Rousseau highlights opportunities from pandemic as SCOR looks ahead

SCOR chief executive Laurent Rousseau has said the carrier is ready to grasp the new opportunities for growth as the reinsurance sector emerges from the COVID-19 pandemic, highlighting the increased awareness of risk and favourable macro trends as tailwinds for the industry.

Speaking at the French carrier’s investor day ahead of the Monte Carlo Rendez-Vous, Rousseau said that clients had become increasingly aware of the need for coverage given the volatility of the past 18 months, with risk scoring higher on the agenda than it had previously.

“Macro trends become opportunities if you make the effort to understand them and have the nimbleness and entrepreneurial spirit to take advantage of them,” he said.

“To put it simply, risk awareness is at a high point, and this will drive long-term growth in both insurance and reinsurance, while ensuring that all competitors are disciplined in pricing and risk appetite.”

However, while the executive underscored the company’s willingness to take advantage of the environment and capitalise on growth opportunities, he warned investors not to expect a radical departure from its current strategy.

“We are proactive about steering our business mix, we are Tier 1 and nimble enough to rebalance swiftly,” he explained.

“The rebalancing we are talking about will stay within the historical cyclical range, we will be pragmatic and adaptive as market dynamics evolve. Do not expect radical change. Our business is about consistency over the long term.”

Asset mix

Rousseau noted that the company would seek to change its asset mix on the investment side of the balance sheet, maintaining an overall neutral stance on market position while moving more towards the position of competitors.

“On the asset side, we will progressively normalise our approach vis-à-vis our peers. This means first of all acting on the asset mix, where our share of value creation assets is around 5 percentage points lower than that of our peers.

“Our invested assets have been very short tail, and we have some scope to take a little more risk from a very low base,” he said.

SCOR chief financial officer Ian Kelly addressed how the carrier’s balance sheet had shifted due to a number of life transactions conducted over the last year which ceded a significant portion of that business to other carriers.

The result of the deals was that the share of life and P&C balance within the business was now more equal, he said, at 53 percent and 47 percent, respectively.

Kelly added that the company remained committed to previously-set targets under its ‘Quantum Leap’ strategic plan, and noted that P&C premium growth had surged during the pandemic to between 15 and 18 percent, well ahead of the 4 to 5 percent target previously set.

“The strong financial position of growth, supported by the successful recent life transaction and our disciplined capital management, will lead us to present strong financials going forward,” he said.