Tester 'll Never " Satisfied "

The affirmation of the ratings on White Mountains and its subsidiaries follows today's announcement of the company's planned reorganization, whereby White Mountains Re Bermuda Ltd. (WMRe Bermuda) (Hamilton, Bermuda) will be contributed to Sirius, with its business and infrastructure transferred to Sirius' newly established Bermuda branch, and White MountainsReinsurance Company of America's (WMRe America) (New York, NY) property quota share to WMRe Bermuda will be novated to Sirius. This planned reorganization and ongoing efforts by management to modify the capital structure throughout the organization are expected to enhance financial flexibility, improve near-term liquidity at the parent level and reduce financial leverage on a consolidated basis.

Offsetting these positive factors is the longer-term potential of a reduced capacity for distributions from Sirius to support parental and affiliate needs, given the expected reduction in Sirius' risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and Sirius' assumption and guaranty of select higher risk and higher volatility businesses of WMRe Bermuda, WMRe America and other entities. As such, A.M. Best will be monitoring medium-term and longer-term parent level liquidity. An additional offset includes management's appetite for seeking higher returns by entering higher risk and higher volatility businesses that have required support and are expected to require future support.


The stable outlook for White Mountains and its subsidiaries (excluding Sirius) takes into account A.M. Best's expectation that management will maintain sufficient liquidity at the parent level and maintain adequate capital on a consolidated basis. In addition, A.M. Best expects management to continue its efforts to reduce financial leverage both on a consolidated basis and at intermediate holding company, OneBeacon Insurance Group, Ltd. (OneBeacon, Ltd.) (Hamilton, Bermuda) [NYSE: OB]. Also, White Mountains' regulated subsidiaries are expected to maintain sufficient risk-adjusted capital levels.

White Mountains is globally engaged, through its subsidiaries and affiliates, in property/casualty insurance and reinsurance activities. White Mountains' primary business segments include OneBeacon, White Mountains Re and Esurance. White Mountains also has an investment advisory business, as well as variable annuity guaranty reinsurance and weather derivatives businesses, both of which are in run-off