AM Best assigns A+ rating to Nestlé’s captive

Rating agency AM Best has assigned a financial strength rating of A+ to Intercona Re, the captive of Nestlé, the global food and beverage company. The outlook assigned to both ratings is stable.

AM Best the ratings reflect Intercona's importance to Nestlé (Switzerland), and its high level of integration within the group's risk management function. Furthermore, the ratings reflect Intercona's excellent risk-adjusted capitalisation, robust technical performance and diversified business portfolio, by line of business and geographic location, the rating agency said.

Intercona's primary function is to provide the working layer of reinsurance protection, absorbing losses from the group's global insurance programme. The captive benefits from Nestlé's financial strength and is a key part of its parent's overall risk management framework, assisting with the mitigation of risk exposures and loss prevention.

Intercona's risk-adjusted capitalisation is likely to remain strong in 2015, supported by large equalisation and fluctuation reserves and the retention of profits, AM Best said. The captive has maintained a robust underwriting performance despite incurring a number of large losses in recent years, as demonstrated by its five-year average combined ratio of 84 percent.