
Thomas
Fossard
Investor Relations
SCOR improves the expected technical profitability and risk-return profile of its portfolio in a favorable market environment.
The combination of these four actions has resulted in an overall reduction of EGPI of -12% for renewed reinsurance business.
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These renewals have been marked by a decrease in reinsurance supply and strong demand for protection from cedants.
Reinsurance treaties renewal book at January 1, 20231:
|
Gross Premiums renewed |
Evolution vs. January 2022 |
Main lines concerned |
Treaty P&C Lines3 |
2,176 |
-20.4% |
|
Treaty Global Lines4 |
1,479 |
+3.6% |
|
TOTAL |
3,655 |
-12.1% |
|
Underwriting has been thoroughly reviewed, with a particular focus on diversification and portfolio balance to take advantage of current market conditions.
Growth in Global Lines continues, with an increase in EGPI 2 of +11% excluding Agriculture. The weight of Global Lines (accounting for 43% of the January EGPI compared to 36% a year ago) and of Europe & Canada (accounting for 61% of the January EGPI compared to 55% a year ago) has also increased.
SCOR has carefully taken into account the changes in claims experience in its pricing, particularly for natural catastrophes, by revising the calibration of these risks. Consequently, the Cat PML3 has decreased by -14% (following a -21% reduction in 2022). This has essentially been achieved through reduced limits on Cat-exposed Property proportional covers (-30%) and aggregate XL (-25%), and through a significant increase in cedant retention.
Because of the acceleration of inflation, SCOR incorporates forward-looking inflation assumptions (for economic and social inflation) for 2023, which vary between 4% and 14% depending on the geographical area. SCOR is reducing its exposure to the most inflation-sensitive lines such as US Casualty and Motor proportional.
The expected net underwriting ratio4 of the portfolio renewed on January 1, 2023, has improved by 2.5 to 3 points. This improvement stems from a rate increase of 9% before taking inflation assumptions into account. The main rate increases are observed on Property Cat treaties, most notably in North America and Europe (+71% and +44% respectively).
SCOR obtains better terms during these renewals, such as the exclusion of additional perils, higher attachment points and tightened reinstatement provisions.
Jean-Paul Conoscente, CEO for P&C at SCOR, comments: “In one of the best reinsurance environments witnessed in a few decades, SCOR is taking all possible steps to improve the risk-reward profile and technical profitability of its portfolio. To achieve this, SCOR has been particularly focused on controlling exposures, on optimizing the capital allocated to the various lines, and on diversifying its risk portfolio. I am confident: the technical profitability of the renewed portfolio should increase significantly. Market hardening looks set to continue, which will allow SCOR to continue to deploy its capital under favorable market conditions during the next renewals”.
SCOR will publish its full year results on March 2nd, 2023.
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1 Estimated Gross Premium Income (EGPI) 2 Estimated Gross Premium Income (EGPI) 3 PML (probable maximum loss) as measured by the net Aggregate Exceedance Probability 1-in-250 years 4 Sum of the expected cost of claims, commissions and the brokerage costs net of retrocession divided by the premium net of retrocession for the underwriting year
CONTACT
Thomas
Fossard
Investor Relations
Alexandre
Garcia
Media Relations