SCOR launches "Quantum Leap", the strategic plan that will accelerate the group's integration in the digital world

5 September 2019 — Daniela GHETU
SCOR has presented in Paris, at its annual Investor Day, the group's new strategic plan, "Quantum Leap". The plan runs from July 1, 2019 to until December 31,2021 to coincide with the new IFRS 17 accounting standard that the Group will implement effective January 1, 2022.

"Quantum Leap" is the seventh strategic plan SCOR has launched and implemented since 2002, after "Back on Track", "Moving Forward", "Dynamic Lift", "Strong Momentum", "Optimal Dynamics" and "Vision in Action".

SCOR successfully concludes "Vision in Action"

SCOR had to face a number of headwinds during its strategic plan "Vision in Action", which was launched in July 2016. A high rate of cat events, a P&C cycle that only turned recently, a continued low yield environment, regulatory shocks such as the Ogden reform in the UK, the US tax reform and geopolitical uncertainties all have weighed on the reinsurance industry's performance over the last three years.

In this difficult context, the Group has successfully delivered on its "Vision in Action" profitability and solvency targets, recording across the course of this plan an average normalized Return on Equity of 9.5% or 876 bps over the risk-free rates, and an average solvency ratio of 219%, in the upper part of the optimal solvency range. Meanwhile, the Group has strongly expanded and deepened its franchise globally in target geographical areas and lines of business.

With the "Quantum Leap" plan, SCOR pursues strong growth of around 4 to 7% per year, and sets equally weighted profitability and solvency targets that are ambitious in the current financial and economic environment:
  • A high return on equity above 800 basis points over the 5-year risk-free rates over the cycle;
  • An optimal solvency ratio in the 185-220% range.
"Quantum Leap" aims to increase the Group's efficiency and unlock value while transitioning SCOR towards IFRS 17, a more economic-based accounting framework than IFRS 4.

SCOR accelerates its transformation to integrate technological developments

This plan aims to create the reinsurance company of tomorrow. To this end, SCOR is transforming profoundly, accelerating its use of new technologies - such as artificial intelligence, robots, blockchain, big data, multi-cloud and satellite imagery - to innovate, expand its product and services offering and increase its efficiency, for the benefit of its clients throughout the world. All areas of the company are involved, from underwriting to asset management and from risk analysis to claims settlement. All of SCOR's employees are committed to this ambitious and transformative plan.

"In this increasingly stochastic and complex environment, the future of the reinsurance industry depends upon embracing new technologies and the ability to manage and analyze data. With the "Quantum Leap" plan, SCOR is committing to a profound transformation to create the reinsurance company of the future, fully adapted to this new ecosystem. Over the course of the plan, SCOR will continue its dynamic combination of growth, profitability and solvency, to create value for all its stakeholders. SCOR is pursuing its growth while staying true to the fundamental principles that have shaped its success, while making greater use of new technologies, to accelerate the creation of long-term economic value," Denis KESSLER, Chairman & Chief Executive Officer of SCOR stated.

SCOR is investing EUR 250 million in the implementation of "Quantum Leap". The Group is focusing on three main pillars:
  • Bringing added value to clients in their digital transformation: SCOR will bring more innovative reinsurance solutions to each key step of the reinsurance process by providing new products and value-added services, a seamless digital customer experience, improved underwriting and analytics, and robotic process automation for claims processing.
  • Expanding profitable new business opportunities: In pursuing its deep digital transformation, SCOR will contribute to expanding insurability: SCOR Global P&C will develop new products and value-added services to help close insurance protection gaps and SCOR Global Life will expand the insurance safety net with insurance solutions at all stages of life.
  • Strengthening digital capabilities around five key clusters: To provide scalability, increased agility and better integration of innovations, SCOR will focus on robotics, e-business, multi-cloud, big data and artificial intelligence.

"Quantum Leap" rests on a set of key assumptions for each of the Group's three engines. Group-wide annual gross written premium growth rate will be approximately 4% to 7% over the course of the plan:

  • SCOR Global P&C is well positioned to pursue sustainable annual growth of gross written premiums of ~4% to 8% over the plan, with a Value of New Business annual growth of ~6% to 9% per year over this period, by: (i) actively redeploying capital on value-creative segments, markets and clients, (ii) growing P&C Partners as an innovation enabler, catalyst, and accelerator (ILS growth, cyber expertise, P&C Ventures) and fostering operational excellence, and (iii) deploying a 360
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