Bermuda-domiciled reinsurers, the parent for which is partly owned by RenaissanceRe Holdings Ltd, have been highlighted by a rating agency for an expected profitable future.

Fontana Reinsurance Ltd and Fontana Reinsurance US Ltd are owned by Fontana Holdings LP, which is a joint venture between RenaissanceRe Holdings Ltd and various third-party capital partners and is RenaissanceRe’s first joint venture focused on casualty and specialty risk.

AM Best has affirmed the financial strength rating of A (Excellent) and a long-term issuer credit rating of “a+” (Excellent) of Fontana Re, and affirmed the FSR of A (Excellent) and the long-term ICR of “a+” (Excellent) of Fontana Re US.

The outlook of these credit ratings is stable.

The ratings of the companies reflect their balance sheet strength, which AM Best assesses as very strong, as well as their adequate operating performance, neutral business profile and very strong enterprise risk management.

Fontana’s capital has been augmented since to support growth at Fontana Re and Fontana Re US.

AM Best said the ratings of the Fontana entities reflected the strength and depth of RenaissanceRe’s management team and its leadership in ERM, as well as the benefits that should accrue to Fontana as a result of RenaissanceRe - through RUM - managing underwriting, pricing, risk selection, reserves, investments and claims.

AM Best noted that Fontana’s operating performance and overall balance sheet strength have been maintained at levels consistent with expectations over its relatively short operating history.

As the companies gain scale, AM Best expects that Fontana will generate underwriting profits and positive operating income in most periods and that risk-adjusted capitalisation will be maintained at levels that are broadly consistent with RenaissanceRe’s other underwriting entities.

Fontana will be managed solely by Renaissance Underwriting Managers Ltd and is consolidated into RenaissanceRe’s financial statements.

Fontana commenced operations in April 2022 with $475 million in committed capital and has assumed a whole account quota share of RenaissanceRe’s casualty and specialty book.