SCOR Global P&C January 2019 renewal results
Victor Peignet
CEO of SCOR Global P&C
1
February 7, 2019
London
2
Disclaimer
General:
Numbers presented throughout this report may not add up precisely to the totals in the tables and text. Percentages and percent changes
are calculated on complete figures (including decimals); therefore the presentation might contain immaterial differences in sums and
percentages due to rounding.
Unless otherwise specified, the sources for the business ranking and market positions are internal.
Forward looking statements:
This presentation includes forward-looking statements and information about the objectives of SCOR, in particular, relating to its current
or future projects. These statements are sometimes identified by the use of the future tense or conditional mode, as well as terms such
as “estimate”, “believe”, “have the objective of”, “intend to”, “expect”, “result in”, “should” and other similar expressions. It should be noted
that the achievement of these objectives and forward-looking statements is dependent on the circumstances and facts that arise in the
future. Forward-looking statements and information about objectives may be affected by known and unknown risks, uncertainties and
other factors that may significantly alter the future results, performance and accomplishments planned or expected by SCOR. Information
regarding risks and uncertainties that may affect SCOR’s business is set forth in the 2017 reference document filed on February 23, 2018
under number D.18-0072 with the French Autorité des marchés financiers (AMF) and posted on SCOR’s website www.scor.com, as may
be updated in the 2018 reference document.
In addition, such forward-looking statements are not “profit forecasts” in the sense of Article 2 of Regulation (EC) 809/2004.
Financial information:
All figures in this presentation are unaudited unless otherwise specified.
Unless otherwise specified, all figures are presented in Euros.
Any figures for a period subsequent to 30 September 2018 should not be taken as a forecast of the expected financials for these periods.
All definitions can be found in the appendix.
All figures are at constant exchange rates as at December 31, 2018 unless otherwise specified.
All figures are based on available information as at January 22, 2019 unless otherwise specified.
SCOR materially grew P&C gross reinsurance premiums by 9.7%1) at the January renewal with better
prices and stable profitability
− Stronger client relationships in both non-proportional treaties and proportional business. Largest
growth in USA, in line with “Vision in Action”.
− Risk-adjusted price is up 1.3% overall. Price improvements achieved across markets, 1.8% in non-
proportional and 1.2% in proportional treaties.
− Expected profitability is stable, both in terms of return on risk-adjusted capital and technical
profitability (loss ratio + commission ratio). Portfolio management actions2) have improved the
technical profitability by ~0.2% and the return on risk-adjusted capital by ~0.4%.
SCOR’s P&C Specialty insurance businesses are benefitting from improved insurance conditions
− SCOR Business Solutions: volume momentum and clear inflection points in most lines and regions
− MGA: improved expected profitability but premium down slightly (-5%) due to portfolio management
actions
− Channel: continued progress on operationalizing SCOR’s London Market platform with continued
portfolio management actions
The outcome of these renewals is in line with the September 2018 IR Day update at 5%-8% p.a. of the
“Vision in Action” strategic plan growth assumption for SCOR Global P&C
Summary: Sound premium growth with stable expected profitability in a
market characterized by supportive price trends
31) Growth rate excludes MGAs, Alternative Solutions, SCOR Business Solutions and Lloyd’s business2) Portfolio management actions refers to deliberate share variations, deliberate cancellations and/or new business written
About two-thirds of SCOR’s P&C reinsurance premium renews at 1/1
Estimated total 2018 UW Year premiums
1) SUL = SCOR Underwriting Limited, SCOR’s capital provision business at Lloyd’s2) Reinsurance treaties include the annual premium of Alternative Solutions business line. All subsequent slides exclude Alternative
solutions business for 2019 4
▐ In EUR billions
4.6
0.3
0.8
0.4
0.4
Reinsurance
Treaties2)
of which 64%
renews at 1/1
(EUR 2.9bn)
MGAs
Business Solutions
Channel Syndicate
SUL1)
Reinsurance
Specialty
Insurance
86%
46%57%
14%
54%43%
EMEA Americas Asia-Pacific
Rest of the
year renewals
January
renewals
Reinsurance treaty renewal seasonality
6.5
2%
2%
1%
-1%
0%
-1%
-1%
3%
7%
1%
-3%
-1%
0%
3%
3%
-3%
-3%
-2%
0%
0%
2%
Price improvement and premium growth continued in January 2019 renewals
Reinsurance price change1) Reinsurance renewal growth2)
5
2012
2019
2012
2018
January
renewals
April
renewals
June-July
renewals
Portfolio management:
grow when prices are
strong; reduce on lines
or programs where
pricing does not meet
hurdles
Stability:
less pricing
volatility than
the market
5%
5%
23%
9%
5%
3%
14%
9%
2%
2%
6%
5%
4%
10%3)
11%
6%
5%
14%
24%
8%
24%4)
14%5)
2012
2018
0%
1) As published. Year-on-year price changes on a comparable basis2) As published. Year-on-year renewal growth at constant exchange rates,
e.g., 2012 growth computed with December 31, 2011, exchange rates and comparable basis. Hence different from annual premium growth. Includes MGA business, except for 2019.
