Fitch Upgrades IFS Ratings of Sirius Group to ‘A’

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded the Insurer Financial Strength (IFS) ratings of Sirius International Insurance Group, Ltd.'s (Sirius Group) operating subsidiaries, Swedish-based Sirius International Insurance Corporation (Sirius International) and U.S.-based Sirius America Insurance Company (Sirius America), to 'A' from 'A-'. The Rating Outlook is Stable. All other ratings of White Mountains Insurance Group, Ltd. and its subsidiaries (White Mountains) are not affected by this action and were most recently affirmed with a Stable Outlook by Fitch on Aug. 7, 2012.

The rating action follows a periodic review by Fitch of the regulatory environment in Sweden with respect to reinsurance companies, and Fitch's updated belief that the existence of a Special Register under the Swedish Insurance Business Act provides additional protections for reinsured obligations that had not been previously reflected in the rating. Under the Special Register, Swedish reinsurers are to set aside certain assets to the benefit of reinsured obligations, giving them a degree of effective priority over other obligations, in Fitch's opinion. In most regulatory jurisdictions, including Europe and the U.S., reinsurance obligations are not afforded priority.

Under Fitch's ratings methodologies, priority afforded an obligation typically results in a one notch ratings benefit, since such obligations would be expected to recover higher amounts in the event of default or insolvency compared to an obligation that is not afforded priority.

The upgrade was also applied to Sirius International's wholly owned New York-based subsidiary, Sirius America, which receives stop-loss and other capital support from Sirius International, and is rated on a group basis.

See the Fitch Rating Action Commentary dated Aug. 7, 2012 on White Mountains for additional details, including a summary of areas of sensitivity and triggers that could result in a future upgrade or downgrade of the ratings.

Fitch upgrades the following ratings with a Stable Outlook:

Sirius International Insurance Corporation

Sirius America Insurance Company

--IFS to 'A' from 'A-'.

Fitch currently rates White Mountains and its subsidiaries as follows:

White Mountains Insurance Group, Ltd.

--Issuer Default Rating (IDR) 'BBB+'.

OneBeacon U.S. Holdings, Inc.

--IDR 'BBB+';

--$270 million 5.875% due May 15, 2013 'BBB'.

Sirius International Group, Ltd.

--IDR 'BBB+';

--$400 million 6.375% due March 20, 2017 'BBB';

--$250 million perpetual non-cumulative preference shares 'BB+'.

OneBeacon Insurance Group and Their Members:

Atlantic Specialty Insurance Company

Camden Fire Insurance Association (The)

Employers' Fire Insurance Company (The)

Essentia Insurance Company

Homeland Insurance Company of New York

Northern Assurance Company of America (The)

OneBeacon America Insurance Company

OneBeacon Insurance Company

OneBeacon Midwest Insurance Company

Pennsylvania General Insurance Company

Traders & General Insurance Company

--IFS 'A'.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Sept. 19, 2012);

--'Fitch Affirms White Mountains' Ratings' (Aug. 7, 2012).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=688011

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Fitch Ratings
Primary AnalystBrian C. Schneider, CPA, CPCU, ARe
Senior Director
+1-312-606-2321
Fitch, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary AnalystGretchen K. RoetzerDirector
+1-312-606-2327
or
Committee ChairpersonR. Andrew Davidson, CFA
Senior Director
+1-312-368-3144
or
Media RelationsBrian Bertsch+1-212-908-0549
[email protected]

Source: Fitch Ratings