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CCR’s premium income spikes; CCR Re’s combined ratio hits 105.2% in H1

9th September 2020 - Author: Luke Gallin

CCR Group, the state-backed French re/insurer, has reported net income of €28 million for the first-half of 2020, while premium income jumped 15%, year-on-year, to €1.068 billion.

ccr-re-logoThe insurer and reinsurer attributes the rise in premium income to the State-backed intercompany credit insurance scheme for SMEs launched as from April through the CAP, CAP+, and CAP Relais treaties.

At the same time, natural disaster risk reinsurance, which accounts for around 82% of the firm’s business, reported a 0.5% increase in premium income.

Overall, claims expenses, net of ceded reinsurance, totalled €357 million in H1 2020 for CCR, driven by lower natural disaster claims over the period when compared with the previous year.

However, in light of the credit reinsurance treaties and a new commission agreement between CCR and natural disaster insurers for 2020-2023, the re/insurer’s fees and commissions to ceding insurers would reach €97 million in H1 2020, against just €2 million in H1 2019.

As at the end of the second-quarter of 2020, the market value of CCR’s assets reached almost €8.2 billion, which is essentially unchanged from the end of 2019.

Turning to CCR Re, the reinsurance arm, and premium income increased by 23%, year-on-year, in H1 2020 to €545 million. According to CCR, this growth is in-line with the objectives of its “Streamline” development plan.

While premium income spiked, underwriting profitability suffered in H1 2020, with CCR Re’s combined ratio deteriorating to 105.2%, compared with 98.2% a year earlier.

The company has revealed that the Life reinsurance profit margin fell to 4.5% from 5.2% in H1 2019, which reflects accruals to claims reserves related to the COVID-19 pandemic, amounting to €43 million in non-life and €5 million in life reinsurance, which is in the top range of current estimates for full-year 2020.

Additionally, EBITER increased by 17% to €35 million in H1 2020. Overall, CCR Re has recorded a year-on-year improvement in net income for H1 2020 to €29 million, which it attributes to a favourable effective tax rate.

As at the end of the second-quarter of 2020, the market value of CCR’s assets totalled €2.5 billion, which is a decline of 0.8% on the end of 2019. CCR Re attributes this dip to the “severe downturn in the first four months of the year linked to Covid-19.”

Furthermore, the reinsurer’s solvency ratio stood within the optimal range at 188% as at June 30th, 2020, and does not account for the July subordinated debt issue for €300 million.

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