A RESPONSIBLE COMPANY
As a responsible and innovative group, places environmental, social and technological issues at the heart of its actions and thought process. The management of the teams aims to develop the skills of each individual, but also promote equality and professional diversity in a work environment that fosters research and innovation. The CCR Group also pursues a sponsorship policy in favour of the environment, culture and humanitarian aid.
Persévérance, the Polar Pod’s supply craft entered its final construction phase in 2022.
A SOUND AND RESPONSIBLE INVESTMENT POLICY
SÉBASTIEN JALLET, Chief Investment Officer
KARINE ROBIDOU, Deputy Chief Investment Officer, Head of Real Estate, Infrastructure and ESG Investments
“IN 2022, WE HAVE OPTED FROM THE OUTSET FOR A CAUTIOUS EXPOSURE TO EQUITY MARKETS AND STRENGTHENED OUR POSITIONS IN INFRASTRUCTURE”
"IN 2022 WE REMAINED DYNAMIC IN THE MANAGEMENT OF OUR REAL ESTATE ASSETS AND CONTINUED TO INVEST IN ENERGY EFFICIENCY”
2022 PROVED TO BE A NIGHTMARE for investors. Indeed, all asset classes declined, affected by the surge in inflation and its consequences. While economic growth in 2021 made sense as post-Covid activity was catching up, strong inflation was the main surprise for central banks and investors in 2022. Investors kept a close eye on monetary policy developments of major central banks in 2022. At the same time, fiscal flexibility, an important support for post-Covid economies, is dwindling with high levels of government debt to be refinanced at significantly higher rates. Overall, the 2021 context of expansionary fiscal policies and very accommodative monetary policies not only completely disappeared in 2022 but also totally reversed. In 2022, equity markets in developed countries performed poorly in both Europe and the United States. The Eurostoxx 50 and CAC 40 indices dropped by 8.5% and 6.7% respectively, while the S&P500 and Nasdaq indices fell by 18.1% and 32.5% respectively.
Growth stocks such as US technology stocks were particularly affected by the bullish interest rate environment, while luxury stocks and a lower exposure to growth stocks favoured European stock markets. The acceleration of inflation, and the subsequent tightening of monetary policies, however, heavily weighed on bond markets with dramatic rate increases. French 10- year rates rose from 0.25% at the beginning of the year to 3.11% at year-end. This is the highest annual interest rate increase since 1994. The United States is not to be outdone, with 10-year rates jumping from 1.63% to 3.88% in 2022. On the credit bond front, Investment Grade (IG) risk premiums rose sharply over the first three quarters. Risk premiums of the iTraxx Europe index corresponding to average European IG premiums rose from 46 to 136 basis points. In the last quarter of 2022, these risk premiums decreased and end the year at 90 basis points.
FINANCIAL INVESTMENTS
How has the investment policy evolved in 2022 in this context?
SÉBASTIEN JALLET : In the context of the year 2022, which was rather depressed in terms of assets overall, the CCR Group opted at the beginning of the year for a conservative exposure to equity markets. On an allocation that had been broadly stable over the past three years, the protection fund was rolled out, resulting in an average net exposure of 20% over the year. The portfolios were therefore rather well protected from the stock market declines in 2022. In Fixed Income products and diversified funds, portfolios were faced with a sharp rise in bond yields, a surge in credit risk premiums and a decline in risky assets. However, the controlled duration of around 4 years and the high average credit quality of the portfolios have been maintained for several years.
The CCR Group did not seek to boost portfolio returns by increasing interest rate or credit risk in a zero-interest rate environment. We took advantage of the rise in interest rates to carry out arbitrages on the bond portfolios by reinvesting short maturity bonds into intermediate maturities, which resulted in an increase in the average yield to maturity of the portfolios. In terms of allocation, the strengthening of the infrastructure segment, via major commitments at the end of 2021 and beginning of 2022, was a good strategy since this asset class, along with real estate, was one of the only ones to post a positive performance in 2022. This was the main allocation shift over the past three years.
What is the outlook for 2023?
S.J. : The energy issue is unlikely to be a major drag on growth in 2023. Indeed, the change in gas prices in Europe may come as a surprise, since after having reached an all-time high over the summer, the trend has now completely reversed. Thus, current prices are lower than the price before the start of the war in Ukraine. Several factors explain the current level: warm winter, economic slowdown, lower consumption... The recession in the Euro area may not be avoidable but it will probably be better than expected this summer.
