WHITE MOUNTAINS INSURANCE GROUP LTD, DEF 14A, 2000-03-27

WHITE MOUNTAINS INSURANCE GROUP LTD
DEF 14A, 2000-03-27
FIRE, MARINE & CASUALTY INSURANCE

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

White Mountains Insurance Group Ltd.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

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<PAGE>

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Notice of 2000
Annual Meeting
of Shareholders
and Proxy Statement
------------------------------------------------------------------

<PAGE>

Table of Contents
- --------------------------------------------------------------------------------

PAGE
<S> <C>
LETTER FROM JOHN J. BYRNE....................................................................... 1

NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS.................................................... 2

PROXY STATEMENT.................................................................................. 3

PROPOSAL 1: ELECTION OF DIRECTORS............................................................ 3

Procedures for Nominating Directors....................................................... 6

Voting Securities and Principal Holders Thereof........................................... 7

Compensation of Directors................................................................. 10

Compensation of Executive Officers........................................................ 11

Reports of the Compensation Committees on Executive Compensation.......................... 13

Shareholder Return Graph.................................................................. 16

Compensation Plans........................................................................ 17

Compensation Committee Interlocks and Insider Participation in Compensation Decisions .... 18

PROPOSAL 2: APPOINTMENT OF INDEPENDENT AUDITORS.............................................. 18

OTHER MATTERS................................................................................. 18
</TABLE>

- --------------------------------------------------------------------------------

White Mountains Insurance Group, Ltd. (the "Company" and, together with its
subsidiaries, "White Mountains") is a Bermuda-domiciled financial services
holding company. White Mountains' insurance operations are conducted through its
subsidiaries and affiliates in the businesses of property and casualty
insurance, reinsurance and financial guaranty insurance.

White Mountains' insurance operations principally include: (i) Folksamerica
Holding Company, Inc. ("Folksamerica"), a New York-based broker-market
reinsurer; (ii) Peninsula Insurance Company ("PIC"), a Maryland-based property
and casualty insurer; (iii) American Centennial Insurance Company ("ACIC"), a
Delaware-based property and casualty insurer; (iv) British Insurance Company of
Cayman ("BICC"), a Cayman Island-based property and casualty insurer; (v) a 26%
economic interest in Financial Security Assurance Holdings Ltd. ("FSA"), a New
York-based Aaa/AAA writer of financial guarantee insurance; and (vi) a 50% stake
in Main Street America Holdings, Inc. ("MSA"), a unit of National Grange Mutual
Insurance Company, a New Hampshire-based property and casualty insurer.

<PAGE>

[WHITE MOUNTAINS LOGO]

JOHN J. BYRNE
CHAIRMAN

March 24, 2000

Dear Shareholder:

I am pleased to invite you to the 2000 Annual Meeting of White Mountains
Insurance Group, Ltd., to be held on Monday, May 22, 2000. This year's meeting
will take place at the Princess Hotel in Hamilton, Bermuda beginning at 9:00
a.m. Atlantic Time (8:00 a.m. Eastern Time). I welcome you all to join me for
the morning in lovely Bermuda.

We will begin the meeting with a discussion and shareholder vote on the
proposals set forth in the accompanying Proxy Statement and on such other
matters properly brought before the meeting. At the meeting you will be asked to
consider and vote on the following issues:

1) to elect one director to Class I, one director to Class II and four
directors to Class III and,

2) to ratify the appointment of independent auditors for 2000.

The 2000 proposals are routine matters that are addressed annually and are
more fully described herein.

Management expects to provide shareholders with a brief summary of each of
its major operating subsidiaries and affiliates at the meeting. For those of
you unable to attend the 2000 Annual Meeting, we will repeat this business
presentation at an informational meeting to be held shortly thereafter in New
York City (details of which will follow at a later date).

Your vote is important. Whether or not you plan to attend the meeting, you
can ensure that your shares are properly represented at the meeting by promptly
completing, signing, dating and returning your proxy card in the enclosed
envelope. Shareholders who hold their shares in a brokerage account, an employee
benefit plan or through a nominee will likely have the added flexibility of
voting their shares by telephone or over the internet.

Respectfully submitted,
JACK BYRNE

<PAGE>

WHITE MOUNTAINS INSURANCE GROUP, LTD.

NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS

MAY 22, 2000

March 24, 2000

Notice is hereby given that the 2000 Annual Meeting of Shareholders of
White Mountains Insurance Group, Ltd. will be held on Monday, May 22, 2000, at
9:00 a.m. Atlantic Time at the Princess Hotel, Hamilton, Bermuda. At the meeting
you will be asked to consider and vote upon the following proposals:

(a) to elect one director to Class I with a term ending in 2001, one
director to Class II with a term ending in 2002 and four directors to
Class III with terms ending in 2003,

(b) to appoint PricewaterhouseCoopers as Independent Auditors for the 2000
audit examination; and

Shareholders of record on the record date, March 24, 2000, (i) who are
individuals, may attend and vote at the meeting in person or by proxy or (ii)
which are corporations or other entities, may be represented and vote at the
meeting by a duly authorized representative or by proxy. A list of all
shareholders entitled to vote at the meeting will be open for public examination
during regular business hours from May 1, 2000, until 12:00 noon on May 22,
2000, at White Mountains Insurance Group, Ltd.'s registered office located at
Clarendon House, 12 Church Street, Suite 322, Hamilton HM 11, Bermuda.

All shareholders are invited to attend this meeting.

By Order of the Board of Directors,

DENNIS P. BEAULIEU
Corporate Secretary

SHAREHOLDERS ARE INVITED TO COMPLETE AND SIGN THE ACCOMPANYING PROXY CARD
TO BE RETURNED TO WHITE MOUNTAINS INSURANCE GROUP, LTD., C/O FIRST CHICAGO TRUST
COMPANY OF NEW YORK A DIVISION OF EQUISERVE, POST OFFICE BOX 8085, EDISON, NEW
JERSEY 08818-9052, IN THE ENVELOPE PROVIDED, WHETHER OR NOT THEY EXPECT TO
ATTEND THE MEETING. SHAREHOLDERS WHO HOLD THEIR SHARES IN A BROKERAGE ACCOUNT,
AN EMPLOYEE BENEFIT PLAN OR THROUGH A NOMINEE WILL LIKELY HAVE THE ADDED
FLEXIBILITY OF VOTING THEIR SHARES BY TELEPHONE OR OVER THE INTERNET.

<PAGE>

WHITE MOUNTAINS INSURANCE GROUP, LTD.

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Company's Board of Directors (the "Board") for the 2000
Annual Meeting of Shareholders (the "2000 Annual Meeting"), to be held on May
22, 2000 in Bermuda. The solicitation of proxies will be made primarily by mail,
and this Proxy Statement and proxy materials will be distributed to registered
shareholders on or about March 27, 2000.

Holders of shares of the Company's Common Stock, par value $1.00 per share
("Shares"), as of the close of business on March 24, 2000, the record date, are
entitled to vote at the meeting.

