AM Best has revised its outlook to ‘positive’ from ‘stable’ for Fidvest US, a South Carolina-based pure captive owned by Fidelity Management & Research (FMR).
The agency also affirms the financial strength rating of ‘A-’ (Excellent) and the long-term issuer credit rating of ‘a-’ (Excellent) of the captive.
The ratings reflect Fidvest’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
According to AM Best, the positive outlooks are driven by the company’s operating performance, which reflects its sustained trend of improving underwriting results since 2020.
Fidvest maintains a very strong level of balance sheet strength, reflective of its strongest level of risk-adjusted capitalisation — as measured by Best’s Capital Adequacy Ratio (BCAR) — a conservative investment risk profile, and strong liquidity position.
Partially offsetting these factors is the volatility in Fidvest’s loss reserve balances related to professional liability claims and related litigation expenses.
AM Best assesses Fidvest’s business profile as limited, as it covers professional liability, workers’ compensation, property, automobile liability, general liability and cyber coverage for its parent in the form of deductible reimbursement and high excess policies.
Fidvest maintains an ERM structure that is appropriate for a company of its size, and as a part of FMR, also benefits from and is an integral part of the parent company’s ERM framework.
In addition, the ratings receive lift from its ultimate parent, FMR, a large and diversified financial services organisation. The enhancement considers Fidvest’s strategic importance to FMR, as well as FMR’s ability to provide financial flexibility to Fidvest should it become necessary.
