Press Release
Investor Day 2020
SCOR is well positioned to capture profitable growth opportunities
from the new supportive market environment
At its annual Investor Day, SCOR’s Executive Management team, led by
Firstly, SCOR is absorbing the impact of the Covid-19 crisis. Based on data currently available, information received from cedants to date and the results of the models used, Life claims are emerging better than expected and better than booked at H1 2020. P&C claims are developing as expected.
Secondly, 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. SCOR has resumed its reinvestment strategy on credit markets and value creation assets. More importantly SCOR extracts value first and foremost from its underwriting activities.
Thirdly, SCOR is very positive on the new P&C market conditions and is expecting strong growth with positive pricing dynamics. SCOR is well positioned to benefit from this improving environment thanks to its optimal solvency and the depth of its global franchise.
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SCOR absorbs the shock of the Covid-19 pandemic and confirms the assessment communicated on
- On the Life side, the Covid-19 claims are emerging better than expected on the
U.S. reinsured portfolio, withEUR 85 million paid as ofAugust 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 ofAugust 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
SCOR Global P&C
For 2020, SGP&C is expecting a positive growth in Gross Written Premiums at constant exchange rates, as the effects of Covid-19 and of the pruning on the 2020 portfolio are expected to be mitigated by the strong growth of the 2018 and 2019 portfolios following the disciplined renewals.
The Covid-19 pandemic is leading to a reinforcement of the P&C (re)insurance market hardening which is expected to be significant, generalized and long-lasting. The outlook for the P&C (re)insurance market is very positive.
In this context, SCOR Global P&C is ideally positioned to benefit from the upcoming hard market across the risk-to-capital value chain. SCOR Global P&C is actively delivering “Quantum Leap” strategic developments by redeploying capital on value-creating segments and clients, growing
- Estimated Gross Premium Income1 growth of +15%2, translating to Gross Written Premium growth of +11%2 at constant exchange rates;
- A combined ratio trending down to 95% and below; and
- A VNB3 annual growth assumption improved from 6%-9% to 7%-10% with positive trends.
SCOR Global Life
The Covid-19 pandemic has accelerated a transformation of the life insurance industry. With an increased desire for protection and security, consumers have greater awareness of the importance of life and health insurance. Engaging and easy to access products are in strong demand. In line with “Quantum Leap” strategic priorities, SCOR Global Life is transforming its value proposition, from simple risk taking to partnering for impact, developing innovative solutions with clients centered around the needs of the consumer.
SCOR Global Life continues to see strong growth from
After the absorption of the financial impact of Covid-19 pandemic, SCOR Global Life expects to return to “Quantum Leap” long term financial assumptions by H2 2021. SCOR Global Life’s revised assumptions are:
- A net technical margin for full year 2020 estimated at 5.5% to 6.0% (compared to 5.2% to 5.4% as communicated at H1 2020 results);
- A net technical margin for full year 2021 estimated at 6.5% to 7.0%, with technical profitability expected to fully return to “Quantum Leap” assumptions in H2 2021;
- Gross Written Premium for 2020 down 1.6% due to a slowdown in large transactions but growth returning to “Quantum Leap” assumptions for 2021;
- A VNB4 annual growth assumption maintained at 6% to 9%.
SCOR Global Investments
During the Covid-19 pandemic, SCOR Global Investments has proven its ability to maximize value creation while safeguarding the value of the portfolio. As of
Its portfolio delivers a resilient financial contribution. SCOR Global Investments portfolio, which amounts to
After a voluntary freeze of its reinvestment activity between March and
SCOR Global Investments continues to execute the “Quantum Leap” roadmap and accelerates its sustainability journey towards carbon neutrality. Thanks to the superior and stress-tested track record of its investment solutions and the acquisition of
SCOR Global Investment’s revised assumptions are:
- An annualized return on invested assets estimated at ~2.2%6 for FY 2020;
- An average return on invested assets over the course of the “Quantum Leap” plan at 2.4% to 2.9%.
The SCOR Investor Day 2020 webcast starts at
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Contact details
Media
+33 (0)1 58 44 76 62
media@scor.com
Investor Relations
+44 (0)203 207 8561
ikelly@scor.com
www.scor.com
LinkedIn: SCOR | Twitter: @SCOR_SE
This publication is an ad hoc disclosure pursuant to article 17 of the Regulation (EU) n°596/2014 of
General
Numbers presented throughout this document may not add up precisely to the totals in the tables and text. Percentages and percent changes are calculated on complete figures (including decimals); therefore the document might contain immaterial differences in sums and percentages due to rounding. Unless otherwise specified, the sources for the business ranking and market positions are internal.
Forward-looking statements
This document includes forward-looking statements and information about the objectives of SCOR, in particular, relating to its current or future projects. These statements are sometimes identified by the use of the future tense or conditional mode, as well as terms such as “estimate”, “believe”, “have the objective of”, “intend to”, “expect”, “result in”, “should” and other similar expressions. It should be noted that the achievement of these objectives and forward-looking statements is dependent on the circumstances and facts that arise in the future.
Forward-looking statements and information about objectives may be impacted by known and unknown risks, uncertainties and other factors that may significantly alter the future results, performance and accomplishments planned or expected by SCOR, and in particular by the impact of the Covid-19 crisis which cannot be accurately assessed at this stage, given the uncertainty related to the magnitude and duration of the Covid-19 pandemic and to the possible effects of future governmental actions and/or legal developments.
Information regarding risks and uncertainties that may affect SCOR’s business is set forth in the 2019 universal registration document filed on
In addition, such forward-looking statements are not “profit forecasts” within the meaning of Article 1 of Commission Delegated Regulation (EU) 2019/980.
Financial information
The Group’s financial information contained in this document is prepared on the basis of IFRS and interpretations issued and approved by the
Unless otherwise specified, prior-year balance sheet, income statement items and ratios have not been reclassified.
The calculation of financial ratios (such as book value per share, return on investments, return on invested assets, Group cost ratio, return on equity, combined ratio and life technical margin) are detailed in the Appendices of the H1 2020 presentation (see page 22).
The first half 2020 financial information included in this document has been subject to the completion of a limited review by SCOR’s independent auditors. Unless otherwise specified, all figures are presented in Euros. Any figures for a period subsequent to
1 EGPI - Underwriting Year
2 Could be revised down if market not improving as expected
3 Value of New Business after Risk Margin and tax
4 Value of New Business after Risk Margin and tax
5 As of
6 Including updated allowance for impairments
Attachment
- SCOR Press Release
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