A.M. Best Affirms Credit Ratings of Blue Whale Re Ltd.
April 17 2018 - 4:15PM
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 balance sheet strength, which
A.M. Best categorizes as very strong, as well as its strong
operating performance, neutral business profile and appropriate
enterprise risk management.
The ratings also reflect Blue Whale’s strategic position as the
captive insurance company for Pfizer, Inc. (Pfizer)
[NYSE:PFE], a leading global pharmaceutical company. As Blue Whale
insures or reinsures 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 enterprise`s
assets.
Blue Whale’s capitalization is very strong, albeit reliant on
the parent. It 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.
Due to the nature of the relationship between Blue Whale and
Pfizer, changes in Pfizer’s credit risk can have certain impact on
Blue Whale’s ratings as it is dependent on Pfizer’s ability to
support its credit risk profile, competitiveness and risk
management. The captive continues to be an integral component of
Pfizer’s risk management platform. A.M. Best’s view of third-party
credit ratings and market-based credit risk measures of Pfizer
indicates stability, resulting in Blue Whale’s outlooks being
stable.
Positive rating actions could occur if the company’s operating
performance improves to outperform similarly rated peers with
supportive risk-adjusted capitalization. Negative rating action
could occur if underwriting performance weakens and negatively
impacts risk-adjusted capitalization over time. Negative rating
action also could occur if there is a material shift in risk
profile that could potentially undermine the stability and
profitability of the company. Additionally, negative rating impact
could occur if the parent’s credit profile materially
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. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20180417006619/en/
A.M. BestDan Teclaw, +1 908-439-2200, ext.
5394Senior Financial
Analystdan.teclaw@ambest.comorSusan Molineux, +1
908-439-2200, ext. 5829Associate
Directorsusan.molineux@ambest.comorChristopher
SharkeyManager, Public Relations, +1 908-439-2200, ext.
5159christopher.sharkey@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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