CCR RE, INTERNATIONAL REINSURER

In 2022, CCR Re reported solid results. The annual targets were met, driven by the growth in gross written premium. This controlled growth, which is taking place under good solvency conditions, reflects strong financial and operational momentum, supported by all the business lines at the service of the clients and partners of CCR Re, which is looking to 2023 with the support of its majority shareholders.

In north-western Europe, on 18 February 2022, Storm Eunice hit London with record winds which damaged the roof of the O2 Arena.

Laurent Montador, Deputy Chief Executive Officer and Bertrand Labilloy, Chairman - Chief Executive Officer

CCR RE KEEPS UP POSITIVE MOMENTUM

“IN 2022, CCR RE DELIVERED A VERY STRONG PERFORMANCE DESPITE A TURBULENT MARKET ENVIRONMENT.”

A Steady Trajectory

Firstly, the operational performance is in line with that recorded over the last five years and that forecasted for the next five years. Coming in at €987m, CCR Re’s business recorded 17% growth in gross written premiums, two thirds of which were driven by existing clients, and the other third by new accounts. The year 2022 also confirmed the improvement of the L&H claims ratio excluding inflation, a continued steady decline in the general expense ratio and a gradual increase in current financial income, which should continue as rates rise.

2022, A Year of Shocks

2022 was also shaped by many radical shifts linked to the resurgence of war in Europe and the spread of climate disruption impacts to all continents. The specific features of our underwriting policy in terms of geographical coverage, exposure and rules of engagement protected us well against the effects of these two shocks.

The same cautious approach led us to massively recharge the effects of inflation on the outstanding claims: EUR 65 million were added, which represents an impact on L&H and P&C technical profitability of 120 bps and 560 bps respectively.

Nevertheless, the combined ratio reached 98.7% compared to 96.6% in 2021 and the L&H technical margin stood at 3.6%, up year-on-year. FY2022 net income came in at EUR 42 million, slightly above FY2021. All 2022 targets were met or exceeded.

CCR Re thus ended the year with good momentum, confirming our business approach and the relevance of our international and diversified reinsurance model.

In a very demanding general environment, CCR Re confirmed its ability to deliver steady and sustained growth, while generating margins regardless of the economic backdrop.

2023, An Encouraging Outlook

If CCR Re started the year on a good footing, the outlook ahead is even brighter: last year’s rise in interest rates resulted in the company gaining value thanks to the favourable duration gap between our assets and liabilities. CCR Re’s solvency, which was above 200% at the end of December 2022, will be further strengthened by midyear thanks to the EUR 200 million share capital increase which should be subscribed by SMA and MACSF, our two future co-shareholders, after the closing of the current transaction.

FY2023 is thus beginning with encouraging signals, bringing with it gross written premium growth of over 20% and encouraging the continued strengthening of operating margins in L&H and P&C.

This good visibility should allow CCR Re to fully benefit from the new market environment, which is very buoyant with an increase in demand for capacity and higher pricing.

Transformation

In 2022, we increased the pace of our investments in quantitative and technical innovation, in digital and cloud technology. These achievements were made in the context of the recovery of our information systems after a cyber-attack that did not interrupt the vital functions of the company or affect business continuity.

CCR Re also increased its attractiveness to recruit the best talents, with a culture that is both highly agile and a workplace environment that fosters individual development and personal initiative, with short reporting lines and quick interactions to serve our clients. We are also proud of the fact that our company culture is open to international experts who interact with their clients in more than 15 languages. Finally, we are committed to our role as a responsible company and are pursuing our artistic and humanitarian patronage commitments.

Affirmation

CCR Re is a reinsurer that asserts both its style and the quality of its services.

The transformation of the Group that we have carried out over the last few years, and which will speed up considerably with the arrival of SMA and MACSF as shareholders, will enable us to serve our clients even better in all areas of their business and across all geographies.

“IN 2022, THROUGH ITS CONTROLLED UNDERWRITING, WITH ITS UNDERWRITERS, ACTUARIES AND LEGAL COUNSEL, CCR RE WAS ABLE TO MINIMISE THE IMPACT OF THE VARIOUS CRISES.”

HERVÉ NESSI,

Chief Underwriting Officer

2022, CCR RE HAD TO ABSORB VARIOUS MARKET SHOCKS

THE SUMMER OF 2022 WAS THE HOTTEST ever recorded in Europe. Record temperatures and heat waves around the world led to drought (especially in Brazil) and fires. Severe flooding in South Africa also hit hard in the second quarter of the year.

