SCOR CEO eyes renewals growth as AM Best affirms strength ratings
AM Best has affirmed the A+ insurer financial strength rating of global reinsurer SCOR and its main operating subsidiaries, reflecting the company's very strong balance sheet, capitalisation, and enterprise risk management. SCOR CEO Denis Kessler is confident that the group is well positioned to take advantage of the improved pricing environment at the upcoming renewals.
The rating agency said SCOR’s balance sheet strength is underpinned by "very strong" risk-adjusted capitalisation, which is supported by the reinsurer's conservative investment portfolio and robust retrocession programme designed to shield its capital base. These strengths are partially offset by SCOR’s reliance on soft capital components, which include hybrid debt, value of in-force life business and a contingent capital facility.
In 2019, SCOR delivered a net profit of $422 million (2018: $322 million) despite exposure to significant natural catastrophe events. For the first half of 2020, the group reported a net profit of $26 million (half-year 2019: $286 million) – a decline mainly attributed to the $456 million of COVID-19-related losses booked by SCOR in the second quarter.
In 2019 and half-year 2020, profits from SCOR’s life reinsurance business partly offset losses in property/casualty reinsurance, demonstrating the benefit of the group’s good balance of earnings, according to AM Best.
Given the strong operating performance, as well as product and geographical diversification, AM Best believes that the company is well-positioned to benefit from improving property/casualty reinsurance market conditions and positive pricing momentum.
Commenting on the ratings affirmation, SCOR chief executive officer Kessler said: “We welcome AM Best’s decision to affirm SCOR’s ratings. This decision further testifies to the soundness of our strategy as a Tier 1 global reinsurer and the resilience of our business model to shocks.
"We are entering the renewal season with confidence. SCOR is well positioned to accelerate its growth in a supportive market environment, benefiting from positive pricing dynamics and improving terms and conditions in P&C reinsurance, while consolidating its position in the top tier of the Life reinsurance market.”
