SCOR expands P&C reinsurance at renewals, expects favourable market in 2019
French reinsurer SCOR grew its property and casualty (P&C) premiums by 9.7 percent at constant exchange rates at the January 2019 renewals, from €2.9 billion to €3.2 billion.
The reinsurer said the outcome of these renewals is in line with its “Vision in Action” strategic plan for the growth of SCOR Global P&C.
SCOR saw the largest renewal growth in the US, where the reinsurer maintained a balance between short and long-tailed business. SCOR claims to have declined business with less attractive margins or risk profiles, particularly when pricing was insufficient, which included some very large proportional treaties.
Overall, its risk-adjusted pricing improved 1.3 percent compared to January 2018. The company added that expected profitability, which is measured by both technical profitability (loss and commission ratios) and return on risk-adjusted capital, was considered to be stable.
The reinsurance pricing was broadly stable across nearly all lines of business and geographic markets.
SCOR said it benefited from improving P&C insurance pricing through both reinsurance and specialty insurance, which includes SCOR Business Solutions, the Channel Syndicate, and the MGA business.
“SCOR starts 2019 with strong January renewals, after having successfully renewed its capital shield back in fall 2018," said Victor Peignet, CEO of SCOR Global P&C. "Clients want to increase the business they conduct with SCOR; they value our client-focused strategy, strong ratings, and technical expertise. Thus we can grow premiums at the high end of the “Vision in Action” range, without sacrificing profitability. We expect favorable market conditions to be more pronounced through the spring/summer 2019 renewals.”
SCOR said it expects the April, June and July renewals to stay firm, with the possibility of further hardening as contracts affected by the high number of natural catastrophe and man-made losses in Q3 and Q4 2018 come up for renewal. It noted that in addition to being well above average in terms of the total amount of insured natural catastrophe losses, 2018 presents an unusual loss profile due to the geography of those losses and the diversity of the perils that caused them.
SCOR has estimated its total natural catastrophe losses for the fourth quarter of 2018 at €384 million net of retrocession and before tax. However, it forecasts that its 2018 net combined ratio will nevertheless be below 100 percent.
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