French insurer and reinsurer SCOR remains on track to deliver growth in 2018, and with the insights of the January and April renewals, is looking forward to mid-year when it expects further confirmation of positive trends.
For the first-quarter of 2018 SCOR recorded net income of €166 million, up almost 17% on the same period in 2017, and a combined ratio of 91.8%, which is an improvement on the 94.5% recorded in Q1 2017.
Commenting on the reinsurer’s performance in the opening three months of the year during its Q1 2018 earnings call, Victor Peignet, Chief Executive Officer (CEO) of SCOR Global P&C, said that with the insights of the January and April renewals, “we are on track to deliver growth for the full year 2018 that will be well positioned within the 3% to 8% range”.
“One important point is that over the January to April renewal monitoring period, risk adjusted prices are improving in all lines of business and all geographies, but for a few where prices are stable…We are looking forward to the June and July renewals, and we expect them to further confirm the positive trends observed in January and April,” said Peignet.
He also noted positive changes in the reinsurance terms and conditions in India in reaction to losses and the stability in the Japanese market, adding that SCOR hopes “that these changes will now be followed by the improvements in the primary market that are needed in addition.”
SCOR Group Chief Financial Officer (CFO), Mark Kociancic, also commented on the renewals, noting that in P&C business it was able to “leverage on successful and disciplined renewals in January and April with improved profitability and price increases.”
Peignet also explained that SCOR extended the perimeter of its natural catastrophe protection following the January 1st 2018 renewal of its retrocession programme, which resulted in the year-on-year increase its management expenses.
In the aftermath of 2017 catastrophe events, prices in the global reinsurance market have started to improve throughout 2018, and while the increases are lower than many hoped for, it’s expected that further positive rate momentum will occur at the important mid-year renewals season.
However, with competition remaining intense and capacity from both traditional and alternative sources continuing to impact the supply/demand dynamics of the sector, it remains to be seen just how meaningful and sustainable any further rate improvements might be in the months ahead.