Reinsurance News

SCOR “significantly” improves risk/return profile of P&C portfolio at April renewals

20th April 2023 - Author: Luke Gallin

SCOR, one of Europe’s big four reinsurance companies, capitalised on the favourable reinsurance market conditions at the April 1st, 2023, renewals, achieving property and casualty (P&C) gross written premium (GWP) growth of 17% to EUR 724 million, excluding agriculture.

The reinsurer notes that it “significantly” improved the expected technical profitability and risk/return profile of its P&C portfolio which renewed on April 1st, with an average rate increase of 7%.

While GWP renewed excluding agriculture grew by 17%, including agriculture business, for which renewals are ongoing, GWP reached EUR 928 million (based on an estimate of renewals) at the April 1st reinsurance renewals, reflecting growth of 5% at constant exchange rates.

For treaty P&C lines, GWP jumped 12%, with growth in non-proportional excess-loss treaties concentrated on contracts where retention has increased significantly. The firm also highlights a decrease of 13% in the limits it engaged with on property proportional treaties exposed to natural catastrophes. Consequently, SCOR says its natural catastrophe PML was stable.

In its Global Lines business, again excluding agriculture, SCOR achieved GWP growth of 28% on the back of strong growth in the engineering and alternative solutions lines of business.

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The company says that it is reducing its PML in agriculture by 50%, which translates into an expected 23% cut in GWP, mainly in Brazil.

SCOR also notes that the gross Contractual Service Margin (CSM) for the risk portfolio renewed as of April 1st, 2023 (excluding agriculture), which reflects the present value of expected future profits on this risk portfolio, is c. 25% higher than the CSM generated during the April 1st, 2022 renewals, under constant economic assumptions.

According to the French reinsurer, it managed to significantly improve the expected technical profitability of its risk portfolio by deploying its capital in the most attractive segments.

The main rate increases achieved were on non-proportional treaties at +23%, in line with trends seen at the 1/1 reinsurance renewals, with SCOR highlighting notable rate on line increases on cat XoL programmes of 20% in Japan and 40% in the U.S. and India.

“At the April 1, 2023 renewals, SCOR continues to improve the expected technical profitability and optimize the risk/return profile of its P&C risk portfolio. We are very satisfied: our objectives in terms of technical profitability have been achieved and the volumes written are up. The outlook remains positive for the June and July 2023 renewals,” said Jean-Paul Conoscente, Chief Executive Officer (CEO) of SCOR P&C.

The GWP growth announced today by SCOR at the 1/4 renewals follows on from the 1/1 2023 renewals, when the firm saw an overall decline in estimated gross premium income (EGPI) of -12% for renewed business, as it further reduced its exposure to natural catastrophe risks.

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