Bermudian-based Fidelis Insurance Holdings Ltd and its subsidiaries have received an outlook upgrade from AM Best.

The ratings agency has revised the outlooks to stable from negative and 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 (United Kingdom) and Fidelis Insurance Ireland Designated Activity Company.

In addition, AM Best has revised the outlook to stable from negative and affirmed the long-term ICR of “bbb” (Good) of Fidelis Insurance Holdings, the ultimate holding company.

Concurrently, AM Best has revised the outlook to stable from negative and affirmed the long-term issue credit rating of “bb+” (Fair) of Fidelis Insurance Holdings’ $304 million ($58 million currently outstanding) nine per cent preference shares, due 2050.

The credit ratings reflect Fidelis’ 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.

The agency said: “The negative outlook AM Best placed on the ratings in 2023, was based on the execution risk related to the creation of Fidelis MGU, a new managing underwriting entity.

“This entity would see key executives from Fidelis moved to this new entity, and risks of its acceptance into the market.

“AM Best has assessed the performance of the Fidelis management team and the strength of the business relationship between Fidelis and Fidelis MGU over the last year, which has been demonstrated through its financial stability.

“Fidelis has reported continuing operating profitability and robust risk-adjusted capitalisation.”

Meanwhile, Fidelis Insurance Holdings announced that Fidelis Insurance Bermuda has successfully closed a new catastrophe bond through the issuance of the Series 2024-1 Class A Principal at Risk Variable Rate Notes and the Series 2024-1 Class B Principal at Risk Variable Rate Notes by its Herbie Re Ltd programme.

The company said this is the fifth series of notes issued by Herbie Re and will provide the Fidelis Insurance Group with $150 million of collateralised reinsurance protection.

The Series 2024-1 Notes issued will be exposed to insured industry losses resulting from named storm and earthquake covered events occurring in the 50 states of the United States and the District of Columbia, Puerto Rico and the US Virgin Islands, as reported by Property Claim Services, on an annual aggregate basis.

Fidelis has the option to renew the Series 2024-1 Notes on an annual basis, up to a maximum of four complete annual risk periods.

Ian Houston, Fidelis Insurance Group chief underwriting officer, said: “These bonds remain a critical component of our comprehensive capital management and outwards protection strategy, providing important capital relief and downside protection.

“They complement our other purchases such as quota share, excess of loss and ILWs to support the work of Fidelis MGU.”

Richard Coulson, deputy group chief underwriting officer at Fidelis MGU, said: “We have worked in close alignment with the Fidelis Insurance Group to bring this series to market which builds on their current Herbie Re Catastrophe Bond programme.

“This tranche of cover is the latest tool employed by Fidelis Insurance Group to enable us to capitalise on opportunities across catastrophe exposed lines of business in 2024 and beyond.”