AM Best has affirmed the ‘A’ (Excellent) financial strength rating and ‘a’ long-term issuer credit rating of Dorinco Reinsurance Company (Dorinco), domiciled in Michigan.
Dorinco is the single parent captive owned by Dow Chemical Company and the outlook for the ratings is stable.
AM Best said the balance sheet strength of Dorinco is “very strong” and is complemented by its “adequate operating performance, neutral business profile and appropriate enterprise risk management”.
The captive primarily writes direct property and liability policies for Dow and its related companies, but half of Dorinco’s premium also comes from reinsuring uncorrelated non-standard auto third-party business.
“Dorinco has exhibited a track record of overall positive reserve development, conservative investment strategy and a good liquidity profile, which are enhanced by its ultimate parent, Dow Inc., which provides financial flexibility,” AM Best stated.
“The ratings also reflect Dorinco’s operating performance, which AM Best assess as adequate.
The company’s historically favourable operating performance continued to improve through 2023, with combined ratio staying below 100 for two consecutive years.
“In prior years, the fluctuations in Dorinco’s metrics were mostly due to redundant reserving, which may produce lower accident year combined ratios when the claims are ultimately settled.”