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Analysts see Thierry Léger appointment as positive for SCOR, negative for Swiss Re

27th January 2023 - Author: Luke Gallin

Analysts at JP Morgan see the recent appointment of Thierry Léger as Chief Executive Officer (CEO) as a positive for SCOR in light of his strong track record of fixing issues, although the loss of his capabilities as Chief Underwriting Officer (CUO) is seen as a negative for Swiss Re.

PositiveIt was announced late yesterday that Léger had left Swiss Re with immediate effect and would assume the CEO role at SCOR from May of this year.

In the interim, Swiss Re CEO Christian Mumenthaler will take over the CUO responsibilities, while SCOR has named François de Varenne as interim CEO amid the departure of Laurent Rousseau to pursue other opportunities.

Commenting on the shift in executive leadership at two of Europe’s largest reinsurers, JP Morgan analysts have said that, at this stage, they see the appointment of Léger as positive SCOR.

“He has a strong track record at Swiss Re of fixing issues whether that was the turnaround of the L&H business to deliver strong ROEs, the sale of Reassure at an attractive price when he was CEO of Life Capital, and his more recent work as Chief Underwriting Officer of the Group when he has taken a more pragmatic approach than some of his predecessors to restore profitability,” say analysts.

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SCOR’s announcement suggests that the incoming CEO will be tasked with drawing up a new strategic plan for the carrier and he’s expected to outline his vision for the company at the 2023 General Meeting.

In light of this, analysts note that it would be presumptuous to believe that any charges taken at the November Capital Markets Day, such as reserving actions, will be the last actions taken to shore up the balance sheet and to restore profitability before Léger assumes his role and has the chance to examine areas that have challenged SCOR in the past.

“We think this will likely prolong the transition period for SCOR beyond 2023, but if investors are given a clear direction for the business they may be willing to look through this,” say analysts. “The appointment of Thierry Léger should help the business to transition with current Chairman Denis Kessler ‘s term set to end in 2024.”

While positive for SCOR, currently, analysts see the loss of Léger as negative for Swiss Re.

Analysts highlight the significant progress he made as CUO, and his excellent track record in fixing issues elsewhere in the Group.

The only positive for JP Morgan is the fact that January renewals business is already on the books at Swiss Re at a time when rates, terms and conditions are likely to have materially improved.

“Whilst Thierry Léger has been a figurehead for Swiss Re, he probably leaves behind a much improved underwriting infrastructure in place,” say analysts.

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