Française des Jeux (FDJ) is preparing its French-domiciled reinsurance captive to provide internal reinsurance coverage on some of its risks and optimize its insurance policy, two sources have told Reuters.

A reinsurance captive is a subsidiary of a group whose purpose is to provide reinsurance cover exclusively for the risks of the company or companies to which it belongs, by building up reserves.

France has enhanced the attractiveness of the scheme by modifying its tax framework in the Finance Bill for 2023, with companies now able to set up a "resilience provision" designed to meet these reinsurance expenses through annual tax-free allocations.

FDJ has confirmed to Reuters that it plans to set up a captive reinsurance company, with a target start-up date in 2025, and that its application is currently being examined after it submitted a request for approval to the French supervisory authority, the Autorité de contrôle prudentiel et de résolution (ACPR).

FDJ's reinsurance captive, named FDJ Ré, will be chaired by Pascal Chaffard, the group's deputy managing director for finance, performance and strategy, and managed by Edeline Minaire, the group's finance director, according to a document consulted by Reuters.

FDJ's total insurance premiums for 2023 amounted to around €7.8 million, according to its 2023 annual report.

Until now, the French group has not had a reinsurance captive. It is working with the French subsidiary of the world's leading insurance broker Marsh, one of its historic brokers, to set it up.

"This captive should enable FDJ to optimize its arbitrage in the insurance market and gain autonomy in a market that is still a little defiant towards gaming in general," Laurent Bonnet, in charge of captives and alternative risk transfer solutions at Marsh France, told Reuters.

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This latest move comes after a surge in the number of captives domiciled in France following the revision of the tax framework, with French groups previously preferring to set up their dedicated subsidiaries in countries with more advantageous tax conditions, such as Luxembourg.

While there were fewer than a dozen reinsurance captives in France before 2022, the ACPR had approved a total of 17 by the end of October 2024, according to a guide on the subject published in early November.

La Poste, Naval Group and Publicis recently received their approval, while companies such as Vivendi, Orange, Pluxee and Fnac Darty are awaiting a response from the supervisor.

Proof of the growing maturity of the French reinsurance ecosystem, the Fédération française des captives de réassurance was recently launched under the auspices of the Association pour le management des risques et des assurances de l'entreprise (Amrae). FDJ is considering joining the group, which has around ten members, the group said.

(Written by Bertrand De Meyer, edited by Blandine Hénault)