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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.          )

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Notice of 2019

Annual General Meeting

Of Members and

Proxy Statement

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White Mountains Insurance Group, Ltd. (the “Company”, “Registrant” or “WTM”) is an exempted Bermuda limited liability company whose principal businesses are conducted through its insurance subsidiaries and other affiliates.  Within this proxy statement, the term “White Mountains” is used to refer to one or more entities within the consolidated organization, as the context requires.

White Mountains is engaged in the business of making opportunistic and value-oriented acquisitions of businesses and assets in the insurance, financial services and related sectors, operating these businesses and assets through our subsidiaries and, if and when attractive exit valuations become available, disposing of these businesses and assets.

White Mountains conducts its business primarily in four areas: municipal bond insurance, specialty insurance distribution, marketing technology (for insurance and other verticals) and other operations.  White Mountains’s municipal bond insurance business is conducted through its subsidiary HG Global Ltd. and its reinsurance subsidiary HG Re Ltd. (“HG Re”), (collectively, “HG Global”).  HG Global was established to fund the startup of and provide reinsurance, through HG Re, to Build America Mutual Assurance Company (“BAM”), a mutual municipal bond insurance company.  White Mountains’s specialty insurance distribution business is conducted through its subsidiary NSM Insurance HoldCo, LLC and its subsidiaries (collectively, “NSM”).  White Mountains’s marketing technology business is conducted through its subsidiary QL Holdings LLC and its subsidiary QuoteLab, LLC (collectively “MediaAlpha”).  White Mountains’s investing activities are conducted through its investment management subsidiary, White Mountains Advisors LLC (“WM Advisors”).  White Mountains’s reportable segments are HG Global/BAM, NSM, MediaAlpha and Other Operations.  For additional information on our business segments, please refer to the Form 10-K for 2018, which can be found at www.whitemountains.com.

The 2019 Annual General Meeting will be confined to a Member vote on the proposals set forth in this Proxy Statement and on such other matters properly brought before the meeting.

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

NOTICE OF 2019 ANNUAL GENERAL MEETING OF MEMBERS

TO BE HELD MAY 23, 2019

Notice is hereby given that the 2019 Annual General Meeting of Members of White Mountains Insurance Group, Ltd. will be held on Thursday, May 23, 2019 at 8:00 am Atlantic Time at Rosewood Bermuda Hotel, 60 Tucker’s Point Drive, Hamilton Parish, Bermuda.  At this meeting, you will be asked to consider and vote upon the following proposals:

1)           election of three directors to Class I with a term ending in 2022 and election of one director to Class II with a term ending in 2020;

2)           approval of the advisory resolution on executive compensation;

3)           approval of the Company’s amended and restated long-term incentive plan; and

4)           approval of the appointment of PricewaterhouseCoopers LLP (“PwC”) as the Company’s Independent Registered Public Accounting Firm for 2019.

The Company’s audited financial statements for the year ended December 31, 2018, as approved by the Company’s Board of Directors, will be presented at this Annual General Meeting.

Members of record of common shares on the record date, Wednesday, April 3, 2019, (1) who are individuals, may attend and vote at the meeting in person or by proxy or (2) that are corporations or other entities, may have their duly authorized representative attend and vote at the meeting in person or by proxy.  A list of all Members entitled to vote at the meeting will be open for public examination during regular business hours beginning on or about April 22, 2019 at the Company’s registered office located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

All Members are invited to attend this meeting.

Members are invited to complete and sign the accompanying proxy card to be returned to White Mountains Insurance Group, Ltd., Proxy Services, c/o Computershare Investor Services, P.O. Box 505008, Louisville, Kentucky 40233-9814, in the envelope provided, whether or not they expect to attend the meeting.  Members may also vote their shares by telephone or via the internet in accordance with the instructions on your proxy card.

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

PROXY STATEMENT

This Proxy Statement is being furnished in connection with the solicitation of proxies on behalf of the Company’s Board of Directors (the “Board”) for the 2019 Annual General Meeting of Members (the “2019 Annual Meeting”), to be held on Thursday, May 23, 2019 at Rosewood Bermuda Hotel, 60 Tucker’s Point Drive, Hamilton Parish, Bermuda.  The solicitation of proxies will be made primarily by mail, and the Proxy Statement and related proxy materials will be distributed to registered Members on or about April 22, 2019.

Holders of the Company’s common shares (“Members”), par value $1.00 per share, as of the close of business on Wednesday, April 3, 2019, the record date, are entitled to vote at the meeting.

You can ensure that your common shares are properly voted at the meeting by completing, signing, dating and returning the enclosed proxy card in the envelope provided.  Members may also vote their shares by telephone or via the internet in accordance with the instructions on your proxy card.  A Member has the right to appoint another person (who need not be a Member) to represent the Member at the meeting by completing an alternative form of proxy which can be obtained from the Corporate Secretary or by notifying the Inspectors of Election (see page 52).  Every Member entitled to vote has the right to do so either in person or by one or more persons authorized by a written proxy executed by such Member and filed with the Corporate Secretary.  Any proxy duly executed will continue in full force and effect unless revoked by the person executing it in writing or by the filing of a subsequent proxy.

Sending in a signed proxy will not affect your right to attend the meeting and vote.  If a Member attends the meeting and votes in person, his or her signed proxy is considered revoked.

IMPORTANT VOTING INFORMATION

If you hold your shares through a broker, bank or other financial institution, in order for your vote to be counted on any matter other than Proposal 4 (the ratification of the selection of PwC as the Company’s auditor for 2019), you must provide specific voting instructions to your broker, bank or financial institution by completing and returning the proxy card or following the instructions provided to you to vote your shares via telephone or the internet.  Voting deadlines vary by institution.  Please check with your broker, bank or other financial institution for the voting cut-off date for WTM.

Your Participation in Voting the Shares You Own Is Important

Voting your shares is important to ensure that you have a say in the governance of your company.  Please review the proxy materials and follow the instructions on the proxy card to vote your shares.  We hope you will exercise your rights and fully participate in your company’s future.

More Information Is Available

If you have any questions about this rule or the proxy voting process in general, please contact the broker, bank or other financial institution where you hold your shares.  The U.S. Securities and Exchange Commission (“SEC”) has information available on the internet at: https://www.investor.gov/system/files/publications/documents/english/sec-guide-to-proxy-brochures.pdf with more information about your voting rights as a shareholder.

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PROPOSAL 1 - ELECTION OF THE COMPANY’S DIRECTORS

THE BOARD OF DIRECTORS

The Board is divided into three classes (each a “Class”).  Each Class serves a three-year term.

At the 2019 Annual General Meeting, Peter M. Carlson, Morgan W. Davis, and David A. Tanner are nominated to be elected to Class I with a term ending in 2022.  Lowndes A. Smith is nominated to be elected to Class II with term ending in 2020.  Of the nominees for election at the 2019 Annual General Meeting, Messrs. Davis and Smith were previously elected by Members.  Messrs. Carlson and Tanner were recommended by Mr. Rountree, the Chief Executive Officer, and approved for nomination to be elected at the 2019 Annual General Meeting by the Compensation/Nominating & Governance Committee.

The Board recommends a vote FOR Proposal 1 which calls for the election of the 2019 nominees.

The current members of the Board and terms of each Class are set forth below:

*Nominated to be elected at the 2019 Annual General Meeting to Class I with a term ending in 2022.

**Nominated to be elected at the 2019 Annual General Meeting to Class II with a term ending in 2020.

The Board is comprised of eight independent directors and the Chief Executive Officer.

The Board believes its members should have a diversity of skills and experience and be willing to devote adequate time and effort to Board responsibilities.  In evaluating director candidates, the Compensation/Nominating & Governance Committee evaluates attributes such as independence, integrity, expertise, breadth of experience, knowledge about the Company’s business and industry, and ownership interest in the Company.  Key aspects of the directors’ experiences, qualifications and skills are included in their individual biographies.

Class I – To Be Elected to a Term Ending in 2022

Morgan W. Davis has been a director of the Company since 2006 and was appointed as Chairman of the Board on March 1, 2017.  Mr. Davis formerly was a Managing Director of OneBeacon from 2001 to 2005 and served in a variety of capacities for subsidiaries of White Mountains from 1994 to 2001.  Prior to 1994, Mr. Davis had 21 years of experience in the insurance business, mostly at Fireman’s Fund Insurance Company and INA/Cigna.  Mr. Davis served as a director of OneBeacon from 2005 until September 2017.  He currently serves as a director of Compare.com (formerly Inspop USA LLC), MediaAlpha and NSM Insurance Group.  Mr. Davis served as a director of Endurance Specialty Holdings, and as a member of its Finance and Compensation Committees, from 2015 until its acquisition by SOMPO Holdings, Inc. in March 2017.  Mr. Davis has extensive executive and board-level experience gained over the course of his more than 45-year career in the property and casualty insurance industry.

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Peter M. Carlson has been a director of the Company since 2019.  Mr. Carlson formerly served as Executive Vice President and Chief Operating Officer of Brighthouse Financial, a U.S. annuity and life insurance company that spun off from MetLife, from 2017 to 2018.  Prior to joining Brighthouse Financial, Mr. Carlson served as Executive Vice President and Chief Accounting Officer at MetLife from 2009 to 2017.  Prior to joining MetLife, Mr. Carlson was at Wachovia Corporation from 2002 to 2009, where he served as Executive Vice President and Corporate Controller from 2006 to 2008.  Mr. Carlson joined Wachovia after fifteen years at Arthur Andersen, where he served as an audit partner working in financial services, manufacturing, commercial services and distribution.  Mr. Carlson has extensive accounting and auditing experience gained over the course of his 30-year career in the insurance and financial services industries.

David A. Tanner has been a director of the Company since 2018.  Mr. Tanner is the Managing Director of Three Mile Capital LLC, a private investment company that was founded in 2017.  Previously, he served as the Managing Director of Arlon Group LLC, and as Executive Vice President and a member of the Management Committee of Continental Grain Company from 2006 to 2017;  Founder and Managing Principal of Quadrangle Group, LLC from 2000 to 2006;  Managing Director at Lazard Freres & Co. and Managing Principal at Lazard Capital Partners from 1998 to 2000; and Managing Director at Warburg Pincus LLC, with which he was associated from 1986 to 1997.  Mr. Tanner has served on the board of directors of numerous public and private companies and currently serves on the boards of The Coastal Companies, Wholesome Sweeteners, Inc., CiCi’s Holdings, Inc., and Northeast Bancorp.  He is also a member of the Advisory Board of Engaged Capital.  Mr. Tanner is Chairman of the Board of the New York University School of Law, Trustee of New York University, Chair Emeritus of Montefiore Medicine Academic Health System, Director of Lawyers for Children, Director of The Carroll and Milton Petrie Foundation and a member of the Council on Foreign Relations.  Mr. Tanner has extensive executive and board-level service and financial expertise gained over the course of over 30 years in the financial services industry.

