AM Best has affirmed the financial strength rating (FSR) of A+ (Superior) of Intercona Re AG (Intercona) (Switzerland), a wholly owned captive reinsurer of global food and beverage company Nestlé.
The outlook for the rating is stable.
The rating reflects Intercona’s importance to Nestlé and its high level of integration within the group’s risk management function. Furthermore, the ratings consider Intercona’s excellent risk-adjusted capitalisation, strong technical performance and diversified business portfolio, by line of business and geographic location, according to AM Best.
Intercona’s risk-adjusted capitalisation is likely to remain at an excellent level in 2016, said the rating firm, supported by large equalisation and fluctuation reserves, and the retention of profits.
The captive has maintained strong underwriting performance despite incurring a number of large losses in recent years, as demonstrated by its five-year average combined ratio of 81 percent.
However, Intercona’s operating performance continues to be tempered by volatile investment results owing to the effect of exchange rate fluctuations and adverse movements in the global financial markets, said AM Best.
“Nonetheless, Intercona’s capital and performance are protected by its modest per risk and aggregate underwriting limits
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