AM Best notes concerns over Fidelis MGA move


AM Best notes concerns over Fidelis MGA move

AM Best has removed from under review with negative implications and affirmed the Financial Strength Rating of A (Excellent) of Fidelis Insurance Bermuda.

The rating agency said the move reflects 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.

But AM Best has also expressed some concerns over a new corporate structure in the business.

Fidelis announced on July 25, 2022, its intention to create Fidelis MGU, a new managing general underwriter, which would be bifurcated from the existing Fidelis companies. Final regulatory approval for the bifurcation of Fidelis’ business was received in November 2022, and the transaction was completed in January 2023.

Fidelis MGU is led by most of the previous senior management of Fidelis. In turn, Fidelis is led by a combination of other Fidelis executives supplemented by a number of experienced senior executives from outside the organization.

As a result of the risks present in implementing the new structure, AM Best said it is of the opinion that Fidelis’ business profile may be affected by the bifurcation of key management personnel into a different legal entity.

The rating agency said the organizational changes that may impact the group’s business profile assessment if there is disruption in its market acceptance. AM Best said it will monitor Fidelis’ market presence, as well as subsequent operating performance to assess if there is any material deterioration.

AM Best, Financial Strength Rating, Fidelis Insurance Bermuda., Insurance, Reinsurance, Bermuda

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