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Scor CEO slams timing of Covéa offer, defends reinsurer's independence

Scor SE Chairman and CEO Denis Kessler spoke against the timing of French mutual group SGAM Covéa's now-abandoned €43-a-share offer for the reinsurer, saying it showed "little understanding of the reinsurance industry."

Covéa, which is Scor's largest shareholder and owns an 8.2% stake, announced Sept. 4 that it had approached Scor with the bid on Aug. 24. Scor declined the bid Aug. 30.

The announcement came a day before Scor's investor day, and less than a week before the reinsurance industry is due to convene in Monte Carlo to begin discussions for the all-important Jan. 1 renewals, when the bulk of global reinsurance business renews.

While not mentioning Covéa by name, Kessler was clear in his criticism at the investor day.

"We don't like to be disturbed when we want to meet [analysts and investors] and explain what we do," he said. "We don't want to be disturbed when we meet our clients to prepare for renewals."

Kessler noted that Scor meets 3,000 clients at Monte Carlo. He also pointed out that 70% of its business renews Jan. 1, so the reinsurance industry needs "serenity" while these discussions take place.

"People trust us because they don't want instability. They want predictability. They want visibility. They don't want turmoil," said Kessler.

"That's reinsurance. If you want to do reinsurance, learn what it is," he added.

Cry for independence

Kessler also defended Scor as an independent listed company, a status that would be lost if it were acquired by a mutual company such as Covéa. He said the company's performance and ability to expand are "intimately linked" with its position as an independent entity.

"We are extremely proud to be an independent company," he said. "That is why we are a tier one company."

Scor is the world's fifth-largest reinsurer measured by 2017 gross written premium, according to S&P Global Market Intelligence data.

Kessler also stressed that having the ability to compensate employees with shares helps align the company's interests with that of its owners.

"If you know what to do when you have no shares and no options to drive a reinsurance company, let me know," he said. "I don't know what to do if we don't have those tools, which are the modern tools to manage people and manage talent."

He added that the desire to stay independent was shared by Scor's board, its executive committee and its business partners.