AM Best Assigns Credit Ratings to Federated Underwriting Company
February 25 2020 - 2:40PM
Business Wire
AM Best has assigned a Financial Strength Rating of A-
(Excellent) and a Long-Term Issuer Credit Rating of “a-” to
Federated Underwriting Company (Federated) (Colchester, VT). The
outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Federated’s balance sheet strength, which AM
Best categorizes as very strong, as well as its adequate operating
performance, limited business profile, appropriate enterprise risk
management and one notch of credit enhancement that it receives
from its ultimate parent, State Street Corporation (State Street)
[NYSE: STT].
This single parent captive was formed and capitalized in 2019 as
part of State Street’s alternative risk financing strategy in the
wake of significant price firming in the professional liability
insurance market. Federated’s business profile is considered
limited as it will operate as a single parent captive insurer whose
sole purpose is to take on a specific layer of risk related its
parent’s professional liability and bankers blanket bond insurance
tower. AM Best views the company’s prospective operating
performance considerations as “adequate” as this includes elements
of stochastic modeling, average annual loss expectancies and tail
risk probabilities. These projections, however, are subject to a
high degree of variability due to external market factors.
Lastly, the rating includes a level of credit enhancement from
State Street., one of the world’s largest financial service
organizations. This rating enhancement considers an implied level
of financial support to be provided if and when necessary as part
of its legal obligation contained in its client agreements.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and throughout the world. For current Best’s Credit
Ratings and independent data on the captive and alternative risk
transfer insurance market, please visit
www.ambest.com/captive.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper media use of Best’s
Credit Ratings and AM Best press releases, please view Guide for
Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in New York, London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20200225005936/en/
Kourtnie Beckwith Financial Analyst +1 908 439
2200, ext. 5124 kourtnie.beckwith@ambest.com Daniel J.
Ryan Senior Director +1 908 439 2200, ext. 5325
daniel.ryan@ambest.com Christopher Sharkey Manager,
Public Relations +1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com Jim Peavy Director, Public
Relations +1 908 439 2200, ext. 5644
james.peavy@ambest.com
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