At the January reinsurance renewals SCOR grew its North America catastrophe risk book, seeing pricing as still attractive and also expecting other opportunities to deploy more capacity there this year, while the reinsurer also expanded its Risk Partnerships business where third-party capital partners participate.
As we reported, SCOR did report a competitive market in property risks but its CEO said that the company delivered “a positive outcome, combining growth with an adequate level of profitability,” at the January 2026 renewals.
During the analyst call after the results announcement, Léger explained, “In a more competitive environment, SCOR applied a disciplined underwriting approach to the January renewals. Our teams leverage SCOR’s tier one franchise to seek every profitable and diversifying opportunity to be added to our portfolio. As a result, we have been able to grow our business at still attractive prices and terms. Overall growth has been achieved in our target markets and with some core clients, where we profited from a flight to quality. We have faced headwinds in some specialty lines, but we stay confident in our ability to grow profitably in these lines of business in the mid and long term.”
Speaking about the nat cat market, the CEO said, “So SCOR has a pretty stark underweight position in the US in North America cat, and therefore that has been over the recent past, including in January, a growth area for us.
“Why is the prices have been declining. The demand has been up, right? And it’s always healthy to be in a more competitive environment, but the demand is still up. So it does actually help the price adequacy and the price quality.”
Léger continued to say, “We still see the nat cat in North America as adequately priced and if that remains so, we would cautiously, cautiously try to expand. So when we expand, we do it with targeted clients, where we have discussions over a year, sometimes or more, in how we gonna do that.
“What we’re not doing, we’re not just putting more capacity into the market, flooding the market with more capacity. We are really trying to have very targeted discussions with some core clients, and if rate adequacy remains more or less where it is now we would have a bit a bit more appetite.”
He went on to say, “However, I just want to make sure everyone understands, we are totally preparing for a market that might become even more competitive and we’re very clear where our hurdle rates are. When prices fall, in any line of business, below those hurdle rates we start to take action. So cycle management does not start until that level, but then it starts and we will be very disciplined in that.
“I’ve been long-enough in this industry to learn that in a soft cycle, it’s really first about avoiding mistakes, and secondly, you have to look at those hurdle rates and take action if needed.
“But personally, I expect us in North American cat to be above hurdle rates on some of the businesses, and I still believe there will be opportunities for us to expand.”
Jean-Paul Conoscente, Chief Executive Officer of SCOR Property & Casualty, also explained during the analyst call that SCOR’s retrocession arrangements are designed to help it achieve its catastrophe loss ratio targets, even as exposure increased.
Conoscente said, “On the cat ratio, on a gross basis, we increased our exposures at 1/1. The way we manage the cat ratio is through the optimisation on the retro side. So you know, our cat ratio is on a net basis, we have a plan going into the renewals and able to deliver on this plan, we buy our retrocession in accordance, and that’s why we are so confident of staying within the cat ratio budget of 10%.
“As I mentioned during the renewals, you know, if you look at individual perils, for example, in the US we expect the PMLs to go up compared to last year. And a number of perils, we expect the PMLs to go down compared to last year. But overall, the cat ratio will stay within the 10% budget.”
So SCOR is confident that despite growing into North American catastrophe risks in a softening market it can sustain its targets, with retrocession playing an important role in that.
During the call, SCOR’s CEO Léger also highlighted the Risk Partnerships business and its continued expansion.
SCOR’s Risk Partnerships business is where the company partners with third-party capital and retrocessionaires, with these activities targeted to drive a doubling of fee income in its latest strategic plan.
Over the last few years, SCOR has been transitioning from a pure risk carrier approach to one where risk partnerships are increasingly important to the company, tapping into third-party investor appetite both for retrocessional needs, as well as sharing risk premiums generated by its underwriting with risk partners.
These partnerships provide valuable capacity and also an additional source of fee income, monetising the groups expertise and franchise.
Léger explained during the call, “We have expanded in risk partnerships, supporting growth, helping manage the group’s risk exposures and generating additional fees. Future developments in this space will mainly depend on the P&C cycle and the effectiveness of new business.”
We feel it is important to note here that SCOR was one of the global reinsurance giants that grew its US nat cat premiums during the softening of the market through the early to mid 2010’s, so the trend is not unusual for the company as it feels it can capitalise on demand in a market where it has been underweight.
But, the strategy has changed somewhat since then, as well as the leadership of the company and the development of risk partnerships and use of third-party capital has increased over-time, which might give the reinsurer even more ability to seek out opportunities, for as long as it finds opportunities that continue to meet its return hurdles.
