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SCOR announces 95% rise in net income despite impact of cats & COVID

24th February 2022 - Author: Luke Gallin

French reinsurer SCOR has reported an almost 95% rise in net income for 2021 to €456 million, despite above budget natural catastrophe losses pushing the property and casualty (P&C) combined ratio to 100.6%.

SCORAlongside a rise in income, SCOR has announced that across the Group, gross written premium (GWP) rose by almost 10%, year-on-year, to €17.6 billion in 2021.

SCOR notes that 2021 saw a continuation of the COVID-19 pandemic, a high frequency of natural catastrophes, and rise in inflation; all of which had an impact on the company’s performance during the year.

In 2021, SCOR’s €456 million net income and return on equity (ROE) of 7.2% were achieved despite catastrophe losses, net of retrocession and pre-tax, of €838 million, which is well above budget and saw the cat load contribute 12.8% to the combined ratio.

At the same time, COVID-19 losses for the year, net of retrocession and pre-tax, totalled €575 million in 2021. The reinsurer says that in 2022, the rapid deployment of vaccination programmes around the world should enable COVID-19 related mortality to significantly decrease.

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Denis Kessler, Chairman of SCOR, commented: “By executing the “Quantum Leap” strategic plan, SCOR has successfully demonstrated its shock-absorbing capacity throughout the Covid-19 crisis. The Life in-force retrocession transaction concluded at the end of H1 2021 also allowed the Group to demonstrate the value of its Life reinsurance portfolio, providing strong optionality to optimally allocate its capital.

“Although 2021 was quite a challenging year, SCOR delivered a strong profitability and its solvency position is now more robust than it was a year ago, even after taking into account the EUR 200 million share buyback to be fully executed by the end of March 2022, and the strong dividend of EUR 1.80 per share that will be proposed at the Annual General Meeting for 2021. This bears witness to the Group’s very strong financials and its ability to create value, even in a challenging environment.”

Within SCOR P&C, GWP increased by almost 18%, year-on-year, to €8.3 billion after a strong 2021 renewals in both reinsurance and specialty. However, the impact of natural catastrophe events during the year resulted in a combined ratio of 100.6%, which is a +0.4% rise on 2020.

In light of the frequency and severity of natural catastrophe events being elevated, SCOR has increased its cat budget from 7% to 8% of its P&C premiums for 2022.

In its Life and Health (L&H) business, GWP increased by 3.6%, year-on-year, as the segment produced a technical margin of 10.3%, driven by the life in-force transaction completed in the first half of the year.

On the asset side, SCOR has reported that investments delivered a return on invested assets of 2.3% in 2021.

Laurent Rousseau, Chief Executive Officer (CEO) of SCOR, said: “In a year marked by a high level of natural catastrophes and Covid-19, SCOR has demonstrated its ability to create value for clients, communities, and shareholders. Our objectives are clear: reducing volatility, increasing profitability, growing the franchise, optimally allocating capital and embarking on the transformation of the Group. These strong results are testimony to the hard work of our teams whom I would like to thank.

“We are now actively preparing the next phase of our strategy and will provide an update on our situation and outlook to shareholders on March 29th, 2022. This should further highlight SCOR’s efforts to support sustainable and profitable growth while reinforcing its franchise and capital position.”

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