AM Best upgrades the Financial Strength Rating to ‘A’ (Excellent) from ‘A-’ (Excellent) and the Long-Term Issuer Credit Ratings to ‘a’ (Excellent) from ‘a-’ (Excellent) of Fidvest US LLC (Fidvest). The outlook of these credit ratings is revised to ‘stable’ from ‘positive’. Based in Charleston, South Carolina, Fidvest is a pure captive insurance company wholly owned by FMR LLC (FMR), the parent company of Fidelity Investments. The ratings reflect Fidvest’s balance sheet strength, which AM Best assesses as ‘very strong’, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). According to the rating agency, the upgrade reflects continued improvement in the company’s operating performance since 2021. The ‘stable’ outlook is driven by expectations that this performance will be sustained. Following a period of underwriting volatility, Fidvest management instituted several corrective initiatives to stabilise operating results, including pricing adjustments, enhanced reserving practices and revised limits and retentions. AM Best notes that improved underwriting profitability has been achieved alongside organic surplus growth. Fidvest maintains a ‘very strong’ level of balance sheet strength, supported by its ‘strongest’ level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). This is further bolstered by a conservative investment risk profile and strong liquidity position. Partially offsetting these factors is the volatility in Fidvest’s loss reserve balances, which is related to professional liability claims and associated litigation expenses. Fidvest’s business profile is assessed as ‘limited’ because it primarily covers professional liability, errors and omissions, and directors and officers liability for its parent company and affiliates. AM Best says it will continue to monitor trends in Fidvest’s underwriting performance and overall operating results.
