A.M. Best Revises Outlook to Positive for Dorinco Reinsurance Company

A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Dorinco Reinsurance Company (Dorinco) (Midland, MI), which is the captive reinsurance company for The Dow Chemical Company (Dow).

The revised outlook recognizes Dorinco's continued positive net income and relatively consistent underwriting income, strong risk-adjusted capitalization, strategic relationship with Dow and Dorinco's balanced risk profile. Dorinco's risk profile remains diversified through its short-tail unrelated third party reinsurance business and the longer-tail exposure associated with its Dow business.

Dorinco initiated a strategy several years ago to reposition its book of business with the goal of improving profitability, creating stable, sustainable results and reducing volatility, while still maintaining its primary objective of being a risk management tool for Dow. Dorinco has demonstrated steady and measurable progress, and management is committed to maintaining this strategy going forward.

Partially offsetting these positive rating factors are the challenges faced by Dorinco's ultimate parent. In April 2009, Dow completed a sizeable acquisition at a time of turmoil in the financial markets. Over the past year, as financial markets have opened up, Dow has substantially reduced its near-term debt maturities and continues to improve its debt-to-capital ratio. Dow's credit profile has stabilized, but if it weakens, it could put pressure on Dorinco's ratings.

A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world.

For current Best's Credit Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.