Global reinsurer SCOR has reported a net loss of €80 million for the first-quarter of 2022, as the firm’s natural catastrophe ratio exceeded budget, COVID-19 continued to impact life and health (L&H), and it reserved for losses related to the war in Ukraine.
The net loss compares with income of €45 million a year earlier, as SCOR notes a period marked by a combination of exceptional events.
However, across the Group, gross written premiums (GWP) increased by almost 10% to more than €4.7 billion, with strong growth in property and casualty (P&C) of 20%.
Within its P&C business, SCOR has also reported that its natural catastrophe ratio hit 10.1% in Q1 2022, which is above its budget of 8% for the quarter. SCOR attributes the elevated cat load to floods in Australia, European storms in January, and the Japan earthquake.
SCOR has revealed that its attritional ratio was also high in its P&C arm in Q1 2022, as it reserved €85 million for potential losses caused by the war in Ukraine, and also drought in Brazil, which took its loss ratio to 74.4%.
All in all, SCOR’s P&C reinsurance division has produced a combined ratio of 103.7% for the quarter, compared with 97.1% a year earlier.
In its L&H business, GWP increased by more than 1%, year-on-year, as the segment produced a technical margin of 1.4%, which is down on the 1.6% reported last year, impacted by COVID-19 claims. In fact, COVID-19 claims amounted to €195 million for SCOR in Q1 2022, compared with losses related to pandemic of €179 million in Q1 2021.
The reinsurer has also provided an update on its experience at the renewals, revealing that it grew its book by 19.6% and benefited from year-to-date price increase of 4.5% on average, year-over-year.
SCOR notes that the active steering of both the January and April renewals is leading to a reduction of exposures to climate sensitive events. In fact, the ongoing curtailing of the catastrophe exposure is now expected to lead to an exposure reduction of 15% year-on-year at the end of 2022.
Denis Kessler, Chairman of SCOR, commented: “Uncertainties and instabilities are multiplying: the pandemic is ongoing, global refragmentation is accelerating, inflation is back, economic growth is slowing down and the world is being hit by natural catastrophes… Our environment seems increasingly stochastic and random, and global predictability seems to be shrinking. Indeed, the (re)insurance industry appears to be facing increasingly frequent shocks and multifaceted and widespread threats. In this respect, we are living in a time of ‘great change’. In this environment of major transformation, where risks are multiplying, reinsurance is increasingly necessary to provide security to all economic agents. To accomplish their fundamental mission, reinsurers need to transform themselves and adapt all aspects of their risk management policies.
“As ultimate risk carriers, their Solvency is critically important. SCOR is ready to meet all these challenges, building on its franchise, its recognized technical expertise, the talent of its teams and its command of new technology. I am convinced that SCOR, with its proven good governance and proactive management, will steadfastly pursue the best ways and means to enable the Group to continue its value creating journey.”
Laurent Rousseau, Chief Executive Officer of SCOR, added: “Q1 2022 has been marked by a series of exceptional events both in L&H and in P&C, which have negatively impacted our financial performance. Amongst these, we have been especially focused on managing the impact of the conflict in Ukraine – from a financial, operational and human standpoint.
“We are also continuously focused on our main objectives: reducing volatility, increasing profitability, growing the franchise, optimally allocating capital and embarking on the transformation of the Group. Our January 1 and April 1 P&C treaty reinsurance renewals have been strong, and we have a clear action plan in place across the entire organization to improve the Group’s financial performance in 2022. Despite an accounting loss, SCOR’s solvency position remains robust, with a solvency ratio of 240%.”