Fidelis rating lifted on 'very strong' underwriting, investment returns

AM Best has upgraded the financial strength rating of Bermuda-based re/insurer Fidelis to A (excellent) from A- (excellent), citing "very strong underwriting results and solid investment returns".

The rating applies to Fidelis Insurance Bermuda, Fidelis Underwriting UK and Fidelis Insurance Ireland.

AM Best said Fidelis’ balance sheet was very strong, while it has an adequate operating performance, neutral business profile and appropriate enterprise risk management.

Fidelis maintains the strongest level of risk-adjusted capitalisation, as measured by AM Best’s capital adequacy ratio, a conservative loss reserve position, overall strong liquidity, a conservative investment portfolio and demonstrated adequate financial flexibility.

Its operating performance has been supported by very strong underwriting results and solid investment returns, the rating agency noted.

"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," said AM Best. "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. Fidelis’ investment returns have also benefited from its focus on holding the majority of its assets in fixed-income securities and cash and cash equivalents, with a small allocation to alternative investments."

It added: "Fidelis is a provider of specialty insurance, reinsurance and retrocession products with a global geographic reach. While Fidelis is a young company in its sixth year of operation, the company has received strong acceptance by the market, as evidenced by its significant premium growth and ability to lead some of the programs it writes. The group has a strong senior management team with an excellent reputation and a proven track record."

AM Best considers Fidelis' COVID-19 pandemic related losses "manageable" based on an analysis performed by Fidelis management and Fidelis’ limited profile in classes that are expected to be most impacted.