In addition, the surge in prices, which began in 2021 as a result of the disruption of distribution chains combined with strong demand for products and services essential to the recovery of post-Covid economies, accelerated to levels not seen since the 1970s-1980s. This inflation was amplified and fuelled by the war in Ukraine...

Climate change, energy crisis, economic crisis, geopolitical crisis - all of these upheavals punctuated the year in 2022 and had a direct or indirect impact on the insurance and reinsurance sectors.

Yet, in this tense environment, CCR Re once again was able to stand its ground. On the contrary, these events validated our model and our underwriting policy

By staying true to the technical fundamentals that we have been anchored to since the creation of CCR Re in 2016, by following a strict underwriting discipline, we have ensured, to reduce the volatility of the outcome, a necessarily large development of our portfolio with risks that are as homogeneous and independent of each other as possible, and of course, individually profitable:

- The 14% increase in our feed is a clear indicator of our success, and it is all the more satisfying because more than half of this growth is explained by the underwriting of new and therefore diversifying business.

- In this regard, it is important to note that, unlike many of our competitors, our business mix is not only diversified by geography...

- we are now present in 92 countries;

- and by choice, we do not underwrite in the USA, Russia or Ukraine, which has spared us from significant losses in 2022 (particularly in the USA with the devastations of Hurricane Ian and case law deviations for sexual harassment or in Eastern Europe with the direct and indirect damage of the war in Ukraine); but also by business line:

- the application of our historical generalist model has led us to develop a very varied portfolio in which L&H business (one third) and P&C business (two thirds) coexist, long lines (representing a quarter of the P&C portfolio and benefiting from significant pricing improvements and rate increases on the assets and liabilities side) and short lines, traditional lines (for example, Life and Health represent 90% of our L&H portfolio) and specialised lines (a quarter of the P&C portfolio).

- In addition to the dispersion of our risks, we sought homogeneity in our individual risks while increasing the overall level. Our capacity, which increased in proportion to our ambition, was distributed by giving priority to our loyal customers and, as a new feature, with a much more cross-functional vision, by underwriting, if possible, a common share to all L&H, P&C and Specialty treaties.

- Finally, target profitability obviously remains core to our project. With this in mind, we terminated a number of accounts that, in the long run, were not providing a satisfactory return on capital which, moreover, we continue to monitor very closely and cautiously.

In L&H, conditions remained fairly stable, with the sector appearing relatively resilient in the face of Covid. Changes remained very much linked to case-by-case assessments. In P&C, we started to see improvements in pricing and contractual terms... which is a far cry from what we experienced later with the 2023 campaign.

The clear improvement in the attritional loss ratio rewarded all our efforts and validated our strategy

Putting People Back at the Heart of Customer Relations

After the Covid hiatus, the underwriting teams were finally able to return to their markets. Although remote contacts did not hinder the development of the company during the pandemic, it still felt great to resume our business trips in most countries (except in Asia).

CCR Re has always put human interaction at the forefront of sustainable relationships and has never considered the digital world as a sustainable alternative. To preserve a high-quality customer relationship, the use of new technologies is useful, but this digitalisation of the customer relationship must not make us forget the human element.

Thus, the gloomy lockdown experience taught us to better humanise the non-contact customer experience on the one hand, and to even more enjoy privileged in-person meetings with our customers on the other. In this respect, we reconsidered our marketing approach to present a broader and more legible offer. We are trying to redefine with them the outlines of customer experience for the world to come. Reinsurance is a moving science. We are always in action and we must constantly adapt to needs, contribute and participate as the case may be to market solutions. For these reasons, we joined the International Credit Insurance and Surety Association, emphasising, at our induction in Helsinki, the importance of these market initiatives, which are the only ones capable of bearing the burden of systemic losses alongside States.

“OUR STRATEGY OF DIVERSIFYING THE SOURCES OF RETROCESSION CAPACITY CONTRIBUTES TO CCR RE’S SUCCESSFUL DEVELOPMENT”

MATHIEU HALM,

Head of Retrocession and Alternative Capital

ADAPTING TO CAPACITY DEPLETION

RETROCESSION IS AN IMPORTANT MECHANISM in a reinsurer’s business model, as this renewal on 1st January 2023 reminded us. Indeed, the hardening reinsurance market is due, among other factors, to the depletion of retrocession capacity. Property Cat programmes have been the most affected by this.

