French reinsurer SCOR reported that the April renewals saw SCOR Global P&C’s gross written premiums increased by 5.8 percent from €374 million [$411 million] to €396 million [$436 million], at constant exchange rates as of December 31, 2014.
SCOR also noted that “using current exchange rates at 31 December 2013 and at 31 March 2015 respectively, premiums increased from €361 million [$397.5 million] to €451 million [$496.96 million], representing growth of 25 percent.”
The premiums up for renewal as of April first “represent around 10 percent of the total annual volume of P&C and Specialty Treaty premiums, the main markets concerned being Japan, the United States and India,” the announcement said. “The April renewals confirm the market trends witnessed in January in terms of competitive environment, cedants’ reinsurance purchase drivers, price changes and terms & conditions.
SCOR Global P&C said that given the current state of the reinsurance industry it “has made good use of its positioning and growth strategy in emerging markets such as India, of its client-focused initiative in the United States and of its close relationships with global insurers, as part of its strategic initiative.”
SCOR’s report also pointed out that the “price decrease observed at 1 April 2015 remains contained at -1.2 percent, 75 percent of the renewed portfolio being composed of proportional treaties, which still benefit from increasing prices on the primary insurance market (although these increases are slowing down in the United States).
“From January to April 2015, the overall price decrease remains limited to the level reported in January, i.e. -0.7 percent, thanks to the relatively low weight of the April renewals in the SCOR Global P&C book. This satisfying performance is due to the diversification of the SCOR Global P&C portfolio and to the quality of its client relationships, which facilitates active portfolio management.
“In view of the 1 April 2015 renewals, which take into account the cancellation of contracts by one of the three major Japanese insurance groups, and despite the lower expected profitability of the relatively limited volume of business renewed in April, SCOR Global P&C confirms its 94 percent normalized net combined ratio assumption for 2015.
“The premiums up for renewal at 1 April are distributed between P&C Treaties (71 percent) and Specialty Treaties (29 percent) in the three geographical areas: Asia (55 percent), Americas (30 percent) and EMEA (15 percent).”
SCOR noted two “main developments” for the April 1 renewals are as follows:
• For P&C Treaties: gross premiums are up by 5 percent at constant exchange rates to €278 million [$306 million]. The strengthening of SCOR Global P&C’s positions on several emerging markets, and the signing of a major contract with a global insurer based in the United States, more than offset the non-renewal of contracts by a group representing two clients in Japan.
• For Specialty Treaties: gross premiums are up by 8 percent at constant exchange rates to €117 million [$128.75 million], thanks in particular to the development of the Agriculture portfolio on the Indian market, and to the growth of the Engineering specialty in Asia.
Victor Peignet, CEO of SCOR Global P&C, commented: “The April renewals confirm the strength of SCOR Global P&C’s business model and the progress recorded in the implementation of the initiatives set out in the strategic plan “Optimal Dynamics”, whether in terms of growth in emerging markets, the strengthening of its relations with global insurers or the roll out of a global approach to clients in certain target segments in the United States. SCOR Global P&C reaffirms its commitment to long-term relationships with its clients and to maintaining the quality of its underwriting, and confirms its 2015 normalized net combined ratio assumption of 94 percent.”
Source: SCOR Global P&C