You can ensure that your Shares are properly voted at the meeting by
completing, signing, dating and returning the enclosed proxy card in the
envelope provided. Shareholders who hold their Shares in a brokerage account, an
employee benefit plan or through a nominee will likely have the added
flexibility of voting their Shares by telephone or over the internet. A
shareholder has the right to appoint another person (who need not be a
shareholder) to represent the shareholder 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 19). Shareholders have the
right to revoke their proxies, at any time prior to the time their Shares are
actually voted, by (i) filing a written notice of revocation with the Corporate
Secretary, (ii) presenting another proxy with a later date or (iii) notifying
the Inspectors of Election in writing of such revocation. Sending in a signed
proxy will not affect your right to attend the meeting and vote. If a
shareholder attends the meeting and votes in person, his or her proxy is
considered revoked.

PROPOSAL 1

ELECTION OF DIRECTORS

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

Mr. Terry L. Baxter, currently a Class III director, will not stand for
re-election at the 2000 Annual Meeting.

At the 2000 Annual Meeting, Mr. Fass is nominated to be elected to Class I
with a term ending in 2001, Mr. John Gillespie is nominated to be elected to
Class II with a term ending in 2002 and Messrs. Barrette, Clark, Cochran and
Zankel are nominated to be elected to Class III with terms ending 2003. THE
BOARD RECOMMENDS A VOTE FOR PROPOSAL 1 WHICH CALLS FOR THE ELECTION OF THE 2000
NOMINEES.

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

- --------------------------------------------------------------------------------
Director
Director Age since
- --------------------------------------------------------------------------------
Class I - Term Ending in 2001
Patrick M. Byrne 37 1997
Steven E. Fass* 54 2000
K. Thomas Kemp 59 1994
Gordon S. Macklin 71 1987
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Class II - Term Ending in 2002
John J. ("Jack") Byrne 67 1985
George J. Gillespie, III 69 1986
John D. Gillespie** 41 1999
Frank A. Olson 67 1996
- --------------------------------------------------------------------------------
Class III - Term Ending in 2000
Raymond Barrette*** 49 2000
Howard L. Clark, Jr.*** 56 1986
Robert P. Cochran*** 50 1994
Arthur Zankel*** 68 1992
- --------------------------------------------------------------------------------

* Nominee at the 2000 Annual Meeting to a term ending in 2001.
** Nominee at the 2000 Annual Meeting to a term ending in 2002.
*** Nominee at the 2000 Annual Meeting to a term ending in 2003.

<PAGE>

The following information with respect to the principal occupation, business
experience, recent business activities involving White Mountains and other
affiliations of the nominees and directors has been furnished to the Company by
the nominees and directors.

CLASS I

PATRICK M. BYRNE has been a director of the Company since 1997. Mr. Byrne
serves as President and CEO of Overstock.com, an internet shopping service. Mr.
Byrne formerly served as President and CEO of Fecheimer Bros. Co. (a
wholly-owned subsidiary of Berkshire Hathaway Inc.), a manufacturer of uniforms
and accessories, from 1997 to 1999 and President and CEO of Centricut, LLC, a
manufacturer of industrial torch consumable parts, from 1994 to 1999. In
addition, since 1991, Mr. Byrne has been the managing general partner of a
number of limited partnerships investing in real estate, gaming, insurance and
international trade. Mr. Byrne is the son of Chairman Jack Byrne.

STEVEN E. FASS was appointed to the Board in February 2000. Mr. Fass has
served as President and Chief Executive Officer of Folksamerica and its
subsidiaries including Folksamerica Reinsurance Company since 1984. He joined
Folksamerica as its Vice President, Treasurer and Chief Financial Officer in
1980.

K. THOMAS KEMP has served as Deputy Chairman of the Company since January
2000 and has been a director since 1994. Mr. Kemp served as the Company's
President and CEO from 1997 to January 2000 and served as Executive Vice
President from 1993 to 1997, Vice President, Treasurer and Secretary from 1991
to 1993 and was formerly a Vice President of Fireman's Fund Insurance Company
("Fireman's Fund"). Mr. Kemp is also a director of FSA, Eldorado Bancshares,
Inc. and Amlin plc.

GORDON S. MACKLIN has been a director of the Company since 1987. Mr.
Macklin is currently a corporate financial advisor. Mr. Macklin formerly served
as Chairman of White River Corporation, an information services company, from
1993 to 1998, as Chairman of Hambrecht and Quist Group, a venture capital and
investment banking company, from 1987 until 1992, and as President of the
National Association of Securities Dealers, Inc. from 1970 until 1987. He is a
director of MCI Worldcom, Inc., Martek Biosciences Corporation, MedImmune Inc.,
Overstock.com and Spacehab, Inc., and is a trustee, director or managing general
partner (as the case may be) of 47 of the investment companies in the Franklin
Templeton Group of Funds.

CLASS II

JOHN J. ("JACK") BYRNE has served as Chairman of the Company since 1985 and
as the Company's CEO since January 2000. Mr. Byrne formerly served as President
and CEO of the Company from 1990 to 1997 and as CEO from 1985 to 1990. Mr. Byrne
is a director of Overstock.com and Markel Corp. Mr. Byrne's son, Patrick Byrne,
is also a director of the Company.

GEORGE J. GILLESPIE, III has been a director of the Company since 1986. Mr.
Gillespie has been a Partner in the law firm of Cravath, Swaine & Moore ("CS&M")
since 1963. He is also a director of The Washington Post Company. CS&M has been
retained by White Mountains from time to time to perform legal services. See
"Compensation Committee Interlocks and Insider Participation in Compensation
Decisions." Mr. Gillespie's son, John Gillespie, is also a director of the
Company.

JOHN D. GILLESPIE was appointed to the board in August 1999. He is the
founder and Managing Partner of his own investment firm, Prospector Partners,
LLC, in Hartford, Connecticut. Prior to forming Prospector Partners, Mr.
Gillespie was President of the T. Rowe Price Growth Stock Fund and the New Age
Media Fund, Inc. White Mountains owns limited partnership investment interests
which are managed by Mr. Gillespie. See "Certain Relationships and Related
Transactions". Mr. Gillespie's father, George Gillespie, is also a director of
the Company.

FRANK A. OLSON has been a director of the Company since 1996. He serves as
Chairman of The Hertz Corporation ("Hertz"). Mr. Olson served as the CEO of
Hertz from 1977 to 1999 and has been with that company since 1964. He is also a
director of Becton Dickinson and Company, Cooper Industries and Commonwealth
Edison Co. and was formerly Chairman and CEO of Allegis Corporation and United
Airlines.

<PAGE>

CLASS III

RAYMOND BARRETTE was appointed to the board in February 2000. Mr. Barrette
has served as President of the Company since January 2000 and served as
Executive Vice President and Chief Financial Officer of the Company since 1997.
He was formerly a consultant with Tillinghast-Towers Perrin from 1994 to 1996
and was with Fireman's Fund from 1973 to 1993. Mr. Barrette is also a director
of Folksamerica, PIC, ACIC and BICC.

