SCOR sees “beginning of a hard market”, says to continue into 2021

France headquartered global reinsurance group SCOR said that it expanded its catastrophe reinsurance portfolios at the June and July 2020 mid-year renewal season, while recognising an overall 8.2% price increase across the renewal book.

SCOR has been steadily expanding its property and catastrophe portfolios in recent years, as and when pricing and rates allowed.

At the June and July 2020 renewal season, SCOR has continued this trend, recognising 13% growth in its renewal book for global catastrophe business and 12% growth for its U.S. catastrophe book.

Overall, SCOR expanded its gross reinsurance premiums by 1.3% at the mid-year renewals, from EUR 708 to 717 million in 2020.

Across its renewals, SCOR said that it saw “strong price growth momentum,” resulting in an overall 8.2% price increase to its renewal book.

Price improvements were seen across geographies and lines of businesss, SCOR said, which it believes is reflective of “the beginning of a ‘hard’ market in treaty reinsurance.”

The company believes that hardening market trends will continue into January 2021, with the impacts of the Covid-19 pandemic seen as a catalyst for the continued firming of treaty reinsurance rates.

SCOR’s renewal results and where it achieved growth can be seen below (in EUR’s millions, and Excluding Alternative Solutions, Lloyds, Channel and MGA):

In the USA SCOR noted “improving market dynamics, with double-digit rate increases and firming terms & conditions.”

It’s SCOR Global P&C unit “kept a prudent approach, growing on CAT driven segments where rates outpace loss cost increases and reducing on treaties with insufficient underwriting profitability improvement,” the reinsurer said.

For the EMEA region, SCOR commented that it saw a, “Strong renewals outcome, with growth reflecting a combination of rate increases, incremental shares on renewing programs, and notable new business.”

Latin America was less impressive though, with “Broadly flat renewals, with improving rates on contracts and geographies requiring large capacity.”

Australia saw more attractive pricing resulting in, “Successful renewals combining strong growth, increase in CAT pricing, and notable non-CAT new business.”

SCOR is just the latest to forecast a hardening reinsurance market into 2021, adding weight to the belief that January 2021 will see some of the best January renewal rate movements seen in years.