AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) of Dorinco Reinsurance Company (Dorinco). Dorinco is the single-parent reinsurance captive of the Michigan-based Dow Chemical Company (Dow). The outlook of these credit ratings is stable. AM Best says the ratings reflect Dorinco’s balance sheet strength, which it assesses as “very strong”, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The very strong balance sheet strength assessment is supported by Dorinco’s risk-adjusted capitalisation, as measured by AM Best’s capital adequacy ratio, which remains at the strongest level. Dorinco has exhibited a track record of overall positive reserve development, conservative investment strategy and good liquidity profile. These are enhanced by its ultimate parent, Dow, which provides financial flexibility. The ratings also reflect Dorinco’s operating performance, which AM Best assess as adequate. The company’s historically favourable operating performance improved during 2022, although its profitability metrics have trended in an unfavourable direction in recent years. The fluctuations in Dorinco’s metrics are due to redundant reserving, which may produce lower accident year-combined ratios when the claims are ultimately settled. Additionally, the ratings acknowledge Dorinco’s business profile, which the ratings company assesses as neutral. Dorinco issues direct property and liability insurance policies to Dow and certain related companies. It also participates in property and casualty reinsurance treaties covering Dow and related parties with other insurance companies.
