How Scor plans to accelerate innovation in the energy market
With several new launches in 2024, Scor has made innovation in energy a strategic priority. Head of P&C underwriting solutions Daniel Duesterhaus explains the detail.
Why was it important for Scor Syndicate 2015 to lead the facility launched by Howden covering CO2 leaks from carbon capture and storage facilities?
Scor has strong expertise in traditional and emerging energy risks. We are well placed to lead the market on this type of risk. The facility is still in its infancy and we will be monitoring the performance closely over the first few years to ensure the pricing adequacy is appropriate, coupled with delivering client value.
We also launched a renewable energy consortium earlier this year which demonstrates our commitment to leading in the energy sector and supporting the energy transition. We have a team of in-house geological experts supported by external risk engineers in this sector. Reinsurance is, after all, a people business, it’s about connections, it’s about the richness of knowledge we have.
How important will geological expertise be to (re)insurers in the coming decades?
You need expertise to develop products, and if you don’t have the expertise, you cannot innovate. We’re looking to onboard new talent with the corresponding skillset, including university graduates.
Obviously, university graduates are looking for a position that carries adequate remuneration combined with a career perspective, but they also want to work somewhere that offers a purpose.
In reinsurance, you can offer them a lifetime career where they can help to address climate change and develop corresponding reinsurance solutions to provide post-disaster relief, or where they could engage with the United Nations or the World Bank.
Scor’s new Restore product appears to break new ground in supporting ecological restoration. What are your initial aspirations for it?
Restore is the first in a series of products we will develop as part of the NatReCo Initiative which Scor has been working on for around 18 months. This is a collaboration between various Scor teams including the product & innovation, transactions and environmental impairment liability teams.
Our focus for the initial six to nine months of the roll-out of Restore across the Americas, Europe and Australia is to gather data, gain experience, and refine the product.
What challenges did you encounter in modelling risk for Restore?
The main challenge was to understand the market/environment we are working in, and our expert and advisory teams provided invaluable support with this. They were clear on the importance of understanding that ecosystems have a biological elasticity to their resilience levels.
“They would say, if you have a fire in a building, it can be bad or very bad. For an ecosystem, a fire can be bad, but it could be neutral or positive because of many factors. That’s why we developed a product that is not a parametric solution. Instead, we use independent third parties to measure the impact of the event. This demonstrates a better understanding of clients’ needs and provides a solution that is there when they need it.
What does innovation mean to Scor?
Innovation is not technology or creativity for the sake of it; it is a multi-stage process by which organisations turn ideas into products, services or solutions to produce value and to differentiate. Innovation at Scor is 100 percent embedded in our raison d’être and in the business we transact, but also understood as a process that needs to be managed and steered with a balanced portfolio. The result is an ability to accelerate time to market.