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Sustainable Profitability – Jean-Paul Conoscente CEO, SCOR Global P&C

21.10.21 AdvantageGo

This week’s guest on The Voice of Insurance podcast is Jean-Paul Conoscente, CEO, SCOR Global P&C, the Property and Casualty (P&C) Business Unit of SCOR. Speaking to Mark Geoghegan, Jean-Paul talks about price adequacy, the impact of Covid, insurtech, data and algorithmic underwriting, and the main issues affecting the reinsurance market today and in the run-up to the 1.1 renewals.

The last time Mark spoke with Jean-Paul, he was running SCOR’s North American P&C operations. Since then, Jean-Paul has been promoted to CEO of SCOR Global P&C and elevated to the executive committee. Kicking off the discussion, Mark asks Jean-Paul about what we can expect with him at the helm. Jean-Paul replies that SCOR’s philosophy and approach to clients hasn’t changed since he became CEO and that clients can expect more of the same.

The conversation soon turns to the state of the market with Mark asking if Jean-Paul is happy about rate adequacy; Jean-Paul replies: “First of all, reinsurers are never happy, but overall, the market is very fragmented, so rate adequacy really varies by geography and by line of business. We think we’re getting better rate adequacy in some European markets. We’re getting decent rate adequacy on the insurance side; on reinsurance, we’re still very cautious in the US and feel that rate adequacy is not quite there yet on US casualty and US property as well as on the European casualty. I think there is still a way to go on the rate adequacy.”

Covid, still a key topic in the industry, has Mark commenting on how SCOR has taken a more partnership approach on the pandemic. Speaking about Covid, Jean-Paul discusses how SCOR has taken a responsible manner to how claims are assessed and that engaging in constructive dialogue with clients has been vital: “I think the clients appreciated the fact that compared to other reinsurers who rejected them outright, we engaged with them and actually had a constructive discussion with them.”

Speaking about market growth, especially within the context of risks such as climate change and cyber, Jean-Paul says: “I think as an industry we have to make sure that we at least have a business model that is able to produce a sustainable profitability.”

Algorithmic Underwriting

Mark asks how far algorithmic underwriting can go up the insurance value change and how much can be automated. Jean-Paul discusses how the lack of wording standardisation can potentially be a danger to automate underwriting: “I think it really is related to the commoditisation of business, so I think if there is a line of business that is very commoditised, it lends itself well to algorithmic underwriting as long as the wordings are standardised. That´s been an issue for the industry for many years; the wordings are not standardised… so relying on algorithmic underwriting when each wording has a little twist to it that you can´t pick it up in the algorithmic underwriting is very dangerous.”

As the conversation moves to data and data sharing, Jean-Paul raises the question around the commercial incentive for insurers and brokers to share data, which remains an industry problem. “I think as a reinsurer we definitely try to create a partnership, but I think the issue is not just between insurers and reinsurers it’s also between the insurance companies and their insurance.
Whereas an insured if an insurance company comes to you and asks millions of questions, you’ll go to another one that only asks five questions. And so I think that if you put yourself into the shoes of the customer, you want something that’s easy. I think the real solution to this is the use of external data that can supplement the standard information we receive and have a much better view of risk by aggregating this data together. I think in my view that’s the real solution for the industry, to have a better view of risk.”

Enjoy the podcast.

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