Global insurer and reinsurer SCOR has announced that its Board of Directors has proposed that no dividend be distributed for the 2019 fiscal year, while Chairman and Chief Executive Officer (CEO) Denis Kessler has proposed that his annual variable compensation for the year be reduced by 30%.
Following SCOR’s performance in 2019, with the re/insurer reporting a rise in net income to €422 million, the Board of Directors, at its meeting on Feb 26th, decided to propose to the Shareholders’ Meeting scheduled for April 17th, that a gross dividend of €1.80 per share be distributed for the 2019 fiscal year.
In light of the challenges of the COVID-19 pandemic, the Board decided on March 27th to postpone its Annual Shareholders’ Meeting until June 16th, 2020.
Since the end of March, the European Insurance and Occupational Pensions Authority (EIOPA) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR) have both issued statements regarding dividend distributions in respect of the 2019 fiscal year.
As a result of the unprecedented challenges and widespread uncertainty being caused by the COVID-19 pandemic and subsequent economic fallout, the statements from both organisations said that carriers must refrain from proposing dividends.
“In view of these factors, the Board of Directors of SCOR SE, which met on May 25, 2020, has decided to propose to the Shareholders’ Meeting of June 16, 2020, that no dividend be distributed for the 2019 fiscal year and that the entire income for that year be allocated to distributable earnings,” explains SCOR.
The re/insurer adds that the ACPR’s position calling for no dividend covers the period from April until October 1st, 2020. SCOR says that it will regain its freedom in terms of capital management after this date.
At the same time, the ACPR has also called on insurers and reinsurers to show some restraint on variable compensation award policies.
“With this in mind, the Chairman & CEO has proposed to the Compensation and Nomination Committee that his annual variable compensation for the 2019 fiscal year be reduced by 30% compared to the amount mentioned in the 2019 URD published on March 13, 2020, which the Board of Directors has approved,” says SCOR.
Furthermore, SCOR says that it has not used the short-time work scheme and benefits from no government support schemes related to the ongoing pandemic.
In the first-quarter of 2020, SCOR reported a limited impact from the COVID-19 pandemic, posting a 23.7% rise in net income and a P&C combined ratio of 94.5%.