AM Best Affirms B+ Financial Strength Rating of Compagnie Centrale de Réassurance, Maintains Stable Outlook
AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Compagnie Centrale de Réassurance (CCR), the Algeria-based reinsurance company. The outlook assigned to both credit ratings remains stable, reflecting the company’s strong balance sheet position, consistent underwriting profitability and established presence in the Algerian reinsurance market.
The rating affirmation highlights CCR’s ability to maintain financial stability while operating in a market characterized by elevated economic, political and financial system risks. AM Best’s assessment considers the company’s strong capitalization, historical operating performance, business position and risk management practices.
According to AM Best, CCR benefits from a very strong balance sheet, supported by its highest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Its financial position is further strengthened by relatively low underwriting leverage and good internal capital generation.
The ratings also recognize the company’s strong operating performance and neutral business profile. However, its enterprise risk management (ERM) is assessed as marginal, reflecting an area that remains relevant to the overall credit assessment.
Strong Balance Sheet Supports CCR’s Credit Ratings
CCR’s balance sheet strength remains one of the principal factors supporting its affirmed credit ratings. AM Best assesses the company’s balance sheet as very strong, highlighting its ability to maintain sufficient capital relative to the risks associated with its underwriting activities.
The company’s risk-adjusted capitalization is supported by its strongest level of BCAR, AM Best’s analytical measure of an insurer’s ability to absorb unexpected financial losses through available capital.
Maintaining strong risk-adjusted capitalization is particularly important for reinsurance companies because they assume financial risks from other insurance providers. Large claims, natural disasters and unexpected increases in insurance losses can create significant pressure on capital resources.
CCR benefits from relatively low underwriting leverage, which helps limit the financial exposure associated with its premium volume. Its good internal capital generation also contributes to maintaining a solid capitalization position by allowing the company to strengthen its financial resources through operating activities.
Another important factor supporting CCR’s balance sheet is the financial assistance arrangement provided by the Algerian government.
The company benefits from a state guarantee in the form of an interest-free loan facility. This arrangement is designed to cover potential losses arising from Algeria’s compulsory natural catastrophe insurance scheme written by CCR, after accounting for retrocession.
The government-backed facility provides an additional financial safeguard against significant losses associated with natural catastrophe exposures. Such support is particularly relevant for CCR because it participates in a market where natural disasters can create substantial claims obligations for insurers and reinsurers.
The arrangement strengthens the company’s ability to manage potential financial pressures arising from its responsibilities under the compulsory natural catastrophe scheme.
Exposure to Algeria’s Economic and Financial Risks
Despite its strong capitalization and government support, CCR faces risks associated with its concentration in Algeria.
AM Best’s assessment considers the elevated economic, political and financial system risks associated with the country, where CCR is headquartered, maintains more than 95% of its invested assets and generates the majority of its business.
Geographic concentration can expose insurance and reinsurance companies to economic developments, regulatory changes and financial market conditions within a particular country.
For CCR, the concentration of business and invested assets in Algeria means that changes in the domestic operating environment could influence its financial performance and investment position.
The company’s exposure to Algeria is therefore an important consideration in AM Best’s overall rating analysis.
Although CCR maintains a dominant position in its domestic reinsurance market, its concentrated geographical presence limits the diversification of its business and investment portfolio.
The company’s investment concentration also creates a close relationship between its financial position and the economic conditions of its home market.
These factors partially offset the benefits provided by its strong risk-adjusted capitalization and consistent underwriting performance.
Retrocession Provides Protection Against Large Insurance Losses
CCR also uses retrocession arrangements to manage its exposure to significant insurance risks, particularly those associated with major events in Algeria.
Retrocession is a form of reinsurance in which a reinsurer transfers part of the risks it has assumed to another reinsurance company. This approach allows reinsurers to limit their exposure to large claims and protect their financial resources against severe loss events.
For CCR, retrocession plays an important role in managing peak exposures, especially risks arising from its domestic business.
AM Best identifies the company’s moderate dependence on retrocession as another factor considered in its rating assessment.
Although retrocession provides important protection, it also introduces counterparty risk. This refers to the possibility that a retrocessionaire may be unable to meet its financial obligations when claims arise.
CCR manages these risks by working with a panel of financially sound retrocessionaires.
Selecting financially stable partners is important for ensuring that the company can recover eligible losses under its retrocession arrangements.
The use of an established panel of counterparties supports CCR’s risk management approach and helps reduce the potential financial impact of significant insured events.
Strong Historical Operating Performance Supports Ratings
CCR has demonstrated a long-term track record of strong operating performance, providing additional support for its affirmed credit ratings.
According to AM Best, the company recorded a five-year weighted average return on equity (ROE) of 15.3% between 2021 and 2025.
Return on equity measures how effectively a company generates profits relative to shareholders’ equity. A consistently strong ROE can indicate effective capital utilization and the ability to generate earnings from existing financial resources.
CCR’s operating performance has been supported by strong technical results, particularly its underwriting activities.
AM Best calculated the company’s five-year weighted average combined ratio at 79.6% for the 2021–2025 period.
