SCOR expands P&C reinsurance at renewals, bullish on rate hardening through 2022
Global reinsurer SCOR has said it will allocate its capital to the lines that benefit from the best risk return profile, such as treaty and specialty reinsurance, as it continues a planned repositioning of the portfolio towards “value-accretive” growth opportunities.
The January 2022 renewals marked a strong acceleration of the P&C treaty reinsurance market hardening after years of high natural catastrophe losses, attritional inflation, and low interest rates, SCOR said, while noting that the demand for reinsurance was “robust” driven by increased general risk aversion.
The reinsurer stated that it took full advantage of favorable market conditions at the “complex” Jan renewals, growing its reinsurance treaty premium income up for renewal by 19% at constant exchange rates including one large European structured transaction.
The growth was largely driven by its global lines – notably in Europe (+15.0%), followed by fast growth markets (+14.7%). In traditional P&C lines, SCOR achieved “modest” premium growth.
The company said it will deploy its capital “rigorously, reducing climate-sensitive exposures as net margins are currently insufficient to reflect the exceptionally volatile environment.”
SCOR plans to actively steer its book towards treaty global lines including marine, engineering, credit & surety.
The specialty insurance book, the company said market trends were “most attractive”, enabling it to record a gross premium growth of +18.6% in 2021, on the back of +12.6% rate increases for large commercial single risk business.
The overall average price increase in P&C reinsurance of +4.9%, alongside various underwriting actions and repositioning of the portfolio, helped improve the priced net combined ratio of c. 0.5 percentage point on a risk-adjusted basis.
SCOR expects the current hardening in P&C treaty reinsurance market to continue well into the April and June / July 2022 renewals. The company's chief executive outlined a positive outlook for the reinsurance market in 2022.
“The market hardening continues into 2022,” said Jean-Paul Conoscente (pictured), CEO for P&C at SCOR. “We are successfully implementing our strategy to reposition our portfolio towards value-accretive growth opportunities.
“The result allows us to expand our franchise, while taking a series of actions to reduce our exposure to climate-sensitive Cat business where rising prices did not lead to sufficient margins given the expected volatility. We expect continuing positive market trends as we head into Q2 2022, anticipating a sustained hardening in the upcoming renewals where we remain well positioned.”
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