White Mountains Ins. Group Affirmed

Standard & Poor’s Ratings Services affirmed its “BBB-” counterparty credit and senior debt ratings on White Mountains Insurance Group Ltd. and its “A-” counterparty credit and financial strength ratings on Folksamerica Reinsurance Co. (Folksamerica) following WTM’s announcement that it plans to acquire Sirius International Insurance Corp. (Sirius International). S&P also affirmed the “A-” counterparty credit and financial strength ratings on Sirius International. The outlook on all these entities is stable.

Sirius is a global reinsurance company based in Sweden, and is currently a wholly owned subsidiary of the Swiss/Swedish industrial engineering group ABB Ltd. Sirius consists of three operating entities: Sirius International, a global reinsurer writing predominantly short-tail lines of business; Sirius America Insurance Co. (Sirius America), a U.S.-based writer of program business; and Scandinavian Re, a Bermuda-based finite reinsurer, which was placed into run-off in January 2002.

WTM uses acquisitions in addition to organic growth to increase its intrinsic value and build its scale and market presence, and the current ratings and outlook already incorporate this risk. WTM is expected to continue increasing its scale both organically and through acquisitions. The acquisition of Sirius is WTM’s first major foray outside the North American market.

The stable outlook reflects the potential long-term benefits of the Sirius acquisition. Separately, WTM has realized substantial improvements in its operating performance, and is expected to maintain its very strong financial flexibility and liquidity in 2004.