SCOR SE (SCR) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the SCOR Global P&C January 2022 Renewals Conference Call. Today's conference is being recorded. [Operator Instructions]. At this time, I would like to hand the call over to Mr. Yves Cormier, Head of Investor Relations. Please go ahead, sir.

Good afternoon, everybody, and welcome to SCOR Global P&C 2022 January Renewals. My name is Yves Cormier, Head of Investor Relations, and I'm joined on the call today by Jean-Paul Conoscente, Chief Executive Officer of SCOR Global P&C; and Romain Launay, Deputy Chief Executive Officer of SCOR Global P&C. Before we start, I would like to remind you that SCOR full-year 2021 results will be presented on February 24. So when it comes to the Q&A session, we will only be able to refer to the renewals information that is provided in the press release or in the slides. And with that, we can start. And I hand over to you, Jean-Paul.

Thank you, Yves, and good afternoon, everyone. I'd like to share with you the progress made by SCOR with regards to the 3 targets we set out for P&C at our Investor Day in September: reduce the climate-sensitive volatility of our portfolio, expand our Global Lines treaty portfolio and accelerate our Specialty Insurance development plan. Starting with the treaty portfolio, the January 1, 2022, renewals took place as expected in a very favorable market for reinsurers. The market hardening continued across most lines of business and geographies, and demand for capacity exceeded supply in a number of lines of business, such as Property aggregate and Cyber. Leveraging these market conditions, SCOR repositioned its portfolio to optimize the expected return on capital, resulting in an estimated 0.5 point improvement of the net price combined ratio and a 19% year-on-year premium growth. We leveraged our leadership positions in Europe and in fast-growth markets to develop our portfolio in Global Lines, which have superior expected margins, and to receive payback on loss-affected Cat programs. Whilst overall Property Cat price increases averaged 13% across the portfolio, price increases obtained on loss-affected European programs ranged from 15% to 60%, whilst the increases on the U.S. programs averaged 9%. In North America and APAC mature markets, we actively managed our Cat portfolio, as the net margins were viewed as insufficient in respect to the expected volatility. U.S. casualty market conditions continued to improve, but we tempered the growth in this segment because of high ceding commissions required to write the business. Finally, our Ventures portfolio, made of insurtech companies with SCOR as both an investor and a risk underwriter, was a strong contributor to the overall growth with a 77% year-on-year progression. The overall average price increase obtained on business up for renewal was 4.9%. However, the strong management actions taken to modify the portfolio mix were also a large contributor to the margin improvement on a risk-adjusted basis. We're overall extremely satisfied with the portfolio mix achieved as it should provide a better sustainability of profits over time with less volatility. Overall, actions taken in the year -- in a year-on-year estimated improvement of the price/net combined ratio of 0.5 percentage points on a risk-adjusted basis. You'll find more information in the slides and press release distributed earlier today. Specialty Insurance, the primary insurance rate adequacy continues to improve for large commercial risks. In 2021, we grew our large commercial single-risk premium by 18.6%, on the back of an average 12.6% rate increase across all geographies in all lines of business. As the profitability of longer-tail lines has improved, we have started to grow this portion of our portfolio and expect this trend to continue in 2022. We also took the decision last year to exit U.S. primary wind-exposed MGAs to allocate the relevant capital to other segments of Specialty Insurance with better returns. This decision will result in a roughly USD 100 million reduction of our MGA premium in 2022. Finally, the retrocession market was probably one of the most difficult segments of the market. Having correctly anticipated this market environment, where we structured our program to compensate for the supply reduction of proportional and aggregate capacity by increasing our side-car facility with a large Swedish pension fund. Price increases on capital provision business did not lead to sufficient improvement on the net expected margins. This led us to reduce our net PML by 11% compared to 2021. As a consequence of all these actions, we are pleased to confirm the guidance we gave at the September 2021 Investor Day of a gross written premium growth of 15% to 18% and a net combined ratio trending to 95% and below. We believe SCOR remains well positioned to profit from the continued improving market conditions, both in Specialty Insurance and Reinsurance. In addition, we are confident that our current portfolio mix will provide a solid base upon which to build the next strategic plan. Romain and I will now take any questions you might have.

