Denis Kessler, SCOR CEO; Source: SCOR
Size is an increasingly important factor in the success of reinsurance businesses, according to SCOR, and the pressure remains on smaller players to merge.
“The hypothesis first expressed four or five years ago seems to be confirmed,” SCOR CEO Denis Kessler said during the company’s first half 2018 earnings call.
Kessler was referring to the notion that so-called Tier 1 reinsurers, which includes giants like Munich Re or Swiss Re, have a competitive advantage. Their size allows them to manage a diversified portfolio, operate in five continents and maintain a top rating.
The Tier 1 status enables access to large volume business which requires significant capacity, Kessler explained. The number of business lines that a reinsurer can offer its clients, as well as scale and scope play a role when you are competing for business, he notes. A large player also is better positioned to absorb rising fixed costs from regulation and compliance, he added.
SCOR, Prices, Growth, Insurance, Reinsurance, Europe, North America, Denis Kessler, Mark Kociancic, Victor Peignet, Laurent Rousseau