WHITE MOUNTAINS INSURANCE GROUP LTD

Operating Cash and Short-term Investments

Holding Company Level

The primary sources of cash for the Company and certain of its intermediate holding companies are expected to be distributions from its insurance, reinsurance and other operating subsidiaries, net investment income, proceeds from sales, repayments and maturities of investments, borrowings from credit facilities, capital raising activities and, from time to time, proceeds from sales of operating subsidiaries. The primary uses of cash are expected to be general and administrative expenses, purchases of investments, payments to tax authorities, payments on and repurchases/retirements of debt obligations, dividend payments to holders of the Company’s common shares, distributions to noncontrolling interest holders of consolidated subsidiaries, contributions to operating subsidiaries and, from time to time, purchases of operating subsidiaries and repurchases of the Company’s common shares.

Operating Subsidiary Level

The primary sources of cash for White Mountains’s insurance, reinsurance and other operating subsidiaries are expected to be (i) collections of premiums, commissions and fees and product and services revenues, (ii) net investment income, (iii) proceeds from sales, repayments and maturities of investments, (iv) contributions from holding companies, (v) borrowings from credit facilities and (vi) capital raising activities. The primary uses of cash are expected to be claim payments, policy acquisition costs, general and administrative expenses, broker commission expenses, cost of sales, purchases of investments, payments to tax authorities, payments on and repurchases/retirements of debt obligations, distributions to holding companies, distributions to noncontrolling interest holders and, from time to time, purchases of operating subsidiaries.

Both internal and external forces influence White Mountains’s financial condition, results of operations and cash flows. Collections of premiums, commissions and fees, product and services revenues, investment returns, claim payments and cost of sales may be impacted by changing rates of inflation and other economic conditions. Some time may lapse between the occurrence of an insured loss, the reporting of the loss to White Mountains’s insurance and reinsurance operating subsidiaries and the settlement of the liability for that loss. The exact timing of the payment of losses cannot be predicted with certainty. White Mountains’s insurance and reinsurance operating subsidiaries maintain portfolios of invested assets with varying maturities and a substantial amount of cash and short-term investments to provide adequate liquidity for the payment of claims.

Management believes that White Mountains’s cash balances, cash flows from operations and routine sales and maturities of investments are adequate to meet expected cash requirements for the foreseeable future at both a holding company and insurance, reinsurance and other operating subsidiary level.

Dividend Capacity

Following is a description of the dividend capacity of White Mountains’s insurance and reinsurance and other operating subsidiaries:

During any 12-month period, GAIL, a class 4 licensed Bermuda insurer, has the ability to (i) make capital distributions of up to 15% of its total statutory capital per the previous year’s statutory financial statements or (ii) make dividend payments of up to 25% of its total statutory capital and surplus per the previous year’s statutory financial statements, without prior approval of Bermuda regulatory authorities. Accordingly, GAIL will have the ability to pay a dividend of up to $425 million during 2026, which is equal to 25% of its statutory capital and surplus of $1,700 million as of December 31, 2025, subject to meeting all appropriate liquidity and solvency requirements. During the first nine months of 2026, GAIL did not pay any dividends to its immediate parent.

During the first nine months of 2026, Ark paid a $51 million dividend to shareholders, including $36 million that was paid to White Mountains. As of September 30, 2026, Ark and its intermediate holding companies had less than $1 million of net unrestricted cash and short-term investments outside of its regulated and unregulated insurance and reinsurance operating subsidiaries.

WM Outrigger Re is a special purpose insurer subject to regulation and supervision by the BMA. WM Outrigger Re does not require regulatory approval to pay dividends; however, its dividend capacity is limited to amounts held outside of the collateral trust pursuant to its reinsurance agreement with GAIL. As of September 30, 2026, WM Outrigger Re had less than $1 million of net unrestricted cash held outside the collateral trust. As of September 30, 2026, WM Outrigger Re had $14 million of statutory capital and surplus and $48 million of assets held in the collateral trusts pursuant to the reinsurance agreement with GAIL. During the first nine months of 2026, White Mountains received $222 million of distributions from WM Outrigger Re.

Kudu

During the first nine months of 2026, Kudu distributed $12 million to unitholders, substantially all of which was paid to White Mountains. As of September 30, 2026, Kudu had $112 million of net unrestricted cash and short-term investments.

