SCOR has three key positive messages for its Investor Day: (1) SCOR is absorbing the impact of the Covid-19 crisis; (2) even though there are challenges placed on the industry from the very low yield environment, SCOR's prudent asset management has safeguarded the value of its investment portfolio since the beginning of the Covid-19 crisis; (3) the company is very positive on the new P&C market conditions and is expecting strong growth with positive pricing dynamics.
SCOR absorbs the shock of the Covid-19 pandemic and confirms the assessment communicated on July 23, 2020 within the Group's H1 2020 results:
- On the Life side, the Covid-19 claims are emerging better than expected on the U.S. reinsured portfolio, with EUR 85 million paid as of August 31, 2020, translating into an actual over expected claims ratio of 62%;
- On the P&C side, the Covid-19 claims are developing as expected, with unchanged assessment compared to H1 2020 and EUR 3 million claims paid as of August 28, 2020.
Covid-19 is contributing to create the conditions for stronger growth with positive pricing dynamics. The exacerbation by Covid-19 of the increase in risk aversion lato sensu will drive higher demand for risk covers globally and therefore stronger growth for the reinsurance industry, on both the Life side and the P&C side. Furthermore, Covid-19 and the persisting low yield environment are expected to be acting as additional catalysts to an already hardening market on the P&C side.
SCOR is well positioned in this supportive environment:
- The company is absorbing the impact of the Covid-19 crisis, both operationally and financially;
- There are clear profitable growth opportunities ahead;
- The SCOR Group has a strong balance sheet, with superior credit ratings and an optimal solvency, after having taken into account all known current and future Covid-19 claims; and
- The Group benefits from a global scalable platform that will continue to bring operating leverage as market opportunities are seized.
SCOR reaffirms its "Quantum Leap" strategy, based upon consistency of focus upon the twofold targets of profitability and solvency, and based upon the transformation of the business through an increasing investment in technology. The Group is further enhancing value creation through accelerated growth in the new and supportive P&C reinsurance market environment.
Out of the EUR 250 million investments in technology planned over "Quantum Leap", EUR 113 million has already been deployed since the start of the plan.
Denis Kessler, Chairman & Chief Executive Officer of SCOR, comments:
"With the Covid-19 pandemic, SCOR has once again demonstrated its capacity to absorb major shocks combined with the resilience of its business model. Regarding the assessment of our exposure to the Covid-19 pandemic that we provided at the end of July 2020, on the P&C side, claims are developing as expected. On the Life side, at this stage, claims experience is emerging better than expected. In addition, the pandemic has also exacerbated society's growing aversion to risk, creating the conditions to drive stronger growth for the reinsurance industry. SCOR is uniquely positioned to benefit from the hardening of the pricing environment and improved terms and conditions. SCOR is well on track with the execution of its strategic plan "Quantum Leap" with a faster than expected profitable growth prospect on the P&C side, and reaffirms its strategy based on consistency and transformation to enhance value creation."