HOWARD L. CLARK, JR. has been a director or advisor to the board since
1986. He is currently Vice Chairman of Lehman Brothers Inc. ("Lehman") and was
Chairman and CEO of Shearson Lehman Brothers Inc. from 1990 to 1993. Prior to
joining Shearson Lehman Brothers Inc., Mr. Clark was Executive Vice President
and Chief Financial Officer of American Express. He is also a director of Lehman
Brothers Inc., Maytag Corporation, MoneyTran.com and Walter Industries, Inc.
Lehman provides various services to White Mountains from time to time. See
"Compensation Committee Interlocks and Insider Participation in Compensation
Decisions."

ROBERT P. COCHRAN has been a director of the Company since 1994. Mr.
Cochran was a founding principal of FSA and has served FSA in various capacities
since 1985. He has been President and CEO and a director of FSA since 1990 and
became Chairman in 1997. He is also Chairman of Financial Security Assurance
Inc. and Financial Security Assurance (U.K.) Ltd. White Mountains has a 26%
economic interest in FSA. See "Compensation Committee Interlocks and Insider
Participation in Compensation Decisions."

ARTHUR ZANKEL has been a director or advisor to the board since 1992. He
served as a General Partner of First Manhattan Co. from 1965 to 1999 and was
Co- Managing Partner of First Manhattan from 1979 to 1997. Mr. Zankel is
currently Managing Member of Zankel Capital Advisors, LLC in which White
Mountains owns a limited partnership investment interest. See "Compensation
Committee Interlocks and Insider Participation in Compensation Decisions."
Mr. Zankel is also a director of Citigroup, Inc., Travelers Property Casualty
Corp. and VICORP Restaurants, Inc.

COMMITTEES OF THE BOARD OF DIRECTORS

The Audit Committee, comprised of certain nonemployee directors (Messrs.
Clark, Olson and Zankel), has general responsibility for the oversight and
surveillance of the accounting, reporting and financial control practices of
White Mountains. The Audit Committee annually reviews the qualifications of the
Independent Auditors; makes recommendations to the Board as to their selection;
and reviews the plan, fees and results of their audit. Mr. Clark is Chairman of
the Audit Committee.

The Compensation Committee, comprised of certain nonemployee directors
(Messrs. Patrick Byrne, Cochran, Macklin, Olson and Zankel), oversees White
Mountains' stock-based compensation and benefit policies and programs, including
administration of the Long-Term Incentive Plan (the "Incentive Plan"), the
Voluntary Deferred Compensation Plan (the "Deferred Compensation Plan") and the
Deferred Benefit Plan (the "Deferred Benefit Plan"). Mr. Macklin is Chairman of
the Compensation Committee.

The Human Resources Committee, comprised of certain nonemployee directors
(Messrs. Patrick Byrne, Clark, Cochran, George Gillespie, Macklin, Olson and
Zankel), sets the annual salaries and bonuses for elected officers and certain
other key employees. Mr. Macklin is Chairman of the Human Resources Committee.

The Finance Committee, comprised of Messrs. Jack Byrne, Clark, George
Gillespie, Kemp, Macklin and Zankel has general responsibility for the oversight
of all significant financing, tax and acquisition/ disposition activities of
White Mountains. Mr. Jack Byrne is Chairman of the Finance Committee.

<PAGE>

The Investment Committee is an advisory committee to the Board and is
comprised of Messrs. Barrette, Jack Byrne (emeritus), John Gillespie, Kemp,
Zankel, certain members of senior management and investment professionals. The
Investment Committee formulates the Company's investment policy and oversees all
the Company's significant investing activities. Mr. John Gillespie is Chairman
of the Investment Committee.

MEETINGS OF THE BOARD OF DIRECTORS

During 1999 the following meetings of the Board were held: eight meetings
of the full Board; two meetings of the Audit Committee; three meetings of the
Compensation Committee, three meetings of the Human Resources Committee, one
meeting of the Finance Committee and one meeting of the Investment Committee. In
1999 each director attended more than 75% of all meetings of the Board and its
various committees, except Messrs. Macklin and Patrick Byrne who were unable to
attend one of the three Compensation Committee and Human Resources Committee
meetings and Mr. George Gillespie who was unable to attend the Finance Committee
meeting.

PROCEDURES FOR NOMINATING DIRECTORS

Under the Company's Bye-laws, nominations for the election of directors may
be made by the Board or by any shareholder entitled to vote for the election of
directors (a "Qualified Shareholder"). A Qualified Shareholder may nominate
persons for election as directors only if written notice of such shareholder's
intent to make such nomination is delivered to the Secretary not later than: (i)
with respect to an election to be held at an Annual Meeting, 90 days prior to
the anniversary date of the immediately preceding Annual Meeting or not later
than 10 days after notice or public disclosure of the date of the Annual Meeting
is given or made available to shareholders, whichever date is earlier, and (ii)
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 shareholders.

Each such notice shall set forth: (a) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the shareholder is a holder of record of
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 shareholder
and each such nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
shareholder; (d) such other information regarding each nominee proposed by such
shareholder as would have been required to be included in a proxy statement
filed pursuant to the proxy rules of the United States Securities and Exchange
Commission (the "SEC") had each such nominee been nominated, or intended to be
nominated, by the Board; and (e) the consent of each such nominee to serve as a
director of the Company if so elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.

<PAGE>

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

VOTING RIGHTS OF SHAREHOLDERS

As of March 24, 2000, there were 5,904,534 Shares outstanding. Shareholders
of record shall be entitled to one vote per Share, provided that if and so long
as the votes conferred by "Controlled Shares" (as defined below) of any person
constitute ten percent (10%) or more of the votes conferred by the outstanding
Shares of the Company, each outstanding Share comprised in such Controlled
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 Shares; and "C" is the number of votes conferred by the Controlled
Shares of such person.

"Controlled Shares" in reference to any person means:

(i) all 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 of America; and

(ii) all Shares directly, indirectly or constructively owned by any
person or "group" of persons within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, 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 shareholder which is a
"Byrne Entity" (as defined below) for any matter submitted to the vote of
shareholders, 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 forgoing provisions or otherwise,
the votes conferred by the Controlled Shares of any person would otherwise
represent 10% or more of the votes conferred by all the outstanding Shares, the
votes conferred by the Controlled 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 Shares of each person represent less than
10% of the votes conferred by all Shares.

<PAGE>

PRINCIPAL HOLDERS OF SHARES

To the knowledge of the Company, there was no person or entity
beneficially owning more than 5% of Shares outstanding as of March 24, 2000,
except as shown below:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Number
of Shares
Name and address of beneficial owner beneficially owned Percent (b)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>

JACK BYRNE 80 South Main Street, Hanover, NH 03755 (a) 1,194,030 20.2%

FRANKLIN MUTUAL ADVISORS, INC. 777 Mariners Island Blvd., San Mateo, CA 94403 (c) 750,271 12.7%

ALLIANZ ASSET ACCUMULATION PLAN 777 San Marin Drive, Novato, CA 94998 (d) 431,945 7.3%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(a) Does not include 53,500 Shares donated to charitable foundations for which
Mr. Byrne disclaims beneficial ownership, but for which his spouse retains
voting power.
(b) Represents voting power with respect to all proposals except the election
of directors. For the election of directors, Mr. Byrne's voting power will
be reduced to no more than 10% which would serve to increase the relative
voting power of all other shareholders with regard to such proposals. See
"Voting Rights of Shareholders".
(c) According to filings by such holders with the SEC, the Shares beneficially
owned by Franklin Mutual Advisors, Inc. were acquired solely for investment
purposes on behalf of client investment advisory accounts of such holders.
(d) Represents Shares beneficially owned by employees of Fireman's Fund
pursuant to an employee incentive savings plan. The trustee for such plan
generally votes the Shares held by the plan in accordance with directions
given by the participating Fireman's Fund employees to whose accounts
Shares have been allocated.

