White Mountains is an owner of insurance-related businesses and, as such, climate change has direct relevance to the performance of our company.

Climate Change Statement

Carbon dioxide and other greenhouse gasses contribute to higher temperatures, sea level rise and weather events including droughts, wildfires, convective storms and hurricanes.  We do not manufacture products that produce carbon dioxide or other greenhouse gasses, nor do we otherwise meaningfully impact the environment through our operations.  However, as the owner and operator of a diversified group of businesses in insurance, financial services and related sectors, we are exposed to risks that are exacerbated by climate change, in particular in our property and casualty insurance/reinsurance and municipal bond guaranty businesses.  Accordingly, in our risk management processes, we consider the potential impact of climate change on the nature of the risks we are assuming and the pricing for such risks.

We believe that we have an important role to play as a responsible corporate citizen on climate change matters.  Our corporate philanthropy reflects our commitment to the environment.

Our Approach

As part of the underwriting process, all of our businesses exposed to the impacts of climate change model expected losses based on the estimated frequency and severity of catastrophic events, then price for those expected losses plus an underwriting profit.  In addition, they model capital adequacy and use various techniques to protect our capital position, such as concentration limits, portfolio diversification strategies, outbound reinsurance and safety margins.  Our businesses use multiple techniques, metrics and data sources in the modeling process.  In doing so, they incorporate current data and science on climate change and frequently customize third party models and tools to enhance their accuracy and relevance.  At the same time, they recognize the limitations of these models.

Additional measures to address climate change vary across our operating businesses. For example:

• Ark. Ark has launched an initiative that targets renewable energy clients including wind farms, solar plants, hydroelectric plants, geothermal plants and wave and tidal projects. In addition, Ark is implementing the evolving climate risk management guidelines of the UK Prudential Regulation Authority (PRA). In recent years, Ark has (i) established a climate change working group; (ii) undertaken a climate change risk assessment; (iii) analyzed climate change risk as part of its risk management framework; (iv) engaged with industry peers through the Lloyd’s Climate Change market group; (v) establishing executive responsibility and quarterly Board reporting for climate change risk; and (vii) incorporated a climate change statement and sustainable underwriting strategy as part of its business plan.
• BAM. BAM incorporates climate change risk in its credit underwriting process by considering both the short-term economic impact from climate change-related severe weather events and the long-term impacts on population and property values from rising sea levels and changing temperature patterns. BAM may reject a credit on the basis of its climate change profile.  In addition, BAM operates the GreenStar initiative, through which it provides a third-party assessment of the green attributes of municipal bond issues.  The program is designed to raise awareness of the benefits of Green Bond issuance among issuers and to broaden investor demand for Green Bonds.  BAM has verified 320+ transactions, totaling $4.9+ billion in par and is the most active provider of third-party Green Bond verifications in the U.S. municipal market.