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FOR IMMEDIATE RELEASE
LONDON - DECEMBER 09, 2016 12:09 PM (EST)
A.M. Best has commented that the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Casiopea Re S.A. (Casiopea Re) (Luxembourg) remain unchanged following the creation of Nova Casiopea Re S.A. (NCRe) (Luxembourg) by Casiopea Re’s ultimate parent, Telefonica S.A. (Telefonica). The outlook of these Credit Ratings (ratings) is stable.
Casiopea Re is a captive reinsurer of Telefonica, a Spanish multinational broadband and telecommunications provider with operations in Europe, Asia, and North, Central and South America. Operating globally, Telefonica is one of the largest telephone operators and mobile network providers in the world.
Casiopea Re will be replaced by NCRe, a newly created captive of Telefonica, in the 2017 renewal of the conglomerate’s property and liability reinsurance contracts. Following the renewal of both contracts, Casiopea Re will be placed into runoff.
Casiopea Re maintains 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 A.M. Best’s view, Casiopea Re has built sufficient levels of conservatism into projections of future loss payments, and its management team is expected to use its experience managing claims to profitably manage the runoff of the loss reserves.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.