White Mountains Insurance Group Ltd. completed its $2.6 billion sale of Sirius International Insurance Group to a division of China Minsheng Investment Corp. Ltd., nine months after the deal was first announced.Out of that total, White Mountains used $160 million to buy out some Sirius assets it plans to keep, including some OneBeacon shares, according to White Mountains.

White Mountains is a Bermuda-based financial services holding company. Its sale of Sirius to the Singapore-based investment arm of China Minsheng Investment gives the latter company a foothold in the Bermuda reinsurance market.

As Bloomberg reported last year, a number of international firms have been pursuing expansion in Bermuda reinsurance, in part, to gain access to risks not correlated with stock and bond markets. In March, for example, Italian investment firm EXOR closed a $6.9 billion acquisition of Bermuda-based reinsurer PartnerRe.

Fitch Ratings, meanwhile, affirmed White Mountains’ issuer default rating of ‘BBB+’, after the Sirius sale closing. The affirmation also notes that White Mountains recorded a $658 million gain when it sold Symetra Financial Corp. to Sumitomo Life Insurance Company on Feb. 1

“Fitch’s rational for the affirmation of White Mountains’ rating reflects the company’s low financial and operating leverage, opportunistic business approach, platform of property/casualty special insurance, and favorable financial flexibility,” the ratings agency noted in its affirmation.

White Mountains now has “considerable levels of cash,” which Fitch believes will be “used to evaluate potential acquisitions, share buy backs, or increased dividends.”

Until the sale, Sirius was White Mountains’ single largest holding in terms of equity, Fitch added

At the same time, Fitch downgraded its IDR rating for Sirius to ‘BBB’ from ‘BBB+’, the senior debt rating to ‘BBB-‘ from ‘BBB’, and the insurer financial strength ratings of its operating subsidiaries to ‘A-‘ from ‘A’, It also removed all ratings from rating watch negative, and maintained a stable outlook.

Fitch said it views the new ownership as less strategic than White Mountains, in that it is at “a lower level of credit quality” and also is a “company with a limited track record.”

“This creates added uncertainties with respect to Sirius’ financial flexibility and access to capital if needed, and business and operating profile, until there is a period of seasoning under CMI ownership,” Fitch said.

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