In China, the economy is expected to bounce back in the coming months following the radical decision to lift almost all Covid-related restrictions and the political stance to support business. In the US, the situation is more uncertain, with the Federal Reserve still willing to raise its key rate in the coming months and economic activity in the process of landing. However, the deceleration of inflation in Europe and in the US reinforces the likelihood of a slower pace for the monetary tightening cycle of major central banks.
2023 promises to be a new confrontation between the pessimism associated with the slowdown in the global economy and the recent optimism reinforced by the reversal in inflation figures and the reopening of the Chinese economy. The latest macro publications suggest that the US and European economies will enter a recession in 2023. At the same time, analysts are forecasting that companies will publish good earnings albeit with lower growth.
The start of 2023, which has seen a boom in risky assets, seems to prove analysts right. Thus, in the space of a few days, all equity markets have moved into largely positive territory, contrasting with a rather gloomy year in 2022. The fairly sharp contraction in inflation figures on both sides of the Atlantic led to a sharp easing of rates in the first half of January of around 50 basis points in Europe and the United States. This significant drop in interest rates led to an increase in the value of future discounted earnings, which in turn led equity markets to bounce back. The paradox, however, lies in the nature of this rate decrease, which expects lower inflation caused by a slowdown in the economy, and therefore a decrease in corporate earnings.
We remain fairly cautious regarding risky assets as we enter 2023. We believe that inflation will be more resilient than what the markets are currently expecting. We believe that central banks will need to keep rates high well into 2023 as core inflation, driven by wage pressures, should decline at a slower pace than headline inflation which includes the energy component. The lower interest rates better reflect the economic slowdown through a flattening of the curves. We consider that a shift back to good credit quality bonds is a good strategy on French 10-year yields of between 2.50% and 3%.
REAL ESTATE
IMPROVING ENERGY PERFORMANCE
How did the performance of real estate assets change in 2022?
KARINE ROBIDOU : The year was split into two very distinct periods in the commercial property investment market. The first half of the year was in line with the positive dynamics of previous years and the second half was sluggish. After years of central bankers displaying an accommodative stance, there followed a rise in bond yields and almost automatically a rise in property yields, the decompression affecting all asset classes but in varying degrees.
Since Q4 2022, the period is one of wait-and-see and investors are finding themselves in a constrained and volatile environment, waiting for a shift, the stabilisation of inflation forecasts and a more readable monetary policy in the medium term.
At the same time, the residential and commercial rental market remained buoyant.
CCR and CCR Re real estate portfolios include directly owned prime office and residential assets located in Paris. We also have holdings in thematic real estate funds that have shown a fair amount of resilience in certain asset classes, like in logistics and managed residential. We now have over €1 billion in real estate assets, which represents 9% of the Group’s assets. In 2022 we kept up our momentum despite the economic backdrop. We integrated a restructured office asset with a label, leased for a long period from a leading player. We sold a residential building, with more than 66 dwellings, located in the 16th arrondissement of Paris.
We continued to be very active in the management of leases, maintaining a good level of flat lets and renewing office space with rent increases. We pursued our ambitious refurbishment programme to improve the energy performance of our assets.
What is the outlouk for 2023?
K.R. : We are going to focus on restructuring our portfolio assets to create value in a value-add strategy. We engaged in the complete refurbishment of an office building and added green surfaces and areas. The building is labelled namely for biodiversity. All our strategies include ESG criteria.
We will continue to pay attention to diversification strategies in favour of utility assets.
We may be opportunistic in our acquisitions, particularly for assets to be transformed if there is a real premium for equity financing.
Finally, we feel infrastructure assets might be interesting in this context of inflation.
“DURING COP 15, THE UN’S BIODIVERSITY CONFERENCE, THE CCR GROUP ADDRESSED THE CHALLENGES OF BIODIVERSITY.”
MATHILDE MANCEL,
ESG Analyst
THE CCR GROUP, A RESPONSIBLE INVESTOR
THE CCR GROUP ADOPTED AN SRI CHARTER in 2019 defining its strategy and responsible investment policy, which is based on three pillars: prevention of transition risk, adaptation to physical risks and support for social transition. Through this charter, the group is committed to complying with the climate goals of the Paris Agreement in order to contribute to achieving carbon neutrality by 2050, as well as to integrating biodiversity into its management processes.
Enrichment of the SRI policy through an ongoing improvement process
The CCR Group’s responsible investment approach is structured around four levers: understanding the issues and concepts; identifying and measuring the impacts of investments; committing to objectives of financing sustainable solutions and reducing negative impacts; communicating and reporting transparently. For each of these levers, the CCR Group is committed to an ongoing improvement process based on scientific recommendations and best practices communicated by France Assureurs and the Observatoire de la Finance Durable.
