Scor plans AI-driven property cat push

SCOR has revealed plans to grow its property catastrophe portfolio with the support of artificial intelligence tools.

But executives at the Paris-based company insisted they will not bow to pressure to loosen terms and conditions as brokers ramp up pressure to restructure programmes.

Speaking at the Rendez-vous de Septembre, Scor executives said the company was currently “underweight” in property catastrophe business and that rates in the line remained “very adequate” — despite recent price reductions.

While rates are expected to fall at the January 1 renewals, provided these reductions are “modest”, then Scor would deploy more capital to this class, Scor P&C chief executive John-Paul Conoscente said.

Conoscente said the company will use AI to support its expansion in property catastrophe. “We believe augmented underwriting using AI can be very effective, and we plan to start deploying that at 1/1/2027 to optimise our capital deployment across the different geographies,” he said.

Scor’s catastrophe-exposed property portfolio currently represents around 10% of its overall P&C premium.

Responding to a question from Insurance Day, Conoscente said the company would be “firm” on terms and conditions. “For us, terms and conditions are almost more important as price,” he said. “It’s an area that we’re very focused on maintaining and protecting as much as possible.”

Ahead of the conference, brokers said they would put pressure on reinsurers to expand coverage, saying the sector’s excess capital presented a unique opportunity for cedants to expand and restructure their reinsurance programmes.

But other reinsurers said they would resist significant changes to programme structures.

Andy Hottinger, chief underwriting officer for international property/casualty at MS Re, told Insurance Day he did not expect to see large structural changes in the reinsurer’s property portfolio this year.

Hottinger said MS Re is open to considering structural adjustments where there was a clear, long-term rational, but the reinsurer would not hand out a “free pass”. Compared to the US, attachment points in Europe were already low, he added.

“There is both willingness and capacity and availability to work closely with our clients to reach their goals, as long as we can align with it,” he said.

Munich Re board of management member Stefan Golling told reporters that he did not expect the market to return to the “naïve” underwriting practices seen in the years before the 2023 renewal season.

But he warned the industry not to be complacent on property catastrophe business adding that pricing was falling below profitability thresholds in some segments.

Golling said the recent absence of a major nature catastrophe event, such as a hurricane or earthquake, had increased the risk appetite for property catastrophe business, but global insured losses still passed the $100bn mark for the sixth consecutive year.

“We should not mistake recent experience for a stable new norm. Once peak perils events occur again — and this will happen — annually insured losses will easily exceed the $150bn mark, the $200bn mark, or even bigger amounts,” Golling said.

Last week, modelling firm Verisk warned the re/insurance industry should be prepared for an annual average insured catastrophe loss of $171bn.