MAIF Launches French Captive Reinsurer Amid Rule Changes
French mutual insurer MAIF is launching a France-based captive reinsurer to “strengthen the management and resilience of its business model”. The move comes as a proposed expansion of the rules in the 2027 French finance bill is a key reason for the formation of the new in-house reinsurer.
The insurer said the proposed changes are a key reason for creating the new in-house reinsurer. Luc Delage, deputy managing director of the MAIF group and managing director of MAIF Réassurance, said the decision is “consistent with its roots and its commitment to economic sovereignty and the resilience of domestic entities”. He added that the legislative developments further support this choice.
Equalisation reserves: a success story
The use of equalisation reserves under the French captive rules, introduced in 2023, has been a major factor in persuading French companies to launch domestic captives rather than in Luxembourg.
However, under the original rules, only industrial groups could use these reserves. Law firm DWF explained that Article 18 of the Draft Finance Bill for 2027 makes two major adjustments:
- Cross-category loss offsetting: Equalisation provisions can be used to offset technical losses in other risk categories, but this triggers the reversal and standard taxation of the used reserve.
- Expanded group eligibility: The resilience provision is now open to reinsurance captives of industrial groups with financial subsidiaries, provided the reserve covers risks tied to non-financial entities.
This change potentially allows mutual insurers to create captive reinsurers, which is how MAIF, the sixth-largest motor insurer and biggest insurer for the non-profit sector in France, has interpreted the new rules.
A new subsidiary for a changing risk environment
MAIF said the intensification of risks and volatility of the reinsurance market justifies the creation of the in-house carrier. The mutual insurer stated that the captive reinsurer will complement its use of external reinsurance.
The new subsidiary, MAIF Réassurance, will begin operations on January 1, 2027, with an initial capital of €145 million. It will support all entities within the group, including SMACL Assurances, Altima, and MAIF VIE.
The move reflects a broader trend in the industry, where insurers are seeking greater control over their risk management strategies in response to evolving market conditions. By establishing a captive reinsurer, MAIF aims to enhance its overall risk oversight and management, pooling risks across its various business activities.
