This plan was approved by the Board of Directors during its meeting of 26 July 2016. The three-year strategic plan “Optimal Dynamics”, launched in September 2013, fully achieved all of its targets

 

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Two strategic targets: profitability and solvency

With “Vision in Action”, SCOR continues to focus on its two equally weighted strategic targets: profitability and solvency
 

“Vision in Action” relies on three dynamics to enhance its profitability and its solvency:

 

  • Build on continuity and consistency: SCOR’s strategy implemented in the previous plans has proven to be relevant. The Group’s four historical cornerstones (strong franchise, high diversification, robust capital shield and controlled risk appetite) are still fundamental in the current environment. The Group, whose focus will remain on the reinsurance business, intends to pursue its diversified strategy, which combines Life and P&C business;
  • Expand and deepen the franchise: over the 2016-2019 period, SCOR plans to grow organically and profitably, leveraging on existing and new platforms. Gross written premiums are expected to grow organically between approximately 4% and 7% annually on average over the plan;
  • Normalize the asset management policy as market conditions allow over the plan by aligning it to the upper mid-level risk appetite of the Group, reducing the very high level of prudence that currently characterizes the investment portfolio.

With “Vision in Action”, SCOR has two targets:
 

  • A high return on equity at or above 800 basis points above the 5-year risk-free rate over the cycle1;
  • An optimal solvency ratio in the 185-220% range (percentage of SCR)2.
A 3-pronged strategy

A strategy based on technical profitability, operational excellence and optimized capital management


The “Vision in Action” plan defines a set of key assumptions for each of the Group’s three engines, including a Group-wide annual gross written premium growth rate of approximately 4% to 7% over the course of the plan:

 

  • The P&C division, SCOR Global P&C, is well positioned to pursue sustainable annual growth in the 3% to 8% range (of gross written premiums) over the plan by: i) further developing the US franchise towards clear Tier 1 reinsurer status, while consolidating its position in international markets, ii) building the Channel Syndicate to sustained profitability, iii) transitioning SCOR Business Solutions (SBS) towards a customer-centric model and expanding the sectors and products offered to large corporations, and iv) developing the MGA3 platform to promote new business channels using the P&C division’s infrastructure. SCOR Global P&C anticipates a net combined ratio of 95-96% over the plan.
  • The Life division, SCOR Global Life, pursues the strengthening of its market position, building on its leadership position in the US market, enhancing its strong EMEA position and expanding in fast-growing Asia-Pacific markets. SCOR Global Life will continue to manage and optimize its in-force book, expand longevity transactions and enhance its Global Distribution Solutions capabilities. Meanwhile, the Life division will develop in China, Japan and South East Asia. SCOR Global Life anticipates a technical margin of around 6.8% to 7.0% p.a., while anticipating annual premium growth of between 5% and 6% over the plan.
  • The Asset Management division, SCOR Global Investments, will normalize its investment policy, by reducing liquidity to the target level of 5%, by closing the duration gap between assets and liabilities by the end of the “Vision in Action” plan and by benefitting from additional degrees of flexibility in its asset allocation. The Group expects an average annualized return on invested assets in the range of 2.5% to 3.2% over the plan.

“Vision in Action” will also attain a new degree of sophistication in terms of the Group’s risk and capital management. The retrocession strategy, ALM4 and risk management will be further fine-tuned to support business developments.

1Based on a 5-year rolling average of 5-year risk-free rates

2This is the ratio of Eligible Own Funds over the Solvency Capital Requirement (SCR)

3Managing General Agent

4Asset Liability Management