UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 2, 2008
Date of Report (Date of earliest event reported)

WHITE MOUNTAINS INSURANCE GROUP, LTD.
(Exact name of registrant as specified in its charter)

80 South Main Street, Hanover, New Hampshire 03755

(Address of principal executive offices)

(603) 640-2200
(Registrant’s telephone number, including area code)

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 2, 2008, White Mountains Insurance Group, Ltd. issued a press release announcing its results for the three months ended March 31, 2008.  The press release furnished herewith is attached as Exhibit 99.1 to this Form 8-K.  Certain information included in the press release constitutes non-GAAP financial measures (as defined in Regulation G of the Securities and Exchange Commission).  Specifically, non-GAAP financial measures disclosed in the press release are adjusted comprehensive net income, fully diluted tangible book value per share and OneBeacon’s adjusted book value per common share.  White Mountains believes these measures to be more relevant than comparable GAAP measures in evaluating White Mountains’ financial performance.

Adjusted comprehensive net income is a non-GAAP financial measure that excludes the change in net unrealized gains and losses from Symetra’s fixed maturity portfolio from comprehensive net income.  In the calculation of comprehensive net income under GAAP, fixed maturity investments are marked-to-market while the liabilities to which those assets are matched are not.  Symetra attempts to earn a “spread” between what it earns on its investments and what it pays out on its products.  In order to try to fix this spread, Symetra invests in a manner that tries to match the duration and cash flows of its investments with the required cash outflows associated with its life insurance and structured settlements products.  As a result, Symetra typically earns the same spread on in-force business whether interest rates fall or rise.  Further, at any given time, some of Symetra’s structured settlement obligations may extend 40 or 50 years into the future, which is further out than the longest maturing fixed maturity investments regularly available for purchase in the market (typically 30 years).  For these long-dated products, Symetra is unable to fully match the obligation with assets until the remaining expected payout schedule comes within the duration of securities available in the market.  If at that time, these fixed maturity investments have yields that are lower than the yields expected when the structured settlement product was originally priced, the spread for the product will shrink and Symetra will ultimately harvest lower returns for its shareholders.  GAAP comprehensive net income increases when rates decline, which would suggest an increase in the value of Symetra – the opposite of what is happening to the intrinsic value of the business.  Therefore, White Mountains’ management and Board of Directors use adjusted comprehensive net income when assessing Symetra’s quarterly financial performance.  In addition, this measure is typically the predominant component of growth in fully diluted tangible book value per share, which is used in the calculation of White Mountains’ performance for both the short-term (annual bonus) and long-term incentive plans.  A schedule is included in Exhibit 99.1 to this Form 8-K that reconciles the Company’s comprehensive net income and adjusted comprehensive net income.

Book value per share is derived by dividing the Company’s total GAAP shareholders’ equity as of a given date by the number of common shares outstanding as of that date, including the dilutive effects of outstanding options and warrants to acquire common shares, as well as the unamortized accretion of preferred stock.  Fully diluted tangible book value per share is a non-GAAP measure which is derived by expanding the GAAP book value per share calculation to include the effects of assumed conversion of all in-the-money convertible securities and to exclude any unamortized goodwill and net unrealized gains from Symetra’s fixed maturity portfolio.  In addition, the number of common shares outstanding used in the calculation of fully diluted tangible book value per share are adjusted to exclude unearned shares of restricted stock representative of the proportion of unamortized compensation cost at the date of the calculation to the value of the restricted stock on the date of issuance.  A schedule is included in Exhibit 99.1 to this Form 8-K that reconciles the Company’s book value per share and fully diluted tangible book value per share.

Adjusted book value per common share at OneBeacon is a non-GAAP financial measure which is derived by excluding the impact of economically defeasing OneBeacon’s mandatorily redeemable preferred stock from book value per common share, the most closely comparable GAAP measure. Management believes that adjusted book value per common share is a useful supplement to understanding OneBeacon’s earnings and profitability. A schedule is included in Exhibit 99.1 to this Form 8-K that reconciles OneBeacon’s book value per share and adjusted book value per common share.

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ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

99.1 Press Release of White Mountains Insurance Group, Ltd. dated May 2, 2008 furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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Exhibit 99.1

WHITE MOUNTAINS REPORTS TANGIBLE BOOK VALUE PER SHARE OF $443

HAMILTON, Bermuda (May 2, 2008) – White Mountains Insurance Group, Ltd. ended the first quarter with a fully diluted tangible book value per share of $443, which was essentially flat for the quarter and an increase of 9% for the past twelve months, including dividends.