Risk appetite must therefore be adapted to the reality of the market and the role of retrocession is all the more important in solving this equation. It is therefore essential to have the most appropriate coverage to support the development of our portfolio. This was therefore a difficult exercise for the 2023 programmes. However, once again, having a long-term philosophy of working with our partners allowed us to place retrocession programmes that best meet our needs. For this renewal, a good understanding of the set of issues our retrocessionaires were facing was needed, to be able to define a retrocession programme that was acceptable to the market and that of course also met our own needs, such as the increased capacity purchased through our event-based protection. This commitment to long-term partnerships also enabled us to issue the fifth generation of our sidecar, 157 Re 23, increasing the collateral raised by more than 40% compared to 157 Re 22. This showcases the quality of our underwriting as well as that of our franchise. It also confirms CCR Re’s aim to build on its 157 Re platform, which gives it privileged access to the capital markets via Insurance-Linked Securities. This platform contributes to the retrocession optimisation that CCR Re implements each year to support its growth.

It should be noted that for our 5th generation of sidecar, in a very tense market environment, CCR Re was able to welcome a new investor. This demonstrates the appeal of this asset class to investors.

Our strategy of diversifying the sources of retrocession capacity is therefore ongoing and is contributing to the successful development of CCR Re and the wider French market.

SPECIALTIES MARKET FOCUS

CREDIT AND SURETY

THE ECONOMIC DOWNTURN caused by the Covid pandemic, as well as private insurers’ reliance on government-provided reinsurance support schemes, contributed to a reduction in premium volumes for this business line in 2020 and 2021. With the end of public support schemes through reinsurance and the economic recovery, our Credit & Surety portfolio returned to its pre-Covid level in 2022. This portfolio was extremely profitable during the pandemic, mainly due to the strong measures taken by governments, specifically in developed countries, to protect their economies, which resulted in historically low levels of corporate insolvency and claims. The underwriting environment remained very favourable in 2022, with corporate defaults and loss ratios not yet returned to their historical average.

In Credit, we mainly developed our portfolio in OECD countries, while in Surety, our development was more diversified since we took on new business in Europe and Canada, but also in Asia and Latin America. Finally, this year we joined ICISA, the International Credit Insurance & Surety Association, which will improve our visibility, expand our network and boost our growth..

AVIATION

AFTER A LONG PERIOD of decline that began in 2013, the aviation market reacted strongly to the Boeing 737 Max design flaw incident in 2018. The hardening market conditions, which began in 2019 with rate increases and tighter coverage offered, have restored this business line’s profitability. The Covid pandemic had and still has an impact on global traffic but did not affect this restored profitability.

This favourable underwriting environment enabled us to further develop our Aviation portfolio in 2022 both by increasing our share of existing treaties as well as by continuing to develop our general and small aviation portfolio which diversifies our portfolio.

MARINE AND ENERGY

WE CAPITALISED on the hardening Marine and Energy market to develop this portfolio significantly over the past three years, a development that continued in 2022.

One of the ways we did so was by underwriting retrocession treaties. This type of business is more remote from risk, allowing us to avoid attritional claims which strongly contribute to the Marine business line’s loss experience. This business also benefits from better pricing conditions. Another strategy to develop this portfolio was to work with specialist underwriting agencies to benefit from their expertise in sub-segments of the Marine and Energy market. Finally, we sought to diversify our portfolio by looking at the renewable energy segment, which we have been closely following for the past two years, but for which the underwriting has been postponed yet again due to insufficient profitability.

WAR IN UKRAINE

THE CONSEQUENCES of the war in Ukraine primarily impacted our Marine portfolio as merchant ships and cargoes have been blocked in Ukrainian ports since the outbreak of hostilities. The exposure of our Marine portfolio has been reduced since the agreement on grain exports and the opening of a Black Sea corridor. The amount of our residual exposure is manageable and under control. Furthermore, the Russian seizure of aircraft leased from foreign lessors should not have an impact on our Aviation portfolio. Indeed, we do not actively underwrite War Risk covers which are most exposed to claims by aircraft lessors.

Finally, our Credit and Surety portfolio should only be marginally impacted by outstanding payments from Russian and Ukrainian companies.

L&H MARKET FOCUS

AFTER TWO YEARS strongly affected by the Covid pandemic, 2022 looks like the first year of return to ‘normal’ in most countries.

However, some major trends are emerging in this post-crisis period. Overall, we strengthened our positions in all markets with product and regional mix diversification that generated growth in line with our business plan objectives. Although most countries lifted their pandemic-related restrictions in 2022, we saw an increase in the frequency of post-lockdown Health claims in the Middle East and some Asian countries. In the Middle East (market where the pandemic mainly affected CCR Re), we experienced a change in written premiums of between 5% and 20% as a result of increased claims frequency. China was the only major country to maintain and strengthen the zero Covid policy during 2022. Strict lockdowns and border closures had negative impacts on business in general, but also on the reinsurance sector. As of 7 December 2022, the Chinese government decided to abandon all covid-related measures. The number of cases is skyrocketing, but the number of Covid-related deaths remains relatively low according to official data. In other markets, the impact, although existing in insurance, was contained due to country policies and the reinsurance structures underwritten by CCR Re.