As of September 30, 2026, HG Global had $619 million face value of preferred shares outstanding, of which White Mountains owned 96.9%. Holders of the HG Global preferred shares are entitled to receive cumulative dividends at a fixed annual rate of 6.0% on a quarterly basis, payable when and if declared by HG Global. As of September 30, 2026, HG Global has accrued $502 million of dividends payable to holders of its preferred shares, $487 million of which is payable to White Mountains and is eliminated in consolidation. As of September 30, 2026, HG Global and its subsidiaries had $16 million of net unrestricted cash and short-term investments outside of HG Re.

HG Re is a special purpose insurer subject to regulation and supervision by the BMA. HG Re does not require regulatory approval to pay dividends; however, its dividend capacity is limited to amounts held outside of the Collateral Trusts. As of September 30, 2026, HG Re had $2 million of net unrestricted cash and short-term investments. As of September 30, 2026, HG Re had $197 million of accrued interest on the BAM Surplus Notes held outside the Collateral Trusts. As of September 30, 2026, HG Re had $711 million of statutory capital and surplus and $993 million of assets held in the Collateral Trusts.

HG Global has two primary sources of cash flows: (i) interest payments on the BAM Surplus Notes that are made outside the Collateral Trusts and (ii) releases of excess balances from the Collateral Trusts. During the first nine months of 2026, HG Global received a cash payment of principal and interest on the BAM Surplus Notes of $8 million. Of this payment, $5 million was a repayment of principal held in the Supplemental Trust, less than $1 million was a payment of accrued interest held in the Supplemental Trust and $3 million was a payment of accrued interest held outside the Supplemental Trust. During the first nine months of 2026, HG Re received a distribution from the Supplemental Trust of $42 million, which consisted of an assignment of accrued interest on the BAM Surplus Notes of $21 million and a cash distribution of $21 million. See Note 10 — “Municipal Bond Guarantee Reinsurance.”

On May 14, 2026, HG Global refinanced its senior debt facility under a private placement transaction. In turn, on May 26, 2026, HG Global paid a $93 million cash dividend to shareholders, of which $90 million was paid to White Mountains.

During the first nine months of 2026, Distinguished did not make any distributions to its unitholders. As of September 30, 2026, Distinguished had $13 million of net unrestricted cash and short-term investments.

WTM Partners

During the first nine months of 2026, WTM Partners distributed $8 million to unitholders, of which $6 million was paid to White Mountains. As of September 30, 2026, WTM Partners had $11 million of net unrestricted cash and short-term investments.

Other Operations

During the first nine months of 2026, White Mountains paid a $2 million common share dividend. As of September 30, 2026, the Company and its intermediate holding companies had $601 million of net unrestricted cash, short-term investments and fixed maturity investments, $171 million of MediaAlpha common stock, $204 million of common equity securities and $344 million of private equity and hedge funds, ILS funds and certain unconsolidated entities.

During the first nine months of 2026, White Mountains received a distribution of $26 million from the Bamboo SPV, of which $21 million was a return of capital and $5 million was a dividend.

Financing

The following table presents White Mountains’s capital structure as of September 30, 2026 and December 31, 2025:

(1)See Note 7 — “Debt.”

(2) Net of unamortized issuance costs and original issue discount, where applicable.

On July 16, 2025, the Company entered into the WTM Credit Facility, a senior unsecured revolving credit facility of up to $250 million that matures on July 16, 2028. As of September 30, 2026, the WTM Credit Facility was undrawn.

Management believes that White Mountains has the flexibility and capacity to obtain funds externally through debt or equity financing on both a short-term and long-term basis. However, White Mountains can provide no assurance that, if needed, it would be able to obtain additional debt or equity financing on satisfactory terms, if at all.

It is possible that the existing ratings for one or more of White Mountains’s subsidiaries may be lowered in the future, which could result in higher borrowing costs and impact White Mountains’s ability to access the capital markets.

Covenant Compliance

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

Share Repurchase Programs

The Company’s Board of Directors has authorized the Company to repurchase its common shares from time to time, subject to market conditions. Shares may be repurchased on the open market or through privately negotiated transactions. The repurchase authorizations do not have a stated expiration date. As of September 30, 2026, White Mountains may repurchase an additional 169,996 shares under these Board authorizations. In addition, from time to time, White Mountains has also repurchased its common shares through self-tender offers that were separately authorized by its Board of Directors.

