“We believe in partnering with our clients, not assuming we know what they need.” É.L.M CONTRIBUTOR INTERVIEW ERIC LE MERCIER Head of Alternative Solutions HOW HAS THE ALTERNATIVE SOLUTIONS PRACTICE EVOLVED OVER THE PAST TEN YEARS? É.L.M. Initially the Alternative Solutions team focused on providing volatility solutions for insurance, industrial, and commercial companies. Over time, the regulatory environment has evolved, first with the implementation of Solvency II in Europe and then with similar risk-based capital regulations in a growing number of countries. This led to a need for a more thorough consideration of different risks and a wider recognition of reinsurance as a risk-mitigation technique. Additionally, changes in accounting standard, especially the introduction of IFRS 17, mean our solutions must constantly adapt to evolving needs from our clients. HOW DOES SCOR’S ALTERNATIVE SOLUTIONS TEAM DIFFERENTIATE ITSELF FROM OTHER PROVIDERS? É.L.M. We believe in partnering with our clients, not assuming we know what they need. The only way to create a solution that meets their needs is to take the time to have those discussions with them. At the same time, we’re working closely with brokers, so we’re able to leverage these relationships to connect players throughout the industry and negotiate a solution that benefits everyone involved. HOW HAVE THE RECENT LEGISLATIVE CHANGES IMPACTED THE DEMAND FOR CAPTIVE SOLUTIONS? É.L.M. In 2023, France introduced a new finance law that has reshaped the tax environment, allowing captives to build a new resilience provision to set aside funds to cover future losses. As a result, there has been a push for captives in France. We expect other countries to follow suit and adopt similar regulations. SCOR has decided to become an associate member of the French Captive Federation to support the national initiative and we would welcome similar projects in other markets. Captives continue to gain popularity and many countries have introduced legislation favorable to these entities. This was the case in France, where SCOR has been keen to offer protections to the newly formed captives. Since most captives have reinsurance licenses, they are not authorized to issue insurance contracts directly. Therefore, SCOR provides fronting solutions, issuing the insurance paper and bearing the insurer’s obligations and then ceding the risk to the captive. This enables the link between the reinsurance captive and the insured operating entities. SCOR’s ability to offer both insurance and reinsurance support has been a significant advantage for clients looking to optimize their risk management strategies. . TRANSFORMING TOMORROW WITH OUR SOLUTIONS 65
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