SCOR commends decision to open up cat reinsurance market in France

SCOR has commended the Paris administrative court’s decision requiring the French Government to "terminate the agreement regarding the State's guarantee of the Caisse centrale de reassurance, [....] insofar as the CCR's natural catastrophe reinsurance business is concerned, within one year".

If the French Government fails to do so, it will be required to alternatively notify the European Commission of the natural catastrophe reinsurance scheme within the same time frame.

In this case, the European Commission will then have to rule on the scheme's compliance with European law.

In response, the Paris administrative court has formally acknowledged the State aid that renders the CCR’s natural catastrophe reinsurance scheme illegal.

SCOR said that it has promoted the opening up of the natural catastrophe reinsurance in France for many years, all without calling into question the State’s role as a reinsurer of last resort within the natural catastrophe insurance system.

SCOR has expressed its objection to the exclusive nature of the French Governments backing of the CCR, which the company describes as giving a virtual monopoly with a share of over 90 percent of the French natural catastrophe reinsurance market.

As a result of this ruling, SCOR believes the service provided to insurers and those insured will improve.

Furthermore, SCOR suggests the court’s decision will mobilise additional reinsurance capacity in the face of increasingly significant catastrophes, and reduce the exposure of the State budget and therefore of taxpayers in the event of a major natural catastrophe.

In accordance with European law, SCOR has said it will work alongside various stakeholders involved to help create an alternative reinsurance system that will enable companies concerned to operate on the natural catastrophe market in France alongside the CCR and the State, as has been the case for many years with regard to the reinsurance of terrorism.