Publication of the CNP Assurances solo and group SFCR reports as of December 31, 2021
CNP Assurances today published its 2021 Solvency and Financial Condition Solo and Group Reports (Solvency and Financial Condition Report or SFCR), in accordance with regulatory requirements.
Concerning the 2021 financial year, they were approved by the Board of Directors of CNP Assurances during the meeting of April 7, 2022. This announcement relates to the French versions of the documents, the English versions will be available online shortly.
The SFCR is a narrative report intended for the public, required by the Solvency 2 directive since 2016. It is produced annually:
– In its “Group” version for the CNP Assurances group, i.e. by consolidating the activity of CNP Assurances SA and its subsidiaries in France and outside France
– In its “solo” version for CNP Assurances SA on a solo basis, i.e. considering only the activity of CNP Assurances SA without consolidating the activity of its subsidiaries
Key points of CNP Assurances Solo and Group SFCRs as of December 31, 2021
The Group SCR coverage rate reached 217% in 2021 (+9 pts compared to 2020) driven in particular by a rise in interest rates and a rise in equity markets. This financial strength is the result of a sound and prudent risk management policy, in line with the company’s long-term strategy.
The other indicators explaining solvency are as follows:
– Own funds eligible to cover the group SCR of €39.1bn at the end of 2021, which include €12.7bn of provisions for profit-sharing (PPB), in accordance with the calculation methods indicated by the ACPR. In addition, the excess equity in the subsidiaries in Joint Venture for a total of €4.0 billion is not recognized by the regulator at Group level.
– Group SCR of €18bn at the end of 2021, of which 59% for market risks and 29% for underwriting risks. The benefit of diversification between risks is estimated at 23%.
– CNP Assurances solo SCR coverage rate of 236% at the end of 2021.
1. SCR coverage rate
The SCR (Solvency Capital Requirement) corresponds to the amount of capital estimated as necessary to absorb significant losses, and providing reasonable assurance that commitments to policyholders and beneficiaries will be honored when due.
CNP Assurances calculates its SCR coverage rate using the standard formula with no prudential equivalence measure and no transitional measure, with the exception of the grandfathering1 subordinated debts. CNP Assurances applies the Solvency 2 requirements to all the subsidiaries included in the scope of the prudential group, including in Brazil, so as to present consistent risk measures at Group level.
At December 31, 2021, at Group level, equity eligible for SCR coverage was €39.1 billion and the SCR was €18 billion.
Equity eligible for Group SCR coverage is made up of €30.1 billion of equity Tier 1 of which, €12.7bn of provisions for profit sharing (PPB recognized as eligible own funds since the end of 2019).
The Group SCR coverage rate integrates 100% of the SCRs of the subsidiaries, including those that are not fully consolidated (Arial CNP Assurances, XS5 Administradora de consorcios SA, Wiz Soluções e Corretagem de Seguros SA). It does not include surplus capital of subsidiaries beyond the contributory SCR (€4.0bn including minority interests2 i.e. 22% of the group SCR as of December 31, 2021), not recognized by the regulator at Group level due to non-fungibility rules.
CNP Assurances solo SCR coverage rate stood at 236% at the end of 2021, i.e. a rate higher than that of the Group. Indeed, this includes the excess equity of the subsidiaries up to their share of ownership.
2. MCR coverage rate
The MCR represents the minimum amount of equity of an insurer below which its approval can be withdrawn.
CNP Assurances calculates its MCR in accordance with the Solvency 2 directive: the MCR is a metric based on the volumes of premiums, benefits and capital at risk. At the level of each entity, the MCR is framed by a floor equal to 25% of the SCR and by a ceiling equal to 45% of the SCR. The MCR of the Group is the sum of all the MCRs of the entities, without taking into account any benefits of diversification between subsidiaries.
As of December 31, 2021, the equity eligible to cover the Group’s MCR was €34.7 billion, of which €30.1 billion was equity Tier 1 unrestricted. The Group’s MCR amounts to €9.1 billion.
The Group MCR coverage rate stands at 382% at the end of 2021.
The CNP Assurances solo MCR coverage rate is 463% at the end of 2021 The coverage rates of the MCR of the other Group subsidiaries are also significantly higher than 100%.
