AM Best Affirms Credit Ratings of Federated Underwriting Company
January 21 2022 - 10:04AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-”
(Excellent) of Federated Underwriting Company (Federated)
(Colchester, VT). The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect Federated’s balance sheet strength, which AM
Best assesses as very strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management. The ratings also reflect the credit enhancement
received 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 insurance market. AM Best
considers Federated’s business profile to be limited, as it
operates as a single-parent captive insurer whose sole purpose is
to take on specific risks related to its parent’s insurance
programs. Being a start-up company, Federated’s historical
operating performance has yet to be determined. The operating
performance assessment of adequate reflects AM Best’s neutral
position until business matures and evolves. AM Best’s assessment
is based largely on Federated’s historical loss experience, as well
as management’s projections and ability to execute its business
plan.
Lastly, the ratings include a level of credit enhancement from
State Street, one of the world’s largest financial service
organizations. AM Best believes that given the captive nature of
the business being insured, the interests of State Street and
Federated are aligned directly, and additional capital and
financial flexibility are available if necessary.
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 use of Best’s Credit
Ratings, Best’s Preliminary Credit Assessments and AM Best press
releases, please view Guide to Proper Use of Best’s Ratings &
Assessments.
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 London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2022 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Fred Eslami Associate Director +1 908 439 2200,
ext. 5406 fred.eslami@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,
Communications +1 908 439 2200, ext. 5644
james.peavy@ambest.com
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