Denis Kessler and SCOR’s Five Strategic Plans

In June 2014, the International Insurance Society inducted Denis Kessler, chairman and CEO of SCOR, into its Insurance Hall of Fame.

“Kessler became chairman of SCOR in November 2002 and transformed a group on the verge of collapse into the fifth-largest global reinsurer in the world. The group now operates in more than 175 countries with a workforce made up of 50 different nationalities,” IIS said, announcing the induction.

According to background information available on the IIS website and on SCOR’s website (facts and figures), during Kessler’s tenure:

• Shareholders equity rose from 0.8 billion euros in 2003 to nearly 5 billion at year-end 2013.
• Premium income climbed from 2.4 billion euros in 2005 to 10.3 billion euros in 2013.
• The S&P rating moved from “BBB-” in 2003 to “A+” today.

Kessler and his management team orchestrated the turnaround and growth with five strategic plans:

1. Back on Track, 2002-2004, which involved strengthening reserves, replenishing the capital base, right-sizing and refocusing the underwriting portfolio by exiting unprofitable lines, as well as new governance procedures.
2. Moving Forward, 2005-2007, setting out to achieve an “A” level of security to clients and underlying profitability of 6 points above the risk-free rate for shareholders.
3. Dynamic Lift, from 2007-2010, with goals of group profitability (achieving an ROE of 900 bps above risk-free rate over the cycle), solvency (providing an “A+” level of security to clients), development financing (self-financing the development of the group over the plan) and shareholder remuneration (returning excess capital to shareholders).
4. Strong Momentum, 2010-2013, with goals of optimizing SCOR’s risk profile, maintaining “AA” level of security and profitability of 1,000 basis points above the risk-free rate over the cycle.
5. Optimal Dynamics, 2013-2016, aiming for an ROE of 1,000 basis points above the three-month risk-free rate over the cycle; a solvency ratio in the 185-220 percent range.

Speaking to Carrier Management, Kessler sums up the group’s current position in the marketplace: “Reinsurance demand is evolving. Insurers are increasingly selective and are reducing the number of partners with whom they work in order to limit their counterparty risks as well as the cost of monitoring reinsurers. Today, large clients are looking for a limited panel of global partners. SCOR’s client-centric approach and diversified multiline portfolio, combined with its top-tier position in all major life and non-life markets, has enabled the group to become a privileged partner to its cedents.”

Kessler, whose industry experience dates back to 1975 when he was a Tokio Marine trainee, has also made important academic contributions to the industry, according to IIS, which lists research he undertook while he was a university professor: “Savings and Retirement” in 1982, “Savings and Development” in 1984 and “Modeling the Accumulation and Distribution of Wealth” in 1988.