French reinsurer SCOR has reported net income of €162 million for the fourth quarter and a record €812 million for the full year 2023, as the P&C combined ratio strengthened in both periods on the back of lower catastrophe losses.
Net income for the quarter and the full year compares with a loss in both periods in 2022, as the underwriting performance improved as well as the investment result.
Group-wide, insurance revenue totalled €3.8 billion in Q4 2023 and €15.9 billion for the full year, as gross written premiums (GWP) reached €4.9 billion and €19.4 billion, respectively, and the insurance service result improved to €417 million in the quarter and to €1.5 billion in 2023.
In P&C, Q4 revenue reached €1.9 billion and the insurance service result increased considerably to €353 million, as the combined ratio strengthened from 98.4% to 75.6%. For the full year, revenue increased 1.7% to €7.5 billion, the insurance service result was flat at $897 million, and the combined ratio came down from 114.9% in 2022 to 85% in 2023.
SCOR attributes the improving P&C combined ratio to a natural catastrophe ratio of 1.5% as claims came in well under budget as a result of re-underwriting, an attritional loss and commission ratio of 79.3%, and a positive one-off technical income of -1.4 points, offset by a negative impact from an IFRS 17 stabilization effect of 3.8 points. Within the nat cat ratio, SCOR highlights -7.2 points related to mature nat cat developments, mainly Hurricane Ian.
The P&C attributable expense ratio stands at 6.4% of net insurance revenue in Q4 2023. P&C GWP fell 7.5% to €2.4 billion in Q4 2023, and declined by more than 5% to €9.5 billion for the year.
Also today, SCOR has commented on its annual P&C reserves review in Q4 2023, during which it set all lines of its P&C reserves at best estimate, with an increase in the confidence level compared to Q4 2022. Further, broker WTW performed an external independent in-depth review covering 92.2% of the gross held P&C reserves of €9.3 billion, and confirmed that “as at 30 September 2023, SCOR Group’s global P&C claim reserves gross of retrocession are greater than WTW’s corresponding best estimate.”
In the firm’s L&H business, revenue for the quarter totalled €1.9 billion, reflecting year-on-year growth of 5.4%, although for the full year revenue fell from €8.5 billion to €8.4 billion.
The L&H insurance service result amounts to €64 million in Q4 2023 compared with -€463 million a year earlier. SCOR notes that for the quarter, the service result is negatively impacted by a change in the CSM amortization pattern on a full year basis. For the year 2023, the insurance service result increased from -€316 in 2022 to €589 million.
L&H GWP rose more than 9% in the quarter to €2.6 billion and increased 2% to €9.9 billion for the full year 2023. L&H new business CSM continues to build for SCOR on the back of new business generation, mostly from Protection, with the firm reporting a result of €90 million in Q4 2023 and €466 million for the year.
Fabrice Brégier, Chairman of SCOR’s Board of Directors, commented on the results: “In 2023, SCOR delivers record results, achieving its solvency target and exceeding its value creation target. With the launch of its new strategic plan Forward 2026, SCOR intends to fully benefit from the most supportive P&C market environment of the past two decades. The Group’s financial strength and business outlook have led the Board to propose a regular dividend of EUR 1.8 per share for 2023, subject to shareholders’ approval at the General Meeting. I am confident in SCOR’s ability to pursue its profitable growth and achieve the ambitious targets set out in its Forward 2026 strategic plan.”
On the asset side of the balance sheet, total invested asset at the end of 2023 amounted to €22.9 billion, up 3.3% on 2022’s €22.2 billion. For the quarter, the regular income yield improved 0.6 percentage points to 3.7% and for the year increased 0.8% to 3.2%.
Thierry Léger, Chief Executive Officer of SCOR, said: “In 2023, SCOR delivers a strong performance across all business activities, with an Economic Value growth of 8.6% and a Solvency ratio of 209%. SCOR’s balance sheet remains strong in 2023, with an increased confidence level within the best estimate range in P&C reserves. This is confirmed by an external independent review and proves that the prudent reserving strategy we have adopted since the second quarter of 2023 is bearing fruit.
“Looking ahead, our objective is to continue to grow in selected lines of business, as we did at the 1.1.2024 renewals. Building on this solid base and on SCOR’s strong client relationships globally, we are hitting the ground running for the Forward 2026 plan, with a firm commitment to profitable growth.”
