A.M. Best Affirms Credit Ratings Of Fidelis

July 29, 2018

A.M. Best has affirmed the Financial Strength Rating of A- [Excellent] and the Long-Term Issuer Credit Ratings [Long-Term ICR] of “a-” of Fidelis Insurance Bermuda Limited [Bermuda] and Fidelis Underwriting Limited [Fidelis UK] [United Kingdom].

A.M. Best also has affirmed the Long-Term ICR of “bbb-” of Fidelis Insurance Holdings Limited [Bermuda], the ultimate holding company. Concurrently, A.M. Best has affirmed the Long-Term Issue Credit Rating of “bb” on Fidelis Insurance Holdings Limited’s $304 million [$248.7 million currently outstanding] 9% cumulative preference shares, due 2050. The outlook of these Credit Ratings [ratings] is stable.

A statement from the ratings agency said, “The ratings reflect the Fidelis’ balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management [ERM].

“Fidelis’ very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio [BCAR], strong liquidity and financial flexibility contribute to A.M. Best’s balance sheet assessment of very strong. Fidelis generated underwriting profit in 2016, its first full year of operation, and continued this positive trend in 2017.

“Additionally, the underwriting gains are supplemented by a healthy fee income generated through Fidelis’ various partnerships. The profits are partially offset by the losses generated by Fidelis’ investment portfolio; however, in mid-2017, the group revised its investment strategy to hold the majority of its assets in fixed-income securities and cash and cash equivalents, with a small allocation to alternative investments. Healthy investment income is projected going forward. Fidelis’ overall operating performance is assessed as adequate.

“A.M. Best views Fidelis’ business profile as neutral. Fidelis is a global provider of specialty insurance and reinsurance products through its two wholly-owned subsidiaries – Fidelis Insurance Bermuda Limited and Fidelis Underwriting Limited. While Fidelis is still in its start-up phase and is one of the newest Bermuda players, the group demonstrated strong acceptance by the market, as evidenced by the stable and consistent year-over-year growth. The group has a strong senior management team with an excellent reputation and a proven track record.

“Additionally, A.M. Best considers Fidelis’ ERM as developed and appropriate for its overall business risk profile.”

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