CCR Re is benefiting from increased business volumes in life and health insurance contracts and service offers linked to the post-pandemic price surge.

The Middle East market has seen a significant increase in Health products particularly in Saudi Arabia and the United Arab Emirates, as well as in Egypt where there are growing investments in the healthcare insurance system.

In France, new equilibriums have to be found after the implementation of the 100% Health reform. The ‘catch-up’ phase of under-consumption, caused by the pandemic or by people foregoing care for financial reasons, is coming to an end.

In Life insurance, a basic trend of the last few years was confirmed with a rise in the cost of medical leaves, particularly due to an increase in long term medical leaves. The markets were particularly tough, with many pricing adjustments and portfolio clean-ups.

2022 was also the year during which we were hit by catastrophic events such as the crash of the China Eastern Airlines Boeing 737-800 flying from Kunming to Guangzhou.

Inflation, the Lemoine Law and rising interest rates: three factors that had a negative impact on the collection of business from loan contracts

In addition, competition remained intense in many markets, with either large-scale incumbents limiting the scope for expansion, or smaller players who were very (sometimes too) competitive. Conversely, we benefited in France, Latin America, Israel and some Middle Eastern countries from a growing demand for catastrophe capacity (even though the reinsurance capacity available in the markets was shrinking) and service offerings to ceding companies.

Thus, even if the majority of countries remained very competitive and the growing number of services impacted technical margins, the modest rise in discount rates offset these ever-higher costs by reducing provisions with a particularly strong impact on long-term risks. Despite the pressure on treaty terms in mature markets (Israel, Europe, France, Asia, etc.) and the few issues discussed above, our underwriting strategy, our prudent provisioning management and our performance enabled CCR Re to be profitable in 2022 with growing results and significant premium growth in line with our business plan.

The increase in interest and discount rates should open the way to a positive development in 2023, even if this year will certainly involve major challenges such as the pension bill in France and inflation.

P&C MARKET FOCUS

IN FRANCE

THE 2022 RENEWAL on 1st January was characterised by a significant change in market behaviour in terms of risk appetite and pricing vision in certain business lines. It is not a hard market yet, but there is a clearly noticeable hardening of the market. The poor results of the last few years led reinsurers to take a more disciplined approach to their underwriting, with increased pressure from retrocession costs and rating agencies.

In France, renewal took longer than in previous years. Renewal information was sent out early on but the conditions were slow to be finalised. We observed priority increases rather than capacity increases with very little change in structure except for the heavily damaged programmes or the Aggregates treaties. These treaties are increasingly difficult to place with placement linked to the main treaty preferred in Cat and Motor.

In Cat, climate change, the frequency and intensity of which in recent years has led to record losses, is now considered but is still poorly understood, which has led the market to be more cautious. However, capacity remained abundant, and the placement ultimately went well. In property damage, prices remained either stable or up by 5% for treaties without claims and up by more than 10% for claims with adjusted risks.

In Motor insurance, the frequency was clearly down as a result of successive lockdowns. However, few structural or clause changes were implemented. Pricing conditions were revised upwards (in the range of 6-15% on non-disaster treaties) and negotiations proved more complicated. The lack of lead market and competitors was clearly felt. However, there was still abundant capacity.

France P&C represents around 10% of CCR Re’s portfolio with 2022 gross written premiums of €65M, up 15% on 2021, with 50 customers, more than 70% of which were intermediated by reinsurance brokers. Motor represents 40% of the portfolio (market share 5%) and Property 20%. France is a mature market. To develop our portfolio, the strategy applied to the 2022 renewal was to strengthen our partnership with our target customers by focusing on a more cross-sectional relationship.

IN CENTRAL AND NORTHERN EUROPE

GROWTH OPPORTUNITIES IN A HARDENING MARKET

In 2022, we substantially expanded our portfolio in Central and Northern Europe with €84.5m of risk added overall representing an 18% increase on 2021. As a result, we achieved a portfolio performance in excess of the 15% growth target set in our Streamline three-year business plan.

New business

We developed new business in line with the Streamline plan. More specifically, we expanded our business relationships with targeted groups and companies. We also took advantage of opportunities in long-duration business.