[Operator Instructions]. We will now take our first question from Kamran Hossain from JPMorgan.

My question is basically around, I guess, this Cat budget versus Cat exposure. So I guess you've increased the Cat budget for this year following -- to make that kind of more forward-looking to 8%. You've reduced the Cat exposure, and I guess your PMLs have reduced pretty materially in the new renewals. Could you maybe just square off those 2 things?

Yes. What we've done is we've modeled our Cat portfolio on a forward-looking basis and calculated our Cat budget for 2022 on a forward-looking basis. So taking into account, as you said, the reduction of our net PMLs as well as the increases that we expect from climate change, another effect, especially on secondary perils, we're confirming our 8% budget for 2022.

Our next question is from Vinit Malhotra from Mediobanca.

I hope you can hear me?

Yes.

So just back on the reduction in nat cat, Jean-Paul, are you able to give us some sense of how much was the result of, we see higher pricing from retro and so we are going to reduce the gross exposure? Or -- and where -- or there is more climate change and increase in secondary perils, as you mentioned. So -- I mean is it roughly half of it? Is the bulk coming from climate change? Is the bulk coming from retro? If you could just help us understand the driver behind this reduction in nat cat, that will be interesting. Second question is that the increase in Global Lines has been flagged very well. But when I look at the pricing, the Global Lines, Marine, Aviation, they're not the ones which are really even above the average achieved. I mean they are roughly 3% from the slide. Could you just comment about your thinking about that? And I think we're only allowed 2 questions, so I'll stick to that. I did have one on guidance, but I can come back later.

So on the first question, what we see is the increase of the retro pricing, and as we mentioned in the press release, we bought roughly the same limit as last year, basically is balanced out by the price increases we achieved on the Cat portfolio. So the net effect of -- I'd say, of the retro is more or less 0. So the increase we're seeing is really from our adjusted view of risk due to climate change and just our -- I'd say, a reevaluation of the risks overall. On your second question regarding Global Lines, you're correct that the price increases were much less on Global Lines than on some of the -- on Property Cat, for example. But when we look at it, it's not price increases, it's rate adequacy. And the reason why those lines received less rate increases than, for example, Property Cat is that they were already well priced and already at a level of price adequacy. A good example was credit -- trade credit and maturity, which, as COVID unfolded, many companies didn't complete re-underwriting of the portfolio, shrinking limits, increasing pricing, and therefore, the rate adequacy of that line of business is already very strong, and that's why it received the smallest price change. So when we look at the -- how to position our portfolio, we're looking at actually the rate adequacy versus the volatility. And that's why you see the Global Lines as very attractive.

We will now take our next question from Andrew Ritchie from Autonomous.

I wonder if you could just help us understand one of the aims when you were restructuring the retro. And I know you've got a big tick by on Slide 3 is optimize retrocession purchase with a redesign towards more earnings protection. Can you help us -- there's always stupid question, but having a side-car, and that being bigger, is there more ground-up protection on your Cat exposure as opposed to the structure before was very much focused on sort of extreme severity protection. But I think this is a quite [ a share of ] side-car. I'm not sure. But is there more ground-up protection? Or how would you sell the case that there's more earnings protection rather than just severity protection? I guess my only other question was within the combined ratio guidance. Can you tell us what the mix headwind has been within that? I'm assuming there is a mix headwind because the books become slightly longer-tail.

