French reinsurer SCOR has reported net income of €339 million in the first nine months of 2021, which represents a year-on-year improvement of more than 151% despite pre-tax natural catastrophe losses of €708 million, net of reinsurance.
Alongside the growth in net income, SCOR has reported 10.1% growth in gross written premiums (GWP) in the first nine months of 2021, when compared with the prior year period, to over €13 billion.
In SCOR Global P&C, GWP jumped by almost 17% as the firm benefited from strong market conditions in both insurance and reinsurance. SCOR Global Life also reported GWP growth in 9M 2021, of 5% when compared with the same period last year.
While the favourable market environment enabled the carrier to raise its premiums, weather-related events and the pandemic had a negative impact on SCOR’s underwriting performance during the period.
Combined, hurricane Ida and the European floods in the third quarter had a total pre-tax impact of €343 million, net of reinsurance.
As well as the impact from nat cats, SCOR has announced claims related to the COVID-19 pandemic of €299 million, pre-tax and net of reinsurance, on the life side of the business, of which €241 million comes from its U.S. mortality portfolio, and increasing by €75 million in Q3 2021.
On the P&C side of the business, SCOR says that pandemic-related claims are stable from the end of June, standing at €109 million for 9M 2021, pre-tax and net of reinsurance.
Partially offsetting the impacts of nat cats and the pandemic, SCOR benefited from a positive one-off revaluation impact of €64 million related to the IPO of Doma Holdings.
Within SCOR Global P&C, the net combined ratio for the nine month period stands at 102.7%, including 14.8% of natural catastrophes and 2.3% of COVID-related claims.
For the first nine months of the year, SCOR Global Life has produced a technical margin of 11.3%, driven by the company’s Life in-force transaction.
SCOR’s Life retrocession in-force transaction unlocked significant value for the firm, generating €1 billion in cashflows while increasing the group’s degrees of freedom for value-accretive capital management.
In view of its strong capital position, SCOR says that it will continue to proactively deploy capital to take advantage of profitable growth opportunities in the firming P&C marketplace, and re-balance its exposure towards P&C business, while moving away from nat cat volatility, and utilising retro earnings.
The company also plans to actively pursue diversification of its investment portfolio into value-creation assets to target 10% exposure by the end of 2022.
With the U.S. hurricane season coming to an end, coupled with the removal of regulatory constraints against capital distribution in October by the ACPR, SCOR has launched a €200 million share buy-back programme that will commence on October 28th, 2021.
Denis Kessler, Chairman of SCOR, commented: “Given the recent lift of the regulatory constraints against capital distribution, the Board of Directors has decided to launch a EUR 200 million share buy-back program, considering on the one hand the very strong solvency position of the Group after taking account of the level of capital required by the company to pursue its profitable growth in 2022, and on the other the high net asset value per share, which makes such an operation highly beneficial to SCOR shareholders.
“Furthermore, the Board has reaffirmed the attractive dividend policy actively pursued by the Group over the past few years.”
Laurent Rousseau, Chief Executive Officer (CEO) of SCOR, added: “This is SCOR’s core mission as a Tier 1 reinsurer: to help its clients and partners be more resilient in a highly volatile environment. Thanks to the strict application of our strategic cornerstones, SCOR absorbs shocks and continues to manage growth, improve profitability and reduce earnings volatility. In this context, SCOR deploys its capital proactively to create long term value to its shareholders.
“The share buy-back program that we are announcing today is a demonstration of the confidence we have in our solvency position and our ability to continue to grow profitably. In the wake of its capital management actions, SCOR retains its robust capital shield in a market environment that remains volatile, and where financial strength is a key differentiator. SCOR is poised to reap the benefits of its strong franchise, and to seize the attractive long-term growth opportunities emerging from the rapidly changing risk environment.”