AM Best Affirms Credit Ratings of Blue Whale Re Ltd.

Rhea-AI Summary

AM Best has reaffirmed the Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of 'a+' (Excellent) for Blue Whale Re Ltd., with a stable outlook. The ratings reflect Blue Whale's strong balance sheet and operating performance, underscoring its crucial role as the captive insurer for Pfizer (PFE). Despite its reliance on Pfizer for capitalization and reinsurance, Blue Whale's operations are expected to maintain strong results. However, any shifts in Pfizer's support could impact Blue Whale's ratings.

Positive

• Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of 'a+' (Excellent) affirmed by AM Best.
• Strong operating performance and very strong balance sheet strength reported.
• Stable outlook indicating expected supportive capitalization.

Negative

• Dependence on Pfizer for financial stability raises concerns; changes in Pfizer's support could affect Blue Whale's ratings.
• Heavy reliance on reinsurance with substantial net retentions could pose risks.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Blue Whale Re Ltd. (Blue Whale) (Burlington, VT). 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 captive insurer for Pfizer Inc. (Pfizer) [NYSE: PFE], a leading global pharmaceutical company. As Blue Whale insures or reinsures Pfizer’s global property exposures, it plays an important role in Pfizer’s overall ERM and assumes a critical role in protecting the Pfizer enterprise’s assets.

The stable outlooks reflect AM Best’s view that the company’s operations will continue to generate operating results that engender supportive capitalization for the ratings.

Blue Whale’s capitalization is very strong, albeit reliant on its parent. It 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, it is heavily dependent on reinsurance, with very substantial net retentions. Its reinsurance is provided by a large panel of reinsurers that provide significant capacity. AM Best takes into consideration the quality of the reinsurers, and the substantial financial resources and support available to the captive as part of the Pfizer enterprise.

Blue Whale’s operating results continue to be strong, digesting infrequent substantial losses in line with its mission. The company has adjusted premium for hard market conditions offset by the company’s decreasing property insurance requirements following Pfizer’s divestiture of Upjohn Inc., including the Caribbean production and warehouse facilities.

Due to the nature of the relationship between Blue Whale and Pfizer, changes in AM Best’s perception of Pfizer’s ability and/or willingness to support Blue Whale can impact Blue Whale’s ratings. Pfizer’s market-based credit risk measures indicate general strength and take into account the company’s strategic shift toward newer pharmaceuticals, with Pfizer having completed divestiture of its over-the-counter pharmaceutical business and contribution of its mature pharmaceuticals going off patent to a joint venture. Since the emergence of COVID-19, Pfizer also has increased usage of Blue Whale by adding incremental product liability coverage (normally wholly retained by the parent) for a portion of its vaccine-related products distributed in several developing countries as a ‘belt and suspenders’ precaution beyond its required sovereign indemnifications. Based on the parent’s corporate strategy, and Blue Whale’s current reinsurance program, Blue Whale appears well-positioned to continue to address Pfizer’s insurance needs.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220713005610/en/

Kourtnie Beckwith

Financial Analyst

+1 908 439 2200, ext. 5124

kourtnie.beckwith@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Dan Teclaw

Associate Director

+1 908 439 2200, ext. 5394

dan.teclaw@ambest.com

Jeff Mango

Managing Director,

Strategy & Communications

+1 908 439 2200, ext. 5204

jeffrey.mango@ambest.com

Source: AM Best

FAQ

What are the latest ratings for Blue Whale Re Ltd. as of October 2023?

AM Best has affirmed Blue Whale Re Ltd.'s Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of 'a+' (Excellent) with a stable outlook.

How does Blue Whale Re Ltd. relate to Pfizer Inc. (PFE)?

Blue Whale Re Ltd. serves as the captive insurer for Pfizer Inc., providing coverage for its global property exposures.

What are the implications of Blue Whale's ratings for Pfizer (PFE)?

Changes in AM Best's perception of Pfizer's ability or willingness to support Blue Whale can directly impact Blue Whale's ratings.