So on your first question, you're right that the side-car that we grew is a proportional capacity. So it does provide first-dollar protection, which pour as a small -- medium-sized losses, provides better protection than an excessive loss. The reduction of volatility, though, is not only through the retrocession, it's also through the underwriting actions. So exiting U.S. MGAs that were exposed to primary U.S. hurricane had a big effect on reducing the volatility. Exiting, we basically cut in half the proportional treaty portfolio and Property worldwide. That has another big effect on reducing the earnings volatility. The way we track this, because it's not so easy to follow, is we model the 1 in 10 PML, and we normalize it to the expected profit for the year. And so we -- that gives us a parameter that we compare to the portfolio that we had at the end of 2021 and the one we're projecting in 2022. And we see that the earnings protection improved about a little more than 10%, something like 12% year-on-year. So to answer your question on this, it's underwriting actions, it's retro, and it's something that we monitor actively through the renewal.

Does the side-car related purely to Cat business? Or is it across the whole group?

Yes. No, no. It's only related to Cat.

It's purely Cat.

Yes.

Okay. fine. And to understand your statistic on earnings protection, what you mean is the attritional earnings cover the 1 in 10, 10% more than they did?

Yes, if you like, the 1 in 10 net PML over the expected profit has decreased in 2022 compared to 2021.

Okay. Yes. Understood.

And on the guidance, you're right that there's the mixture. As we see the -- as I said, on the Cat side, the -- despite the price increases, the net impact of Cat is fairly neutral, which is why we reduced the portfolio because the return is not better than it was last year. On the other lines of business, even though they are longer-tail, this has volatility as well. So we're looking not just at the absolute profit, but also the risk-return profile. So it's trying to come up with the best profitability for the volatility basically.

Sure. But within the combined ratio, it's a nominal combined ratio. So there is a headwind on mix? I'm just trying...

Yes. But I'm not sure what answer you're looking for. Is it how much of it is due to a portfolio mix?

Yes, what -- yes, exactly, yes.

It's not an easy question to answer. I'd say probably the improvement is maybe 2/3 due to portfolio mix.

We will now take our next question from Thomas Fossard from HSBC.

The first question is, Jean-Paul, I just wanted to come back to the volatility profile of your book, given the change in -- or slight change in the retro. I don't know if I'm right, but I mean looking at the slide where, in fact, you're talking PML down 11%. That's PML based on 1 in 200 year. And what you just said that it was -- you're down 11%. But what you just said is the 1 in 10 is, I think down 12. So for me, it looks like the PML reduction is throughout the probability loss curve, while I thought that, in fact, you signaled the fact that potentially, you will switch some severity protection to have better earnings protection. So I'm not sure to understand if my way of looking at things is right, but maybe you can restate how much compared to last year you have further improved or increased the earnings protection versus the previous years? And the second point, coming back to the combined ratio, mix change impact. I think the question was you're increasing long tail and you're decreasing Property Cat, so should have a negative impact on your combined ratio. And also, you signaled a big structured contract with a European account. Had it also impact on your combined ratio? Because if, I guess, this is a structured program, it's likely to come with a -- maybe a higher than 95% combined ratio. So also here, there could be a negative impact from the single contract. So can you put that every -- I would say, back in order for us?

On your first question, you're right that what we communicated on Slide 5 is the 1 in 250 PML that's on the severity side. On the earnings side, we haven't communicated on this in the presentation, but we -- it's something also we measure. And you're correct that actually the reduction in the portfolio that's been achieved is across the distribution. So -- and the earnings protection is, as I discussed, on the retro side with some of the increase of the Cat side-car, but it's also a lot through the underwriting actions that we're taking in reducing the portfolio that is exposed to secondary perils. So proportional -- first-dollar proportional treaties, MGA portfolio. And also, we dramatically reduced the aggregate Cat portfolio that we write on behalf of our cedants. So it's the combination of those actions that reduce the earnings volatilities, not just the retro.

Okay. Sure. Maybe if I can squeeze a question. Can you share with us if you had a rerun of what took place last year in 2021? And what would have been the impact on earnings pro forma applying the new retro structure?

I don't have that. It's difficult because, as I said, it's not just the retro structure, it's the re-underwriting of the portfolio. I think if we took into account the re-underwriting of the portfolio as well as the new retro structure, we probably would have a better performance than we had last year. By how much, we haven't run that simulation.

Okay. Sure. And on the combined ratio mix?

