Rating agency concerned about new Fidelis structure
AM Best has expressed concern with regard to the business profile of Fidelis Insurance Holdings Limited (Bermuda) and related companies, as a result of risks inherent in establishing a new corporate structure.
Fidelis announced in July its intention to create Fidelis MGU, a new managing general underwriter, which would be bifurcated from the existing Fidelis companies, and led by most of the previous Fidelis senior management team.
As of January, Fidelis is led by a combination of the remaining Fidelis executives, together with other experienced senior executives from outside the company.
As a result of the risks present in implementing the new structure, AM Best is of the opinion that Fidelis’ business profile may be affected by the bifurcation of key management personnel into a different legal entity.
AM Best has removed from under review with negative implications and affirmed the financial strength rating of A (Excellent) and the long-term issuer credit ratings of “a” (Excellent) of Fidelis Insurance Bermuda Limited, together with related companies in the UK and Ireland.
Best reported the same action for the long-term ICR of “bbb” (Good) of Fidelis Insurance Holdings Limited (Bermuda), the ultimate holding company.
Similar action was reported for the long-term issue credit rating of “bb+” (Fair) of Fidelis Insurance Holdings Limited’s $304 million ($58 million currently outstanding) 9 per cent preference shares, due 2050.
The outlook assigned to these credit ratings is negative.
The ratings also 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.
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