WHITE MOUNTAINS INSURANCE GROUP LTD (WTM)

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

The following discussion contains “forward-looking statements.” White Mountains intends statements that are not historical in nature, which are hereby identified as forward-looking statements, to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. White Mountains cannot promise that its expectations in such forward-looking statements will turn out to be correct. White Mountains’s actual results could be materially different from and worse than its expectations. See “FORWARD-LOOKING STATEMENTS” on page 89 for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.

The following discussion also includes eleven non-GAAP financial measures: (i) Ark’s tangible book value, (ii) Ark’s growth in tangible book value, (iii) Ark’s tangible capital, (iv) Kudu’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), (v) Kudu’s adjusted EBITDA, (vi) Distinguished’s ScaleCo net income (loss), (vii) Distinguished’s ScaleCo EBITDA, (viii) Distinguished’s ScaleCo adjusted EBITDA, (ix) WTM Partners’s EBITDA, (x) WTM Partners’s adjusted EBITDA and (xi) total consolidated portfolio return excluding MediaAlpha. These non-GAAP financial measures have been reconciled from their most comparable GAAP financial measures on page 87. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.

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

Overview

White Mountains reported book value per share of $2,258 as of June 30, 2026, an increase of 4% in the second quarter of 2026 and 3% in the first six months of 2026, including dividends. Results in the second quarter and first six months of 2026 were driven primarily by strong operating company results and solid investment returns.

White Mountains reported book value per share of $1,804 as of June 30, 2025, an increase of 3% in both the second quarter and first six months of 2025, including dividends. Results in the second quarter and first six months of 2025 were driven primarily by solid operating company results and good investment returns.

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

In the second quarter of 2026, WTM Partners closed two new acquisitions. The acquisition of Basesix, a low voltage contracting platform, closed on April 1, 2026. WTM Partners deployed $97 million into Basesix. Enterprise Solutions’s bolt-on acquisition of Hawkeye Electric, a provider of specialty electrical contracting services, closed on May 1, 2026. WTM Partners deployed $35 million into Enterprise Solutions to fund the acquisition of Hawkeye Electric. Beginning in the second quarter of 2026, in conjunction with the acquisitions of Basesix and Hawkeye Electric, WTM Partners has been presented as a separate reportable segment. Prior period amounts have been reclassified to conform to the current period presentation.

In the second quarter of 2026, White Mountains repurchased and retired 91,194 of its common shares for $191

million at an average share price of $2,092.72, or 93% of White Mountains’s June 30, 2026 book value per share. In the first six months of 2026, White Mountains repurchased and retired 103,816 of its common shares for $217 million at an average share price of $2,088.40, or 93% of White Mountains’s June 30, 2026 book value per share. Including these share repurchases as well as recent deployments and operating company distributions, undeployed capital is roughly $0.8 billion.

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

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

Ark reported gross written premiums of $778 million and $1,868 million, net written premiums of $538 million and $1,128 million and net earned premiums of $375 million and $747 million in the second quarter and first six months of 2026 compared to gross written premiums of $815 million and $1,923 million, net written premiums of $536 million and $1,226 million and net earned premiums of $357 million and $703 million in the second quarter and first six months of 2025. The decline in gross written premiums in the second quarter of 2026 was driven primarily by softening market conditions in property lines, which was partially offset by growth in specialty lines. The decline in gross written premiums in the first six months of 2026 was driven primarily by a change in the timing of recognition of certain delegated authority business, which had no impact on the timing of recognition of Ark’s earned premiums.

Ark reported pre-tax income of $78 million and $85 million in the second quarter and first six months of 2026 compared to $91 million and $144 million in the second quarter and first six months of 2025. Ark’s results included net realized and unrealized investment gains (losses) of $31 million and $(2) million in the second quarter and first six months of 2026 compared to $51 million and $81 million in the second quarter and first six months of 2025.

Ark reported book value of $1,615 million as of June 30, 2026, an increase of 4% in the second quarter of 2026 and 5% in the first six months of 2026, including dividends. Ark reported tangible book value of $1,736 million as of June 30, 2026, an increase of 6% in the second quarter of 2026 and 7% in the first six months of 2026, including dividends. Ark’s book value includes goodwill and other intangible assets, net of tax, and White Mountains’s contingent consideration liability, which are excluded from Ark’s tangible book value.

