Our markets

After years of inadequate profitability for reinsurers, the market recovered in 2023. Supported by two new shareholders, CCR Re expanded its underwriting capacity with clients and maintained a trajectory of profitable growth.

Growth was strongest in the General Insurance (P&C) and Specialty lines (notably in transport, aviation and credit).

In 2023, our Life portfolio accounted for one-third of our business, with operations spanning across the Middle East, North Africa, France, Latin America, and Asia.

2023, The Market Turnaround

“We have a unique model that allows us to underwrite almost any product out of France. We really believe in our model. Our Paris office boasts a team of exceptionally skilled underwriters, comprising men and women from 16 different countries, collectively fluent in 12 languages. This diverse tapestry of backgrounds and languages converges seamlessly on the same floor, creating a dynamic and energising atmosphere. This blend of cultures and expertise fosters an unparalleled collective dynamic, fuelling our agility and responsiveness.”

HERVÉ NESSI,

Chief Underwriting Officer

In Reinsurance, no two years are alike. That’s the beauty of our business. The events of 2023 have certainly confirmed this aphorism.

The Sale: a Turning Point for CCR Re

Internally, the sale of the company’s share capital and the arrival of two new shareholders in July took up much of the first half of the year.

In terms of underwriting, the year was characterized by very successful renewal campaigns in January, April, and July, along with an unusual Nat Cat claims experience.

Firstly, the sale marks a turning point in the life of CCR Re. Backed by CCR at the time of its creation with a capital contribution of EUR 300 million, CCR Re will now benefit from the capital backing of two major players from the French mutual insurance market. This transaction is mutually beneficial for both parties: CCR Re is offering sectoral and geographical diversification to these two mutual insurance companies, and the capital injection of EUR 200 million will enable CCR Re to sustain its growth with sound financial and solvency conditions.

Following the successful execution of its first two business plans and achieving profitable growth of over 150% since its inception, CCR Re remains steadfast in its ambition to expand and attain critical mass in the reinsurance industry. This goal is now within reach, thanks to the support of its new partners.

2023: A Year Marked by Strong Organic Growth

In 2023, we are proud of our progress, which can be attributed to:

- Two-thirds stemming from organic growth within our portfolio, driven by the commercial momentum of our underwriting teams: securing new clients, generating new business, and expanding existing partnerships.

- One-third resulting from premium hikes in both insurance and reinsurance, complemented by improvements in contractual reinsurance terms across nearly all Property & Casualty Reinsurance sectors. The Life & Health sector remains relatively stable and is traditionally subject to individual adjustments on a case-by-case basis.

While growth was relatively uniform across all countries and sectors, we experienced particularly robust expansion in Property & Casualty insurance in Canada and Latin America. There was also aboveaverage growth in the Life & Health business in Israel and Latin America.

« We underwrite the products we know with those we know. »

Our underwriting profile is clear: we are a mediumsized reinsurer, now representing a relevant alternative among ceding companies to the world’s major Tier 2 reinsurers.

Well-armed with our single A ratings from S&P and AM Best, CCR Re is perceived in the reinsurance market as an atypical, loyal and very solid player. Our growing presence on the panel of ceding companies around the world attests to this. In every country where we have a presence, the CCR Re brand is highly sought after and valued for its unwavering solidity, reliability, and dependability.

While we do not position ourselves as a market leader, it’s becoming increasingly evident that customers are turning to us with that expectation.

Instead of adopting a transactional approach where we underwrite business in isolation, we prioritise a relationship-based strategy, aiming to underwrite insurance for customers with comprehensive participation, encompassing Property & Casualty, Specialty, and Life/Health segments wherever feasible.

The Reinsurance Market Hardens Further

The third significant aspect of this underwriting year pertains to natural catastrophes and the increasing frequency of what were previously referred to as “secondary perils”.

The situation is problematic and likely warrants the ongoing hardening of the reinsurance market in the years ahead. Indeed, the occurrence of these “secondary” risks is not strictly included in the pricing of Cat protection, which typically focuses on the occurrence of a single, extremely rare event, resulting in correspondingly low “Rate on Line” with high return periods.

As it does every year since its inception in 2017 (with the exception of 2020 due to the pandemic), CCR Re posted a significant increase in written premiums and earnings in 2023.

