Third Party Reinsurance

3 Months Ended

Mar. 31, 2013

Reinsurance Disclosures [Abstract]

Third Party Reinsurance

Third Party Reinsurance

In the normal course of business, White Mountains’ insurance and reinsurance subsidiaries may seek to limit losses that may arise from catastrophes or other events by reinsuring with third party reinsurers. White Mountains remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts.

OneBeacon

At March 31, 2013, OneBeacon had $2.4 million and $105.8 million of reinsurance recoverables on paid and unpaid losses. Reinsurance contracts do not relieve OneBeacon of its obligation to its policyholders. OneBeacon is selective with its reinsurers, placing reinsurance with only those reinsurers having a strong financial condition. OneBeacon monitors the financial strength of its reinsurers on an ongoing basis. Uncollectible amounts historically have not been significant. As of March 31, 2013, greater than 90% of reinsurance recoverables on paid and unpaid losses are from reinsurers with an A.M. Best Company ("A.M. Best") rating of A (Excellent, which is the third highest of 16 financial strength ratings) or better. The largest recoverable from an individual reinsurer was $11.0 million with Hannover Ruckversich, which has an A.M. Best rating of A+ (Superior, which is the second highest of 16 financial strength ratings). The reinsurance balances associated with the runoff business are included in discontinued operations (see Note 15).

Sirius Group

At March 31, 2013, Sirius Group had $13.2 million of reinsurance recoverables on paid losses and $305.0 million of reinsurance recoverables on unpaid losses that will become recoverable if claims are paid in accordance with current reserve estimates. Because retrocessional reinsurance contracts do not relieve Sirius Group of its obligation to its insureds, the collectability of balances due from Sirius Group's reinsurers is critical to its financial strength. Sirius Group monitors the financial strength and ratings of retrocessionaires on an ongoing basis.

The following table provides a listing of Sirius Group’s top reinsurers based upon recoverable amounts, the percentage of total recoverables and the reinsurers’ A.M. Best Rating.

Top Reinsurers (Millions)	Balance at  March 31, 2013		% of Total		A.M. Best Rating(1)	% Collateralized
Berkshire Hathaway	$	56.9	18	%	A++	—	%
Swiss Re Group	34.8		11	%	A+	—	%
Olympus Reinsurance Company(2)	24.9		8	%	NR-5	100	%
Lloyds of London(3)	17.0		5	%	A	9	%
Michigan Catastrophic Claims Association(4)	14.7		5	%	N/A	—	%

⁽¹⁾  A.M. Best ratings as detailed above are: “A++” (Superior, which is the highest of sixteen financial strength ratings), “A+” (Superior, which is the second highest of sixteen financial strength ratings), “A” (Excellent, which is the third highest of sixteen financial strength ratings) and “NR-5” (Not formally followed).

⁽²⁾ Non-U.S. insurance entity. The balance is fully collateralized through funds held, letters of credit or trust agreements.

⁽³⁾ Represents the total of reinsurance recoverables due to Sirius Group from all Lloyds Syndicates.

⁽⁴⁾ Michigan Catastrophic Claims Association (“MCCA”) is a non-profit unincorporated association, established by the State of Michigan with the power to issue and collect assessments, to which every insurance company that sells automobile coverage in Michigan is required to be a member. A.M. Best does not rate MCCA. Sirius Group acquired its recoverable from MCCA in the acquisition of Stockbridge Insurance Company. As part of the acquisition, Sirius Group obtained $25.0 of reinsurance protection from the seller (currently rated A+ by A.M. Best) for unfavorable loss reserve development, including uncollectible reinsurance.