French reinsurance company SCOR has increased the size of its underwriting book by 3.7% at the January renewals, with premium growth largely driven by the United States and the United Kingdom, with U.S. catastrophe risk a factor.
SCOR grew its P&C reinsurance renewal premiums by 3.7% at the January 2018 renewals, from EUR 3 billion to EUR 3.1 billion.
At the same time risk adjusted pricing was up 3% for the book underwritten, compared to a year earlier, while the expected profitability of the book is up by 2% both technically and based on return-on-capital.
Victor Peignet, CEO of SCOR Global P&C, commented on the renewal outcome, “SCOR has a strong position in the 2018 renewals, resulting from the Group’s multiple recent rating upgrades, a client-by-client approach, and the expansion of our capabilities as described in our ‘Vision in Action’ plan.
“We negotiated to reduce, cancel or decline business that did not meet our hurdles without damaging our franchise. As a result, our portfolio renewed in January is both larger and more profitable while still being well-diversified.”
SCOR said that reinsurance pricing rose across nearly all lines of business and markets it participates in, with loss-affected programs and layers rising the most, particularly catastrophe-exposed reinsurance in the United States and motor reinsurance in the United Kingdom.
SCOR also took advantage of improved primary insurance market conditions, both through its provision of reinsurance and through SCOR Business Solutions, the Channel Syndicate, and its MGA business.
SCOR said that it deployed more capacity into client programs where non-proportional treaties had improved expected profitability, but it reduced or declined some high-volume proportional treaties which were not as attractive to underwrite or where pricing improvement was deemed insufficient.
Around 69% of SCOR’s P&C premiums renewed in January and the company said that its risk appetite and profile are largely unchanged, despite the larger book written. SCOR also said that it has robust retrocession protection in place and that this only cost it a single-digit increase in pricing versus last year.
Growth was seen in both treaty P&C business and specialty treaties, with treaty P&C premiums up 4.1%, driven by the U.S. and the UK, while specialty treaties were up 2.6%, driven by credit & surety and U.S. natural catastrophe business.
SCOR, like its fellow reinsurance giants Munich Re and Hannover Re reported recently, has been able to secure growth at the higher rates that were available at the renewals, so will be hoping for an increased level of profitability in 2018.
However, with the news of M&A and investment deals now pointing to a renewed search for scale among reinsurers (the Swiss Re and SoftBank news is one example), it will be interesting to see whether SCOR has any ambitions of a similar nature.