This remarkable momentum can be attributed to our strict underwriting discipline, effective risk control measures, and a highly regarded team of underwriters who possess both technical expertise and strong interpersonal skills.

Property & Casualty Market

France, Belgium and Luxembourg

CCR’s portfolio for France, Belgium and Luxembourg was exclusively renewed as of 1st January. France and Belgium witnessed unprecedented renewals in 2023

A hardening market

In France and Belgium, the campaign was long and late in coming, with extensive negotiations between clients and reinsurers. It took considerable time and effort to reach a consensus on pricing and contractual structures.

After more than a decade of challenging market conditions for reinsurers, the landscape finally began to shift towards tougher conditions.

Several factors may explain this turnaround: the frequent occurrence of moderate to severe weatherrelated events in recent years (such as hailstorms in June, drought in France, and flooding in Belgium), as well as high inflation, which amplified the cost of claims.

Added to this are the collateral effects of legal developments, such as:

- the entry into force of the French Crop Insurance Reform, which had been running at a deficit in recent years;

- the introduction of a new capitalization table with a negative technical rate for the motor insurance business, leading to a significant increase in the cost of bodily injury claims.

Improvements were observed not only regarding tariffs but also regarding the contractual terms and conditions of treaties.

For example, the structures of the Force of Nature and Motor programmes were radically overhauled, with very significant increases in retentions and prices, along with a more limited scope of risks.

The number of reinstatements was also limited, and premiums for reinstatements have become chargeable. It is interesting to note that this movement led to the emergence of new reinsurance programmes to protect these chargeable reinstatements.

Subsidence damage was excluded from the underlying Nat Cat cover.

The motor programmes were restructured so that motor damage is covered under a specific programme.

Finally, most Aggregate climate treaties disappeared, with ceding companies continuing to be protected by master programmes.

During the campaign, relations between ceding companies and reinsurers were relatively tense. The latter put strong pressure on us to drastically review the technical terms and structures. The concern was initially raised at the Monte-Carlo Conference, but it wasn’t until the Baden-Baden Conference that the reinsurers’ message was properly taken on board. Hurricane Ian, which hit Florida in September, was the catalyst. Reinsurers then showed collective discipline.

In this context, CCR Re stood out

Leveraging on our long-standing positive relationships within the French market and the partial or complete withdrawal of certain reinsurers, we capitalised on excellent opportunities to expand our portfolio profitably.

Our underwriting teams facilitated constructive discussions by negotiating improved yet reasonable terms for all parties involved. They also consistently proposed alternatives to inadequate offers. As a result, we consistently executed our strategy of fostering global, multi-branch relationships across all segments, including Property & Casualty Reinsurance, Life & Health Reinsurance and Specialty Lines.

No business was lost.

Premium income from the France, Belgium and Luxembourg Non-Life BU accounted for c.8% of CCR Re’s premium income in 2023, with almost 60 ceding companies.

CCR Re exclusively renewed its portfolio in France as of 1 st January. Most of the business was non-proportional and intermediated. A third of our growth came from new customers or new business with existing customers. The remainder was due to improved riskadjusted pricing conditions.

Significantly higher profitability

In addition, we took advantage of this tougher environment to improve the profitability of our portfolio by declining or reducing our commitments on treaties that did not meet our target profitability conditions.

We continued to prioritise a cross-functional approach, allowing us to maintain a balanced portfolio with historically long-term growth. Until then, the motor business line accounted for 39% of the portfolio of the France, Belgium, and Luxembourg BU. It now accounts for 35% of the portfolio, while General insurance grew from 23% to 27% of the overall portfolio.

In addition, we underwrote more than €10M in Belgium/ Luxembourg, with a relationship extended to around ten customers. This portfolio consists exclusively of non-proportional reinsurance contracts.

Property & Casualty Market

Southern Europe, the Netherlands, Israel, and Latin America

During the January 2023 campaign, premiums written by the entity for Southern Europe, the Netherlands, Israel and Latin America rose by 37%, from €104M to €142M.

Southern Europe, the Netherlands and Israel

In 2023, written premiums in Southern Europe, Israel and the Netherlands increased by 37% from €104M to €142M. Market share increases were the primary driver of growth, as we capitalised on favourable market conditions to expand on many of the treaties we were targeting. The growth in treaty risk, propelled by inflation and increasing base rates, also played a role in this advancement, as did new business.

