Although the ongoing tariff war and resulting inevitable higher inflation will undoubtedly impact all lines of insurance and reinsurance business, French reinsurer Arundo Re’s very strong balance sheet will create opportunities for growth, according to the company’s Deputy Chief Executive Officer (CEO), Laurent Montador.
Formerly known as CCR Re, the Arundo Re brand launched in January 2025 and followed the acquisition of a majority shareholding in the reinsurer by a consortium comprised of SMABTP and MACSF.
“While CCR is still a shareholder with a 25% holding, they will leave us either this year or next, so it was absolutely normal to change the name,” Montador told Reinsurance News. “The rebranding is really to focus on our DNA with values such as humanity, solidity, clarity, and vitality. The market has reacted very, very well to this new rebranding.”
The new Arundo Re reported strong portfolio growth at the January 2025 renewals, and earlier this month, announced a robust 2024 performance with 15% turnover growth and an improved underwriting outcome.
However, after the success at the 1.1 reinsurance renewals, Montador explained that he has mixed feelings about the recent April renewal season.
“2023 was a year of reset in the reinsurance industry, which was due to happen for several reasons. One of the reasons was that it was more than 10 years in a row that the reinsurance business was not making a profit, and with still large claims and still large capacity as well. Clients have taken the positive side of this, and the reset in 2023 was effectively something important, but it was not just for one year.
“And so, for the April 1st renewal, I’ve been surprised to see a clear softening of the conditions with programmes placed at 120% or more. It’s surprising but the capacity is there, and we have to cope with that,” said the Deputy CEO.
Climate change, and the general increase in the frequency and severity of catastrophe events, highlighted by the January wildfires in California, will always be a challenge that the reinsurance industry must navigate, and the hope for Montador is that the market reacts in the correct way.
“That has also been the case for the April 1st renewal, still a softening on the market at that date. I hope the market will react. Not only because of the Los Angeles fires in January but the increase in terms of market events. I think that now all of the companies could have some troubles, some of them at least on the asset side and on the financial results that put the pressure on the balance sheet in order to get very clear, positive technical results,” he said.
Adding, “So, I think and I hope that the July 1st renewal will put things into order, clearly, from the claims that occurred in the US, but not only, and also because of the financial distress.”
In terms of property catastrophe reinsurance rates at the mid-year renewals, Montador told this publication that he expects a flat outcome, for the most part.
“It’s crucial to get a proper technical rate,” he said. “I don’t think that the rates at the moment are insufficient in terms of, I would say, actuarial or modelled loss rates, but it’s clear that we do not have room to go further in the decrease.”
“We have to think about the claims inflation that will happen very soon. The new paradigm from the tariffs decided by the US will have an impact. We will all see that in our basket. And yes, inflation means the cost inflation, it means all lines of business impacted. It’s not only credit or marine with less international trade, but it’s, I think, all lines of business that will be impacted, and we have to cope with that. We thought that inflation could not go up again after two years, but in fact, it is, and it is going to be very hard on the claims side. So, we need sufficient premium from now for the future,” continued Montador.
Given the current trade war, which continues to evolve day by day, and ensuing higher inflation, the market outlook for insurers and reinsurers, and all other sectors, is far less clear than it was just weeks ago. But despite this, stressed Montador, there are good opportunities for Arundo Re.
“First of all, I would say that our balance sheet is very strong. Of course, we are seeing what is currently happening in the market, but we have a very small pocket of equity, and this pocket is protected by an overlay, so it’s now 100% protected. We have a big proportion of rate product on short and medium term, and the bonds are gaining values with what is happening, which is good for us. We also have a high liquid assets base, more than 84% is very, very liquid, which is also important. And with US uncertainties, Europe is seen commercially more predictable. This can help us.
“So, this strong balance sheet gives us opportunities to make business in different regions, either in life or non-life,” he said.
In certain regions, such as India, explained Montador, the reinsurer has been somewhat disappointed with protectionism, but he suggested that Arundo Re could do more in Southeast Asia, although this is challenged by the uncertainty of world trade impacts.
“I had a clearer view, I would say, two weeks ago. Now, in the middle of the market turmoil due to tariffs war, we have to be very, very agile. What is very important to us is the strong balance sheet. That’s really a good thing for us. And so, the opportunities will come.
“In specialty lines we could increase our risk profile. And on the life side, yes, it used to be 1/3 of the portfolio, then it has been less than 30%, we could reach again 30% which I think is a good balance for the overall portfolio. It’s very important to have a balanced portfolio, it’s the most important thing on the technical side, and being able to balance it clearly from the capital consumption point of view on the net basis, to view the gross and the net,” said Montador.