On the combined ratio mix, you're right that the -- having more longer-tail lines increases the net combined ratio. However, this is why we try to quantify the overall because it's not so easy to look at the different parts. That's why we try to quantify based on the portfolio renewed at 1/1, how would that impact the net combined ratio, and on a price basis, we see a slight improvement of 0.5. I think if we have focused only on longer-tail lines, probably the improvement expected would have been larger, but also the volatility of the portfolio would have been larger. And as I said before, what we're trying to optimize is the risk return profile of the portfolio. So we have less volatility and better returns.

We will now take our next question from Will Hardcastle from UBS.

Two from me. I guess, what proportion of retro is now purchased by non-traditional retro providers? And how has this changed year-on-year in terms of percentages? And then, would credit rating prevent you from increasing this further? Or do you think there's more scope for optimization potential? And the second question, I don't mean to go back over what people are trying to ask. But I really think that a bridge from the 4.9% price to the 0.5 point risk-adjusted combined ratio benefit would be useful. I mean as a sort of moving parts of something like retro inflation mix, which people here asking about, and perhaps model adjustment, but anything here just to sort of give ballpark figures would be really helpful.

All right. On the retro, I think today, the amount of retro we place with non-traditional players, including the Cat bonds we have outstanding, is roughly 60%, ILS; 40%, traditional. So -- and I don't think credit rating has -- what we're trying to do is -- in terms of limit purchase, it's more 50-50. What I was mentioning is more premium base, but the limit purchase, it's roughly 50-50 between ILS and traditional. And going forward, that's the mix that we want to sort of keep. We don't necessarily want to have an overexposure to ILS markets. And we like long-term players on the traditional side with whom we've been renewing year-over-year. On your second question, I know this is what many of you are looking for. The difficulty is -- it's not easy to present this in a simple manner, the bridge between the price increases, the portfolio mix, the model change, the inclusion of inflation. And this is why we try to give you the -- our estimate of the outcome of the 0.5. But we can maybe try to have a separate session on how we get from price increases, portfolio mix to net combined ratio, but it's -- honestly, it's quite complicated.

No, I'm sure. And just to be clear, on that 0.5 point, that should all earn through in 2022? Or that's over the next -- it's a bit longer time period?

Yes. So it's the price 2022 net combined ratio. For -- it depends on the type of business that we write. I'd say, typically, for the portfolio we write in January 1, we expect roughly 50% of that to earn through in 2022 and the rest to earn through the following years. And then as we get to the later renewals, April, June, July, then the earning for 2022 will be less than that.

Our next question comes from Vikram Gandhi from Societe Generale.

I hope you can hear me all right. A couple of quick ones from my side. Firstly, it's good to see a net 0.5 percentage point combined improvement that you flagged despite all the actions. Can I just ask, what should be the starting point to base that improvement of? i.e., should we assume the starting point is, let's say, somewhere around 94.5% so that after the improvement, we get to around 94%? How should we think about the base when we think about the 0.5 delta? So that's question one. And secondly, how should we think about the expected man-made loss impact going forward, now that the group has grown materially it's large corporate single risk portfolio? I know a lot of it is rate driven, so the exposure increase might be more limited. But any color there would be very helpful.

On your first question, we don't disclose the price net combined ratio, but I would say your assumption of something around 94% would be the way we see it. As we presented the results for the 2021 year at the end of February, you'll be able to see the impact of Cat and the normalized net combined ratio. And that should give you a good guidance of what the starting point is.

Okay. Jean-Paul, when you say 94%, that's the base you're referring to? Or that's after the 0.5 percentage point?

No, no, no. That's -- the 94.5% would be roughly the price net combined ratio we would estimate for the portfolio that was renewed on 1/1.

Okay. Okay. Understood.