We opted to decrease our proportional motor portfolio in Israel while simultaneously increasing our exposure in other business lines. As a result, premiums within the Israeli portfolio remained stable. All other markets experienced growth rates surpassing 37%, with the Netherlands leading the charge by doubling our written premiums—a remarkable achievement.

Our zone was affected by several major Cat losses in 2023.

A major earthquake struck Turkey and Syria on 6 February 2023. Two aftershocks within a few hours of each other resulted in a very high human and material toll, largely attributed to the inadequate quality of the buildings. The number of victims surpassed 50,000, and the insured loss value was estimated at €5.5 billion, significantly below the economic cost. We do not have any exposure in Syria, and our market share in Turkey is estimated to be less than 1%. Our share of the loss was significant, but in line with the Probable Maximum Loss expected on this market. Most of this loss has already been settled.

Italy was then hit by exceptionally severe bad weather in July. Hailstones exceeding 10cm in diameter fell in July, leading to widespread damage to motor, residential, and agricultural exposures, with an estimated total insured value of almost €5 billion. Despite our cautious underwriting approach, our estimated share surpasses the Probable Maximum Loss anticipated for this type of peril and is continuing to grow unfavourably.

Greece suffered very severe flooding in September, with an estimated insured value of €375M. As our portfolio in Greece is very limited, our share of the claim remains modest.

We expect to see strong improvements in these markets during the 2024 renewal.

To bolster the growth of the portfolio, we hired a new team member to support our underwriter overseeing Turkey, Israel, and Greece.

Latin America

The Latin American portfolio continued to experience sustained growth in 2023. We were able to initiate relationships with a number of targeted companies and now have 42 partners in 12 countries. Our premium in Latin America increased by 81% in 2023, from €21M to €38M. The market hardening observed during the European renewal in January also occurred during the Latin American renewals throughout the year. This market situation freed up space on our reinsurance panels and enabled us to renegotiate the terms of many treaties. Finally, we were able to leverage the Cat capacity provided to obtain exposures in other treaties, thereby enhancing portfolio diversification.

Our comprehensive support offering, encompassing Life & Health Reinsurance, Property & Casualty Reinsurance and Specialty lines, is greatly appreciated by our partners. Similarly, coordinating the accounts of groups with subsidiaries in Latin America helped us to enter into several programmes and optimise global relationships.

Mexico was struck by a very violent hurricane that hit the city of Acapulco on 25 October 2023. The insured market loss is currently estimated at $4.5 billion, with a significant portion of it being ceded in the Facultative (Fac) market and through Group programmes outside the country. This loss does not compromise the profitability of our portfolio in Latin America, particularly considering it is the first major loss since we initiated the development of this portfolio in 2021. However, it underscores the rapidity with which a tropical storm can escalate into a Category 5 hurricane.

PROPERTY & CASUALTY Market

Central and Northern Europe

In Central and Northern Europe, we strengthened our growth in a favourable reinsurance market. We significantly expanded our portfolio in the region.

We attained €110 million in written premiums for the full year 2023, compared with €82 million in 2022, achieving a remarkable 34% increase and surpassing the target set in our business plan.

We were certainly helped by the upturn in conditions observed across all the markets in which we operate. We increased our participation in the programmes of customers with whom we aimed to foster development.

Our proactive efforts in prospecting for new customers and selecting new business resulted in underwriting €14 million in new premiums in 2023. This included securing three new treaty packages in Germanspeaking countries, as well as new motor and fire business in the UK, the Nordic countries, and the Baltic States.

Germany, Austria and Switzerland

Conditions improved significantly in Germany and Austria. This trend was less pronounced in Switzerland.

Companies generally decided to keep their general reinsurance budgets under control, primarily by raising their retention levels, sometimes substantially. In addition, technical conditions improved for both proportional and non-proportional policies, with rate increases of around 20%.

In Austria, we increased our gross written premiums by 50% year-on-year, benefiting from finally improved reinsurance conditions, particularly in General Insurance (P&C). This growth is supported by the excellent relationships we have with reinsurance brokers and ceding companies.

On the claims front, the violent hailstorms in Bavaria at the end of August only had impacted us slightly.

United Kingdom and Ireland

In the UK and Ireland, we saw an average increase of between 25% and 50% in the retention rate for nonmotor programmes, accompanied by a corresponding increase in pricing of at least 20%.

