Fortegra deal tests DB Insurance's capital strength

Hybrid securities supported the year-end 2025 BCAR assessment.

DB Insurance is foreseen to recover through earnings, after a potential hit on its risk-adjusted capitalisation from the acquisition of The Fortegra Group, Inc. (Fortegra).

DBI’s risk-adjusted capitalisation remained at the strongest level at the end of 2025, based on Best’s Capital Adequacy Ratio (BCAR), including credit for hybrid securities, according to AM Best. 

However, it said the insurer has enough capital to absorb the impact and is expected to rebuild its capital through strong earnings.

AM Best also said the insurer’s ability to generate capital internally, financial flexibility and asset-liability management have helped its capital remain resilient despite challenging conditions, including volatile interest rates.

DBI’s adjusted financial leverage ratio was 11.9% at year-end 2025, including equity credit for hybrid securities, whilst interest coverage was strong.

DBI’s operating performance remains strong, supported by a double-digit return on equity, a combined ratio that generally outperforms its domestic peers and strong investment profits. 

AM Best expects the recent decline in overall underwriting profitability to remain manageable, following measures including rate adjustments and tighter underwriting standards.

The company’s large contractual service margin is expected to continue providing a stable source of underwriting income from its long-term insurance business. 

AM Best also expects the Fortegra acquisition to provide a moderate boost to DBI’s overall earnings.