AM Best has downgraded the Financial Strength Rating (FSR) to A (Excellent) from A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to 'a+' (Excellent) from 'aa-' (Superior) of
Concurrently, AM Best has downgraded the Long-Term Issue Credit Ratings (Long-Term IRs) on SCOR's outstanding rated instruments. The outlook of these Credit Ratings (ratings) has been revised to stable from negative. See below for a detailed listing of companies and ratings.
The ratings reflect SCOR's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, very favourable business profile and appropriate enterprise risk management (ERM).
The rating downgrades reflect the deterioration in SCOR's operating performance, which is no longer considered supportive of AM Best's previous strong assessment.
In 2022, SCOR reported a sizable net loss of
While the group's management has implemented remedial actions to improve underwriting performance, such as reduction of its peak exposures (natural catastrophe risk and
The poor underwriting performance in recent periods has highlighted weaknesses in the group's underwriting and risk management capabilities. As a result, the ERM assessment is no longer considered supportive of the previous very strong assessment and has been revised to appropriate. The group's risk management capabilities are in line with its risk profile.
AM Best expects SCOR's risk-adjusted capitalisation to be maintained at the strongest level prospectively, as measured by Best's Capital Adequacy Ratio (BCAR), supporting its very strong balance sheet strength assessment. The group benefits from a conservative investment portfolio and a robust retrocession programme designed to shield its capital base. A partially offsetting factor is SCOR's reliance on soft capital components, which includes hybrid debt, value of in-force life business and a contingent capital facility.
SCOR continues to maintain its prominent position as one of the top five global reinsurers, with excellent product and geographic diversification. The group's internationally recognised franchise, long-standing client relationships and technical expertise help SCOR manage local and global reinsurance market cycles. The group is expected to benefit from improved reinsurance market conditions, while executing on its stated objective to reduce earnings volatility.
The FSR has been downgraded to A (Excellent) from A+ (Superior) and the Long-Term ICRs downgraded to 'a+' (Excellent) from 'aa-' (Superior), with the outlooks revised to stable from negative, for
The following Long-Term IRs have been downgraded with the outlook revised to stable from negative:
to 'a-' (Excellent) from 'a' (Excellent) on
to 'a-' (Excellent) from 'a' (Excellent) on
to 'a-' (Excellent) from 'a' (Excellent) on
to 'a-' (Excellent) from 'a' (Excellent) on
This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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