TUESDAY
17.10.17
DAY 3
PCI TODAY Tuesday October 17, 2017
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Jean-Paul Conoscente
“Progressive growth is coming from
expanding our client base, which in the US has
so far been focused on regional clients, excess &
surplus lines clients, specialty clients, and global
players,” he said.
“The main segment that we haven’t really
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News
SCOR vows to take a nuanced view on rate rises, assessing
clients on a case-by-case basis
(Continued from top of page 1) “It has been a pretty
dry conversation in the last few years but, while
there is angst in the market, people are also
energised. You earn your keep as an underwriting
in this environment.”
The reaction of third party capital to the
recent losses will also play an important role
in determining the extent to which rates might
rise, he said. But he thinks, especially given that
this segment of the market has so much capital
trapped in structures while claims are calculated,
that these investors will be seeking healthy rate
increases to compensate for it.
“They will want a better return than if they
were just rolling the same capital over,” he said.
“Their reaction will have an influence on rates,
especially in catastrophe business.”
SCOR has enjoyed a steep growth trajectory
in the US in recent years—around 20 percent a
year in recent years. Its market share in the US
on the P&C side is much lower than in most other
parts of the world, so it has targeted the region
and has enjoyed a good reception from cedants.
Jenkins said that SCOR’s aim is to become
(Continued from bottom of page 1) claims and
losses are calculated, may become spooked by
the frequency and severity of recent catastrophe
losses. This, combined with the possibility of
interest rates rising, could prompt them to exit
the market in favour of less volatile asset classes.
“We have had four hurricanes, two
earthquakes and a really bad wildfire in quick
succession; back in 2005 there was a similar
sequence of events and some people thought this
might be the new norm,” he said.
“Some investors may not want such volatility,
especially if they can get better returns elsewhere
if interest rates increase.”
He added that the reaction of third party
capital could be important to the development
of the market in a number of ways—one being
that some reinsurers are able to write very large
line sizes only because they leverage third party
capital, either through the use of sidecars or
a top five player in the US market on the P&C
side; it is currently around 11th. On the life side,
it is number one. While its growth trajectory had
dipped a little in 2017, he believes potential rate
increases in the market will now help boost its
growth prospects further.
“It has been a win-win for us and for cedants
in the US. We have a very strong brand in the
rest of the world and an A+ rating, and new
clients will have no reinsurance recoverables with
SCOR. That makes us an attractive proposition,”
he said.
“Our growth had probably dipped into the
single digits after a few very strong years but we
expect that to accelerate again now.”
He said SCOR is targeting national insurers
to work with. While the SCOR group has strong
relationships with international insurers and its
US arm has good penetration into regional or
niche players, something of a gap exists in its US
client base between these two extremes.
“We are identifying clients we want to work
with and seeking growth in that way,” Jenkins
concluded. n
with retrocessional capacity behind them. Their
ability to do this could be severely reduced if
these investors back away from the market.
This is clearly a concern for some cedants
who, for the first time, have been asking Beazley
2 | PCI TODAY | DAY 3: Tuesday October 17 2017
Patrick Hartigan
Beazley seeks global rate hikes
of 5 to 10% for renewals
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Telephone:Reinsurance companies +are 44 becoming
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Email:and the attractions— john.of working walsh@with mortgage
grown substantially.
organisations such as Freddie Mac and Fannie
newtonmedia.“Since 2013, Freddie Mac’s co.She believes more growth is to come. “The
reinsurance
uk
goal is to get to 50,” she said. “On an annual
Mae in the credit risk transfer market, and many
risk transfer programme has increased in size
basis we plan to transfer approximately $2.5
are enjoying profitable growth on the back of this.
of achieve a cumulative risk transfer of just
billion of risk to the reinsurance market and
DIRECTOR
Gina Subramonian Healy, vice president of
over $5.5 billion across 20 transactions,” said
continue to offer a sustainable programme.”
credit risk transfer at Freddie Mac, said that since
Subramonian Healy. “The panel of reinsurance
She explained that Freddie Mac’s portfolio
the first transactions were done with reinsurers
participants has also increased from an initial
has approximately (Continued bottom of page 2)
Nicholas Lipinski
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DAY 3: Tuesday October 17 2017 | PCI TODAY |
SCOR targets a market
share in the US on a
par with its global status
SCOR is targeting becoming a topend
reinsurer in the US by size—an
achievement that would see it match its position
and market share globally—as it executes a
long-term plan that will boost its presence in
this market, Jean-Paul Conoscente, president
and CEO of SCOR’s US P&C operations, told
PCI Today.
Conoscente pointed out that while the
company is ranked among the top four or five
global reinsurers, it is ranked only #13 in the US.
He added that an important part of this plan was
a policy of deepening its relationships with its
clients in the US.
“The US is one of the main areas of
development for SCOR. We see a long-term
opportunity to grow our US business to be of
a similar size compared to our global business,”
Conoscente said.
He added that to achieve this, the company
plans to focus heavily on clients and their needs.
At present, he said, the company has around 250
clients in the US. SCOR is looking to deepen its
relationships with those clients, for instance, such
as by reinsuring them across multiple lines of
business in a coordinated way.
developed yet is nationwide carriers and insurers,
so we plan to target that segment next.”
Conoscente stressed that SCOR has been
targeting growth in this market in this way for
some time and will continue to do so. “This is
a long-term plan, it’s (Continued top of page 2)
Reinsurers writing US mortgage business tipped to double
what its gross and net positions are on certain
lines. Beazley is not highly leveraged, using only
some retrocessional coverage, but Hartigan said
this demonstrates the thought process buyers are
going through.
“If a reinsurer put down a $100 million line
last year and can now do only $20 million, that
is going to be a problem for clients. They will
have to go further afield to find the same level
of coverage.
“It is too early to predict how third party
capital will react, but some cedants are clearly
considering all possibilities,” he concluded. n