AM Best has affirmed the financial strength rating of “A-” (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Vermont-based Federated Underwriting Company (Federated). Federated is a single-parent captive of State Street, formed and capitalised in 2019 as part of State Street’s alternative risk financing strategy. The outlook of these credit ratings is stable. The ratings reflect Federated’s balance sheet strength, which AM the rating agency assesses as “very strong”. In addition to 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, one of the world’s largest financial service organisations. AM Best considers Federated’s business profile to be limited. The company’s sole purpose is to take on specific risks related to State Street’s insurance programmes. The operating performance assessment of adequate reflects AM Best’s neutral position until Federated’s business matures and evolves. Consideration is also given to management’s projections and its ability to execute on these projections in conjunction with Federated’s overall mission and business plans.