Class II – To Be Elected to a Term Ending in 2020

Lowndes A. Smith has been a director of the Company since 2003.  Mr. Smith has served as Managing Partner of Whittington Gray Associates since 2001.  Mr. Smith formerly served as Vice Chairman of The Hartford Financial Services Group, Inc. (1989-2001) and President and CEO of Hartford Life Insurance Company (1989-2001).  Mr. Smith served OneBeacon as Chairman of the Board and the Compensation Committee and was a member of the Audit, Executive and Compensation Committees from 2006 until September 2017.  Mr. Smith also served as Chairman of the Board and a member of the Audit, Compensation and Executive Committees of Symetra Financial Corporation from 2007 until its February 2016 merger with Sumitomo Life Insurance Company.  Mr. Smith has more than 40 years in the insurance industry as well as broad management and financial experience.

Class II – Term Ending in 2020

Yves Brouillette has been a director of the Company since 2007.  He has been the President of Beluca Investment, Inc. since 2006.  Previously, Mr. Brouillette had been with ING since 1989, serving in many leadership positions at ING companies, including as the CEO for ING Latin America operations in Mexico, Brazil, Chile and Peru (2002-2005).  From 2004 until May 2017, Mr. Brouillette was a director of Intact Financial Corporation (formerly ING Canada), where he served on the Audit and Risk Committees, and was the Chairman of the Board (2003-2007).  Mr. Brouillette is an actuary and has over 30 years of experience in the property and casualty insurance industry in North and South America.

G. Manning Rountree was appointed as a director and Chief Executive Officer of the Company on March 1, 2017.  Previously, Mr. Rountree served as an Executive Vice President of the Company and President of White Mountains Capital, Inc. (“WM Capital”).  He joined White Mountains in 2004 and served as President of WM Advisors from March 2009 until December 2014.  Prior to joining White Mountains, Mr. Rountree was a Senior Vice President at Putnam Investments for two years.  Prior to joining Putnam Investments, Mr. Rountree spent three years with McKinsey & Company. Since 2015, Mr. Rountree has been a director and member of the Risk Management Committee of Admiral Group plc, a large car insurance provider based in the UK.

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Class III – Term Ending in 2021

Mary C. Choksi has been a director of the company since 2017.  Ms. Choksi was a founding partner of Strategic Investment Group (“Strategic”), an investment management enterprise founded in 1987 which designs and implements global investment strategies for large institutional and individual investors. She served as a Senior Managing Director/Senior Advisor of Strategic until February 2017.  Ms. Choksi has served as a Director of the Avis Budget Group since 2007, where she serves on the Compensation Committee, and of the Omnicom Group since 2011, where she serves on the Audit and Compensation Committees. She is also a Director of 39 investment companies in the Franklin and Templeton series of mutual funds. Ms. Choksi was a founder and, until May 2011, a Managing Director of Emerging Markets Management LLC, which manages portfolios of emerging market equity securities, primarily for institutional investors. Prior to 1987, Ms. Choksi worked in the Pension Investment Division of the World Bank.  Ms. Choksi has extensive executive and board-level service and investment management expertise gained over the course of her 40 years in the financial services industry.

Philip A. Gelston has been a director of the company since 2018.  Mr. Gelston joined Cravath, Swaine & Moore LLP in 1978 and became a partner in 1984.  He retired from Cravath’s Corporate Department in December 2017.  He has extensive experience in mergers and acquisitions, joint ventures and general corporate counseling.  Mr. Gelston’s practice encompassed complicated negotiated transactions, hostile transactions (both offense and defense), cross border transactions, activist defense, and advising boards and senior executives, particularly on corporate governance and managing crisis situations.  Mr. Gelston also serves as a Trustee for the Friends of Bronx Preparatory Charter School.  Mr. Gelston has extensive legal and management expertise gained over the course of his 40-year career in the legal field.

Edith E. Holiday has been a director of the Company since 2004.  Ms. Holiday formerly served as Operating Trustee for TWE Holdings I and II Trusts from 2002 to 2007.  Ms. Holiday was also the President, Secretary and Treasurer of Comcast TW Holdings, Inc. from 2006 to 2007.  From 1990 to 1993 Ms. Holiday served as Assistant to the President of the United States and Secretary of the Cabinet.  From 1989 to 1990 she was General Counsel to the United States Treasury Department.  Ms. Holiday also holds directorships at Canadian National Railway Company (since 2001), where she also serves on the Audit Committee, Hess Corporation (since 1993), Santander Consumer USA (since 2016), and is a Director of 39 investment companies in the Franklin Templeton Group of Mutual Funds (since 1996).  Ms. Holiday also served as a Director of RTI International Metals Inc. (from 1999 until its sale in 2015).  Ms. Holiday has extensive board-level experience across diverse industries and significant experience with the U.S. Federal government.

CORPORATE GOVERNANCE

Corporate governance is the system by which companies are directed and controlled and involves the distribution of rights and responsibilities among the Board, management and the Company’s Members.  The Company has established Corporate Governance Guidelines that spell out its overall approach towards corporate governance.

The Company also has a Code of Business Conduct that applies to all directors, officers and employees in carrying out their responsibilities to, and on behalf of, the Company.  No waivers of the Code of Business Conduct were requested of, or granted by, the Board for any director or executive officer during 2018.

The Company’s Corporate Governance Guidelines and Code of Business Conduct are available at our website, www.whitemountains.com.  These documents are available in print, free of charge, to any Member upon request.

The Board

The day-to-day management of the Company, including preparation of financial statements and short-term and long-term strategic planning, is the responsibility of management.  The primary responsibility of the Board is to oversee and review management’s performance of these functions in order to advance the long-term interests of the Company and its Members.

In fulfilling this responsibility, directors must exercise common sense business judgment and act in what they reasonably believe to be in the best interests of the Company.  Directors are entitled to rely on the honesty and integrity of senior management and the Company’s outside advisors and auditors.  However, it is the Board’s responsibility to establish that they

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have a reasonable basis for such reliance by ensuring that they have a strong foundation for trusting the integrity, honesty and undivided loyalty of the senior management team upon whom they are relying and the independence and expertise of outside advisors and auditors.

Mr. Davis, an independent director, serves as Chairman of the Board.  At meetings of the Board, Mr. Davis presides over a separate session of non-management directors without Company management present.  In addition to being led by an independent Board Chair, the Board is comprised of directors that, together, are knowledgeable and experienced in the Company’s business. The Board is satisfied that the current structure provides strong oversight of the Company’s affairs.

Director Independence

The Board has determined that a majority of the Company’s current directors are independent, as defined in Section 303A of the New York Stock Exchange (“NYSE”) Listed Company Manual.  Those directors determined to be independent are Messrs. Brouillette, Carlson, Davis, Gelston, Smith and Tanner and Mmes. Choksi and Holiday.  For a director to be independent, the Board must determine that the director has no relationship with the Company (other than being a director or shareholder of the Company or its subsidiaries) or has only immaterial relationships with the Company.  The Company does not apply categorical standards as a basis for determining director independence.  Accordingly, the Board considers all relevant facts and circumstances, on a case-by-case basis, in making an independence determination.

The Board notes no current relationships (other than being directors or shareholders) with Messrs. Brouillette, Carlson, Gelston, Smith and Tanner or Mmes. Choksi and Holiday.  The Board notes a relationship with Mr. Davis, as disclosed herein under “Director Compensation”, that it concluded was immaterial and did not impair his independence.  In making its independence determinations, the Board considers all such relationships in light of NYSE standards as well as the attributes it believes should be possessed by independent-minded directors.  Those attributes include the relative impact of the transactions to the director’s personal finances, the perceived degree of dependence by the director or the Company upon the relationship or transactions continuing in the future and whether the transactions were on terms that were reasonable and competitive.

Board Meetings and Committees; Annual Meeting Attendance

During 2018, the following meetings of the Board were held: six meetings of the full Board, nine meetings of the Audit Committee, three meetings of the Compensation Committee, one meeting of the Performance Compensation Subcommittee, two meetings of the Nominating and Governance Committee, two meetings of the Compensation/Nominating & Governance Committee and four meetings of the Finance Committee.  During 2018, each director attended more than 75% of the aggregate of: (1) the total number of meetings of the Board (held during the period for which he or she has been a director); and (2) the total number of meetings held by all committees of the Board on which he or she served.  It is White Mountains practice that all directors are invited to and generally attend all Committee meetings.  In addition, each Committee Chair provides regular updates to the Board regarding Committee activities.

Directors are encouraged, but are not required, to attend annual meetings.  All of the Company’s directors were in attendance at the 2018 Annual General Meeting, which was held on May 24, 2018.

Committees of the Board

Compensation/Nominating & Governance Committee

The primary purposes of the Compensation/Nominating & Governance Committee are to (1) review and make recommendations on director compensation, (2) discharge the Board’s responsibilities relating to the compensation of executives, (3) oversee the administration of the Company’s (and, to the extent the Committee deems appropriate, the major subsidiaries of the Company) compensation plans, in particular the incentive compensation and equity-based plans, (4) prepare the annual report on executive compensation required by the rules and regulations of the Securities and Exchange Commission (the “Commission”) to be included in the Company’s annual proxy statement or annual report on Form 10-K, as applicable, (5) identify individuals qualified to become Board members and recommend such individuals to the Board for nomination for election to the Board, (6) make recommendations to the Board concerning committee appointments, (7) develop, recommend

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and annually review corporate governance guidelines applicable to the Company and oversee corporate governance matters and (8) oversee the evaluation of the Board and management.

The Compensation/Nominating & Governance Committee is currently comprised of Ms. Holiday (as Chairwoman) and Messrs. Brouillette, Davis and Gelston.  The Board has determined that each current member of the Compensation/Nominating & Governance Committee satisfies applicable NYSE requirements.

The Compensation/Nominating & Governance Committee Charter, which outlines the duties and responsibilities of the Compensation/Nominating & Governance Committee, is available at www.whitemountains.com.  The Compensation/Nominating & Governance Committee Charter is available in print, free of charge, to any Member upon request.