<PAGE>

BENEFICIAL STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth, as of March 24, 2000, beneficial ownership
of Shares by each director of the Company, by each of the "Named Executive
Officers" as defined herein currently holding office, and by all directors and
executive officers as a group.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Number of Shares owned
------------------------------------------
Directors and Executive Officers Beneficially (a) Economically (b)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RAYMOND BARRETTE 27,192 59,745
TERRY L. BAXTER 18,742 33,288
JACK BYRNE (c) 1,194,030 1,204,030
PATRICK M. BYRNE 106,395 106,395
HOWARD L. CLARK, JR. 1,000 1,000
ROBERT P. COCHRAN 0 0
MORGAN W. DAVIS 26,574 30,574
STEVEN E. FASS 1,446 1,446
GEORGE J. GILLESPIE, III 1,000 1,000
JOHN D. GILLESPIE 1,176 1,176
K. THOMAS KEMP 81,690 102,760
GORDON S. MACKLIN 15,000 15,000
FRANK A. OLSON 3,000 3,000
MICHAEL S. PAQUETTE 12,371 25,871
DAVID G. STAPLES 4,283 17,283
ARTHUR ZANKEL 11,600 11,600
All directors and executive officers as a group (17 persons) (c) 1,510,501 1,632,169
=================================================================================================================
</TABLE>

(a) The beneficial ownership positions of Messrs Jack Byrne, Patrick Byrne,
Kemp and all directors and executive officers as a group represent 20.2%,
1.8%, 1.4% and 25.6% of the total Shares outstanding at March 24, 2000,
respectively. All other directors and executive officers beneficially owned
less than 1% of the total Shares outstanding at that date.
(b) Shares shown as economically owned by directors and executive officers
include unvested performance share awards outstanding, unvested stock
options outstanding and earned phantom shares on compensation deferred. See
"Compensation Plans - White Mountains Retirement Plans." Each performance
share, stock option and phantom share are economically equivalent to one
Share. Unvested performance shares and stock options outstanding at March
24, 2000 represented 25,000, 8,000, 10,000, 4,000, 11,000, 13,500, 13,000
and 97,500 Shares for Messrs. Barrette, Baxter, Jack Byrne, Davis, Kemp,
Paquette, Staples and all directors and officers as a group, respectively.
(c) Does not include 53,500 Shares donated to charitable foundations for which
Mr. Byrne disclaims beneficial ownership, but for which his spouse retains
voting power.

<PAGE>

COMPENSATION OF DIRECTORS

COMPENSATION OF DIRECTORS EXCEPT FOR JACK BYRNE

Messrs. Patrick Byrne, Clark, Cochran, George Gillespie, Macklin, Olson and
Zankel each received a retainer of $50,000 during 1999 and fees of $1,000 for
each Board meeting and Committee meeting attended. The annual retainer relates
to the twelve month period from May 1999 to May 2000. Mr. John Gillespie
received a prorated retainer of $37,500 during 1999. Messrs. Clark, John
Gillespie and Macklin also received additional retainers of $3,000, $100,000 and
$6,000 during 1999 for their roles as Chairman of the Audit Committee, Chairman
of the Investment Committee and Chairman of the Compensation and Human Resources
Committees, respectively. Messrs. Patrick Byrne, Cochran and John Gillespie also
received meeting fees of $3,500, $5,250 and $5,250 in their capacity as
directors of White Mountains Holdings, Inc., an indirect wholly-owned subsidiary
of the Company. Directors who are also officers of White Mountains do not
receive compensation for their role as a director.

During 1999, the Company terminated its nonqualified director retirement
plan (the "Retirement Plan") whereby non-management directors retiring from the
Board with at least five years of service as a director of the Company would be
entitled to an annual retirement benefit equal to 50% of the amount of the
annual retainer for the year in which the retirement occurs. In connection with
the Retirement Plan termination, Messrs. Patrick Byrne, Clark, Cochran, George
Gillespie, Macklin, Olson and Zankel received $50,000, $275,000, $125,000,
$325,000, $300,000, $75,000 and $125,000, respectively, in Retirement Plan
benefits.

Through 1999, certain directors participated voluntarily in the Deferred
Compensation Plan, an unfunded, nonqualified, deferred compensation savings
plan. Pursuant to the Deferred Compensation Plan, directors could defer all or a
portion of qualifying remuneration payable by White Mountains. During 1999, the
Company terminated the Deferred Compensation Plan and paid-out account balances
to its participants. In connection with the early termination of the Deferred
Compensation Plan, Messrs. Patrick Byrne, Cochran and John Gillespie were paid a
special payment of $26,289, $72,807 and $26,289, respectively, in additional to
their plan balances in order to compensate them for the early termination.

COMPENSATION OF JACK BYRNE

Mr. Byrne has served as Chairman of the Company since 1985 and served as
CEO of the Company from 1985 to 1997. In January 2000, Mr. Byrne returned as CEO
of the Company.

As a director, during 1999, Mr. Byrne received a $100,000 all-inclusive
annual retainer for his services as Chairman of the Board and his participation
in White Mountains' various committees and subsidiary boards of directors. In
connection with the Retirement Plan termination, Mr. Byrne received $50,000 in
Retirement Plan benefits.

As former President and CEO, Mr. Byrne received $650,000 in performance
shares during 1999 which were awarded to him in 1997 when he was Chairman and
CEO of the Company. See "Reports of the Compensation Committees on Executive
Compensation - Compensation Committee - Long-Term Incentive Awards." In
addition, as both an officer and a director, Mr. Byrne participated in the
Deferred Compensation Plan and the related Deferred Benefit Plan ("See
Compensation Plans - Retirement Plans"). During 1999, Mr. Byrne was paid
$2,769,398 in addition to his plan balances in connection with the termination
of the Deferred Compensation Plan and the Deferred Benefit Plan.

At the Board's request, in October 1999 Mr. Byrne exercised all of his
remaining warrants to acquire 1,000,000 Shares from the Company at a strike
price per share of $21.66. The warrants were awarded to him in 1985 and were
exercisable until January 2, 2002. In order to entice Mr. Byrne to exercise his
warrants early, the Company paid Mr. Byrne $6,000,000 to compensate him for the
estimated interest cost of borrowing to pay the strike price and the income tax
liability associated with his accelerated warrant exercise. The amount of income
realized by Mr. Byrne in exercising his warrants, including the $6,000,000
payment, was $102,460,000.