3) Without specific large deal the growth would have been ~8%4) Without specific large deals the growth would have been ~14%5) Without specific large deals the growth would have been ~4%
21882370
735-117 -17
25
191130 71
836
Premium upfor renewal
Cancelled Sharevariation
Restructured Underlyingvolume x
pricechanges
Newbusiness
with existingclients
New clients RenewedPremium
-4% -1% +1% +7% +2%+4%
Change
in %
6
SCOR grew P&C reinsurance premium by 9.7% primarily through growth
with existing clients, with portfolio actions to improve the overall profitability
3)
1) Global lines include: Agriculture, Aviation, Credit & Surety, Inherent Defects Insurance, Engineering, Marine and Offshore, Space, Cyber and Motor Extended Warranty
2) P&C lines include: Property, Property Cat, Casualty, Motor & other related lines (Pers. Insurance, Nuclear, Terrorism, Special Risks & Inwards retro)3) Cancelled business and Share variations include portfolio management actions. Portfolio management actions are deliberate share variations,
deliberate cancellations and/or new business written
Global Lines1)
P&C Lines
composed of:
EMEA 49%
Americas 34%
Asia-Pacific 17%
composed of
EMEA 48%
Americas 37%
Asia-Pacific 15%
2 923
3 206
+9.7%
▐ Gross premiums in EUR millions
3)
+13.7%
+8.3%P&C Lines2)
without a large deal the
growth would have been 8%
Of which:▪ Positive : 117m▪ Negative: -93m
Of which:▪ Positive : +187m▪ Negative : -204m
Proportional(1.2%; 8.7%)
Non Proportional
(1.8%; 11.7%)
0%
2%
4%
6%
8%
10%
12%
14%
0% 1% 2%
Reinsurance price and premium changes year on year
7
SCOR Global P&C secured price & premium improvements both in
proportional and non proportional
Non Proportional rates improved
− Lines most impacted by losses
displayed largest improvements:
Marine, Casualty and Auto
Proportional renewals were driven by
increases in large whole-account
programs
Cat pricing was broadly flat
− Most of the loss affected programs
renew later in the year
▐ In %
SC
OR
Pre
miu
m C
ha
ng
e
SCOR Price Change on Risk-adjusted Basis
(price; premium)
Note: SCOR Price monitoring only considers contracts renewing without any change in structure.
Reinsurance price and premium changes year on year
8
SCOR Global P&C grew with improving Americas trends, while selectively
growing in challenging EMEA markets, maintaining positions in China and
growing in the rest of APAC
Americas: SCOR Global P&C pursuing
strong profitable growth across all lines
despite flat Cat environment:
− Non Prop rates +4.8%
− Improved non Cat Property (+4.8%)
and US casualty (+3.6%)
EMEA: selective growth with existing
clients
− Prices driven by primary rates
(+1.7%)
APAC ~flat driven by China
− Portfolio management actions in
China
▐ In %
SC
OR
Pre
miu
m C
ha
ng
e
EMEA(1.2%; 6.7%)
Americas(3.4%; 20.5%)
China(-1.3%; -0.3%)
APAC excl. China(-0.2%; 7.8%)
APAC(-1.0%; 2.3%)
-1%
5%
10%
15%
20%
-2% -1% 0% 1% 2% 3% 4%
(price; premium)
Note: SCOR Price monitoring only considers contracts renewing without any change in structure.
SCOR Price Change on Risk-adjusted Basis
Agriculture(0.0%; 22.7%)
Property Prop(2.0%; 4.3%)
Property Cat(-0.3%; 15.0%)
Credit & Surety(-1.3%; 16.0%)
Motor(-0.1%; 2.4%)
Marine & Offshore(1.7%; 3.5%)
Engineering(1.5%; 6.0%)
IDI(1.5%; 6.5%)
Casualty(3.0%; 8.8%)
Aviation(2.8%; 9.1%)
0%
10%
20%
-2% 0% 2% 4%
Reinsurance price and premium changes year on year
9
SCOR Global P&C grew broadly while improving pricing and conducting
portfolio management actions
▐ In %
SC
OR
Pre
miu
m C
ha
ng
e
SCOR Price Change on Risk-adjusted Basis
(price; premium)
Note: SCOR Price monitoring only considers contracts renewing without any change in structure.
