Scor cuts 1/1 portfolio by 12% to improve profitability
Reinsurer's renewed premium volumes in treaty global lines, including cyber, marine and aviation, increased 3.6% to €1.48bn
Paris-based reinsurer expects '2.5 to 3 point improvement in underwriting ratio' as it increases exposure in global specialty lines and cuts back on natural catastrophe and casualty business
Scor said it improved the expected profitability of its portfolio at the January 1 renewals, as it increased its exposure in global specialty lines and cut back on natural catastrophe and casualty business.
The Paris-based reinsurer’s renewed premium volumes in treaty global lines, including cyber, marine and aviation, increased 3.6% to €1.48bn ($1.58bn) – or 11% excluding agriculture business.
Renewed premiums in treaty property and casualty lines declined 20.4% to €2.18bn. Scor continued to reduce natural catastrophe exposures and cut back in lines most sensitive to economic and social inflation, particularly casualty and motor lines.
Overall, Scor reduced the expected premium income of its January 1 portfolio by 12.1%, with an overall rate increase of 9% across the portfolio.
The company said its actions should result in an improvement in the expected net underwriting ratio of “around 2.5 to 3 points”.
The expected improvement in profitability follows a challenging period for Scor which has led to ratings downgrades and the exit of its chief executive.
Jean-Paul Conoscente, chief executive for property/casualty at Scor, said the company is “taking all possible steps” to improve the risk-reward profile and technical profitability of its portfolio.
“To achieve this, Scor has been particularly focused on controlling exposures, on optimizing the capital allocated to the various lines, and on diversifying its risk portfolio.”
Scor continued to cut back its catastrophe exposure at the January 1 renewals, reducing its 1-in-250-year net catastrophe PML by 14%. This followed a 21% reduction in 2022.
The reduction was achieved through reduced limits on catastrophe-exposed property proportional covers and aggregate excess-of-loss business, and through a “significant” increase in cedant retention.
More broadly, Scor said it obtained better terms during these renewals, such as the exclusion of additional perils, higher attachment points and tightened reinstatement provisions.
Significant rate increases were achieved on property catastrophe treaties, most notably in North America and Europe (+71% and +44% respectively).
“Market hardening looks set to continue, which will allow Scor to continue to deploy its capital under favorable market conditions during the next renewals,” Conoscente added.
Approximately 67% of Scor’s property and casualty reinsurance premiums – representing 47% of the group’s total P&C premiums – is renewed in January.
