One more round: SCOR’s Kessler eyes victory lap today, exit in a year

SCOR’s two-decade kingpin Denis Kessler (pictured) set the stage to go out at what he could call the top of his game in one year’s time, laying claim to having buried SCOR’s difficulties and laid the groundwork for a return to growth on market tailwinds that are “here to stay”.

“This is truly my last year,” Kessler said at the conclusion of his nearly hour-long opening remarks at the group’s 2023 AGM. “Statutes have been changed and I have promised that I will not modify them again. I have no intention of staying.”

Kessler sidestepped suggestion, explicit in a shareholder question, that his health might be failing. “Let’s not listen to rumours,” Kessler told gathered shareholders. “If I weren’t capable of being at the head of the board, then I wouldn’t be here.”

But going does not necessarily mean going quietly. Kessler dominated the May 25 AGM. His opening remarks, designed as he said as an introduction to what he considered the main event, a strategy presentation by newly appointed CEO Thierry Léger, nonetheless lasted considerably longer than the Léger speech. Kessler covered a broad range of his views to the firm and the industry from across the decades with no shortage of personal digressions.

Kessler joined SCOR as CEO in late 2002 and reigned for nearly nineteen years until ousted by shareholders with a promotion to supervisory board chief. Kessler’s replacement as CEO, an eleven-year SCOR insider who’d risen the P&C Re ranks, may have clashed with his predecessor.

Attempts to set a new strategy for the group floundered after the prior expired end-2021. A March 2022 date had been set for an unveiling, then delayed with reference to rising uncertainties. By mid-year, leadership could instead reference rising losses. After Q3, with its spike in loss-making provisions, management spoke more to short-term triage than longer-term directions. By January, Kessler announced the jump from Laurent Rousseau to the Swiss Re chief underwriting officer Léger.

With a stronger set of Q1 2023 results under his belt and an outlook for continued hard markets, Kessler sounded ready to declare all fires extinguished.

“That is it, Voilà! The job is done,” Kessler said during his opening remarks. “The first quarter of 2023 has done everything I said!” Current tailwinds are “here to stay.”

If 2021 and 2022 did show certain glitches, including an outright loss and ratings downgrade in 2022, then the answer is a longer-term time frame. “If you don’t look at the long-term, it is quite hard, almost impossible, to understand the dynamics of reinsurance.”

Without naming names, Kessler seemed to rebuke the de-risking, re-underwriting and selective retreat that had founded Rousseau’s answer to SCOR problems.

“We are a growth company,” Kessler said repeatedly to throw off the shackles of 2021-22.

The growth tasks put to Léger match Kessler’s personal tastes: “to put us in the leaders of world reinsurance, not lagging behind. I hate lagging behind.” Kessler takes his own mantra taken from an American metaphor: “make dust, don’t eat dust.”

Kessler’s opening remarks set any number of boundaries Léger will have to work within. Kessler likes diversification and can’t imagine a SCOR with a different mix of, or clear preference for, life versus P&C. Solvency limits are not to be tinkered with. SCOR is a dividend payer.

SCOR’s board nomination committee has already defined what they seek in a replacement for Kessler and contracted headhunters. Kessler claims to be ready for a clean break. “We have a new CEO; we need a new chair of the board,” Kessler said. SCOR seeks “somebody who doesn’t have the same profile as I do.”

“Long life to SCOR and let the show go on.”

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