1 Subordinated debt issued before the entry into force of Solvency 2 is considered as Tier 1 capital (for perpetual securities) and Tier 2 capital (for dated securities) for a period of ten years ending on 1er January 2026.
2i.e. €2.0bn of minority interests not available at Group level as of December 31, 2021.
3. Impacts of Volatility Adjustment and transitional measures on technical provisions and interest rates
CNP Assurances uses the correction for volatility (Volatility Adjustment or VA), which corrects the risk-free discount curve used to value technical provisions.
The Solvency 2 prudential regime provides for transitional measures allowing insurance companies to have time to adapt before fully applying the new provisions, and to smooth out their impacts over time. The CNP Assurances group does not apply the transitional measures relating to interest rates or technical provisions.
The impacts of these various measures on the Group’s solvency indicators as of December 31, 2021 are as follows:
Impact of transitional measure on technical provisions | Impact of the transitional measure on interest rates | Impact of fix for volatility at the end of 2021 | Reminder : Impact of the volatility correction at the end of 2020 | |
Group SCR coverage rate | n / A | n / A | + 4 points | + 9pts |
Group SCR (€bn) | n / A | n / A | -€0.1bn | -€0.3bn |
Own funds eligible for group SCR coverage (€bn) | n / A | n / A | +€0.2bn | +€0.9bn |
How can you obtain our SFCR reports?
Financial calendar
– General Meeting of Shareholders: Friday April 22, 2022 at 2:30 p.m.
– Results indicators as of March 31, 2022: Thursday, May 12, 2022 at 7:30 a.m.
– Half-year results as of June 30, 2022: Thursday, July 28, 2022 at 7:30 a.m.
This press release and the complete regulated information of the CNP Assurances group, published pursuant to the provisions of Article L. 451-1-2 of the Monetary and Financial Code and Articles 222-1 et seq. of the General Regulations of the of the Financial Markets Authority (AMF) are available on the website dedicated to shareholders and investors www.cnp.fr/analyst-investor.
About CNP Assurances
A key player in the French personal insurance market, CNP Assurances is present in 19 countries, including 17 countries in Europe, particularly in Italy, and in Latin America, with strong activity in Brazil, its second largest market. As an insurer, co-insurer and reinsurer, CNP Assurances has more than 36 million policyholders in provident/protection worldwide and more than 11 million in savings/retirement. In accordance with its business model, its solutions are distributed by multiple partners and adapt to their mode of distribution, physical or digital, as well as to the needs of protection and facilitation of the life paths of customers in each country.
Listed on the Paris Stock Exchange since October 1998, CNP Assurances is a subsidiary of La Banque Postale. The company posted net income of €1,552 million in 2021.
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Warning :
This document may contain information of a forward-looking nature. These data refer in particular to projections, future events, trends or objectives which are subject by nature to risks and uncertainties likely to cause a significant difference between the actual results and those contained explicitly or implicitly in these data. These risks and contingencies may relate, for example, to changes in the economic climate and the performance of the financial markets, decisions and legislative or regulatory changes, the frequency and severity of insured claims, changes in interest rates and exchange rates, changes in central bank or government policies, lawsuits or legal actions, the effects of acquisitions and divestitures, and general factors affecting competition. Information concerning these risks and contingencies may appear in the documents filed by CNP Assurances with the AMF. CNP Assurances does not undertake to update or revise, due to new information, future events or for any other reason, the forward-looking data that may be presented in this document.
Some prior year items may be reclassified to be consistent with current year data. The sum of the figures presented in this document may not correspond exactly to the total indicated in the tables and the text. Percentages and variations in percentages are calculated on the basis of complete numerical data also including decimals, this is why this document may contain slight differences in sums and percentages due to rounded values. The final results of CNP Assurances in terms of solvency must be submitted subsequently to the supervisory authorities and may differ from the estimates explicitly or implicitly given in this document.
This document may contain alternative performance indicators (eg gross operating income) that CNP Assurances considers to be useful indicators, but which are not recognized by IFRS standards as adopted by the European Union. Consequently, these indicators must be considered as complements, and not as substitutes, to the balance sheet and the income statement determined in accordance with IFRS standards. As not all companies define them in the same way, these indicators may not be comparable to indicators of the same name used by other companies.