AM Best Assigns Preliminary Credit Assessment to Fortium Insurance Company Ltd.

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Preliminary Credit Assessment (PCA) to Fortium Insurance Company Ltd. (Fortium) (Bermuda) with a Financial Strength Assessment of A- pca (Excellent) and a Long-Term Issuer Credit Assessment of “a-” pca (Excellent). The outlook assigned to the PCA is stable.

The PCA reflects Fortium’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).

The PCA also reflects AM Best’s assessment that, based on Fortium’s business plan, the company will maintain a balance sheet strength assessment of very strong supported by projected risk-adjusted capitalization at the strongest level through the five-year initial forecast period, as measured by Best’s Capital Adequacy Ratio (BCAR). An initial capital contribution of approximately $110 million in 2026 and retained earnings through the forecast period are expected to support premium growth, which is anticipated to be significant in the company’s initial years. As the company plans to cede all its premiums, credit risk related to reinsurance recoverables is expected to be material. This is expected to be partially mitigated through use of highly rated or fully collateralized counterparties. The company’s investment risk is expected to be low given the relatively conservative investment portfolio, which will support stability in future balance sheet metrics.

The adequate operating performance assessment and the limited business profile assessment are based on Fortium’s business plan as presented to AM Best. This plan includes significant premium growth in the first years of operation with improving operating profitability that supports the adequate operating performance assessment. The company outlines a business plan of short-tailed specialty business, which is expected to be somewhat diversified by business line and geography. Fortium’s management has experience within the specialty lines business market. However, the limited business profile assessment considers the execution risk faced by start-up organizations and recognizes the challenges associated with gaining market acceptance within the specialty space, while remaining profitable. Fortium has established an ERM structure and this structure is expected to evolve as the business matures.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.