AM Best has assigned credit ratings to Bermudian-based Soteria Reinsurance Ltd.

The ratings agency has assigned Soteria a financial strength rating of A- (Excellent) and a long-term issuer credit rating of “a-” (Excellent).

The outlook assigned to these credit ratings is stable.

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

AM Best said the ratings also reflect the ratings lift the company receives from the ultimate parent, FMR LLC.

Soteria’s very strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is assessed at the strongest level, as measured by Best’s capital adequacy ratio.

AM Best said it expects Soteria’s risk-adjusted capitalisation to remain at the strongest level, prospectively.

The ratings agency said: “The company receives support from FMR LLC in the form of capital contributions, operational support and investing expertise.

“Soteria provides strategic importance to FMR LLC and the US operating insurance entities by providing reinsurance solutions, as well as growing the wider Fidelity organisation’s exposure to the insurance space.

“Soteria’s operating performance is assessed as adequate. The company currently has a mix of affiliated business assumed from Fidelity Investments Life Insurance Company.

“These deals include single premium immediate annuities and single premium deferred annuities.

“Soteria’s Bermuda class E license allows it to expand its reinsurance business to unaffiliated counterparties seeking reinsurance solutions of both annuity and life business.”

The agency added: “AM Best assesses Soteria’s ERM as appropriate. The company has a formal risk appetite statement and investment guidelines.

“Soteria complies with regulations set out by the Bermuda Monetary Authority. The company utilises its relationship with FMR LLC for support in its ERM programme.”

AM Best said it will monitor Soteria’s results closely.

The agency said a positive rating action may occur if there is a sustained improvement in balance sheet metrics.

A negative rating action may occur if Soteria becomes less strategically important to the ultimate parent company, FMR LLC, or if there is a material deterioration in balance sheet metrics.