A.M. Best Affirms Ratings of Compagnie Centrale de Réassurance

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of Compagnie Centrale de Réassurance (CCR) (Algeria). The outlook for both ratings remains stable.

The ratings reflect CCR’s good domestic business profile, solid risk-adjusted capitalisation and consistently strong operating performance. An offsetting rating factor is the company’s concentration of risks within Algeria.

CCR has a good domestic business position as Algeria's national reinsurer. As a state-owned reinsurer, the company benefits from compulsory cessions on all lines of business and manages various national schemes, including the natural catastrophe programme, which is covered by a state guarantee. In 2014, CCR’s gross written premium grew by 9.8% to DZD 22.3 billion, mainly driven by new business from the property and engineering segments.

CCR’s profit after tax has more than doubled since 2010, when the rate of compulsory cession was increased to 50.0%. Despite the significant increase in net written premium since 2010, the company has maintained its underwriting discipline, as demonstrated by producing a five-year average combined ratio below 75.0%. CCR posted a profit before tax of DZD 3.5 billion in 2014, translating into a return on premium of 27.4% and a return on equity of 12.1%. This strong performance was supported by an underwriting result of DZD 2.5 billion and an investment income of DZD 1.0 billion.

CCR’s risk-adjusted capitalisation remains solid with shareholder’s equity being strengthened through high earnings retention. The company’s risk-adjusted capitalisation is expected to remain supportive of the current ratings despite the dividend pay-out ratio forecast to increase to 40%.

An offsetting rating factor remains CCR’s high exposure to economic and political risks associated with Algeria, where the company derives approximately 90% of its business and maintains its invested asset base. CCR’s planned expansion in Asia and the Middle East and North Africa region is expected to bring some diversification but international business is anticipated to account for less than 15% of consolidated premiums in the medium term.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best Company
Charlotte Vigier
Senior Financial Analyst
+(44) 20 7397 0270
[email protected]
or
Ghislain Le Cam, CFA
Associate Director, Analytics
+(44) 20 7397 0268
[email protected]
or
Christopher Sharkey
Manager, Public Relations
+(1) 908 439 2200, ext. 5159
[email protected]
or
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
[email protected]

Source: A.M. Best Company

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