Fitch puts OneBeacon on positive watch

Fitch Ratings said it placed the BBB+ long-term issuer default rating of OneBeacon Insurance Group, Ltd.'s intermediate holding company, OneBeacon U.S. Holdings, Inc. on Rating Watch positive.

The agency also said it placed the BBB+ long-term issuer default rating of White Mountains Insurance Group, Ltd. on Rating Watch evolving.

OneBeacon is 75.7% owned by White Mountains, Fitch said.

The ratings follow news that OneBeacon has entered into a definitive agreement to be acquired by Intact Financial Corp. for $1.7 billion, Fitch said.

The transaction is expected to close in the fourth quarter of 2017 and is subject to customary regulatory and shareholder approvals, the agency said.

OneBeacon transformed itself into a diversified specialty insurance company after shedding its run-off operations, standard commercial and personal lines of business, Fitch said.

The agency said it believes this transformation provides the company an optimal platform to compete with specialty peers and generate consistently strong operating profits.

The positive watch reflects an expectation that the ratings will likely be upgraded to Intact's ratings, Fitch said.

The evolving watch on White Mountains reflects the agency's need for more information about the go-forward capital deployment strategy of White Mountains, Fitch explained.

Once that strategy is understood, the agency said it will determine what, if any, impact it will have on White Mountains ratings.

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