Ray Barrette, Chairman and CEO, said “We had a tough quarter resulting in a flat book value per share.  OneBeacon’s combined ratio was 100% driven by a number of large Commercial claims on top of a seasonally difficult quarter.  White Mountains Re’s combined ratio was a decent 94%, but continued adverse reserve developments at Folksamerica hurt an otherwise strong, low cat quarter.  Esurance had a combined ratio of 113% due to weather losses and increased severity for injury claims. On the investment front, the total return on the portfolio was 0.5%.  Bonds were up 1.6%, aided by favorable currency movements, but behind conventional benchmarks, while equities were down 4 points, but well ahead of the S&P 500.  On the positive side, OneBeacon Specialty had another great quarter, Esurance grew premiums 11% and passed the 500,000 policyholders mark, we now own 69% of Answer Financial and we are on track with the exchange transaction with Berkshire Hathaway.”

Adjusted comprehensive net income for the first quarter was break-even, compared to $103 million in last year’s first quarter, while net loss was $57 million, compared to net income of $92 million.

Effective January 1, 2008, the Company adopted FAS 159 and elected to record the changes in unrealized gains and losses from nearly all of its investment portfolio in net income. In prior periods, these changes have been included in other comprehensive income rather than in net income. Accordingly, net income (loss) and pre-tax income (loss) for 2008 periods are not directly comparable to such measures for 2007 periods.

OneBeacon

OneBeacon’s adjusted book value per share decreased by 1.1% in the quarter, including dividends.  OneBeacon’s pre-tax loss for the quarter was $39 million compared to pre-tax income of $87 million, while the GAAP combined ratio was 100% compared to 98%.  Pre-tax loss in the first quarter of 2008 included $59 million in net unrealized investment losses and $4 million in net realized investment gains compared to $55 million in net realized investment gains in pre-tax income in the prior year period.

Mike Miller, CEO of OneBeacon, said, “We had a challenging quarter.  Both underwriting (100% combined ratio) and investment results (0% total return) were off, which led to a 1% decrease in adjusted book value per share, including dividends.  On the underwriting side, Specialty Lines had an excellent quarter at an 87% combined ratio and strong growth and Personal Lines generated a solid 96% combined ratio.  Commercial Lines had a tough quarter at a 110% combined ratio driven by unusually heavy catastrophe losses and a few large claims.  Our business is in good shape and we expect to deliver better results in the coming quarters.”

Net written premiums were $426 million for the first quarter, a decrease of 3% from the comparable period of 2007.  Specialty Lines premiums increased by 15% and Commercial Lines and Personal Lines premiums decreased by 1% and 16%, respectively. At the end of the quarter, OneBeacon launched its collector car and boat products through its partnership with Hagerty Insurance.

During the quarter, OneBeacon paid approximately $215 million of dividends and completed share repurchases of approximately $53 million.

White Mountains Re

White Mountains Re’s pre-tax loss was $12 million for the quarter compared to pre-tax income of $58 million, while the GAAP combined ratio was 94% compared to 99%.  Pre-tax loss in the first quarter of 2008 included $40 million in net unrealized investment losses and $12 million in net realized investment losses compared to $20 million in net realized investment gains in pre-tax income in the prior year period.  The decrease in the combined ratio was primarily due to a decrease in catastrophe losses.  The 2008 first quarter included $9 million of catastrophe losses, net of reinstatement premiums, from European windstorm Emma, compared to $45 million from Kyrill and Hanno in the first quarter of 2007.  This improvement was partially offset by an increase in prior year loss reserves of $33 million in the first quarter of 2008, compared to net loss reserve releases of $7 million in the first quarter of 2007.   The 2008 reserve addition includes $41 million for late reported construction defect claims at Folksamerica for underwriting years 2002 and prior.

Allan Waters, CEO of White Mountains Re, said, “Overall, White Mountains Re reported a reasonably good 94% combined ratio.  We benefited from reduced catastrophe activity, but once again added to Folksamerica’s loss reserves.  Dwight Evans assumed the helm at Folksamerica during the quarter and is quickly assessing all opportunities to improve the operations.”

Gross written premiums were down 10% for the quarter, while net written premiums were down 11%. These decreases occurred in almost every line of business, especially in casualty where pricing, terms and conditions for certain accounts did not meet White Mountains Re’s underwriting guidelines.

Esurance

Esurance’s pre-tax loss was $24 million for the quarter compared to $9 million, while the GAAP combined ratio was 113% compared to 111%.  The loss ratio increased to 81% in the first quarter compared to 76% in the same period last year, due to higher injury claims costs.  Esurance’s higher loss ratio was partially offset by a 3-point improvement in the expense ratio as compared to the first quarter of 2007. Pre-tax loss in the first quarter of 2008 included $6 million in net unrealized investment losses and $2 million in net realized investment losses compared to $1 million in net realized investment gains in pre-tax loss in the prior year period.

Gary Tolman, CEO of Esurance, said, “Our underwriting results continue to be disappointing.  The loss ratio was a few points higher than expected.  Over the past six months, we have implemented rate increases in 18 states averaging 9% and we expect our loss ratio to decline over the rest of the year.  We continued to increase our policyholder base and grow our premium volume. We realized a 3-point reduction in our expense ratio as we lowered acquisition costs and continued to scale the business.”

Gross written premiums were $231 million for the first quarter, an increase of 11% from the first quarter of last year.  During the first quarter, Esurance added approximately 20,000 policies-in-force, ending the quarter with more than 500,000 policyholders.

