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

White Mountains’ property and casualty insurance and reinsurance operations principally include: (1) OneBeacon Insurance Group, Ltd. (“OneBeacon” or “OB”), a 75%-owned Bermuda-based company which, through its U.S.-based subsidiaries, offers a range of specialty and personal insurance products sold through select independent agents, regional and national brokers, and wholesalers; (2) White Mountains Re Ltd. (“White Mountains Re” or “WMRe”), a wholly-owned Bermuda-based company, which is a global multi-line reinsurance organization that provides reinsurance for property, accident & health, agriculture, aviation and space, casualty and certain other exposures on a worldwide basis through its subsidiaries, Sirius International Insurance Corporation (“WMRe Sirius”) and White Mountains Reinsurance Company of America (“WMRe America”) and; (3) Esurance Holdings, Inc., which writes personal auto insurance directly to customers online and through select online agents, and Answer Financial, Inc., which is an independent insurance agency that sells insurance online and through call centers (collectively, “Esurance”).  White Mountains’ invested assets are managed by White Mountains Advisors LLC (“WM Advisors”), the Company’s wholly-owned investment management subsidiary.

The 2010 Annual General Meeting will be confined to a Member vote on the proposals set forth in this Proxy Statement and on such other matters properly brought before the meeting.

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

NOTICE OF 2010 ANNUAL GENERAL MEETING OF MEMBERS

TO BE HELD MAY 26, 2010

March 29, 2010

Notice is hereby given that the 2010 Annual General Meeting of Members of White Mountains Insurance Group, Ltd. will be held on Wednesday, May 26, 2010 at 12:30 pm Central European Time at the offices of Sirius International Insurance Corporation, Birger Jarlsgatan 57B, SE-113 96 Stockholm, Sweden.  At this meeting you will be asked to consider and vote upon the following proposals:

1)           to elect four of the Company’s directors to Class I with a new term ending in 2013;

2)           to elect the Board of Directors of Sirius International Insurance Corporation, (“WMRe Sirius”) a wholly-owned reinsurance company organised under the laws of Sweden;

3)           to elect the Board of Directors of Scandinavian Reinsurance Company Ltd. (“Scan Re”), a wholly-owned reinsurance company organised under the laws of Bermuda;

4)           to elect the Board of Directors of White Mountains Re Bermuda Ltd., a wholly-owned reinsurance company organised under the laws of Bermuda;

5)           to elect the Board of Directors of White Mountains Life Reinsurance (Bermuda) Ltd. (“WM Life Re”), a wholly-owned reinsurance company organised under the laws of Bermuda;

6)           to elect the Board of Directors of any new non-United States operating subsidiary, as designated by the Company’s Board of Directors;

7)           to approve amendments to, and performance criteria in, the Company’s long-term incentive plan (“LTIP”);

8)           to approve amendments to the terms of the options granted to the Chairman & CEO; and

9)           to approve the appointment of PricewaterhouseCoopers LLP (“PwC”) as the Company’s Independent Registered Public Accounting Firm for 2010.

The Company’s audited financial statements for the year ended December 31, 2009, as approved by the Company’s Board of Directors, will be presented at this Annual General Meeting.

Members of record of common shares on the record date, Monday, March 29, 2010, (1) who are individuals, may attend and vote at the meeting in person or by proxy or (2) that are corporations or other entities, may have their duly authorised representative attend and vote at the meeting in person or by proxy.  A list of all Members entitled to vote at the meeting will be open for public examination during regular business hours beginning on or about April 17, 2010 at the Company’s registered office located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

All Members are invited to attend this meeting.

Members are invited to complete and sign the accompanying proxy card to be returned to White Mountains Insurance Group, Ltd., c/o Computershare, P.O. Box 8069, Edison, New Jersey, 08818-8069, in the envelope provided, whether or not they expect to attend the meeting. Members may also vote their shares by telephone or via the internet in accordance with the instructions on your proxy card.

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

PROXY STATEMENT

This Proxy Statement is being furnished in connection with the solicitation of proxies on behalf of the Company’s Board of Directors (the “Board”) for the 2010 Annual General Meeting of Members (the “2010 Annual Meeting”), to be held on Wednesday, May 26, 2010 at the offices of Sirius International Insurance Corporation, Birger Jarlsgatan 57B, SE-113 96 Stockholm, Sweden. The solicitation of proxies will be made primarily by mail, and the Proxy Statement and related proxy materials will be distributed to registered Members on or about April 9, 2010.

Holders of the Company’s common shares (“Members”), par value $1.00 per share, as of the close of business on Monday, March 29, 2010, the record date, are entitled to vote at the meeting.

You can ensure that your common shares are properly voted at the meeting by completing, signing, dating, and returning the enclosed proxy card in the envelope provided.  Members may also vote their shares by telephone or via the internet in accordance with the instructions on your proxy card. A Member has the right to appoint another person (who need not be a Member) to represent the Member at the meeting by completing an alternative form of proxy which can be obtained from the Corporate Secretary or by notifying the Inspectors of Election (see page 42).  Every Member entitled to vote has the right to do so either in person or by one or more persons authorised by a written proxy executed by such Member and filed with the Corporate Secretary.  Any proxy duly executed will continue in full force and effect unless revoked by the person executing it in writing or by the filing of a subsequent proxy.

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

IMPORTANT VOTING INFORMATION

If you hold your shares through a broker, bank or other financial institution, the U.S. Securities and Exchange Commission (“SEC”) has approved a New York Stock Exchange rule that changes the manner in which your vote in the election of directors will be handled at our upcoming 2010 Annual Meeting of Members, which is now consistent with the manner of voting on non-routine matters.

Members who hold WTM common shares through a broker, bank or other financial institution; receive proxy materials and a proxy card prior to each Annual Meeting. In prior years, if you did not complete your proxy card or transmit your voting instructions before the meeting, your broker was allowed to vote on your behalf on the election of directors and other matters considered to be routine.

A New Rule for Shareholder Voting

Effective January 1, 2010, your broker will no longer be permitted to vote on your behalf on the election of directors unless you provide specific instructions by completing and returning the proxy card or following the instructions provided to you to vote your shares via telephone or the Internet. For your vote to be counted, you now will need to communicate your voting decisions to your broker, bank or other financial institution before the 2010 Annual Meeting on May 26, 2010.

Your Participation in Voting the Shares You Own Is Important

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

More Information Is Available

If you have any questions about this new rule or the proxy voting process in general, please contact the broker, bank or other financial institution where you hold your shares. The SEC has information available on the internet at: www.sec.gov/investor/alerts/votingrules2010.htm  with more information about your voting rights as a shareholder.

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PROPOSAL 1 - ELECTION OF THE COMPANY’S DIRECTORS

THE BOARD OF DIRECTORS

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

At the 2010 Annual General Meeting, Messrs. Berkowitz, Davis and Smith and Ms. Holiday are nominated to be elected to Class I with a term ending in 2013.

