French reinsurance firm SCOR has reported a strong start to 2018, with premiums underwritten rising across the business, an increased net income and ongoing improved market conditions experienced at the April 1st reinsurance renewals.
The reinsurer reports gross premiums underwritten of EUR 3.771 billion for the first-quarter of 2018, up by 10.2% at constant exchange rates (0.9% at current rates), with the life business growing an impressive 14.7% (at constant rates) and P&C growing 3.9%.
At the same time, SCOR has reported an improved technical result, with a combined ratio of 91.8% in P&C that included 4.1% of natural catastrophe losses due to windstorm Friederike and an earthquake in Papua New Guinea. On the life side the technical margin declined slightly, to 6.8%.
The result is net income of EUR 166 million for Q1 2018, up by 18.6% on 2017’s EUR 140 million, while the annualised return on equity (ROE) for the period reached 11.2%.
Denis Kessler, Chairman & Chief Executive Officer of SCOR, commented on the results, “SCOR is off to a strong start for 2018: successful P&C renewals, the continued expansion of the Life business in key markets, notably Asia-Pacific, and a well-received debt issuance. The Group holds firmly to its “Vision in Action” plan and is on track to deliver on its targets. The Group continues to pursue its attractive shareholder remuneration policy, with a dividend of EUR 1.65 per share that has been submitted for approval at the Annual General Meeting. SCOR is strategically positioned for growth across its businesses and in targeted geographies.”
SCOR Global P&C recorded a 3.9% increase in premiums underwritten at constant exchange rates, with growth coming from reinsurance treaties in the United States and SCOR Business Solutions, while the life business recorded a 14.7% increase, thanks to growth in the Asia-Pacific region and Financial Solutions.
The growth trend continued at the April reinsurance renewals as well, on which SCOR reports underwriting increased gross written premiums by 13.5% at constant exchange rates, rising to EUR 505 million, while at the same time the firm reports that the risk adjusted pricing secured improved by 2.9% and terms and conditions remained stable.
That renewal should also position SCOR for more profitable future quarters, as the company realises the income boost from higher rates and more written premiums throughout the rest of this year.
At April, SCOR experienced most of its growth across areas of the business including reinsurance Treaty (especially in India and the U.S.) and Specialty Treaties (including in Agriculture, Credit and Surety and U.S. Cat).
As starts to the year go, the 18.6% increase in net income will be pleasing for SCOR and its investors, perhaps reflecting the type of increases in profit we could see in other businesses as the effects of higher reinsurance rates flow through a quarter when major loss activity has been more limited for the largest reinsurers.
You can read the full results statement from SCOR here.