Reinsurance News

SCOR reports solid 2018 growth and profit despite nat cats

20th February 2019 - Author: Luke Gallin

Global insurer and reinsurer SCOR’s gross written premiums (GWP) surpassed €15 billion for the first time in 2018, while full-year net income improved to €322 million despite the impacts of catastrophe losses in the third and fourth-quarter.

SCOR logoThe French re/insurer has reported GWP of €15.3 billion for the full-year 2018, up 3.2% from 2017’s total. This is the first time the company’s GWP has exceeded the €15 billion mark, with growth occurring across both its Global Property and Casualty (P&C) and Global Life segments.

For the full-year, SCOR’s net income increased by 12.6% to €322 million, despite the impacts of catastrophe losses in the second-half of the year, which, contributed to a 107.6% Q4 net income decline for the firm to a €20 million loss.

The firm’s group cost ratio remained flat for the full-year at 5% and declined slightly in Q4 to 4.9%. At the same time, SCOR’s annualised return on equity (ROE) improved in 2018 to 5.5%, while in Q4 it declined significantly to -1.3%.

SCOR’s Chairman and Chief Executive Officer (CEO), Denis Kessler, commented: “In 2018 – a year once again marked by a high level of natural catastrophes – SCOR continues to grow: the Group delivers robust growth and solid recurring profitability, and provides a strong solvency position. For the first time the Group has recorded total gross premiums of more than EUR 15 billion. Alongside a robust solvency ratio, we completed a EUR 200 million share buyback program and awarded shares to all our employees worldwide, while avoiding any dilution for our shareholders.

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“Our shareholder return remains attractive, with a proposed strong dividend of EUR 1.75 for 2018. With our financial rating reaffirmed by all four rating agencies, we are now actively preparing the Group’s next strategic plan, which will be presented at the beginning of September. As an independent Tier 1 global reinsurer, SCOR will continue to create value and to be the master of its own destiny.”

A look at SCOR’s 2018 results by segment reveals that growth in its Global P&C segment is in line with the re/insurer’s “Vision in Action” growth assumptions, with expansion in this area coming mainly from U.S. Treaty reinsurance and Specialty insurance.

SCOR’s Global P&C unit was hit by numerous catastrophe events in the third and fourth-quarter of 2018, including typhoons Jebi (€167mn) and Trami (€31mn) in Japan, hurricane Michael (€125mn) and Florence (€60mn), and the California wildfires (Camp wildfire €110mn and Woolsey wildfire €34mn) in the U.S. Furthermore, additional smaller nat cat events impacted the firm, amounting to a net impact of €130 million.

Despite the impacts of catastrophe events, SCOR’s Global P&C segment remained profitable in 2018, with a combined ratio of 99.4%. However, in Q4, the combined ratio weakened to 115.9%, compared with 91.6% in Q4 2017.

SCOR’s Global Life segment also saw its GWP improve in 2018 and the fourth-quarter, up by 3.6% and 3.4%, respectively. The life technical margin remained flat for both the full-year and the fourth-quarter, at 7% and 7%, respectively.

Turing to investments, and SCOR’s total investments for the 2018 year improved by 0.6%, which is the same percentage increase witnessed in Q4. However, the return on investment fell to 2.3% in 2018 and 2.9% in Q4.

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