<PAGE>

COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY COMPENSATION TABLE

The following tables set forth certain information regarding the salary,
incentive compensation and benefits paid by White Mountains to its CEO, its four
most highly compensated executive officers and one former executive officer
(collectively, the "Named Executive Officers").

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Annual compensation Long-term compensation
-------------------------------- ------------------------
Awards Payouts
---------- -------------
Other Restricted
annual Stock,
Name and compen- Options, LTIP All other
principal position Year Salary Bonus(a) sation SARs (#) payouts (b) compensation (c)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
K. THOMAS KEMP 1999 $400,000 $1,308,809 $ 0 0 $2,600,000 $269,490
President and CEO 1998 386,923 304,000 0 0 1,995,000 275,185
1997 312,692 241,500 0 0 1,152,957 169,698

RAYMOND BARRETTE 1999 262,692 1,278,776 0 0 1,105,000 462,291
Executive Vice President 1998 250,000 217,000 0 0 0 294,175
and CFO 1997 28,846 25,000 0 0 0 28,769
(began November 17, 1997)

TERRY L. BAXTER 1999 262,692 738,853 0 0 1,625,000 475,451
Executive Vice President 1998 247,692 180,000 0 0 931,000 758,588
1997 195,000 200,000 0 0 516,500 70,714

MORGAN W. DAVIS 1999 173,752 667,062 0 0 1,625,000 67,568
Former Executive Officer (d) 1998 247,692 205,000 0 0 1,197,000 52,821
1997 233,462 155,000 0 0 1,475,770 30,458

MICHAEL S. PAQUETTE 1999 144,539 341,368 0 0 858,000 28,356
Senior Vice President and 1998 139,308 94,000 0 0 532,000 30,223
Controller 1997 123,423 97,500 0 0 387,375 19,079

DAVID G. STAPLES 1999 135,077 1,081,313 0 0 520,000 19,489
Vice President 1998 128,769 106,000 0 0 399,000 15,330
1997 121,450 97,500 0 0 0 22,058
==================================================================================================================
</TABLE>

(a) Represents the payment of 1999 regular bonuses as well as 1999 "special"
bonuses relating primarily to the Company's 1999 redomestication to Bermuda
(the "Redomestication"). See "Reports of the Compensation Committees on
Executive Compensation - Human Resources Committee Annual Bonus."
(b) Represents the payment of performance shares during 1999 relating to the
performance periods running from 1997 to 1999 and 1998 to 1999. See
"Reports of the Compensation Committees on Executive Compensation -
Compensation Committee - Long-Term Incentive Awards."
(c) Amounts for 1999, 1998 and 1997 represent principal credited to the
Deferred Benefit Plan, 401(k) Savings Plan matching contributions (which
did not exceed $6,000 per individual), certain director fees and retainers
(those paid by companies for which White Mountains is entitled to board
representation as a result of the Company's sizable ownership position in
such companies) and certain other compensation as described below. The
amounts for 1999, 1998 and 1997, respectively, relating to director fees
and retainers of affiliates include: $71,650, $75,100 and $51,900 for Mr.
Kemp; $22,450, $15,475 and $0 for Mr. Barrette; $41,342, $21,700, and
$20,300 for Mr. Baxter and $21,000, $2,400, and $0 for Mr. Davis. The 1999
and 1998 amounts for Mr. Barrette also include $42,545 and $249,646,
respectively, in reimbursements principally associated with a
Company-sponsored relocation. The 1999 amount for Mr. Davis includes
$21,268 in transportation reimbursements. The 1999 amounts for Messrs.
Barrette and Baxter also include $351,917 in phantom stock awards resulting
from the sale of the mortgage banking assets of White Mountains Services
Corporation ("WMSC"). The 1998 amount for Mr. Baxter also includes $665,000
in incentive compensation as interim Chairman of WMSC.
(d) Mr. Davis was formerly Executive Vice President of White Mountains
Holdings, Inc. which owned the Company's property and casualty insurance
operations. As a result of a sale of a substantial amount of the Company's
property and casualty insurance operations, Mr. Davis ceased to be an
Executive Officer during 1999. The Summary Compensation Table above
reflects Mr. Davis' total compensation for 1999.

<PAGE>

OPTIONS AND WARRANTS

The following table summarizes, for the Named Executive Officers, stock
options and SARs exercised during the Company's latest fiscal year, and the
number and in-the-money value of stock options outstanding as of the end of the
fiscal year.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
As of December 31, 1999
----------------------------------------------------------
Stock options and SARs Number of unexercised In-the-money value of all
exercised during the year ended stock options outstanding stock
December 31, 1999 (a) and SARs (a) options and SARs (a)
------------------------------- ---------------------------- ----------------------------
Shares Value Not Not
Name acquired realized Exercisable exercisable Exercisable exercisable
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
K. Thomas Kemp 2,000 $188,740 0 0 $0 $0
=====================================================================================================================
</TABLE>

(a) No other Named Executive Officers had stock options or SAR's outstanding
during 1999.

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

The following table summarizes the Incentive Plan awards made to the Named
Executive Officers during the latest fiscal year. Such awards consisted entirely
of performance shares. Since 1991, all long-term incentive compensation awards
have been in the form of performance shares.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Number of
performance Performance Estimated future payouts in Shares:
shares period for -------------------------------------
Name awarded (a) payout Threshold Target Maximum
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
K. Thomas Kemp 9,000 3 yrs. 0 9,000 18,000
Raymond Barrette 6,000 3 yrs. 0 6,000 12,000
Terry L. Baxter 6,000 3 yrs. 0 6,000 12,000
Morgan W. Davis 2,000 3 yrs. 0 2,000 4,000
Michael S. Paquette 2,500 3 yrs. 0 2,500 5,000
David G. Staples 2,000 3 yrs. 0 2,000 4,000
====================================================================================================================
</TABLE>

(a) Such performance shares are payable upon completion of pre-defined business
goals and are payable in cash based on the market value of Shares at the
time of payment or Shares. The "Target" performance for the 1999
performance share award is the attainment of a corporate annualized return
on equity ("ROE") of 13% after tax. The determination of ROE is generally
based on the economic value of Shares with dividends reinvested. At an ROE
of 6% or less ("Threshold") the percentage of performance shares payable
will be 0% and at an ROE of 25% or more ("Maximum") the percentage of
performance shares payable will become 200% of Target.

<PAGE>

OTHER COMPENSATION ARRANGEMENTS

Pursuant to the Incentive Plan, under some circumstances such as a "Change
in Control" followed by a termination without cause, constructive termination or
an "Adverse Change" in the Incentive Plan, stock options will generally become
fully exercisable and performance shares will become partially or fully payable.
Such circumstances are more fully described in the Incentive Plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

For corporate travel purposes White Mountains Holdings, Inc. jointly owns
two short-range aircraft with Haverford Utah, LLC ("Haverford"). Messrs. Jack
Byrne, Patrick Byrne and Kemp are principals of Haverford. Both aircraft were
acquired from unaffiliated third parties during 1996. In exchange for
Haverford's 20% ownership interest in the aircraft, Haverford contributed
capital equal to 20% of the total initial cost of the aircraft and pays a pro
rata share of all fixed costs plus the direct operating costs when onboard the
aircraft pursuant to a Joint Ownership Agreement.

