Folksamerica Ratings Affirmed, Removed from CreditWatch

May 29, 2001

Standard & Poor’s removed from CreditWatch and affirmed its “A-” counterparty credit and financial strength ratings on Folksamerica Reinsurance Co. (FRC). These ratings had been placed on CreditWatch with negative implications on Jan. 19, 2000. The outlook is negative.

The ratings reflect FRC’s extremely strong capital position and good, though modest, business position compared with its larger peers in the U.S. reinsurance marketplace. Mitigating these positive factors is FRC’s marginal operating performance over the last two years.

FRC’s ultimate parent is White Mountains Insurance Group Inc. (WMIG, “BBB+” senior unsecured debt rating on CreditWatch negative), which is in the process of acquiring the CGU Insurance Pool (CGU US).

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