A.M. Best Affirms Credit Ratings of Dorinco Reinsurance Company

OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term 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 of
these Credit Ratings (ratings) remains stable.

The ratings reflect Dorinco’s balance sheet strength, which A.M. Best
categorizes 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 was created to serve as a risk management tool to help Dow
efficiently manage its risks and insurance liabilities. 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.
While Dorinco is a captive of Dow, it also writes a book of uncorrelated
third-party business. This book of largely non-standard auto is stable
and short-tailed and serves to reduce the volatility of its Dow-related
captive business. Since implementing this model a number of years ago,
Dorinco continues to deliver strong overall earnings and underwriting
results, while maintaining very strong risk-adjusted capitalization and
a conservative investment portfolio. Partially offsetting these positive
rating factors is Dorinco’s limited business profile as a single-parent
captive and mono-line reinsurer.

Factors that could lead to positive rating action include a continued
and profitable operating performance, an enhancement of Dorinco’s
profile in the reinsurance market or an improvement in the risk-adjusted
capitalization. Key drivers that could lead to negative rating action
are unfavorable operating profitability trends, significant catastrophe
or investment losses, a significant decline in risk-adjusted
capitalization or loss of parental support.

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 Credit Ratings 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 see A.M. Best’s
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view
Guide
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Guilherme (Guy) Monteiro Simoes, +1
908-439-2200, ext. 5301

Senior Financial Analyst
guy.simoes@ambest.com
or
Christopher
Sharkey, +1 908-439-2200, ext. 5159

Manager, Public Relations
christopher.sharkey@ambest.com
or
Scott
Mangan,+1 908-439-2200, ext. 5593

Associate Director
scott.mangan@ambest.com
or
Jim
Peavy, +1 908-439-2200, ext. 5644

Director, Public Relations
james.peavy@ambest.com

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