AM Best Affirms Credit Ratings of Dorinco Reinsurance Company

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) (Midland, MI), which is the captive reinsurance company of The Dow Chemical Company (Dow). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Dorinco’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. Dorinco is a wholly owned subsidiary of Liana Limited, which is ultimately a wholly owned subsidiary of Dow.

Dorinco’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level. The balance sheet strength also considers the company’s track record of overall positive reserve development, conservative investment strategy, good liquidity profile and the enhanced financial flexibility provided by its ultimate parent, Dow.

Dorinco has historically generated strong operating earnings, resulting in performance metrics that have consistently outperformed its composite group. In 2020, the company reported a net profit of USD 72.6 million (2019: USD 47.2 million) and a return-on-equity ratio of 11.5% (2019: 7.1%). Recent overall operating performance has been driven by the investment contribution as underwriting losses have manifested in recent years.

Dorinco issues direct property and liability insurance policies to Dow and certain related companies, and participates in property and casualty reinsurance treaties covering Dow or related parties with other insurance companies. The company also writes a book of uncorrelated third-party business that is largely comprised of non-standard auto, which involves short-tailed risks. This strategy serves to reduce the potential volatility of the Dow-related business and has proven successful for a number of years.

As a single-parent captive, Dorinco is well-integrated within the Dow group and plays a fundamental role in managing the group’s risk exposures. The company’s risk management capabilities are in line with its risk profile.

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 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.

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