Success of 157 Re is proof sidecar structure works in France: Montador, CCR Re

Since its launch as the first French reinsurance sidecar, CCR Re’s 157 Re vehicle has become an important part of the reinsurer’s property catastrophe play, and further expansion of the sidecar and its capabilities is expected in the future, according to Laurent Montador, Deputy Chief Executive Officer (CEO).

CCR Re launched its 157 Re sidecar in 2019 as the first insurance-linked securities (ILS) vehicle to be governed by French law.

Initially, the vehicle assumed a 25% quota share of the reinsurer’s worldwide property cat portfolio. It was renewed for 2020 and 2021 at an unspecified size, and then in 2022, CCR Re upsized 157 Re by 22% alongside the addition of a new investor.

For 2023, the sidecar was increased by more than 40% and yet another investor was added, highlighting the success of the vehicle in spite of challenging retrocession market conditions.

Against this backdrop of continued growth, Artemis spoke with CCR Re’s Montador at RVS 2023 about the company’s 157 Re sidecar.

“We are the first in France to have this type of vehicle, and we proved that it works,” said Montador. “We had the help of the regulators and the tax authorities to improve the speed, and I think this also is a way for others to look to do the same.”

“Paris is now more of a financial centre, and with Brexit some banks are coming to Paris. And I think a mixture between finance and reinsurance, is probably an area where Paris can have a recognised place,” he continued. “Probably, there will be new deals in the future from ourselves.”

Montador went on to explain that 157 Re is a pro-rata sidecar that will “probably be increased.”

“Also, we are trying to obtain an alternative way, complementary to our existing tower in order to get catastrophe bonds and to be able to add a new tool in the 157 Re ILS platform,” he added.

This is interesting, as while CCR Re has made good use of the ILS space and the investor community for its retrocession needs via the sidecar route, the company is yet to sponsor a catastrophe bond.

CCR Re’s property cat book has grown for the past seven years, and supported by its new ownership, the trend looks set to continue.

As the company looks to expand in existing and new lines of business, 157 Re and potentially cat bonds will serve as an important and complimentary part of its retrocession and overall capital structure.

View our comprehensive list of collateralized reinsurance sidecars transactions for details of many reinsurance sidecar investment offerings over the history of the insurance-linked securities (ILS) market.