A.M. Best Affirms Ratings of White Mountains Insurance Group Ltd.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a" of OneBeacon Insurance Group (OneBeacon) (Boston, MA), which, in addition to the OneBeacon pool members, also includes Esurance Insurance Company (San Francisco, CA) and those of Sirius International Insurance Corporation (Stockholm, Sweden). In addition, A.M. Best has affirmed the FSR of B++ (Very Good) and the ICR of "bbb+" of Potomac Insurance Company (Philadelphia, PA). This company is currently in run-off. All of the above companies are members of White Mountains Insurance Group Ltd. (White Mountains) (NYSE: WTM) (Hamilton, Bermuda). On August 17, 2006, A.M Best affirmed the FSR of A- (Excellent) and the ICR of "a-" of Folksamerica Reinsurance Company (New York, NY), another member of White Mountains.

Concurrently, A.M. Best has affirmed the debt rating of "bbb" on $700 million 5.875% existing senior unsecured notes due 2013 of Fund American Companies, Inc. (Boston, MA). Fund American is a wholly-owned intermediate holding company of White Mountains. A.M. Best also affirmed the various debt ratings on White Mountains' and Fund American's existing shelf registrations. The outlook for all ratings is stable. (See link below for a detailed list of the ratings.)

These rating affirmations reflect White Mountains' conservative financial leverage and financial flexibility, as well as the steps it has taken to improve earnings sustainability at its various operating entities. On a consolidated basis, the group's operating earnings have improved over a five-year period leading to generally favorable return measures when considering realized capital gains. Somewhat offsetting these positive rating factors are the inherent challenges associated with White Mountains' acquisition strategy, the negative impact of storm losses on its 2004 and 2005 consolidated operating results and its dependence upon investment earnings and capital gains to generate sustainable earnings.

The consolidated financial leverage (debt plus preferred stock-to-total capital) of White Mountains, including Fund American, remains at approximately 20% at June 30, 2006. Leverage has improved over a five-year period primarily due to increased shareholders' equity resulting from growth in retained earnings, the exercise of warrants to purchase additional White Mountains' common stock by Berkshire Hathaway Inc. (NYSE: BRKa) and unrealized capital gains on White Mountains' investment portfolio.

Fund American's ratings recognize its stand-alone financial leverage, cash flow and fixed coverage, as well as its role as White Mountains' intermediate holding company. The $700 million existing senior unsecured notes issued by Fund American are guaranteed by White Mountains. As part of a recently announced planned initial public offering (IPO) of OneBeacon, all the preferred stock issued by Fund American will be defeased with funds borrowed by White Mountains. Neither the defeasement nor the planned IPO is expected to significantly change the consolidated leverage of White Mountains.

OneBeacon's capitalization continues to support its current rating levels. Furthermore, its balance sheet is enhanced by virtue of significant reinsurance protection on asbestos and environmental (A&E) and other mass tort liabilities. OneBeacon has historically incurred adverse loss reserve development on prior accident years. However, its more recent accident years (2001 and forward) have generally developed favorably. Management has also strengthened claims-handling and other infrastructure capabilities in recent years.

For a complete list of White Mountains Insurance Group Ltd.'s FSRs, ICRs and debt ratings, please visit www.ambest.com/press/090102whitemountains.pdf.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.