SCOR improves rates by 3% at January renewals
French reinsurer SCOR improved risk-adjusted pricing by 3 percent at the January 2018 renewals compared to 2017.
Expected profitability measured by both technical profitability (loss and commission ratios) and return on risk-adjusted capital, improved by two percentage points on each measure.
SCOR expanded property/casualty (P&C) reinsurance renewal premiums by 3.7 percent at constant exchange rates at the January 2018 renewals, from €3.0 billion to €3.1 billion.
The reinsurer reduced or declined some high-volume proportional treaties with less attractive margins or risk profiles, particularly when pricing improvement was insufficient.
At the same time, the company increased support to clients on non-proportional treaties with improved expected profitability.
“We negotiated to reduce, cancel or decline business that did not meet our hurdles without damaging our franchise,” said SCOR Global P&C CEO Victor Peignet.
“As a result, our portfolio renewed in January is both larger and more profitable while still being well-diversified.”
Reinsurance pricing broadly improved across nearly all lines of business and geographic markets, SCOR said a Feb. 8 press release. Price improvements come after the sector experienced record insured losses of around $130 billion in 2017, driven by hurricanes Harvey, Irma and Maria (HIM).
Loss-affected programmes and layers show the greatest improvements, most notably catastrophe-exposed reinsurance in the US and motor reinsurance in the UK. SCOR benefits from improved primary insurance market conditions both through reinsurance and through SCOR Business Solutions, the Channel Syndicate, and the managing general agent (MGA) business, the company noted.
Approximately 69 percent of SCOR’s P&C premiums renew in January, and the division’s risk appetite and profile are not substantially changed, according to the press release.
At January 2018 renewals, SCOR Global P&C increased retrocession protection at a single-digit increase in spend compared to 2017.
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