``International reinsurers have taken a cautious stance & we have not seen an increase in competition in an already competitive Indian market''
French major SCOR has set up its reinsurance branch in India. Outlining the company's Indian strategies, in an exclusive interview with Asia Insurance Post, he says, this is an exciting time for (re)insurers in Asia and in India in particular, with rapidly expanding markets and an extremely dynamic environment.We expect the P&C Indian insurance and reinsurance markets to continue growing at a pace of 15 pc per annum in the medium to long term. Edited Excerpts
Now that you have set up branch operations, what are your plans for the Indian market?
Receiving the R3 authorization from the IRDAI to establish a SCOR branch in India marks a milestone for the Group in terms of solidifying its presence in the country, where it has enjoyed strong business relationships for many years. SCOR has been writing business with Indian clients since 1973, having opened a liaison office in India in 2005.
The establishment of a SCOR branch in 2016 demonstrates the Group’s commitment to the Indian market and to the continued provision of services to its clients in the country.
We aim at consistency and continuity in our relationships with our clients, for the benefit of all parties. These are values that we not only promote, but practice daily and globally with all our clients and business partners. They have been fundamental tothe commercial success of our operations worldwide.
How do you see insurance and reinsurance markets in India? What kind of growth do you expect in the next few years in these market? What are the challenges in the Indian market and what needs to be done?
This is an exciting time for (re)insurers in Asia and in India in particular, with rapidly expanding markets and an extremely dynamic environment.We expect the P&C Indian insurance and reinsurance marketsto continue growing at a pace of c. 15% per annum in the medium to long term.It is our duty, as insurers and reinsurers, to push back the frontiers of insurability, whether in terms of emerging risks or with regard to bridging the protection gap.Pricing is still a challenge in India, however we anticipate market correction driven by a reduction in investment income and the potential listing of insurance companies.
How do you see the Indian reinsurance regulations now?
The Indian Reinsurance regulations are evolving. The Regulator has recently constituted a committee to review the regulatory framework for reinsurance and make appropriate recommendations. Hopefully, this will benefit all the reinsurers who have established branch offices in India.
What are the segments you will focus on in India? What are the new products you plan to launch in the Indian market?
SCOR offers solutions across all lines of business to its clients, with both Non-Life and Life products. In line with the overall Indian reinsurance market, a large part of our premiums currently stem from Agriculture business.By working with selected clients, SCOR is willing to export its product expertise and to help cedants develop new solutions that suit the Indian market’s needs.
It has beensaid that in the latest Apr 1 renewals, foreign reinsurers who have branches in the country didn’t participate in the proportional business much. Would you agree with this?
SCOR does not comment on its competitors.
How competitive is the Indian becoming now that half a dozen top global reinsurers have set up operations in the Indian market?
Despite the attribution of new licenses, international reinsurers have taken a cautious stance and we have not seen an increase in competition in an already competitive market.Our strategy is to partner with a selected number of clients, with whom our long-term relationship is more important than short-term interests.
Has India been a profitable market for you? Will you focus on top line or bottom line going ahead?
After several years of Natural Catastrophe losses (Cyclone Phailin in 2013, Hudhud in 2014, Chennai Floods in 2015), the Indian reinsurance market has been impacted by several large industriallosses in 2016-2017. This has kept the market in deficit.
As presented in our strategic plan and in line with our worldwide approach, SCOR targets solvency and profitability in the longterm. Growth is a subsequent assumption and we adjust our topline based on anticipated profitability.
What are your plans and priorities for the Asian region?
SCOR has been active in Asia for nearly half a century now. SCOR’s footprint in the region reflects the diverse and rapidly changing environment, with dynamic expansion by the Group on both the P&C and Life sides. Over the decades, SCOR has developed and nurtured extremely strong relationships with its clients throughout the region and today has a total of eight offices across all key Asian markets.
On the P&C side, and in rapidly expanding markets, SCOR is looking for profitable growth by working with chosen clients, by offering lead terms, helping to broaden their product offerings and sharing technical expertise (underwriting and claims reviews).
Do you thing soft pricing and overcapacity are still impacting the global reinsurance market? How has SCOR managed thisand its future plans to grow its global business?
The new strategic plan, “Vision in Action”, is built on our strong foundations.Our current position on the P&C market, our excellent reputation with clients, our tools and technical capabilities and the stability and quality of our teamsall demonstrate this. We are a solid and stable organization that has been operating successfullyover the years and throughout the cycles.
The whole plan is designedfirstly to manage the currently challengingmarket environment, and secondly to make sure that we are prepared to take up any opportunities that mayarise, whether because of a change in the nature of the market or because the market takes an upward turnfollowing anexternal event.
“Vision in Action” focuses on opportunities in four business areas:
- US Reinsurance – which represents half of the Global market
- International reinsurance & specialties: diversifying, and to serve customers globally
- Large corporate insurance: complementary to the reinsurance platform
- Broad distribution capabilities: to access business
What kind of investments have you already made in the Indian market andwhat kind of manpower do you have now?How much Indian talent you are hiring?
We currently have a team of c. 10 employees in India, and we will progressively step-up and increase the manpower hired locally in line with the plan submitted to the IRDAI.
Would you participate in the Indian Nuclear Pool and Terror Pool?
SCOR’s Strategy is to favor the creation of market pools when it comes to the management of Nuclear and Terror risks.