Bermuda’s Fidelis Insurance and its UK underwriting arm have had their ratings affirmed by AM Best.

The agency retained the A- excellent financial strength rating on both companies, as well as the bbb- on the long-term issuer credit rating of holding company Fidelis Insurance Holdings.

AM Best added: “Concurrently, AM Best has affirmed the long-term issue credit rating of bb on its $304 million ($287.15 million currently outstanding) 9 per cent cumulative preference shares, due 2050. The outlook of these Credit Ratings (rating) is stable.”

The agency said: “The rating affirmations of Fidelis and Fidelis UK are based on strong risk-adjusted capitalisation, an experienced management team with a proven track record and acceptance in the marketplace. “Additionally, AM Best recognises Fidelis’ ability to generate underwriting profit in its first full year of operation.

“Furthermore, Fidelis UK’s ratings recognise the support it receives from its affiliate, Fidelis, and from Fidelis Insurance Holdings Limited, the ultimate parent.

But AM Best added: “Partially offsetting these positive rating factors are the start-up nature of the company, the volatility of operating results caused by business plan changes, greater investment risk associated with its alternative investment strategy, as well as the continued competition and capacity in the reinsurance marketplace, which contribute to the difficulty of business plan execution.

“Mitigating these concerns are the prudent underwriting leverage contemplated in Fidelis’ business plan and the diversified, multi-manager investment strategy.”