WM Outrigger Re’s combined ratio was 25% and 40% in the second quarter and first six months of 2026 compared to 44% and 120% in the second quarter and first six months of 2025. Catastrophe losses in the first six months of 2025 included $19 million of losses related to the California wildfires (net of reinstatement premiums). Ark renewed Outrigger Re Ltd. for the 2026 underwriting year with $70 million of unaffiliated third-party capital. Through June 30, 2026, WM Outrigger Re has generated pre-tax income of $59 million from the 2025 underwriting year, $29 million from the 2024 underwriting year and $76 million from the 2023 underwriting year. In the first six months of 2026, White Mountains received $145 million of distributions from WM Outrigger Re, primarily a return of capital related to its non-renewal for the 2026 underwriting year. On July 23, 2026, White Mountains received an additional distribution of $77 million.

Kudu reported total revenues of $69 million and $132 million, pre-tax income of $57 million and $109 million and adjusted EBITDA of $16 million and $33 million in the second quarter and first six months of 2026 compared to total revenues of $20 million and $84 million, pre-tax income of $11 million and $64 million and adjusted EBITDA of $16 million and $32 million in the second quarter and first six months of 2025. Total revenues, pre-tax income and adjusted EBITDA included $19 million and $40 million of net investment income in the second quarter and first six months of 2026 compared to $19 million and $39 million in the second quarter and first six months of 2025. Total revenues and pre-tax income also included $50 million and $92 million of net realized and unrealized investment gains in the second quarter and first six months of 2026 compared to $1 million and $45 million in the second quarter and first six months of 2025. The increases in net realized and unrealized investment gains in the second quarter and first six months of 2026 were driven by increases in the fair value of Kudu’s participation contracts, primarily due to lower discount rates across the portfolio and step-ups in valuation related to certain sale transactions. The increase for the first six months of 2026 was also due to growth in assets under management at several managers.

Kudu deployed a total of $36 million, including transaction costs, into two new asset management firms in 2026. As of June 30, 2026, Kudu had deployed a total of $1.2 billion, including transaction costs, into 32 asset and wealth management firms globally, including three that have been exited. As of June 30, 2026, the asset and wealth management firms have combined assets under management of approximately $164 billion, spanning a range of asset classes.

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HG Global reported gross written premiums of $11 million and $19 million and earned premiums of $8 million and $15 million in the second quarter and first six months of 2026 compared to gross written premiums of $19 million and $26 million and earned premiums of $7 million and $15 million in the second quarter and first six months of 2025. HG Global’s total par value of policies assumed was $818 million and $1,335 million in the second quarter and first six months of 2026 compared to $931 million and $1,358 million in the second quarter and first six months of 2025.

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains “forward-looking statements.” White Mountains intends statements that are not historical in nature, which are hereby identified as forward-looking statements, to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. White Mountains cannot promise that its expectations in such forward-looking statements will turn out to be correct. White Mountains’s actual results could be materially different from and worse than its expectations. See “FORWARD-LOOKING STATEMENTS” on page 101 for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.

The following discussion also includes 12 non-GAAP financial measures: (i) Ark’s tangible book value, (ii) Ark’s tangible capital, (iii) Kudu’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), (iv) Kudu’s adjusted EBITDA, (v) Bamboo’s MGA pre-tax income (loss), (vi) Bamboo’s MGA net income (loss), (vii) Bamboo’s MGA EBITDA, (viii) Bamboo’s MGA adjusted EBITDA, (ix) Distinguished’s ScaleCo net income (loss), (x) Distinguished’s ScaleCo EBITDA, (xi) Distinguished’s ScaleCo adjusted EBITDA and (xii) total consolidated portfolio return excluding MediaAlpha that have been reconciled from their most comparable GAAP financial measures on page 85. White Mountains believes these measures to be useful in evaluating White Mountains’s financial performance and condition.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

Overview—Year Ended December 31, 2025 versus Year Ended December 31, 2024

White Mountains ended 2025 with book value per share of $2,188, an increase of 25% for the year, including dividends.