In the UK Motor business, we observed a boost in reinsurance premium rates ranging from 5% to 20%, reflecting a higher premium base compared to 2022. Moreover, for other lines of business, particularly Non-Motor Third Party Liability, we observed a less pronounced increase in reinsurance premium rates.

Nordic Countries

In Northern Europe, within the General Insurance sector, we observed notable rises in the retention of non-Motor programmes, coupled with a substantial increase in reinsurance rates. For the other business lines, rates remained stable.

In terms of claims, we were impacted by Storm Hans in August and also experienced significant industrial risk claims.

Central and Eastern Europe, Baltic States

For the region encompassing Central and Eastern Europe and the Baltic States, we witnessed in 2023 an escalation in retentions for Cat programmes ranging between 50% and 100%, along with a rise in reinsurance rates of approximately 20% for XL programmes. For the other business lines, pricing remained relatively stable.

In terms of claims, 2023 was marked by a major natural hazard: the historic floods in Slovenia in August.

In conclusion, for the Central and Northern Europe zone, amidst the favourable environment of 2023, it proved challenging to expand our market shares due to the highly appealing conditions prevalent among the majority of reinsurers. Nevertheless, we succeeded in expanding our participation in several new programmes that we had targeted, either with existing customers or with new ones.

PROPERTY & CASUALTY Market

Asia and Africa

Premium growth in the Asia and Africa portfolio surged by 27% in 2023.

In all markets within the Asia and Africa Business Unit, renewals were shaped by significantly harder pricing and contractual conditions. This included reductions in limits per event, capacity adjustments to better balance treaties, the imposition of co-insurance clauses, stricter exclusion clauses, reduced commissions, imposition of loss participation clauses, increased reinsurance premiums, and the generalisation of co-insurance clauses, among other measures.

In parallel, we continued to work on improving the portfolio. Some business had to be terminated due to disappointing results, overly broad geographic scope, unbalanced overall treaty structure, or rejection of requested adjustments by the ceding company.

We did not underwrite any treaties with deteriorating terms. We were pleased to strengthen our business relationships with our chosen customers and establish new partnerships. We for example increased the number of treaties in which we were lead underwriters.

Overall, we managed to underwrite larger exposures on treaties with improved terms for the reinsurance market without significantly increasing our natural catastrophe exposures.

We also strengthened our presence in markets such as Cambodia, Thailand, the Philippines and Sri Lanka.

The risk added in 2023 versus 2022 rose by 27%. For our Asia and Africa portfolio, the year was characterised by a more moderate claims experience compared to the previous year, despite several natural events in China (such as Typhoon Doksuri in Beijing and Typhoon Saola in Hong Kong) and a few individual claims, fortunately not significant for us, notably in Korea.

South Africa

As a result of the significant claims experience in the South African market in previous years (due to events like Covid-19, riots, and flooding in KwaZulu-Natal), we observed a specific market hardening, particularly for non-proportional per-event treaties. This included increases in priority of between 50% and 100% and price hikes ranging from 50% to 80%

China

Despite the absence of any major claims in the previous financial year, the market saw prices rise by between 15% and 30% on non-proportional treaties with increased priorities.

India

Once again, and despite the absence of any eventdriven or major claims on this market, adjustments were made to treaty limits (both by risk and by event), with several treaties transitioning from a full excess of loss structure to a quota share arrangement..

South Korea

After a long series of disastrous years (abnormally high frequency of high-severity individual claims), this market is finally reacting. Priorities are being substantially elevated, with reduced coverage and notable price hikes, sometimes soaring by 200- 300%. On the proportional side, ceding companies reluctantly accepted the imposition of co-insurance clauses, transitioned from variable to fixed cessions, substantially decreased treaty capacities (in certain instances by half from the previous year), and faced loss participation clauses, tiered commissions, and annual limits.

During this financial year, CCR Re successfully pursued its development by improving the quality of its portfolio in Asia and Africa, while also benefiting from a mild claims experience.

PROPERTY & CASUALTY Market

Canada

2023: a Record Year in Canada

After a challenging year for reinsurers in 2022, several companies scaled back their capacity in 2023 or exited the market entirely. At the same time, insurers increased their customers’ insured sums to keep up with inflation. They asked for more capacity during the 2023 renewal. The renewal on January 1st 2023 was the toughest brokers and clients experienced in Canada for more than 30 years.

