News


Tiering will continue to shrink P/C landscape: SCOR


S


COR’s leadership again emphasised the importance


of size in the reinsurance


market and the increasingly tiered nature of the landscape in its annual press conference in Monte Carlo this week. Denis Kessler, chief executive of SCOR, said


that he had foreseen the way the market would change several years ago and predicted that size would be increasingly important in the future. This prompted SCOR to embark on a strategy


to ensure it would be in this top tier, something Kessler said he is proud to have achieved. He said the recent upgrade of the company by Standard & Poor’s to AA-, matching Fitch’s upgrade to the same level in July, represented an important achievement for the group and reaffirms its strong financial position and dominant market presence. AM Best has also changed its A rating of SCOR to positive outlook. “That upgrade was a target for us and we


were delighted,” Kessler said. “We are very satisfied with our ratings, which we feel prove we are a tier 1 reinsurer. We said tiering would occur in the market several years ago at a time when the thinking was that the market would instead becoming increasingly commoditised. “That set us upon a strategy towards ensuring


we were in that elite tier 1 bracket. We were right about how the market would change and the


actions we took have worked for the company.” He said that SCOR predicted the current


wave of consolidation between what he dubs second and third tier players. He said it was becoming increasingly hard for smaller players to compete—and that once they had lost their place on an insurer’s panel, it was very difficult to regain it. “Once you are off a panel, it is very difficult to get back on,” he said. He also stressed the increased importance


of diversification under Solvency II, something it has also achieved, both through its geographical reach and growth on the life side of the business. He added that SCOR had turned Solvency II into an opportunity by helping its clients deal with its implications in terms of capital management and relief. Victor Peignet, the chief executive of SCOR


Global P&C, said that he sees the company’s future success as being based on its ability to adapt to the specific challenges of different markets. He gave specifics in terms of markets in which the company sees the greatest growth potential. China and India topped this list,


with


Peignet noting the potential of these markets as insurance penetration grows and they open up. They were followed by the US, which for largely historic reasons SCOR is underweight in. Peignet described SCOR’s very deliberate


IUMI calls for action to prevent cargo theft R


eacting to an alarming increase in cargo thefts globally, the International Union


of Marine Insurance (IUMI) has called for the introduction of a range of measures to help reverse this worrying trend. In a position paper published at the IUMI


conference in Berlin, the association points out that cargo theft is no longer confined to high- value goods and that online trading platforms are encouraging the crime. Håkan Nyström, a member of IUMI’s


political forum and the presenter of the position paper at the conference said: “There is a market for any kind of stolen goods and online platforms are making it easy to trade these products openly. The impact on the economy is huge.


Denis Kessler (top) and Victor Peignet


approach to growing its market share in the US, in which it has moved from targeting specialist players to more national and global players. He also stressed that in many markets where


it is already strong, the company leads a very high proportion of the business. Going back to the importance of being a tier


1 player, Kessler added that the gap between this top segment of players and the rest was growing. “The gap is widening; it is becoming more difficult to achieve,” he said. “The market could continue to evolve to a similar structure as we see in the life reinsurance space, where there are only half a dozen serious players worldwide.” n


WEDNESDAY 16.09.15


“Back in 2008 the EU estimated the annual


economic damage to Europe was €8.2 billion ($9.3 billion). This figure must be vastly increased today. Comparable numbers are not available for Africa, the Americas or Asia but we believe these regions are suffering in the same way.” Although IUMI applauds the preventive measures implemented the


already—including security standards being promoted by


the worldwide Transported Asset Protection Association (TAPA)—the organisation wants more action. Specifically, it has called for relevant national


authorities to develop and share an overview of cargo theft in their country; improved law enforcement


12 | MONTE CARLO TODAY | DAY 4: Wednesday September 16 2015 through transnational


coordination


and cooperation


between


countries and national police forces; the creation of special police units and specialised departments to deal with cargo crime; better monitoring of online platforms trading stolen cargo;


increased police presence in public


traffic areas; and the creation of a network of high-security truck parks. “We believe that many of these crimes are


highly organised, with goods being stolen to order,” said Nyström. “We recognise that resources are always limited, but introducing this package of measures would, in our view, significantly reduce cargo theft; enable marine and transport insurers to deliver an optimum service; and improve the business of global trade.” n


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