The responsible investment policy is therefore updated annually. For example, in 2022: the implementation of a policy to exit from non-conventional hydrocarbons and the strengthening of the biodiversity approach, by excluding unsustainable palm oil producers for example.
Data quality: a key objective for the CCR Group
In order to fulfil its commitments, the CCR Group considers it essential to use comprehensive and quality data. Fine granular understanding is needed on two levels. Firstly, on the portfolio: which issuers are held (including in open-ended collective funds). To this end, the entire portfolio is systematically looked through. Using look-through analysis to assess and monitor ESG-Climate indicators in portfolios allows for fine granularity and overall consistency across sustainability indicators for open-ended fund investments.
Secondly, on the methodologies of data providers. To this end, the CCR Group conducts a continuous series of audits, including with the help of its climate experts.
Finally, the direct take-up in 2022 of Sustainalytics strengthened the consistency of the SRI approach as this data is used in the management processes of both directly held assets and delegated funds (via the Morningstar tool). In addition, it also improved the understanding of the data (through access to qualitative analysis, dialogue with analysts, etc.).
Each year, the ESG report (called 29LEC) explains how the CCR Group integrates sustainability issues in its asset management.
The CCR Group is now a signatory to the CDP
The CCR Group became a signatory to the CDP (formerly the Carbon Disclosure Project) in 2022. The CDP encourages investors, companies and cities to measure and understand their environmental impacts. The organisation has the largest database of environmental performance. The CDP contacts many companies each year on behalf of investor signatories to report on their climate, water and deforestation data.
The CCR Group also participated in a second CDP engagement campaign to contact nearly 1,600 high-carbon-emitting companies, asking them to set target figures to reduce their carbon emissions. The CDP calls for these targets to be validated by the Science Based Target initiative (SBTi) as being consistent with a 1.5°C warming trajectory.
The Management teams participated in a Biodiversity Mural
During COP 15, the UN Biodiversity conference, in Montreal, the CCR Group addressed the challenges of biodiversity. The management teams took part in a Biodiversity Fresco workshop to understand the issues and pressures surrounding biodiversity, based on the work of the Intergovernmental Science and Policy Platform on Biodiversity and Ecosystem Services (IPBES).
Through this fun and collaborative workshop, the asset managers were able to discover the systemic aspect of biodiversity: what it is, what it achieves and what deteriorates it. As a result of this training, they were also able to reflect on concrete solutions to fully integrate biodiversity into the investment strategy.
“AS AN ENGAGED AND CIVIC-MINDED GROUP, WE PLACE PEOPLE AND DIVERSITY AT THE HEART OF OUR ACTIVITIES AND APPROACH.”
MARLÈNE LARSONNEUR,
Chief Human Resources Officer
SOCIAL RESPONSIBILITY AT THE HEART OF TALENT MANAGEMENT
THE HUMAN RESOURCES DEPARTMENT has a central position in the CCR Group’s CSR approach. As guarantor of the employer brand, it is developing an increasingly inclusive and responsible policy. It promotes the Group’s culture and ensures employee cohesion through its shared values: Team spirit, Involvement, Honesty, Respect, Service and Responsibility, which reflect our DNA and allow us to meet the human challenges of the Group’s transformation.
Diversity and inclusion
For the CCR Group, diversity and inclusion represent our commitment to bringing people together across all social, cultural and intellectual backgrounds. As an engaged and civic-minded Group, we consider social, environmental and technological issues to be at the heart of our activities and approach. The management of our teams aims to value the skills of each individual and to promote equality and professional diversity.
Although historically the insurance and reinsurance sector has not been very engaged in diversity issues, the CCR group, beyond the implementation of legal requirements, is aware of the many challenges it faces in the fight against discrimination. In order to improve professional equality, we concentrate our efforts on looking for people with various backgrounds and profiles than in more traditional recruiting.
22
nationalities
32
jobs
310
employees, including 27 apprenticeships
89%
attended at least one training course
We are strengthening gender equality and developing work-study programmes and intergenerational mentoring. We promote professional equality by increasing gender diversity across all business lines and positions and at every level of responsibility. In order to support the career development of women, we guarantee equal treatment in the evaluation of objectives and have taken measures to ensure fair treatment in terms of remuneration. We encourage networks where women can share their career experiences and make professional connections.
Over the past five years, we have strengthened our teams by recruiting from more multicultural talent pools. This is one of the main drivers of our human resources policy. We increasingly hire qualified candidates of different nationalities, depending on operational needs, and we support them throughout their integration with bespoke programmes.
