Shaking up the Life and Health Division: SCOR's New Approach
Paris
Strategy revision proposed by the Commission for the troubled industry sector
In an effort to boost Scor's struggling Life and Health (L&H) insurance division, the French reinsurer is rolling out a fresh strategy, featuring an enhanced product mix, increased margins in fresh business, and cost-cutting measures. Amidst pressure from investors due to the division's performance, Scor's bold move aims to resurrect investor confidence. Scor's stock saw a minor increase on December 12 at the Paris Stock Exchange following an investor day in London, but over the past 12 months and five years, it has dipped by 11% and 37%, respectively.
Insights:
- Revamped Strategy: The new approach comprises three key elements: reviewing L&H assumptions, shifting new business toward higher margins, and managing in-force business effectively to preserve value [1].
- New Leadership: Philipp Rüede is Scor's newly appointed CEO of the L&H segment, aiming to revitalize the division after a period of underperformance [2].
- Consolidation and Streamlining: Scor merged L&H Fast Growth Markets APAC and L&H Mature Markets APAC into a single regional unit (SCOR L&H APAC) and appointed Chloe Wang to lead the unified APAC operations for greater control over the regional footprint [2].
- Outlook: Though the L&H review had an Impact, the underlying performance remained robust, with an Insurance Service Result (ISR) of EUR 452 million in 2024. However, the full-year ISR is projected to fall short of expectations due to the review's impact [1].
Objectives:
- Restore Investor Faith: By implementing these changes, Scor intends to convey a message of resilience and commitment to sustainability, appeasing investors about the reinsurer's ability to navigate risks and enhance profitability [1].
- Enhance Performance: Emphasis on higher margins, improved product mixes, and stronger in-force business management is expected to bring about overall improvement and stability in the L&H segment [1][2].
- Scor's restructuring strategy in the Life and Health division includes focusing on new business with increased margins to bolster confidence within the finance industry.
- The revamped product mix, cost-cutting measures, and enhanced focus on higher margins are all part of SCOR's efforts to resurrect investor faith and improve the performance of the L&H segment.
- The new CEO of the L&H segment, Philipp Rüede, aims to revitalize Scor's L&H division, which has underperformed in the past, as part of the company's strategy to boost overall business in the finance industry.
- The consolidation of several Scor L&H units into a single regional unit, SCOR L&H APAC, and the appointment of Chloe Wang to lead the unified APAC operations are strategic moves to streamline the business and gain better control over the regional footprint, contributing to the reinsurer's growth in the finance industry.
