State-backed reinsurer CCR has reported net income of €67 million for 2019, all of which the firm has dedicated to the recently launched state-guaranteed COVID-19 reinsurance scheme designed to support the country’s SMEs by covering credit insurance risks.
At €67 million, net income declined from the €147 million reported a year earlier, while consolidated net income fell from €132 million in 2018 to €104 million in 2019.
Gross written premiums (GWP) increased year-on-year to €945 million, while the company’s cost ratio improved from 2.4% to 2%. In 2019, CCR’s combined ratio deteriorated to 96.3%, compared with 95.1% posted a year earlier.
For the third year running, natural disasters were a frequent occurrence in France. These include severe drought conditions across parts of the country, floods in the Occitanie region, the Cevennes region and in the South-West, as well as the earthquakes in Le Teil and Rhone Valley, as well as other events will less serious outcomes. In total, CCR puts the cost of these events at €766 million.
Premium income increased 4% year-on-year to €945 million, comprised of 93% natural disasters and 7% terrorist attacks.
“CCR delivered a very satisfactory performance in 2019. Consolidated premium income was up 10% at €1,507 million and consolidated net income came in at €104 million. Administrative expenses were kept under control and the investment portfolio performance improved.
“Public reinsurance regime of natural disaster risks once again shown its criticality, with 2019 extending a three-year run of high NatCat losses,” said Board Chairman, Pierre Blayau.
The company’s reinsurance arm, CCR Re, maintained profitable growth in the year and reported a 21% rise in premium income. GWP jumped 21% to €562 million, while net income remained flat at €35 million.
CCR Re’s cost ratio also improved in the year, hitting 5.5% compared with 5.9% a year earlier. Overall, the unit’s net combined ratio strengthened to 98.1%, against 99.4% in 2018.
“Within the Group, CCR Re continued to grow, reporting gross written premiums of €562 million (up 21%) and current income before equalization reserve of €56 million (up 23%). With a combined ratio of 98.1%, CCR Re outperformed its business plan objective. I would like to congratulate the Chief Executive Officer and his teams for this performance.
“Today, more than ever, CCR is contributing to France’s resilience during the exceptionally difficult period we are going through. Alongside French Treasury, we played a very active role in launching a state-guaranteed reinsurance scheme that covers credit insurance risks. And we also decided to allocate CCR 2019 net income to funding this system, rather than paying a dividend as originally planned,” said Blayau.
As losses and uncertainty from the COVID-19 coronavirus pandemic have increased, governments in many parts of Europe have been urged to backstop trade credit insurers to support domestic markets. in France, a €10 billion guarantee scheme has been approved by the European Commission.