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FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 21, 2015 08:54 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 remains 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 global, 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, as well as its exposure to Dow's risks, many of which are global 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 deterioration of Dorinco's risk-adjusted capitalization, loss of parental support, unfavorable operating performance trends, excessive growth, or outsized catastrophe or investment losses. Factors that could lead to rating upgrades or a positive outlook include continued favorable operating profitability trends, improved risk-adjusted capital levels and enhancement of its profile within the reinsurance market.
A.M. 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 rating(s) that have been published on A.M. 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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.