AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a+” (Excellent) of Pfizer’s Vermont-domiciled captive, Blue Whale Re.
The ratings agency said the outlook for these Credit Ratings are stable.
Blue Whale provides coverages with significant limits and elevated potential gross exposures per loss occurrence.
During the hard market, Blue Whale has opted to participate in small slices of its CAT tower as an economic efficiency for the group. It also offers capacity for cyber liability coverage when required.
Its net property retentions remain quite substantial. Nonetheless, AM Best said the reinsurance programme is appropriate and diverse, providing ample coverage for all of its lines of business.
AM Best said it recognises 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.
The ratings also 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).
AM Best said: “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”
In addition, a negative rating action could occur if AM Best’s perception wanes of Pfizer’s ability and willingness to support the captive.