Body
- Premium volume up by 9%
- Prices up by around 2%
- Balanced growth between Treaties and Specialties
During the January renewals, SCOR Global P&C combines a 9% increase in gross written premiums (to EUR 2.507 billion) with an expected 1.3% improvement in technical profitability for total contracts renewed and a price rise of 1.9% net of general inflation.
SCOR Global P&C continues to strengthen its competitive position during these renewals, both with its existing clients and with new cedants. The recent rating upgrades to “A+” recognise this business franchise and its constant reinforcement, as well as providing a catalyst for new opportunities that strengthen SCOR Global P&C’s position at the very forefront of the reinsurance industry.
These renewals constitute one of the final steps before the conclusion of the strategic plan “Strong Momentum v1.1”, and satisfy its profitability objectives and premium income growth assumptions. They confirm the evolution of premium income, which is trending towards the EUR 5 billion level.
EUR 2.3 billion of premiums were up for renewal in January, i.e. around half of SCOR Global P&C’s premiums. This proportion is particularly significant for Non-Life treaty business (71%), and represents more than half of specialty treaty business (55%).
During these renewals, SCOR Global P&C continues to improve the expected technical performance of its business thanks to the active management of its portfolio. Its position as one of the leaders on a number of segments, along with the long-term relationships it has established with cedants, enable it to negotiate satisfactory pricing conditions that are higher than those recorded by the rest of the market. Price increases in the Americas have notably reached 5.1 %, with P&C prices increasing overall by 1.5% and 3.0% respectively for proportional and non-proportional contracts.
The main business line developments at the January 2013 renewals are as follows:
- For Non-Life Treaties: premiums increase by 9% to EUR 1.890 billion, of which 6 points relate to a quota share treaty for an Asian cedant. SCOR Global P&C’s ability to seize this opportunity bears witness its benchmark role in this region of the world. Moreover, the emerging countries record particularly strong growth overall (+48% in Asia, +16% in Latin America, and +12% in Africa & the Middle East). This growth accompanies active portfolio management: more than 8% of business has been cancelled and restructured, while new clients represent three additional growth points. This growth is taking place in favourable pricing conditions, which are up by more than 2%.
- For Specialty Treaties: gross written premiums increase by 9% to EUR 617 million, driven by a good performance in the Marine branch (+11 %). This branch benefits from a significant improvement in pricing conditions (notably +14.5% for non-proportional contracts, of which the portfolio share has increased), following a year marked by exceptional losses in 2012. The year opened with the shipwreck of the Costa Concordia, and closed on Hurricane Sandy, which has had a considerable impact on the Marine branch. Moreover, prices for specialty treaties have risen by more than 1% overall, showing strong resilience in branches sensitive to the economic cycle such as credit reinsurance and construction reinsurance, where rates have remained stable (+0.7% and +0.4% respectively). Moreover, while conditions remain difficult for the Aviation reinsurance market, SCOR Global P&C has managed to maintain stable price levels and premium volume.
Victor Peignet, CEO of SCOR Global P&C, comments: “SCOR Global P&C is achieving good renewals in a challenging environment. The Group continues to benefit from a positive commercial and financial dynamic, and we are approaching the preparation of our new strategic plan with a business franchise that is strong both in terms of the most sophisticated markets and clients and in emerging markets. The dynamics of the market confirm the validity of the strategic initiative launched in September 2012, which aims to better cover the reinsurance needs of global insurers. The latter are continuing to review their reinsurance protection structures and the placement of their programmes with a more global approach. They are turning more towards peak risk and accumulated loss coverage, in per-event and above all aggregate excess of loss structures, which can combine several branches and financial years. SCOR Global P&C’s technical expertise and commercial responsiveness enable it to position itself well in order to understand, anticipate and satisfy demand”.
