French reinsurance company CCR Re was acquired by a consortium comprised of SMABTP and MACSF earlier this year, a deal which is positive for all parties and a good fit for the reinsurer, according to Deputy Chief Executive Officer (CEO), Laurent Montador.
The two French mutual insurers, SMABTP, which specialises in construction risk and MACSF, a healthcare insurance specialist, took control of CCR Re in July and simultaneously subscribed to a €200 million capital increase.
A little more than two months after the deal completed, we spoke with CCR Re’s Deputy CEO, Montador, at RVS 2023 in Monte Carlo, about the new ownership and direction going forward.
“We are very pleased with the transaction, and we have an excellent relationship with the new owners,” said Montador. “For us, it’s important that the shareholders are French large mutuals. For them, it makes sense to get this deal because of international and business diversification.”
Following the transaction, S&P upgraded CCR Re’s rating to A from A-, while AM Best affirmed its A rating, with the former noting CCR Re’s strategic importance to SMABTP.
“Rating is important,” continued Montador. “It’s clear that it’s a kind of permit for insurance, in simple terms. No doubt that we will continue to get this strong rating, and we’ll even do our best to improve it. We want to go upwards.”
Aside from the stronger rating, Montador explained that the deal is important for CCR Re because the firm share “the same DNA with the new shareholders,” which includes long-term relationships with clients.
“It’s very technical and data driven, but also driven by relationships as to know the cedent, to know the employee is important in our business. And so, it’s really a very good fit,” he said.
CCR Re will remain fully autonomous as regards the conduct of its reinsurance activities but there will be synergies on the asset management side, Montador explained.
“SMA will take the asset management operations. What we will still have, of course, is our input at the most senior management on the asset allocation, in order to shape the overall risk profile of the balance sheet and to take advantage from market movements.
“It’s also important for us to get a view on the different economical evolutions and different demographics, in order to forecast the drivers that will influence the insurance and reinsurance market.” said Montador.
The Deputy CEO also stressed that going forward, CCR Re wants to continue to run the business the same way, in the same direction.
“The new shareholders have bought, of course, a portfolio, a company, but also the management, with the teams, the underwriters, as well as a development plan putting profitability on top of the list,” he said.
The goal for the reinsurer is to achieve a double-digit return-on-equity, and Montador told Reinsurance News that to reach that it will need to continue to grow for some years at the same pace it did in 2022.
“Last year, in 2022, we had a top line of almost €1 billion. We think that at the end of this year we will probably be above €1.1 billion, and we want to reach something in the region of €1.9 – €2 billion in 2027,” said Montador.