The increase in book value per share was driven primarily by the net gain on sale of the Bamboo Group of approximately $320 per share (based on 2.54 million shares outstanding at December 5, 2025). In addition, the growth in White Mountains’s book value per share reflected solid results at its operating companies and good investment returns.

Comprehensive income attributable to common shareholders was $1,109 million in 2025, largely driven by the net gain on sale of the Bamboo Group, compared to $230 million in 2024. White Mountains also recognized a net deferred tax expense of $73 million in 2025 from the reversal of the deferred tax asset related to the Bermuda economic transition adjustment, of which $51 million was recorded at Ark and $22 million was recorded at HG Global. Due to the enactment of Pillar II legislation by Luxembourg in December 2025, White Mountains no longer expects to utilize the benefit of the Bermuda economic transition adjustment.

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. White Mountains sold approximately 77.3% of its equity interest in the Bamboo Group for net cash proceeds at closing of $848 million and retained an indirect equity interest valued at $250 million. White Mountains’s Other Operations recognized a net gain of $816 million, which was comprised of an $849 million net gain on sale of the Bamboo Group, partially offset by $33 million of parent company compensation costs recorded within general and administrative expenses.

On September 2, 2025, White Mountains closed its transaction to acquire a controlling financial interest in Distinguished, a full-service MGA and program administrator for specialty property & casualty insurance. White Mountains paid $225 million of cash consideration, including a post-closing purchase price adjustment of $1 million. In addition, Distinguished borrowed $50 million of incremental debt and utilized $7 million of cash on hand as part of the transaction.

On July 18, 2025, White Mountains closed its transaction to deploy $150 million into BroadStreet through the BroadStreet SPV, alongside co-lead investors Ethos Capital LP and British Columbia Investment Management Corporation. BroadStreet is an insurance brokerage company with a presence in all 50 U.S. states and ten Canadian provinces.

On April 1, 2025, White Mountains acquired a majority interest in Enterprise Solutions, a provider of specialty electrical contracting services. This was the first acquisition by WTM Partners. White Mountains paid $58 million of cash consideration, and Enterprise Solutions borrowed $15 million in new debt as part of the transaction.

In 2025, White Mountains repurchased and retired 100,581 of its common shares for $203 million at an average share price of $2,013.67, or 92% of White Mountains’s December 31, 2025 book value per share. This included 64,064 shares repurchased through the self-tender offer in December.

Including a distribution of $128 million from WM Outrigger Re received in January, undeployed capital stands at roughly $1.0 billion.

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The Ark/WM Outrigger segment’s combined ratio was 81% in 2025 compared to 82% in 2024. The Ark/WM Outrigger segment reported gross written premiums of $2,557 million, net written premiums of $1,812 million and net earned premiums of $1,697 million in 2025 compared to gross written premiums of $2,207 million, net written premiums of $1,679 million and net earned premiums of $1,588 million in 2024. The Ark/WM Outrigger segment reported pre-tax income of $310 million in 2025 compared to $299 million in 2024.

Ark’s combined ratio was 83% in both 2025 and 2024. Ark’s combined ratio in 2025 included eight points of catastrophe losses, driven primarily by Hurricane Melissa and losses related to the January 2025 California wildfires, compared to 13 points of catastrophe losses in 2024, driven primarily by Hurricanes Milton, Helene, Debby and Beryl. Ark’s combined ratio included seven points of net favorable prior year development in 2025, driven primarily by property and specialty lines of business. This included six points of unfavorable development related to aviation losses from the conflict in Ukraine and Russia. This compares to four points of net favorable prior year development in 2024, driven primarily by property and specialty lines of business.

Ark reported gross written premiums of $2,557 million, net written premiums of $1,727 million and net earned premiums of $1,613 million in 2025 compared to gross written premiums of $2,207 million, net written premiums of $1,593 million and net earned premiums of $1,500 million in 2024. Ark reported pre-tax income of $265 million in 2025 compared to $253 million in 2024. Ark’s results included net realized and unrealized investment gains of $125 million in 2025 compared to $50 million in 2024. Ark’s results in 2025 also included a $173 million of expense related to the increase in fair value of contingent consideration compared to $61 million in 2024. The increase in the contingent consideration liability was driven primarily by strong growth in Ark’s tangible book value in the year. Ark’s results in 2025 also included the reversal of the $51 million deferred tax asset associated with the Bermuda economic transition adjustment. In November 2025, A.M. Best affirmed Ark’s “A/stable” financial strength rating and upgraded its issuer credit rating to “a+/stable”.

