French reinsurance company SCOR, a top-four global player in property, casualty and life reinsurance, has reported growth in its premiums written, along with portfolio optimisation to avoid the worst of the soft reinsurance market in its January renewal update.
SCOR Global P&C reports an average price decline across all of the renewed property, casualty and specialty reinsurance business at January 1st of just -0.7% across the renewed portfolio. In the currently challenging and softened reinsurance market environment, with SCOR renewing 70% of its total annual treaty premiums at 1/1, this is an impressive result and shows the significant effort in portfolio optimisation.
In fact, SCOR increased its premiums written at 1/1 by 2.4% at the renewals as it found opportunities to divert capacity to areas where profitable growth could be found. Examples of this include growth in Asia, where SCOR continues to cultivate its reputation and expand awareness of its position in global reinsurance.
Victor Peignet, CEO of SCOR Global P&C, commented; “In an environment that is becoming increasingly competitive on the supply side, and increasingly restricted by budgets on the demand side, and where a number of reinsurance market segments are under pressure from challenging economic and financial factors, SCOR Global P&C has taken advantage of the quality of its organisational structure and the cohesion of its teams to consolidate its position among the leading reinsurers.”
A growing focus was placed on specialty reinsurance premiums, as SCOR sought to reduce its reliance on catastrophe risk exposed premiums where pricing has naturally been worse. Gross premiums in specialty reinsurance grew by 6.5%, compared to a 0.9% increase in P&C treaties underwritten.
SCOR pulled back on some northern European business in P&C, as it found renewal pricing and terms had deteriorated too far. At the same time it has grown premiums written in Asia as it increasingly leverages its heightened profile there.
Interestingly, SCOR also grew its U.S. natural catastrophe premiums, despite this being perhaps the most softened market in the world. SCOR grew its volumes in U.S. nat cat by 3%, citing “successful renewals with global clients as part of the strategic plan initiative, and to SCOR Global P&C’s favourable signings on overplaced programs.”
This further demonstrates the important role that U.S. catastrophe reinsurance premiums continue to have for reinsurers, despite softened prices, as the rates available still outweigh many other regions of the world.
“The strategic initiatives implemented by SCOR Global P&C rely on these differentiating assets to anticipate changes in demand and to offer targeted clients the global and innovative solutions that they need. These renewals confirm the relevance of our organisational and strategic choices and contribute to strengthening the competitive positioning of SCOR Global P&C,” Peignet explained.
SCOR has also leveraged cheaper retrocessional capacity as well as capital markets capacity in order to optimise its combined ratio. The latest example of this is the just completed $150m U.S. hurricane and earthquake and Canada earthquake Atlas IX Capital Limited (Series 2015-1) catastrophe bond.
SCOR is using alternative capital sensibly to allow it to expand in areas such as the U.S. property catastrophe market, while hedging its exposures with lower-cost capital as well. This strategy, employed as a capital tool to manage its combined ratio and ultimately profits, puts SCOR in a good position to achieve its full-year results target which will be announced in March.