Bubble size proportional to premium renewed
in progress
10
SCOR’s Specialty Insurance performed well thanks to strong SBS growth
and MGAs portfolio management
SBS
MGAs
(USA)
Channel
Main lines1)Renewed
Premium
(EUR millions)YOY Δ
Property Non Energy 139 +17%
Property Energy 81 +14%
Casualty 61 +14%
Offshore 20 +12%
Winning new business and growing in all lines
Positive price movements in most lines and regions
Premium growth1): +18%
Slight reduction of premium (-5%) with improved
expected profitability at January 2019 renewals
Portfolio management: Growing with select partners
and shedding low-performing business
Expected technical profitability improved by 6
percentage points
Estimated premium growth over Q43): +5% (excluding lines in run-off – Marine, Accident & Health, and Financial
Institutions)
Underwriting and operational alignment underway with formation of the London Platform. Service company
approval received which will help geographical expansion notably in EIL4) and PCR4)
Portfolio management actions in other lines of business
▐ In %
-15%
-10%
-5%
0%
5%
10%
FY
'09
FY
'10
FY
'11
FY
'12
FY
'13
FY
'14
FY
'15
FY
'16
FY
'17
FY
'18
SBS price trends improving2)
Property
Non Energy
Property
Energy
Offshore
Casualty
1) Sample of analyzed contracts with an inception date from October 1, 2018 to January 1, 2019, underwriting year basis
2) Weighted average annual pricing change of the SBS renewed portfolio, FY18 includes January 1, 2019, renewals
3) Sample of analyzed contracts with an inception date from October 1, 2018 to January 10, 2019.
4) EIL stands for Environmental Impairment Liability; PCR stands for Political and Credit Risks.
All figures based on available information as at January 25, 2019. SBS stands for SCOR Business Solutions; Channel stands for The Channel Syndicate.
91
95
95
136
163
195
219
245
260
267
295
366
778
91
84
94
131
137
181
222
223
242
261
265
367
626
Eastern Europe
Latam and Caribbean
Canada
Northern Europe
Italy
APAC excl. China
Other Western Europe
UK & Ireland
MEA
Germany
France
China
USA +24%
0%
+11%
+2%
+8%
+10%
-1%
+8%
+20%
+4%
+1%
+13%
0%
1) Other Western Europe: Austria, Cyprus, Greece, Malta, Portugal, Spain, Switzerland2) Northern Europe: Belgium, Luxembourg, The Netherlands, Sweden, Denmark, Norway, Finland, Iceland3) Eastern Europe: Albania, Bosnia, Bulgaria, C.I.S., Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro,
Poland, Romania, Serbia, Slovakia, Slovenia
11
SCOR Global P&C’s reinsurance gross premium – By geography
▐ Gross premiums in EUR millions
Up for renewal
Renewed business
11
By Geography
1)
2)
3)
Key Client Management
approach allowed us to seize
opportunities to grow profitably
with existing US clients on new
and existing programs
82
99
95
113
103
312
77
94
91
92
94
268
IDI
Engineering
Marine &Offshore
Agriculture
Aviation(includ. Spaceand GAUM)
Credit & Surety
54
110
138
158
292
298
118
477
847
51
111
139
120
259
286
96
414
812
Others
Casualty NP
Motor NP
Property NPW
Casualty P
Motor P
o/w US CAT
Property Cat
Property P
+24%
By line of business
1) Position of the Agriculture renewals as at January 22, 20192) Includes Personal Accident, Special Risks, Workers’ Compensation, Nuclear Pools, Terrorism Standalone, Motor Extended Warranty and Inwards retrocession 12
SCOR Global P&C’s reinsurance gross premium – By line of business
▐ Gross premiums in EUR millions
+16%
+9%
1)
Up for renewal
Renewed business
in progress
2)
+4%
+15%
+4%
+13%
-1%
0%
+6%
+3%
+6%
+7%
+32%
Cancelled/restructured: client or SCOR decided to cancel the business/programs and/or to change their programs (e.g.
from proportional to Non-Proportional)
EMEA: Europe, Middle East & Africa
IDI: Inherent Defects Insurance (Decennial)
LoB: Line of Business
MGA business: business done with Managing General Agents / Managing General Underwriters (MGA/MGU)
New business with existing clients: existing client decided to place new business/programs with SCOR (i.e. new to SCOR
or new as such) and/or to change their programmes (e.g. from Proportional to Non-Proportional)
Price change: “price change” defined as movement in price per unit of exposure. Therefore for most products, where the
exposure unit is a monetary amount, the price movement is net of general inflation. By definition, changes in commissions are
not considered as price changes. All percentages based on weighted averages per segment and overall on premium volume.
Share variation: client or SCOR decided to reduce or increase the share participation (e.g. SCOR increases share with client
X from 10% to 20%)
Underlying volume x price changes: combined effect of variations in underlying primary volume, in exposures and/or in
rates (= ceded EGPI change for existing clients)
Underwriting Ratio: on an underwriting year basis, the sum of the gross loss ratio and the acquisition cost ratio (cedant's
commission and brokerage ratios). Administration costs must be added to get the Combined Ratio
2017 Underwriting year premiums: SCOR Global P&C premiums for contracts incepting between January 2017 and
December 2017, expressed at December 31, 2017 closing exchange rates
13
Definitions