In this context, CCR Re approached the renewal season with more capacity than in 2022. We were well positioned to take advantage of the hardening market conditions. The results lived up to our expectations: a 42% surge in written premiums, accompanied by a notably positive impact on our reputation and standing among customers and brokers.

Inflation and climate change remain significant issues of concern. For the second year in a row, Canada suffered more than $3 billion in losses caused by natural events. Unlike 2022, there were no major events, and claims were generally borne by insurers. Hurricane season was also busier than normal, but spared the Caribbean, the area we cover from Canada.

With financial markets bouncing back after a difficult year in 2022 and very positive technical results, the branch posted record profits in 2023.

PROPERTY & CASUALTY Market

Lebanon

A major player in the local insurance market in the Middle East and North Africa

The Lebanon office has been a cornerstone of CCR Re’s presence in the MENA region for over 25 years, facilitating our expansion into the Middle East and North Africa market. It has played a pivotal role in establishing enduring and fruitful partnerships within the region.

Our long-standing presence in Lebanon gives us a strategic hub for business development in the MENA region. Our accessibility and availability are pivotal in nurturing our relationships with our partners, who value our proximity and prompt responsiveness. We are exerting every effort to sustain our operations in a market fraught with political and economic challenges. Despite these challenges, we persist in maintaining our stellar reputation and achieving yearon-year business growth. With an average customer relationship of 12 years, loyalty and stability are key factors in shaping our future.

In 2023, the representative office in Lebanon achieved a total of €58 million in underwriting business.

The MENA market is attractive, with generally positive underwriting trends. Despite crises, catastrophes and wars, demand remains strong, and supply is adapting. Cat capacity is still just sufficient in our region, leaving room for pricing adjustments and stricter underwriting conditions. Our portfolio consists mainly of General Insurance (52%), Marine (15%), Engineering (15%), Motor (11%) and Miscellaneous (7%).

Over the next decade, we anticipate the MENA Property & Casualty insurance market to maintain a robust growth rate of nearly 5% per annum. For our part, our goal is to achieve a growth rate of 15% annually over the next five years.

LIFE & HEALTH Market

France

The 2023 renewals were punctuated by a number of regulatory changes.

In loan protection insurance, the impacts of French Loi Lemoine were limited by the increase in interest rates, leading to a decrease in the number of loans. In In healthcare, the effects of the 100% Santé reform were noticeable, while the second phase of the reform was taking shape.

The pension reform could have had a significant impact on sick leaves; however, the exclusion of disabled people from the reform substantially mitigates its effects on provident insurance.

The trend observed in recent years regarding healthcare-related sick leave persists, prompting insurers to make significant pricing adjustments.

In this context, CCR Re successfully met the requirements of its partners and achieved 10% growth in France, primarily driven by the implementation of new programmes.

Middle East

National regulators are pursuing their efforts to reinforce their supervisory frameworks, with a particular focus on capitalisation and solvency standards. This trend is expected to result in a decrease in the number of market participants, thereby potentially mitigating competition.

Premium income from provident insurance continued to grow profitably, mirroring the growth in premium income from healthcare insurance, largely driven by the implementation of compulsory basic schemes in countries such as Bahrain, Oman, and Qatar. CCR Re intends to capitalise on its excellent relationships with market leaders, who may be approached by regulators to support these new frameworks.

In Life, we face strong competition in traditional segments, where we mainly offer leader terms. We are seeing growing interest in individual products.

Asia

In China, the new law on the protection of personal data added complexity to the renewal process in 2023. Our position as a centralised reinsurer in Paris is well-received by our customers, particularly as our interactions with Chinese underwriters are seamless.

CCR Re was able to maintain its premium volume in the region.

Latin America

Following the Covid-19 crisis, which led to a contraction in Life insurance portfolios, we are now witnessing a notable resurgence in growth. The zone’s potential remains high, given the still relatively low penetration rate.

This growth is also reflected in the increased demand for capacity on a per capita and per event basis. At the same time, and despite the significant reduction in the impact of Covid-19, some reinsurers are reallocating their underwriting capacity.

In line with its development plan, CCR Re is growing by 50% in this region in Life, and is acquiring additional capacity and talent to sustain this trajectory in the future.

