White Mountains’s ownership interest gives White Mountains the ability to exert significant influence over the significant financial and operating activities of the BroadStreet SPV. Accordingly, the BroadStreet SPV meets the criteria to be accounted for under the equity method. White Mountains has taken the fair value option for its investment in the BroadStreet SPV, which is measured at NAV as a practical expedient. Changes in the fair value of the BroadStreet SPV are recorded in net realized and unrealized investment gains (losses). As of June 30, 2026, White Mountains’s maximum exposure to loss on its limited partnership interest in the BroadStreet SPV is the carrying value of $176.2 million.

Limited Partnerships

White Mountains’s investments in limited partnerships are generally considered VIEs because the limited partnership interests do not have substantive kick-out rights or participating rights. White Mountains does not have the unilateral power to direct the operations of these limited partnerships, and therefore White Mountains is not the primary beneficiary and does not consolidate the limited partnerships. White Mountains has taken the fair value option for its investments in limited partnerships, which are generally measured at NAV as a practical expedient. Changes in the fair value of the limited partnerships are recorded in net realized and unrealized investment gains (losses). As of June 30, 2026, White Mountains’s maximum exposure to loss on its investments in limited partnerships is the carrying value of $283.2 million.

Note 16. Equity Method Eligible Investments

White Mountains’s equity method eligible investments include those in which White Mountains has the ability to exert significant influence over the investee’s operating and financial policies. Under GAAP, equity method eligible investments are considered related parties. White Mountains has generally taken the fair value option for its equity method eligible investments.

The following table presents the ownership interests and carrying values of White Mountains’s equity method eligible investments as of June 30, 2026 and December 31, 2025:

(1) Ownership interest references basic ownership interest with the exception of Kudu’s Participation Contracts, which are generally noncontrolling equity interests in the form of revenue and earnings participation contracts.

(2) MediaAlpha’s ownership interest is based on the total class A and class B common shares outstanding.

(3) Includes certain other unconsolidated entities, private equity funds and an ILS fund.

(4) Represents a private equity fund.

For the three and six months ended June 30, 2026, White Mountains received dividend and income distributions from equity method eligible investments of $22.7 million and $52.9 million, which were generally recorded within net investment income in the consolidated statements of operations. For the three and six months ended June 30, 2025, White Mountains received dividend and income distributions from equity method eligible investments of $20.3 million and $36.9 million.

Note 17. Fair Value of Financial Instruments

White Mountains records its financial instruments at fair value with the exception of debt obligations, which are recorded as debt at face value less unamortized debt issuance costs and original issue discount. See Note 7 — “Debt.”

The following table presents the fair value and carrying value of these financial instruments as of June 30, 2026 and December 31, 2025:

The fair value estimates for White Mountains’s debt obligations have been determined based on discounted cash flow analyses and are considered to be Level 3 measurements.

For the fair value measurements associated with White Mountains’s investment securities see Note 3 — “Investment Securities.” For the fair value measurements associated with White Mountains’s derivative instruments see Note 9 — “Derivatives.” For the fair value measurements associated with the BAM Surplus Notes see Note 10 — “Municipal Bond Guarantee Reinsurance.”

Note 18. Commitments and Contingencies

Legal Contingencies

White Mountains, and the insurance industry in general, is routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, nor are directly related to, claims activity. White Mountains’s estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. See Note 5 — “Loss and Loss Adjustment Expense Reserves.”

White Mountains considers the requirements of ASC 450 when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or if there is a reasonable possibility that a loss may have been incurred. White Mountains does not have any current non-claims related litigation that may have a material adverse effect on White Mountains’s financial condition, results of operations or cash flows.

Note 19. Held for Sale

White Mountains recognizes assets and liabilities classified as held for sale at the lower of carrying value on the date the asset is initially classified as held for sale or fair value less costs to sell. At the time of reclassification to held for sale, White Mountains ceases to recognize depreciation and amortization on assets held for sale.

As of June 30, 2026 and December 31, 2025, White Mountains reported assets and liabilities held for sale related to the pending sale of an Other Operating Business, which included $1.6 million and $1.0 million of short-term investments, $0.3 million and $0.7 million of cash, $3.4 million and $3.3 million of other assets, and $4.0 million and $3.6 million of other liabilities.