French reinsurance giant SCOR has expanded its underwriting of catastrophe reinsurance treaties in Japan and elsewhere during the April renewals, growing premiums underwritten at SCOR Global P&C by almost 10%.
SCOR said that it saw and benefitted from “broadly improving market conditions” at the April reinsurance renewals, while it said that catastrophe reinsurance treaties “responded rationally” following recent loss experience.
The firm increased its P&C premiums written to EUR 548 million, up by 9.6% on the prior year, as it sought to benefit from higher catastrophe reinsurance treaty rates.
In Japan, SCOR said that catastrophe rates rose by around 15%, which made up around 10% of its April renewals book.
The firm said that it remains disciplined though, “profitably growing within its risk appetite while carefully managing the exposure of its portfolio.”
Of course this growth has to come at someone else’s expense, as major reinsurance firms like SCOR must be taking business off other players in order to grow that quickly.
As we’ve been saying for months now, this is perhaps a sign of what we should expect at the mid-year renewals, where we expect that the major reinsurers will grow their books considerably if rate rises are sufficiently high, at the expense of others renewal books (given demand is not up that significantly).
SCOR also grew its Non-Cat property and casualty lines portfolios in the United States in April. The reinsurers strategy targets growth profitably in the U.S., which the firm believes it achieved.
However, in the U.S. SCOR said that catastrophe premium remained stable as the U.S. reinsurance programs most affected by the loss events of 2018 renew in June and July.
“Market conditions are progressively improving,” the company explained. Adding that, “These renewals prove the relevance of SCOR Global P&C’s client-focused strategy in the US.”
Jean-Paul Conoscente, CEO of SCOR Global P&C, commented on the renewal outcome, “The April renewals, which are very much driven by Asia-Pacific, continue the strong start delivered by SCOR Global P&C in January 2019. The Cat market is disciplined in this region, given the weight of the events of 2018. SCOR’s clients continue to value its long-term coverage capacity and multi-line participation. Our client-focused strategy, backed by SCOR’s top-notched balance sheet and expertise, generates new business opportunities, especially in the United States. We are confident as we embark on the June and July renewals that SCOR Global P&C will achieve results in line with the “Vision in Action” strategic plan assumptions.”
SCOR saw risk adjusted pricing up 1.6% overall, across its April renewals, as rises in some regions such as Japan are tempered by flat to declining rates in regions including India, Republic of Korea, Latin America, Europe, and the Middle East.
However, “The April renewals reaffirm the positive trends observed in January,” SCOR explained.
SCOR Global P&C has now renewed around 75% of its portfolio and the firm feels well on track towards its growth targets, which it says is in-line with the upper range of its 5%-8% “Vision in Action” strategic plan assumptions.
As we’ve said before, the growth targets of major reinsurers are likely to dampen price rises to a degree at the mid-year renewals, as it’s impossible for the market to absorb the extra capacity that major players want to deploy while rates are up without their being some moderating effect on reinsurance rates.
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