S&P Revises Ratings Outlook on White Mountains, OneBeacon to Stable

December 7, 2009

Standard & Poor’s Ratings Services has revised its outlook on White Mountains Insurance Group Ltd. (WTM), OneBeacon Insurance Group Ltd. (OB), and the members of OneBeacon Insurance Group (OneBeacon) to stable from negative.

S&P also affirmed its ‘BBB’ counterparty credit ratings on WTM and OB and its ‘A’ counterparty credit and financial strength ratings on OneBeacon. WTM irrevocably and unconditionally guarantees the senior debt of OB’s subsidiary, OneBeacon U.S. Holdings Inc.

In addition, S&P affirmed its ‘BBB-‘ counterparty credit rating on White Mountains Re Group Ltd. (WMRe) and its ‘A-‘ counterparty credit and financial strength ratings on White Mountains Re America (formerly Folksamerica Reinsurance Co.) and Sirius International Insurance Corp. The outlook on these companies remains stable. St&P said it “views these reinsurance subsidiaries as core to WMRe, and the ratings on all of them move in tandem with one another.”

“The outlook revision on OB and OneBeacon is based on the group’s improved underwriting profitability from its core operations, very strong capital adequacy, and stable investment results,” explained credit analyst Sid Ghosh.

S&P noted that “OneBeacon’s GAAP pretax income was strong at $373 million as of Sept. 30, 2009, compared with a pretax loss of $330 million for the same period in 2008. The group’s consolidated GAAP combined ratio also improved to 94.7 percent through Sept. 30, 2009, from 98.1 percent for the same period in 2008. Mitigating some of these favorable factors is OneBeacon’s continued high expense ratio and its geographic concentration in the Northeast U.S.”

Source: Standard & Poor’s – www.standardandpoors.com

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