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

AMSTERDAM–(BUSINESS WIRE)–AM Best has affirmed the 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) remains 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, and North, Central and South America. 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. NCRe is solely dependent on Telefonica for the generation of premiums, as such, whilst diverse by line of business and geography, premium volumes will remain constrained to the operations of Telefonica.

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 assessment is supported by NCRe’s conservative and appropriate liquid investment portfolio, as well as capital buffers in the form of equalisation reserves. A partially offsetting rating factor is the level of natural catastrophe risk the company is exposed to, which has the potential to introduce balance sheet volatility.

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. In 2018, NCRe generated a pre-tax profit of EUR 14.5 million, underpinned by a robust combined ratio of 63.5%, reflecting an improvement compared with the prior year (2017: 76.9%). The recent announcement of Telefonica’s new business model will not impact the captive’s performance immediately. However, AM Best acknowledges that a potential spin-off on the Latin America business will likely impact the captive’s risk exposure.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data provider specialising in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Giannina Carbajal Ortiz
Financial Analyst
+31 30 308 5428

Angela Yeo
Senior Director, Analytics
+31 20 308 5421

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

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644

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