This diversity in all areas of our human resources policy contributes to strengthening the culture of our Group.
Inclusive hiring
As part of the effort to overcome the barriers that may prevent disabled people from accessing employment, we entered into a partnership with Agefiph, which offers assistance and support for the employment of people with disabilities. We actively participate each year in the forum of the Club Handicap of the Institut de formation de la profession de l’assurance (IFPASS) by promoting the inclusion of its participants in our companies. We are determined to pursue our efforts on disability and have organised a theatrical conference to raise awareness of deafness in the workplace.
In June 2022, we also signed the LGBT+ Commitment Charter represented by L’Autre Cercle, a non-profit organisation that works for the inclusion of LGBT+ people in the workplace. By signing this Charter, we want to remind everyone that we welcome all talents in the CCR Group without discrimination. We launched a webinar in collaboration with L’Autre Cercle to raise awareness among our employees about the fight against LGBT+ discrimination.
UN STAGE ET APRÈS
The CCR Group is committed to young people by setting up a process of induction and integration as well as regular monitoring of their experience within the teams and a skills sponsorship project with the association ‘Un Stage et Après’ to develop sponsorship of internships and involve our employees in supporting partner schools.
52%
of women on permanent contracts
40%
of women in the Group Executive Committee since 2019
39%
of managers are women in the CCR group as at 31/12/2022
97%
gender equality index of the CCR group
CCR & CCR RE CAMPUS LEARNING IN DIGITAL FORMAT
The CCR Group’s human resources policy is based on ambitious vocational training and is one of the supporting levers for the management of our talents. The establishment of a “Digital Campus”, as a complementary tool to vocational training, is a natural part of the digital HR transformation process and helps to maintain our culture of learning and developing skills. Kick-offs were organised on 11 and 12 May 2022 to present the platform to all employees. A specific programme has been set up for newcomers. They automatically receive by email the link to access the Campus and can follow the following courses:
- Cybersecurity course
- Solvency II
- The Basics of Reinsurance
- Business line presentations.
A MODERN APPROACH TO MOBILITY
In line with the sustainable development and responsible mobility approach initiated in 2021 with Vélib’Pro, which offers employees who wish to take out an unlimited membership to use self-service bicycles in the Greater Paris region, the CCR Group’s Human Resources department has just signed a new partnership with Cyclofix, the leading company in on-demand bicycle repairs since 2016.
This new partnership offers all employees who use bicycles as a means of transport to and from work the opportunity to receive €50 in credit for the repair of their bicycle.
SPOTLIGHT ON OUR IN-HOUSE TALENT
To reflect on the strong corporate culture of the CCR and CCR Re entities, over the summer of 2022, some fifteen employees agreed to be interviewed on camera about their job, the perks and the growth opportunities.
The quality of the videos and images is a real asset for recruitment as well as to gain greater visibility among potential future employees and getting closer to them.
MATINALES BLEUES HANDISPORT
During the Beijing Paralympic Games and as part of its partnership with the French Handisport Federation, the CCR Group was invited to the Matinal Bleues on 8 March 2022.
The morning event’s programme was rich with live broadcasts of Paralympic competitions, sports entertainment, and discussions with disabled athletes to celebrate the French successes of the day. The three employees who took part in this event were able to meet Alain Bernard, the 2008 Olympic 100m freestyle champion.
CCR, ENVIRONMENTAL, CULTURAL AND SOCIAL PATRON
ENVIRONMENTAL PATRONAGE
CCR patron of Energy Observer, in 2022 the ship travelled to South East Asia and in France it set up its travelling exhibition village in Saint-Malo at the start of the Route du Rhum. CCR is still a sponsor of Polar Pod, the oceanographic expedition launched by Jean-Louis Etienne. Driven by the circumpolar current, like a satellite around Antarctica, the Polar Pod will allow researchers, oceanographers, climatologists and biologists to get invaluable long-term data and observations.
CULTURAL PATRONAGE
The CCR Group, patron of the Rodin Museum, contributed to the creation of the Atelier Rodin, a new facility dedicated to the discovery of art and sculpture through hands-on activities and games, which opened in the summer of 2022.
SOCIAL PATRONAGE
Each year, the Group’s employees can request financial support for actions or projects that are important to them in a humanitarian, social or environmental field. The patronage committee, which reviews applications, allocated EUR 40,000 in grants to associations in 2022.
MUSÉE RODIN
The Atelier Rodin invites families to explore Rodin’s art through the engagement of all their senses, offering a comprehensive and fun experience at the museum. Designed as a sustainable project, it will resume in spring 2023, enriched with new proposals.