On the man-made loss, I think what's important is, even though we have significant growth of the Specialty Insurance portfolio, especially on the simple risk, is that the same risk appetite. So we're managing our capacities very carefully. We will increase some of the lines that we deploy on some of the risk that we think are well priced. But I don't expect a large impact on the man-made loss ratio. Those have been actually lower than the historical averages in 2021. I think part of it is due to a COVID effect. Part of it is also due to just an improved rate environment overall. So our assumption would be the man-made loss ratio for 2022, we'd still assume something similar to historical averages.

[Operator Instructions] We will now take our next question from Darius Satkauskas from KBW.

So last year, you achieved a 7.8% headline rate increase and you were guiding to roughly 1.5 to 2.5 percentage point combined ratio improvement to the end of the 12 to 14, 24 months. From this year's renewal, you're talking about 0.5 percentage point combined ratio benefit. If I look at how your normalized combined ratio guidance changed in a year, it was reduced from 95% to 96% to 95% and below. You could say that only 1 percentage point was earned from the guided 1.5 to 2.5. Are you still expecting some combined ratio benefit from previous year's renewal rates earning through? Has this now been eaten up by inflation?

Yes. I think last year, when we look at a combined ratio, it was more on a gross basis than on a net basis, which is why this year, we sort of revised the guidance and gave you a better guidance on a net basis. The improvement that we achieved in -- during the 2021 underwriting year, we expect to continue to earn in 2022. As I said, when we have the full-year results in 2021, I think, you'll see improvement in the attritional loss ratio of the portfolio. And that's from actions taken in 2020 and 2021. And then as we go into the financial year 2022, we'll continue to see the benefits flowing through the book of 2021 and part of the 2022 improvements.

We will now take a follow-up question from Vinit Malhotra from Mediobanca.

Just one -- if I can ask two, but one question, definitely, on the long-tail lines, a slight shift seen. And is there any building up or thinking about inflationary concerns, which have been flagged by one of your peers a few days ago? And -- but I'm just curious if the shift has already had any discussions internally about inflation risk? And the second question is just, to be clear, this 0.5 improvement is net basis, I understand, and it will take some time to earn through. So could we assume that the guidance on the combined ratio of 95% and below is a little bit stronger based on these renewals? Or would you rather call it unchanged?

On your first question, inflation is definitely a concern that we look at when we price business. I think for the long-tail lines, there's 2 parts. There's the pricing of the business and then there's the reserving of the business. On the reserving of the business, we include inflation as we do, let's say, for all exercises. And so again, in the results for the full year, that will be addressed by the -- I'd say, the inflation on the existing reserves is taken into account. And so that's on the in-force portfolio. As we look at the portfolio that we write going forward, we assume, I'd say, high single-digit to low double-digit inflation rates, depending on the line of business and the geography. And the way we price this is we assume this inflation to be constant throughout the life of the treaty. So if it's -- if you write a 5- to 10-year type of line of business, we would assume the same inflation applies throughout the life cycle of that contract to receive this adequate pricing. So I'd say it's something we take into account. We -- it is why in some lines of business, like on U.S. casualty, we remain prudent because even though we see the underlying business as being probably rate adequate, the amount of commissions you need to pay on that business eat up a lot of the margin and don't leave a lot of room for the volatility around worse inflation than expected or some shock losses that we're not expecting. I think we take a really differentiated approach to the different lines of business depending on what the case is.

Sorry, you said single to low double digit for all of the portfolio or really short tail? Sorry, I missed that bit, the inflation assumption.

No, no. Yes, the inflation assumption runs from single digit to -- let's say, mid- to high-single digit to low double-digit assumptions for all lines of business.

All lines?

Not just for short line. And the 0.5 net improvement, yes, the 95% and below, is it strong? Right now, we're confirming the guidance. It was also the guidance, I'd say, we gave part of Quantum Leap. The plan finishes by the end of 2022. We'll present the new strategic plan at the end of March. And there, we'll give further guidance on what to expect for the new plan. For 2022, we're just confirming the guidance given in September.

We will now take a follow-up question from Thomas Fossard from HSBC.

Yes, just to come back on the 94.5% that you just mentioned. If I understood it right, that's the expected combined ratio on the renewed book at 1/1, is that right?

