A.M. Best has affirmed the financial strength rating of ‘A-’ (Excellent) and the long-term issuer credit rating of ‘a-’ (Excellent) of Federated Underwriting Company, the single-parent captive of global financial services firm State Street. The outlook of these credit ratings is stable. Alternative risk transfer rating agency A.M. Best assessed that these ratings reflect Federated’s very strong balance sheet, adequate operating performance and appropriate enterprise risk management, as well as the credit enhancement received from State Street when necessary. Federated was formed in 2019 as part of State Street’s revised alternative risk financing strategy following huge price increases in the commercial insurance market. A.M. Best recognised Federated’s limited business profile in its capacity as a single-parent captive insurer, where the company’s main purpose is to take on specific risks relating to State Street’s insurance programmes. It was noted that, as a start-up company, Federated does not yet have a historic operating performance, but A.M. Best’s assessment of “adequate” reflects its neutral position until Federated matures and evolves.