The Board recommends a vote FOR Proposal 1 which calls for the election of the 2010 nominees.

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

* Nominated to be elected at the 2010 Annual Meeting to Class I with a term ending in 2013.

All four of the nominees for election at the 2010 Annual Meeting, Messrs. Berkowitz, Davis and Smith and Ms. Holiday, were previously elected by Members.

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

Class I - Term Ending in 2010 (up for re-election)

Bruce R. Berkowitz has been a director of the Company since 2004.  Mr. Berkowitz is the Founder and Managing Member of Fairholme Capital Management, LLC (“Fairholme”), a registered investment adviser, and is a Director of Fairholme Funds, Inc.  Prior to founding Fairholme in 1997, Mr. Berkowitz was a Managing Director of Smith Barney, Inc. and a Senior Portfolio Manager at Lehman Brothers Holdings, Inc.  Over the past five years Mr. Berkowitz has served as a Director of AmeriCredit Corp. (2008-2009), TAL International Group, Inc. (2004-2009), and as a Trustee for the Winthrop Realty Trust (2000-2008).  Mr. Berkowitz possesses extensive financial and investment experience.

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Morgan W. Davis has been a director of the Company since 2006.  Mr. Davis was formerly a Managing Director of OneBeacon from 2001 to 2005 and served in a variety of capacities for White Mountains from 1994 to 2001.  Prior to joining the Company in 1994, Mr. Davis had 21 years of experience in the insurance business, mostly at Fireman’s Fund Insurance Company and INA/Cigna.  Mr. Davis also serves as a director of OneBeacon, Esurance, Answer Financial, Inc. and Montpelier Re Holdings. Mr. Davis has extensive executive and board-level experience gained over the course of his thirty-seven year career in the property and casualty insurance industry.

Edith E. Holiday has been a director of the Company since 2004.  Ms. Holiday formerly served as Operating Trustee for TWE Holdings I and II Trusts from 2002 to 2007.  Ms. Holiday was also the President, Secretary and Treasurer of Comcast TW Holdings, Inc. from 2006-2007.  From 1990 to 1993 Ms. Holiday served as Assistant to the President of the United States and Secretary of the Cabinet.  From 1989 to 1990 she was General Counsel to the United States Treasury Department. Ms. Holiday also holds directorships at Hess Corporation (since 1993), Canadian National Railway Company (since 2001), H. J. Heinz Company (since 1994) and RTI International Metals, Inc. (since 1999) and is a director or trustee of 41 investment companies in the Franklin Templeton Group of Mutual Funds (since 1996).  Ms. Holiday has extensive board-level experience across diverse industries and significant experience with the U.S. Federal government.

Lowndes A. Smith has been a director of the Company since 2003.  Mr. Smith has served as Managing Partner of Whittington Gray Associates since 2001.  Mr. Smith formerly served as Vice Chairman of The Hartford Financial Services Group, Inc., (“The Hartford”) (1989-2001) and President and CEO of Hartford Life Insurance Company (1989-2001).  Mr. Smith also serves as Chairman of the Board of OneBeacon and Symetra Financial Corporation.  Mr. Smith is a director of 72 investment companies in the mutual funds of The Hartford (since 1990).  Mr. Smith has more than 40 years of experience in the insurance industry and broad management and financial experience.

Class II - Term Ending in 2011

Raymond Barrette has served as Chairman and CEO of the Company since January 2007 and has been a director since August 2006.  He previously served as a director of the Company (2000-2005), as President and CEO of the Company (2003-2005), as CEO of OneBeacon (2001-2002), as President of the Company (2000-2001) and as Executive Vice President and Chief Financial Officer of the Company (1997-2000).  Prior to joining the Company in 1997, Mr. Barrette had 23 years of experience in the insurance business, mostly at Fireman’s Fund Insurance Company.  Mr. Barrette is also Chairman of White Mountains Re and Esurance and a director of OneBeacon.  Additionally, Mr. Barrette served as a director for Montpelier Re Holdings, Ltd. (2001-2007).  Mr. Barrette is an actuary and has significant experience in all facets of the property and casualty insurance industry.

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

George J. Gillespie, III has been a director of the Company since 1986 and served as the Company’s Chairman (2003 to 2006).  Mr. Gillespie serves as Special Counsel to the law firm of Cravath, Swaine & Moore LLP (“CS&M”) and was a partner of CS&M from 1963 to 2005.  Mr. Gillespie’s son, John Gillespie, is also a director of the Company.  Mr. Gillespie served as a director for The Washington Post (1974-2005).  Mr. Gillespie possesses long-term knowledge of the Company, and brings legal experience to the Board.

John D. Gillespie has been a director of the Company since 1999. Mr. Gillespie is the founder and Managing Member of Prospector Partners, LLC (“Prospector”) and has been the Chairman and President of Prospector Funds, Inc. since 2007 and a Director of Prospector Offshore Fund (Bermuda) Ltd. since 1997. Mr. Gillespie served as Chairman and President of WM Advisors (2003-2005), as a Managing Director of OneBeacon (2001-2003) and was a director of Symetra Financial Inc. (2004-2007).  Mr. Gillespie also served as a director for Montpelier Re (2004-2005). Prior to forming Prospector, Mr. Gillespie was President of the T. Rowe Price Growth Stock Fund and the New Age Media Fund, Inc.  Mr. Gillespie’s father, George J. Gillespie, III, is also a director of the Company.  Mr. Gillespie possesses extensive financial and investment experience.

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Class III - Term Ending in 2012

Howard L. Clark, Jr. was a director of the Company (1986-1990), an advisor to the Board (1990-1993), and was re-elected as a director in 1993.  Mr. Clark has served as Vice Chairman at Barclays Capital, Inc. (“Barclays”) since 2008.  Prior to joining Barclays, Mr. Clark was Vice Chairman of Lehman Brothers, Inc. (“Lehman”), the broker/dealer subsidiary of Lehman Brothers Holdings (1993-2008), and Chairman and CEO of Shearson Lehman Brothers Holdings Inc. (1990-1993).  Previously, Mr. Clark was Executive Vice President and Chief Financial Officer of the American Express Company.  He is also a director of United Rentals, Inc., Walter Industries, Inc. and Mueller Water Products, Inc. Mr. Clark has extensive board-level experience across diverse industries and extensive executive experience in the financial services industry.

Robert P. Cochran has been a director of the Company since 1994 and serves as its Deputy Chairman.  Mr. Cochran is a founding principal of Financial Security Assurance Holdings, Ltd. (“FSA”) and until his retirement from FSA in July 2009, served as FSA’s CEO from 1990 and as its Chairman and CEO from 1997. Mr. Cochran possesses a broad background of insurance industry management, financial analysis, compensation philosophy and strategy experience.