Renewals

In the German-speaking sector, no bouquets or treaties were lost and we did not observe any deterioration in conditions.

On the one hand, we saw substantial increases in Cat rates of between 30% and 100% on programmes affected by the events in the sector in 2021 (particularly Bernd). On the other hand, we observed a 5% increase in the other P&C business lines. These increases were mostly related to the historical performance of the programmes. All this contributed to an overall increase of 20% in P&C risk while maintaining Cat capacities.

In Great Britain, Ireland, the Nordic countries and Central and Eastern Europe, we saw 5-10% increase on profitable programmes and 15-30% increases on programmes affected by claims.

In the Motor and GTPL business line, the increases were dependent on the outcomes of the programmes. Overall, this business line showcased a 5% increase. We noticed some underwriting discipline among reinsurers. We also succeeded in introducing differentiated contractual terms in some programmes.

Terminations

While we had a few terminations on selected programmes, mainly due to the lack of potential development with these clients, we were terminated on some programmes where the companies merged.

Claims

2022 was relatively quiet on the claims front, with the exception of a ‘snow weight’ claim in Austria at the beginning of the year and the disastrous results recorded on an XS Fire in the Nordic countries.

Trend

We observed a hardening market reflected in proven underwriting discipline and a gradual improvement in technical and contractual terms.

On the premium side, thanks to our marginal exposures in Belarus, the Russian Federation and Ukraine, we were not impacted by Russia’s war against Ukraine. Concerns over inflation and the uncertain economic backdrop led to gradual harder rates and terms in the second half of the year for programmes maturing after the first quarter.

IN SOUTHERN EUROPE

DEVELOPMENT AND DIVERSIFICATION

CCR Re continued to develop and diversify its portfolio in Southern Europe in line with the strategy defined for these markets.

In 2022, the premium written in the Southern European markets increased by 21% to €89.2M. This growth was driven by the Fire business line (+€13m) and the Agricultural business line (+€3.4m). At the same time, we started taking underwriting actions on the proportional auto portfolio in Israel resulting in a 9% decrease in the auto premium in Southern Europe in 2022. In terms of markets, our growth was strongest in Spain (+95%), mainly in retrocession thanks to the development of our relationship with a local reinsurer. Turkey (+28%) and Portugal (+21%) also contributed to portfolio growth. Israel remains our largest market but our premium there has remained stable, so the weight of this market in our total portfolio has reduced from 51% to 44%, contributing to a better regional business mix.

The balance of the portfolio between Proportional and Non-Proportional premium remained stable at 84% and 16% respectively.

New business accounted for 55% of the portfolio growth and 45% was due to growth in premium bases, rate improvements and share increases. We entered into 71 new treaties, 40 of which were with partners who already did business with CCR Re, contributing to the development and further diversification of relationships. The remaining 31 treaties were signed with 12 new partners. Finally, priority was given to the profitability of the portfolio, and we improved conditions wherever possible while systematically refusing any deterioration. Our result rate increased from 8.23% in 2021 to 9.81% in 2022 and our profitability from 15.23% to 18.6%.

ASIA & AFRICA MARKET FOCUS

THE ASIA - AFRICA BUSINESS UNIT is unique in that it conducts several renewal campaigns every year: mainly in January, April and July. The January campaign represents 42.38% of the risk, the April campaign 37% and the July campaign 11.4%. We renew business every month, including in August.

In 2022, renewals were impacted by the continued clear up of the portfolio with the termination, mainly at our initiative, of business that no longer corresponded to our appetite (results, territories of exposure, treaty equilibrium) or for which the partner did not accept the improvements requested (in terms of clauses for instance) for an amount close to €10m.

As a result, we no longer have a presence in Australia and New Zealand for traditional reinsurance business lines (Property and GTPL).

In 2022, the risk was increased by 15% vs. 2021. We strengthened our presence in recently opened markets such as Cambodia, Thailand, the Philippines and Sri Lanka. In addition, we did not underwrite any treaties with deteriorated terms and terminated those where we considered the terms to be improved for the ceding company.

We also increased the number of treaties in which we were Lead Underwriters and successfully underwrote treaties with improved terms for the reinsurance market while at the same time, reducing our natural catastrophe exposures. The year 2022 was marked by high natural catastrophe loss experience in Korea (Typhoon Hinnamor) and South Africa (KZN Flood) and by the recurrence of fire losses in South Korea (such as the Hyosung claim).

