AM Best has affirmed the financial strength rating of A (excellent) and the long-term issuer credit rating of “a” (excellent) for Brit Reinsurance (Bermuda) Ltd, with a stable outlook.

The ratings agency said the affirmation reflects Brit Re’s very strong balance sheet, adequate operating performance, limited business profile and appropriate enterprise risk management. The assessment also benefits from the support of its intermediate parent, Brit Group Holdings Ltd, and ultimate parent, Fairfax Financial Holdings Ltd.

Brit Re, which is domiciled in Bermuda, has historically acted as an internal reinsurer for affiliates including Lloyd’s Syndicate 2987 and Brit UW Limited. In 2024, the company introduced a growth strategy aimed at expanding third-party business outside the Brit Group, targeting property/casualty and speciality insurance and reinsurance lines. Despite that shift, most premium still comes from a quota share with Syndicate 2987.

AM Best said Brit Re’s balance sheet strength is supported by a record of profitable underwriting, manageable premium growth and sound liquidity, backed by short-term, high-quality fixed income securities and cash. Risk-adjusted capitalisation remains at the strongest level under Best’s capital adequacy ratio, although the assessment also reflects catastrophe exposure linked to Lloyd’s business and the limited flexibility of certain invested assets.

The agency noted that regular dividend payments to the parent limit capital growth and that rapid expansion of third-party business, if combined with large dividends, could pressure capitalisation. Even so, AM Best expects capital levels to remain supportive as third-party underwriting grows.

Operating performance was described as adequate, driven by quota share participation in Syndicate 2987 and offset by a stop-loss contract, with low expenses benefiting from group scale. AM Best also cited Fairfax’s financial flexibility and track record of support.