Despite strong P&C and investments results, SCOR posts a €-308m net loss for Q2 2024024

Paris - Despite very strong P&C results and Investments performances, SCOR has announced a €-308 million net loss in Q2 2024 (€-112 million net loss in H1 2024), driven notably by a negative insurance service result (ISR) in L&H reinsurance, partially offset by very strong P&C and Investments performances:

• In P&C (re)insurance, the combined ratio stands at 86.9% in Q2 2024 including a natural catastrophe claims ratio of 9.9%, in an active period with several mid-sized events. Over the first six months of 2024, the natural catastrophe ratio of 8.6% remains below the budget. The attritional loss and commission ratio stands at 77.6% in Q2 2024, reflecting a satisfactory underlying performance allowing for continued reserving discipline.
• In L&H reinsurance, the insurance service result stands at €-329 million in Q2 2024, mainly impacted by the best estimate view of the 2024 L&H assumption review (€-509 million), partly offset by a positive effect (€143 million) mainly driven by portfolio actions. Therefore, the L&H ISR in 2024 is expected to be significantly less than the EUR 500m indicated during the Q1 2024 results presentation.
• In Investments, SCOR benefits from still-elevated reinvestment rates in Q2 2024 and records a strong regular income yield of 3.6% (+0.5pts vs. Q2 2023).

The reinsurer stated that its annualized Return on Equity stood at -23.7% (-21.9% adjusted) in Q2 2024 and the Group Economic Value over the first half of 2024 decreases by -7.3% at constant economics, both impacted by the best estimate view of the 2024 L&H assumption review accounting for €-0.5bn (pre-tax) in insurance service result and €-1.0bn (pre-tax) in contractual service margin (CSM). Over the first half of 2024, SCOR reports a net loss of €-112 million (€-107 million adjusted), implying an annualized Return on Equity of -4.7% (-4.5% adjusted).

SCOR said that its Group solvency ratio is estimated at 201% at the end of Q2 2024, within the optimal range of 185%-220%, and compared to 209% at year-end 2023. This is supported by strong operating capital generation from the P&C and Investments activities and negatively impacted by the 2024 L&H assumption review (-20 points).

It concluded by explaining that its Group Economic Value under IFRS 17 stands at €8.4bn as of Q2 2024, down -5.2% (-7.3% at constant economics) driven by the 2024 L&H assumption review with a €-1.0bn (post-tax) negative impact. As a result, the Group Economic Value growth target at 9% per annum at constant economics is unlikely to be met in FY 2024, it said.

Thierry Léger, Chief Executive Officer of SCOR, comments: “I am disappointed by the L&H H1 results. In response, we have launched an ambitious 3-step plan resulting in a series of determined actions aiming at restoring the profitability of the L&H business in a sustainable way. The still ongoing 2024 L&H assumption review, which will be completed by year-end, has led to a significant negative impact on our results in Q2 2024. We will present full details of an updated L&H business strategy and Forward 2026 assumptions and targets on 12 December 2024. 

In P&C, with a combined ratio of 86.9%, we delivered very strong results while continuing our strategy of building reserve buffers. We are very satisfied with the latest round of renewals with a +24% premium growth at unchanged attractive margins in June and July, supported by diversified growth in our preferred lines, and market conditions which remain attractive. Investments continue to produce stable and elevated positive results, with a higher regular income yield in line with our longer-term targets.

SCOR actively manages its solvency position and is confident that its solvency ratio will remain in the optimal range of 185%-220% at year-end 2024. 
Frieder Knüpling, CEO of SCOR L&H since 2021, has decided to pursue new professional opportunities and will leave the Group. Until further notice, I will take over the management of L&H. I would like to wish him every success in the next stage of his career.”