AM Best has placed the financial strength ratings of Fidelis and its subsidiaries under review with negative implications, following last week’s announcement that Fidelis plans to set up a new managing general underwriter.
Provided regulatory approval is received, Fidelis MGU will be separated from the existing Fidelis companies and will be led by most of the current management of Fidelis.
In turn, Fidelis will be led by a combination of existing Fidelis executives supplemented by a number of experienced senior executives from outside the organization.
As a result of the risk of implementation of the new structure, AM Best is of the opinion that Fidelis’ business profile may be affected by the separation of key management personnel into a separate legal entity.
The rating agency will continue to monitor the separation, implementation and execution of the new strategy and structure, but says Fidelis will be under review with negative implications in the meantime.
The under review status is expected to be resolved when the separation is fully executed, which includes appropriate regulatory approvals, and AM Best can assess, among other items, the market acceptance of the new structure, which will be apparent by analyzing business volumes and quality.
The ratings under review by AM Best include the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of Fidelis Insurance Bermuda Limited (Fidelis) (Bermuda), Fidelis Underwriting Limited (United Kingdom) and Fidelis Insurance Ireland Designated Activity Company (Ireland).
In addition, AM Best has placed under review with negative implications the Long-Term ICR of “bbb” (Good) of Fidelis Insurance Holdings Limited (Bermuda), the ultimate holding company.
Concurrently, AM Best has placed under review with negative implications the Long-Term Issue Credit Rating of “bb+” (Fair) of Fidelis Insurance Holdings Limited’s $304 million ($58 million currently outstanding) 9% preference shares due 2050.
