Third Party Reinsurance

6 Months Ended

Jun. 30, 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 June 30, 2013, OneBeacon had $2.8 million and $81.8 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 June 30, 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 following table provides a listing of OneBeacon's top reinsurers, excluding industry pools and associations, based upon recoverable amounts, the percentage of total recoverables and the reinsurers’ A.M. Best Rating. The reinsurance balances associated with the runoff business are included in discontinued operations (see Note 15).

Top Reinsurers (Millions)	Balance at June 30, 2013	% of Total	A.M. Best Rating(1)
Hannover Ruckversich	$10.2	9%	A+
Munich Reinsurance America	6.7	6%	A+
Platinum Underwriters	5.4	5%	A
Swiss Reinsurance America Corp	5.0	4%	A+
Hartford Steam Boiler	4.9	4%	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) and “A” (Excellent, which is the third highest of sixteen financial strength ratings).

Effective May 1, 2013, OneBeacon renewed its property catastrophe reinsurance program through April 30, 2014. The program provides coverage for OneBeacon's property business as well as certain acts of terrorism. Under the program, the first $20.0 million of losses resulting from any single catastrophe are retained and the next $130.0 million of losses resulting from the catastrophe are reinsured in three layers, although OneBeacon retains a co-participation of 50% of losses from $20.0 million to $30.0 million, 10% of losses from $30.0 million to $70.0 million, and 5% of losses from $70.0 million to $150.0 million. Any loss above $150.0 million would be retained in full. In the event of a catastrophe, OneBeacon's property catastrophe reinsurance program is reinstated for the remainder of the original contract term by paying a reinstatement premium that is based on the percentage of coverage reinstated and the original property catastrophe coverage premium.

Sirius Group

At June 30, 2013, Sirius Group had $13.3 million of reinsurance recoverables on paid losses and $306.8 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 June 30, 2013	% of Total	A.M. Best Rating(1)	% Collateralized
Berkshire Hathaway	$56.3	18%	A++	—	%
Swiss Re Group	34.0	11%	A+	—	%
Olympus Reinsurance Company(2)	25.0	8%	NR-5	100	%
Lloyds of London(3)	16.1	5%	A	16	%
International Medical Insurance Co. Ltd.	12.2	4%	NR-5	31	%

⁽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 trust agreements or funds held.

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