CANADA MARKET FOCUS

THE CANADIAN BRANCH

OF CCR RE PROVES ITS RESILIENCE IN THE FACE OF MANY CHALLENGES

In 2022, Canada faced the same challenges as the rest of the world: a relentless pandemic, hyperinflation, social issues, major weather-related events, and a difficult investment market. CCR Re, and the insurance industry in general, was able to meet these challenges head on.

The most significant event in 2022 was the significant increase in inflation, to levels not seen in 40 years. First, it signalled the end of the accommodative phase of the Bank of Canada, which hiked its policy rate by 375 basis points in 2022. Interest rates were not historically high, but this increase caused insurers’ fixed income products to fall. The equity market was also down in 2022, giving insurers no breathing space. However, as interest rates rose, CCR Re was able to increase the returns on its bond portfolio.

Inflation, combined with supply difficulties, also increased the cost of claims. This put pressure on the result of excess loss treaties, while our ceding companies were increasing their reconstruction estimates. Weather events (the Derecho in May and Hurricane Fiona in September) also cost more than what they would have before the pandemic. In response, insurers continued to increase rates for policyholders. But an adjustment of reinsurance rates seems inevitable for 2023 renewals.

In this difficult market, CCR Re proved a reliable partner for our clients. This is demonstrated by the 27% growth in gross written premiums. And the branch reports an underwriting profit as well as an after-tax profit.

LIBAN MARKET FOCUS

NORTH AFRICA MIDDLE EAST

CCR RE IS A MAJOR PLAYER IN THE LOCAL INSURANCE MARKET

CCR Re has been present in Beirut for over 25 years and is one of the main players in the MENA region and a recognised leader in the local insurance market.

The Beirut office is firmly committed to operating to the profession’s highest standards and principles. The team provides expert advice to any national entity on all insurance, reinsurance and risk management issues. The objective of CCR Re’s branch office in Lebanon is to reiterate a relationship with high potential clients.

CCR Re is fully dedicated to the needs of clients in the MENA region and has made commendable progress, adding to its good rating. Thanks to our sustainable approach and achievable targets, we are a major player in the market which positions us as a leading reinsurer, even though we are faced with somewhat unbalanced treaties. Although many insurance companies want to be part of the CCR Re panel where we are facing increasing competition in the market.

“ACTUARIAL EXPERTISE IS CORE TO THE ANALYSIS PROCESS OF CCR.”

JÉRÔME ISENBART,

Chief Risk Officer and Chief Actuary

THE KEY ROLE OF ACTUARIAL SCIENCE

What role do actuaries play in the life cycle of a business deal?

The quality of our portfolio is supported by the specific focus paid by CCR Re staff at every stage of the process. The life cycle of any new business deal begins with its pricing. The teams of actuaries are top quality professionals who ensure that the required actuarial independence is balanced with portfolio development.

Management is constantly optimising the actuarial input: for example, since 2016, the pricing actuaries have been analysing all business to be underwritten, adjusting the actuarial input according to the expected premium of the business. The teams have at their disposal powerful tools that they master perfectly. All of this makes it easy to adapt resources to an increase in business volume handled, and guarantee the analysis of each file.

Another important aspect at CCR Re is that the actuarial underwriters, after training, participate in the controlled pricing of their contracts. Ceding companies also contribute to the rating of certain risks: since 2020, the MyQuote tool has been implemented for Group Life Middle East business to be rated.

Another example is the formation of pairs for underwriting areas requiring specific skills, such as agriculture, motor and credit insurance. In addition, the ratings of sensitive cases are systematically double-checked.

What about the Nat Cat business?

Since 2020, Nat Cat modelling has been handled by a dedicated team of specialists, increasing the quality of the modelling and the efficiency of the modelling process. Awareness raising among underwriters and regular communication with brokers continuously improve the quality of the data received for Nat Cat risk modelling. The databases are now more extensive and more detailed whilst the modelling phase is shorter.

Since 2021, Nat Cat modelling results for the entire portfolio have been centralised in the TigerEye software. This allows for more timely and controlled processing to provide enhanced information.

Also since 2021, the modelling process has been further automated with Python and since 2022 with APIs. CCR Re acquires the best catastrophe models on an ongoing basis: TigerEye in 2021 and RiskModeler in 2022. Since last year, all non-Middle East modelling based on aggregated insured sums has been carried out in a single tool (CatGate), replacing four different tools previously used, thereby increasing efficiency.

Do actuaries have other roles in the company?

Once underwritten, the business continues to be monitored by the actuaries through the various estimates that punctuate its life. Inventory and provisioning, for example, are managed by a small team whose methods and tools have been praised by various external reviews; the approach is tiered and leaves room for individual cases, combining inventory and pricing approaches where necessary. Last but not least, the current organisation allows for the quick integration of any new type of risk thanks to its flexibility and control.