General Criteria and Process for Selection of Director Candidates.  In identifying and evaluating director candidates, the Compensation/Nominating & Governance Committee does not set specific criteria for directors.  Under its Charter, the Committee is responsible for determining desired Board skills and evaluating attributes such as independence, integrity, expertise, breadth of experience, knowledge about the Company’s business or industry and ownership interest in the Company.  In selecting director candidates, the Company seeks a diversity of skills and experience, but does not affirmatively seek diversity based on race, gender, or national origin.  Directors must be willing to devote adequate time and effort to Board responsibilities.  As set forth in the Company’s Corporate Governance Guidelines and its Charter, the Committee is responsible for recommending director candidates to the Board.

Consideration of Director Candidates Nominated by Members.  The Company has not adopted a specific policy regarding consideration of director candidates from Members.  Members who wish to recommend candidates for consideration by the Committee may submit their nominations in writing to the Corporate Secretary at the address provided in this Proxy Statement.  The Committee may consider such Member recommendations when it evaluates and recommends candidates to the Board for submission to Members at each annual general meeting.  In addition, Members may nominate director candidates for election without consideration by the Committee by complying with the eligibility, advance notice and other provisions of our Bye-laws as described below.

Procedures for Nominating Director Candidates.  Under the Company’s Bye-laws, nominations for the election of directors may be made by the Board or by any Member entitled to vote for the election of directors (a “Qualified Member”).  A Qualified Member may nominate persons for election as directors only if written notice of such Qualified Member’s intent to make such nomination is delivered to the Secretary not later than: (1) with respect to an election to be held at an annual general meeting, 90 days prior to the anniversary date of the immediately preceding annual general meeting or not later than 10 days after notice or public disclosure of the date of the annual general meeting is given or made available to Qualified Members, whichever date is earlier, and (2) with respect to an election to be held at a special general meeting for the election of directors, the close of business on the seventh day following the date on which notice of such meeting is first given to Qualified Members.  Each such notice shall set forth: (a) the name and address of the Qualified Member who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the Qualified Member is a holder of record of common shares entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the Qualified Member and each such candidate and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the Qualified Member; (d) such other information regarding each candidate proposed by such Qualified Member as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had each such candidate been nominated, or intended to be nominated, by the Board; and (e) the consent of each such candidate to serve as a director of the Company if so elected.

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Performance Compensation Subcommittee

In February 2013, the Compensation Committee formed the Performance Compensation Subcommittee.  The Committee delegated to the Subcommittee review and approval of performance-based compensation in order to comply with Internal Revenue Code Section 162(m) (“Section 162(m)”).  The Performance Compensation Subcommittee is comprised of Ms. Holiday and Messrs. Brouillette and Gelston.

Audit Committee

The primary purposes of the Audit Committee are to: (1) assist with Board oversight of: the integrity of the Company’s financial statements; the qualifications and independence of the independent auditors; the performance of the internal audit function and the independent auditors; and the Company’s compliance with legal and regulatory requirements; (2) provide an avenue of communication among the independent auditors, management, the internal auditors and the Board; (3) approve certain related or affiliated person transactions and review disclosures thereof and; (4) prepare the Audit Committee Report (which appears on page 39).  In addition, with respect to risk management, the Committee discusses with management the Company’s policies with respect to risk assessment and risk management, including the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures.  The Audit Committee also receives a report, at least annually, on company-wide risks.

The Audit Committee meets individually in private session with the Company’s Chief Financial Officer, General Counsel, General Auditor, Chief Accounting Officer, and the independent auditors at its quarterly meetings.

The Audit Committee is comprised of Messrs. Smith (as Chairman), Brouillette, Carlson, Gelston and Tanner.  The Board has determined that, of the persons on the Audit Committee, at a minimum Mr. Smith meets the requirements of being an Audit Committee Financial Expert as defined in Item 407(d) of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  The Board has also determined that each current member of the Audit Committee satisfies applicable NYSE requirements as well as the separate independence standards set forth by the SEC.

The Audit Committee Charter, which outlines the duties and responsibilities of the Audit Committee, is available at www.whitemountains.com.  The Audit Committee Charter is available in print, free of charge, to any Member upon request.

Finance Committee

The primary purposes of the Finance Committee are to:  (1) formulate the Company’s investment policy and investment guidelines;  (2) review the performance and asset allocation of the Company’s investment portfolio on a regular basis; and (3) monitor the capital, debt, and corporate structure of the Company and, in coordination with the Audit Committee, review the adequacy of risk management, including with respect to new business opportunities outside of traditional property and casualty insurance and reinsurance.  The Finance Committee is currently comprised of Ms. Choksi (as Chairwoman) and Messrs. Rountree, Smith and Tanner.

Interlocks and Insider Participation

No member of the Compensation/Nominating & Governance Committee or the Performance Compensation Subcommittee was an employee of the Registrant during the last fiscal year or has served as an officer of the Registrant.

Risk Oversight

The Board, directly and through its Committees, plays an active role in the oversight of the Company’s risk management.  The subject of risk management is a recurring agenda item, for which the Board regularly receives reports from management on capital, investments, and operations, including the risks associated with each and the steps management is taking to manage those risks.  The Board also discusses with management the Company’s business strategy, risk appetite and appropriate levels of risk.

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The Board’s committees are assigned oversight responsibility for particular areas of risk.  For example, the Audit Committee receives a report, at least annually, on company-wide risks which encompass operational, financial, legal, compliance and reputational risks, as well as climate risks and sustainability matters.  The Compensation/Nominating & Governance Committee oversees risk related to executive compensation plans and implementation.  The Finance Committee oversees the risks related to managing the Company’s investment portfolio.

Shareholder Communications

Members, employees and others interested in communicating directly with the Board, any of the Board’s Committees or any individual member of the Board should write to the addressee, c/o the Corporate Secretary, at the address presented under “Available Information” (which appears on page 53).

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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Voting Rights of Members

As of April 3, 2019, there were 3,181,199 common shares outstanding.  Members of record of common shares shall be entitled to one vote per common share, provided that if, and so long as, the votes conferred by “Controlled” common shares (as defined below) of any person constitute ten percent (10%) or more of the votes conferred by the outstanding common shares of the Company, each outstanding common share comprised in such Controlled common shares shall confer only a fraction of a vote that would otherwise be applicable according to the following formula:

[(T divided by 10)-1] divided by C

Where: “T” is the aggregate number of votes conferred by all the outstanding common shares; and “C” is the number of votes conferred by the Controlled common shares of such person.

“Controlled” common shares in reference to any person means:

(1)                  all common shares directly, indirectly, or constructively owned by such person within the meaning of Section 958 of the Internal Revenue Code of 1986, as amended, of the United States; and

(2)                  all common shares directly, indirectly, or constructively owned by any person or “group” of persons within the meaning of Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated thereunder; provided that this clause (ii) shall not apply to (a) any person (or any group that includes any person) that has been exempted from the provisions of this clause or (b) any person or group that the Board, by the affirmative vote of at least seventy-five percent (75%) of the entire Board, may exempt from the provisions of this clause.

The limitations set forth above do not apply to any Member which is a “Byrne Entity” (as defined below) for any matter submitted to the vote of Members, except with respect to the election of directors.  “Byrne Entity” means any of John J. Byrne, any foundation or trust established by John J. Byrne, Patrick Byrne, and any associate or affiliate of any of them (or any group of which any of them is a part), as defined under Section 13(d) of the United States Securities Exchange Act of 1934, as amended.

If, as a result of giving effect to the foregoing provisions or otherwise, the votes conferred by the Controlled common shares of any person would otherwise represent 10% or more of the votes conferred by all the outstanding common shares, the votes conferred by the Controlled common shares of such person shall be reduced in accordance with the foregoing provisions.  Such process shall be repeated until the votes conferred by the Controlled common shares of each person represent less than 10% of the votes conferred by all common shares.

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Security Ownership of Certain Beneficial Owners

To the knowledge of the Company, there was no person or entity beneficially owning more than 5% of the common shares outstanding as of April 3, 2019, except as shown below.

(a)          Information as of December 31, 2018, based on Schedule 13G filed with the Securities and Exchange Commission on February 11, 2019, by and on behalf of The Vanguard Group.

(b)          Information as of December 31, 2018, based on Schedule 13G filed with the Securities and Exchange Commission on February 12, 2019, by and on behalf of Wellington Management Group, LLP.

(c)          Information as of December 31, 2018, based on Schedule 13G filed with the Securities and Exchange Commission on February 14, 2019, by and on behalf of Boston Partners.

Security Ownership of Management

The following table sets forth, as of April 3, 2019, beneficial ownership of common shares by each director, the Named Executive Officers (as defined on page 17) and all other executive officers as a group:

(a)          The common shares shown as beneficially owned by all directors, Named Executive Officers and all other executive officers as a group represent 2.5% of the total common shares outstanding at April 3, 2019.  No director or executive officer beneficially owned 1% or more of the total common shares outstanding at that date.  Beneficial ownership has been determined in accordance with Rule 13d-3 of the Exchange Act.

(b)          Common shares shown as economically owned include common shares beneficially owned and target unearned performance share awards, less any common shares in which the owner disclaims a pecuniary interest.

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EXECUTIVE COMPENSATION

FROM OUR COMPENSATION/NOMINATING & GOVERNANCE COMMITTEE

Dear Fellow Shareholders,

As the independent Compensation/Nominating & Governance Committee (the “CNG Committee”) of White Mountains Insurance Group, one of our most important mandates is to structure our executive compensation programs to create close alignment with our shareholders’ interests, while continuing to attract and retain talented executives to execute on our Company’s strategy and create long-term value.

To that end, we regularly seek feedback from our shareholders on our compensation practices and, as appropriate, make refinements that we believe enhance our programs.  Following our 2018 Say-on-Pay vote, we met with shareholders representing approximately 50% of our ownership base, with Ms. Edith Holiday, as CNG Committee chair, personally leading discussions in meetings with shareholders representing approximately 35% of our shares outstanding.  The feedback received during these meetings was extremely valuable and helped to inform our Committee’s decisions regarding changes to our executive compensation programs and policies implemented for 2019.

