AM Best Assigns Credit Ratings to Fenchurch General Insurance Company
AM Best has assigned Fenchurch General Insurance Company (Fenchurch), based in Toronto, Canada, a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-“ (Excellent). The ratings are accompanied by a stable outlook, reflecting the company’s robust financial standing and operational outlook.
Strong Balance Sheet and Risk Management
The ratings reflect Fenchurch’s very strong balance sheet strength, which is supported by best-in-class risk-adjusted capitalization, as indicated by the Best’s Capital Adequacy Ratio (BCAR). This strong capitalization is expected to sustain the company’s future growth plans. Additionally, Fenchurch benefits from a strong liquidity position and a conservative investment strategy, both of which underpin its financial stability.
A key strength of Fenchurch’s balance sheet is its solid capital base, bolstered by The Pandher Group, the company’s parent organization. Since acquiring Fenchurch in 2021, The Pandher Group has contributed approximately $44 million in capital. This support, both implicit and explicit, has played a significant role in enhancing the company’s financial position.
Adequate Operating Performance and Business Profile
AM Best assesses Fenchurch’s operating performance as adequate, largely due to its relatively recent foray into the commercial auto sector and efforts to streamline its current portfolio. The company’s ability to right-size its business book is expected to lead to improved operating results in the near to medium term.
Fenchurch’s business profile is rated as limited due to its geographic concentration in Ontario, where most of its operations are based. While the company has made strides in expanding into the commercial auto and property markets, its limited business profile continues to be a consideration for its overall ratings.
Fenchurch’s enterprise risk management (ERM) program is deemed appropriate for its risk profile. The company has designed its policies with structured limits to minimize reliance on reinsurance, although it plans to purchase reinsurance for new lines of business as part of its expanding risk management framework. This proactive approach to risk management is expected to support its long-term stability and growth.
Strategic Direction and Future Outlook
Fenchurch was founded in 1981 and specializes in property and casualty insurance. Its primary business lines include commercial auto and accident & sickness insurance, with minor involvement in habitational property coverage. The company is owned by The Pandher Group, a diversified family office with operations spanning various sectors, including insurance, primarily in North America.
Looking ahead, AM Best expects that Fenchurch’s strategic initiatives, particularly its recent expansion into commercial auto, will enable the company to enhance its profitability and overall business performance. With continued capital support from its parent group and a solid risk management framework in place, Fenchurch is well-positioned to meet future challenges and capture growth opportunities in the property and casualty insurance market.
In conclusion, AM Best’s A- (Excellent) rating reflects Fenchurch General Insurance Company’s solid financial foundation, strategic growth efforts, and its prudent risk management practices, which together position the company for long-term success in the competitive insurance market.
