Monday, February 26, 2024

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AM Best affirms State Street’s captive ratings

AM Best has affirmed the financial strength rating of A- (excellent) and the long-term issuer credit rating of “a-” (excellent) of Vermont-domiciled Federated Underwriting Company. The outlook for the ratings is stable.

Federated is a single parent captive owned by global financial services company, State Street Corporation.

The captive was formed in 2019 as part of State Street’s alternative risk financing strategy following significant price firming in the commercial market.

AM Best considers Federated’s business profile to be limited, and its sole purpose is to take on specific risks related to State Street’s insurance programmes.

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 parent.

As a relatively new captive, Federated’s historical operating performance has yet to be determined.

The operating performance assessment of adequate reflects AM Best’s neutral position until the captive’s business profile matures.