2018 Compensation Program Highlights:

Ø                 Base salaries were held flat for all Named Executive Officers

Ø                 Annual percent-of-salary target bonus opportunities were held flat for all Named Executive Officers

Ø                 Annual long-term incentive grants made to Named Executive Officers had a total grant-date fair value that was 21% lower than in 2017

Ø                 Over 90% of total target 2018 CEO compensation was linked to metrics assessing Company, stock or individual performance and therefore meaningfully “at-risk”

2019 Changes in Response to Shareholder Feedback:

Ø                 Introduced a 100% formulaic annual incentive program for our executive officers, with pre-established, rigorous, and quantifiable performance targets that are relevant for our firm and industry – see page 26

Ø                 Established share ownership guidelines for our executive officers, set at 10x base salary for our CEO and Executive Vice Presidents, and at 3x base salary for other executive officers – see page 27

Ø                 Enhanced disclosure around the Company’s proactive shareholder engagement efforts and changes made in response to feedback – see page 19

White Mountains remains in a transitional period marked by thoughtful and patient re-deployment of undeployed capital generated from sales of businesses during 2015-2017, and the CNG Committee remains committed to ensuring that our compensation programs continue to motivate long-term value creation. We believe the actions highlighted above are responsive to our shareholders’ input, and we welcome your continued feedback.

Sincerely,

The White Mountains Insurance Group Compensation/Nominating & Governance Committee

April 8, 2019

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Compensation Discussion and Analysis

Executive Summary

Business Overview and 2018 Performance Highlights

White Mountains is engaged in the business of making opportunistic and value-oriented acquisitions of businesses and assets in the insurance, financial services and related sectors, operating those businesses and assets through our subsidiaries and, if and when attractive exit valuations become available, divesting to realize gains on their sale. Our principal focus is to grow adjusted book value per share (“ABVPS”) because we believe that, over the long term, our share price growth will parallel our growth in ABVPS (see chart and discussion on page 22). Since our IPO, including dividends, White Mountains has delivered 14% annualized growth in ABVPS and 12% annualized growth in market value per share. Having sold off a number of significant businesses from 2015-2017, which generated $1.4 billion in transaction gains and left us with $3.1 billion of pro forma undeployed capital, we remain in a transitional period as we continue to work to thoughtfully redeploy and distribute the proceeds of those transactions. We expect our returns to continue to normalize and revenues to grow as we finish redeploying and distributing this capital.

In 2018, we redeployed $330 million primarily in connection with NSM Insurance, and we returned $519 million to our shareholders through share repurchases, ending the year with undeployed capital of $1.2 billion. In addition, in early 2019, our subsidiary MediaAlpha completed its sale of a significant minority stake and recapitalization, which generated $85 million of proceeds for us and recognized the significant value we have created in the business to date. Consistent with prior practice, the CNG Committee considered this to be a 2018 event for compensation purposes as much of the work relating to the transaction was done in 2018 and it closed before the February compensation meeting where targets for 2019 were established.

2018 generally was a tough year for insurance and financial benchmarks. Including the effect of the MediaAlpha transaction, we grew ABVPS and compensation value per share (“CVPS”) by 3.2% and 2.9%, respectively, outperforming those benchmarks. For the 2016-2018 performance cycle, the average annual growth in ABVPS and CVPS was 6.7% and 5.6%, respectively.

Shareholder Engagement and Say on Pay Response

Following the advisory Say-on-Pay vote result at our 2018 annual general meeting, we conducted a comprehensive review of our executive compensation programs and engaged in an extensive shareholder outreach effort to ensure feedback was appropriately represented in the review of our compensation programs. A summary of these efforts, feedback received and responsiveness is below:

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The Right Compensation Peer Group

As described in more detail below, the CNG Committee refers to a peer group as part of its evaluation of the Company’s compensation practices.  Importantly, we do not use this peer group to benchmark compensation.  Rather, we evaluate the executive compensation programs of these peers in terms of structure and variability of payouts in good and poor performance scenarios. We seek to structure our compensation program to be more variable than most other insurance and reinsurance peers.  The CNG Committee believes that our compensation structures closely align the financial interests of management with those of our shareholders and encourage appropriate, but not excessive, risk taking.

We have made meaningful progress in redeploying and distributing the proceeds from our sale transactions in 2015-2017.  However, as we continue to have over $1 billion of undeployed capital, our returns are not comparable to peers who are fully deployed, and pay level benchmarking comparisons to any peer group, including our own, are not meaningful at this time. The CNG Committee regularly evaluates the continuing appropriateness of our peer group and will revisit our peer group as we continue to redeploy capital. See page 20 for further details on our 2018 peer group.

Compensation Program Aligned with Company Performance

In assessing the design of our executive compensation program, we value input from our shareholders and incorporate their feedback into our assessment. The current design of our compensation program consists of three primary elements: base salary, annual incentive bonus and long-term incentive compensation. Each element is structured with the primary goal of maximizing shareholder value over long periods of time. Highlights of our 2018 compensation program, along with a preview of certain 2019 features are as follows:

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We believe that the goal of maximizing shareholder value over long periods of time is best pursued by utilizing a pay-for-performance program that closely aligns the financial interest of management with those of our shareholders while rewarding appropriate risk taking. We accomplish this by emphasizing variable long-term compensation, the value of which is tied to performance over a number of years rather than fixed entitlements. To illustrate, 86% of our CEO’s 2018 target total direct compensation was linked to long-term incentives, while only 8% was made up of base salary, and 6% linked to target annual cash bonus opportunity.

Chief Executive Officer:

Other NEOs:

Named Executive Officers

In this CD&A, we review the philosophy of White Mountains’s executive compensation program, the compensation process, the program’s elements, and the 2018 and 2019 compensation decisions for our named executive officers:

Unless otherwise noted, the term named executive officers (or “NEOs”) refers to the group of the four individuals listed in above table, the term “CEO” refers to Mr. Rountree, the term “CFO” refers to Mr. Campbell, and the term “CNG Committee” refers to the Compensation/Nominating & Governance Committee of the Board of Directors of White Mountains.

Business Overview, Significant Transactions in 2015-2017 and Performance Highlights

White Mountains is engaged in the business of making opportunistic and value-oriented acquisitions of businesses and assets in the insurance, financial services and related sectors, operating these businesses and assets through our subsidiaries and, if and when attractive exit valuations become available, divesting to realize gains on the sale of these businesses and assets.

·                 From 2015-2017, White Mountains sold a number of its businesses—Sirius, Symetra, Tranzact and OneBeacon—as buyers made compelling offers that resulted in roughly $1.4 billion of transaction gains and drove strong growth in ABVPS.

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·                 In 2015, White Mountains agreed to sell its reinsurance business, Sirius, for approximately $2.6 billion.  The transaction closed in 2016, and White Mountains recorded a total after-tax gain on the sale of $477 million. Over White Mountains’s 20-year history with its reinsurance business, we produced an after-tax IRR of 11%.

·                 Also in 2015, Symetra agreed to be sold to Sumitomo Life for $3.8 billion.  White Mountains owned 18% of Symetra and recorded a total after-tax gain relating to the sale of $270 million and generated a 15% after-tax IRR over its 11-year ownership period.

·                 In 2016, White Mountains sold Tranzact after a 20-month hold generating an $82 million after-tax gain and a 35% after-tax IRR.

·                 In 2017, OneBeacon agreed to be acquired by Intact Financial for $1.7 billion, or 1.7x book value.  In exchange for our 76% stake, we received cash proceeds of about $1.3 billion and recorded an after-tax gain of $555 million.  Over the 16 years from acquisition to sale, White Mountains’s return on the OneBeacon investment was a 14% after-tax IRR.

As a result of these sales, the Company is in a transitional period as management works to intelligently redeploy and distribute the transaction proceeds.  As of May 2017, on a pro forma basis for the OneBeacon sale, the Company had undeployed capital of $3.1 billion on a capital base of $4.2 billion.  In addition, after the sales, the Company generated much lower revenues than before the sales, and the high level of undeployed capital implied a low single digit go-forward rate of growth in ABVPS. As undeployed capital continues to be deployed or distributed, we expect returns to normalize and revenues to grow.

In 2018, we continued to make good progress redeploying and distributing the proceeds.  We deployed $330 million in 2018 and returned $519 million to shareholders through share repurchases.  As of December 31, 2018, undeployed capital was down to $1.2 billion. In 2018, including the effect of the early 2019 MediaAlpha transaction, which the CNG Committee determined to be a 2018 event for compensation purposes as much of the work relating to the transaction was done in 2018 and it closed before the February compensation meeting where targets for 2019 were established, ABVPS and CVPS grew by 3.2% and 2.9%, respectively.  While these results fell short of our expectations going into the year, they generally outperformed insurance and financial benchmarks in a tough year for financial markets.  In addition, for the 2016-2018 performance cycle, the average annual growth in ABVPS and CVPS was 6.7% and 5.6%, respectively.

[1] Adjusted as if the MediaAlpha transaction had closed on December 31, 2018.

[2] Total Value Creation (TBV plus dividends) composite for 53 publicly-traded underwriters reported by Dowling & Partners.

[3] Composite performance for 59 publicly-traded underwriters and brokers reported by Dowling & Partners.

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The Company remains focused on economics and creating shareholder value, while targeting redeployment in its areas of expertise: primarily insurance, broader financial services and adjacent sectors.  The Company remains value-oriented, opportunistic and highly flexible.

Shareholder Engagement and 2019 Compensation Program Changes

Following our 2018 annual general meeting, where our advisory vote on executive compensation received 64% shareholder support, our CNG Committee, in conjunction with the Board of Directors, undertook a review of our executive compensation programs and conducted extensive shareholder outreach to ensure feedback was appropriately represented in the review.  This was part of a continuing effort to engage with our shareholders, and followed our prior engagement meetings earlier in 2018, as well as in 2017.

Our late 2018 shareholder outreach efforts, led by the Board and senior management, often included our CNG Committee chair, Ms. Edith Holiday, leading the discussion and providing a direct line of communication between the Board and our shareholders.  In late 2018, we reached out to our largest institutional owners representing 77% of our outstanding shares and engaged in 20 meetings with investors representing approximately 50% of our shares outstanding.  Ms. Holiday personally led discussions in ten meetings with shareholders representing approximately 35% of our shares outstanding.  Shareholder feedback received from these meetings, as well as from our meetings earlier in 2018, was shared with the entire Board and helped inform the CNG Committee’s thinking about how it could refine our compensation programs for 2019 to continue to motivate and reward our executive officers for strong performance in executing our strategic transformation, while also taking into account shareholders’ views on the structure of our compensation programs.