Israel

The Israeli insurance sector is facing a number of developments. After several postponements, the reform of the healthcare system came into force in October 2023.

There is also uncertainty surrounding the future of long-term care funds, as major players are not extending coverage for 2024. In the current context, many questions remain unanswered regarding the coverage of war risks in reinsurance and its formalisation in contract clauses.

In this volatile environment, CCR Re remained a loyal partner and achieved 12% growth thanks to the new business underwritten with its trusted partners.

SPECIALTY LINES Market

Growth in the Specialty Lines division was strong in 2023, with premiums up 18%. The volume of underwritten premiums amounted to €72m in 2023.

A balanced portfolio

The objective of rebalancing the Specialty Lines portfolio was achieved in 2023 through growth in Credit & Surety. Today, 90% of the Specialty Lines portfolio is based on three main pillars of roughly equal weight: Aviation, Marine and Credit.

Diversification is based on Space, which represents 4% of the portfolio, Nuclear 4% and Terrorism 2%.

A Fast-Growing Portfolio

98% of our Specialties portfolio was renewed. The growth in our portfolio up for renewal is primarily attributable to the increase in our share and capacity that we offer to our target customers.

In 2023, we underwrote insurance under 14 new business deals, primarily in Credit and Surety, generating a written premium volume of €5 million. The increasing prominence of intermediation is indicative of our growth. The significance of our historical portfolio, primarily underwritten directly, decreased. Our growth mainly comes from new intermediated business.

We rebalanced our Energy portfolio by underwriting, for the first time, a share of the Upstream Energy portfolio of a leading reinsurer.

The growth of our Nuclear portfolio is attributed to the entry into force of the 2004 Paris Protocol, which extends coverage for Nuclear Liability. The implementation of this protocol resulted in a substantial pricing increase (+35%), which was fully reflected in 2023. We therefore expanded our capacity during the year.

The Moderate Impact of the 2023 Claims Experience

In response to the war in Ukraine, we observed the market hardening, particularly in Terrorism, Marine and Aviation.

The claims experience in 2023 was moderate in the Marine business line, with two notable losses that did not significantly impact its profitability: the explosion of an oil rig in the Gulf of Mexico and the fire on a cargo ship transporting cars off the coast of the Netherlands. Challenges in the construction industry, stemming from input inflation and rising interest rates leading to a decline in volumes, required a vigilant approach in the Surety business.

Management: The Key Driver at the Heart of the Value Chain

Part of the underwriting team

2023 was a busy year: our underwriting assistants managed over 3,500 cases and initiated more than 3,300 pricing requests, which were then sent to the actuaries for review.

The Pivotal Role of the Management Department in Underwriting

The Management department serves as the primary entry point for all underwriting business submissions. The department is pivotal in the underwriting process, handling business from the moment it arrives at CCR Re until it is underwritten and throughout the life of the contract. The department collaborates closely with underwriters, actuaries, and the accounting department.

Underwriting assistants master the technical and contractual aspects of reinsurance contracts, they guarantee the quality of the data used by all CCR Re departments.They are also responsible for managing non-major claims, for which they oversee the setup and monitoring.

Major IT Upgrades

In 2023, the Management department benefited from major IT upgrades. The management tool, which integrates the applications needed to process transactions and provides an interface with quotation and accounting applications, was migrated to a modern technology that greatly enhances the user experience.

The Management department also worked on an Artificial Intelligence model for reading contractual documents, aimed at expediting the process of generating new business.

Capital: Optimising the Potential of this Scarce Resource

MATHIEU HALM

Chief Retrocession & Alternative Capital Officer and Board Secretary

Increase in the cost of retrocession

The renewal on January 1st 2023 was a reminder that capital has a cost. The return of higher rates in 2022 brought the period of massive capital inflows into the global economy to an end. In the reinsurance industry, this resulted in inflation, shrinking balance sheets, an increased need for capital to enable various players to continue growing their portfolios, and ultimately, a rise in retrocession costs.

This renewal took place in what is regarded as the most challenging market since 1992 (as a result of Hurricane Andrew), with a sharp deterioration in pricing conditions and more contractual restrictions such as a narrower scope of coverage, higher attachment points, and numerous exclusions.

