Major reinsurer SCOR has revealed its cost estimate for natural catastrophes in the fourth quarter of 2019, and suggests it is ready in case actual numbers turn out to be higher.
“The fourth quarter of 2019 has registered a high severity of natural catastrophe events worldwide, in particular coming from typhoons in Japan,” noted the Paris-headquartered group. “SCOR estimates the cost of Japanese typhoon Hagibis at €227 million (around SG$345.6 million) after retrocession and before tax based upon cedants’ information and assuming an insured market loss in the region of US$8 billion (around SG$11.09 billion).
“Our efficient retro program would allow SCOR to materially dampen the increase in the loss, should Hagibis deviate beyond our current estimate of market loss assumption.”
Meanwhile, for full-year 2019, SCOR Global P&C (property and casualty) expects to record an actual net combined ratio below 100% including natural catastrophe costs, citing the company’s efficient capital shield policy.
“As the reinsurance market did not fully react to loss perspectives as we had initially anticipated, SCOR maintains a disciplined underwriting approach as evidenced during the January 2020 renewals,” noted SCOR Global P&C chief executive Jean-Paul Conoscente.
“Despite plentiful reinsurance capacity, persistently low interest rates, and upward expected losses, SCOR significantly improves its P&C profitability, while accompanying the growth of its key reinsurance clients.”
Conoscente added: “Thanks to its specialty insurance arm, SCOR leverages further the hardening witnessed in commercial lines, expected to continue throughout the year.
“Given that the January 2020 renewals are focused on EMEA (Europe, the Middle East, and Africa) with benign loss experience, we expect more pronounced favourable market conditions through the spring/summer 2020 renewals and maintain our ‘Quantum Leap’ assumptions for the duration of the plan.”
SCOR Global P&C’s gross written premium grew 15.8%, at current exchange rates, to €7.1 billion (around SG$10.8 billion) in the full financial year 2019.