A.M. Best Affirms Ratings of White Mountains Insurance Group Ltd., Its Subsidiaries and OneBeacon In


A.M. Best Affirms Ratings of White Mountains Insurance Group Ltd., Its Subsidiaries and OneBeacon Insurance Group, Ltd.

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a" of Atlantic Specialty Insurance Company (New York, NY) and its three reinsured affiliates, collectively referred to as OneBeacon Insurance Group (OneBeacon).

At the same time, A.M. Best has affirmed the ICRs of "bbb" and debt ratings of OneBeacon's publicly traded parent, OneBeacon Insurance Group, Ltd. (OneBeacon Ltd.) (Hamilton, Bermuda) (NYS: OB) , and its intermediate holding company, OneBeacon U.S. Holdings, Inc. (OneBeacon U.S.).

Concurrently, A.M. Best has affirmed the ICR of "bbb" of the group's ultimate parent, White Mountains Insurance Group, Ltd. (White Mountains) (Hamilton, Bermuda) (NYS: WTM) . The outlook for all the above ratings is stable.

Additionally, certain indirect subsidiaries of OneBeacon Ltd. (containing the group's run-off business) were placed under review in October 2012, as a result of their planned sale to Armour Group Holdings Limited (Amour). Certain of these companies remain under review with negative implications pending completion of the sale. The ratings of the remaining companies have been withdrawn, as they have been merged into affiliates. (Please see below for a detailed listing of the companies and ratings.)

The affirmation of OneBeacon's ratings reflects its sound level of risk-adjusted capitalization and strong earnings derived from its generally profitable underwriting performance and solid investment earnings. The ratings also consider the financial flexibility of OneBeacon U.S. and OneBeacon Ltd.

These positive rating factors are partially offset by the historical adverse development of the loss reserves of the run-off business, the payment of significant shareholder dividends, which have constrained growth in surplus, and the elevated level of equity investments, which while well-managed, adds volatility to the group's earnings and balance sheet. In addition, A.M. Best remains somewhat concerned by the risk inherent in pursuing a more concentrated business strategy following the sale of OneBeacon's personal lines and standard commercial lines businesses. However, A.M. Best's concern with the less-diversified strategy is significantly offset by the profitability of OneBeacon's specialty business.

While the ratings for OneBeacon are stable, future positive rating actions may result from continued strong underwriting and operating performance. However, negative rating actions could result if the group's underwriting and operating performance falls markedly short of A.M. Best's expectations or there is a weakening of its overall risk-adjusted capitalization.

The affirmation of the ratings of OneBeacon Ltd., OneBeacon U.S. and White Mountains acknowledges the companies' strong financial flexibility and solid operating results generated through their operating subsidiaries. Financial leverage and interest coverage ratios are within A.M. Best's guidelines for the ratings.

The FSR of A (Excellent) and ICRs of "a" have been affirmed for Atlantic Specialty Insurance Company and its following affiliates:

  • Homeland Insurance Company of New York

  • Homeland Insurance Company of Delaware

  • OBI National Insurance Company

The FSR and ICRs for the following indirect subsidiaries of OneBeacon Insurance Group Ltd. are unaffected by the above rating actions andremain under review with negative implications:

  • The Employers' Fire Insurance Company

  • OneBeacon America Insurance Company

  • OneBeacon Insurance Company

  • Potomac Insurance Company

The FSR and ICRs have been withdrawn for the following indirect subsidiaries of OneBeacon Insurance Group Ltd. due to being merged into affiliates:

  • The Camden Fire Insurance Association

  • The Northern Assurance Company of America

  • OneBeacon Midwest Insurance Company

  • Traders & General Insurance Company

The following debt rating has been affirmed:

OneBeacon U.S. Holdings, Inc.—
-- "bbb" on $275 million 4.60% senior unsecured notes, due 2022

The following indicative ratings under the shelf registration have been affirmed:

OneBeacon U.S. Holdings, Inc. and OneBeacon Insurance Group, Ltd.—
-- "bbb" on senior unsecured debt
-- "bbb-" on subordinate debt
-- "bb+" on preferred stock

OneBeacon U.S. Holdings Trust I, II, III—
-- "bb+" on preferred stock

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visitwww.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Brian O'Larte,908-439-2200, ext. 5138
Senior Financial Analyst
Jennifer Marshall,908-439-2200, ext. 5327
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations

KEYWORDS: United States Bermuda Europe North America Caribbean New Jersey New York


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