Yes, that would be the price net combined ratio of last year's book.

On last year book or renewed book, that's where I'm a bit confused. Just because looking at the consensus that you just circulated a couple of days ago, the -- currently, the consensus is expecting a 94.1% combined ratio financial year 2022. So I was just wondering if you were flagging that earnings estimates currently are a bit optimistic? Or I mean the 94.5% you're talking about is compatible with the 94.1% currently expected by the market?

I was not commenting on the consensus. I was commenting on the expected profitability of the portfolio that we wrote last year on January 1. And as I explained for the portfolio, we wrote this January, only part of that portfolio flows through the financial year, roughly 50%.

Okay. Yes. Okay. Understood. Second question was on the Property Cat. Actually, you're complaining that the risk-adjusted pricing is not yet there and actually more is needed to make it sensible for you. Can you tell us how Casualty versus Property risk-adjusted returns are comparing at the present time? Because it looks to me that you're slightly increasing Casualty and you're reducing or retrenching Property Cat. I can understand that you're managing the volatility of the book. But -- I mean would you say that currently Casualty lines, risk-adjusted pricing is starting to be better than Property Cat?

I think yes, it depends what you mean by risk adjusting. So I would say on a gross basis, the expected profit you would get out of Property would still be higher than on Casualty. When you put this on a net basis, whether you buy a retro, like we do, or you buy reinsurance, if you're an insurance company, I'd say, today, on an insurance basis, probably the Casualty -- U.S. Casualty has a better risk return profile than Property. The amount of capital required and the return you get for the capital is slightly better on a net basis than it is for Property. As a reinsurer, that's where you have to be -- look further because it's not just about the underlying book. It's also the amount of commission you pay to access the business. And there, it really depends on the conditions you're able to obtain. So today, we see Casualty as, I'd say, for reinsurance, on par with Property from a risk return basis, slightly better depending on the conditions were obtained. On the insurance side, we see a much better risk return than we see on reinsurance for Casualty.

And maybe one last question for me on Slide 18, looking at the evolution of the Specialty Insurance book. I mean if I'm looking at the trend 2021 cumulative versus 2018, looks like the growth in premium has been mainly driven by rate changes, and it's been really steep in terms of rate changing. So I was wondering why actually you've not decided to grow much more volumes. I mean it seems to be that, again, this year, you're growing volumes by 6 points, but last year was on 7. So I mean, overall, no big change. I mean should we expect now you to accelerate on, I mean, volumes on Specialty side in the upcoming renewals and maybe into 2023?

Yes. I think your comment is fair. And maybe I'll provide some comments and ask Romain to add to that. The reason why premium is very much aligned with the rate change for Specialty Insurance, as you should see on Slide 18, is because that -- behind that, there's a lot of re-underwriting of the portfolio to position the portfolio differently than what we had historically taking advantage of market hardening. So even though the premium increase is aligned with the rate change, there's still a lot of business that we shared and others that we grew to get to the overall result. And I don't know, Romain, can you just pick on this, please?

Sure. So first, if you look at 2021, there's still a 6% excess in the premium change over the rate change. So that's one thing. Second, as Jean-Paul mentioned, there was an element of re-underwriting, lots of minuses and pluses in the re-underwriting. For instance, in 2020, we paused credit risk -- credit insurance because with COVID, we wanted to take a cautious approach. And so we've now restarted it in 2021. As you also know, we did quite some work to turn around our syndicate at Lloyd's with good results because finally, in 2020, the syndicate was rated top quartile, but that involved a number of re-underwriting in the syndicate. In terms of our ambitions, I think we were quite clear in September on the fact that Specialty Insurance and single risks, in particular, was an area where we wanted to grow because the compounding effect, the price increase that we've seen in the past years is making it, we think, very attractive. And so that's something that we'll come back on in March as we announce our new strategic plan.

[Operator Instructions] We will now take our next question from Derald Goh from RBC.

