INTERVIEW: LAURENT MONTADOR, CCR RE
CCR Re plans expansion after stake sale
With extra capacity and the backing of two established insurer shareholders, CCR Re eyes long-term growth in business lines and regions, says the firm’s Laurent Montador.
Last year’s 1/1 renewal was very difficult for some cedants as the hard market and the uncertain economic landscape pushed the reinsurance market to react strongly to years of continuous rate decreases with higher rates and increases in retention. Further hardening is likely at this year’s 1/1 as negotiators can expect to see more of what we witnessed last year, but maybe to a lesser extent.
This is the view of Laurent Montador, deputy chief executive at CCR Re, as he spoke to Monte Carlo Today.
CCR Re is in a strong position ahead of renewal season as the reinsurer now has the backing of two established shareholders following parent company CCR’s sale of a majority stake in CCR Re in July 2023. The shares, worth close to €1 billion ($1.1 billion), were acquired by French mutual insurers SMABTP and MACSF. As part of the deal the new shareholders have injected €200 million into the reinsurance business.
Montador welcomes the merger, saying it was “very important” given it was an opportunity for CCR to sell the stake at a good price, while also bringing in additional capital.
“This allows us to develop more in the future, especially on leveraging our cat capacity for additional lines of business. It is important because clients want to have more capacity, as it is a scarce commodity.”
He says it was important for CCR Re to have cat as a business line, but also to have treaties in other lines as a global partner with the same clients and some new ones.
“This allows us to develop more in the future, especially on leveraging our cat capacity for additional lines of business.”
Laurent Montador, CCR Re
“This deal allows us to deploy our business plan for the next five years with profitable diversification within our client base, to gain momentum and to facilitate cross-fertilisation.”
The deal brought certain benefits very quickly as it prompted credit agency S&P Global Ratings to raise the reinsurer’s issuer credit and financial strength ratings from ‘A-’ to ‘A’. S&P also removed the ratings from CreditWatch, indicating a stable outlook.
SMABTP and MACSF both have very good ratings, Montador says, adding that the new shareholders take a long-term view on business and specialised in construction and medical insurance.
He is clear that their partnership with CCR Re is for the long term, which is crucial because “it fits with our DNA of having a long-term partnership with our clients”.
Extra capacity means expansion
With this backing and the additional capacity it brings, Montador says, CCR Re can expand its commercial reach in terms of market share of business lines and geography.
The reinsurer is already in around 80 countries having expanded into Latin America, and it wants to continue this kind of growth with its sights set on more expansion in the region as well as in Africa and Asia but still not present in the US.
“We will continue to build strong relationships with clients in terms of new lines of business and also delivering underwriting tools for our clients.”
“We are moving in the right direction to get a return on equity in the next five years or so.”
Montador adds: “With our average share on the market, we are able to continue to grow on the short-tail basis, as well as longer-term liabilities. We could develop further on other lines such as engineering, marine, general aviation, and also on credit surety. ”
CCR Re’s life portfolio accounts for a third of the total business. “We continue to serve our clients in the Middle East & North Africa, France, Latin America and Asia, and we could develop that in other countries having additional insight on some markets with extended services.”
Life insurance is very important and the business needs to provide additional services as well. For example, automatic pricing for sub-standard life risks is one development option, Montador says.
Asked about cyber, he says: “Potentially we can increase our current small involvement for clients that write this line on an exclusive basis and only for small limits within a global relationship.”
For the medium term, CCR Re will continue to develop per its business plan. Montador says: “We have had an increase in our turnover in the year to June of 19 percent, and we reached a net combined ratio a little under 95 percent on a French GAAP basis at end of June. This is totally compatible with the business plans that we projected.
“In terms of profitability, we are moving in the right direction to get a return on equity in the next five years or so with a double-digit target.”
Laurent Montador is deputy chief executive of CCR Re. He can be contacted at: lmontador@ccr-re.fr
Main image: Shutterstock / Somchai Som
