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CCR Re sees GWP rise 17% despite turbulent market

29th March 2023 - Author: Kane Wells

CCR Re, the French state-owned reinsurer, has reported a total premium income of €987m in 2022, up 17% compared with 2021.

ccr-re-logoThe firm states that it continued to pursue the profitable growth trajectory defined by the board of directors, in a market “hit by a combination of major shocks.”

CCR Re’s net income for the year was €42m, stable with 2021’s €41m.

The reinsurer’s combined ratio in 2022 stood at 98.7%, up slightly from 96.6% in the prior year.

The costs related to natural disasters (gross €62m and €35m net of retrocession) were lower than in 2021 (gross €79m and €43m net), though were offset by the increase in man-made claims. In Life, CCR Re notes that the profitability of the portfolio improved despite the consequences of inflation, with a technical margin of 3.6%.

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The yield on CCR Re’s investment assets came to 2.3%, while the firm’s assets stood at €3 billion at market value, stable compared with 2021, including €207m in unrealised capital gains (down €224m compared with December 31, 2021).

CCR Re’s solvency ratio stood in 2022 was 205%, which is in the optimal 180%-220% range defined by the firm’s risk appetite framework.

CCR Re notes that it does not have direct exposure to Ukraine nor Russia in its reinsurance portfolio, nor in its asset portfolio, and therefore the direct consequences of the war were limited.

Bertrand Labilloy, Chairman & CEO of CCR Re, commented, “In 2022, the targets of the development plan were once again achieved.

“This strong dynamic justifies the contemplated €200m capital increase that would be subscribed by SMABTP and MACSF and would enable CCR Re to take advantage of the current buoyant market.”

Meanwhile, the CCR Group’s overall consolidated revenue in 2022 came to €2 billion, compared to €1.9 billion in 2021. The net consolidated income came out at €164m.

CCR’s total premium income amounted to €1.08 billion in 2022, an increase of 2.5% compared with the prior year.

The Group explains that its Natural Disaster claims ratio in 2022 was impacted by the exceptional drought event.

It writes, “No other significant event occurred, and attritional claims were lower than in 2021. All told, the cost for CCR of the events recorded in 2022 is estimated at €1.77 billion compared with €323 million in 2021.

“Unfavorable liquidation from previous years (-€455m for Natural Disasters) can mainly be attributed to the revaluation of CCR’s commitments to factor in inflation.”

To tackle these exceptional claims levels, CCR reversed a €1.18 billion equalisation reserve for Natural Disasters.

The yield on investment assets came to 1.1%. CCR’s assets amounted to €8.7 billion at market value, including €486m unrealised capital gains, down €641m compared with end-December 2021.

CCR notes that this decline amounts to €140m excluding interest assets and investments in affiliated companies.

The group’s net income on a stand-alone basis came to €67m, down by half compared with the €134m reported in 2021.

CCR observes that In 2023, it could face claims of €2 billion on a standalone basis, or €3.8 billion at the market level, without drawing on the State guarantee. In 2022, its absorption capacities were €3 billion and €4.9 billion, respectively.

Chairman of the Board, Jacques Le Pape, said, “In 2022, CCR faced the impacts of inflation and the most expensive drought in history. Victims were or will be compensated thanks to the mobilization of CCR’s reserves.

“The board of Directors observed that these reserves are no longer necessarily sufficient to cover both the improvement in compensation already decided over the past two years and the impacts of climate change on the claims ratio.

“The issue of the scheme’s resources and the level of the additional premium, currently at 12%, becomes, therefore, a concern from this year.”

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