It underscored the significance of the retrocession link in the chain of our industry, leading to a very delayed renewal.

The Importance of Third-Party Capital

Supporting the growth of our portfolio through thirdparty capital is therefore increasingly crucial, not only to leverage on improved conditions in underwriting but also to provide robust support to our customers. Nevertheless, it's crucial to consider the new paradigm shaping the pursuit of third-party capital.

This is true not only in traditional retrocession but also in non-traditional retrocession. The InsuranceLinked Securities market also intends to benefit from the improved conditions offered by the reinsurance industry. While the capacity available for renewal as of January 1st 2023 was contracting, it was not the case in the second half of the year, as investors more restrictive hedges and sharply higher expected returns thanks to spreads above the rising risk-free rate.

The Cat bond market experienced a high volume of issuances, as did the sidecar market, which also benefited from strong growth in capital raised. Earnings expectations rose sharply, with a generally low claims experience in 2023 at market level, given the absence of major claims in North America.

It is against this backdrop that we continued our efforts with our various partners to support CCR Re’s growth. We were able to forge high-quality partnerships to make third-party capital available to CCR Re, thereby optimising the use of our own capital. These partnerships are strategic for us, whether with our traditional retrocessionaires or through our 157 Re platform.

Learn more

The company also successfully issued the fifth generation of its sidecar, which saw a 40% increase in capital raised compared with 2022. It also benefited from the arrival of a new investor alongside our historic partners.

Actuarial Science: A Vital Component of Risk Management

JÉRÔME ISENBART

Chief Risk Officer and Actuary

How did Cat modelling evolve in 2023?

In 2023, we continued to improve the overall catastrophe modelling process. Our work enabled us to develop an automated processing chain interfacing input data specific to Cat modelling, Cat modelling software, contractual data, our retrocession programme and our modelling aggregation tool. The benefits are varied and include enhanced efficiency, productivity gains, and a decrease in potential errors. This improves and strengthens our ability to steer our business effectively.

For example, we started to build a platform to centralise CCR Re’s worldwide catastrophe exposure. The aim of the work is to aggregate all the data processed in an agnostic way, enrich it with our business expertise and eventually provide continuous flow reporting and dashboarding by adding a mapping visualisation component. The operational implementation of this tool will enable us to promptly and accurately assess our Cat commitments on a geographical basis when a major Cat event occurs.

In 2024, the work will continue, especially considering that climate change is now a reality.

What about modelling for your other business lines?

Development work for the Property & Casualty Reinsurance business excluding catastrophes involved the development of a new modelling and pricing platform based on the Python programming language. Our customers’ historical and current databases, as well as external databases, calculation engines and user interfaces, were completely overhauled. The new tools will be gradually rolled out starting from 2024. The goal is to leverage on both structured and unstructured data comprehensively within an industrialised framework, enabling us to derive pricing that aligns optimally with our risk profile and desired return on capital. These complex calculations and large quantities of highly granular data are then optimised both in terms of performance and execution speed, and in terms of the reliability and traceability of the results, which are as consistent as ever.

For the Life and Health business, work focused on strengthening our approaches by using the increasingly granular data that our ceding companies are willing to provide us with. This allows us to reduce the burden of data uncertainty.

The business model transitioned into a new phase, focusing on bolstering the company's resilience and enhancing the overall risk analysis concerning business growth and the challenges of underwriting and retrocession, in particular.

We witness it daily; data analysis lies at the core of expectations. Structuring this value chain is imperative and serves as a competitive advantage that addresses the challenges of both the present and the future.

The Acceleration of Online Services

SYLVIE CHANH

Chief Legal, Claims and Services

CCR Re is pursuing its investments in digital and analytical capabilities to enhance the experience of its clients. These tools serve three main objectives: enhancing the experience of its ceding companies, streamlining operational processes, and automating performance indicators.

Epocr@te: Medical Selection with a 100% Digital Platform

The loan protection and provident insurance market is highly competitive. An aggravated medical risk must therefore be promptly identified and appropriately priced within a short timeframe.

In 2023, in response to these constraints, CCR Re completely revamped its Epocr@te website to provide clients with a 100% digital experience.

Epocr@te is a secure platform offering 24-hour online underwriting for straightforward cases, real-time submission and tracking of complex cases by our Medical Department, and access to a medical underwriting library containing over 200 pathologies. This facilitates decision-making and speeds up case processing.

