While the significant losses related to the California wildfires will impact the June/July reinsurance treaty renewals, they are not expected to be a major factor dictating SCOR’s overall price adjustments across its book of business, according to CEO Jean-Paul Conoscente.
He stated: “The California wildfire payback will impact the June/July reinsurance treaty renewals, and I think you’ll probably see this in the overall price increase or decrease we’ll have across the entire book because there’ll be more loss effective programs renewing.
“But, for SCOR, it won’t be a major driver of the overall price increase or decrease we have across the book.”
Despite the $50 billion in losses from the California wildfires estimated this year, with approximately $20 billion ceded to the reinsurance market, reinsurance rates have softened so far in 2025, a trend that may well continue despite one of the biggest cat losses hitting the US.
The amount of capital in the reinsurance market has been highlighted, with good results in ‘23 and ‘24 for reinsurers, and new investors wanting to support perils.
Conoscente expects similar market trends in the upcoming June/July renewals to the ones seen in April, although, with more loss affected US cat programs renewing.
The April renewals were similar to the trends seen in January, characterised by increased competition and softening prices, particularly in the property cat space, and to a lesser extent in speciality lines.
Conoscente highlighted that rate adequacy remains strong across most business lines, with reinsurance terms and conditions generally stable. In this environment, the reinsurer is maintaining its P&C strategy, growing strategically in preferred lines.
Its portfolio’s overall price, and net technical profitability remains stable year to date compared to 2024.
“Year-To-date growth stands at 9% versus 2024. A strong franchise gives us access to a wide range of opportunities enabling us to remain selective and grow over rate adequacy remains attractive. We have maintained a prudent approach to climate exposed business. The Los Angeles wildfires and the active tornado Hill losses in Q1 are a reminder of the impact of climate sensitive perils,” Conoscente stated.
He continued: “However, their impact on April renewals was limited to loss-affected US programs only. Pricing pressure continued on loss free programs which often renewed at minus 10%, to minus 15%, the risk adjusted rate on lines compared to 2024 prices. Lost affected layers renewed at risk adjusted rate online increases of plus 10% to plus 15%.”
The CEO concluded: “We have also maintained a selective approach to US casualty. Lost Trends, inflation and nuclear verdicts continue to be the focus of renewal discussions.
“Although we have seen improvements in the primary underwriting from many of our clients, we do not believe there is still sufficient accumulated rate to catch up with past lost trends and lost cost inflation. In addition, reinsurance terms and conditions have remained broadly stable, thereby providing insufficient margins to reinsurers.”
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