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Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2011

Reserves for Unpaid Losses and Loss Adjustment Expenses

The following table summarizes the loss and LAE reserve activities of White Mountains’ insurance and reinsurance subsidiaries for the years ended December 31, 2011, 2010 and 2009:

	Year Ended December 31,
Millions	2011			2010			2009
Gross beginning balance	$	5,736.8		$	6,379.2		$	7,029.4
Less beginning reinsurance recoverable on unpaid losses	(2,344.0		)	(2,771.5		)	(3,049.0		)
Net loss and LAE reserves	3,392.8			3,607.7			3,980.4

Less: Beginning net loss and LAE reserves for AutoOne (1)	(77.3		)	(95.8		)	(102.0		)

Loss and LAE reserves acquired—Old Lyme	21.0			—			—
Loss and LAE reserves acquired—Central National	—			17.6			—
Loss and LAE reserves sold—OneBeacon Personal Lines	—			(231.0		)	—

Losses and LAE incurred relating to:
Current year losses	1,256.7			1,503.4			1,571.2
Prior year losses	(49.8		)	(114.2		)	(147.1		)
Total incurred losses and LAE	1,206.9			1,389.2			1,424.1

Accretion of fair value adjustment to net loss and LAE reserves	8.3			8.5			12.2
Foreign currency translation adjustment to net loss and LAE reserves	.1			4.7			23.5

Loss and LAE paid relating to:
Current year losses	(404.0		)	(544.9		)	(591.6		)
Prior year losses	(952.8		)	(840.5		)	(1,234.7		)
Total loss and LAE payments	(1,356.8		)	(1,385.4		)	(1,826.3		)

Less: Beginning net loss and LAE reserves for AutoOne (1)	—			77.3			95.8

Net ending balance	3,195.0			3,392.8			3,607.7
Plus ending reinsurance recoverable on unpaid losses	2,507.3			2,344.0			2,771.5
Gross ending balance	$	5,702.3		$	5,736.8		$	6,379.2

(1)	Adjustment is to present loss and LAE reserve activities from continuing operations. At December 31, 2011, loss and LAE reserves for AutoOne have been reclassified as liabilities held for sale. Loss and LAE reserve balances for AutoOne prior to December 31, 2011 were not reclassified.

Schedule of asbestos and environmental loss and LAE reserve activities

The following tables summarize reported asbestos and environmental loss and LAE reserve activities (gross and net of reinsurance) for OneBeacon and Sirius Group, for the years ended December 31, 2011, 2010 and 2009, respectively:

OneBeacon

Net A&E Loss	Year Ended December 31,
Reserve Activity	2011									2010									2009
				Pre-NICO									Pre-NICO									Pre-NICO
Millions	Gross			Net(1)			Net			Gross			Net(1)			Net			Gross			Net(1)			Net
Asbestos:
Beginning balance	$	904.0		$	647.3		$	6.4		$	985.6		$	688.8		$	6.5		$	1,098.4		$	741.5		$	6.5
Incurred losses and LAE	256.8			32.2			(4.0		)	—			—			—			1.0			—			—
Paid losses and LAE	(86.5		)	1.7			(.2		)	(81.6		)	(41.5		)	(.1		)	(113.8		)	(52.7		)	—
Ending balance	1,074.3			681.2			2.2			904.0			647.3			6.4			985.6			688.8			6.5
Environmental:
Beginning balance	119.0			93.8			9.2			350.7			218.6			7.6			470.3			261.2			5.5
Incurred losses and LAE	231.8			62.2			10.0			6.2			6.0			6.0			4.9			5.0			5.0
Paid losses and LAE	(71.0		)	(4.4		)	(10.2		)	(237.9		)	(130.8		)	(4.4		)	(124.5		)	(47.6		)	(2.9		)
Ending balance	279.8			151.6			9.0			119.0			93.8			9.2			350.7			218.6			7.6
Total asbestos and environmental:
Beginning balance	1,023.0			741.1			15.6			1,336.3			907.4			14.1			1,568.7			1,002.7			12.0
Incurred losses and LAE	488.6			94.4			6.0			6.2			6.0			6.0			5.9			5.0			5.0
Paid losses and LAE	(157.5		)	(2.7		)	(10.4		)	(319.5		)	(172.3		)	(4.5		)	(238.3		)	(100.3		)	(2.9		)
Ending balance	$	1,354.1		$	832.8		$	11.2		$	1,023.0		$	741.1		$	15.6		$	1,336.3		$	907.4		$	14.1

(1)	Represents A&E reserve activity, net of third-party reinsurance, but prior to the NICO Cover.

Sirius Group

Net A&E Loss Reserve Activity	Year Ended December 31,
	2011						2010						2009
Millions	Gross			Net			Gross			Net			Gross			Net
Asbestos:
Beginning balance	$	191.9		$	151.5		$	187.0		$	146.6		$	173.7		$	138.5
Losses and LAE acquired — Central National	—			—			10.4			9.7			—			—
Incurred losses and LAE	13.6			10.3			9.0			7.3			24.7			18.4
Paid losses and LAE	(20.4		)	(15.6		)	(14.5		)	(12.1		)	(11.4		)	(10.3		)
Ending balance	185.1			146.2			191.9			151.5			187.0			146.6
Environmental:
Beginning balance	22.4			18.1			22.2			17.9			24.5			20.1
Losses and LAE acquired — Central National	—			—			3.5			2.4			—			—
Incurred losses and LAE	2.9			2.0			(2.5		)	(1.3		)	(.8		)	(.7		)
Paid losses and LAE	(3.2		)	(3.6		)	(.8		)	(.9		)	(1.5		)	(1.5		)
Ending balance	22.1			16.5			22.4			18.1			22.2			17.9
Total asbestos and environmental:
Beginning balance	214.3			169.6			209.2			164.5			198.2			158.6
Losses and LAE acquired — Central National	—			—			13.9			12.1			—			—
Incurred losses and LAE	16.5			12.3			6.5			6.0			23.9			17.7
Paid losses and LAE	(23.6		)	(19.2		)	(15.3		)	(13.0		)	(12.9		)	(11.8		)
Ending balance	$	207.2		$	162.7		$	214.3		$	169.6		$	209.2		$	164.5

- Definition

Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims.

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