Reinsurance News

SCOR reports Q2 net loss amid COVID-19 impacts of €456mn

23rd July 2020 - Author: Luke Gallin

Global insurer and reinsurer SCOR has reported a net loss of €136 million for the second-quarter of 2020 and net income of €26 million for the first half of the year, as the estimated cost of the COVID-19 pandemic booked in Q2 reached €456 million.

SCORIn Q2 2020, COVID-19 pandemic impacts amounted to €248 million on the P&C side of the business, with the firm’s exposure coming mainly from credit, surety & political risks and from property business interruption.

SCOR states that the actual COVID-19 claims received totalled €74 million, with the estimated cost of this pandemic at €248 million, net of retrocession and reinstatement premiums, and before tax.

On the firm’s Life business, SCOR has booked pandemic related impacts of €194 million for Q2 2020, of which actual claims received totals €63 million. According to the firm, the main exposure in its Life business comes from the U.S.

On its investments, SCOR states that it benefitted from the defensive nature and very high quality of its investment portfolio when the pandemic began. The level of impairment charges remains limited in Q2 at €14 million, while the level of unrealised gains has increased by €172 million between December 31st, 2019 and June 30th, 2020 despite €62 million of realised gains largely coming from the real estate programme in the opening quarter of the year.

Stratumn, by SIA Partners

“In the face of the Covid-19 pandemic, SCOR has once again demonstrated both its capacity to absorb major shocks and the resilience of its business model. With its AA- credit rating, which matches that of other Tier 1 reinsurers and has been recently confirmed by Moody’s, Standard & Poor’s and Fitch, the Group is in a very strong position to benefit from the hardening of the pricing environment and improved terms and conditions in the P&C market.

“SCOR continues to execute its strategic plan “Quantum Leap” combining growth, profitability and solvency, with no change in risk appetite, capital shield policy or capital management policy,” said Denis Kessler, Chairman and Chief Executive Officer (CEO) of SCOR.

In light of the COVID-19 impacts, SCOR has reported a net loss of €136 million for the second-quarter of the year, compared with net income of €155 million in Q1 2019. Gross written premiums for the quarter remained flat at more than €4 billion, while the annualised ROE hit -8.4% compared with +10.5% a year earlier.

For the first six months of 2020, SCOR has reported net income of €26 million compared with €286 million for the same period in 2019. This represents a year-on-year decline of more than 90%. Gross written premiums increased slightly in H1 2020 to €8.195 billion, while the annualised ROE fell by 9 percentage points to 0.8%.

In H1 2020, SCOR’s Global P&C unit has reported a combined ratio of 102.3% as COVID-19 dented the profitability of the business.

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