A. Michael Frinquelli has been a director of the Company since June 2005.  Mr. Frinquelli is co-founder and Manager of Renaissance Fund Advisors, Inc.  Until 2004, Mr. Frinquelli was a general partner of Renaissance Executive Partners, which he co-founded in April 1997. Prior to that, he was a managing director at Merrill Lynch and a managing director at Salomon Brothers.  Mr. Frinquelli also serves as a director for Primus Financial Products, LLC, a wholly-owned subsidiary of Primus Guaranty, Ltd.  Mr. Frinquelli has extensive insurance industry expertise, serving as an insurance industry equity analyst for 33 years.

Allan L. Waters was appointed President and CEO of White Mountains Re in March 2007.  He served as a director of the Company from 2003 to 2004 and was re-elected a director in 2005.  Mr. Waters was the founder and Managing Member of Mulherrin Capital Advisors, LLC, (1998-2007).  Mr. Waters formerly served as Senior Vice President and Chief Financial Officer of the Company (1993-1997), as Vice President and Controller (1990-1993), as Vice President of Finance (1987-1990) and as Assistant Vice President of Finance (1985-1987).  Mr. Waters possesses long-term knowledge of the Company and has significant executive and board-level experience in the property and casualty industry.

CORPORATE GOVERNANCE

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

The Company also has a Code of Business Conduct that applies to all directors, officers and employees in carrying out their responsibilities to, and on behalf of, the Company. No waivers of the Code of Business Conduct were requested of, or granted by, the Board for any director or executive officer during 2009.

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

The Board

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

In fulfilling this responsibility, directors must exercise common sense business judgment and act in what they reasonably believe to be in the best interests of the Company and its Members. Directors are entitled to rely on the honesty and integrity of senior management and the Company’s outside advisors and auditors. However, it is the Board’s responsibility to establish that they have a reasonable basis for such reliance by ensuring that they have a strong foundation for trusting the integrity, honesty and undivided loyalty of the senior management team upon whom they are relying and the independence and expertise of outside advisors and auditors.

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Mr. Barrette serves as Chairman of the Board and as CEO of the Company.  The Board believes that the most effective leadership structure for the Company at the present time is for Mr. Barrette to serve in both roles.  As CEO, Mr. Barrette is  effective at overseeing the complex, decentralized operations of the Company.  By virtue of his broad knowledge of the insurance industry and of his long experience and track record with the Company, the Board believes Mr. Barrette is best suited to preside over the Board and set its agendas. The Board is composed of directors that, together, are knowledgeable and experienced in all aspects of the Company’s business, and the Board is satisfied that the current structure provides strong oversight of the Company’s affairs.

Mr. Cochran, an independent director, serves as Deputy Chairman of the Board.  At each meeting of the Board, Mr. Cochran presides over a separate session of non-management directors without Company management present.

Director Independence

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

The Board notes no relationships (other than being directors or shareholders) with Messrs. Berkowitz, Brouillette, Cochran, Frinquelli and Smith or Ms. Holiday.  The Board notes a relationship with Mr. Clark, as disclosed herein under “Transactions with Related Persons, Promoters and Certain Control Persons”, that it concluded is immaterial and does not impair his independence.  In making its independence determinations, the Board considers all such relationships in light of NYSE standards as well as the attributes it believes should be possessed by independent-minded directors.  Those attributes include the relative impact of the transactions to the director’s personal finances, the perceived degree of dependence by the director or the Company upon the relationship or transactions continuing in the future and whether the transactions were on terms that were reasonable and competitive.  The Board concluded that Mr. Clark’s relationship does not impair his independence.

Board Meetings and Committees; Annual Meeting Attendance

During 2009, the following meetings of the Board were held: four meetings of the full Board, eight meetings of the Audit Committee, five meetings of the Compensation Committee, two meetings of the Nominating and Governance Committee, and two meetings of the Finance Committee.  During 2009, each director attended more than 75% of the aggregate of: (1) the total number of meetings of the Board (held during the period for which he or she has been a director); and (2) the total number of meetings held by all committees of the Board on which he or she served.

Directors are encouraged, but are not required, to attend annual meetings.  All of the Company’s directors were in attendance at the 2009 Annual General Meeting, which was held on June 4, 2009.

Committees of the Board

Nominating and Governance Committee

The primary purposes of the Nominating and Governance Committee are to: (1) identify individuals qualified to become Board members and recommend such individuals to the Board for nomination for election to the Board; (2) make recommendations to the Board concerning committee appointments; (3) develop, recommend and annually review corporate governance guidelines applicable to the Company and oversee corporate governance matters and (4) oversee the evaluation of the Board and management.

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The Nominating and Governance Committee is currently comprised of Messrs. Clark (as Chairman), Brouillette, Cochran and Frinquelli and Ms. Holiday.  The Board has determined that each current member of the Nominating and Governance Committee satisfies applicable NYSE requirements.

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

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

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

Procedures for Nominating Director Candidates.  Member proposals will be eligible for consideration for inclusion in the proxy statement and proxy relating to the Company’s 2011 Annual Meeting of Members pursuant to Rule 14a-8 promulgated under the Exchange Act if all applicable requirements of Rule 14a-8 are satisfied and such proposals are received timely by the Corporate Secretary as outlined below.

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

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Audit Committee

The primary purposes of the Audit Committee are to: (1) assist Board oversight of: the integrity of the Company’s financial statements; the qualifications and independence of the independent auditors; the performance of the internal audit function and the independent auditors; and the Company’s compliance with legal and regulatory requirements; (2) provide an avenue of communication among the independent auditors, management, the internal auditors and the Board; (3) approve certain related or affiliated person transactions and review disclosures thereof, and (4) prepare the Audit Committee Report (which appears on page 32).  In addition, with respect to risk management, the Committee discusses with management the Company’s policies with respect to risk assessment and risk management, including the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures.

The Audit Committee is comprised of Messrs. Smith (as Chairman), Berkowitz, and Frinquelli and Ms. Holiday. The Board has determined that, of the persons on the Audit Committee, at a minimum Mr. Smith meets the requirements of being an Audit Committee Financial Expert as defined in Item 401(h) of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has also determined that each current member of the Audit Committee satisfies applicable NYSE requirements as well as the separate independence standards set forth by the SEC.

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

Compensation Committee

The primary purposes of the Compensation Committee are to: (1) review and make recommendations on director compensation; (2) discharge the Board’s responsibilities relating to the compensation of executives; (3) oversee the administration of the Company’s compensation plans, (and, to the extent the Compensation Committee deems appropriate, the plans of the Company’s major subsidiaries), in particular the incentive compensation and equity-based plans and (4) review and discuss the Compensation Discussion and Analysis with management and prepare the Compensation Committee Report (which appears on page 20).

