12 March 2015Services

AM Best affirms Pfizer captive ratings

Rating agency AM Best has affirmed the financial strength and the issuer credit rating of Blue Whale Re, a captive of pharmaceutical company Pfizer.

AM Best affirmed its financial strength rating of ‘A’ (Excellent) and the issuer credit rating of ‘a+’. The outlook for both ratings is stable.

The rating agency said the ratings reflect Blue Whale`s strong capitalisation and conservative operating strategy.

“The ratings also consider the company`s critical and central role and favourable profile as part of the Pfizer Group, as well as the excellent performance of its operations. 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,” said AM Best.

Blue Whale re/insures Pfizer`s global property exposures, playing an important role in Pfizer`s overall enterprise risk management and assumes a critical role in protecting the Pfizer group`s assets.

AM Best said: “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.

“Reinsurance is provided by a large panel of reinsurers, and Blue Whale relies on significant capacity to be able to support its obligations. As such, it is heavily dependent on reinsurance. Nevertheless, AM Best recognises the quality of the reinsurers and the substantial financial resources and support available to the captive as part of the Pfizer group.”