White Mountains Insurance Group (WTM) risk factors, FY2024 10-K

Risks Related to White Mountains

1. 01We have successfully created shareholder value through acquisitions and dispositions. We may not be able to continue to create shareholder value through such transactions in the future, which could materially adversely affect our results of operations and financial condition
2. 02As of December 31, 2024, we had total goodwill and other intangible assets of $720 million on our consolidated balance sheet, $355 million of which relates to our acquisition of Bamboo and $293 million of which relates to our acquisition of Ark

Risks Related to Ark/WM Outrigger’s Business and Industry

1. 03Unpredictable catastrophic events could materially adversely affect our results of operations and financial condition
2. 04Ark and its subsidiaries benefit from favorable financial strength ratings from A.M. Best, Standard & Poor’s and others, the deterioration of which could materially adversely affect its ability to conduct business and, consequently, could materially adversely affect our results of operations and financial condition
3. 05Ark may not successfully alleviate risk through reinsurance and retrocessional arrangements, which could materially adversely affect our results of operations and financial condition
4. 06The property and casualty insurance and reinsurance industries are highly competitive and cyclical, and Ark may not be able to compete effectively in the future, which could materially adversely affect our results of operations and financial condition
5. 07Ark/WM Outrigger’s loss and LAE reserves may be inadequate to cover the ultimate liability for losses, and as a result, our results of operations and financial condition could be adversely affected

Risks Related to HG Global’s Business and Industry

1. 08HG Re is only licensed to provide reinsurance to BAM. If BAM does not maintain its favorable financial strength rating from Standard & Poor’s, it could materially adversely affect HG Re’s business and, consequently, could materially adversely affect our results of operations and financial condition
2. 09Certain sectors of the municipal bond insurance industry are highly competitive, and BAM may not be able to compete effectively in the future, which could materially adversely affect HG Re’s business and, consequently, could materially adversely affect our results of operations and financial condition
3. 10We are exposed to losses from municipal bond insurance written by BAM through our reinsurance treaties between HG Re and BAM, which could materially adversely affect our results of operations and financial condition
4. 11If BAM does not pay some or all of the principal and interest due on the BAM Surplus Notes, it could materially adversely affect our results of operations and financial condition
5. 12We may be subject to greater volatility from the BAM Surplus Notes, as the valuation of the BAM Surplus Notes under the discounted cash flow analysis subsequent to deconsolidation could be more volatile, which could materially adversely affect our results of operations and financial condition

Risks Related to Kudu’s Business and Industry

1. 13Kudu’s financial performance is dependent upon its clients’ asset and performance-based fees, which are subject to a variety of economic, market and other risks

Risks Related to Bamboo’s Business and Industry

1. 14Bamboo’s business is dependent on its capacity providers (both fronting and reinsurance), and a change in availability, terms or ratings could materially impact Bamboo’s results of operations and financial condition or adversely affect its ability to write business
2. 15Bamboo primarily relies on third-party agents and brokers to distribute its products, and any deterioration in the relationships with these parties could adversely affect Bamboo’s business
3. 16Bamboo and its fronting partners are subject to extensive regulation which may prevent Bamboo from adequately pricing or selecting risk

Risks Related to Investments

1. 17We may be subject to volatility from our investment in MediaAlpha, which could materially adversely affect our results of operations and financial condition

Risks Related to Taxation

1. 18We may not meet the requirements of the five-year deferral from the Bermuda corporate income tax or the OECD Pillar Two Undertaxed Profits Rule, which could materially adversely affect our results of operations and financial condition
2. 19On July 11, 2023, the U.K. enacted conforming legislation adopting the Pillar Two IIR and QDMTT, which became effective for fiscal years beginning on or after December 31, 2023
3. 20Changes in tax laws or tax treaties could materially adversely affect our results of operations and financial condition

Risks Related to Laws and Regulation

1. 21Regulation may have a material adverse effect on our operations and financial condition
2. 22Bermuda law differs from the laws in effect in the United States and may afford less protection to shareholders
3. 23We could be materially adversely affected if our controls designed to ensure compliance with guidelines, policies, and legal and regulatory standards are not effective
4. 24We may be unable to adequately maintain our systems and safeguard the security of our data, which could adversely impact our ability to operate our business and cause reputational harm and, consequently, could materially adversely affect our results of operations and financial condition
5. 25We may suffer losses from unfavorable outcomes from litigation and other legal proceedings, which could materially adversely affect our results of operations and financial condition
6. 26We depend on our key personnel to manage our business effectively, and they may be difficult to replace, which could materially adversely affect our results of operations and financial condition