AM Best has affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a+" of Blue Whale Re. The outlook for both ratings is stable.
The ratings reflect Blue Whale's strong capitalisation and conservative operating strategy. The ratings also consider the company's critical and central role as part of the Pfizer Group, as well as the 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.
Blue Whale is a single parent captive of Pfizer, a global pharmaceutical company. As Blue Whale reinsures Pfizer's global property exposures, it plays an important role in its overall enterprise risk management and assumes a critical role in protecting the Pfizer Group's assets.
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.
Positive rating actions could occur if there is a sustainable and long-term improvement in the operating performance and capital strength of Blue Whale and Pfizer.
Conversely, negative rating actions could occur as a result of material operational and performance issues at both Blue Whale and Pfizer. Rating pressure would be likely if there were any adverse changes to many of the regulatory standards to which Pfizer adheres.
The potential for future acquisitions, the associated integration risks and company profile changes could lead to both positive and/or negative pressure on the ratings, depending on the acquisition details.
