AM Best Affirms Credit Ratings of Blue Whale Re Ltd.
04 Avril 2019 - 4:04PM
Business Wire
AM 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
AM Best categorizes as very strong, as well as its strong operating
performance, neutral business profile and appropriate enterprise
risk management (ERM).
The ratings also reflect Blue Whale’s strategic position as the
captive insurer 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 ERM and assumes a critical role in protecting the
Pfizer enterprise’s assets.
Blue Whale’s capitalization is very strong, albeit reliant on
its 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 depends heavily on
reinsurance. Nevertheless, AM 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. AM Best’s view of third-party
credit ratings and Pfizer’s market-based credit risk measures
indicate stability, resulting in Blue Whale’s outlooks being
stable.
The company’s results rebounded in 2018, as the captive
recovered from the impact of Hurricane Maria, which occurred in
late 2017. Resolution of all Hurricane Maria-related claims is
expected by mid-2019, after which time reserves are expected to
return to historical levels.
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, or if there is a
material shift in risk profile that could potentially undermine the
stability and profitability of the company. In addition, negative
rating action could occur if the parent’s credit profile materially
deteriorates.
AM 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 AM 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 AM 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 AM
Best press releases, please view Guide for Media - Proper
Use of Best’s Credit Ratings and AM Best Rating Action Press
Releases.
AM Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2019 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/20190404005470/en/
Dan TeclawSenior Financial Analyst+1 908 439 2200, ext.
5394dan.teclaw@ambest.com
Susan MolineuxDirector+1 908 439 2200, ext.
5829susan.molineux@ambest.com
Christopher SharkeyManager, Public Relations+1 908 439 2200,
ext. 5159christopher.sharkey@ambest.com
Jim PeavyDirector, Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
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