S&P Confirms Arundo Re’s Growth Outlook with ‘A’ Rating and Stable Forecast
Strategic Backing Bolsters Arundo Re’s Credit Profile
S&P Global Ratings has affirmed Arundo Re’s financial strength rating at ‘A’ and assigned a Stable Outlook, highlighting confidence in the reinsurer’s strategic direction and operational resilience. Formerly known as CCR Re, the company is majority-owned by French mutual insurers—Société Mutuelle d’Assurance du Bâtiment et des Travaux Publics (SMABTP) and MACSF.
As of now, SMA Group controls 56% of Arundo Re, MACSF holds 19%, while Caisse Centrale de Réassurance (CCR) retains 25%. Notably, CCR possesses a put option to exit its stake by 2026.
S&P underscored SMABTP’s financial strength and commitment, describing the company as a strategically important subsidiary. This status contributed to the reinsurer receiving an additional notch of support in the final credit rating.
Arundo Re’s Financial Strength Fuels Positive Momentum
Demonstrating a strong financial foundation, the company continues to deliver consistent earnings and operational performance. The company’s strategic target is to reach €2 billion in gross written premiums (GWP) by 2027—a goal that remains well within reach.
In 2024, the company reported a 13% year-on-year increase in GWP, reaching around €1.4 billion. S&P expects the reinsurer’s performance to remain solid, forecasting a net combined ratio averaging around 98% over the next few years, benefiting from favorable conditions in the hard reinsurance market.
Capital Resilience Remains Exceptional for Arundo Re
S&P praised Arundo Re’s robust capital adequacy, crediting its conservative investment approach, disciplined reserving policies, and reinvested earnings. At the end of 2024, Arundo Re’s solvency ratio stood at 211%, comfortably within its designated optimal range of 180% to 220%.
The Stable Outlook reflects S&P’s view that the company will maintain its profitability, operational strength, and strategic relevance within the SMABTP group over the next two years.
Potential Downgrade Triggers for Arundo Re
Despite the positive rating, S&P outlined conditions that could lead to a downgrade. These include a potential downgrade of SMABTP’s own credit rating or a significant deviation from expected profitability levels at the company—especially if driven by large, unforeseen catastrophe losses that weaken capital buffers.
S&P cautioned, “If the company fails to meet our expectations for sustained profitability or experiences a material decline in capital adequacy, a one-notch downgrade may be considered.”
