AM Best Co has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of the captive reinsurer for The Dow Chemical Company, saying the outlook for both is stable.

The agency said the ratings for Michigan-domiciled Dorinco Reinsurance Company recognize its strong risk-adjusted capitalization, strategic relationship with the parent and balanced risk profile.

AM Best added that the risk profile of Dorinco remains diversified through the short-tail nature of its unrelated third party business and the longer-tail exposure associated with the Dow business.

Partially offsetting the positive rating factors are the challenges faced by its ultimate parent, which has recently completed a sizeable acquisition and has been progressing towards restructuring its credit profile.

If Dow’s credit profile weakens, said AM Best, it could put pressure on the ratings of Dorinco.