The Compensation Committee is currently comprised of Messrs. Cochran (as Chairman), Berkowitz, Frinquelli and Smith and Ms. Holiday. The Board has determined that each current member of the Compensation Committee satisfies applicable NYSE requirements.

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

Interlocks and Insider Participation

No member of the Compensation Committee has served as an officer or employee of White Mountains.

Finance Committee

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

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Risk Oversight

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

The Board’s committees are assigned oversight responsibility for particular areas of risk.  For example, the Audit Committee receives semi-annual reports on company-wide risks which encompass operational, financial, legal, compliance, and reputational risks.  The Compensation Committee oversees risk related to executive compensation plans and implementation.  The Finance Committee oversees the risks related to managing the Company’s investment portfolio. It is WTM practice that all directors are invited to attend all Committee meetings and each Committee Chair provides regular updates to the Board regarding Committee activities.

Shareholder Communications

Members, employees and others interested in communicating directly with the Board, any of the Board’s Committees or any individual member of the Board should write to the addressee, c/o the Corporate Secretary, at the address presented under “Available Information” (which appears on page 42).

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Voting Rights of Members

As of March 22, 2010, there were 8,783,411 common shares outstanding.  Members of record of common shares shall be entitled to one vote per common share, provided that if, and so long as, the votes conferred by “Controlled” common shares (as defined below) of any person constitute ten percent (10%) or more of the votes conferred by the outstanding common shares of the Company, each outstanding common share comprised in such Controlled common shares shall confer only a fraction of a vote that would otherwise be applicable according to the following formula:

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

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

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

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

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

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

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

Security Ownership of Certain Beneficial Owners

To the knowledge of the Company, there was no person or entity beneficially owning more than 5% of the common shares outstanding as of March 22, 2010, except as shown below.

(a)   Franklin Mutual Advisers, LLC (“Franklin”) has advised the Company that the common shares it is reported to beneficially own were acquired for investment purposes on behalf of client investment advisory accounts.

(b)   Of the 926,113 common shares which are beneficially owned by Mr. Barrette, (1) 701,717 represent common shares for which full proxy to vote was granted to Mr. Barrette in January 2007 by Mr. Byrne – see note (c) below, (2) 29,000 represent unvested restricted shares granted to Mr. Barrette by the Company in January 2007, and (3) 120,000 represent vested but unexercised stock options. The remaining shares represent common shares over which Mr. Barrette or his wife have both voting and dispositive power.

(c)   Mr. Byrne has, or shares with his spouse, dispositive power over a total of 750,154 common shares of which 44,730 common shares are owned by trusts and charitable foundations in which Mr. Byrne has no pecuniary interest and an additional 3,707 shares are shares in a trust in which Mr. Byrne retains a pecuniary interest.

(d)   Wellington Management Company, LLP (“Wellington”) has advised the Company that the common shares it is reported to beneficially own were acquired for investment purposes on behalf of client investment advisory accounts.

(e)   T. Rowe Price Associates, Inc. has advised the Company that the common shares it is reported to beneficially own were acquired for investment purposes on behalf of client investment advisory accounts.

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Security Ownership of Management

The following table sets forth, as of March 22, 2010, beneficial ownership of common shares by each director, the Named Executive Officers (as defined on page 21) and all other executive officers as a group:

(a)   The common shares shown as beneficially owned by (1) Mr. Barrette and (2) all directors, Named Executive Officers and all other executive officers as a group represent 10.5% and 12.2% of the total common shares outstanding at March 22, 2010, respectively.  No other director or executive officer beneficially owned 1% or more of the total common shares outstanding at that date. Beneficial ownership has been determined in accordance with Rule 13d-3(d)(1) of the Exchange Act.  To the Company’s knowledge, no common shares shown as beneficially owned above have been pledged as security.

(b)   Common shares shown as economically owned (1) include common shares beneficially owned, target unearned performance share and phantom performance share awards, unvested stock option awards and deferred compensation phantom share balances, (2) exclude, in the case of Mr. Barrette, common shares in which he has no pecuniary interest and (3) include, in the case of Mr. John Gillespie, performance shares granted to Prospector, of which Mr. Gillespie is the Managing Member.

(c)   Of the 926,113 common shares which are beneficially owned by Mr. Barrette, (1) 701,717 represent common shares for which full proxy to vote was granted to Mr. Barrette in January 2007 by Mr. Byrne - see “Security Ownership of Certain Beneficial Owners”, (2) 29,000 represent unvested restricted shares granted to Mr. Barrette by the Company in January 2007, and (3) 120,000 represent vested but unexercised stock options. The remaining shares represent common shares over which Mr. Barrette or his wife have both voting and dispositive power.

(d)   Includes 50,000 common shares owned by various funds of Prospector in which Mr. Gillespie is either general manager or investment manager; Mr. Gillespie’s pecuniary interest in such shares is limited to his economic interests in the Prospector funds.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Philosophy

Our executive compensation policies are designed with one primary goal in mind, maximization of shareholder value over long periods of time.  We believe that this goal is best pursued by utilizing a pay-for-performance program that closely aligns the financial interests of management with those of our shareholders and encourages appropriate risk taking.  We accomplish this by emphasizing highly variable long-term compensation that is contingent on performance over a number of years rather than entitlements (such as base salary, pensions and employee benefits).  To that end, the Compensation Committee has established base salaries and target annual bonuses for our executives that tend to be lower than those paid by comparable property and casualty insurers and reinsurers, while granting the bulk of an executive’s target compensation as long-term incentive compensation.

Under our long-term incentive compensation programs, we target sharing with management an aggregate of 13% to 17% of the value added above a risk-free return on our shareholders’ equity.  We take this approach because producing a rate of return equal to a risk free rate does not add value to the capital owners put in the business—our shareholders would be better off putting their money in the bank and avoiding entirely the risk of owning a portion of a business.  We target sharing 13% to 17% because we compete for talent and investment opportunities where such sharing is common.

In the case of our Chairman & CEO, Mr. Barrette, to induce him to re-join the Company and to incent him as an owner, in January 2007 he was granted a package of 200,000 escalating strike price options and 35,000 restricted shares, each of which vests in annual installments over five years.  Mr. Barrette also received a tranche of 15,000 restricted shares that are structured to vest in the event of a change in control prior to January 20, 2012. These grants were intended to be the only equity grants made to Mr. Barrette over the seven years following his January 2007 election as Chairman & CEO.  As discussed below under “Proposed Amendments to CEO Compensation”, the Board is recommending that shareholders approve certain modifications to the terms of Mr. Barrette’s options.

