Commenting on January renewals, French reinsurer SCOR said it reached its objective of successfully consolidating two strong independent reinsurance groups–SCOR and Converium–into one franchise.
The results show that the "integration of Converium and SCOR is well underway," Denis Kessler, chairman and chief executive officer of SCOR, said in a conference call Wednesday. "Exactly one year afterward we bring the proof of what we said" in February 2007.
Mr. Kessler said: "In today's challenging market environment, it is an outstanding achievement that SCOR has managed to integrate Converium and combine the portfolios for the January renewals with such limited attrition, while having fully followed its underwriting policy in terms of selectivity and profitability."
SCOR said that making the one-year anniversary of the January treaty renewals for its Global P&C–when 78 percent of the total non-life treaty premiums were up for renewal–confirmed its strong market position internationally.
Highlights of the renewals include:
? Strong pro-forma 2007 business volume of an estimated $8.5 billion for the group.
? Efficient integration of SCOR and Converium portfolios
? Enhancement of market positions and extended leadership of reinsurance programs
? Non-life treaty business amounting to $?2.5 billion renewed against $2.5 billion up for renewal at constant exchange rates
? Terms and conditions of renewed and new business in line with the net technical ratio objective for 2008
? Estimated 2008 gross premium income of $4.5 billion in non-life and $8.6 billion for the group. In 2006, gross written premium was $4.2 billion, according to the 2006 financial statement.
SCOR said that in a post-merger environment, the main underlying reasons for such outstanding renewals were: two very strong complementary reinsurers combining forces; an efficient and swift integration process with regard to teams and systems; access to new business with existing clients; enlargement of client base; strict underwriting discipline and tight controls applied throughout the renewals; and 12 percent of the non-life treaty business up for renewal cancelled and successfully replaced by new business.
SCOR said it experienced a very limited decrease of 1 percent in its non-life treaty reinsurance volume, despite a competitive market environment, where reinsurance volumes and prices sustained a general contained decline due to increased cedant retention levels and a move toward nonproportional cover.
The total volume of treaty premiums renewed at January 2008 stands at around $2.5 million (property-casualty treaties and specialty treaties) plus around $655 million from joint-ventures and partnerships.
Seventy-nine percent of p-c treaty business was up for renewal. The total volume of premiums renewed at Jan. 1, 2008 stands at around $1.8 million, compared to $1.9 million of premiums up for renewal, the company said.
Twelve percent, or $240 million, of p-c treaty business up for renewal was cancelled and successfully replaced by new business, both with existing clients to the value of around $139 million and with new clients to the value of around $71.3 million, SCOR said.
SCOR said it successfully secured business continuity with the three Converium joint-ventures and partnerships–i.e. Lloyd's, GAUM (Global Aerospace Underwriting Managers Limited) and MDU (Medical Defence Union).
For 2008, SCOR estimated that gross written premiums from this segment will amount to $664.5 million.
SCOR reported stable development in all major p-c treaty markets. In the Americas, SCOR said its growth in small and medium-sized U.S. regional company business outweighed the premium decline due to the move from proportional to nonproportional business in this market.
This growth is particularly meaningful as it occurs in the p-c treaty segment of choice for SCOR in the U.S. mainland market.
The company said this was offset by slightly reduced volumes in Canada, because of changes in reinsurance purchase practices by major players and due to mergers and acquisitions.
In the Caribbean, Mexico and Latin America, premium income decreased by around 7 percent, in line with SCOR's reduction of its catastrophe capacity allocation to this region, the insurer said.
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