26 April 2012
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Investor Relations Director
Thanks to its very favourable positioning, SCOR Global P&C records a premium increase of 11% and a pricing increase of 7% during the 1 April 2012 renewals
In fragmented market conditions, SCOR continues to apply the profitability criteria defined in its strategic plan Strong Momentum V1.1., and pursues its policy of strict underwriting and prudent pricing in its various lines of business.
SCOR Global P&C (SGPC) records growth of 11% at constant exchange rates from the EUR 328 million of premiums up for renewal at 1 April 2012, with no increase in exposure to natural catastrophes. During these renewals, SGPC has continued to actively manage its risk portfolio, enabling it to achieve an average weighted price increase of 7% whilst reinforcing the quality of its portfolios: 7% of the business up for renewal has been cancelled or restructured.
The global pricing increase of around 7% benefits from the trends observed in natural catastrophes (+17%), particularly in Asia (+19%) and to a lesser degree in the United States (+ 10%), regions in which most of the nat cat premiums renewed in April are concentrated. The expected profitability of business renewed in April, measured by projections of the combined ratio and returns on allocated capital, is up sharply for both Non-life and Specialty treaties, with an improvement of around 2.5 points on each of the two ratios compared to the same projections made during the renewals of April 2011.
The premiums up for renewal, which represent around 11% of the total annual volume of treaty premiums, were distributed between treaties (69%) and Specialty treaties (31%) in three geographic areas: Asia (70%), Americas (22%) and EMEA (8%).
On a business line level, the main developments of the 1 April 2012 renewals are as follows:
This increase in the volumes underwritten and in prices is mainly linked to renewals in Asia, and more specifically in Japan and India. These two countries represent three quarters of the treaty premiums renewed at 1 April 2012, and each records growth of 25%. Premiums underwritten in Asia benefit from sharp price increases and significant improvements to coverage conditions, in both direct insurance and reinsurance.
In the Americas, the volume of premiums underwritten is down by 9%. This change is due to contrasting trends, between strong growth in Latin America (+16%) and a significant decline in the United States (- 23%, although this relates to a limited premium volume of EUR 31 million), where SGPC has reduced its exposure in certain lines of business that no longer offer the levels of profitability expected. Finally, SCOR achieves growth of 26% in EMEA, benefitting from pricing conditions up by 3.8% and expanding its business franchise with new cedants.
In Specialty Treaties: SGPC has chosen not to renew certain contracts, concentrating instead on improving the profitability of its portfolio, which remains stable in terms of volume and price. The fall in volumes in both Credit & Surety (- 6%) and in Agriculture is due to a small number of treaties. The Marine and Construction business lines, which benefit from more satisfactory pricing conditions, record growth of 17.1% and 13.2% respectively.
Victor Peignet, CEO of SCOR Global P&C, comments: "These excellent renewals bear witness to SCOR's ability to pursue its policy of strict underwriting and active portfolio management, whilst remaining a long-term partner for its clients. Although 2011 was marked by unprecedented losses in Asia-Pacific, this momentum has been made possible by the Group's strong franchise and the quality of its client relationships. Over the first three months of 2012, SCOR records growth of 12.8% and an average pricing increase of around 3% compared to the 1st quarter 2011, in line with the objectives of Strong Momentum V1.1".
SCOR does not communicate "profit forecasts" in the sense of Article 2 of (EC) Regulation n°809/2004 of the European Commission. Thus, any forward-.looking statements contained in this communication should not be held as corresponding to such profit forecasts. Information in this communication may include "forward-looking statements", including but not limited to statements that are predictions of or indicate future events, trends, plans or objectives, based on certain assumptions and include any statement which does not directly relate to a historical fact or current fact. Forward-looking statements are typically identified by words or phrases such as, without limitation, "anticipate", "assume", "believe", "continue", "estimate", "expect", "foresee", "intend", "may increase" and "may fluctuate" and similar expressions or by future or conditional verbs such as, without limitations, "will", "should", "would" and "could." Undue reliance should not be placed on such statements, because, by their nature, they are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, on the one hand, to differ from any results expressed or implied by the present communication, on the other hand.
Please refer to SCOR's Document de référence filed with the AMF on 8 March 2012 under number D.12-0140 (the "Document de référence"), for a description of certain important factors, risks and uncertainties that may affect the business of the SCOR Group. As a result of the extreme and unprecedented volatility and disruption of the current global financial crisis, SCOR is exposed to significant financial, capital market and other risks, including movements in interest rates, credit spreads, equity prices, and currency movements, changes in rating agency policies or practices, and the lowering or loss of financial strength or other ratings.
The Group's financial information is prepared on the basis of IFRS and interpretations issued and approved by the European Union. This financial information does not constitute a set of financial statements for an interim period as defined by IAS 34 "Interim Financial Reporting".
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