Other than in the case of Mr. Barrette’s inducement grant, we have generally structured our long-term incentive compensation as performance shares, restricted common shares or performance units.  At our parent company, long-term incentive compensation is typically in the form of WTM performance shares and restricted common shares.  Performance shares reward company-wide performance.  The number of WTM common shares earned from a grant of performance shares, which can be from 0x to 2x the target number granted, is tied to our after-tax annual growth in intrinsic business value per share (as defined by the Committee) over the performance cycle.  Performance shares and performance units are typically granted annually, and performance is tied to a three-year period.

Since OneBeacon’s initial public offering in November 2006, its long-term compensation had been structured primarily in the form of OneBeacon performance shares, which reward OneBeacon’s overall performance.  Beginning with the 2009-2011 performance cycle, OneBeacon’s long-term incentives were re-designed with the CEO and CFO receiving half in the form of performance units that are tied to underwriting performance and half in OneBeacon performance shares.  Other OneBeacon executives receive a greater proportion or all of their long-term incentives in performance units. The number of OneBeacon common shares earned from a performance share grant, which can be from 0x to 2x the target number granted, is tied to OneBeacon’s after-tax annual growth in intrinsic business value per share (as defined by the OneBeacon Compensation Committee (as defined below)) over the performance cycle.  The payout earned from a OneBeacon performance unit grant, which also can be from 0x to 2x the target number granted, is tied to OneBeacon’s combined ratio over the performance cycle.

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At our major non-public operating subsidiaries, White Mountains Re and Esurance, long-term incentive compensation is typically in the form of performance units.  Performance units reward the performance of the particular operating group.  The number of units earned at the end of the performance cycle is tied to those elements of performance for which the operating group’s management has primary responsibility.  As an example, because the parent company keeps responsibility for investing the assets of our non-public operating subsidiaries, in calculating performance the operating subsidiaries are credited with a “standard” return on their investible assets.  At WMRe, the number of units earned can be from 0x to 2x the target number granted.  At Esurance, the number of performance units that are earned is calculated such that 10% of the value added over the risk-free hurdle is shared with Esurance management (assuming no forfeitures). In addition, for the most senior non-public operating group executives, including our Named Executive Officers at our wholly owned operating companies, in order to better align their interests with those of our shareholders, we typically denominate a portion of their long-term incentives in WTM performance shares.

Generally, we have set the performance target for a 100% payout of WTM performance shares at roughly 700 basis points above the risk-free rate, a level consistent with the risk premium that the market has demanded for investing in equities.  To establish the risk-free rate, the Committee typically looks to the yield on the 10-year treasury at the beginning of the performance cycle.  In general, no shares are earned if annual growth in intrinsic business value per share is less than the risk-free rate and 200% are earned if performance is 1,400 basis points above the risk-free rate.  We use linear interpolation to determine the payout percentage for results in between.

In order to test our beliefs about the size of the awards we make and their variability, annually the Committee has had management review the public disclosures about compensation made by other property and casualty insurers and reinsurers and assess the amount and variability of their compensation at differing levels of performance.  The results of these reviews have supported the Committee’s view that our compensation programs are appropriately sized and more variable than most other insurers and reinsurers, have fewer fixed elements of compensation and perquisites and do not lead to significant rewards for poor performance as can happen with long-term options granted with a fixed exercise price equal to the market price on the date of grant.

Under our performance share system, at any given time an executive typically has three overlapping performance cycles running.  This approach avoids cliffs that could foster a short-term outlook and also serves as an effective retention tool.  Based on the Company’s poor performance in 2008 no WTM performance shares were earned for the 2006-2008 and 2007-2009 cycles, and the 2008-2010 cycle is also unlikely to have any payout under most reasonable scenarios.  To reflect the loss of retention incentives for key employees, at its February 2009 meeting, the Committee determined to bridge the gap to the next potential long-term incentive payout in early 2012 by issuing restricted common shares to selected executives and increasing the target size of the 2009 annual bonus pool at WTM and WM Advisors.

The Committee believes that the compensation structures that have been developed for the Company and its subsidiaries closely align the financial interests of management with those of our shareholders and encourage appropriate, but not excessive, risk taking. In the case of WMRe, given its exposure to catastrophic events, beginning in 2008 we implemented a catastrophe spreading mechanism with respect to both its performance units and annual bonus.  This mechanism ensures that WMRe is charged with at least 50% of its annual catastrophe load whether or not any catastrophe losses are actually incurred.  Through this mechanism and WMRe’s management of its aggregate exposure to very large catastrophic events through its maximum net financial impact underwriting limit, the Company’s management and the Committee believe that WMRe’s incentive plans are appropriate and do not encourage excessive risk taking.

Our Compensation Process

The Committee is responsible for approving our compensation practices that affect executive officers and it specifically approves all compensation for our executive officers and for any employee with target annual compensation in excess of $1.5 million.  Our CEO annually presents the Committee with his evaluation of our executives, their individual performances, responsibilities and the contributions they made to the Company’s accomplishments over the past year as well as over the last long-term incentive plan cycle and his expectations for the future.  In connection with this evaluation, the CEO presents the Committee with his recommendations for establishing the compensation for these executives for its consideration.  The Committee assesses the performance, responsibilities and contributions of the CEO and sets the compensation of the CEO.

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

Following the OneBeacon initial public offering (the “OB IPO”) in November 2006, the Committee determined that it would fully delegate to the OneBeacon Compensation Committee (the “OneBeacon Committee”) authority for the compensation of OneBeacon’s officers, including those who might be Named Executive Officers of the Company.  Accordingly, compensation actions for OneBeacon personnel following the date of the OB IPO (including new annual and long-term incentives and approval of payouts on existing annual and long-term incentives) have been taken by the OneBeacon Committee (which is currently comprised of Lowndes Smith (Chair), Raymond Barrette, Lois Grady and Kent Urness) and, to the extent necessary to comply with applicable regulations, a subcommittee that excludes Mr. Barrette.

Compensation for 2009

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

Long-Term Incentive Compensation

CEO.  Mr. Barrette did not receive any new long-term incentive compensation grants in 2009. In January 2009, a portion of his inducement grant described above vested.  He vested in 7,000 restricted common shares and 40,000 options to purchase common shares.  The exercise price of the options was $704 per share on the date of vesting and increases at a rate of 5% per year less dividends until exercised.

Named Executive Officers.  In the case of Messrs. Foy, Campbell and Waters, in determining the amount of new long-term incentive compensation grants for 2009, the Committee assessed each executive’s scope of authority and ability to impact the success of the Company.  In addition, in designing the structure of the 2009 incentive compensation grants, the Committee considered that, as a result of the impact of the 2008 financial crisis, there was likely to be no payout of WTM performance shares for the 2006-2008 through 2008-2010 performance cycles. Based on the Committee’s general experience and the recommendation of the CEO, the Committee established a grant level that it believed was appropriate to reflect each such executive’s expected contribution to the Company over the next performance cycle.  And, given the expected three-year period without any WTM performance share payouts, as a retention tool, the Committee structured a portion of the usual WTM performance share grants as restricted common shares.  Mr. Miller’s level of compensation was established by the OneBeacon Committee.

