SCOR: Covid-19 impact on the Life side stands at EUR 268 million while in P&C was EUR 109 million in H1

29 July 2021 — Andrei Victor
In H1 2021, French reinsurer SCOR records a strong growth with gross premiums up 9.1%, strong profitability with a net income of EUR 380 million and a very strong solvency position of 245%, "demonstrating its ability to create value and its resilience", as the company mentioned in a statement.

"The underlying performance of the business continues to be strong, reflecting the successful recent P&C renewals in 2020 and 2021, on the back of a disciplined (re)insurance market environment, with attractive growth prospects".

The reinsurer mentioned that the impact of Covid-19 on the Life side stands at EUR 268 million, of which EUR 222 million comes from the U.S. mortality portfolio. In P&C, the impact stands at EUR 109 million in H1 2021, stemming mainly from Property Business Interruption lines.

At the same time, the conclusion of the settlement agreement with Covea demonstrates the value of SCOR's in-force Life book and provides strong optionality - with a strengthened solvency position and EUR 860 million of cash to be reinvested - enabling greater flexibility to fuel growth.

Overall, gross written premiums of EUR 8,441 million in H1 2021, are up 9.1% at constant exchange rates compared with H1 2020 (up 3.0% at current exchange rates).

SCOR Global P&C gross written premiums are up 14.3% at constant exchange rates compared with H1 2020 (up 7.1% at current exchange rates), benefiting from a strong market environment. The net combined ratio stands at 97.2%, including 9.4% of natural catastrophes and 3.6% of Covid-19 related claims. Normalized for natural catastrophes and excluding Covid-19, the net combined ratio stands at an excellent 91.2%, materially outperforming the "Quantum Leap" assumption.

SCOR Global Life gross written premiums are up 5.2% at constant exchange rates compared with H1 2020 (down 0.1% at current exchange rates). SCOR Global Life delivers a technical margin of 13.1% driven by the Covea retrocession agreements demonstrating the value of the Group's Life business, and the reduced impact of Covid-19 mortality.

SCOR Global Investments delivers a return on invested assets of 2.5% in H1 2021 driven notably by EUR 98 million of realized gains.

Other essential emphasized by the reinsurer in a press release are as follows:

  • The Group cost ratio, which stands at 4.4% of gross written premiums, is more favorable than the "Quantum Leap" assumption of ~5.0%.
  • The Group net income stands at EUR 380 million in H1 2021. The annualized return on equity (ROE) stands at 12.2%, 1,177 bps above the risk-free rate.
  • The Group generates high operating cash flows of EUR 531 million in H1 2021. The Group's total liquidity is very strong, standing at EUR 3.5 billion at June 30, 2021.
  • The Group shareholders' equity stands at EUR 6,338 million as at June 30, 2021, following the payment of a dividend of EUR 335 million distributed on July 6, 2021. This results in a book value per share of EUR 33.96, compared to EUR 33.01 as at December 31, 2020.
  • The Group financial leverage stands at 28.0% as at June 30, 2021, lower by 0.5% points compared to December 31, 2020.
  • The estimated Group solvency ratio stands at 245% on June 30, 2021.
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