Caisse Centrale de Reassurance, a public French reinsurer, said it has stopped writing new businesses in Thailand, New Zealand and Australia to refocus its resources in key areas after a strategic review of its global reinsurance business.
The reinsurer conducted a strategic review on “global positioning of our open market reinsurance book of business” last August and “it became obvious that we had to refocus CCR’s limited resources on key targets,” said Marc Hannebert, executive vice president of CCR.
“We decided to limit the number of countries where we do business in order to better serve our clients, ensure professional risk management and long-term profitability for the benefit of our shareholders,”
In Thailand, New Zealand and Australia, CCR mainly underwrote treaty property/casualty business. “We won’t write any more business with immediate effect and we are currently informing our clients,” said Hannebert.
For existing businesses, Hannebert said CCR “remains bounded by existing contracts until their natural expiration or cancellation as permitted by the cancellation provision” and the company is committed to them in a fair manner.
In 2010, CCR’s nonlife treaty business in Asia amounted to 200 million euro (US$267 million), which represented about 34% of its open market reinsurance income and 15% of its global income. High frequency of severe natural catastrophe losses in Asia-Pacificin the past year confirmed the strategic analysis, said Hannebert.
The Thailand flooding has mostly impacted property and business interruption business, said Hannebert. Claims losses have not been finalized yet.
CCR offers reinsurance coverage for natural catastrophe, terrorism and other exceptional risks with the explicit support of the French government, its sole shareholder, in the form of unlimited stop-loss reinsurance, according to an A.M. Best rating action in August.
In 2010, CCR’s technical profitability was badly hit by the windstorm Xynthia and the floods in Var, which pushed the combined ratio to 100.4 from 56 in 2009, in spite of which the company recorded net profit of 110.8 million euro after an equalization provision release of 49.8 million euro. Despite the negative impact from natural catastrophe events in 2010, CCR’s risk-adjusted capitalization remained strong, said A.M. Best (Best’s News Service).
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