For each recipient of a WTM performance share grant for the 2009-2011 performance cycle, the Committee established 10% annual growth in intrinsic business value per share as the performance target that would result in a payout of 100% of the target shares.  Annual growth of 3% or less would result in a payout of 0% and annual growth of 17% or more would result in a payout of 200%. The targets were consistent with the Company’s compensation philosophy described above.  To measure growth in intrinsic business value per share, the Committee looks to growth in economic value per share (weighted 50%) and growth in adjusted GAAP book value per share (weighted 50%), in each case including dividends.

David Foy.  Mr. Foy has been the CFO of the Company since 2003.  Based on the Company’s performance over the 2007-2009 performance cycle, there was no payout of WTM performance shares and Mr. Foy received $0 from this performance cycle.

Mr. Foy was granted 9,000 WTM performance shares for the performance cycle from 2009-2011 and 9,000 restricted common shares.  The grant date value was approximately $3.5 million. The number of performance shares that will be earned will be determined after the end of 2011 based on the Company’s performance over the cycle compared to the target described above.

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Reid Campbell.  Mr. Campbell has been a Managing Director of White Mountains Capital since 2004 and has served in a variety of financial management positions with the Company since 1994.  Based on the Company’s performance over the 2007-2009 performance cycle, there was no payout of WTM performance shares and Mr. Campbell received $0 from this performance cycle.

Mr. Campbell was granted 6,000 WTM performance shares for the performance cycle from 2009-2011 and 5,500 restricted common shares.  The grant date value was approximately $2.2 million. The number of performance shares that will be earned will be determined after the end of 2011 based on the Company’s performance over the cycle compared to the target described above.

Allan Waters.  Mr. Waters has been the CEO of White Mountains Re since 2007.  In addition, from time to time Mr. Waters takes on responsibility for certain projects at the Company.  Based on the Company’s performance over the 2007-2009 performance cycle, there was no payout of WTM performance shares and Mr. Waters received $0 from WTM performance shares for this performance cycle.  The payout of Mr. Waters’ WMRe performance units is calculated excluding any net adverse reserve development on old reserves through the end of 2008.  As a result, based on WMRe’s performance for the 2007-2009 performance cycle excluding net adverse development on old reserves, which was an annualized after-tax, levered underwriting return on deployed capital (“uroc”) of 13.8%, Mr. Waters received a payout of 111% of the WMRe units granted to him for the 2007-2009 cycle at a value of $1,472 per unit, which equaled approximately $4.2 million.

Mr. Waters was granted 2,630 WMRe performance units and 3,950 WTM performance shares for the performance cycle from 2009-2011, and 1,200 restricted WTM common shares.  The grant date value was approximately $3.6 million.   The performance target for the WMRe units is an annual 11% uroc, with a uroc of 4% or less resulting in no payout and a uroc of 18% or more resulting in a 200% payout.  The number of performance shares and units that will be earned will be determined after the end of 2011 based, respectively, on the Company’s and WMRe’s performance over the cycle compared to the targets described above.

T. Michael Miller.  Mr. Miller has been the CEO of OneBeacon since 2005.  For the 2007-2009 OneBeacon performance share cycle, based on annual growth in adjusted book value per share of 7% over the cycle, the OneBeacon Committee approved a payout of 14% of the OneBeacon performance shares originally granted.  This resulted in a payout of $0.3 million to Mr. Miller.  In addition, Mr. Miller had a $3 million retention award that vested in February 2010; however, the OneBeacon Committee reduced the payout by $0.3 million to offset the amount paid to Mr. Miller for the 2007-2009 OneBeacon performance share cycle.

The OneBeacon Committee granted Mr. Miller 25,000 OneBeacon performance units and 117,536 OneBeacon performance shares for the 2009-2011 performance cycle.  The grant date value was approximately $3.9 million. The number of performance units and performance shares that will be earned will be determined after the end of 2011 based OneBeacon’s performance over the cycle compared to the targets described below.  The performance target for the performance units is 95% average adjusted combined ratio, with a combined ratio of 99% or more resulting in no payout and a combined ratio of 91% or less resulting in a 200% payout.  The OneBeacon performance units have a fixed value of $100 per unit.  For the performance shares, the OneBeacon Committee set 12% annual growth in book value per share as target performance, with a range of 5% to 19%.

Base Salary

We pay our executive officers salaries that we believe to be below-market. In 2008, we limited base salaries to a maximum of $500,000, which was the salary each of our Named Executive Officers received, other than Mr. Campbell, who received a salary of $450,000.  No changes to base salaries of the Named Executive Officers have been made since that time.

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Annual Incentive Bonuses

We provide annual bonus opportunities to our executive officers.  Each Named Executive Officer participates in the annual bonus pool of his respective business unit.  As discussed above, to address the loss of retention incentives for key executives resulting from the impact of the 2008 financial crisis, the Committee doubled the size of the target bonus pool for 2009 at the WTM level.  No other changes that affect Named Executive Officers were made to the 2009 bonus programs.  The annual bonus target for each of Messrs. Barrette, Foy and Campbell was equal to 100% of his base salary and for Messrs. Waters and Miller was 50% and 75% of base salary, respectively.  The aggregate bonus pool size for each business unit could range from 0% to 200% of target, depending upon performance.  Individual bonuses can vary widely around the pool average based on individual performance and no cap (other than the size of the pool) applies to any single individual. Typically, the head of a business unit receives the average bonus percentage applicable to his business unit.

For Messrs. Barrette, Foy and Campbell, their annual incentive bonuses are designed to reward company-wide performance.  Based on the Company’s performance in 2009, the Committee awarded a bonus pool of 200% of target, and each of them received a bonus of $1,000,000.

For our operating subsidiaries (including for our Named Executive Officers at operating subsidiaries), we design our annual incentives to reward performance of the applicable subsidiary operating group.

For White Mountains Re, including for Mr. Waters, the performance objective was the uroc.  Based on a uroc of 14.7% compared to the target of 11%, the bonus pool would have been 153%.  The awarded pool was increased to 170% to reflect the successful efforts by WMRe to return substantial capital to the parent company during 2009 through the reorganization of WMRe Bermuda as a branch of WMRe Sirius.  As CEO, Mr. Waters received the pool average of 170%, or $425,000.

For OneBeacon in 2009, including for Mr. Miller, the primary performance objective required to achieve a bonus pool of 100% of target was the achievement of a combined ratio of 95% or better.  Based on OneBeacon’s performance, including the achievement of a 94.4% combined ratio, the OneBeacon Committee awarded Mr. Miller a cash bonus of $468,800, which equaled 125% of target and was the same as the overall pool percentage.

