Scor CEO sets 3-year growth targets to reassure shareholders

(Reuters) — French reinsurer Scor SE’s CEO, Denis Kessler, who opposed a takeover by rival Covea last year, on Wednesday unveiled growth targets for 2019-2021 as he sought to allay investor concerns over his strategy for the group.

In a new strategic plan dubbed “Quantum Leap”— the seventh since he took over in 2002 — Kessler forecast gross written premiums would grow organically by an annual average of 4% to 7%. Mr. Kessler, who is also chairman, said he sought a return on equity at or above 800 basis points above the five-year risk-free rate.

“Over the plan’s period, Scor will continue to combine growth, profitability and solvency, to create value benefiting to all stakeholders,” he said.

The CEO’s previous strategic plan for 2016-2019 had set the same targets for growth and return on equity. Both objectives were broadly met.

Scor’s share price rose 1.7% in early trading, outperforming the CAC-40 index, but by lunchtime were hovering only fractionally above their opening price of €36.59.

JPMorgan, which rates the shares “overweight,” said the headline targets were in line with its expectations.

“We believe they continue to underpin a healthy organic growth outlook over the coming years,” the investment bank said in a research note.

Mr. Kessler, 67, has had to face down investor disquiet over his ability to generate shareholder returns after he opposed an €8.2 billion ($9.14 billion) takeover bid by unlisted rival Covea Mutual Insurance Group Co. in September 2018.

Activist fund CIAM asked fellow shareholders to remove Mr. Kessler from the board. The fund said the rejection of Covea’s bid and a subsequent lawsuit filed by Scor against Covea for breach of trust were detrimental to shareholder interests.

In April, though, three-quarters of shareholders voted for Mr. Kessler to remain CEO, while about 54% approved his pay package.

He is expected to reveal a succession plan in late 2020, with his current and final term due to end in mid-2021.

Scor also said it would invest €250 million to implement the plan, mainly in technological upgrades.