AM Best has confirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of a+ (Excellent) for Blue Whale Re located in Burlington, VT, the sole captive for Pfizer.
The credit agency noted that these ratings underscore Blue Whale’s robust balance sheet, strong operating performance, neutral business profile, and effective enterprise risk management (ERM).
Blue Whale is integral in insuring or reinsuring Pfizer’s global property exposures and plays a vital role in the company’s overarching ERM strategy to protect its assets.
As per AM Best, the ratings reflect its ability to cover liabilities with significant retentions and the support of a diverse and substantial reinsurance program. It notes the quality of the reinsurers involved and the extensive financial resources available to the captive as part of the Pfizer family.
The captive’s operating performance has been favorable, demonstrating low average loss and minimal expense ratios compared to its industry peers. Despite the potential for moderate volatility due to its high retentions for low-frequency, high-severity coverage, the performance in 2023 was within acceptable risk tolerance levels.
As a wholly owned subsidiary of Pfizer, Blue Whale was established to insure or reinsure specific risks associated with its parent organization. In response to recent hard market conditions, Blue Whale has strategically opted to take smaller portions of its catastrophe tower to maximize economic efficiency for Pfizer.
Additionally, it has provided capacity for cyber liability coverage in response to challenging market pricing.
Potential negative rating actions could be prompted if AM Best perceives any change in Pfizer’s ability or willingness to support Blue Whale, which could impact the captive insurer’s operational stance and financial robustness.
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