Learn more

Clause Identification and Search Engine, Tools to Legally Secure CCR Re Contracts

Every year, thousands of reinsurance contracts are submitted for underwriting. Reviewing each of these pre-contractual documents would require a significant amount of time and resources.

In collaboration with CCR Re’s legal teams, the CCR Re Digital Factory has developed a pre-analysis tool to detect any deviations from the predefined standards set by contract-specialist lawyers in downloaded documents. This tool saves time and enhances efficiency by allowing lawyers to focus only on the most critical contracts and clauses.

The Search Engine tool enables the identification and comparison of various categories of clauses across all our reinsurance contracts, facilitating the modification of our standards as needed.

Introducing SID - a Dashboard for the Steering of Operational Indicators

Directly connected to CCR Re’s production and management system, SID is a data analysis solution. Employees at CCR Re can access these indicators from a dedicated website or a tablet, customising them to suit their individual requirements.

Innovation: The Critical Link in Information Systems

HIND MECHBAL

Chief Information Officer

CCR Re established its own Information Technology Department in July 2023, with the main objective of separating its information systems from those of CCR. Investing in innovation, including Artificial Intelligence, Data, and the continuous digitalisation of processes, was another one of our top priorities.

2023, A Transition Year

2023 was a pivotal year for CCR Re. With its privatisation in July, a number of structural changes took place:

- The formation of CCR Re’s Information Technology department on July 3rd, comprised of 13 former CCR employees, including the Head of Information Technology, the Digital Factory team, and several Research and Development team members. Further recruitment is slated for 2024 to sustain our growth trajectory.

- The signing of a transitional Information Technology management agreement entailing CCR providing ongoing IT services and executing specific projects on behalf of CCR Re. This arrangement ensures uninterrupted IT services for CCR Re during the transition period.

- At the same time, CCR Re’s IT Department is working on the implementation of its target master plan with all the stakeholders. Having its own full-fledged information system is a crucial project that will ensure the full autonomy of CCR Re’s IT.

Innovation & Development of our Information System

Several innovation and development projects for our information system serving customers and businesses progressed in 2023.

These include:

- Launching the medical underwriting customer portal midway through the year.

- Structuring data governance by introducing a data catalogue and data lineage tool, initially focusing on critical company processes.

- Initiating a project to establish a Data platform, designed to offer business units autonomous access to necessary data, along with efficient data processing and visualisation tools.

- Advancing the industrialisation of Artificial Intelligence projects, particularly in automating treaty reading and extracting contractual information, as well as reviewing IS architecture to enhance scalability.

- Automating compliance processing and implementing various enhancements to digitised processes.

- Revamping the Group Life quotation portal, set for release in 2024.

The Finance Department’s Collaboration with SMABTP to Strengthen Ties

ISABELLE BION,

Chief Financial Officer

Establishing a Fully-Fledged Finance Department

The SMABTP and MACSF Consortium’s entry into CCR Re’s capital on July 3rd bolstered CCR Re’s credit quality. Following the transaction, Standard & Poor’s raised its assessment of CCR Re’s financial strength by one notch to single A. This reflects CCR Re’s strategically important’ status within the SMA Group, reflecting the Group’s willingness and ability to support the development of CCR Re’s business. The €200m capital increase illustrates these new synergies and will enable CCR Re to roll out its growth strategy in the best possible way.

2023: Meeting Challenges Head-On

This change of ownership also provided CCR Re with the opportunity to create a fully-fledged Finance Department, which had to take on major challenges in recent months.

We pursued the IFRS 17 and IFRS 9 projects with the aim of going live in 2024. This strategic initiative will facilitate the production of financial statements in accordance with IFRS 9 and IFRS 17 standards across our branches, while empowering the head office to establish business metrics aligned with industry benchmarks.

We also set up various management agreements with CCR, including one dedicated to the management of financial assets. This arrangement will conclude in 2024 and will be replaced by a framework agreement between CCR Re and SMABTP, organising the management of asset management by pool.

Projects based on Artificial Intelligence continued, in particular the Accounting Eprocessing project for the automated processing of proportional Property & Casualty Reinsurance technical accounts.

Finally, we strengthened our compliance controls. In 2023, we developed a tool that automatically redacts personal data from accounts received from certain brokers.