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 its acquisition moves, said it will buy Sirius Insurance Group, a Swedish insurance and reinsurance unit of Zurich, Switzerland-based manufacturing giant ABB Ltd., for $425 million.[@@]

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

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

Sirius America, a U.S.-based insurer focused on primary insurance programs since 2000, wrote $96 million of net premiums last year, while Scandinavian Reinsurance is a Bermuda-based finite reinsurer currently in runoff.

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

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

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

On Nov. 25, White Mountains' subsidiary Folksamerica Holdings Co. Inc. said it is buying California Indemnity Insurance, a workers' compensation unit of Las Vegas-based Sierra Health Services Inc. That deal, valued at $79.5 million, is expected to close in the 2004 first quarter.

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

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

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

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

Special Reports /

White Mountains, On Buying Spree, To Buy Sirius

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