Best and Fitch Comment on Sirius, White Mountains

April 19, 2004

The rating Agencies A.M. Best Co. and Fitch both announced that they are not currently contemplating a change in the ratings of Swedish-based Sirius International Insurance Corporation and its U.S. subsidiary, Sirius America Insurance Company following the completion of their acquisition by Bermuda-based White Mountains Insurance Group Ltd.

Best said its “A” (Excellent) financial strength ratings would, however, “remain under review with developing implications.” The rating agency said it “intends to resolve the under review status by April 20, 2004, and expects to most likely affirm the ratings on both entities at the current level. The financial strength rating of A- (Excellent) of Fund American Reinsurance Company Ltd. (FARe) (Hamilton, Bermuda), which is ultimately owned by White Mountains, is likely to remain under review pending further detailed analysis of its integration with Sirius International.”

In a more detailed announcement, Fitch stated that the acquisition “does not affect Fitch’s ratings on White Mountains or any of its subsidiaries.”

The bulletin noted that “Sirius Insurance Group is a Swedish based international insurance and reinsurance group specializing in property reinsurance and accident and health (A&H) reinsurance. The two primary operating companies in the group are Sirius International Insurance Company, based in Stockholm, and Sirius America Insurance Company, incorporated in Delaware, which wrote net premiums of $4,000,000 and $1,000,000, respectively, in 2003. The group also includes Scandinavian Re, which has been in run-off since January 2002.”

Fitch compared those figures with those of White Mountains, “which wrote $3.1 billion of net premium in 2003, including $2 billion in OneBeacon Insurance Group and $9,000,000 in Folksamerica Reinsurance Company.”

Fitch said it “views the Sirius acquisition as consistent with White Mountains’ strategy of purchasing fundamentally sound companies or operating businesses from sellers that are seeking to exit the insurance business. White Mountains also recently closed on Folksamerica’s acquisition of Sierra Insurance Group, and OneBeacon’s acquisition of Atlantic Specialty Insurance Company (ASIC) from Atlantic Mutual.”

It also noted White Mountains recent announcement that it had entered into an agreement with Berkshire Hathaway Inc. as leaders of “a private investor group to purchase the life and investments business of SAFECO Corp, with the transaction expected to close in the third quarter 2004.”

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