Scor has offered a bullish outlook for a continuation of the onerous market by way of the three-year interval coated by its new strategic plan, with the Paris-based reinsurer planning to take care of its treaty cat XL place because it appears to benefit from the hardening situations.
Newly arrived CEO Thierry Léger hailed the “best market conditions over the last two decades” as he unveiled the group’s Forward 2026 technique forward of this 12 months’s Rendez-Vous.
The technique and investor day – which was well-received by insurance coverage analysts – targets P&C insurance coverage income compound annual progress of 4-6 % through the 2024 to 2026 interval, whereas sustaining its nat cat ratio at 10 % of web insurance coverage income.
Scor additionally stated it was focusing on a web mixed ratio of beneath 87 % over the three-year interval – a ratio that few would have thought achievable just a few years in the past.
In its investor day presentation, the reinsurer highlighted the recent emergence of a $65bn provide/demand imbalance for property cat, with extra demand outstripping provide for the primary time within the present underwriting cycle.
Scor stated its technique can even see continued portfolio diversification in its reinsurance business, whereas sustaining a “prudent approach” on business uncovered to local weather change, primarily agriculture (the place Scor has skilled recent heavy losses in areas akin to Brazil) and property cat.
Part of this method has seen it undertake a major portfolio remediation for property cat, with its present stability being one it intends to take care of.
“Following the significant portfolio remediation done over the past two years, we are today underweight in property cat compared to our peers, with a good balance between US and non-US exposures,” stated Jean-Paul Conoscente, CEO of Scor P&C.
However, Léger underlined that local weather change and nat cat aren’t fully synonymous.
He famous that decrease layer claims, typically related to warmth, rain and flooding, are affected by local weather change and have been averted.
Higher layer claims, akin to hurricanes and earthquakes, weren’t dramatically impacted by local weather change, with demographics a extra vital issue.
Another space the place Scor capped its capital allocation was US casualty, largely a results of what it noticed as a “volatile litigious environment in the US”.
Conoscente stated it might obtain its actions throughout property cat and US casualty by way of its third-party capital-supported danger partnership platform, which it plans to broaden throughout its strategic plan.
Scor additionally plans to broaden throughout 4 fundamental segments: engineering, marine, worldwide casualty and inherent defects insurance coverage.
“In total, we want to increase the premium on these four lines of business by roughly 8 percent per year over the plan while maintaining stable capacities,” Conoscente added.
The group additionally revealed plans to develop diversifying strains in specialty reinsurance, in addition to leveraging its sturdy place in development and power to fulfill the world’s infrastructure and transition wants.
Scor’s share value closed up final week following the investor day and is now up 35 % 12 months up to now and buying and selling at round 1.1x ebook. 2022 noticed its share value dive on heavy losses and surprising again 12 months reserving.
KBW analyst Darius Satkauskas commented: “We came away from the investor day feeling that Scor has turned the corner”.
