April 23, 2019 / 10:12 AM / 3 months ago

French insurer Covea seeks new reinsurance acquisitions

PARIS (Reuters) - French co-operative insurer Covea, which in January dropped plans to buy reinsurer SCOR, on Tuesday said it was still interested in diversifying into reinsurance via acquisitions.

Covea, which holds an 8.17 percent stake in SCOR, has said it does not plan to increase its stake after it abandoned its attempt to buy SCOR.

“Developing such an activity from scratch takes decades, so external growth is the more plausible,” Covea’s Chief Executive Thierry Derez said on Tuesday at a news conference on Covea’s 2018 performance.

Derez declined to comment on whether Covea would sell its SCOR stake if the company were to buy another reinsurer.

Derez said he wanted Covea get into reinsurance to gain exposure to less common but more severe risks. At present Covea’s main casualty and property insurance business has exposure mainly to small but recurrent risks such as car crashes and domestic accidents.

Reinsurance would also allow Covea to diversify outside its main market France, where it makes almost 90 percent of its 17 billion euros ($19 billion) business, Derez told reporters.

Derez said he expected new entrants, such as utilities and car manufacturers, to increase competition in the property and casualty business.

Covea abandoned its attempt to buy SCOR after its offer valuing SCOR at 8.2 billion euros was rebuffed by the board, led by veteran chairman and CEO Denis Kessler.

Scor has taken legal action against Covea and its CEO for breach of trust.

Since then activist fund CIAM filed a proposal to SCOR’s shareholders asking them to oust Kessler from the board at the annual shareholder meeting due to be held on Friday.

Thierry Francq, Derez’s chief of staff, said Covea will participate in the shareholders’ meeting although he declined to say whether it would vote to oust Kessler.

Reporting by Inti Landauro Matthieu Protard; Editing by Leigh Thomas/Sudip Kar-Gupta/Jane Merriman

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