2010 Compensation Actions

In February 2010, the Committee and the OneBeacon Committee made new long-term incentive grants to and established annual bonus target levels for the Named Executive Officers based on the same factors described above with respect to grants made in 2009.   Prior to 2009, long-term incentive compensation for White Mountains executives (other than operating company executives) was typically comprised solely of WTM performance shares.  This year, the Committee granted 65% of the target shares as performance shares and 35% as restricted shares vesting on December 31, 2012.  This is expected to have the effect of moderating the volatility of the payouts and of encouraging long-term share ownership in the Company.  In addition, for the Named Executive Officers at the WTM level (Messrs. Barrette, Foy and Campbell), the Committee established target annual bonuses of 75% of salary.  The Committee reduced the target amount of the new long-term incentive compensation grants for Messrs. Foy and Campbell by the amount of the increase in their target annual bonus compared to the 50% target from 2008.  The Committee took this action to moderately increase the percentage of total compensation provided by annual incentives.  However, the bulk of each Named Executive Officer’s compensation remains based on the long-term performance of the Company.

For each recipient of a WTM performance share grant for the 2010-2012 performance cycle, the Committee established 11% annual growth in intrinsic business value per share as the performance target that would result in a payout of 100% of the target shares.  Annual growth of 4% or less would result in a payout of 0% and annual growth of 18% or more would result in a payout of 200%. To measure growth in intrinsic business value per share, the Committee looks to growth in economic value per share (weighted 50%) and growth in adjusted GAAP book value per share (weighted 50%), in each case including dividends.

In addition, in 2010 the Committee adopted a clawback policy applicable to bonuses and long-term incentive awards.  If the Company is required to restate any financial statement included in an SEC filing as a result of an employee’s misconduct, the Board may, without prejudice to any other remedies available to the Company, seek reimbursement of any bonus or long-term incentive award received by such person that relates in whole or in part to any period for which such financial statements were restated.  If the misconduct was fraud, then in addition to other actions, the Board mandatorily will seek such reimbursement.

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Proposed Amendments to CEO Compensation

In late 2009 and early 2010, the Committee reviewed Mr. Barrette’s compensation and the incentives created by his options.  Given that the options are deeply out of the money and subject to continuing exercise price increases, the Committee determined that the existing incentives are no longer appropriate. Mr. Barrette and the Committee have agreed to amend the terms of the options, subject to the approval of the Company’s shareholders.  The proposed amendments, which are discussed in more detail on page 40 of this proxy statement, are as follows:

·     Extend the term of the options by three years to January 20, 2017

·     Freeze the exercise price at $742, the exercise price on February 24, 2010 and more than double current stock price

·     Extinguish 75,000 of the 200,000 options

·     Limit the potential in-the-money value of the options in excess of $100 million to 50% of the amount in excess of $100 million

In addition, the Committee determined to amend the vesting terms of the tranche of 15,000 restricted shares that were to vest if there was a change in control prior to January 20, 2012 so that those shares time vest in three equal annual installments beginning on January 20, 2013.

The Committee believes that these modifications are appropriate and in the best interest of the Company’s shareholders.

Other Elements of Compensation

Retirement Benefits

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

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

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

Perquisites

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

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

Our Named Executive Officers also participate in our other benefit plans on the same terms as our other employees.  These plans include medical and health insurance, company paid life insurance (which is currently capped at $150,000 in coverage at our parent company) and charitable gift matching.

Certain Board Fees

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

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Employment and Severance Agreements; Change in Control

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

At our parent company, severance benefits, if any, are determined by the Committee in its sole discretion.  At our operating subsidiaries, our Named Executive Officers participate in the severance plans, if any, generally applicable at those companies.

If any of our most senior executives were to retire from the Company, we generally will consider entering into a one to three year consulting agreement with the executive that would permit the executive to earn some or all of such executive’s long-term incentive compensation then outstanding and would enable the Company to ensure a smooth transition, to receive a non-compete/non-solicit from the executive and to retain access to valuable knowledge, talents and relationships.

While the Company has no employment or severance agreement with Mr. Barrette, pursuant to the terms of his inducement grant discussed above under “Philosophy”, if Mr. Barrette is terminated without cause, any of these grants that are outstanding but unvested at that time would vest in such circumstance.

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

The stock option and restricted share grants made to Mr. Barrette include provisions pursuant to which such grants vest upon the occurrence of a change in control.  While as described above the Company typically has “double-trigger” change in control provisions in its long-term incentive plans, the Committee determined that, in light of the design of Mr. Barrette’s grants (principally stock options with an escalating exercise price set initially well above the current market price) and as an inducement to Mr. Barrette, immediate vesting upon a change in control was appropriate.

Tax Considerations

As a Bermuda-domiciled company, we do not receive a tax deduction for compensation paid to employees of White Mountains Insurance Group, Ltd. and, accordingly, the limitation of Section 162(m) of the Internal Revenue Code does not impact compensation paid to our Named Executive Officers who are employees of non-U.S. companies (Messrs. Barrette, Foy and Waters).  However, in the case of Named Executive Officers who are employees of subsidiaries that are organized in the United States (Messrs. Miller and Campbell), Section 162(m) would limit the deductibility of their compensation to $1,000,000 per individual to the extent that such compensation is not “performance-based” as defined in Section 162(m).  The Company is cognizant of Section 162(m) and generally seeks to structure its long-term incentive programs to permit the deductibility of the bulk of such compensation paid to these Named Executive Officers.  However, the Committee may approve compensation that will not meet the Section 162(m) requirements if, in the Committee’s judgment, structuring compensation in such manner better promotes the Company’s interests (such as with a grant of restricted shares).

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Compensation Committee Report

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

Robert P. Cochran, Chairman

Bruce R. Berkowitz

A. Michael Frinquelli

Edith E. Holiday

Lowndes A. Smith

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Presentation Note:  This year, the Securities and Exchange Commission revised the presentation requirements for the Summary Compensation Table and Director Compensation Table.  The rules now require that the value of stock and option awards be shown in the year of grant at the grant date fair value.  Prior years have been restated in accordance with this new rule.  Previously, the SEC had required that the aggregate dollar amount expensed for accounting purposes for all outstanding awards be shown on these tables.  Therefore, the disclosures in this year’s Proxy Statement are not comparable to the disclosures in previous Proxy Statements.

Summary Compensation Table

The following table presents compensation earned during 2009, 2008 and 2007 by the Company’s CEO, CFO and its three other most highly compensated executive officers (collectively, the “Named Executive Officers”).

(a)          Represents annual incentive bonuses earned for the years ended December 31, 2009, 2008 and 2007.  Mr. Miller’s amount in 2009 also includes a retention bonus of $2,741,159 paid in February 2010.  See “Compensation Discussion and Analysis”.

