9 February 2016 News

US growth helps SCOR dodge premium reductions elsewhere

The property/casualty division of French reinsurer SCOR was boosted in its year-end by its increased traction in the US market, Victor Peignet, chief executive officer (CEO) of SCOR Global P&C, told Intelligent Insurer.

The company renewed 68 percent of its total annual volume of treaty premiums at the end of the year. It said a process of “very active portfolio management” 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 percent in the US.

It is unusual for a reinsurer to achieve such solid growth in what is a very mature market. But Peignet said SCOR’s growth in the US needed to be understood against the background of it pulling out of the US market in 2002/2003 after it suffered several downgrades and, as a result, the fact that many potential now have little exposure to one of the world’s biggest reinsurers and appreciate the diversity it offers them.

“We discontinued a lot of business there in 2002/2003 but especially since around 2008 we have been rebuilding in that market,” Peignet said. “In the past four or five years, we have segmented the market and identified around 200 clients who we want to work with.

“We have a diverse portfolio now that combines regular business with SME business and we are working with bigger clients all the time. We go right from risk retention groups and captives to national insurers and US-based global insurers. We don’t want to grow too fast in the market. We want the right mixture in the portfolio.”

He explained that clients see SCOR as a financially strong company that offers good diversity to their panels. “They also see our much larger operations on the life side of the business and understand that we are dedicated to the market,” he said. “We have a very strong position on the long-tail life side and that gives them the certainly we will be there to pay claims in ten years’ time.”

Commenting on the global reinsurance picture in the next 12 months, Peignet said there are reasons to be optimistic. He said he anticipates a tightening of the underwriting in certain lines of business but also admits excess capacity remains a big problem for the industry.

“There is excess capacity, an excess number of players and everyone wants to survive,” he said. “But the cake is too small. If there is no market transforming event, we anticipate more consolidation in the market this year.”

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