The main topics in our engagement meetings were our current business strategy, executive compensation practices, and peer group selection methodology.  The most common feedback we heard was that (i) investors overwhelmingly support WTM’s efforts to be patient in the capital redeployment process and have confidence in the Company’s management and Board to successfully execute on that strategy and (ii) our compensation programs, metrics utilized, and peer group selection process are thoughtful and properly aligned with shareholder interests.  While a majority of our owners supported our pay program and practices, some provided constructive feedback on areas where we could refine our practices.  A few common themes arose from these conversations, which the CNG Committee took action on to ensure we were responsive to shareholders’ views and to further refine our compensation programs.  The following summarizes the 2019 program changes approved by the CNG Committee to address this feedback:

Ø                 Introduced a 100% formulaic annual incentive program for our executive officers, with pre-established, rigorous, and quantifiable performance targets that are relevant for our firm and industry – see page 26 for additional detail

Ø                 Established share ownership guidelines for our executive officers, set at 10x base salary for our CEO and Executive Vice Presidents, and at 3x base salary for other executive officers – see page 27 for additional detail

The Company’s management and Board is committed to continuing its extensive shareholder outreach program in order to regularly monitor shareholder views and trends with respect to its compensation and governance programs and consider refinements as necessary.

Compensation Philosophy

Our executive compensation policies are designed with the primary goal of maximizing shareholder value over long periods of time.  We believe that this goal is best pursued by utilizing a pay-for-performance program that closely aligns the financial interests of management with those of our shareholders while rewarding appropriate risk taking.  We accomplish this by emphasizing variable long-term compensation, the value of which is tied to performance over a number of years rather than fixed entitlements (such as base salary, pensions, and employee benefits).  To that end, the CNG Committee has established base salaries and target annual bonuses for our executives that tend to be lower than those paid by comparable property and casualty insurers and reinsurers, while granting the bulk of an executive’s target compensation as long-term incentive compensation.  To illustrate, 86% of our CEO’s 2018 target total direct compensation was linked to long-term incentives, while only 8% was made up of base salary and 6% was target annual cash bonus opportunity.

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The following principles guide and inform the CNG Committee’s efforts to deliver a highly effective executive compensation program that drives shareholder value and fosters the attraction and motivation of key talent:

Compensation Setting Process

The CNG Committee is responsible for approving our compensation programs for executive officers, and it specifically approves all compensation for our executive officers and for any employee with target annual compensation in excess of $1.5 million.  Our CEO annually presents to the CNG Committee his evaluation of our executives, their individual performance, achievements, and the contributions they made to the Company’s accomplishments over the past year, as well as over the most recent long-term incentive plan cycle.  In connection with this evaluation, the CEO recommends to the CNG Committee appropriate compensation amounts for these executives.  The CNG Committee assesses the performance, responsibilities, and contributions of the CEO, considers CEO succession plans, and sets the compensation of the CEO.

With the exception of significant promotions and new hires, compensation matters are usually addressed at the first meeting of the CNG Committee each year (typically late February), following the availability of financial results for the prior year and the current year’s financial plan.  This allows us to determine the results of prior period grants and to set targets for the current year and newest long-term performance cycle.  Performance cycles for long-term compensation typically run for three years beginning on January 1st of the year of grant.

Compensation Peer Group

When making new long-term incentive grants, the CNG Committee assesses the impact of different performance scenarios on potential realizable compensation.  Further, in order to test our beliefs about the structure and variability of the awards we make, the CNG Committee annually reviews and considers a systematic analysis of the public compensation disclosures made by other property and casualty insurers and reinsurers that the CNG Committee considers to be peers.

Importantly, our compensation peer group is not used for benchmarking purposes, but rather to analyze whether our compensation programs are appropriately structured and to ensure they are more variable than most other insurance and reinsurance peers.  We are going through a transitional period of redeploying substantial proceeds from the 2015-2017 value-generating transactions, and as such our returns from our year-end ~60%-deployed capital will not be comparable to peers who are fully deployed.  Therefore, pay level benchmarking comparisons to any peer group, including our own, is not meaningful at this time.

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The companies included in the analysis presented to the CNG Committee prior to it making compensation decisions in 2018 were:

The Company uses this group of companies as it reflects traditional competitors of White Mountains.  The CNG Committee regularly evaluates the continuing appropriateness of this group.  Even though the 2015-2017 sales transactions temporarily lowered our go-forward revenues and near-term growth in ABVPS expectations, our strategy remains intact as we look to invest our undeployed capital.  Therefore, the CNG Committee believes this group currently remains appropriate for the Company’s competitive analysis, as a temporary reduction in revenues following significantly value-generating asset sales is not an appropriate catalyst for what would be an interim peer group change at this time.

The CNG Committee concluded that the peer analysis supported its view that the Company’s compensation programs are more variable than most other insurance and reinsurance peers, have fewer fixed elements of compensation and perquisites, and do not lead to significant rewards for poor performance.  The CNG Committee believes that the compensation structures that have been developed for the Company closely align the financial interests of management with those of our shareholders and encourage appropriate, but not excessive, risk taking.

Compensation Best Practices

We maintain a number of compensation governance best practices which support our overarching compensation philosophy and are fully aligned with our compensation principles, as discussed in the following section. Our compensation practices also align with input we have received from shareholders.

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Superior Track Record and the Alignment of Growth in ABVPS and Market Value Per Share

Since our IPO, we have delivered 14% annualized growth in ABVPS and 12% annualized growth in market value per share to our shareholders.  Importantly, as seen in the chart below, ABVPS and market value per share have moved in tandem over the last thirty years, despite short-term fluctuations.  This is a core reasoning behind the CNG Committee’s selection of incentive plan performance metrics that relate to growth in book value per share.

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Compensation for 2018

The principal elements of compensation for our executives in 2018 - base salary, annual incentive bonuses and long-term incentive compensation - are discussed below.

2018 Target Annual Direct Compensation Mix

1.            Base Salary

As discussed above under “Compensation Philosophy”, the Company’s compensation program emphasizes variable long-term incentive compensation, rather than fixed entitlements.  Accordingly, we pay our executive officers salaries that we believe to be below market.  In 2008, we limited base salaries to a maximum of $500,000.  Each of our Named Executive Officers currently receives a salary of $500,000, other than Mr. Palmer who receives a salary of $400,000.

The salaries of our NEOs were not increased in 2018, and they are also kept flat for 2019:

2.            Annual Incentive Bonuses

We provide annual bonus opportunities to our executive officers, which make up a small percentage of each NEO’s target total annual compensation – 6% for our CEO, and 11% on average for the other NEOs in 2018 – as the bulk of our executive officers’ compensation opportunity is tied to long-term incentives.  Each Named Executive Officer participates in the annual bonus pool applicable to the parent holding companies.  For 2018, the target bonus pool was $4.6 million for 38 employees. The awarded bonus pool size can range from 0% to 200% of target, depending upon performance.  For 2018,

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individual bonuses could vary widely around the pool average based on individual performance and without a cap (other than the size of the pool) applied to any single individual.

For the Named Executive Officers, the annual incentive bonus is designed to reward company-wide performance and the individual NEO’s contributions to those results.  The CNG Committee did not set a quantitative target in 2018 and instead established the size of the awarded pool based on a qualitative assessment of the Company’s performance during the year based on its judgment.  In response to valuable shareholder feedback received following our 2018 annual general meeting, the CNG Committee has made the 2019 annual incentive program for our executive officers entirely formulaic, which is further discussed on page 26.

For 2018, the Named Executive Officers had target annual bonuses of 75% of salary, which was unchanged from the prior year and is continued into 2019.  Based on the Company’s performance in 2018, the CNG Committee awarded the NEOs with bonuses of 92% of target, on average (ranging from 67% to 100% of target, as per table below).  Among the items considered by the CNG Committee in funding the bonus pool were:

Ø                 The Company’s 3.2% growth in ABVPS and 2.9% growth in CVPS, which generally outperformed relative to insurance and financial benchmarks

Ø                 Substantial progress against our strategic priorities, chiefly capital distributions and redeployment.  For the full year 2018, we distributed $523 million of capital and deployed $330 million.  Since 2017, this brings our total distributions to $1.3 billion and deployments to $0.7 billion, for a total of $2.0 billion.  Undeployed capital ended the year at $1.2 billion.

3.            Long-Term Incentive Compensation

Long-term equity awards generally consist of an equal mix of performance shares and restricted shares, rewarding long-term value creation and aligning executives’ interests with shareholders.  Restricted shares are subject to a three-year cliff-vesting provision, instead of annual vesting, in order to promote retention that balances incentives to re-deploy capital aggressively and to remain patient for good opportunities.  The number of WTM common shares earned from a grant of performance shares can range from 0%-200% of target, depending on performance on after-tax annual growth in CVPS over the three-year performance cycle (which is defined by the CNG Committee as the average of growth in ABVPS and growth in “intrinsic business value per share”, which is the ABVPS including franchise value and certain other adjustments).

The CNG Committee selected performance metrics that relate to growth in book value per share because it continues to believe these metrics are the best for valuing insurance and reinsurance companies and ultimately drive growth in our share price for our shareholders.  The market value of our shares is not included as a direct measure of performance, but it determines the ultimate value of earned performance and restricted share awards.

From year-to-year when we make new long-term incentive grants, we typically adjust the target number of shares granted to individual employees to reflect the change in CVPS during the prior year, rather than focusing on changes in market values.  This is consistent with our view that the change in book value per share and related metrics provides a better view of the change in value of the Company than metrics reflecting short-term market price fluctuations.  In addition, we generally limit total annual share grants to employees to equal to or less than 1% of the Company’s outstanding shares.  For each of the 2017-2019, 2018-2020, and 2019-2021 cycles, we adhered to this guideline.

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New Grants in 2018:  For the CEO and each of our other NEOs, the annual 2018 long-term incentive awards were allocated 50% as performance shares and 50% as restricted shares, consistent with prior years.  The restricted shares are subject to a three-year cliff vesting provision based on continuous service, in order to promote retention of key executive talent.  The performance shares will vest in a range of 0% - 200% of target, following a three-year performance period.

For the 2018-2020 performance period, the CNG Committee established a target of 6% annual growth in CVPS as the performance target that would result in the payout of 100% of the target performance shares.  There would be no payout for annual growth of 2% or less, and annual growth of 10% or more would be required for a payout of 200%.  Importantly, each of the threshold, target, and maximum goals for the 2018-2020 performance cycle (2% - 6% - 10%) were set higher than the previous 2017-2019 cycle (1% - 5% - 9%), which in turn were set higher than the previous 2016-2018 cycle (0% - 4% - 8%).  In setting this performance scale, the CNG Committee took account of the level of deployed and undeployed capital (and the expected run rate returns thereon) and made assumptions regarding the timing and magnitude of future redeployment and distributions of undeployed capital.  As further described below, a primary goal of the CNG Committee was to set a performance target that would incentivize management to redeploy capital thoughtfully.