(b)          On January 20, 2007, Mr. Barrette was granted 35,000 restricted shares with a grant date market value of $20,164,550 that vest in five equal annual installments beginning on January 20, 2008.  Mr. Barrette was also granted 15,000 restricted shares with a grant date market value of $8,641,950 that would vest in the event of a change in control of the Company before January 20, 2012.

(c)          On January 20, 2007, Mr. Barrette was granted 200,000 seven-year options that vest in five equal annual installments beginning on January 20, 2008.  The options had an initial exercise price of $650 per share that escalates each year by 5% less the annual regular dividend rate.  Under applicable SEC rules, the Summary Compensation Table is required to reflect stock awards at the grant date fair value in accordance with ASC Topic 718, not the current fair value.  As of December 31, 2009, the exercise price was $736.47 and the current fair value of Mr. Barrette’s options was approximately $5.1 million.  For a discussion of the assumptions used in calculating the grant date fair value of the awards under ASC Topic 718, see Note 11 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on February 26, 2010.

(d)          For Mr. Foy, the amounts represent the grant date market value of WTM performance shares granted in 2009, 2008 and 2007 and WTM restricted shares issued in 2009.  For Mr. Waters, the amounts represent the grant date market value of WTM phantom performance shares granted in 2009 and 2008 and WTM restricted shares issued in 2009.  For Mr. Miller, the amounts represent the grant date market value of OB performance shares granted in 2009, 2008 and 2007 and 25,600 OB restricted stock units (“RSUs”) granted in 2008.  In connection with the OneBeacon IPO, Mr. Miller’s WTM performance shares outstanding with respect to the 2005-2007 and 2006-2008 performance cycles were cancelled in 2007.  The cancelled WTM performance shares were replaced with grants of 68,700 OB performance shares for a one-year 2007 performance cycle with a grant date market value of $1,916,730 and 75,570 OB performance shares for a two-year 2007-2008 performance cycle with a grant date market value of $2,108,403. At the date of grant, the OB performance shares for the 2007 and 2007-2008 performance cycles had the same value as the WTM performance shares that were cancelled.  For Mr. Campbell, the amounts represent the grant date market value of WTM performance shares granted in 2009, 2008 and 2007 and WTM restricted shares issued in 2009 and 2007.  For all Named Executive Officers, at a maximum payout, the grant date fair value of the performance share awards would be 200% of the amounts included in the table.  See “Grants of Plan Based Awards” and “Outstanding Equity Awards at Fiscal Year End.”

(e)          Following the payment of a $2.03 extraordinary dividend by OneBeacon in 2008, the OneBeacon Compensation Committee reduced the exercise price of all outstanding option awards by the amount of the extraordinary dividend.  For Mr. Miller, the incremental fair value of the award modification calculated under ASC Topic 718 was $77,791.  See “Outstanding Equity Awards at Fiscal Year End.”

(f)         Amount represents WMRe performance units Mr. Waters earned for the 2007-2009 performance cycle and OB performance units Mr. Miller earned for the 2006-2008 and 2005-2007 performance cycles.  Performance units are incentive awards that are payable upon completion of pre-defined business goals that are settled in cash.

(g)          Represents the aggregate change in the present value of the accumulated benefit under a tax-qualified defined benefit pension plan for 2009, 2008 and 2007.  See “Pension Benefits.”

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

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All Other Compensation

The following table presents a breakout of “All Other Compensation” included in the Summary Compensation Table for 2009, 2008 and 2007:

(a)         Represents director fees paid to Mr. Foy by Symetra Financial Corporation.

(b)         For Company aircraft, amounts represent the aggregate incremental cost to the Company that is computed based upon a direct cost per hour multiplied by the number of hours of use.  For chartered flights, the incremental cost to the Company was the actual cost of the flight.

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Grants of Plan-Based Awards

The following table presents grants of plan-based awards granted, except as otherwise noted, under the White Mountains Long-Term Incentive Plan (the “WTM Incentive Plan”) to the Named Executive Officers during 2009.

(a)          On February 25, 2009, Mr. Waters was granted 2,630 WMRe performance units for the 2009-2011 performance cycle granted under the White Mountains Re Incentive Plan.  Each unit is initially valued at $1,000 and compounds in value based on White Mountains Re’s uroc during the performance period.  A uroc of 4% or less (Threshold) would result in no payout.  A uroc of 11% would result in a target payout of 100%.  A uroc of 18% or more (Maximum) would result in a 200% payout.  Payouts for results in between are determined by linear interpolation.

(b)          On February 24, 2009, Mr. Miller was granted 25,000 OB performance units for the 2009-2011 performance cycle granted under the OneBeacon Incentive Plan.  Each unit has a fixed value of $100. An OB adjusted combined ratio of 99% or more (Threshold) would result in no payout.  An adjusted combined ratio of 95% would result in a target payout of 100%.  An adjusted combined ratio of 91% or lower (Maximum) would result in a 200% payout.  Payouts for results in between are determined by linear interpolation.

(c)          On February 25, 2009, Messrs. Foy, Waters and Campbell were granted WTM performance shares for the 2009-2011 performance cycle.  Mr. Waters’ grant was granted under the White Mountains Re Incentive Plan.  Growth in WTM’s intrinsic business value per share of 3% or less (Threshold) would result in no payout.  Growth in intrinsic business value per share of 10% would result in a target payout of 100%.  Growth in intrinsic business value per share of 17% or more (Maximum) would result in a payout of 200%.  Payouts for results in between are determined by linear interpolation.

(d)          On February 24, 2009, Mr. Miller was granted OB performance shares for the 2009-2011 performance cycle granted under the OneBeacon Incentive Plan.  Growth in OB’s intrinsic business value per share of 5% or less (Threshold) would result in no payout.  Growth in intrinsic business value per share of 12% would result in a target payout of 100%.  Growth in intrinsic business value per share of 19% or more (Maximum) would result in a payout of 200%.  Payouts for results in between are determined by linear interpolation.

(e)   On February 25, 2009, Messrs. Foy, Waters and Campbell were granted restricted shares that vest on December 31, 2010.

(f)            Represents the grant date fair value (based on a market price of $194.50 for White Mountains and $11.55 for OneBeacon) as determined in accordance with ASC Topic 718 without regard to forfeitures.  Assuming a maximum 200% payout, the grant date fair value of the performance shares granted to Messrs. Foy, Waters, Miller and Campbell would be $3,501,000, $1,536,550, $2,715,082 and $2,334,000.

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Outstanding Equity Awards at Fiscal Year-End

The following table presents outstanding equity awards under the WTM Incentive Plan, except as otherwise noted, to the Named Executive Officers as of December 31, 2009.