White Mountains owns limited partnership investment interests which are
managed by Mr. John Gillespie, a director of the Company.

White Mountains believes that the above transactions were on terms that
were reasonable and competitive.

DEDUCTIBILITY OF COMPENSATION - SECTION 162(M) OF THE INTERNAL REVENUE CODE

Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for certain compensation over $1
million. The Company has determined that approximately 80% of all compensation
paid to the Named Executive Officers during 1999 is expected to be tax
deductible. Effective upon the "Redomestication", the Company will no longer be
entitled to a tax deduction on compensation as the Company is no longer subject
to United States income tax.

REPORTS OF THE COMPENSATION
COMMITTEES ON EXECUTIVE COMPENSATION

The Human Resources Committee and the Compensation Committee (collectively,
the "Committees") are comprised entirely of certain non-employee directors. The
Committees are responsible for developing, administering and monitoring the
executive compensation policies of the Company. White Mountains' salary and
bonus compensation is established by the Human Resources Committee of the Board.
White Mountains' stock based compensation (performance shares, stock options and
warrants) is established by the Compensation Committee of the Board.

White Mountains' executive compensation policies are designed with one goal
in mind - maximization of shareholder value over long periods of time. The
Committees believe that this goal is best pursued by utilizing a
pay-for-performance program which serves to attract and retain superior
executive talent and provide management with performance-based incentives to
maximize shareholder value. Through the compensation program, the Committees
seek to maximize shareholder value by aligning closely the financial interests
of White Mountains' management with those of the Company's shareholders.

The Committees believe that the most appropriate indicator of shareholder
return is the Company's ROE as measured by growth in economic value per Share,
measured with dividends reinvested. The Committees believe that, over long
periods of time, maximizing the Company's ROE will optimize shareholder returns.

The Committees believe that the performance-based compensation of the
Company's key employees should be payable only if the Company achieves truly
superior returns for its shareholders. Therefore, the target of many of White
Mountains' performance-based compensation programs are directly linked to
achievement of an annualized ROE for the Company at least equal to the market
yield available from ten-year United States Treasury notes plus 700 basis
points, or currently approximately 13%. The Committees believe that this return
is a challenging target for the Company in its current form.

<PAGE>

Compensation of White Mountains' management team, including the Named
Executive Officers, consists primarily of three components: base salary, annual
bonus and long-term incentive awards.

HUMAN RESOURCES COMMITTEE

BASE SALARY. Base salary for each Named Executive Officer is established
annually, generally as of March 1. When establishing base salaries of the Named
Executive Officers, the Human Resources Committee considers numerous factors
including: qualifications of the executive; the corporate responsibilities of
the executive; the executive's performance since his or her last salary
adjustment; and, for all executives except the CEO, the recommendations of the
CEO.

ANNUAL BONUS. For 1999 the target annual bonus pool for all officers of the
Company was equal to 50% of eligible base salary at a 13% annual ROE and the
maximum bonus attainable was equal to 100% of eligible base salary at a 20%
annual ROE. When establishing the aggregate size of the annual bonus pool, the
Human Resources Committee considers numerous factors including performance
versus the objectives set forth in the Company's Annual Business Plan, in
particular the Company's financial performance for the latest fiscal year as
measured by ROE, and the recommendations of the CEO. The Human Resources
Committee reviews the Annual Business Plan with management near the beginning of
the year and approves the plan after changes required by the Human Resources
Committee, if any, are made.

After establishing the aggregate size of the annual bonus pool, the Human
Resources Committee then considers the distribution of the bonus pool among the
key employees of the Company. Each participant's allocation of the pool is
determined after considering numerous factors including individual achievements
as compared to objectives included in the Annual Business Plan, the contribution
of such achievements to the Company's overall financial performance, and the
recommendations of the CEO.

The CEO receives annual bonuses, as a percent of his salary in effect at
the time the bonus percentage is determined, equal to the average bonus
percentage received by all officers eligible to participate in the bonus pool.
For 1999, Mr. Kemp received a bonus that was determined using the average bonus
percentage.

For 1999 the Human Resources Committee determined that the financial
results of the Company warranted a bonus pool equal to 50% of aggregate base
salary. The principal factors considered by the Human Resources Committee in
determining the size of the 1999 pool were: (i) the Company's 1999 ROE
performance of 12.1%, as measured by change in economic value per Share, versus
a 13% target ROE (the predominant factor); (ii) the Company's significant
repurchases of its common stock during 1999 at an average price per share less
than its current economic value; and (iii) overall favorable results versus
certain specific objectives contained in the 1999 Annual Business Plan.

SPECIAL BONUS. During 1999 the Human Resources Committee also approved special
bonuses to Messrs. Kemp, Barrette, Baxter, Davis, Paquette and Staples in the
amounts of $1,109,000, $1,146,000, $606,000, $605,000, $269,000 and $1,013,000
which were based primarily on the contributions of these individuals in
accomplishing the Redomestication. The amount of such special bonuses were
determined by the Human Resources Committee.

GORDON S. MACKLIN, Chairman
PATRICK M. BYRNE
HOWARD L. CLARK, JR.
ROBERT P. COCHRAN
GEORGE J. GILLESPIE, III
FRANK A. OLSON
ARTHUR ZANKEL

COMPENSATION COMMITTEE

LONG-TERM INCENTIVE AWARDS. The Incentive Plan provides for granting to
executive officers and certain other key employees of the Company various types
of stock-based incentive awards including stock options and performance shares.

Over the past several years the Company has predominantly used performance
shares in its long-term compensation plans. Performance shares are conditional
grants (payable subject to the achievement of specific financial goals) of a
specified maximum number of Shares, payable generally at the end of a three-year
period or as otherwise determined by the Compensation Committee. Performance
shares are denominated in Shares at market value and are payable in cash, Shares
or a combination thereof at the discretion of the Compensation Committee.

<PAGE>

The Compensation Committee believes that performance share awards made
pursuant to the Incentive Plan are an effective method of providing incentives
for management to strive to maximize shareholder value over the long term. The
Compensation Committee's conclusion is based on the
following factors: (i) such awards vest or are earned over multi-year periods;
(ii) such awards are generally made in the form of Shares or derivatives
thereof, which helps to align the interests of management with those of the
Company's shareholders; and (iii) the Incentive Plan awards made over the last
three fiscal years were linked to the achievement of a 13% ROE over the
applicable performance period.

In 1999 Messrs. Kemp, Barrette, Baxter, Davis, Paquette and Staples were
granted 9,000, 6,000, 6,000, 2,000, 2,500 and 2,000 performance shares,
respectively, by the Compensation Committee. The performance period for such
awards began on January 1, 1999 and will continue through December 31, 2001. The
"target" performance for the 1999 performance share award is the attainment of a
ROE of 13%. The determination of ROE considers the rate of growth of the
economic value of Shares with dividends reinvested. At a "threshold" ROE of 6%
or less the percentage of performance shares payable will be 0% and at a
"maximum" ROE of 25% or more the percentage of performance shares payable will
become 200% of target.

