AM Best Affirms Credit Ratings of Blue Whale Re Ltd.
April 30 2020 - 10:16AM
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) remains 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, it is heavily
dependent on reinsurance, with very substantial net retentions. Its
reinsurance is provided by a large panel of reinsurers that provide
significant capacity. 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 impact Blue Whale’s
ratings, as it is dependent on Pfizer’s ability to support its
credit risk profile, competitiveness and risk management. AM Best’s
view of third-party credit ratings and Pfizer’s market-based credit
risk measures indicate general strength, despite short-term
uncertainty as Pfizer refocuses its strategy toward newer
pharmaceuticals, divests its over-the-counter pharmaceutical
business and contributes its mature pharmaceuticals going off
patent to a joint venture. That said, the captive continues to be
an integral component of Pfizer’s risk management platform.
Blue Whale’s operating results and reserve levels reverted to
historical levels in 2019, following final resolution of Hurricane
Maria-related claims. Prospectively, the company anticipates lower
property insurance requirements through 2020 as the parent
evaluates its Caribbean production and warehouse insurance
requirements. Based on the parent’s refocused corporate strategy
described above, as well as Blue Whale’s current reinsurance
program, Blue Whale appears well-positioned to address Pfizer’s
insurance needs.
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 Guide to 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 credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in New York, London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Dan Teclaw Senior Financial Analyst +1 908 439 2200,
ext. 5394 dan.teclaw@ambest.com Christopher
Sharkey Manager, Public Relations +1 908 439 2200,
ext. 5159 christopher.sharkey@ambest.com Susan
Molineux Director +1 908 439 2200, ext. 5829
susan.molineux@ambest.com
Jim Peavy Director, Public Relations +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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