The CEO of French reinsurance giant Denis Kessler has applauded Lloyd’s of London for its choice of John Neal as the next CEO as he fended of M&A speculation.
Speaking at the Monte Carlo Rendez-Vous yesterday, Kessler said the former QBE boss was a solid choice for the top role at the Corporation.
“We think the choice of Mr Neal is a positive step for the market,” Kessler said.
“He has the experience, he is global and we’re extremely positive that he will be the one promoting the Lloyd’s market,” he added.
Victor Peignet, the carrier’s global P&C CEO echoed Kessler, saying the timing of Neal’s appointment was fortuitous because it coincides with Jon Hancock’s crackdown on underperforming business at Lloyd’s.
Peignet said Scor welcomed the hardline approach the corporation was taking against underperforming syndicates. “We look to London and to Lloyd’s for access to the specialty market,” he said.
“If Lloyd’s wants to go back to its origins of specialty insurance – we can only be in favour of that.”
Separately, Kessler shrugged off speculation the French reinsurance powerhouse would enter into any M&A talks in the wake of an unsolicited EUR8.3bn takeover offer from Covea.
Kessler dismissed reports that Scor had any ambitions to become the latest carrier to engage in M&A.
“Scor doesn’t need to merge,” Kessler said. “We’re profitable and we’re not in a crisis state – we don’t need support,” he added.
Kessler said a lot of the drivers of M&A activity – including scale, diversification and technology – do not apply to Scor.
“People merge because they’re not profitable enough, because they are lacking resources or they need size or even solvency,” Kessler said. “We don’t need any of that,” the executive said.
The Scor boss reflected on a prediction he made at the Rendez-Vous five years ago when he said the market would see several waves of (re)insurance M&A.
But, he said, at the time he stressed that M&A was not likely to involve tier-one carriers, of which Scor is one.
“I said at the time it would focus on tier-two and tier-three companies,” Kessler said.
“We’ve observed consolidation between a lot of those, but not the tier ones,” he added. “As a tier-one reinsurer we can grow without merging.”
Kessler said it was natural the carrier would add “the odd portfolio here and there” but said Scor valued its independence and the “freedom to adapt”.
The chief executive’s comments come on the back of the unsolicited EUR8.3bn takeover approach from French mutual Covea last month.
But Scor called the offer “incompatible” with its “strategy of independence” as it said any revised public bid would be deemed hostile.
In a press release following the bid, the reinsurer confirmed that Covea had sent a letter proposing to open talks about taking a majority stake in Scor.
Covea confirmed it had made a “friendly” EUR43 per share offer for Scor on 24 August. The bid marked a 24.2 percent uplift on Scor’s EUR34.62 closing share price in Paris that day.
Just one day after, the reinsurer put out a staunch denial of rumours that it had had talks with PartnerRe earlier this year.