Furthermore, CCR Re is subject to various standards like French GAAP, Solvency 2 and IFRS. Actuaries are heavily involved in all of them: calculations, checks, analyses, reporting. The explicability and traceability of these standards is absolutely necessary and a fundamental principle. Another example of the actuaries’ intervention is the lookthrough process of investments in the representation of commitments: the efficiency of the latter has been further increased, with a reduction in costs, and industrially covers financial as well as extra-financial risk indicators allowing CCR Re to be one of the leaders in this area.

Finally, the construction of a strong cross-functional approach between the actuaries provides a high degree of consistency and credibility for the various evaluations and therefore simplifies the steering process, making it more precise and above all proactive. This cross-functional approach allows actuaries to evolve throughout their career at CCR Re.

The topics of 2023 are a continuation of 2022: climate change, the impact of overinflation on our commitments and investments, and cyber risk management.

“FOR CCR RE, SPECIALIST LAWYERS ARE KEY PLAYERS IN THE VALUE CHAIN.”

SYLVIE CHANH,

Head of Legal, Claims and Services

THE LEGAL TEAM AT THE SERVICE OF THE UNDERWRITING BUSINESS

THE LEGAL, CLAIMS AND SERVICES DEPARTMENT of CCR Re supports policyholders not only during the underwriting process but also during the term of the contract. It is driven by the objective of securing legal partnerships for business development. To this end, the various specialist lawyers provide their expertise by business line: compliance, reinsurance and claims.

Compliance Officers, Guarantors of CCR Re’s Ethics and Reputation

Upstream, compliance officers ensure that the regulations and procedures in place are complied with. They identify, assess and inform the Underwriting team of the risks of any exposure according to the rules of anti-money laundering and financing of terrorism on the one hand and international sanctions on the other. As soon as the business relationship is entered into, for the sake of mutual vigilance, the compliance officers carry out the process aimed at improving knowledge of the customer, known as a KYC (Know Your Customer) as well as a Due Diligence Throughout the business relationship, the compliance officer supervises the adequacy of operations with the evolution of regulations, which are constantly monitored.

Through these tasks, the compliance specialist is an essential player in the value chain: he/she ensures transparency and preserves CCR Re’s reputation.

Reinsurance Lawyers, Guarantors of the Legal Security of the Treaties

Reinsurance lawyers may be involved in the pre-contractual phase when a non-disclosure agreement is drawn up or when a reinsurance scheme is being negotiated (sometimes a prerequisite for the exchange of information in certain business deals).

They regularly communicate with policyholders to adjust contracts according to operational and technical constraints. This interaction is essential because it makes it possible to factor in the specifics of the coverage, to adapt treaty clauses to the particulars of the business underwritten, the country of the ceding company and the territories of exposure. In contrast to insurance policies, reinsurance contracts allow for considerable contractual freedom and, therefore, for more innovation.

The mission of reinsurance lawyers is to provide legal certainty in the expression of the commitments of all parties to a treaty, while complying with public policy provisions, such as compliance clauses for personal data protection or international sanctions. In doing so, reinsurance lawyers must be both flexible and firm.

The reinsurance lawyers thus assist the underwriters in negotiating terms with ceding companies or brokers, whenever required.

CCR Re has developed an artificial intelligence search tool that can detect the desired clauses from its thousands of treaties and facultative reinsurance agreements. In addition, during the course of a contract, reinsurance lawyers may be called upon to draft endorsements to consider new circumstances or to early terminate the commitments, either by novation to a third party or by commutation. In the event of a dispute giving rise to an amicable settlement, reinsurance lawyers will also be involved to draw up a settlement agreement.

Claims Lawyers, Guarantors of the Services

At CCR Re, claims lawyers help deliver the promise made by the underwriters to clients, ensuring the smooth performance of the reinsurance contract. They analyse the admissibility of high-stakes claims, by checking that the coverage conditions of the original policy and the reinsurance contract have been met, that there are no exclusions or limitations of coverage, and that the clauses governing the definition of claims or events and the final net loss have been respected.If necessary, they handle disputes in coordination with the reinsurance lawyers.

In addition, by carrying out claims visits, the claims lawyers enable CCR Re to improve its knowledge of the client: organisation, claims management processes and provisioning policies. On these occasions, they strengthen the partnership and may be called upon to share their experience and expertise with the ceding companies on complex cases.

