AM Best has reaffirmed the Financial Strength Rating (FSR) and Long-Term Issuer Credit Rating (Long-Term ICR) for both Fontana Reinsurance Ltd. (Fontana Re) and Fontana Reinsurance U.S. Ltd. (Fontana Re US).
These ratings, an FSR of A (Excellent) and a Long-Term ICR of “a+” (Excellent), come with a stable outlook. Both companies are based in Hamilton, Bermuda.
The ratings agency acknowledges that, since its inception, Fontana has maintained its operating performance and overall balance sheet strength at levels meeting expectations. The ratings for Fontana Re are grounded in its very strong balance sheet, as evaluated by AM Best. Additionally, the company’s adequate operating performance, neutral business profile, and robust enterprise risk management (ERM) contribute to its rating.
Similarly, Fontana Re US’s ratings reflect its very strong balance sheet, as well as its adequate operating performance, neutral business profile, and strong ERM capabilities.
Owned by Fontana Holdings L.P. (Fontana), both Fontana Re and Fontana Re US operate under the umbrella of Fontana, a joint venture between RenaissanceRe Holdings Ltd. (RenaissanceRe) and various third-party capital partners. This venture represents RenaissanceRe’s first foray into the casualty and specialty risk market. Fontana’s management is exclusively handled by Renaissance Underwriting Managers, Ltd. (RUM), and the entity is integrated into RenaissanceRe’s consolidated financial statements.
As the entities continue to grow, AM Best anticipates that Fontana will consistently generate underwriting profits and positive operating income, maintaining risk-adjusted capitalization at levels similar to RenaissanceRe’s other underwriting entities.
Fontana began operations in April 2022 with an initial capital commitment of US$475 million, assuming a whole account quota share of RenaissanceRe’s casualty and specialty book. Since then, its capital has increased to support growth in both Fontana Re and Fontana Re US.
The ratings of these Fontana entities are influenced by the strength and experience of RenaissanceRe’s management team, their leadership in ERM, and the benefits accrued from RenaissanceRe’s management through RUM, which oversees underwriting, pricing, risk selection, reserves, investments, claims, and more.
In other ratings-related developments, AM Best has also reaffirmed the ratings of Starr International Company’s (SICO) insurance and reinsurance subsidiaries.
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