With hail storms in France having been responsible for an estimated €6bn+ in (re)insurance losses so far this year, the losses from subsidence will add further pressure on lower reinsurance layers, Montador told The Insurer TV during the Monte Carlo Rendez-Vous.

“Drought this year in France is a very big problem – subsidence… The total market loss for this year is estimated around €2bn up to €2.5bn,” Montador noted.

“This [subsidence] is something which will hit again the balance sheet of the cedants and the reinsurers, and we’ll have to take that into account in the future. I think the French market is really in turmoil,” he added.

Montador added that the subsidence losses will have an impact on how reinsurance programs will be structured next year.

The insured hail losses, which Montador estimated at up to €4.5bn, stem from two major hail storms that occurred earlier this year.

Earlier this week The Insurer revealed that several sources placed the Q2 hail storm losses at an estimated €6bn, an uptick of around 50 percent compared with initial estimates owing to a significant rise in business interruption costs and the recent spike in inflation.

“The lower layers have been hit… totally burned. So it has an impact on capacity of future layers, and clients will probably have to adapt to new ways of protecting themselves at this level,” Montador added.

He also noted that these events will have an impact on players that are part of the French government-backed nat cat reinsurance scheme.

Laurent Montador, deputy CEO at CCR Re

Pricing uncertainty

Climate change is more obvious than ever before in the large catastrophe losses experienced in 2022 and in other recent years, Montador noted.

“It was due to climate change, it will continue to have some impacts on our losses in the future,” he said.

Severe droughts experienced in France amid new record temperatures set across Europe in July were also responsible for the steep rise in subsidence claims on property business, the cost of which is still being counted.

Montador spoke of the rise in inflation as a big concern going into 2023, when added to market challenges already faced by reinsurers in recent years.

“We have to cope with that [inflation], and it has been a surprise. We’ll see how this is going to be managed by governments, but for us, we have to manage for ourselves and so it’s clear that the premiums need to be increased when the losses are increased,” he warned.

Montador added: “For future pricing it’s very difficult to project the inflation rate for the next three or four years. You have to do that for property and for short term business because short term is not only one year, it’s now three or four years because of loss creep.”


He indicated that for a market turn he wants to see profitable combined ratios, rather than some rate rises that are then wiped out soon after by further cat losses and future inflation.

“We can say only that it is hardening when the combined ratio is diminishing. And so you have to take some measures in order to get more premiums, in addition to inflation.” he said.

CCR Re grew its gross written premium by 15 percent to €764mn in the first six months of 2022, The Insurer reported, as it continued to expand its book both in France and internationally.

It reported a half-year combined ratio of 98.2 percent, a 1.2 percentage point deterioration from the first half of 2021, driven by severe hailstorms experienced in France in June, as well as the effects of the war in Ukraine.

Click to watch CCR Re deputy CEO Laurent Montador speaking with The Insurer TV in Monte Carlo, from the balcony of our Hôtel de Paris pop-up studio suite. Listen for more on:

  • Investing in underwriting technology
  • Growth plans in Africa and Latin America
  • Planning pricing against inflation risk