News
News
26.10.11 WEDNESDAY
Tough lessons learned formed ‘resilient’ SCOR
Trying times endured by French reinsurer SCOR in the middle of the last decade have left it well placed to weather the current economic crisis.
The volatile and uncertain market condi- tions in Europe have presented the company with the opportunity to show the strength of its risk management capabilities – systems ini- tially implemented as a reaction to the series of downgrades and doubts about its future it endured in 2002-2003. “We view the current crisis in Europe as an
opportunity to test and prove our resilience,” Peignet says. “Since we resurfaced in 2005 and got our ‘A’ rating back, the external envi- ronment has tested us on three or four occa- sion. But we have always been able to deliver to shareholders and clients throughout that period as per our successive plans, without causing any bad surprises. Circumstances in Europe now once again give us the opportu- nity to prove the solidity of both sides of the balance sheet.” As the euro-zone grapples with a sovereign
debt crisis, a concern for many reinsurers is the threat posed by potential losses on the asset-side of their balance sheets. But Peignet says SCOR has no such worries having taken steps several years ago to de-risk its investment portfolio. “If you look at the composition of our in-
Victor Peignet, SCOR S
ome tough lessons learned at the beginning of the last decade have left SCOR well
positioned to cope with the many challenges facing the market now. That is the view of Victor Peignet, chief executive
officer of SCOR’s
Global Property/Casualty business, who says the French reinsurer is now more resilient than ever after the tough times it endured.
vestment portfolio, I wouldn’t say that we saw the euro-zone crisis coming, but we certainly feared something might happen as early as 2008,” he says. “As a result, we cleaned our book of risky debt instruments, particularly from countries such as Greece, Iceland, Ire- land, Italy Portugal and Spain.” Peignet says the question now is not ‘if ’ the
crisis will finally come to a head but ‘when’ and what the fallout will be. “When the crisis finally
bursts, the question is how it will evolve. We believe that when the denouement finally oc- curs, our clients will appreciate the difference SCOR brings thanks to its European knowl- edge, conservative investment approach and the strengthening we have done since 2005.” Peignet believes that in today’s investment
environment, in which decent returns are dif- ficult to achieve, clients will reward those firms that take a responsible and pragmatic view of what is achievable and plans ahead. “Our approach can be characterised by
what some might call ‘reasonable pessimism’. It is important when running a company to plan for all eventualities. That way, when issues do arise, you will have already analysed and deter- mined an approach. By doing this we can com- municate the rationale behind our decisions and provide clarity to our clients. This means that there are no surprises behind our decisions and trust is maintained.” Peignet also believes SCOR maintains a
strong position in the European market in oth- er ways. Some European reinsurers have be- moaned the extra competition in the European market of late since the emergence of Zurich as a reinsurance hub and the arrival of numerous players from Bermuda and the London market. But Peignet says that he does not view these
entrants as a threat. “Rather it is recognition that a global, multi-domestic approach is need- ed – an approach that SCOR itself employs,” he says. Peignet adds that few entrants have a presence in European geographies beyond Zu- rich and are therefore unable to access the same level of business SCOR enjoys.
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Wednesday October 26 2010 | INTELLIGENT INSURER —BADEN-BADEN TODAY | 19
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