đź“° Curated Industry Article
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Fortium Insurance Company Ltd., a new Bermuda specialty startup, has been assigned a Preliminary Credit Assessment (PCA) by AM Best with a Financial Strength Assessment of A- pca (Excellent) and a Long-Term Issuer Credit Assessment of “a-” pca (Excellent).
The PCA, which has also been assigned a stable outlook, 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).
Additionally, the PCA indicates that AM Best expects Fortium to maintain a very strong balance sheet strength assessment, according to the company’s business strategy.
This outlook is bolstered by risk-adjusted capitalisation projected to remain at the strongest level throughout the initial five-year forecast period, as evaluated by Best’s Capital Adequacy Ratio (BCAR).
Premium growth is anticipated to be significant in the company’s starting years, supported by an initial capital contribution of approximately $110 million in 2026 and retained earnings through the forecast period.
While Fortium plans to cede all its premiums – making reinsurance credit risk material -, this is expected to be partially mitigated by using highly rated or fully collateralised counterparties.
Moreover, a conservative portfolio is expected to keep investment risk low given, which according to the rating agency, 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,” AM Best stated.
Adding: “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.”
The assessment of Fortium’s limited business profile takes into account the execution risks faced by start-up organisations. It also acknowledges the difficulties of achieving market penetration and maintaining profitability within the specialty sector.
While an Enterprise Risk Management (ERM) framework has already been put in place by the company, this structure is anticipated to develop further as the organisation grows and reaches maturity.
The post AM Best assigns PCA to new Bermuda insurer Fortium appeared first on ReinsuranceNe.ws.
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đź“° This article is sourced from a trusted insurance industry publication. Farmer Stockman Insurance shares this for informational purposes only. Always consult a licensed advisor for personalized guidance.
