OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Blue Whale Re Ltd. (Blue Whale) (Burlington, VT). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Blue Whale`s strong risk-adjusted capitalization and conservative operating strategy. The ratings also consider the company`s critical and central role, and favorable profile as part of the Pfizer Group, as well as the excellent operations performance. Partially offsetting these positive rating factors are Blue Whale`s very large gross and net underwriting exposures to property losses, and its dependence on reinsurance.
Blue Whale is a single-parent captive of Pfizer Inc. (Pfizer) [NYSE: PFE], a leading global pharmaceutical company. As Blue Whale (re)insures Pfizer`s global property exposures, it plays an important role in Pfizer`s overall enterprise risk management and assumes a critical role in protecting the Pfizer Group`s assets. Thus, Blue Whale benefits from Pfizer Group`s extensive risk management and loss control programs.
Blue Whale operates at conservative underwriting leverage levels; however, it provides coverages with extremely large limits, and its gross exposures per loss occurrence are elevated. Although Blue Whale benefits from reinsurance protection, its net retentions remain very substantial. Reinsurance is provided by a large panel of reinsurers, and Blue Whale relies on significant capacity to support its obligations. Therefore, it is heavily dependent on reinsurance. Nevertheless, A.M. Best recognizes the quality of the reinsurers, and the substantial financial resources and support available to the captive as part of the Pfizer Group.
Blue Whale’s ratings and outlooks could be upgraded if the parent’s and company’s operating performance improves, and risk-adjusted capital remains supportive of the ratings. Negative rating impact could occur if underwriting performance declines and demonstrates volatility, impacting earnings and capitalization negatively over time. Negative rating impact also could occur if a material shift in risk profile undermines the company’s stability and profitability. Additionally, negative rating impact could occur if the parent’s credit profile deteriorates.
A.M. 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 A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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