French reinsurance group SCOR is not expecting any issues in placing its retrocession program this year and is already in active discussions with its lead markets as it continues to work towards an optimal placement, its senior executives said today.
Speaking during a virtual media briefing today, held in place of the cancelled Monte Carlo Rendez-vous, SCOR’s CEO Dennis Kessler highlighted the work undertaken to establish the best mix of retro sources and structures in recent years.
“We’ve spent a lot of time optimising our retro. We want to protect the book and the way we structure retro and the way we combine types of protection is something we’ve been working on a lot. I believe it should be done by November,” Kessler explained.
Laurent Rousseau, Deputy CEO of the reinsurance firms property and casualty unit SCOR Global P&C, explained that the company is already in discussions with markets about the placement of its retrocession for 2021.
“We’re very comfortable we’ll be placing our program, we’re an early placer of retro,” Rousseau said.
He is confident that market conditions will not impact SCOR’s ability to place the program this year, saying, “We would not expect changes in the retro market to change our placement.”
However, he also noted SCOR’s strong capitalisation, saying that should SCOR encounter more challenges than expected, “We raised 300 million of debt yesterday and our capital base is very strong, so we’re comfortable retaining more risk.”
Jean-Paul Conoscente, CEO of SCOR Global P&C, added, “We’re a strategic buyer of retrocession, we’ve had the same leaders on our program for a number of years. We’ve already started discussions with them and we expect to have the first idea in the coming weeks.”
On how retro market conditions could impact the placement, Conoscente, said, “We will know from the price discussions whether we’re better off holding or retaining more risk, but we’ll find out soon.”
As a strategic buyer SCOR leverages third-party capital through the issuance of catastrophe bonds, the use of sidecars and other collateralised retro arrangements, with ILS funds or investors.
Alongside its own balance-sheet capital strength, its contingent capital arrangements, as well as debt and other financing, SCOR looks set to enter 2021 with ample support for the expected growth of its property reinsurance book.