AM Best Affirms Credit Ratings of Nova Casiopea Re S.A.

December 19, 2018

LONDON--(BUSINESS WIRE)--Dec 19, 2018--AM Best has affirmed a Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Nova Casiopea Re S.A. (NCRe) (Luxembourg). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NCRe’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

NCRe is a pure captive reinsurer of Telefonica, S.A. (Telefonica), a Spanish multinational broadband and telecommunications provider with operations in Europe, Asia, and North, Central and South America. Operating globally, it is one of the largest telephone operators and mobile network providers in the world. NCRe began operations in 2017, replacing Casiopea Re S.A. (CRe) as Telefonica’s main reinsurance captive. Concurrently, NCRe assumed the run-off liabilities of CRe. Over the course the first year of its operation, the captive’s management has successfully executed the transition and the renewal of business, reporting gross written premiums of EUR 57 million. NCRe is solely dependent on Telefonica for the generation of premium, as such, whilst diverse by line of business and geography, premium volumes will remain constrained to the operations of Telefoncia.

NCRe’s operating performance assessment reflects AM Best’s expectation that NCRe’s prospective earnings will mirror the track record of the captive’s predecessor (CRe), which generated healthy albeit fluctuating returns. NCRe generated a pre-tax profit of EUR 5 million in its first year of operation (2017), with a combined ratio of 76.9%. For year-end 2018, AM Best expects the company to deliver a combined ratio below 85%.

NCRe’s balance sheet strength is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength is supported by an excellent level of liquidity managed through the captive’s conservative investment strategy. A partially offsetting rating factor is the level of natural catastrophe risk the company is exposed to, which is likely to cause volatility. NCRe maintain a highly rated retrocession panel to mitigate this risk.

AM 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 .

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit for more information.

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

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CONTACT: Emily Thompson

Associate Financial Analyst

+44 20 7397 0291

emily.thompson@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comSalman Siddiqui, ACA

Associate Director, Analytics

+44 20 7397 0331

salman.siddiqui@ambest.comJim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644





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PUB: 12/19/2018 09:17 AM/DISC: 12/19/2018 09:17 AM


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