SCOR continues drive into specialty market under Léger

SCOR continued its strong drive into the European and global primary speciality insurance market during the first quarter of this year under its new leadership, with a 21.5% rise in premiums over the period. The specialty business now accounts for 34% of the Paris-based group’s total P&C insurance revenue. SCOR group net income stood at €311m for Q1 2023, implying an annualised return on equity of 29.7%. Primary specialty business was a strong focus for former SCOR CEO Laurent Rousseau, who succeeded Denis Kessler as CEO of SCOR in June 2021. Kessler remained chairman. Rousseau was replaced by chief underwriting officer Thierry Léger in January of this year after a poor run of results that demanded a de-risking of the group’s book. The first set of quarterly results under Léger suggest that the expansion into specialty business will continue against the backdrop of a continued hard market in most lines, notably property. SCOR reported that in the first quarter of 2023, its P&C insurance revenue was €1.79bn, up 5.4% at constant exchange rates compared to Q1 2022. “There has been a strong increase in insurance revenue for specialty insurance (+21.5% at constant exchange rates), which now represents 34% of SCOR P&C’s overall insurance revenue,” commented the group. “Market conditions remain favourable for reinsurers, with regard to both pricing and terms and conditions. SCOR is taking advantage of this supportive market to continue the repositioning of its P&C risk portfolio,” it added. The P&C combined ratio showed a huge improvement at 85.2% in Q1 2023, compared to 97.8% in Q1 2022. SCOR P&C's attributable expense ratio stands at 6% of its insurance revenue in Q1 2023. SCOR explained that the reinsurance industry continues to be driven by three “favourable” developments that have emerged and accelerated in recent quarters on both the asset and liability sides. First, the “positive” phase of the P&C reinsurance cycle, marked by a strong improvement in pricing conditions, is ongoing. SCOR recorded a 7% average rate rise for its renewed P&C portfolio on 1 April 2023. It said this should lead to a “significant improvement” in technical profitability. “These favourable market conditions are expected to remain in place at the June and July 2023 renewals. This is against a backdrop of continued high natural catastrophe losses, including a major earthquake in Turkey, tornadoes in the US and floods in New Zealand in Q1 2023,” commented SCOR. Second, in life and health reinsurance, the excess mortality linked to the Covid-19 pandemic has been “greatly reduced”, leading to a further reduction in the number of related claims. Third, on the asset side, the rise in interest rates and consequently reinvestment rates will significantly increase the financial contribution of investments to reinsurer results in general, predicted SCOR. The company said it is therefore taking “full advantage” of the short duration of its investment portfolio. Kessler said: “The group is taking full advantage of the current favourable environment. Our new CEO, Thierry Léger, is in charge of drawing up a new three-year strategic plan under IFRS 17. This plan will define the best ways and means for the group to consolidate its position as a leading global reinsurer, taking advantage of its Tier 1 global underwriting platform and technical know-how.” Léger added: “The current market is very supportive, and all the teams are mobilised to take advantage of this favourable environment.”

SCOR continues drive into specialty market under Léger

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