AM Best Revises Outlooks to Positive for Fidvest US LLC

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Fidvest US LLC (Fidvest) (Charleston, SC).

The Credit Ratings (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).

Fidvest is a pure captive insurance company wholly owned by FMR LLC (FMR), the parent company of Fidelity Investments.

The positive outlooks are driven by the company’s operating performance, which reflects its sustained trend of improving underwriting results since 2020. Following a period of underwriting volatility, management instituted several correcting initiatives to stabilize Fidvest’s operating results such as pricing adjustments, enhanced reserving practices and revised limits and retentions. Improved underwriting profitability has been noted since that time and organic surplus growth has been achieved. Going forward, AM Best will continue to monitor trends in Fidvest’s underwriting performance and overall operating results.

Fidvest maintains a very strong level of balance sheet strength, reflective of its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), 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 patent, FMR, a large and diversified financial services organization. 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.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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