WM Outrigger Re’s combined ratio was 57% in 2025, compared to 60% in 2024. Catastrophe losses in the year ended December 31, 2025 included $19 million of losses related to the California wildfires (net of reinstatement premiums), primarily attributable to the 2024 underwriting year. WM Outrigger Re reported gross written premiums of $84 million and net earned premiums of $85 million in 2025 compared to gross written premiums of $87 million and net earned premiums of $88 million in 2024.

WM Outrigger Re reported pre-tax income (loss) of $45 million in 2025, of which $55 million was attributable to the 2025 underwriting year and $(10) million was attributable to the 2024 underwriting year. WM Outrigger Re reported pre-tax income of $46 million in 2024, of which $38 million was attributable to the 2024 underwriting year and $8 million was attributable to the 2023 underwriting year. Through December 31, 2025, WM Outrigger Re has generated pre-tax income of $55 million from the 2025 underwriting year, $29 million from the 2024 underwriting year and $76 million from the 2023 underwriting year.

White Mountains’s capital commitment to WM Outrigger Re was $150 million for the 2025 underwriting year, $130 million for the 2024 underwriting year and $205 million for the 2023 underwriting year. During the fourth quarter of 2025, Ark renewed Outrigger Re Ltd. for the 2026 underwriting year with $70 million of capital. The capital was provided entirely by third-party investors excluding White Mountains.

HG Global reported gross written premiums and earned premiums of $61 million and $31 million in 2025 compared to $52 million and $29 million in 2024. HG Global’s total par value of policies assumed was $3,170 million in 2025 compared to $2,952 million in 2024. HG Global’s total gross pricing was 194 basis points in 2025 compared to 177 basis points in 2024. HG Global reported pre-tax income (loss) of $45 million in 2025 compared to $(66) million in 2024. HG Global’s results included net realized and unrealized investment gains (losses) of $23 million in 2025 compared to $(6) million in 2024, driven by movements in interest rates. HG Global’s results in 2025 also included the reversal of the $22 million deferred tax asset associated with the Bermuda economic transition adjustment. HG Global’s results in 2025 included a $38 million decline in the fair value of the BAM surplus notes, which was driven by changes in certain key inputs used in the discounted cash flow analysis. HG Global’s results in 2024 included an increase of $1 million in the fair value of the BAM surplus notes. In addition, HG Global’s results in 2024 included the $115 million unrealized loss on deconsolidation of BAM.

The fair value of the BAM Surplus Notes was $339 million as of December 31, 2025 compared to $382 million as of December 31, 2024. The decline was driven by the $38 million decrease in fair value and $35 million in cash payments of principal and interest, partially offset by approximately $30 million of accrued interest.

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Kudu reported total revenues of $183 million, pre-tax income of $140 million and adjusted EBITDA of $65 million in 2025 compared to total revenues of $119 million, pre-tax income of $81 million and adjusted EBITDA of $55 million in 2024. Total revenues, pre-tax income and adjusted EBITDA included $79 million of net investment income in 2025 compared to $67 million in 2024. Total revenues and pre-tax income also included $104 million of net realized and unrealized investment gains in 2025 compared to $51 million in 2024.

Kudu deployed $197 million, including transaction costs, into three new asset management firms in 2025. As of December 31, 2025, Kudu has deployed $1.2 billion, including transaction costs, into 30 asset and wealth management firms globally, including three that have been exited. As of December 31, 2025, the asset and wealth management firms have combined assets under management of approximately $153 billion, spanning a range of asset classes.

Bamboo reported commission and fee revenues of $211 million and pre-tax income of $40 million in the period from January 1, 2025 through December 5, 2025, the date of sale, while Bamboo reported commission and fee revenues of $135 million and pre-tax income of $33 million in 2024. Bamboo reported MGA pre-tax income of $41 million and MGA adjusted EBITDA of $91 million in the period from January 1, 2025 through December 5, 2025, while Bamboo reported MGA pre-tax income of $32 million and MGA adjusted EBITDA of $53 million in 2024. Managed premiums, which represent the total premium placed by Bam

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