SCOR cut P&C treaty 20% at 1.1 in accelerated slash of cat risks

Global reinsurer  SCOR cut its tally of premiums renewed at 1.1 by 12.1%, including an over 20% slashing of P&C lines helped cut long-shot cat risks by 14%.

SCOR claimed a 9% overall rate increase across its total 1.1 portfolio after the rebalancing and said the shift should boost its net underwriting ratio by around 2.5 to 3 points.

The rebalance should “improve the expected technical profitability and improve the risk-return profile of [the] P&C portfolio,” management said.

The 14% reduction in the 1-in-250 net cat probable maximum loss (PML) came on a 30% cut in limits on cat-exposed proportional property covers and a 25% cut to aggregate excess of loss, aided by “a significant increase” in cedant retention, management said.

“In one of the best reinsurance environments witnessed in a few decades, SCOR is taking all possible steps to improve the risk-reward profile and technical profitability of its portfolio,” SCOR's CEO for P&C Jean-Paul Conoscente said, hailing moves to optimise capital allocation and diversify risk profiles.

A 3.6% increase in renewed premium on global lines treaty, mainly IDI & engineering as well as price-driven cyber, helped take the edge off the deeper cut to cat-exposed property. Global lines were up 11% excluding agriculture.

Beyond the cut to nat cat, SCOR moved to reduce lines most sensitive to economic and social inflation. That spelled a 24% cut to premium for casualty and motor lines, SCOR indicated.

For all the talk of reductions, SCOR spoke bullish of pending renewal deadlines and market conditions.

“Market hardening looks set to continue, which will allow SCOR to continue to deploy its capital under favourable market conditions during the next renewals,” Conoscente said.

“The Group is actively preparing the upcoming April, June and July 2023 renewals in a positive market environment,” management added in its statement.

SCOR has been the poster-child of the industry’s retreat from nat cat exposures for much of 2022 and before, although the group’s strategy may now be up for revisions. SCOR ousted its CEO of less than two years in late January in a move heralding a major revision of strategy for the loss-strapped reinsurer.

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