Global credit ratings agency AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Fed Re Ltd. (Fed Re) (Bermuda), with a stable outlook.

According to AM Best, the ratings reflect Fed Re’s balance sheet strength, which the agency assesses as strong.

The agency also cited the company’ adequate operating performance, neutral business profile and appropriate enterprise risk management.

For those unaware, Fed Re is a subsidiary of Federal Life Group, Inc., and its ultimate parent, Insurance Capital Group, LLC (ICG).

ICG is an affiliate of Bain Capital, and Fed Re is an affiliate of Federal Life Insurance Company (Fed Life).

Furthermore, AM Best also noted that the ratings reflect their expectation that Fed Re’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), will remain at the strongest level through the end of business plan provided, through the end of 2028, supported by capital contributions as necessary.

As the agency explains, it expects capital expansion to come from a combination of organic growth and parental support.

The agency also stated that it will continue to monitor the development and appropriateness of Fed Re’s investment portfolio, asset allocation, asset liability management, as the liabilities continue to grow over time within the organisation.

In addition, AM Best also expects Fed Re’s ongoing trend of profitable premium growth to continue, as management executes on its business plans, which includes its expansion and diversification efforts.

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