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Loss and Loss Adjustment Expense Reserves
 6 Months Ended
Jun. 30, 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 and six months ended June 30, 2014 and 2013:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
Millions
 
2014
 
2013
 
2014
 
2013
Gross beginning balance
 
$
3,048.4

 
$
3,100.6

 
$
3,079.3

 
$
3,168.9

Less beginning reinsurance recoverable on unpaid losses
 
(425.2
)
 
(410.8
)
 
(428.1
)
 
(429.1
)
Net loss and LAE reserves
 
2,623.2

 
2,689.8

 
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
 
278.4

 
290.0

 
518.9

 
532.9

Prior year losses
 
4.3

 
(15.4
)
 
(6.9
)
 
(14.0
)
Total incurred losses and LAE
 
282.7

 
274.6

 
512.0

 
518.9

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

 
.1

 
.4

 
1.3

Foreign currency translation adjustment to loss and LAE reserves
 
(.5
)
 
(4.6
)
 
1.3

 
(14.2
)
 
 
 
 
 
 
 
 
 
Loss and LAE paid relating to:
 
 
 
 
 
 

 
 

Current year losses
 
(65.8
)
 
(83.3
)
 
(100.8
)
 
(119.9
)
Prior year losses
 
(219.7
)
 
(207.3
)
 
(457.6
)
 
(477.9
)
Total loss and LAE payments
 
(285.5
)
 
(290.6
)
 
(558.4
)
 
(597.8
)
 
 
 
 
 
 
 
 
 
Net ending balance
 
2,620.1

 
2,669.3

 
2,620.1

 
2,669.3

Plus ending reinsurance recoverable on unpaid losses
 
433.2

 
388.6

 
433.2

 
388.6

Gross ending balance
 
$
3,053.3

 
$
3,057.9

 
$
3,053.3

 
$
3,057.9

(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 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 Professional Insurance, 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.

Loss and LAE incurred relating to prior year losses for the three and six months ended June 30, 2013
For the three and six months ended June 30, 2013, White Mountains experienced $15.4 million and $14.0 million of net favorable loss reserve development.
For the three and six months ended June 30, 2013, OneBeacon had net favorable loss reserve development of $1.0 million and $3.9 million primarily related to the healthcare business within Professional Insurance, the ocean marine business within International Marine Underwriters, and OneBeacon Government Risks, offset in part by unfavorable loss reserve development for Collector Cars and Boats in the three months ended June 30, 2013. For the three and six months ended June 30, 2013, Sirius Group had net favorable loss reserve development of $14.4 million and $10.1 million primarily due to decreases in property loss reserves, including reductions in loss reserves for the Japan earthquake and hurricane Sandy.

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 and $0.4 million of such charges, recorded as loss and LAE for the three and six months ended June 30, 2014, and $0.1 million and $1.3 million for the three and six months ended June 30, 2013.  As of June 30, 2014, the remaining pre-tax un-accreted adjustment was $4.3 million.