Just 2 questions, please. The first one, could you give us any sense around the growth areas that you have for the remainder of the year? Things like structured transactions, see if any more in the pipeline. And how does the capital deployment at 1/1 track against the 10 to 15 points of solvency that you indicated at the last CMD? And my second question is on Cyber. Could you remind us what the size of your Cyber book is in both primary and reinsurance? And also how are you positioned there? And any comments around it, please.

The growth areas for the rest of the year, again, on the insurance side, there isn't a single renewal season. So I'd say Specialty Insurance remains a growth area for the rest of the year in 2022 across both the single risk and the MGA part. And I'll not comment on this further. On the treaty side, really, it's the same strategy. The Global Lines, we'll look at Casualty. We'll look at Property in terms of how the conditions finalize. When we look at the upcoming April renewals, there's been a lot of re-underwriting of the Japanese book following the prior losses and rate adjustments. So we think the rate adequacy in Japan is getting to a good point, and we're projecting this from further book there. In the U.S., we'll see exactly how the market pans compared to 1/1. Our expectation with it to be harder than 1/1, but that remains to be seen. In terms of capital, I think we're in line with the plan currently after the 1/1. So as I said, the risk return of the portfolio is a plan what we had originally planned. And now it's going to be a question of executing to get to -- exactly to plan. On Cyber, the treaty book remains fairly small. So Cyber-specific treaty business viewed at 1/1 is about EUR 45 million to EUR 78 million. And maybe, Romain, you can give some figures on the Specialty Insurance side?

Yes, sure. So on the Specialty Insurance side, the Cyber premium that writes is low to mid-2 digits. As mentioned in the slides, the rate increase that we've seen last year was, on average, plus 69%. That's very high, but that's pretty much in line with what other players have seen. Risk managers in large corporates have had really a hard time placing their Cyber insurance covers. And in terms of our approach to underwriting, so we write a single risk and we select the companies to which we ground cover based on an analysis of their defensive [ risk per risk ].

Yes. But just very quickly, in terms of the outlook, are you planning to grow broadly in line with rates? Or would you consider expanding some of your exposure as well?

I think, overall, we're looking to expand if rate -- if the rate environment remains as is, but one of the key in Cyber is capacity. So we're very careful into monitoring our aggregates across both insurance and reinsurance. And we have very strict guidance as to how much capacity we deployed per treaty clients, per individual treaty and on a single risk per individual account. So I -- really, we're -- potentially, we'll grow the portfolio, but it will also depend on the rate environment and how quickly we reach our maximum capacity.

We will now take our final question from Ashik Musaddi from Morgan Stanley.

Just I have a very simple question, like you mentioned that you have retrenched from a bit on the exposure on the Cat side. Would you be willing to just give some color as to what business lines and which geographies or what specifically have you reduced exposure to? Just trying to get a bit more sense where things are a bit more tough at the moment and that you're not able to capture the inflation or maybe just like high exposure that you're working on?

Yes. The main lines of business where we reduced is Property. So as we said, we viewed Property proportional that was both in the U.S., Europe and Australia, where we reduced Property Cat, where on the aggregate covers as well as, I'd say, the low layers, where price increases were not sufficient, we reduced significantly. Some per risk as well on Property where there was big Cat exposure and not sufficient rate increases were reduced. The other lines of business, we didn't see any big reductions. And on the contrary, we felt that overall, the environment was probably better than last year. So as I said before, depending on the risk return, we grew just flat portfolio, slight growth or big growth like in Global Lines and then properties where we dramatically reduced our portfolio.

Ladies and gentlemen, that concludes today's question-and-answer session. At this time, I would like to turn the call back to your speakers for any additional or closing remarks. Thank you.

Thank you very much, everybody. Just a reminder, we're available to answer any other additional questions. So if you'd like to get in touch with the team, then please do so. The next call will be on the February -- on February 24 for the 2021 full-year group results. And SCOR will hold an Investor Day on March 29, 2022, during which, its new strategic ambitions will be presented. Thank you very much, and enjoy the rest of your day.