Jean-Paul Conoscente, P&C Chief Executive Officer (CEO) at SCOR, has said there “may not be as much remediation needed” at the upcoming April and mid-year renewals, when compared to the actions that were required during the January period.
SCOR saw an overall decline in estimated gross premium income (EGPI) of -12% for renewed business at the January 1st, 2023, reinsurance renewals, as the firm further reduced its exposure to natural catastrophe risks, and looked to optimise capital allocation by line and client.
But as the reinsurer now turns towards the later renewal periods this year, its management sees more opportunity for growth and portfolio improvement beyond withdrawing from unattractive business.
Speaking on a recent call to discuss SCOR’s P&C renewals, Conoscente said that leaders “do see opportunities to further improve the risk-return profile of the portfolio” at the April, June and July renewals.
However, he also noted that, compared to the January renewals, which are very heavily focused on Europe, the later renewals are focused on regions which already have gone through significant remediation actions last year.
“And so, we think that the market cycle will continue as it has in January, and therefore there’ll be interesting opportunities for us to continue to improve the portfolio,” Conoscente explained.
“The portfolios that come up for renewal for the rest of the year have already gone through significant remediation in the past,” he continued. “So, the market remains hard, in our view, for those renewals. But we’ll have to see the extent to which terms continue to improve. We believe that there’s still opportunities for us to attract good opportunities, and there may not be as much remediation needed as there was on January 1st.”
SCOR’s decision to shrink in P&C lines at January was driven by a desire to improve the expected technical profitability and the risk-return profile of its portfolio, taking advantage of favourable reinsurance market conditions.
The reinsurer says that it has particularly focused on optimising the capital allocation by line and by client, as well as optimising the portfolio mix, in terms of risk diversification and the resilience of the technical result.
Also during the renewals, SCOR continued to grow in global lines, further reduced its exposure to natural catastrophe risks, strengthened profitable relationships with long-term clients, and reshaped its portfolio by cutting back in lines the most sensitive to both economic and social inflation.