SCOR sees profit bounce with major drop in P&C combined ratio
Global reinsurance giant SCOR made a remarkable comeback in Q1 2023, turning a significant loss from the previous year into a profitable quarter. The standout performer was the property and casualty (P&C) unit, which showed a significant improvement in its combined ratio, while the other business units, L&H and investments, also reported robust profitability. The Q1 results are “very satisfactory,” said the new CEO Thierry Léger, who is looking to overhaul the company’s strategy for the next three years.
The French reinsurer reported a net profit of €311 million in the first quarter, compared with a net loss of €35 million a year earlier. Management attributed this growth to favourable market conditions and positive developments on both the asset and liability sides.
The ongoing positive phase of the P&C reinsurance cycle resulted in a 7% average rate increase for renewed P&C policies in April, with the trend expected to continue at the June and July renewals.
The group’s insurance revenue fell 4.2% year-on-year to €3.9 billion, while the gross written premiums dropped by 0.7% to €4.7 billion. However, SCOR P&C saw a 5.4% increase in insurance revenue, and its combined ratio improved by 12.6 points year-on-year, coming in at 85.2%, including a nat cat ratio of 9.9%.
SCOR P&C gross written premiums declined 3.1% at constant exchange rates compared with Q1 2022, but the company noted a “strong increase” in insurance revenue for specialty insurance, which now represents 34% of SCOR P&C’s overall insurance revenue.
New business CSM in Q1 2023 stood at €588 million, benefiting from a higher technical profitability for the treaties underwritten at the January 2023 renewals.
SCOR L&H insurance revenue amounted to €2.135 billion, down 11% at constant exchange rates compared to Q1 2022.
SCOR Investments generated a return on invested assets of 2.9%, benefiting from a high reinvestment rate of 4.6% as of March 31, 2023.
“SCOR has generated excellent results in Q1 2023,” said Denis Kessler, chairman of SCOR. “The Group is taking full advantage of the current favourable environment. Our new CEO, Thierry Léger, is in charge of drawing up a new three-year strategic plan under IFRS 17. This plan will define the best ways and means for the Group to consolidate its position as a leading global reinsurer, taking advantage of its Tier 1 global underwriting platform and technical know-how. The Board of Directors is confident in the Group's ability to actively pursue its growth, with the twofold objective of solvency and value creation.”
Léger, chief executive officer of SCOR, added: “The Q1 results are very satisfactory. All business units – P&C, L&H and Investments – have generated positive results, and the Group's Economic Value has increased significantly. In parallel, our Finance teams have successfully managed the transition to the new IFRS 17 framework: we would like to thank them for this achievement. I am now looking to the future: the current market is very supportive, and all the teams are mobilized to take advantage of this favourable environment. I look forward to presenting the outline of the new strategic plan at the Annual General Meeting."
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
