SCOR plunges to Q1 loss on Ukraine war losses; combined ratio soars to 104%

Global reinsurance giant  SCOR blamed a “series of exceptional events” both in life and health (L&H) and in property and casualty (P&C) for its headline loss in the first quarter. Chairman Denis Kessler (pictured) pointed to an increasingly stochastic environment with “multifaceted and widespread threats” due to ongoing challenges such as the pandemic, rising catastrophes and the war in Ukraine.

SCOR slipped to a quarterly net loss of €80 million driven by the €85 million provisioned losses stemming from the Russian invasion of Ukraine. Same time last year the company reported a net profit of €45 million.

However, its gross written premiums of €4.7 billion in Q1 2022 was up 9.7% at constant exchange rates (up 14.3% at current exchange rates) on the prior-year period, with 20.2% (24.9%) GWP growth in P&C and 1.1% (5.6%) in L&H.

SCOR’S P&C combined ratio worsened 6.6 percentage points to 103.7% in Q1 2022, compared with 97.1% in the same period last year. The company, however, experienced strong 2022 renewals in P&C reinsurance and specialty insurance, management indicated.

SCOR’s strategy this year is to reduce volatility and improve profitability by “selectively focusing its growth on profitable lines”, management said, alongside other de-risking initiatives. It hopes these actions should result in increased efficiency and a return to a sustainable profitability level.

Kessler, chairman of SCOR, said: “Uncertainties and instabilities are multiplying: the pandemic is ongoing, global refragmentation is accelerating, inflation is back, economic growth is slowing down and the world is being hit by natural catastrophes… Our environment seems increasingly stochastic and random, and global predictability seems to be shrinking. Indeed, the (re)insurance industry appears to be facing increasingly frequent shocks and multifaceted and widespread threats. In this respect, we are living in a time of ‘great change’.

“In this environment of major transformation, where risks are multiplying, reinsurance is increasingly necessary to provide security to all economic agents. To accomplish their fundamental mission, reinsurers need to transform themselves and adapt all aspects of their risk management policies. As ultimate risk carriers, their Solvency is critically important. SCOR is ready to meet all these challenges, building on its franchise, its recognized technical expertise, the talent of its teams and its command of new technology. I am convinced that SCOR, with its proven good governance and proactive management, will steadfastly pursue the best ways and means to enable the Group to continue its value creating journey.”

Laurent Rousseau, chief executive officer, added: “Q1 2022 has been marked by a series of exceptional events both in L&H and in P&C, which have negatively impacted our financial performance. Amongst these, we have been especially focused on managing the impact of the conflict in Ukraine - from a financial, operational and human standpoint.

“We are also continuously focused on our main objectives: reducing volatility, increasing profitability, growing the franchise, optimally allocating capital and embarking on the transformation of the Group.

“Our January 1 and April 1 P&C treaty reinsurance renewals have been strong, and we have a clear action plan in place across the entire organization to improve the Group’s financial performance in 2022. Despite an accounting loss, SCOR’s solvency position remains robust, with a solvency ratio of 240%.”

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