SCOR reports stable renewals despite global headwinds
The property/casualty (P/C) division of French reinsurer SCOR has said it managed to achieve stable growth in the January 1, 2016, renewals despite pressures on prices worldwide and intense competition globally.
The company said it maintained quasi-stable technical profitability compared with January 2015, while recording gross premium growth of 2 percent at constant exchange rates, to €3 billion. It said the market showed some signs of levelling out for certain types of contracts and exposures but competition also regained some momentum at the very end of 2015.
SCOR added that it was able to find enough business to replace accounts that it has needed to reduce or walk away from to maintain profitability.
“SCOR Global P&C continues to find pockets of profitable new business, more than counterbalancing the premium reductions caused by increased selectivity and heightened portfolio management, thereby maintaining overall expected profitability,” the company said.
“This has been made possible by a combination of several factors, such as the successful deployment of the client-focused initiative in the US, and having developed the right culture and the right tools to manage global client relationships and steer business in real time.”
The premiums up for renewal represented 68 percent of the company’s total annual volume of treaty premiums and are distributed between P&C treaties (71 percent) and specialty treaties (29 percent).
For P&C treaties: gross premiums increases by 2.4 percent at constant exchange rates, to €2.1 billion, with very active portfolio management that led to a re-balancing of the portfolio towards the US.
It said premium reductions of 2 percent recorded in the EMEA and APAC regions are more than counterbalanced by profitable growth of 24% in the US, leveraging on the US Client-Focused Initiative.
For speciality treaties, gross premiums increased by 0.9 percent to €880 million at constant exchange rates.
SCOR also revealed some expectations for its performance in 2016. It said that partly thanks to the improved efficiency of the retrocession cover achieved for 2016, and it expects to post a net combined ratio of close to 94 percent for 2016 under normal loss experience.
It added that a 2 percent growth in its overall premiums reflects very fragmented trends, by market/region and by line of business.
“Further openings in the US, where the rebuilding of the franchise is progressing very well, have offset voluntary reductions of shares or cancellations with clients that no longer meet profitability conditions, from both mature and emerging markets," said SCOR.
It said that based on the outcome of the January renewals and on current exchange rates, SCOR Global P&C anticipates total gross premiums of €6 billion in 2016.
"In view of the difficult business environment in which we operate, this is yet another renewal season that can be considered a success," said Victor Peignet, chief executive officer of SCOR Global P&C.
"For the third year in a row under the "Optimal Dynamics" plan, our strategic initiatives are proving relevant, both in our core reinsurance business, where we continue to achieve notable progress in the US and with Global Clients, and in the field of Alternative Solutions, where SCOR Global P&C positions itself as an influential player. Despite the headwinds in front of us, this is a good start to the year and gives us confidence in our ability to maintain profitability on target for 2016."
