Global re/insurer SCOR has reported a 72% dip in net income for the first quarter of 2021 to €45 million, as COVID-19 impacted the life side of the business and natural catastrophes hit the performance of its P&C operation in the period.
SCOR notes that its Q1 2021 results have been impacted by both known and modelled COVID-19 claims development and a series of large catastrophe events, notably winter storm Uri in the U.S.
During the first quarter, claims related to the pandemic impacted SCOR’s life business by €162 million, of which €145 million comes from the U.S. mortality portfolio. On the P&C side, the impact of COVID-19 has been stable since the end of 2020, explains the firm.
According to SCOR, pandemic related claims are tracking as expected with the impacts largely limited to the U.S.
Despite the impact of the pandemic on its life business, the segment still recorded a technical result of €34 million in Q1 2021, while gross written premiums fell by 3.6% to €2.27 billion.
Within SCOR Global P&C, gross written premiums increased by just shy of 3% during the period to €1.85 billion.
However, the P&C net combined ratio did deteriorate year-on-year to 97.1%, including a nat cat ratio of 12.6%, which is above the 7% budget. SCOR attributes elevated catastrophe losses in the period to Uri in Texas at a cost of €98 million (net of retrocession), European storm Filomena at €15 million (net of retrocession), and also deterioration from hurricanes Laura and Sally at €38 million (net of retrocession).
SCOR Global P&C has also recorded a net attritional loss and commission ratio of 77.8% for Q1 2021, which is an improvement of 5 percentage points on the prior year quarter.
All in all, SCOR has reported gross written premiums of €4.13 billion for the first quarter of 2021, down almost 1% on the same period in 2020.
Investment income also fell slightly in the period to €173 million against €175 million a year earlier, while the operating result declined by more than 60% to €102 million.
Denis Kessler, Chairman and Chief Executive Officer (CEO) of SCOR, commented: “More than a year into the Covid-19 crisis, with its deep human, economic and financial impact, SCOR once again demonstrates the strength of its business model and the relevance of its strategy. SCOR relies on its expertise in risk and epidemiological modelling capabilities to predict and monitor the Covid-19 development and to estimate its foreseeable impacts on the Group.
“As expected, SCOR’s Q1 2021 results are significantly impacted by Covid-19, in particular on the Life side. In addition, on the P&C side, SCOR had to face in Q1 2021 a series of natural catastrophes driven by a polar vortex causing Winter Storm Uri in Texas, a remote tail risk event in this region of the United States. The probability of a polar vortex and a pandemic occurring in the same quarter is extremely low but is nonetheless one of the extreme scenarios within our risk appetite.
“On the investment side, SCOR was able to successfully seize opportunities in the fixed income market on the back of a reflation dynamic to crystallize value. SCOR is profitable in Q1 2021, delivers a very high level of liquidity and records a solvency level above its optimal range.
“As demonstrated by the successful January and April renewals, SCOR is very well positioned to benefit from improvements in pricing and terms and conditions in particular on the P&C (re)insurance market which should continue.”