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

AMSTERDAM–(BUSINESS WIRE)–#insurance–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) 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 assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

NCRe operates as a single parent captive of Telefónica, S.A. (Telefónica), a multinational broadband and telecommunications provider based in Spain with operations in Europe, as well as North, Central and South America. In 2017, NCRe took over Casiopea Re S.A. (CRe), the former captive of Telefónica, assumed its liabilities and mirrored its operations. NCRe benefits from Telefonica’s geographic diversification across Europe and Latin America. NCRe maintains a broad portfolio mix, but as a pure captive its business profile remains constrained to Telefonica’s operations and strategic decisions.

NCRe’s balance sheet strength assessment is underpinned by the strongest level of risk-adjusted capitalisation, on both standard and catastrophe-stressed basis, as measured by Best’s Capital Adequacy Ratio (BCAR). This assessment is supported by NCRe’s conservative and liquid investment portfolio, as well as capital buffers in the form of equalisation reserves. An offsetting factor is the company’s elevated exposure to natural catastrophe risk, which has the potential to introduce volatility to capitalisation levels.

The adequate operating performance assessment reflects the captive’s good albeit fluctuating underwriting results since inception. In 2021, NCRe generated a pre-tax profit of EUR 11.3 million compared with EUR 21.3 million in 2020, mainly driven the captive’s net technical results, which reported a higher loss ratio of 38.6% compared with 21.4% in 2020. The better net results in 2020 are mainly due to low frequency and low severity losses. In 2021, the captive’s combined ratio was 72.0%, still below CRe’s historical five-year weighted average of 85.4% (2012-2016).

Recent changes to Telefónica’s business model have not materially affected the captive’s operations. However, AM Best notes that potential spin-offs of Telefónica’s major businesses in Latin America will likely impact the captive’s risk exposure. In 2022, NCRe has continued to increase some of its net exposures in response to hardening reinsurance market conditions, reflecting the captive’s strategic importance to the group as a cost-effective risk management tool.

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 Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Giannina Carbajal Ortiz

Financial Analyst
+31 30 308 5428

Dr. Angela Yeo
Senior Director, Analytics
+31 20 308 5421

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098

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