AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit ratings of “a” (Excellent) of Fidelis Insurance Bermuda Ltd, Fidelis Underwriting Ltd of Britain and Fidelis Insurance Ireland Designated Activity Company.

In addition, AM Best has affirmed the long-term ICR of “bbb” (Good) of Bermudian-based Fidelis Insurance Holdings Ltd, the ultimate holding company.

Concurrently, AM Best has affirmed the long-term issue credit rating of “bb+” (Fair) of Fidelis’s $304 million, 9 per cent preference shares, due 2050 ($58.4 million remains outstanding).

The credit ratings reflect Fidelis’s balance-sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

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

The ratings agency said: “Fidelis has reported reserve strengthening of $287.2 million for year-end 2024 for its aviation line of business for claims related to the Russia-Ukraine conflict.

“AM Best notes that the company’s fundamentals around capital management and disciplined underwriting remain strong, and that these events do not materially impact Fidelis’s balance-sheet assessment.

“The company also announced a preliminary range for losses related to the California wildfires of $160 million to $190 million, which is based on an industry projected loss of $40 billion to $50 billion. These wildfire losses will be reflected in its first-quarter 2025 financials.”

AM Best added: “Fidelis’s operating performance has been supported by consistent underwriting gains and solid investment returns. The group’s disciplined underwriting, experienced management team and its acceptance and recognition by the market have allowed for a profitable underwriting performance over the past years.

“Performance also benefits from earnings generated through Fidelis’s diversified business platform, which includes managing general agencies and a sponsorship of a special-purpose insurer.

“Scale and access to highly selective underwriting capabilities through The Fidelis Partnership, the managing general underwriter that sources most of the group’s business, gives Fidelis the ability to be cautiously opportunistic.

“Fidelis’s investment returns also have 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.”

The agency said Fidelis is a provider of specialty insurance, reinsurance and retrocession products with a global geographic reach. The company has received acceptance by the market over the years, as evidenced by its significant premium growth and increased market share. The group has a strong senior management team with vast industry experience and a proven track record.

AM Best said Fidelis’s enterprise risk management is supported by robust governance frameworks that monitor and review business risks. Fidelis has established a comprehensive framework with defined functions and key performance indicators to oversee and validate total factor productivity.