AM Best Upgrades Credit Ratings of Fidelis Insurance Holdings and Its Subsidiaries

June 5, 2020

AM Best has upgraded the credit ratings of Fidelis Insurance Holdings Ltd. and its subsidiaries.

AM Best upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a” from “a-” of Fidelis Insurance Bermuda Ltd., UK-based Fidelis Underwriting Ltd. and Fidelis Insurance Ireland Designated Activity Co. (DAC).

AM Best also upgraded the Long-Term ICR to “bbb” from “bbb-” of Bermuda-based Fidelis Insurance Holdings Ltd., the ultimate holding company.

The outlook of these credit ratings is stable.

The ratings reflect Fidelis’ balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Fidelis maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), a conservative loss reserve position, overall strong liquidity, a conservative investment portfolio and demonstrated adequate financial flexibility, said the ratings agency.

The group’s operating performance is supported by strong underwriting results and solid investment returns, said AM Best.

“Fidelis’ disciplined underwriting, experienced management team and its acceptance and recognition by the market have allowed for solid underwriting performance over the past three years,” added AM Best.

Fidelis is a young company in its sixth year of operation, noted the ratings agency, but it has received strong market acceptance, evidenced by its significant premium growth and ability to lead some of the programs it writes.

“Performance also benefits from earnings generated through Fidelis’ diversified business platform, including its establishment of managing general agencies and a sponsorship of a special-purpose insurer,” the ratings agency said.

AM Best said Fidelis’ investment returns have benefited from the fact that it holds the majority of its assets in fixed-income securities and cash and cash equivalents, with a small allocation to alternative investments.

The group, which is a global provider of specialty insurance, reinsurance and retrocession products, has a strong senior management team with an excellent reputation and a proven track record, AM Best continued.

However, Fidelis’ exposure to high severity losses associated with global catastrophe events partially offsets these strengths, the ratings agency noted.

During first quarter of 2020, Fidelis indicated that its COVID-19 claims were primarily related to event-based covers, which AM Best currently considers as manageable losses.

Source: AM Best

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