Further, the total grant-date fair value of the 2018 long-term incentive grants to our NEOs was 21% lower than in 2017.  A detailed breakdown of the fiscal 2018 grants are included in the table below:

In determining the amount of new long-term incentive compensation grants for 2018 for our named executive officers, the CNG Committee assessed each executive’s scope of authority and ability to impact the success of the Company.  Based on the CNG Committee’s general experience and the recommendation of the CEO, for NEOs other than himself, the CNG Committee established a grant level that it believed was appropriate to reflect each such executive’s expected contribution to the Company over the next performance cycle.

Payout of 2016-2018 Performance Cycle:  For the 2016-2018 performance cycle, long-term incentives were granted to the NEOs as follows: 50% as performance shares and 50% as restricted shares.  For the performance shares, which matured at the end of 2018, 4% annual growth in CVPS was the performance target for a payout of 100% of the target performance shares.  Annual growth of 0% or less would have resulted in no payout and annual growth of 8% or more would have resulted in a payout of 200%. When the Performance Compensation Subcommittee (the “Subcommittee”), which is responsible for the review and approval of the payout of performance-based compensation, originally set the target for the 2016-2018 performance cycle, it had taken account of the substantial amount of undeployed capital that had been generated by the sales of Sirius and Symetra at the beginning of the performance cycle and the impact that it would have on the Company’s ability to generate growth in book value per share during the period. At its meeting in February 2019, based on an average annual growth in CVPS of 5.6%, the Subcommittee confirmed that the payout that was earned was 139% of target.

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2019 Compensation Actions

Target total cash compensation opportunities remain unchanged from 2018.  At its February 2019 meeting, the CNG Committee decided to keep the NEOs’ 2019 base salaries and percent-of-salary target bonus opportunities at the same levels as in 2018.  This further supports the CNG Committee’s long-standing philosophy of linking a vast majority of executives’ compensation to long-term incentives in order to align their interests with those of our shareholders, as opposed to awarding high levels of fixed or variable annual cash compensation.

2019 Long-term Incentive Grants.  In February 2019, the CNG Committee made new long-term incentive grants to the Named Executive Officers based on the same factors described above with respect to grants made in 2018, allocated 50% as performance shares and 50% as restricted shares.  With respect to grants made to all employees of the Company, the CNG Committee granted 31,200 target shares for the 2019-2021 performance cycle.  In total, the WTM performance share and restricted share grants made to all employees of the Company for the 2019-2021 performance cycle totaled approximately 1.0% of the then outstanding shares, within the CNG Committee’s 1% guideline discussed above.

With approximately $1.2 billion of undeployed capital at year-end 2018, deploying capital intelligently remains the key job for the Company’s management team.  Taking account of the level of deployed and undeployed capital (and current expected run rate returns thereon) and reasonable assumptions regarding the timing and magnitude of future redeployment and distributions of undeployed capital, the CNG Committee determined that 7% annual growth in CVPS is an appropriately challenging target for a payout of 100% of the target shares for the 2019-2021 performance cycle.  Annual growth of 2% or less would result in no payout of 0%, and annual growth of 12% or more would be required for a payout of 200%.  As seen in the table below, the performance target goals associated with our performance shares have been increased each cycle for the past four grant cycles.

The CNG Committee believes this target and scale properly balance the competing incentives (i) to deploy or distribute undeployed capital aggressively and (ii) to remain patient for good opportunities.  This target is an increase of 1 point from the target for the previous cycle.  The CNG Committee expects targets for future performance share cycles to continue to increase as the level of undeployed capital normalizes over time.

New Annual Bonus Program.  Following the 2018 annual general meeting, the Company’s management team, along with CNG Committee chair Edith Holiday, who participated in a significant portion of the meetings, engaged with shareholders representing approximately 50% of our outstanding shares.  Based on those discussions and as a direct response to feedback, the CNG Committee has introduced a 100% formulaic annual incentive program for our executive officers, with pre-established, rigorous, quantifiable performance targets relevant for our firm and industry.

In effect beginning with 2019, the annual bonus program for executive officers will be an entirely quantitative annual bonus program, with the level of payout determined by reference to the Company’s growth in CVPS.  In choosing this metric for the annual bonus program, the CNG Committee considered a number of other metrics but concluded that no other metric is as pertinent to our business as CVPS.  CVPS is the metric that the Board and the management team focus on because it is linked to growth in book value per share metrics, which we believe is what ultimately drives growth in our share price for our shareholders.  Bonuses will be earned ranging from 0% to 200%, according to the same harvest scale applicable to the 2019-2021 performance share cycle, as discussed above (2% - 7% - 12%).

For our executive officers, the CNG Committee will maintain the discretion to decrease the individual annual bonus payouts after the quantitative formula has been finalized, however it will not have discretion to increase payouts.  Our executive officers, at most, will receive the quantitative result.

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Share Ownership Guidelines for Executive Officers.  Also in response to shareholder feedback, the CNG Committee established share ownership guidelines for our executive officers.  According to the guidelines in effect for fiscal 2019, our CEO and EVPs are required to hold Company shares with a value of 10x salary, while other executive officers are required to hold Company shares with a value of 3x salary.  Shares received upon vesting must be held until the executive is in compliance with the guideline.  Unvested restricted shares will count toward satisfaction of the guideline, while unvested performance shares will not count.

Clawback Policy

The Company has adopted a clawback policy applicable to bonuses and long-term incentive awards.  If the Company restates any financial statement included in an SEC filing as a result of an employee’s misconduct, the Board may, without prejudice to any other remedies available to the Company, seek reimbursement of any bonus or long-term incentive award received by such person that relates in whole or in part to any period for which such financial statements were restated.  If the misconduct involved fraud, then in addition to other actions the Board will mandatorily seek such reimbursement.

Other Elements of Compensation

Retirement Benefits

We have no active U.S. defined benefit pension plans.  Benefit accruals under all our U.S. qualified defined benefit pension plans and all our U.S. supplemental defined benefit pension plans were frozen for all employees in 2002.

Our Named Executive Officers who are not employees of Bermuda-domiciled entities may participate in our voluntary non-qualified deferred compensation plans whereby they may defer all or a portion of their compensation.  Investment options in these plans are those available in our 401(k) plans, including White Mountains common shares.  None of the investment options offered under these plans provides an above-market rate of interest.

Our employees may participate in our qualified 401(k) plans and eligible employees can participate in a qualified employee stock ownership plan.  We do not provide supplemental retirement benefits to any employees in connection with these plans.

Perquisites

We review the perquisites that our senior management receives.  The primary perquisites include housing allowances in special circumstances and personal use of corporate aircraft.

We allow our Named Executive Officers to use our corporate aircraft from time to time for personal reasons.  The aggregate incremental cost to the Company is included, for proxy reporting purposes, as compensation to the Named Executive Officer.  For tax purposes, we comply with IRS regulations.  We do not “gross-up” our Named Executive Officers for their taxes associated with perquisites, including with respect to personal use of our aircraft.

Our Named Executive Officers also participate in our other benefit plans on the same terms as our other employees.  These plans include medical and health insurance, company paid life insurance and charitable gift matching.

Certain Board Fees

Our Named Executive Officers do not receive director fees for serving on the Company’s board of directors or for serving on the boards of directors of our wholly-owned or majority-owned subsidiaries.  However, those Named Executive Officers who serve on the boards of directors of other companies in which we have a minority interest may receive director fees from those companies.  We consider those board fees when evaluating the compensation of our Named Executive Officers.

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Employment and Severance Agreements; Change in Control

We have no long-term employment agreements with our Named Executive Officers although, from time to time, we have entered into short-term arrangements with newly hired executives governing their compensation and severance during up to their first three years with the Company.  No such arrangements are in effect with our Named Executive Officers.

Severance benefits, if any, for our Named Executive Officers are determined by the CNG Committee in its sole discretion.  Executive officers of our operating subsidiaries participate in the severance plans, if any, generally applicable at those companies.

If any of our most senior executives were to retire, in order to enable the Company to ensure a smooth transition, to receive a non-compete/non-solicit from the executive and to retain access to valuable knowledge, talents and relationships, we generally would expect to enter into arrangements that would permit the executive to earn some or all of such executive’s long-term incentive compensation then outstanding.

We have no standalone change in control agreements with our Named Executive Officers.  However, under our long-term incentive plans, if a change in control of the Company (or a business unit, as applicable) were to occur, certain events, such as involuntary or constructive employment termination or amendments to our incentive plans which are materially adverse to its participants, may cause stock options to become fully exercisable, restricted shares to become immediately vested and performance shares and performance units to become payable in full or in part.  Our plans do not provide for tax gross-ups for excess parachute payments that may result from a change in control.

Compensation/Nominating & Governance Committee Report

The Compensation/Nominating & Governance Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation and Nominating & Governance Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Edith E. Holiday, Chair

Yves Brouillette

Morgan W. Davis

Philip A. Gelston

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Summary Compensation Table

The following table presents compensation in 2018, 2017 and 2016 for the Company’s CEO, CFO and its two other most highly compensated executive officers (collectively, the “Named Executive Officers”):

(a)         For Messrs. Rountree, Campbell, Seelig and Palmer, the amounts represent annual incentive bonuses earned for the years ended December 31, 2018, 2017 and 2016.  For Mr. Seelig, the amount in 2016 also includes a special award of $2,000,000 earned in connection with the closing of the sale of Sirius Group.  See “Compensation Discussion and Analysis.”

(b)         Represents the grant date market value of WTM performance shares granted in 2018, 2017 and 2016 and WTM restricted shares issued in 2018, 2017 and 2016.  The WTM performance share awards included in the table have a maximum payout of 200% of the shares granted and, at such level, would have a grant date fair value equal to 200% of the amounts shown in the Grants of Plan Based Awards table.  See “Grants of Plan Based Awards” and “Outstanding Equity Awards at Fiscal Year End.”

(c)          See next table for details of All Other Compensation.

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All Other Compensation

The following table presents a breakout of “All Other Compensation” included in the Summary Compensation Table for 2018, 2017 and 2016:

(a)         Amounts represent director fees paid by BAM.

(b)         Amounts represent the aggregate incremental cost to the Company for the use of aircraft that were not otherwise in use for business.  For Company aircraft, the incremental cost is the direct cost per hour multiplied by the number of hours of use.

(c)          Represents parking garage rental fees paid by the Company on behalf of Mr. Palmer.

