AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) 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 assesses 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 only 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 provides coverages with significant limits and elevated potential gross exposures per loss occurrence. Its net property retentions remain quite substantial. Nonetheless, the reinsurance program is appropriate and diverse, providing ample coverage for all of its lines of business. AM Best recognizes the quality of the reinsurers and the substantial financial resources and support available to the captive as part of Pfizer. Blue Whale’s historical and prospective operating performance are strong with low average loss and minimal expense ratios. However, volatility of key metrics can be low to moderate with its high retentions for low frequency, high severity coverage.
Blue Whale is a wholly owned captive insurance subsidiary of Pfizer, created to insure or reinsure specific risks of the parent organization. In recent years of hard market conditions, Blue Whale has opted to participate in small slices of its CAT tower as an economic efficiency for the Pfizer enterprise. It also offers capacity for cyber liability coverage when required by hard market pricing.
Negative rating action could occur if AM Best's perception wanes of Pfizer’s ability and/or willingness to support the captive.
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.
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Kourtnie Beckwith CPCU, AU, AMIM
Senior Financial Analyst
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