CCR Re to grow Asia-Pac life
CCR Re is looking to expand the life business with its existing partners in the Asia-Pacific region, where it is currently mostly focused on property/casualty, Bertrand Labilloy, CCR chairman, told SIRC Today.
“The reinsurer will target opportunities to expand this area through existing franchises.”
The French reinsurer was formed in January 2017 when its parent, French-government backed CCR, split its open market reinsurance activities to form a new subsidiary. For the first half of 2018, CCR Re posted premium income of €381 million ($440 million), a 12 percent increase on the same period a year earlier, and net profit of €17 million ($19.6 million), equal to its profit for the whole of 2017.
Asia currently represents around 25 percent of CCR Re’s book and the firm is facing strong demand driven by economic expansion in the region. CCR Re operates mainly in the big markets in Asia such as India, Japan, China, Malaysia, Korea, and Hong Kong, but it is in the process of expanding its footprint in the region, looking at opportunities particularly in the Philippines, Thailand and Vietnam.
CCR Re partners mostly with local insurers in the region, offering tailor-made solutions and services.
CCR Re operates in the reinsurance market in life, non-life and specialty lines in France and internationally. Its non-life/property and casualty reinsurance offering includes property, motor, fire and third party liability. Its life business operations focus on accident and health reinsurance where it offers proportional, non-proportional and alternative reinsurance protection covering mortality, long-term care, disability and critical illness.
In specialty lines, CCR Re provides tailor-made solutions in areas such as credit and surety, political risk, non-life cat, marine, and aviation, among others.
“In Asia, CCR Re underwrites traditional non-life reinsurance business as well as marine reinsurance, credit and bond reinsurance.
“It is growing its agri business, which is developing rapidly particularly in India and China,” Labilloy said.
Cats and cyber
The cat business in Asia is of particular importance to CCR Re as natural catastrophe events impacted by climate change are increasing in frequency and severity. For example Typhoon Jebi, dubbed the strongest typhoon to strike Japan since Yancy in 1993, made landfall over Japan on September 4 as a category 5 typhoon. Insured losses from Jebi are estimated at between $5 and $7 billion.
Japan was also hit by typhoon Trami in September as well as by two earthquakes and very heavy rainfall.
Industry insured losses from Typhoon Mangkhut in mainland China, Hong Kong, and Macau are expected to be between $1 billion and $2 billion, according to estimates.
On the cat side of the business, CCR Re is interested in participating in risk pools in the region as governments seek to reduce the protection gap and offer more effective protection to populations.
Indonesia has, for example, recently been hit by severe earthquakes and a major tsunami, but the losses are largely uninsured. By setting up a scheme which would include the private sector, affected parts of the population could receive financial support more quickly after a catastrophe through, for example, a scheme based on parametric triggers.
Such a structure would also protect the fiscal budget of the government from the required financial compensation and enable a reasonably priced cover for everyone, Labilloy noted.
However, developments in this area in Asia which require the support and initiative of governments has been slow so far, he said.
Meanwhile, cedants in Asia are also wanting to discuss cyber risk protection and the risks related to autonomous driving, but these are areas that will take some time to develop into significant business for reinsurers, Labilloy said.
In the short term, CCR Re wants to focus on expanding its life business in Asia. The reinsurer will target opportunities to expand this area through existing franchises with its long-term local insurance partners, he added.
CCR Re sees growing demand for reinsurance, for example in healthcare and in the personal accident life business. At the moment CCR Re operates in these business lines particularly in Europe and the Middle East, but the firm is now expanding these activities to other parts of the world.
For its life expansion in Asia, CCR Re is focusing primarily on its partners in Singapore, Hong Kong, Taiwan and Japan. As of June 30, 2018, CCR Re’s life technical margin was at 6.8 percent, from 6.7 percent at year-end 2017.
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