AM Best Confirms Credit Ratings for Fidelis Insurance Holdings Limited and Its Subsidiaries
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) for Fidelis Insurance Bermuda Limited (Bermuda), Fidelis Underwriting Limited (United Kingdom), and Fidelis Insurance Ireland Designated Activity Company (Ireland). Additionally, AM Best has affirmed the Long-Term ICR of “bbb” (Good) for Fidelis Insurance Holdings Limited (Fidelis) (Bermuda), the ultimate holding company. Concurrently, AM Best has affirmed the Long-Term Issue Credit Rating of “bb+” (Fair) for Fidelis’ $304 million, 9% preference shares, due 2050, with $58.4 million remaining outstanding.
These Credit Ratings (ratings) reflect Fidelis’ strong financial position, as assessed by AM Best. The evaluation considers the company’s very strong balance sheet, adequate operating performance, neutral business profile, and appropriate enterprise risk management (ERM).
Fidelis has consistently maintained the highest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s financial strength is also reinforced by its overall strong liquidity, a conservative investment portfolio, and proven financial flexibility. In 2024, Fidelis reported reserve strengthening of $287.2 million for its aviation line of business, primarily due to claims arising from the Russia-Ukraine conflict. Despite this significant reserve development, AM Best recognizes that Fidelis maintains a solid capital management approach and disciplined underwriting practices. The company’s balance sheet remains resilient despite these events.
Additionally, Fidelis announced preliminary estimated losses related to the California wildfires, ranging between $160 million and $190 million. This estimate is based on the broader industry projection of wildfire losses, which range between $40 billion and $50 billion. These wildfire losses will be accounted for in Fidelis’ first-quarter 2025 financial statements.
Fidelis’ operating performance has been bolstered by consistent underwriting gains and stable investment returns. The company has demonstrated a disciplined underwriting approach, managed by an experienced leadership team. Market recognition and acceptance have allowed Fidelis to sustain profitable underwriting results over the years. Furthermore, Fidelis benefits from a diversified business model, which includes managing general agencies (MGAs) and a sponsored special-purpose insurer.
The Fidelis Partnership (TFP), a managing general underwriter, plays a crucial role in sourcing most of the group’s business. The company’s ability to leverage TFP enables it to capitalize on selective underwriting opportunities while maintaining a cautious and strategic approach. The investment portfolio of Fidelis remains primarily composed of fixed-income securities and cash equivalents, with limited exposure to alternative investments. This prudent investment strategy has contributed to the company’s stable financial performance.
As a provider of specialty insurance, reinsurance, and retrocession products, Fidelis operates on a global scale. The company has steadily increased its market presence, demonstrating substantial premium growth and expanded market share. The strength of the Fidelis leadership team, with extensive industry experience and a strong track record, has been a key driver of the company’s success.
Enterprise Risk Management (ERM) remains a fundamental component of Fidelis’ operational framework. The company has implemented a robust governance structure to oversee and assess business risks effectively. With a well-defined framework in place, Fidelis ensures thorough monitoring, validation, and review of risks associated with The Fidelis Partnership (TFP). The ERM framework consists of clearly established functions and key performance indicators that allow the company to maintain oversight and mitigate potential risks.
The company’s ability to navigate industry challenges while maintaining financial stability highlights its resilience in the face of global uncertainties. Despite the challenges posed by the Russia-Ukraine conflict and the California wildfires, Fidelis has remained committed to disciplined underwriting and sound risk management practices. These strengths have contributed to the affirmation of its credit ratings by AM Best.
Looking ahead, Fidelis is well-positioned to continue leveraging its market expertise and underwriting capabilities to achieve sustainable growth. Its commitment to capital adequacy, financial stability, and a conservative investment approach ensures that the company remains a strong player in the insurance and reinsurance market. With a continued focus on strategic risk management and disciplined underwriting, Fidelis is poised to navigate evolving market conditions successfully.
