Fortium Insurance Company Ltd., a new professional start-up company in Bermuda, has received a Preliminary Credit Assessment (PCA) from AM Best, a Financial Strength Assessment of A- pca (Excellent), and a Long-Term Issuer Credit Assessment of “a-” pca (Excellent).
PCA’s outlook is also stable, reflecting 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, PCA said that in line with the company’s business strategy, AM Best expects Fortium to maintain a very strong balance sheet strength assessment.
The outlook is supported by risk-adjusted capital expected to remain at the highest levels over the initial five-year forecast period, according to Best’s capital adequacy ratio (BCAR) assessment.
Premium growth is expected to be significant in the company’s first few years, supported by an initial capital investment of approximately $110 million in 2026 and retained earnings throughout the forecast period.
While Fortium plans to waive all premiums (making reinsurance credit risk material), this is expected to be partially mitigated through the use of highly rated or fully collateralized counterparties.
Furthermore, given the ratings agency’s view, a conservative portfolio is expected to maintain lower investment risk, which will support the stability of balance sheet metrics going forward.
AM Best said: “The full operating performance assessment and limited business profile assessment are based on Fortium’s business plan submitted to AM Best. The plan includes significant premium growth in the first year of operations as well as improvements in operating profitability to support the full operating performance assessment.”
Adding: “The company has outlined a business plan for the short-tail specialty business, which is expected to be diversified across business lines and geographies. Fortium’s management has extensive experience in the specialty line business market.”
The assessment of Fortium’s limited business profile considers the execution risks faced by start-up organizations. It also acknowledges the difficulties of achieving market penetration and maintaining profitability in specialized areas.
While the company already has an enterprise risk management (ERM) framework in place, the structure is expected to evolve further as the organization grows and matures.
