3 April 2017Analysis

AM Best affirms Pfizer captive ratings

Ratings agency AM Best has affirmed the financial strength rating of A (Excellent) of Blue Whale Re, a Vermont-based, single-parent captive of pharmaceutical company Pfizer.

AM Best stated that the ratings reflect Blue Whale’s strong risk-adjusted capitalisation and conservative operating strategy.

The action also consider the company’s critical and central role, and favourable 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 Re reinsures Pfizer’s global property exposures and fulfils an important role in its overall enterprise risk management and plays a critical role in protecting the Pfizer Group’s assets.

As a result, Blue Whale Re 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,” said AM Best.

“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, 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.”

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