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Grants of Plan-Based Awards

The following table presents grants of plan-based awards granted, except as otherwise noted, under the White Mountains Long-Term Incentive Plan (the “WTM Incentive Plan”) to the Named Executive Officers that received such awards during 2018:

(a)          Messrs. Rountree, Campbell, Seelig and Palmer were granted WTM performance shares for the 2018-2020 performance cycle.  Mr. Rountree was also granted 100 WTM performance shares for the 2017-2019 performance cycle and 100 WTM performance shares for the 2016-2018 performance cycle.  For the 2018-2020 performance cycle, the targeted performance goal for full payment of outstanding WTM performance shares granted under the WTM Incentive Plan for all NEOs is a 6% average growth in CVPS.  Average growth of 2% or less would result in no payout and average growth of 10% or more would result in a payout of 200%.  For the 2017-2019 performance cycle, the targeted performance goal for full payment of outstanding WTM performance shares granted under the WTM Incentive Plan is a 5% average growth in CVPS.  Average growth of 1% or less would result in no payout and average growth of 9% or more would result in a payout of 200%.  For the 2016-2018 performance cycle, the targeted performance goal for full payment of outstanding WTM performance shares granted under the WTM Incentive Plan is a 4% average growth in CVPS. Average growth of 0% or less would result in no payout and average growth of 8% or more would result in a payout of 200%.

(b)          Messrs. Rountree, Campbell, Seelig and Palmer were granted WTM restricted shares that vest on January 1, 2021.  Mr. Rountree was also granted 100 WTM restricted shares that vest on January 1, 2020 and 100 WTM restricted shares that vested on January 1, 2019.

(c)          Represents the grant date fair value (based on a market price on the date of grant) as determined in accordance with ASC Topic 718 without regard to forfeitures.  Assuming a maximum 200% payout, the grant date fair value of the WTM performance shares granted to Messrs. Rountree, Campbell, Seelig and Palmer would be $5,186,048, $3,241,280, $2,917,152 and $810,320.

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Outstanding Equity Awards at Fiscal Year-End

The following table presents outstanding equity awards under the WTM Incentive Plan, except as otherwise noted, to the Named Executive Officers as of December 31, 2018:

(a)          Equity incentive plan awards not yet vested at December 31, 2018 for Messrs. Rountree, Campbell, Seelig and Palmer include 3,000, 2,000, 1,800 and 500 target WTM performance shares, respectively, for the 2018-2020 performance cycle and 3,000, 2,250, 2,000 and 560 target WTM performance shares, respectively, for the 2017-2019 performance cycle.  Payout values for WTM performance shares are shown at 100% of target for the 2018-2020 performance cycle and 200% of target for the 2017-2019 performance cycle and based on the December 31, 2018 closing market price ($857.69) including dividends declared since the grant date.

(b)          Stock awards not yet vested at December 31, 2018 for Messrs. Rountree, Campbell, Seelig and Palmer include 3,000, 2,000, 1,800 and 500 WTM restricted shares, respectively, that vest on January 1, 2021; 3,000, 2,250, 2,000 and 560 WTM restricted shares, respectively, that vest on January 1, 2020; and 3,000, 2,250, 2,000 and 560 WTM restricted shares, respectively, that vested on January 1, 2019.  Market values are based on the December 31, 2018 closing market price ($857.69).

(c)          Excludes WTM performance shares for the 2016-2018 performance cycle, which vested on December 31, 2018.  See “Option Exercises and Stock Vested.”

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Option Exercises and Stock Vested

The following table presents stock awards that vested in 2018 for each of the Named Executive Officers.  No option awards were exercised by the Named Executive Officers during 2018.

(a)          Represents 3,000, 2,250, 2,000 and 560 target WTM performance shares awarded for the 2016-2018 performance cycle to Messrs. Rountree, Campbell, Seelig and Palmer, respectively, which became fully vested on December 31, 2018 at 139% of target.  Value realized on vesting is based on the average of the high and the low market values of common shares on February 27, 2019, as determined by the CNG Committee, plus dividends declared since the cycle was granted in 2016.

(b)          The amounts represent WTM restricted shares that vested on January 1, 2018.

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Pension Benefits

The Named Executive Officers did not participate in any defined pension plans sponsored by White Mountains in 2018.

Nonqualified Deferred Compensation

The Named Executive Officers did not participate in any nonqualified deferred compensation plans sponsored by White Mountains in 2018.

Potential Payments Upon Termination or Change in Control

Employment and Severance Agreements

We have no employment agreements with our Named Executive Officers although from time to time we have entered into short-term arrangements with newly hired executives governing their compensation and severance for a period of up to their first three years with the Company.

Long-Term Incentive Plans

Under our long-term incentive plans, certain events, such as retirement, death or disability, or the occurrence of both a change in control of the Company (or a business unit, as applicable) and an involuntary or constructive employment termination or materially adverse amendments to such plans, WTM restricted shares become vested and WTM performance shares become payable in full or in part.  Below is a description of the payments to which each of our Named Executive Officers would be entitled assuming in each case that such events occurred on December 31, 2018.

Voluntary Termination of Employment

Had any of our Named Executive Officers voluntarily terminated their employment on December 31, 2018, their unvested long-term incentive grants would have been cancelled and payments, if any, in respect of those cancelled grants would be made at the sole discretion of the CNG Committee.

Involuntary Termination of Employment

Had any of our other Named Executive Officers been terminated without cause on December 31, 2018, their outstanding long-term incentive grants would have been cancelled and payments, if any, in respect of those cancelled grants would be made at the sole discretion of the CNG Committee.

Retirement

Had any of our Named Executive Officers retired on December 31, 2018, their unvested long-term incentive grants would have been cancelled and payments, if any, in respect of those cancelled grants would be made at the sole discretion of the CNG Committee.

Death or Disability

Had any of our Named Executive Officers employed as of December 31, 2018 died or become disabled on that date, they would have been entitled to pro rata vesting of their WTM performance shares and full vesting of their restricted shares.  Under this scenario, Messrs. Rountree, Campbell, Seelig and Palmer would have been entitled to receive $13,890,357, $10,131,621, $9,031,321 and $2,524,191, respectively.

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For purposes of computing the amounts above, the WTM performance shares were valued at the December 31, 2018 common share closing market price ($857.69) including dividends since grant.  The WTM performance shares would vest pro-rated for time and at 100% of target; provided, that in the case of the 2016-2018 performance cycle, values are shown at actual performance of 139%.  Restricted shares were valued at the December 31, 2018 common share closing market price.

Change in Control

Had both a change in control of the Company (or a business unit, as applicable) and an involuntary termination, constructive termination or materially adverse amendments to our long-term incentive plans occurred on December 31, 2018 to any of our Named Executive Officers employed as of that date, they would have been entitled to full vesting of their WTM performance shares at up to 200% of target and full vesting of their restricted shares.  Under this scenario, Messrs. Rountree, Campbell, Seelig and Palmer would have been entitled to receive $23,193,630, $16,751,455, $14,947,406 and $4,174,973, respectively.

For purposes of computing the amounts above, the WTM performance shares, including the 2016-2018 performance cycle, were shown at 200% of target.  The WTM performance shares were valued at the December 31, 2018 common share closing market price ($857.69) including dividends since grant.  Restricted shares were valued at the December 31, 2018 common share closing market price.

Our long-term incentive plans do not provide for tax gross-ups for excess parachute payments that may result from a change in control.

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Director Compensation

The following table summarizes director compensation for 2018 (for directors other than Named Executive Officers):

(a)         Mr. Rountree does not receive any additional compensation for his role as a director.  Non-management directors receive an annual cash retainer of $135,000.  Additional retainers in the following amounts are provided to those directors serving in the following roles: Chairman of the Board ($100,000), Chairman of the Audit Committee ($100,000), Chairman of any other Board committee ($25,000) and members of the Audit Committee ($15,000).  Retainers were paid in cash except for Mr. Brouillette who received an equivalent value in common shares.  Retainers relate to the period from May 2018 to May 2019, inclusive, and are typically pro-rated for partial year service.

(b)         On May 24, 2018, all non-management directors, except for Mr. Tanner, received an annual grant of 250 common shares and Mr. Brouillette received additional common shares in lieu of payment of his cash retainer.  Mr. Davis received an additional 100 common shares for his role as Chairman of the Board.  Upon his election to the Board on August 22, 2018, Mr. Tanner received a grant of 188 common shares, representing the pro-rata portion of the annual grant for the service period ending May 2019.  All common shares issued were valued at $904.10 per share, except for Mr. Tanner’s shares that were valued at $926.12 per share, the market prices on the dates the shares were granted. In addition, Mr. Gelston received a grant of 63 common shares upon his election to the Board on March 1, 2018, representing the pro-rata portion of the annual grant for the service period ending May 2018.  These shares were valued at $904.10 per share, the market price on the date the shares were granted.

(c)          Amount shown for Mr. Brouillette represents $2,534 in matching payments from a company-sponsored charitable gift program.  Amount shown for Mr. Davis represents $60,000 in director fees paid to him by Compare.com, $40,000 in director fees paid to him by MediaAlpha and $30,000 in director fees paid to him by NSM Group.  Amount shown for Mr. Gelston represents $6,750 in matching payments from a company-sponsored charitable gift program.  Amount shown for Ms. Holiday represents $6,000 in matching payments from a company-sponsored charitable gift program.

(d)         Mr. Tolman resigned from the Board of Directors on January 3, 2019.

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CEO PAY RATIO

CEO Pay Ratio

Below is (i) the 2018 annual total compensation of our CEO; (ii) the 2018 annual total compensation of our median employee; (iii) the ratio of the annual total compensation of our CEO to that of our median employee, and (iv) the methodology we used to calculate our CEO pay ratio:

Methodology

Our CEO pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules.  Our methodology and process is explained below:

(1)           Determined No Significant Change.  We determined that there have been no changes in our compensation arrangements or employee population(a) in 2018 that would result in a significant change to the CEO Pay Ratio reported for 2017.  Accordingly, SEC rules permit us to use the same median employee identified for 2017 or, under certain circumstances, an employee with substantially similar compensation.  Except as noted below, we have used the same methodology for 2018 as described in our proxy for 2017.

(2)           Identified the Median Employee.  The median employee selected in 2017 experienced a significant increase in his or her base salary in 2018, which we believe would result in a significant decrease to the CEO Pay Ratio in 2018.  Therefore, we selected as the 2018 median employee another employee from the 2017 identification process with substantially similar compensation as the original median employee.

(3)           Calculated CEO Pay Ratio.  We calculated our median employee’s annual total compensation for 2018 in accordance with SEC rules for preparing the Summary Compensation Table.  We compared the median employee’s compensation to our CEO’s annual total compensation in the Summary Compensation Table to determine the pay ratio shown above.

(a)          SEC rules permit us to omit the employees of a newly-acquired business from the pay ratio calculation for the fiscal year in which the acquisition occurs. Accordingly, the 741 employees at NSM Insurance Group LLC and its subsidiaries as of December 31, 2018 were excluded from the employee population.

