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FOR IMMEDIATE RELEASE
LONDON - OCTOBER 13, 2016 11:48 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Casiopea Re S.A. (Casiopea Re) (Luxembourg). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Casiopea Re’s excellent risk-adjusted capitalisation, which is supported by a substantial equalisation reserve providing the company with a significant capital cushion. The captive’s regulator, Commisariat aux Assurances of Luxembourg, has full authority in relation to any release of capital from this equalisation reserve. In addition, the captive’s low risk retention is supported by a comprehensive reinsurance programme, with a panel of financially strong reinsurers that mitigates the risk of large property and liability losses depleting capital. Casiopea Re is a captive of Telefonica S.A. (Telefonica), a leading provider of telecommunication services across Europe and Latin America. As the main reinsurer of group risks, Casiopea Re’s risk management is closely integrated with that of Telefonica.
The company has a track record of good, albeit volatile, operating performance, and has reported an average combined ratio of 91% over the past five years. In 2015, Casiopea Re reported a net profit of EUR 4.1 million, which equated to an adjusted return on capital and surplus of 1.3%. The result was driven mainly by an adequate investment profit, partly offset by a modest technical loss.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated 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.
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