White Mountains, a Bermuda-based insurance and reinsurance group, was on Friday given a seal of approval by ratings firm Standard & Poor?s ? although some worries linger over the group?s reliance on a reinsurance contract and reserves for expected claims.

In a Press statement, Standard & Poor?s Ratings Services said it raised its counterparty credit and senior debt ratings on White Mountains Insurance Group Ltd. and Fund American Cos. Inc. to ?BBB? from ?BBB-? . The outlook is stable, or unlikely to change.

At the same time, Standard & Poor?s assigned its ?A? counterparty credit and financial strength ratings to the members of OneBeacon Insurance Group, White Mountains? main US subsidiary. The outlook on OneBeacon is also stable.

Various ratings are assigned as an indicator of a company?s financial strength and ability to meet its obligations to customers, and senior debt holders.

In addition, Standard & Poor?s affirmed its ?A-? counterparty credit and financial strength ratings on Folksamerica Reinsurance Co. and Sirius International Insurance Corp.

?The upgrade of White Mountains reflects the fact that the group exceeded Standard & Poor?s expectations, as well as its strong competitive position, strong operating performance, strong financial flexibility, extremely strong capitalisation, and conservative balance sheet,? said credit analyst Siddhartha Ghosh.

?Offsetting these positive factors are its reinsurance concentration with Olympus Re, potential reserve deficiencies at Folksamerica and OneBeacon, and integration risks associated with its acquisition strategy.?

White Mountains is heavily reliant on reinsurance contracts with Olympus, a privately-held Bermuda reinsurer that White Mountains established with other investors in 2002.

Olympus owes White Mountains reinsurance units a total of $705.6 million in reinsurance, or 40 percent of the group?s total reinsurance to be recovered, according to a third-quarter filing with the US Securities and Exchange Commission.