
Thomas
Fossard
Investor Relations
SCOR takes full advantage of the hardening P&C reinsurance market at January 1, 2022, delivering 19% premium growth
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SCOR begins 2022 with strong renewal results in P&C reinsurance, navigating a complex and prolonged renewal season. The results of these renewals fully deliver on the strategy outlined at the September 2021 Investor Day. SCOR deploys its capital rigorously, reducing climate-sensitive exposures as net margins are currently insufficient to reflect the exceptionally volatile environment, and actively steers its book towards Treaty Global Lines (e.g., Marine, Engineering, Credit & Surety).
The January 1, 2022 renewals evidence the continuing hardening of the P&C treaty reinsurance market, following years of large natural catastrophe losses, attritional inflation and low interest rates. The generalized risk aversion trend is accompanied by a robust demand for reinsurance. In this context, SCOR fully leverages its deep client relationships and broad franchise to actively steer its portfolio towards lines of business and regions displaying the most attractive risk / return conditions.
SCOR achieves +19.0% reinsurance premium growth at constant exchange rates1, including one large structured transaction in Europe on a non-catastrophe-exposed, and a well-balanced portfolio. Excluding this large transaction, the underlying growth stands at +9.8%, corresponding to a premium increase of EUR 3712 million to EUR 4,149 million. All P&C reinsurance figures presented hereafter refer to underlying growth trends unless otherwise specified.
Gross Premiums renewed (in EUR millions)2 |
Evolution vs. January 2021 | Notable drivers | |
---|---|---|---|
Treaty P&C Lines3 | 2,712 | +4.8% | Europe (including Casualty), Motor (Ventures) |
Treaty Global Lines4 | 1,437 | +20.7% | Credit & Surety, Marine & Energy |
TOTAL | 4,149 | +9.8% |
1. Approximately 64% of SCOR’s P&C reinsurance premiums – representing 46% of SCOR’s total P&C premiums - renew in January
2. Excluding one large transaction in Europe, and SCOR’s 3rd party capital provision business at Lloyd’s (“SUL”)
3. Treaty P&C Lines include: Property, Property Cat, Casualty, Motor, and other related lines (Personal Insurance, Nuclear, Terrorism, Special Risks, Motor Extended Warranty, and Inwards Retrocession)
4. Treaty Global Lines include: Agriculture, Aviation, Credit & Surety, Inherent Defects Insurance, Engineering, Marine and Offshore, Space, Cyber and Alternative Solutions
SCOR records an overall average price increase of +4.9% in P&C reinsurance, building further on prior years’ renewals, as conditions for the P&C treaty market continue to harden. These changes translate into an estimated improvement of the priced net combined ratio of c. 0.5 points, taking into account SCOR’s Cat retrocession renewed program, the various underwriting actions, the repositioning of the portfolio and SCOR’s updated view of risk (including economic and claims inflation). The improvement in the priced net combined ratio of the book will translate into net income progressively, in the quarters to come.
SCOR continues to view Specialty Insurance as the most attractive segment of the P&C (re)insurance market currently, growing its book to 26% of P&C portfolio in 2021:
Looking forward to the April and June / July 2022 renewals, SCOR expects the current positive market trends to continue. The Group is well positioned to take full advantage of these trends in both its Specialty Insurance and Reinsurance businesses, leveraging on its global underwriting platform.
SCOR confirms the 2022 assumptions presented at the September 2021 Investor Day, including gross written premium growth of +15-18%, and a net combined ratio trending downwards towards 95% and below.
SCOR will hold an Investor Day on March 29th, 2022, during which new strategic ambitions will be presented.
Jean-Paul Conoscente, CEO for P&C at SCOR, comments:
“In line with the forward-looking view shared during its September 2021 Investor Day, the market hardening continues into 2022. 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.”
1. Exchange rates at December 31st, 2021
2. Excluding one large transaction in Europe, and SCOR’s 3rd party capital provision business at Lloyd’s (“SUL”)