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FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 26, 2014 10:06 AM (EDT)
A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a" of Dorinco Reinsurance Company (Dorinco) (Midland, MI), which is the captive reinsurance company of The Dow Chemical Company (Dow). The outlook for both ratings is stable.
The rating affirmations reflect Dorinco's continued strong operating performance, balanced risk profile and strong risk-adjusted capitalization. The ratings also consider Dorinco's strategic importance within the Dow organization and Dorinco's successful mitigation of Dow's worldwide, long-tail and volatile risks through its short-tailed uncorrelated third-party reinsurance business.
Partially offsetting these positive rating factors is Dorinco's limited profile in the reinsurance market, which is a function of its hybrid captive nature. Another offsetting factor is Dorinco's exposure to Dow's risks, many of which are worldwide and long tail in nature.
A.M. Best believes that Dorinco is well positioned at its current rating level. Key drivers that could lead to a ratings downgrade or a revision in the outlook to negative include a decline in Dorinco's risk-adjusted capitalization, unfavorable operating performance trends or an outsized catastrophe loss. Alternatively, factors that could lead to rating upgrades or a positive outlook include continued favorable operating profitability trends coupled with improved risk-adjusted capital levels.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.