During 1999 Messrs. Kemp, Barrette, Baxter, Davis, Paquette and Staples
had, pursuant to a 1997 grant of performance shares, 10,000, 1,000, 6,000,
6,000, 2,600 and 2,000 performance shares eligible for payout, respectively, on
December 31, 1999 subject to the attainment of a 13% target ROE. During the 1997
to 1999 performance period, the Company attained an ROE of 12.0% as measured by
the change economic value calculated in accordance with the Incentive Plan. In
light of the ROE attained and in consideration of the perceived benefits
resulting from the Redomestication which are not reflected in this return, the
Compensation Committee determined that 100% of such performance shares would
become immediately payable and were paid on October 22, 1999. In determining the
ROE attained, the Compensation Committee adjusted the Company's 1999 performance
for certain long-term expenditures which were accelerated into the current
period in order to provide the Company with increased tax deductible expenses.
The performance share payouts are included in the Summary Compensation Table.

During 1999 Messrs. Kemp, Barrette, Baxter, Davis, Paquette and Staples
had, pursuant to a 1997 grant of performance shares, 10,000, 7,500, 6,500,
6,500, 4,000 and 2,000 performance shares eligible for payout, respectively, on
December 31, 2000 subject to the attainment of a 13% target ROE. During the 1998
to 1999 performance period, the Company attained an ROE of 11.5% as measured by
the change economic value calculated in accordance with the Incentive Plan. In
light of the ROE attained and in consideration of the perceived benefits
resulting from the Redomestication which are not reflected in this return, the
Compensation Committee determined that 100% of such performance shares would
become immediately payable and were paid on October 22, 1999. In determining the
ROE attained, the Compensation Committee adjusted the Company's 2000 performance
for certain long-term expenditures which were accelerated into the current
period in order to provide the Company with increased tax deductible expenses.
The performance share payouts are included in the Summary Compensation Table.

As of October 22, 1999 Mr. Jack Byrne had, pursuant to a 1997 grant of
performance shares, 5,000 performance shares eligible for payout on December 31,
1999 which also became immediately payable and were paid on October 22, 1999.

GORDON S. MACKLIN, Chairman
PARTRICK M. BYRNE
ROBERT P. COCHRAN
FRANK A. OLSON
ARTHUR ZANKEL

<PAGE>

SHAREHOLDER RETURN GRAPH

The following graph shows the five-year cumulative total return for a
shareholder who invested $100 in Shares (New York Stock Exchange symbol "WTM")
on January 1, 1995, assuming re-investment of dividends. Cumulative returns for
the five-year period ended December 31, 1999 are also shown for the Standard &
Poor's 500 Stocks (Property & Casualty) Capitalization Weighted Index ("S&P
P&C") and the Standard & Poor's 500 Stocks Capitalization Weighted Index ("S&P
500") for comparison.

As stated herein, the Company's various compensation plans are based on its
growth in its economic value which is believed to be conservative proxy for its
perceived intrinsic business value. The Company's long-term goal is to maximize
White Mountains' intrinsic business value per Share which will in turn affect
its market value per Share. Management believes that the Company's growth in
intrinsic value over the past five years has exceeded that of its market value.

(TABULAR REPRESENTATION OF LINE CHART)

FIVE-YEAR CUMULATIVE TOTAL RETURN
(value of $100 invested December 31, 1994)

1995 1996 1997 1998 1999

WTM $103.4 $134.1 $170.8 $200.0 $174.1

S&P P&C 135.4 135.4 239.3 222.7 166.0

S&P 500 137.6 137.6 225.6 290.1 351.1

<PAGE>

COMPENSATION PLANS

RETIREMENT PLANS

In 1999 Messrs. Kemp, Barrette, Baxter, Davis, Paquette and Staples
received retirement benefits pursuant to the Deferred Benefit Plan, an unfunded,
nonqualified, defined contribution plan established for the purpose of providing
retirement and postretirement benefits. The amount of annual contributions to
the Deferred Benefit Plan are determined using actuarial assumptions and are
based on the present value of the benefit table figures presented below.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Eligible compensation Gross annual benefit paid as a straight-life annuity
- -------------------------------------------------- ---------------------------------------------------------------
15 years 20 years 25 years 30 years 35 years
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$125,000 $ 24,540 $ 33,137 $ 42,984 $ 52,831 $ 62,678
150,000 29,915 40,387 52,359 64,331 76,303
175,000 35,290 47,637 61,734 75,831 89,928
200,000 40,665 54,887 71,109 87,331 103,553
225,000 46,040 62,137 80,484 98,831 117,178
250,000 51,415 69,387 89,859 110,331 130,803
300,000 62,165 83,887 108,609 133,331 158,053
400,000 83,665 112,887 146,109 179,331 212,553
450,000 94,415 127,387 164,859 202,331 239,803
500,000 105,165 141,887 183,609 225,331 267,053
===================================================================================================================
</TABLE>

Eligible compensation (which includes salary and bonus) is computed as the
average of the five highest paid consecutive years in the last ten years of
service. Participants in the Deferred Benefit Plan may choose between four
investment options for their plan balances including phantom shares. Amounts
credited to the Deferred Benefit Plan accounts of such individuals have been
included in the Summary Compensation Table. During 1999, the Company terminated
the Deferred Benefit Plan and paid-out all account balances to its participants.

Also in 1999 Messrs. Kemp, Barrette, Baxter, Davis, Paquette and Staples
participated voluntarily in the Deferred Compensation Plan, an unfunded,
nonqualified, deferred compensation savings plan. Pursuant to the Deferred
Compensation Plan, executive officers and directors may defer all or a portion
of qualifying remuneration payable by White Mountains. Amounts deferred pursuant
to the Deferred Compensation Plan are included in the Summary Compensation
Table. Participants in the Deferred Compensation Plan may choose between four
investment options including phantom shares for their plan balances. During
1999, the Company terminated the Deferred Compensation Plan and paid-out account
balances to its participants.

At the request of the Board, Messrs. Kemp, Barrette and Baxter deferred
$1,300,000, $975,000 and $845,000 of their 1999 compensation in phantom shares
for a period of no less than one year. These compensation amounts are included
in the Summary Compensation Table.

<PAGE>

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS

The Company notes the following relationships and transactions pertaining
to Messrs. Clark, Cochran, George Gillespie and Zankel who are members of the
Compensation Committee and/or the Human Resources Committee.

Mr. Clark is Vice Chairman of Lehman. Lehman has, from time to time,
provided various services to White Mountains including investment banking
services, brokerage services, underwriting of debt and equity securities and
financial consulting services. The amounts paid or payable by White Mountains to
Lehman during 1999 were not material to either White Mountains or Lehman.

Mr. Cochran is Chairman and CEO of FSA. As of December 31, 1999 White
Mountains had a 26% economic interest in FSA. During 1999, Mr. Kemp served as
the Chairman of FSA's compensation committee which determines Mr. Cochran's
compensation.

