AM Best Affirms Credit Ratings of Caisse Centrale de Reassurance and CCR RE.

ENPNewswire-July 29, 2021--AM Best Affirms Credit Ratings of Caisse Centrale de Reassurance and CCR RE

(C)2021 ENPublishing -

Release date- 28072021 - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of 'aa' (Superior) of Caisse Centrale de Reassurance (CCR) (France).

Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of 'a' (Excellent) of CCR RE (France). The outlook of these Credit Ratings (ratings) is stable.

The ratings of CCR reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management (ERM). The ratings also consider, in the form of rating lift, the explicit unlimited guarantee provided by the Republic of France to CCR's state-backed business.

CCR's balance sheet strength assessment reflects the company's strongest level of risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR). CCR's capital position is supported by significant equalisation and special reserves, which provide capacity to absorb potential losses from its peak exposures to natural catastrophe, terrorism and other exceptional risks. The balance sheet strength assessment also reflects CCR's high quality, liquid investment portfolio and conservative reserving practices.

AM Best considers CCR's long-term operating performance track record to be adequate. Results are subject to volatility given the nature of business written; however, the company has established significant equalisation reserves, which can be released in loss-heavy years. Losses have trended higher in recent years, driven by weather-related natural catastrophe events, translating to an average loss ratio of 107% for the five-year period ending in 2020 (as calculated by AM Best, before movement in the equalisation reserve).

CCR's favourable business profile assessment reflects the company's role in France's public reinsurance regime and its unique position as the principal reinsurer of natural catastrophe risks underwritten in the country, with an estimated market share of over 90%. AM Best considers CCR's market offering of a 50% quota share, supplemented by an optional, unlimited stop loss treaty, to be a competitive advantage.

The ratings of CCR RE reflect its balance sheet strength, which AM Best assesses as...

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