Scor steals improved market

Reinsurer Scor has reported strong renewals and increased premiums in the January reinsurance round.

The company said: “SCOR tapped the benefits of its ranking in the top five on the global reinsurance market during the 2009 reinsurance renewals season. In this period of financial turmoil and credit crisis, where the lack of financial flexibility for insurers was a major reason behind the increased demand for reinsurance, the Group maintained an extremely strict policy on technical underwriting. The annual negotiations with its clients enabled SCOR to optimise its portfolio and pursue diversification, whilst ensuring that its capital was allocated as profitably as possible, thereby demonstrating the Group’s strength and confirming the success of the combination of the SCOR and Converium portfolios that was achieved in 2008. The renewals demonstrate the anti-cyclical nature of the reinsurance industry in a difficult economic and financial context.

The key figures:

• 73% of total Property & Casualty premiums, €1,653m, up for renewal (P&C Treaties and Specialty Treaties);
• 3% rise in business volume to €1,708m at constant exchange rates, following a policy of increased profitability;
• Start of a general hardening in reinsurance with better prices and conditions; Group exposure stable;
• Selective growth of €55m at constant exchange rates, mostly driven by new business in the stronger lines of the Specialty Treaties;
• 17% of total premiums up for renewal were cancelled and successfully replaced by more profitable new business from existing and new clients;
• Stable business volume in P&C Treaties and changes to the portfolio composition designed to provide greater profitability (shift towards more non-proportional business and movements in the geographical spread);
• Increase of 13% in Specialty Treaties lines that benefited from the mobilisation of the SCOR network and improved terms and conditions;
• Estimated total premiums of €392m from joint ventures and partnerships in 2009;
• Reaffirmation of the strength and depth of SCOR’s business franchise, with minimal cedant attrition of 1%;
• Global capacity reduction in the reinsurance industry likely to continue in 2009; April & July renewals should confirm the cycle turn and show stronger improvements for reinsurers;
• Estimated Non-Life premium income of approximately €3.2bn in 2009; net underwriting ratio and net combined ratio expected to be below 92% and 98% respectively.

Victor Peignet, chief executive of SCOR Global P&C, said: “Profitability and predictability were the two key words for SCOR at these 2009 renewals. We only slightly increased the volume of business underwritten, but significantly increased the quality of our portfolio and its expected profitability. I am very happy with the highly efficient work of our underwriting teams, as what they have achieved is fully in-line with the objectives that we set for ourselves.

"There is no doubt that market conditions have improved for reinsurers. The increasing capital needs of cedants and their reducing appetite for risks and uncertainties of results on the liability side of their balance sheet are currently enabling the traditional reinsurance industry to gain market share."