During the first nine months of 2026, White Mountains repurchased and retired 103,827 of its common shares for $217 million at an average share price of $2,088, which was approximately 93% of White Mountains’s book value per share as of September 30, 2026. Of the shares White Mountains repurchased in the first nine months of 2026, 4,229 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the amount available under the Board repurchase authorizations.

During the first nine months of 2025, White Mountains repurchased and retired 5,097 of its common shares for $10 million at an average share price of $1,945, which was approximately 105% of White Mountains’s book value per share as of September 30, 2025. All of the shares White Mountains repurchased in the first nine months of 2025 were to satisfy employee income tax withholding pursuant to employee benefit plans, which do not reduce the amount available under the Board repurchase authorizations.

Cash Flows

Detailed information concerning White Mountains’s cash flows from continuing operations during the nine months ended September 30, 2026 and 2025 follows:

Cash flows from operations for the nine months ended September 30, 2026 and September 30, 2025

Net cash provided from operations was $332 million for the first nine months of 2026 compared to $497 million for the first nine months of 2025. The decrease in net cash provided from operations was driven primarily by an increase in cash used for operations at Ark/WM Outrigger as well as a decrease in cash provided from operations as a result of the sale of Bamboo in 2025, partially offset by proceeds from a sale transaction at Kudu in 2026. As of September 30, 2026, the Company and its intermediate holding companies had $601 million of net unrestricted cash, short-term investments and fixed maturity investments, $171 million of MediaAlpha common stock, $204 million of common equity securities and $344 million of private equity funds, hedge funds, ILS funds and certain unconsolidated entities.

Cash flows from investing and financing activities for the nine months ended September 30, 2026

Financing and Other Capital Activities

During the first nine months of 2026, the Company declared and paid a $2 million cash dividend to its common shareholders.

During the first nine months of 2026, White Mountains repurchased and retired 103,827 of its common shares for $217 million, of which 4,229 were to satisfy employee income tax withholding pursuant to employee benefit plans.

On May 14, 2026, HG Global refinanced the HG Global 2022 Senior Notes under a private placement transaction. In the refinancing, HG Global issued $200 million face value fixed rate secured senior notes with a maturity date of May 14, 2036 and received net proceeds of $197 million. HG Global used $150 million of these proceeds to repay the outstanding principal on the HG Global 2022 Senior Notes.

During the first nine months of 2026, Kudu repurchased $19 million of management equity incentives.

During the first nine months of 2026, Distinguished repaid $1 million of the Distinguished Credit Facility.

Acquisitions and Dispositions

On April 1, 2026, WTM Partners closed the Basesix Transaction. WTM Partners paid $96 million of cash consideration, which included a post-acquisition capital contribution of $1 million and a post-closing purchase price reduction of $1 million. In addition, Basesix borrowed $20 million in new debt as part of the transaction.

On May 1, 2026, Enterprise Solutions closed the Hawkeye Electric Transaction. Enterprise Solutions paid $67 million of cash consideration, which included net debt financing of $26 million and a post-closing purchase price reduction of less than $1 million. In addition, Hawkeye Electric utilized $6 million of cash on hand as part of the transaction.

Cash flows from investing and financing activities for the nine months ended September 30, 2025

Financing and Other Capital Activities

During the first nine months of 2025, the Company declared and paid a $3 million cash dividend to its common shareholders.

During the first nine months of 2025, White Mountains repurchased and retired 5,097 of its common shares for $10 million, all of which were to satisfy employee income tax withholding pursuant to employee benefit plans.

During the first nine months of 2025, Kudu borrowed $37 million in term loans under the Kudu Credit Facility.

During the first nine months of 2025, White Mountains contributed $15 million to Kudu, which was used to repurchase certain management equity incentives that were then replaced with new equity incentive units.

During the first nine months of 2025, Bamboo borrowed $110 million in term loans under the Bamboo Credit Facility.

Acquisitions and Dispositions

On April 1, 2025, WTM Partners closed the Enterprise Solutions Transaction. WTM Partners paid $58 million of cash consideration, which included a post-acquisition capital contribution of $2 million and a post-closing purchase price reduction of less than $1 million. In addition, Enterprise Solutions borrowed $15 million in new debt as part of the transaction.

On July 18, 2025, White Mountains deployed $150 million into BroadStreet through the BroadStreet SPV.

On September 2, 2025, White Mountains closed its acquisition of Distinguished. White Mountains paid $224 million of cash consideration and Distinguished borrowed $50 million of incremental debt as part of the transaction.