SCOR targets US P/C growth
SCOR has successfully delivered on
its ‘Vision in Action’ targets on a
normalised basis—profitability and
solvency—and has ambitions for expansion
with “growth assumptions in the range of
4 to 7 percent on a premium basis” for its
new ‘Quantum Leap’ strategic plan, Frieder
Knuepling, chief risk officer at SCOR, told
Monte Carlo Today.
“We are quite clear in emphasising that
we have two objectives: profitability and
solvency. That’s something we’ve been doing
“We have a commitment to our
shareholders in terms of profit that we want
to generate,” Knuepling said.
To achieve this, he said, SCOR models
potential outcomes of the developments over
the next couple of years, then the reinsurer
makes assumptions as it plots them on
growth and pricing.
“Our growth assumptions are in the range
of 4 to 7 percent on a premium basis on the
plan horizon,” he said.
“We believe we have good opportunities
for profitable growth, on the life and P&C
“Starting with P&C, we have been
historically been underweight in the US, but
we continue to grow more quickly in the US
“Most of the growth on the P&C side will
continue to come from the US, where we have
firmed up our position.
“SCOR is recognised as a very well rated
company with a strong, clean balance sheet
for many of its cedants, with a very high
diversification profile,” Knuepling explained.
“We can continue to grow in a selective
way and where we believe the balance between
risk and return works out well.
“We believe there are some pockets of
US casualty business which we can grow
profitably. We’ve been quite underweight in
this area, we allocate capital to this and the
risk:return metrics work well. It’s diversifying
well with our other exposures.
“We have more short-tail nat cat exposure
on the P&C side and generally growing
our P&C business results in diversification
benefits because currently our life business is
a little more than 50 percent of our business,
and we like to keep a good balance between
“We are underexposed to market and credit
risks. Generally, we believe we can generate
more value by allocating our resources to our
areas of our reinsurance expertise.” l
Climate change challenges the use of historical data
The world’s changing climate calls
into question the usefulness of
historical data and raises the need
for increasingly technological data solutions,
Stephen Netherway, partner at Devonshires
law firm told Monte Carlo Today.
“It’s not just that there might be new
climate change risks, but also how often these
risks occur,” Netherway said.
“If the world is changing, there is an issue
around the impact that has on the integrity of
old data; you want to model data historically
to get some prediction for the future but the
environment has changed.
“External factors are now at play that were
not there 20 or 30 years ago, so can you really
model using data from that long ago?”
He said it is necessary for carriers to make
significant insurtech investments to stay on
top of data and remain relevant in the market.
“You’re going to need a big capital
investment, but there is a lot of capital flying
around and I don’t see that changing,” he
“Capital will continue to flood in—that
means you have the dampening effect on
pricing but you also have the ability to raise
capital and finance and manage all these
heavy investment costs.”
A flipside of technological advancement
is growing demand for cyber risk coverage,
and Netherway believes the industry faces
a challenge around accurately identifying
rapidly evolving risks.
“People know they have to be very clear
about where the exposures are,” he said.
“When cyber first came along you could
see it emerging in areas that people didn’t
understand. The market will want to be very
clear about what they are, or are not, picking
up. One of the issues with cyber is expectation
Discussing other important themes in
the market, he said that Lloyd’s needs to
reorganise and reduce costs.
“It’s all about staying relevant—they have
to do what they have done periodically and
restructure,” he concluded. l
Monte Carlo Today Day 4 Wednesday September 11 2019
assumptions are in
the range of 4 to 7 percent
on a premium
they have to be very
clear about where the