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Loss and Loss Adjustment Expense Reserves
 3 Months Ended
Mar. 31, 2014
Insurance Loss Reserves [Abstract]  
Loss and Loss Adjustment Expense Reserves
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 months ended March 31, 2014 and 2013:
 
 
Three Months Ended
 
 
March 31,
Millions
 
2014
 
2013
Gross beginning balance
 
$
3,079.3

 
$
3,168.9

Less beginning reinsurance recoverable on unpaid losses
 
(428.1
)
 
(429.1
)
Net loss and LAE reserves
 
2,651.2

 
2,739.8

 
 
 
 
 
Loss and LAE reserves acquired (1)
 
—

 
21.3

Loss and LAE reserves consolidated — SSIE
 
13.6

 
—

 
 
 
 
 
Loss and LAE incurred relating to:
 
 

 
 

Current year losses
 
240.5

 
242.9

Prior year losses
 
(11.2
)
 
1.4

Total incurred losses and LAE
 
229.3

 
244.3

 
 
 
 
 
Accretion of fair value adjustment to loss and LAE reserves
 
.2

 
1.2

Foreign currency translation adjustment to loss and LAE reserves
 
1.8

 
(9.6
)
 
 
 
 
 
Loss and LAE paid relating to:
 
 

 
 

Current year losses
 
(35.0
)
 
(36.6
)
Prior year losses
 
(237.9
)
 
(270.6
)
Total loss and LAE payments
 
(272.9
)
 
(307.2
)
 
 
 
 
 
Net ending balance
 
2,623.2

 
2,689.8

Plus ending reinsurance recoverable on unpaid losses
 
425.2

 
410.8

Gross ending balance
 
$
3,048.4

 
$
3,100.6

(1) Loss and LAE reserves acquired relate to WM Solutions purchase of Ashmere in the first quarter of 2013.

Loss and LAE incurred relating to prior year losses for the three months ended March 31, 2014
During the three months ended March 31, 2014, White Mountains experienced $11.2 million of net favorable loss reserve development.
For the three months ended March 31, 2014, OneBeacon had net favorable loss reserve development of $1.4 million primarily related to its ocean marine business and its technology business. For the three months ended March 31, 2014, Sirius Group had net favorable loss reserve development of $9.8 million primarily related to its casualty and accident and health lines of business.

Loss and LAE incurred relating to prior year losses for the three months ended March 31, 2013
During the three months ended March 31, 2013, White Mountains experienced $1.4 million of net unfavorable loss reserve development. OneBeacon had net favorable loss reserve development of $2.9 million primarily driven by medical facilities and managed care errors and omissions lines in its healthcare business, which is included in OneBeacon's Professional Insurance underwriting unit. Sirius Group had net unfavorable loss reserve development of $4.3 million primarily due to a late reported agricultural claim related to the 2012 U.S. drought.

Fair value adjustment to loss and LAE reserves
In connection with purchase accounting for acquisitions, White Mountains is required to adjust loss and LAE reserves and the related reinsurance recoverables to fair value on their respective acquired balance sheets.  The net reduction to loss and LAE reserves is being recognized through an income statement charge ratably with and over the period the claims are settled.
White Mountains recognized $0.2 million of such charges, recorded as loss and LAE for the three months ended March 31, 2014, and $1.2 million for the three months ended March 31, 2013.  As of March 31, 2014, the remaining pre-tax un-accreted adjustment was $4.5 million.