Mr. George Gillespie is a partner in CS&M, which has been retained by White
Mountains from time to time to perform legal services. The amounts paid or
payable by White Mountains to CS&M during 1999 were not material to either White
Mountains or CS&M.

White Mountains owns a limited partnership investment interest which is
managed by Mr. Zankel. The amounts paid or payable by White Mountains to
Mr. Zankel during 1999 were not material to either White Mountains or
Mr. Zankel.

White Mountains believes that all the preceding transactions were on terms
that were reasonable and competitive and did not serve to impair the
independence of any of the parties involved. Additional transactions of this
nature may be expected to take place in the ordinary course of business in the
future.

CERTAIN FILINGS UNDER SECTION 16

Pursuant to SEC rules relating to the reporting of changes in beneficial
ownership of the Company, Mr. Macklin failed to file three Form 4's relating to
open market purchases of Shares made during the fourth quarter of 1999. Upon
discovering that no Form 4 filings had been made with respect to the 1999
purchase transactions, Mr. Macklin promptly made all necessary filings in
January 2000.

PROPOSAL 2

APPOINTMENT OF INDEPENDENT AUDITORS

Subject to shareholder approval, the Audit Committee of the Board has
appointed PricewaterhouseCoopers ("PwC") as White Mountains' Independent
Auditors for 2000. Representatives from PwC will attend the 2000 Annual Meeting
and will be provided with the opportunity to make a statement and will be
available to answer appropriate questions.

PwC has served as Folksamerica's Independent Auditors since 1981 and as the
Company's Independent Auditors since 1999.

THE BOARD RECOMMENDS A VOTE FOR PROPOSAL 2 APPROVING THE APPOINTMENT OF PWC
AS WHITE MOUNTAINS' INDEPENDENT AUDITORS FOR 2000.

OTHER MATTERS

MANNER OF VOTING PROXIES

Shares represented by all valid proxies received will be voted in the
manner specified in the proxies. Where specific choices are not indicated, the
Shares represented by all valid proxies received will be voted for the election
of the nominees named earlier in this Proxy Statement as directors and for the
appointment of PwC as Independent Auditors.

<PAGE>

Should any matter not described above be acted upon at the meeting, the
persons named in the proxy card will vote in accordance with their judgment. The
Board knows of no other matters which are to be considered at the 2000 Annual
Meeting.

VOTES REQUIRED FOR APPROVAL

The proposals require a favorable vote of a majority of the votes actually
cast with respect thereto (excluding abstentions and Shares not voted).

INSPECTORS OF ELECTION

First Chicago Trust Company of New York a division of EquiServe, P.O. Box
2500, Jersey City, New Jersey 07303-2500, has been appointed as Inspectors of
Election for the 2000 Annual Meeting. Representatives of First Chicago will
attend the 2000 Annual Meeting to receive votes and ballots, supervise the
counting and tabulating of all votes and ballots, and determine the results of
the vote.

COSTS OF SOLICITATION

The solicitation of proxies will be made primarily by mail; however,
directors, officers, employees and agents of the Company may also solicit
proxies by telephone, telegram or personal interview. Solicitation costs will be
paid by the Company. Upon request, the Company will reimburse banks, brokerage
houses and other custodians, nominees and fiduciaries for their reasonable
expenses incurred in forwarding proxy materials to their principals.

AVAILABLE INFORMATION

The Company is subject to the informational reporting requirements of the
Exchange Act. In accordance therewith, the Company files reports, proxy
statements and other information with the SEC.

THE COMPANY WILL PROVIDE TO EACH PERSON TO WHOM A COPY OF THIS PROXY
STATEMENT IS DELIVERED, UPON REQUEST AND WITHOUT CHARGE, COPIES OF ALL DOCUMENTS
(EXCLUDING EXHIBITS UNLESS SPECIFICALLY REQUESTED) FILED BY THE COMPANY WITH THE
SEC. Written or telephone requests should be directed to the Corporate
Secretary, White Mountains Insurance Group, Ltd., 80 South Main Street, Hanover,
New Hampshire 03755-2053, telephone number (603) 643-1567. Additionally, copies
of all such documents are available at the Company's registered office at
Clarendon House, 2 Church Street, Suite 332, Hamilton, HM 11 Bermuda.

WWW.WHITEMOUNTAINS.COM

All reports, including press releases, SEC filings and other information
for the Company, its subsidiaries and its affiliates are available for viewing
or download at our website.

PROPOSALS BY SHAREHOLDERS FOR THE 2001 ANNUAL MEETING OF SHAREHOLDERS

Shareholder proposals (other than those proposals to nominate persons as
directors) must be received in writing by the Secretary of the Company no later
than December 31, 2000 and must comply with the requirements of the SEC in order
to be considered for inclusion in the Company's proxy statement relating to the
Annual Meeting to be held in 2001.

By Order of the Board of Directors

DENNIS P. BEAULIEU, Corporate Secretary
March 24, 2000

<PAGE>

PROXY

WHITE MOUNTAINS INSURANCE GROUP, LTD.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING MAY 22, 2000

The undersigned hereby appoints K. Thomas Kemp and George J. Gillespie, III,
and each of them, proxies with full power of substitution, to vote all Shares
of the undersigned at the 2000 Annual Meeting of Shareholders to be held May
22, 2000, and at any adjournment thereof, upon all subjects that may properly
come before the meeting including the matters described in the proxy
statement furnished herewith, subject to any directions indicated on the
reverse of this card or below. IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL
VOTE FOR THE ELECTION OF DIRECTORS, FOR THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS AS INDEPENDENT AUDITORS, AND AT THEIR DISCRETION
ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.

Your vote for the Election of Directors may be indicated on the reverse. The
following Directors are being nominated at this meeting for election to terms
ending in the year indicated.
(Change of address/comments)

2001. Steven E. Fass ---------------------------------------
2002. John D. Gillespie ---------------------------------------
2003. Raymond Barrette ---------------------------------------
Howard L. Clark, Jr. ---------------------------------------
Robert P. Cochran ---------------------------------------
Arthur Zankel ---------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card.)

YOUR VOTE IS IMPORTANT! PLEASE SIGN AND DATE ON THE REVERSE SIDE AND RETURN
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR OTHERWISE TO FIRST CHICAGO
TRUST COMPANY OF NEW YORK, A DIVISION OF EQUISERVE, POST OFFICE BOX 8085,
EDISON, NEW JERSEY 08818-9052.

PLEASE RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE SEE REVERSE
SIDE

<PAGE>

/X/ PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE.

This proxy when properly executed will be voted in the manner directed
herein. If no directions are made, this proxy will be voted FOR the Election
of Directors and FOR the Appointment of Independent Auditors.

The Board of Directors recommends a vote "FOR" Proposals 1 and 2.

<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election of / / / / 2. Appointment of / / / / / /
Directors Independent
(see reverse) Auditors

FOR, except vote withheld from the Change of Address / /
following nominee(s): Comments on
Reverse Side
- -------------------------------------

The signer hereby revokes all proxies heretofore
given by the signer to vote at said meeting or any
adjournment thereof.

Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such.

---------------------------------------------------

SIGNATURE(S) DATE
</TABLE>