AM Best

A.M. Best Removes From Under Review the Ratings of Fidelity National Group and Its Members

Michael Russo
Financial Analyst
(908) 439-2200, ext. 5372

Michael Lagomarsino, CFA
Assistant Vice President
(908) 439-2200, ext. 5810

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK, N.J. - DECEMBER 19, 2011 12:00 AM (EST)
A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of "a-" of Fidelity National Group (Fidelity) and its members, Fidelity National Insurance Company (FNIC) (Santa Barbara, CA) and Fidelity National Property and Casualty Insurance Company (FNPC) (New York, NY). The outlook assigned to all ratings is stable.

These rating actions follow the recent sale of Fidelity National Indemnity Insurance Company to WRM America Holding Company, LLC, which consists of Fidelity's "Write-Your-Own" flood insurance that acted as a natural hedge against Fidelity's personal lines business.

The rating actions reflect Fidelity's excellent risk-adjusted capitalization and the implementation of recent underwriting initiatives designed to improve underwriting profitability. Initiatives include achieving rate adequacy, enhanced loss cost controls and more refined risk selection. In addition, management recently has been proactive in reducing its aggregate risk exposures as well as purchasing additional catastrophe reinsurance protection.

Offsetting these positive rating factors are Fidelity's historically volatile and weak underwriting performance on its underlying private passenger auto and homeowners' business, as well as the execution risk associated with its ongoing corrective actions to improve results that would be in line with management's expectations.

Although the outlook assigned is stable, factors that may lead to negative rating actions include a continued deterioration in Fidelity's underwriting and operating performance and the erosion of surplus that could consequently cause a decline in its risk-adjusted capital position.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Catastrophe Analysis in A.M. Best Ratings"; "Rating Members of Insurance Groups"; "Risk Management and the Rating Process for Insurance Companies"; and "Understanding BCAR for Property/Casualty Insurers." Methodologies can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

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