CCR Re commits to renewal of pioneering 157 Re sidecar

Paris-headquartered CCR Re, the open market reinsurance arm of French state-owned carrier CCR, plans to renew its pioneering 157 Re sidecar at 1 January with further renewals expected in both 2024 and 2025.

157 Re, a pioneering onshore French reinsurance securitisation that first rolled off the production line on 1 April 2019, will renew at 1.1, timed with the placement of the state-owned reinsurer’s annual retro program.

The planned 2023 renewal comes after CCR Re renewed the collateralised reinsurance sidecar in January, a move that marked the fourth annual issuance of the sidecar since its launch.

The sidecar, which writes a 25 percent quota share of CCR Re’s global property cat book, takes the form of a mutual securitisation fund (fonds commun de titrisation), a structure that was previously only used for asset securitisation.

Speaking on the sidelines of the Rendez-Vous in Monte Carlo, Mathieu Halm, head of retrocession and strategy at CCR Re, said the securitisation continues to attract strong investor demand, noting that the main covered exposure is European wind, which some investors see as a diversifier.

While Halm would not be drawn on the performance of the sidecar in 2021, the executive said CCR Re was pleased with the “success” of the transaction and pointed to positive feedback from both its domestic French regulatory authorities and from investors.

Halm explained that 157 Re’s current structure differs from the original 2019 issuance and offers the reinsurer greater flexibility, including “compartments” – similar to protected cell structures seen in existing offshore ILS/risk transfer transactions – which enable multiple ring-fenced securitisations to take place using the same platform.

Through these “compartments” the 157 Re platform – named after the building number of CCR’s Paris headquarters – can also be easily adapted to issue a catastrophe bond or industry loss warranty, depending on CCR Re’s appetite, he said.

Users of the fund also benefit from an exemption allowing cedants a better return on investment than they may receive in other jurisdictions.

As previously reported, the pioneering onshore French reinsurance securitisation was first launched in April 2019. It remains the only ILS vehicle to be governed by French law.

As the sidecar is a private securitisation, it can be launched without obtaining regulatory approval from the Autorité des marchés financiers (AMF).

At the time of launch, CCR Re described the vehicle as a “strategic instrument”. The reinsurer said 157 Re will provide it with full Solvency II regulatory credit and give it access to a new competitive and agile investor base