French reinsurer SCOR has reported Group net income of EUR 311 million in the first quarter of 2023, compared with a net loss of EUR 35 million a year earlier, although insurance revenue declined 4% to EUR 3.9 billion.
Across the Group, gross written premiums (GWP) fell by 0.7% year-on-year to EUR 4.7 billion, driven by a decline in P&C GWP of 3.1%, partially offset by growth in L&H premiums of 1.6%.
The firm notes that during the quarter, the reinsurance industry continues to be driven by three favorable developments that have emerged and accelerated.
This includes the ongoing positive phase of the P&C reinsurance cycle. SCOR records a 7% average rate increase for its renewed P&C portfolio on April 1st, 2023, which it says should lead to a significant improvement in technical profitability. It expects this favourable trend to persist at the mid-year renewals, against a backdrop of continued high natural catastrophe losses.
In L&H reinsurance, SCOR explains that the excess mortality linked to the Covid-19 pandemic has been greatly reduced.
And then, on the asset side of the balance sheet, SCOR expects that the rise in interest rates and consequently in reinvestment rates will significantly increase the financial contribution of investments to reinsurer results in general.
Within SCOR P&C, insurance revenue increased 5.4% at constant exchange rates, with a combined ratio of 85.2%, which includes a nat cat ratio of 9.9%, in line with the 10% budget announced on April 12th, 2023. New business CSM amounts to EUR 588 million.
Within SCOR L&H, insurance revenue fell 11% at constant exchange rates, while the insurance service result stands at EUR 272 million and new business CSM stands at EUR 192 million in Q1 2023.
Turning to SCOR Investments, and the segment delivers a return on invested assets of 2.9% and a regular income yield of 2.8% in the quarter.
Denis Kessler, Chairman of SCOR, said: “SCOR has generated excellent results in Q1 2023. The Group is taking full advantage of the current favorable environment. Our new CEO, Thierry Léger, is in charge of drawing up a new three-year strategic plan under IFRS 17. This plan will define the best ways and means for the Group to consolidate its position as a leading global reinsurer, taking advantage of its Tier 1 global underwriting platform and technical know-how. The Board of Directors is confident in the Group’s ability to actively pursue its growth, with the twofold objective of solvency and value creation.”
Thierry Léger, Chief Executive Officer (CEO) of SCOR, added: “The Q1 results are very satisfactory. All business units – P&C, L&H and Investments – have generated positive results, and the Group’s Economic Value has increased significantly. In parallel, our Finance teams have successfully managed the transition to the new IFRS 17 framework: we would like to thank them for this achievement. I am now looking to the future: the current market is very supportive, and all the teams are mobilized to take advantage of this favorable environment. I look forward to presenting the outline of the new strategic plan at the Annual General Meeting.”
