Fitch Ratings has published an insurer financial strength rating of ‘A’ with a stable outlook for Constellation Re (Bermuda) Ltd, a new Bermuda life reinsurer within American insurer Constellation Insurance Inc.

Constellation Re was formed in December 2024 and is licensed as a Class C insurer. It was capitalised with $250 million in common equity contributed by AuguStar Life Insurance Co, Constellation’s primary operating company.

Fitch said it regarded the Bermuda company as a core entity of the group, sharing its branding, management, systems, governance and risk-management framework.

The ratings agency said Constellation Re was expected to replace the group’s American onshore captives as its vehicle for both existing and new life-insurance liabilities.

It added that management wanted over time to expand the Bermuda operation to third-party reinsurance business.

Fitch said that while there were no formal support agreements in place, it believed Constellation can and will support its Bermuda subsidiary. It said a disposal was unlikely because of the company’s strategic importance and the reserving, capital and cost advantages it provides.

The agency’s rating is expected to move in line with the wider Constellation group.

Fitch said factors that could result in negative action included a deterioration in the group’s business profile, lower capital ratios, weaker profitability or a material reserve charge in its legacy variable-annuity business.