A.M. Best Affirms Ratings of Fidelis Insurance

July 21, 2016

Rating company A.M. Best has affirmed the financial strength rating of A- [Excellent] and the issuer credit rating of “a-” of Fidelis Insurance Bermuda Limited [Fidelis] [Bermuda] and Fidelis Underwriting Limited [Fidelis UK] [United Kingdom]. A.M. Best also has affirmed the ICRs of “bbb-”of Fidelis Insurance Holdings Limited [Bermuda], the ultimate holding company.

A statement from the ratings agency said, “Concurrently, A.M. Best has affirmed the issue rating of “bb” on its $304 million 9% cumulative preference shares, due 2050. The outlook for each rating is stable.

“The rating affirmations are based on Fidelis and Fidelis UK’s excellent projected risk-adjusted capital position, prudent business plan and knowledgeable management team. Partially offsetting these positive rating factors are the start-up nature of the companies and investment risk associated with the companies’ alternative investment strategy, as well as the competitive conditions and excess capacity in the reinsurance marketplace that may challenge the execution of the business plan.

“Furthermore, Fidelis UK’s ratings recognize the support it receives from its affiliate, Fidelis, and from Fidelis Insurance Holdings Limited.

“The ratings are supported by an amount of capital that has met A.M. Best’s stringent requirements for newly formed companies. Fidelis will operate as a Bermuda-based insurer and reinsurer writing a global property insurance and reinsurance portfolio.

“A.M. Best believes that Fidelis’ underwriting risk coupled with its alternative investment strategy creates an elevated-risk profile that could adversely influence the company’s risk-adjusted capitalization. Mitigating these concerns are the prudent underwriting leverage contemplated in Fidelis’ business plan and the diversified, multi-manager investment strategy.

“Fidelis’ assets are managed by eight investment advisers who are registered with the Securities and Exchange Commission, with assistance from Goldman Sachs Alternative Investments Manager & Selection [AIMS] Group. AIMS manages USD 150 billion in client assets and has a staff of over 300 professionals worldwide. Fidelis’ assets are held in fund-of-one portfolios or separately managed accounts. “

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