White Mountains, On Buying Spree, To Buy Sirius

NU Online News Service, Dec. 9, 1:25 a.m. EST?Bermuda-based White Mountains Insurance Group, continuing itsacquisition moves, said it will buy Sirius Insurance Group, aSwedish insurance and reinsurance unit of Zurich, Switzerland-basedmanufacturing giant ABB Ltd., for $425 million.[@@]

Sirius employs some 200 workers at its three major units:Sweden-based Sirius International, Sirius America and ScandinavianReinsurance.

Sirius International, a Stockholm-based reinsurance company, isthe largest reinsurer in Scandinavia. It wrote about $400 millionin net premiums last year.

Sirius America, a U.S.-based insurer focused on primaryinsurance programs since 2000, wrote $96 million of net premiumslast year, while Scandinavian Reinsurance is a Bermuda-based finitereinsurer currently in runoff.

White Mountains said expects the transaction to be completed bythe second quarter of next year, pending regulatory approval.

White Mountains said the $425 million purchase price is anestimate. It is the third acquisition to be announced by thecompany in the past couple of weeks.

Last Friday, White Mountains announced its subsidiary OneBeaconInsurance would buy Atlantic Specialty Insurance Company, asubsidiary of New York-based Atlantic Mutual Companies, as well asthe renewal rights to Atlantic Mutual's commercial insurancebusiness, including the unearned premiums on the acquired book. Theoverall gross written premium for this book of business is reportedto be about $450 million.

On Nov. 25, White Mountains' subsidiary Folksamerica HoldingsCo. Inc. said it is buying California Indemnity Insurance, aworkers' compensation unit of Las Vegas-based Sierra HealthServices Inc. That deal, valued at $79.5 million, is expected toclose in the 2004 first quarter.

White Mountains' chief executive Ray Barrette, commenting on thelatest acquisition, said the purchase of Sirius "leverages all thestrengths of the White Mountains organization."

"We are adding a nice business to our family ofproperty-casualty insurance and reinsurance companies," Mr.Barrette said, "and the transaction adds significant value for ourshareholders."

Another benefit of bringing Sirius into the White Mountain groupof companies, according to Mr. Barrette, is that Sirius has beenfocusing on property and other short-tailed lines of business,"allowing them to avoid most of the legacy issues that otherinternational reinsurance companies are facing today."

"[Sirius' management] is an outstanding team that shares WhiteMountains' core belief that underwriting comes first," he said.