SCOR pushed to Q1 loss as Russian war renders high 8-digit hit

Global reinsurance giant  SCOR will slip to a loss in the first quarter of 2022, driven down in part by losses from the Russian invasion of Ukraine that will be counted in the high eight digits.

“ SCOR expects a Q1 2022 charge in the high double-digit EUR million range for potential claims related to the conflict across both treaty reinsurance and specialty insurance,” management said. “As the conflict continues, this estimate will evolve.”

The losses flowing out of Russia hit business lines including political risks, credit and surety and aviation in addition to the impact on the Russian unit SCOR PO, which has stopped underwriting new business, management said.

Combined with natural catastrophe losses from such events as Australian floods, European windstorms and a Brazilian drought, SCOR expects to slip into the red for Q1.

“These developments will have an adverse impact on SCOR P&C’s combined ratio and on SCOR L&H’s technical margin and are expected to result in a quarterly loss,” management said.

The loss on Russia-Ukraine hostilities and Russian sanctions is lower than one recent estimate on the market. Analysts at Deutsche Bank had extrapolated from loose guidance from Swiss Re to put the likely SCOR loss in the low triple-digit millions.

SCOR has already been forced to delay a planned unveiling of a strategy update on concern that the Russian invasion of Ukraine has to deeply reshuffled the deck.

Management had been planning to review performance and outlook with investors at a March 29 investor day, but later had to say it could only hope for an end-July date to be named later.

At the time, SCOR management had vowed that exposure to Russia and Ukraine was “limited.”

“The direct consequences of these events are expected to be limited, and will not impact the Group’s fundamentals,” management had said March 11.

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