French reinsurer SCOR has reported a rise in net income for the full year 2019 to €422 million and a net combined ratio of 99%. However, a high level of natural catastrophe activity pushed its Global P&C segment to an underwriting loss in the fourth-quarter.
Overall, Group net income increased by €100 million in 2019 when compared with the previous year and for the fourth-quarter, SCOR has recorded net income of €21 million, against a net loss of €20 million in the fourth-quarter of 2018.
Gross written premiums expanded in the year by more than 7% year-on-year to €16.3 billion, and for Q4 2019, jumped by more than 9% to €3.9 billion, when compared with the prior-year fourth-quarter.
For 2019, the reinsurance giant has announced a P&C net combined ratio of 99% versus 99.4% in 2018. However, for the fourth-quarter of 2019 SCOR’s combined ratio, at 108.8%, did strengthen by more 7.1 percentage points when compared with Q4 2018, but remained in unprofitable territory as a result of elevated natural catastrophe activity experienced within its Global P&C segment.
The Global P&C segment produced a net cat ratio of 11.6% in 2019 against 7% nat cat budget, driven mostly by €227 million of losses from Typhoon Hagibis, net of retrocession and pre-tax, €156 million of losses from Typhoon Faxai, net of retro and pre-tax, €90 million from Hurricane Dorian, net of retro and pre-tax, and also €66 million of loss development on Typhoons Jebi and Trami, net of retro and pre-tax.
As well as elevated natural catastrophe activity in the period, SCOR also highlights a higher level of man-made claims, which combined with the impact of the Ogden rate in the UK, pushed its net attritional loss and commission ratio higher, to 80.5% in 2019.
Despite the high level of catastrophe losses, the reinsurer notes that its exposure to these events is within its risk appetite.
Within the Global P&C division, SCOR also recognised €110 million of reserve releases in 2019, compared with €100 million a year earlier.
Staying with Global P&C, and SCOR has reported premium growth of almost 16% for the full year 2019 to €7.2 billion, and growth of more than 19% to €1.9 billion for the fourth-quarter of 2019, when compared with the same periods in the prior-year.
The reinsurer attributes the strong premium growth to robust successive renewals in H2 2018 and 2019 on both U.S. treaty reinsurance and specialty insurance lines of business.
Denis Kessler, SCOR’s Chairman and Chief Executive Officer (CEO), commented: “In 2019, the third consecutive year marked by a high level of natural catastrophes and man-made claims, as well as the persistence of a low interest rate environment, SCOR demonstrates once again its capacity to absorb shocks. The Group continues its development and its strong value creation, recording sustainable growth, an increase in profitability, and further strengthening of solvency.
“Our shareholder return is attractive with a proposed dividend of EUR 1.80 for 2019 subject to the approval of the Annual General Assembly. SCOR as an independent global Tier one reinsurance company is fully mobilized to reach the targets of its “Quantum Leap” strategic plan.”
Turning to SCOR Global Life, and the unit’s gross written premiums increased by almost 2% to €9.2 billion in 2019 and by almost 3% to €2.4 billion in the fourth-quarter of 2019.
For the full year 2019, SCOR’s life technical margin stands at 7.5%, versus 7% in 2018 and, for the fourth-quarter of 2019, the life technical margin reached 8.3%, compared with 7% in Q4 2018.
Regarding investments, and SCOR reveals that investment income on invested assets reached €588 million in 2019, benefitting from realised gains of €93 million, generating a return on invested assets of 3% for the year.
SCOR’s results appear in line with its expectations announced previously, with the reinsurer achieving a combined ratio of below 100% for the full year, as anticipated.