Finally, the studies carried out by the business lawyers contribute to the continuous update of knowledge and are a valuable source of information for external clients (ceding companies and brokers) as well as for internal clients (underwriters, actuaries, finance professionals). Bringing together within the same department the lawyers responsible for drafting contracts and those in charge of their execution facilitates exchanges and fosters a virtuous circle of collaboration, with the latter’s feedback feeding into the former’s thought process.

CCR Re has five legal experts in reinsurance, compliance and claims who work closely with underwriters in an agile environment.

“IN 2022, WE CONTINUED WORKING ON THE PROJETS FOR THE MODERNISATION OF OUR INFORMATION SYSTEMS TO IMPROVE EFFICIENCY AND EFFECTIVENESS.”

HIND MECHBAL,

Chief Information Officer

INFORMATION SYSTEMS

RECONSTRUCTION AND AUTOMATION

THE GROUP SET AS A MAJOR PRIORITY for 2022, the launch of the programme to separate the information systems of the two entities CCR and CCR Re. The IT Department therefore launched the ‘Information Systems Ownership’ programme at the beginning of 2022, which aims to select new data centres and, by the end of the programme, to have two completely separate and independent information systems for each entity. This is a major IT programme with a new infrastructure to be built from scratch and over 80 applications to be migrated.

Increasing Efficiency and Effectiveness

In addition, many projects to modernise and enhance the information system continued to enable the company to become more efficient and effective, with for example :

- Improvement of the decision-making system with new dashboards: the ‘income statement’ dashboard designed to monitor the company’s results in as much detail as possible, the ‘retrocession monitoring’ dashboard and the ‘business reporting’ dashboard;

- the addition of a new broker in ‘eProcessing Accounting’ which allows the automation of account entries and processing;

- Continued work on the new medical underwriting portal for our ceding companies;

- continued work to automate the entry of information from reinsurance treaties and its integration into the company’s ERP (Enterprise Resource Planning) system;

- On the natural catastrophe modelling front, the teams tested and validated the migration of the computing grid to Linux;

- new tools were introduced such as the e-learning platform and the expense management tool for financial control;

- structuring projects were able to progress, such as the implementation of IFRS 17 standards with a view to going live in 2023..

Rebuilding after the Cyber Attack

In July 2022, the Group suffered a major cyber-attack, which required the shutdown of internally hosted information systems for variable periods of time while they were being rebuilt and security was being increased.

By the end of the first week, we were able to restore email and access to priority files, followed by applications such as the showcase websites, and by early September the company was able to restore its critical systems.

It should be noted that no data was lost and that all the essential services of the company were restored, whether to our customers, our partners or our employees.

The rebuilding of the information system in response to this major crisis was an opportunity to implement a number of projects and improvements. These projects, cyber or otherwise, were fast-tracked and rolled out into production.

The IT teams, and in general, all the employees of the company showed strong resilience in the management of this crisis, by being calm, organised and collaborating across the board, which enabled us, collectively, to emerge from this crisis bigger and stronger. We also received a lot of support from our partners, who were there to help us through the event.

“A YEAR OF CREATIVITY AND ADAPTABILITY...”

ISABELLE BION,

Chief Operations Officer

OPERATIONS DEPARTMENT

CREATIVITY AND ADAPTABILITY

THE OPERATIONS DEPARTMENT - the Acceptance and Retrocession technical accounting department, which is responsible for the accounting and financial processing of the statements submitted by ceding companies and brokers;

- the underwriting assistants who, during renewal campaigns, ensure that the contractual data are integrated into the management system. They are also responsible for the creation of P&C claim notices.

Their main objective is to provide quality service to their internal and external customers by limiting the risk of data processing errors.

Innovative Projects to serve the Business Lines

After a successful year in 2021, during which the teams demonstrated the effectiveness of the Digital Transformation and the importance of data quality, they built on this momentum in 2022 with the Contractual eProcessing project.

This artificial intelligence tool will automatically identify certain key elements in contracts. It will assist the underwriting assistants in the processing and integration of contract data into the company’s management system. This large-scale project, the first part of which should go into production in the first half of 2023, complements all the developments initiated by the team leaders and their staff to improve the performance of the overall process and the features of the management system.

Operational Inventiveness in Action

The teams within the Operations Department also proved their adaptability during the cyber-attack the company faced over the summer.

Thanks to the Business Continuity plan defined beforehand, the teams had the necessary elements to pursue their work. They showed initiative and proposed innovative solutions to deal with cases with the tools at their disposal without giving up on check points. The monitoring reports devised on this occasion were then integrated into the management system, thus limiting the time period needed to restore the situation, with normal business resuming at the end of the year.

A busy year with a happy end!