2017 results testify to the pertinence and solidity of CCR's business model
2017 results testify to the pertinence and solidity of CCR’s business model
The Board of Directors of the CCR Group met on April 10, 2018 to approve the 2017 consolidated financial statements. Following that meeting, Group Chairman Pierre Blayau stated: “In a year that put the global reinsurance industry to the test, the CCR Group demonstrated the solidity and the pertinence of its business model, serving in particular the people and the territories of France highly exposed to natural risks.”
The year 2017 confirmed the solidity of the public reinsurance mechanism managed by CCR
The 2017 financial year was marked by exceptional loss experience with, in particular, severe drought on mainland France, and above all Hurricane Irma, the costliest event since inception of the Natural Disaster scheme. This disaster underscored CCR’s public service mission of protecting the people and territories of France vulnerable to these risks who benefited from an immediate assessment of the full extent of their losses, the assurance that their affordable insurance coverage will be maintained, strict control of the compensation process and the payment of a major portion of losses alongside local insurers.
Total losses for 2017 amount to nearly 2.2 billion euros. They were amortized to a great extent by liquidation surpluses relating to prior years and to a greater extent by the transfer of 1.1 billion euros from the equalization reserve booked to this effect. Resultantly, taking into account the underwriting results from terrorism risk and specialty lines reinsurance as well as the financial income generated by the investment portfolio, income before tax for all public reinsurance activities amounts to 204 million euros compared to 275 million in 2016.
Beyond this result, the public reinsurance balance sheet remains solid as CCR is capable, at present, of covering a natural disaster market loss of 4.5 billion euros without resorting to the use of the State guarantee.
CCR Re’s 2017 results, which improved over 2016, are a testimony to its prudent management
CCR Re completed its first financial year meeting its operational, underwriting and solvency objectives over one year in advance with 396 million euros in premium income, an improved loss ratio of 73% and a solvency ratio of 190%.
It was relatively unaffected by the natural disasters and the consequences of the new Ogden regulation in the United Kingdom, in particular, thanks to the diversification of its activity and a prudent underwriting policy.
In the same manner, modernization efforts enabled the company to reduce its general expenses and improve current returns from its investment portfolio thereby contributing to an increase in income before tax of 26 million euros compared to 21 million the previous year.
At the same time, the CCR Re balance sheet was strengthened by an increase in unrealized capital gains of 21 million euros and a transfer to the equalization reserve of 6 million.
CCR Group: a pertinent business model
Coming out of 2017, a year marked by several natural disasters in France and internationally, CCR Group posts a consolidated income before tax figure of 228 million euros compared to 295 million in 2016. Net consolidated income for 2017 amounts to 45 million euros due to an exceptional tax expense.
The Group’s balance sheet remains solid due to a smart investment policy and the positive performance of the financial markets. In particular, unrealized capital gains increased by 50 million euros for a total assets under management of 10,212 billion euros.
2017 CCR Group Key Figures
**Ratio of management expenses net of investment charges and tax to written premiums gross of retrocesssion.
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