Other Operations

White Mountains’ Other Operations segment’s pre-tax loss was $30 million for the first quarter, compared to $4 million.  The increase in pre-tax loss for the segment is primarily due to $21 million of losses in the Life Re business, which were primarily mark-to-market losses from the effect of the volatile investment market conditions on the valuation of Life Re’s derivative assets and liabilities during the quarter.

In conjunction with its previously announced exchange transaction with Berkshire Hathaway, in March the Company drew the $475 million available on its revolving credit facility to provide the necessary funds at the holding company level required for the transaction.  The Company plans to repay the facility over time as it harvests funds from its operations.  In April, the Company repaid $175 million of the borrowings on the facility leaving $300 million currently outstanding.

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Investment Activities

The GAAP total return on invested assets for the first quarter was 0.5% compared to 1.9% in the first quarter of last year.  Net investment income was $117 million in the quarter, which was flat when compared to last year’s first quarter.

Mark Dorcus, President of White Mountains Advisors, said, “First quarter investment results were slightly positive as bonds were up 1.6%, aided by favorable currency movements in Sirius, which was mostly offset by a 4% decline in our equity positions.  Treasuries extended their winning streak into the first quarter as investors continued to shun risk.  As a result, spreads for corporate bonds and structured securities widened much further.  Our limited exposure to Treasuries and the wider spreads restrained our bond returns.  Prospector’s security selection helped us weather the tough equity markets with only minimal damage.”

Additional Information

White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM. Additional financial information and other items of interest are available at the Company’s website located at www.whitemountains.com. The Company expects to file its Form 10-Q with the Securities and Exchange Commission on or before May 12, 2008 and urges shareholders to refer to that document for more complete information concerning White Mountains’ financial results.

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Regulation G

This earnings release includes three non-GAAP financial measures that have been reconciled to their most comparable GAAP financial measures.  White Mountains believes these measures to be more relevant than comparable GAAP measures in evaluating White Mountains’ financial performance.

Adjusted comprehensive net income is a non-GAAP financial measure that excludes the change in net unrealized gains and losses from Symetra’s fixed maturity portfolio from comprehensive net income.  The reconciliation of adjusted comprehensive net income to comprehensive net income is included on page 8.

Fully diluted tangible book value per share is a non-GAAP measure which is derived by expanding the GAAP book value per share calculation to include the effects of assumed conversion of all in-the-money convertible securities and to exclude any unamortized goodwill and net unrealized gains/(losses) from Symetra’s fixed maturity portfolio.  In addition, for periods subsequent to December 31, 2006, the number of common shares outstanding used in the calculation of fully diluted tangible book value per share are adjusted to exclude unearned shares of restricted stock representative of the proportion of unamortized compensation cost at the date of the calculation to the value of the restricted stock on the date of issuance. This adjustment was not made to fully diluted tangible book value per share for periods prior to December 31, 2006 as the impact was not significant. The reconciliation of fully diluted tangible book value per share to book value per share is included on page 7.

Adjusted book value per common share at OneBeacon is a non-GAAP financial measure which is derived by excluding the impact of economically defeasing OneBeacon’s mandatorily redeemable preferred stock from book value per common share, the most closely comparable GAAP measure. Management believes that adjusted book value per common share is a useful supplement to understanding OneBeacon’s earnings and profitability. A reconciliation of OneBeacon’s book value per common share to OneBeacon’s adjusted book value per common share follows:

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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This earnings release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  All statements, other than statements of historical facts, included or referenced in this release which address activities, events or developments which we expect or anticipate will or may occur in the future are forward-looking statements.  The words “will,” “believe,” “intend,” “expect,” “anticipate,” “project,” “estimate,” “predict” and similar expressions are also intended to identify forward-looking statements.  These forward-looking statements include, among others, statements with respect to White Mountains’:

These statements are based on certain assumptions and analyses made by White Mountains in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that could cause actual results to differ materially from expectations, including:

Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by White Mountains will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, White Mountains or its business or operations.  White Mountains assumes no obligation to publicly update any such forward-looking statements, whether as a result of new information, future events or otherwise.

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions, except share amounts)

(Unaudited)

(more) 

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

FULLY DILUTED TANGIBLE BOOK VALUE PER COMMON AND EQUIVALENT SHARE

(Unaudited)

(1)  Remaining adjustment of subsidiary preferred stock to face value, which is representative of White Mountains’ ownership interest in   OneBeacon Insurance Group, Ltd. of 74.7% as of March 31, 2008, 72.9% as of December 31, 2007, and 71.8% as of March 31, 2007.

(more)

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(millions, except per share amounts)

(Unaudited)

8

WHITE MOUNTAINS INSURANCE GROUP, LTD.

YTD SEGMENT INCOME STATEMENTS

(in millions)

(Unaudited)

(more)

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

SUMMARY OF GAAP RATIOS AND PREMIUMS

(Unaudited)