The combined ratio is an important performance indicator for insurance and reinsurance companies. It compares claims and underwriting expenses with earned premiums. A ratio below 100% generally indicates that an insurer is generating an underwriting profit before investment income.
CCR’s reported five-year average of 79.6% demonstrates its ability to maintain profitable underwriting operations over the assessment period.
These results have been supported by highly profitable domestic business, which remains the company’s primary source of underwriting activity.
The company’s conservative underwriting approach has also contributed to its operating performance. By maintaining disciplined underwriting standards and carefully assessing risks, CCR aims to protect profitability while managing its exposure to potential claims.
AM Best expects the company to maintain robust underwriting profitability in the future, supported by its continued conservative approach to risk selection and underwriting management.
Investment Returns Provide Additional Earnings Support
In addition to underwriting profitability, investment income represents another important contributor to CCR’s overall financial performance.
Reinsurance companies typically maintain investment portfolios to support their claims-paying obligations and generate additional income from available capital.
CCR has benefited from good investment returns, which have supplemented its technical underwriting results.
AM Best reported that the company’s average investment yield, including investment gains, was 5.5% over the five-year period from 2021 to 2025.
Investment returns can provide an important source of earnings diversification for insurance and reinsurance businesses, particularly when market conditions create pressure on underwriting margins.
For CCR, investment income has complemented its strong technical results and contributed to its overall profitability.
However, the company’s investment portfolio is highly concentrated in Algeria, with more than 95% of invested assets held in the country.
This concentration remains an important consideration because domestic economic and financial market developments can influence investment performance and asset values.
Despite these risks, CCR’s historical investment returns have contributed positively to its financial results and supported its overall operating performance.
Dominant Position in Algeria’s Reinsurance Market
AM Best assesses CCR’s business profile as neutral, recognizing its established position and significant influence within Algeria’s reinsurance industry.
The company holds a dominant position in the domestic market, with an estimated market share of 64% in 2025, measured by ceded premiums.
Its market position is supported by compulsory reinsurance cessions and its leadership role in most domestic reinsurance treaties.
Compulsory reinsurance arrangements provide CCR with access to a substantial portion of the country’s domestic insurance business. These arrangements contribute to the company’s established market presence and support its premium generation.
Leading most domestic reinsurance treaties also reinforces its importance within Algeria’s insurance sector.
Reinsurance plays an important role in helping primary insurance companies manage their risk exposures, maintain financial stability and obtain protection against significant claims.
By providing reinsurance capacity to domestic insurers, CCR contributes to the broader functioning of Algeria’s insurance market.
Nevertheless, AM Best notes that the company’s scale remains limited by global standards.
Although CCR maintains a strong domestic market position, its business is concentrated primarily within Algeria. This limits its geographical diversification compared with larger international reinsurance groups operating across multiple regions.
Premium Generation Reflects Strong Domestic Presence
CCR generated DZD 53 billion in gross written premiums in 2025, equivalent to approximately USD 412 million.
Of this amount, 79% was generated in Algeria, demonstrating the company’s substantial dependence on its domestic market.
Gross written premiums represent the total premiums received or recorded by an insurance or reinsurance company before deducting reinsurance costs and other adjustments.
The premium figures highlight CCR’s established position in Algeria and its ability to generate significant business through domestic insurance relationships.
Its compulsory reinsurance arrangements and participation in major domestic treaties provide important support for its premium base.
However, the high proportion of premiums generated within Algeria also reinforces the company’s geographical concentration.
For a reinsurer, geographic diversification can help distribute risk across different economic environments and insurance markets. A concentrated business model can increase exposure to country-specific developments, particularly when a large proportion of premiums and investments originate from the same market.
CCR’s domestic focus is therefore an important component of AM Best’s neutral business profile assessment.
Enterprise Risk Management Remains an Assessment Factor
While CCR benefits from very strong balance sheet strength and strong operating performance, AM Best assesses its enterprise risk management as marginal.
Enterprise risk management involves identifying, measuring, monitoring and managing the risks that could affect an insurance or reinsurance company’s financial position and operational performance.
For reinsurance businesses, these risks can include underwriting exposure, investment concentration, natural catastrophe losses, counterparty defaults and changes in the economic environment.
CCR’s risk management framework is particularly important given its substantial exposure to Algeria and its use of retrocession arrangements to manage peak insurance risks.
The company’s established capitalization, government-backed support arrangement and selection of financially sound retrocessionaires provide important elements of its overall risk management structure.
Nevertheless, the marginal ERM assessment remains part of the factors considered by AM Best when evaluating the company’s credit profile.
The affirmation of CCR’s B+ Financial Strength Rating and “bbb-” Long-Term Issuer Credit Rating, both with stable outlooks, reflects AM Best’s assessment of the company’s overall financial position and operating prospects.
Its very strong balance sheet, strong historical profitability, established domestic market position and government-backed support arrangement provide important foundations for its credit profile.
At the same time, the company’s concentration in Algeria, exposure to country-specific risks, moderate dependence on retrocession and marginal enterprise risk management remain relevant considerations.
CCR’s historical underwriting performance and investment returns demonstrate its ability to generate consistent earnings. Its conservative underwriting approach is also expected to support continued profitability.
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