AM Best has affirmed the Financial Strength Rating of A (Excellent) and the long-term Issuer Credit Rating (ICR) of “a+” (Excellent) of Vermont-based Blue Whale Re. 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, the global pharmaceutical company. As Blue Whale (re)insures Pfizer’s global property exposures, it plays a key role in Pfizer’s overall ERM and protecting the Pfizer enterprise’s assets.
Blue Whale provides coverages with limits and elevated potential gross exposures per loss occurrence. Its net property retention remains substantial.
Nonetheless, AM Best finds its reinsurance programme appropriate and diverse, providing ample coverage for all of its lines of business. AM Best 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 retention for low frequency, high severity coverage.
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.
AM Best warns that negative ratings could occur if its perception wanes of Pfizer’s ability and willingness to support the captive.
