AM Best affirms Casiopea Re’s financial strength rating of ‘excellent’
AM Best has affirmed the Financial Strength Rating of A- (Excellent) of Casiopea Re, a captive reinsurer based in Luxembourg. The outlook of the ratings remains stable.
The rating agency said that the ratings reflect Casiopea Re’s excellent risk-adjusted capitalisation, which is supported by a substantial equalisation reserve providing the company with a significant capital cushion.
In addition, AM Best said that the captive’s low risk retention is supported by a comprehensive reinsurance programme, with a panel of financially strong reinsurers that mitigates the risk of large property and liability losses depleting capital.
Casiopea Re is a captive of Telefonica S.A. (Telefonica), a telecommunication services provider across Europe and Latin America.
As the main reinsurer of group risks, Casiopea Re’s risk management is closely integrated with that of Telefonica.
“The company has a track record of good, albeit volatile, operating performance, and has reported an average combined ratio of 91 percent over the past five years. In 2015, Casiopea Re reported a net profit of EUR 4.1 million, which equated to an adjusted return on capital and surplus of 1.3 percent. The result was driven mainly by an adequate investment profit, partly offset by a modest technical loss,” AM Best stated.