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TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

Review, Approval or Ratification of Transactions with Related Persons

The Company’s Audit Committee Charter states that the Audit Committee shall approve any related or affiliated person transactions and review disclosures thereof.  In determining whether to approve or reject a related person transaction, the Audit Committee takes into account, among other factors it deems appropriate, whether the proposed transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related persons’ economic interest in the transaction.  For purposes of Audit Committee approval, a related person transaction is defined as any transaction that is required to be reported under Item 404 of SEC Regulation S-K.

During 2018, there were no Transactions with Related Persons that required Audit Committee approval.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2018, with respect to the common shares that may be issued under the Company’s existing incentive compensation plans.  Performance shares awarded under the WTM Incentive Plan are typically paid in cash, though they may be paid in the Company’s common shares at the election of the Compensation/Nominating & Governance Committee.

(a)         Represents the amount of WTM shares available for issuance at target under the WTM Incentive Plan as of December 31, 2018.  To the extent granted as WTM performance shares, such shares could be earned at 0x to 2x the target number granted and, although typically in cash, may be paid in WTM common shares at the discretion of the Compensation/Nominating & Governance Committee.  As of April 3, 2019, 38,132 common shares remained available for grant, which could result in up to 76,264 common shares being issued.

(b)         Represents the target amount of WTM performance shares outstanding as of December 31, 2018.

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AUDIT COMMITTEE REPORT

In connection with the audit of the Company’s financial statements for the year ended December 31, 2018, the Audit Committee has: (1) reviewed and discussed with management and PwC the Company’s audited financial statements for the year ended December 31, 2018, management’s assessment of the effectiveness of the Company’s internal control over financial reporting and PwC’s audit of the Company’s internal control over financial reporting; (2) reviewed and discussed with PwC the matters required by Statement of Auditing Standards No. 61, as amended; and (3) received the written disclosures and the letter from PwC required by the applicable Public Company Accounting Oversight Board rules and discussed with PwC their independence.

Based on these reviews and discussions, the Audit Committee determined that the non-audit fees billed by PwC for services performed in 2018 and 2017 (as presented herein) are compatible with maintaining their independence.  Further, the Audit Committee recommended to the Board that the audited financial statements be included in the Annual Report on Form 10-K for filing with the SEC and for presentation to the Members at the 2019 Annual Meeting.

Management is responsible for the preparation, presentation and integrity of the Company’s consolidated financial statements as well as for establishing and maintaining adequate internal control over financial reporting.  The Company’s independent registered public accounting firm, PwC, is responsible for expressing its opinion on the conformity of the Company’s audited financial statements with Generally Accepted Accounting Principles (“GAAP”).  In addition, PwC is responsible for expressing its opinion on the effectiveness of the Company’s internal control over financial reporting.  It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with GAAP; that, as described above, is the responsibility of management and PwC.  In giving its recommendation to the Board, the Audit Committee has relied on (1) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with GAAP and (2) the reports of PwC with respect to such financial statements.

The Audit Committee has established a Charter which outlines its primary duties and responsibilities.  The Audit Committee Charter, which has been approved by the Board, is reviewed at least annually, is updated as necessary and is available for viewing at www.whitemountains.com.

Lowndes A. Smith, Chairman

Yves Brouillette

Peter M. Carlson

Philip A. Gelston

David A. Tanner

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Audit Committee, pursuant to its policy, pre-approves the scope and fees for all services performed by PwC.  Annually, the Audit Committee receives and pre-approves a written report from PwC describing the elements expected to be performed in the course of its audit of the Company’s financial statements. All other audit, audit-related and non-audit-related services rendered by PwC also require pre-approval, which may be granted in accordance with the provisions of the policy either (a) at a meeting of the full Audit Committee, (b) on an interim basis by the Chairman of the Audit Committee, provided that the requested services are not expressly prohibited and are ratified by the full Audit Committee at its next regularly scheduled meeting, or (c) on a per-project basis through specific compliance with pre-approved definitions of services that do not exceed per-project limits established by the Audit Committee, provided that any such services are authorized by the Company’s General Auditor or his/her designee and that the General Auditor makes a full report of all services pre-approved per the policy at the next regularly scheduled Committee meeting.

It is the intent of the policy to assure that PwC’s performance of audit, audit-related and non-audit-related services are consistent with all applicable rules on auditor independence. As such, services expressly prohibited by the Audit Committee under its policy include bookkeeping or other services related to the accounting records or financial statements of the Company or its subsidiaries; financial information systems design and implementation; appraisal and valuation services; fairness opinions; contribution-in-kind reports; certain actuarial services; internal audit outsourcing services; management functions; human resources; broker-dealer, investment advisor or investment banking services; legal services; and expert services unrelated to the audit.  All services performed by PwC during 2018 and 2017 were pre-approved in accordance with the policy described above.

The services performed by PwC in 2018 and 2017 are described below. PwC does not provide any services to the Company that are prohibited under applicable laws and regulations, such as financial information systems design and implementation.  From time to time, PwC may perform permissible consulting services for the Company, provided they have been pre-approved in accordance with the policy described above. To the extent consulting services are provided by PwC, they are closely monitored and controlled by both management and the Audit Committee to ensure that their nature and extent do not interfere with the independence of PwC. The independence of PwC is also considered annually by the Audit Committee.

The following table sets forth the approximate aggregate fees billed by PwC for professional services provided in 2018 and 2017:

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to SEC rules relating to the reporting of changes in beneficial ownership of common shares, the executive officers, directors and greater than 10% Members are believed to have filed all reports required under Section 16(a) of the Exchange Act on a timely basis during 2018.

PROPOSAL 2

ADVISORY VOTE ON EXECUTIVE COMPENSATION

Pursuant to Section 14A of the Securities Exchange Act of 1934, in this Proposal 2 we are asking you to provide approval, on an advisory basis, of the compensation of the named executive officers as disclosed in the section of this proxy statement titled “Executive Compensation”.  You are being asked to vote on the following advisory resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the company’s proxy statement dated April 8, 2019, pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables and narrative discussion, is hereby APPROVED.

The Board of Directors believes that the compensation policies and practices described in the Compensation Discussion & Analysis are effective in achieving the Company’s primary goal of maximizing shareholder value over long periods of time, as well as motivating and retaining our key executives.  The compensation of our named executive officers is heavily weighted toward variable long-term compensation, the value of which is tied to performance over a number of years.

We urge you to read the Compensation Discussion & Analysis, beginning on page 13 of this proxy statement, as well as the 2018 summary compensation table and related compensation tables and narrative, beginning on page 29, which provide detailed information on the Company’s compensation policies and practices and the compensation of our named executive officers.

Although the vote is non-binding, the Board of Directors and the Compensation/Nominating & Governance Committee will review and consider the voting results when evaluating our executive compensation program.

The Board recommends a vote FOR Proposal 2 which calls for the approval of the advisory resolution on executive compensation.

PROPOSAL 3

APPROVAL OF THE COMPANY’S AMENDED AND RESTATED

LONG-TERM INCENTIVE PLAN

The Company previously adopted the White Mountains 2013 Long-Term Incentive Plan (the “Plan”), which was approved by our Members on May 23, 2013.  On February 28, 2019, based upon the recommendation of the CNG Committee, our Board of Directors (“Board”) approved an amendment and restatement of the Plan (the “Amended Plan”), subject to Member approval at the 2019 Annual General Meeting.  The proposed Amended Plan would make a total of 110,000 common shares (“Shares”) available for future grants and would add new provisions for the benefit of our Members.  Accordingly, our Board is seeking Member approval of the Amended Plan.

The text of the Amended Plan appears at the end of this Proxy Statement as Appendix A.  The following description of the Amended Plan is a summary only and should be read in conjunction with the full text of the Amended Plan.

Our Board recommends that Members vote FOR approval of the Amended Plan.

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Importance of Long-Term Incentive Compensation

The Plan was established to advance the interests of the Company and our Members by providing the ability to grant long-term equity-based incentive awards to our key employees, consultants and directors.  Equity-based incentive awards are an essential component of our long-term compensation program and enable us to create substantial incentives for our key employees, consultants and directors to achieve our long-term goals and to provide competitive compensation to help in recruitment and retention.  The Company believes that its long-term compensation program should be based on “pay for performance” and further believes that our management should act as if they were owners.  The Amended Plan would provide opportunities for eligible individuals to obtain a proprietary interest in the Company and incentives to contribute to our long-term value creation.

Requested Share Reserve

The Amended Plan would create a new reserve of 110,000 Shares available for future grants (the “New Reserve”).  The New Reserve would replace the existing Share reserve under the Plan (the “Old Reserve”) in its entirety.  Any awards granted after the adoption of the Amended Plan would be subject to the limits of the New Reserve, and no unused portion of the Old Reserve would be used for future grants.

Failure of our Members to approve the Amended Plan would mean that we have a limited number of Shares that we can grant through long-term incentive awards to our key employees, consultants and directors.  Under the Old Reserve, as of April 3, 2019, there were approximately 86,515 Shares subject to outstanding equity awards under the Plan, taking into account performance shares based on target performance (which could be up to 129,635 Shares if performance shares were included based on maximum performance), and approximately 38,132 Shares available at target for future grants under the Plan (which could be up to 76,264 Shares assuming maximum performance of performance shares).

Share Counting — Performance Shares

Since 2005, the Company has taken a more conservative approach in counting the number of Shares issued out of the Old Reserve than the approach required by the New York Stock Exchange.  The Company has counted the number of performance shares issued out of the Old Reserve assuming maximum potential payout (200%), even though performance shares have been historically settled in cash and not by the actual issuance of Shares.

The Amended Plan reconciles the Company’s Share-counting mechanism with the Company’s actual practice of settling performance shares in cash.  Under the Amended Plan, the Company would count Shares against the New Reserve only if and when Shares are actually issued.  Performance shares that are settled in cash would no longer be counted against the New Reserve.

Dilution Calculation

The table below sets forth our potential dilution (or overhang) levels based on our Shares outstanding and the new authorization of 110,000 Shares to be available for future grants under the Amended Plan.  Although the use of equity is an important part of our compensation program, we are mindful of our responsibility to our Members in granting equity awards.  Our Board believes that the Shares requested for purposes of the Amended Plan represent a reasonable amount of potential equity dilution, which is consistent with the current level of dilution under the Plan and would allow us to continue awarding long-term incentives, an important component of our overall compensation program.  The Share information listed in the table below is as of April 3, 2019.

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