French state-owned reinsurer CCR Re has reported a 49% decrease in net income over 2020, as the impact of the COVID-19 pandemic and the Beirut explosion weighed heavily on its results for the year.
The company reported net income of €18 million for 2020, down from €35 million in the previous year, as its combined ratio deteriorated from 98.1% to 103.2%.
This included COVID impacts of €49 million (before and after reinsurance) and losses from the August Beirut explosion of €24 million, before reinsurance (€15 million after reinsurance).
However, excluding these two events, underwriting margins continued to improve thanks to pricing action and CCR’s gross written premium rose 16% to €649 million.
The reinsurer also reported overall premium income growth of 12% to €50 million at the January 1st, 2021 reinsurance renewals, a period which represents roughly 70% of its annual premium income volume across both P&C and L&H reinsurance.
CCR, which represents the primary insurance side of the French re/insurer, reported only a 9% dip in net income for 2020, which moved from €67 million to €61 million.
The result was affected by natural disaster losses of €775 million, including a major drought affecting a quarter of France and extensive flood damage caused by storm Alex in October.
In an environment shaped by the Covid-19 pandemic, the French government also called on CCR to provide reinsurance cover for the portfolios of domestic credit insurers through the Cap, Cap+ and Cap Relais mechanisms, adding €260 million to its gross written premium for the year.
Overall, the company’s gross written premium for 2020 came to €1,215 million, up 29% on 2019. Of this, 73.2% related to natural disaster business, with 21.3% for credit insurance and 5.5% for terror.
In 2021, CCR assured that it has sufficient capital to absorb natural disaster losses of up to €4.6 billion without drawing on the State guarantee.
“In last year’s singularly difficult Covid-19 environment, the CCR Group powerfully demonstrated the quality of its business model,” said Chairman of the Board, Pierre Blayau.
“CCR fulfilled its corporate mission by deploying a mechanism to support supplier credit, which plays an important role in fueling the domestic economy, and by providing protection against the financial impacts of natural disasters,” Blayau continued.
“CCR Re continued to grow its business, raised new debt and improved its solvency ratio, while also preserving its income despite the losses associated with Covid-19 and the Beirut explosion. It held firm to the trajectory set in the strategic plan, and I would like to congratulate the Chief Executive Officer and his teams for their performance.”