One of the steps taken by French reinsurance firm SCOR to optimise its business in the new Solvency II world is a rationalisation, consolidation and reorganisation of its various legal entities, which once completed could save the company around EUR 200 million.
As part of SCOR’s latest strategic plan the firm had said it would investigate whether a rationalisation of its platform companies could help to improve its solvency capital position.
The proposed changes would see a merger of its SCOR SE, SCOR Global P&C SE and SCOR Global Life SE legal operating entities in early 2019, leaving a single top-level SCOR SE entity with regional subsidiaries cascading beneath (as illustrated).
The current organisational structure was put in place prior to the Solvency II regime being adopted.
As Solvency II rules do not recognise diversification in the same way across legal entities, it is deemed more efficient to consolidate and merge the three SE entities (Societas Europeae).
By merging SCOR SE, SCOR Global P&C SE and SCOR Global Life SE to leave just a single SCOR SE entity the reinsurance firm said it will see positive diversification benefits appear through the risk margin.
SCOR anticipates that the result of this consolidation and reorganisation could be potential benefits of up to EUR 200 million of solvency capital, as well as an operational efficiency improvement.