The reinsurance market environment is “probably the most attractive market in a decade,” according to Romain Launay, Deputy Chief Executive Officer (CEO) of SCOR Global P&C.
During SCOR’s 2021 Investor Day, Launay discussed the impact of several market conditions on reinsurance rate momentum, against the backdrop of the COVID-19 pandemic.
With the pricing improvements achieved so far in 2021, he explained that SCOR is currently writing treaty reinsurance business at two percentage points more profitable than last year, on average.
And the reinsurer is also expecting to see further risk-adjusted price increases and market improvements in 2022, Launay added.
“While there remains plentiful market capacity, demand for reinsurance is also on the rise,” he explained. “This is due to a general increase in risk aversion shown by an uncertain risk environment following recent elevated cat activity, social and general inflation, as well as the need to restore margins in the industry, and compensate for low interest rates.”
As part of its Investor Day, SCOR unveiled a set of new ambitious growth targets for 2022, which include a significant boost to premiums within its P&C business, as well as an increased focus on natural catastrophe lines of business.
“Looking more closely at the various lines of business for reinsurance and specialty insurance, we expect most of the market segments to remain attractive or very attractive,” Launay continued.
“And this will offer us flexibility to further grow our book and seize value accretive growth opportunities in 2022. Reinsurance will particularly focus on Europe, fast growth markets, and global lines, expanding our shares with a selection of clients, with a focus on non-cat exposed business.”
Also speaking at SCOR’s Investor Day was Jean-Paul Conoscente, CEO of SCOR Global P&C, who said that COVID-19 is expected to “continue to act as a catalyst for future price increases going forward,” given the unforeseen nature of the pandemic from a P&C market standpoint.
On this point, Launay added that payback for COVID-19 related losses, which were generally left out of renewal negotiations in 2021, will also lead to improved rates of adequacy.
“This will provide us with meaningful room for further growth in the most attractive parts of the market, further leveraging our top tier position,” he concluded.