ENERGY OBSERVER
The Energy Observer educational exhibition village was in Saint-Malo for the Route du Rhum - Destination Guadeloupe from 25 October to 6 November 2022. This travelling exhibition dedicated to sustainable energy and hydrogen opened its doors every weekend to the general public and during the week to pupils from local schools
PERLS
PERLS is dedicated to helping children from disadvantaged backgrounds in Asia. The association helps to improve their living conditions in orphanages, hospitals and schools. PERLS focuses its efforts on supporting the BE THO orphanage, which is home to nearly 100 children in Vietnam. It is actively involved in their daily lives, providing them with material support and food.
OLAGARROA
promotes artistic, cultural and sporting activities for young people with disabilities. The association promotes collective activities for broader social integration. It organises and participates in sporting events and competitions in France, as well as finances its members travelling and accommodation expenses.
APF FRANCE HANDICAP
is a French organisation for the defence and representation of people with disabilities and their families. The association promotes equal rights, citizenship, social participation and free choice of lifestyle for people with disabilities and their families.
ECOACTEURS
promotes and supports the great outdoors, the heritage and the sustainable development players in the Médoc region. Organises its actions around environmental education and sustainable development, agri-environment and ecotourism. Develops communication of its projects on social media and environmental awareness-raising events for the general public.
ENVIRONMENTAL PATRONAGE
CCR patron of Energy Observer, in 2022 the ship travelled to South East Asia and in France it set up its travelling exhibition village in Saint-Malo at the start of the Route du Rhum. CCR is still a sponsor of Polar Pod, the oceanographic expedition launched by Jean-Louis Etienne. Driven by the circumpolar current, like a satellite around Antarctica, the Polar Pod will allow researchers, oceanographers, climatologists and biologists to get invaluable long-term data and observations.
CULTURAL PATRONAGE
The CCR Group, patron of the Rodin Museum, contributed to the creation of the Atelier Rodin, a new facility dedicated to the discovery of art and sculpture through hands-on activities and games, which opened in the summer of 2022.
MÉCÉNAT SOCIAL
Each year, the Group’s employees can request financial support for actions or projects that are important to them in a humanitarian, social or environmental field. The patronage committee, which reviews applications, allocated EUR 40,000 in grants to associations in 2022.
MUSÉE RODIN
The Atelier Rodin invites families to explore Rodin’s art through the engagement of all their senses, offering a comprehensive and fun experience at the museum. Designed as a sustainable project, it will resume in spring 2023, enriched with new proposals.
ENERGY OBSERVER
The Energy Observer educational exhibition village was in Saint-Malo for the Route du Rhum - Destination Guadeloupe from 25 October to 6 November 2022. This travelling exhibition dedicated to sustainable energy and hydrogen opened its doors every weekend to the general public and during the week to pupils from local schools.
PERLS
PERLS is dedicated to helping children from disadvantaged backgrounds in Asia. The association helps to improve their living conditions in orphanages, hospitals and schools. PERLS focuses its efforts on supporting the BE THO orphanage, which is home to nearly 100 children in Vietnam. It is actively involved in their daily lives, providing them with material support and food.
OLAGARROA
promotes artistic, cultural and sporting activities for young people with disabilities. The association promotes collective activities for broader social integration. It organises and participates in sporting events and competitions in France, as well as finances its members travelling and accommodation expenses.
APF FRANCE HANDICAP
is a French organisation for the defence and representation of people with disabilities and their families. The association promotes equal rights, citizenship, social participation and free choice of lifestyle for people with disabilities and their families.
ECOACTEURS
promotes and supports the great outdoors, the heritage and the sustainable development players in the Médoc region. Organises its actions around environmental education and sustainable development, agri-environment and ecotourism. Develops communication of its projects on social media and environmental awareness-raising events for the general public.
JRS France
JRS Welcome offers free accommodation in host families to asylum seekers who are left homeless due to lack of space in the French National Reception Scheme [Dispositif National d’Accueil]. This housing arrangement allows them to enjoy a break from their difficult journey, giving them time to immerse themselves into French culture by sharing the everyday life of people living in France.
WUMODJA
provides access to culture for Comorian children and facilitates the integration of students arriving in France. The association organises collections of books and school supplies to equip a library in the south-west of Grande Comore, in the village of Domoni, where it has undertaken the construction of a primary school.
ADADA
The association aims to protect donkeys, develop actions around animal integration and participate in maintaining biodiversity. It provides employment to people who have drifted away from the working world. The association operates in retirement homes and receives children from a day-care centre, children with disabilities or behavioural problems.