AM Best has assigned a financial strength rating of A- and a long-term issuer credit rating of “a-” to Soteria Reinsurance Ltd. (Soteria), a Bermuda-based reinsurer. The outlook for both ratings is stable.
AM Best said that the ratings reflect Soteria’s balance sheet strength, which AM Best assesses as very strong, along with its adequate operating performance, limited business profile, and appropriate enterprise risk management (ERM). The company also benefits from ratings lift due to its relationship with its ultimate parent, FMR LLC.
Soteria also receives capital contributions, operational support, and investment expertise from FMR LLC. The company plays a strategic role in supporting FMR LLC’s US insurance entities by offering reinsurance solutions and increasing Fidelity’s presence in the insurance sector.
Soteria’s operating performance is considered adequate. Its portfolio consists of affiliated business assumed from Fidelity Investments Life Insurance Company, including Single Premium Immediate Annuities and Single Premium Deferred Annuities.
The company holds a Bermuda Class E license, allowing it to expand its reinsurance offerings to unaffiliated entities seeking reinsurance solutions for annuity and life insurance business.
AM Best assesses Soteria’s ERM framework as appropriate. The company has a defined risk appetite and investment guidelines and operates in compliance with Bermuda Monetary Authority (BMA) regulations. It also leverages its relationship with FMR LLC for risk management support.
Soteria’s financial stability is also indicative of the current state of the Bermuda reinsurance market. A study from KPMG revealed that the offshore reinsurance segment in the island nation, as well as the Cayman Islands, are seeing growth, driven by increasing use of sidecar models and expansion into new lines of business.
These developments are taking place alongside regulatory changes affecting offshore jurisdictions, with Bermuda implementing enhancements to its regulatory framework, introducing more stringent reporting and governance requirements under a risk-sensitive capital regime.
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