Loss and Loss Adjustment Expense Reserves

The following table summarizes the loss and loss adjustment expense (“LAE”) reserve activities of White Mountains’s insurance and reinsurance subsidiaries for the three and six months ended June 30, 2015 and 2014:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
Millions	2015			2014			2015			2014
Gross beginning balance	$	3,035.0		$	3,048.4		$	3,159.8		$	3,079.3
Less beginning reinsurance recoverable on unpaid losses	(436.9		)	(425.2		)	(483.9		)	(428.1		)
Net loss and LAE reserves	2,598.1			2,623.2			2,675.9			2,651.2

Loss and LAE reserves consolidated — SSIE	—			—			—			13.6

Loss and LAE incurred relating to:
Current year losses	300.0			278.4			566.8			518.9
Prior year losses	(11.7		)	4.3			(13.1		)	(6.9		)
Total incurred losses and LAE	288.3			282.7			553.7			512.0

Foreign currency translation adjustment to loss and LAE reserves	7.5			(.5		)	(14.9		)	1.3

Loss and LAE paid relating to:
Current year losses	(72.9		)	(65.8		)	(113.5		)	(100.8		)
Prior year losses	(216.7		)	(219.5		)	(496.9		)	(457.2		)
Total loss and LAE payments	(289.6		)	(285.3		)	(610.4		)	(558.0		)

Net ending balance	2,604.3			2,620.1			2,604.3			2,620.1
Plus ending reinsurance recoverable on unpaid losses	427.5			433.2			427.5			433.2
Gross ending balance	$	3,031.8		$	3,053.3		$	3,031.8		$	3,053.3

Loss and LAE incurred relating to prior year losses for the three and six months ended June 30, 2015

For the three and six months ended June 30, 2015, White Mountains experienced net favorable loss reserve development of $11.7 million and $13.1 million.

For the three and six months ended June 30, 2015, Sirius Group had net favorable loss reserve development of $11.4 million, and $10.9 million primarily due to reductions in reserves for prior year catastrophes and run-off casualty business. During the three months ended June 30, 2015, OneBeacon experienced no net loss and LAE reserve development. For the six months ended June 30, 2015, OneBeacon had net favorable loss reserve development of $1.8 million. For the three and six months ended June 30, 2015, SSIE had net favorable loss reserve development of $0.3 million and $0.4 million.

Loss and LAE incurred relating to prior year losses for the three and six months ended June 30, 2014

For the three and six months ended June 30, 2014, White Mountains experienced net unfavorable loss reserve development of $4.3 million and net favorable loss reserve development of $6.9 million.

For the three and six months ended June 30, 2014, OneBeacon had net unfavorable loss reserve development of $8.4 million and $7.0 million primarily related to a few large losses in OneBeacon Other Professional Lines and Management Liability, as well as OneBeacon Entertainment, OneBeacon Government Risks and OneBeacon Accident Group, partially offset by favorable loss reserve development in OneBeacon Specialty Property. For the three and six months ended June 30, 2014, Sirius Group had net favorable loss reserve development of $6.3 million and $16.1 million primarily due to decreases in property loss reserves, including reductions for prior period catastrophe losses. For both the three and six months ended June 30, 2014, SSIE had net unfavorable loss reserve development of $2.2 million.