SCOR grows P&C reinsurance 24% at renewals, expects market discipline to persist
Global reinsurance company SCOR expanded its estimated gross premium income on business underwritten at the June and July 2024 renewal season by 24%, while also reporting still positive price increases and now turning to year end with a view that market discipline will persist into 2025.
Overshadowing SCOR’s strong P&C results reported this morning is the life and health reserving actions the company hasd previously announced, which have driven the reinsurance company to a EUR -308 million net loss for Q2 2024.
Actions are underway to reposition the life and health reinsurance book and CEO Thierry Léger, said, “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.”
But things are much brighter on the property and casualty reinsurance side, where SCOR continues to grow and also diversify its book across specialty and alternative solutions lines.
SCOR has reported a P&C combined ratio of 86.6% for Q2, better than the prior year and still allowing for ongoing reserving discipline, the company said this morning.
CEO Léger said, “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.”
During Q2 2024, SCOR reported a natural catastrophe claims ratio of 9.9%, due to an active period with several mid-sized events, calling out losses due to the flooding in UAE/Oman, as well as in South Germany and Brazil.
But, for the first-half, SCOR’s nat cat ratio remained under budget at 8.6%, which gives the company some additional buffer for the second-half.
In addition, SCOR reported an attritional loss and commission ratio of 77.6%, which it said reflects satisfactory underlying performance despite losses from the civil unrest in New Caledonia, and ongoing reserving discipline.
P&C insurance revenue reached EUR 2.031 billion for Q2 2024, which is up 8.4% at constant exchange rates over the prior year.
At the June and July 2024 renewals, SCOR has expanded further in preferred and diversifying lines, while terms and conditions have been maintained, as too has the still elevated profitability level of its P&C reinsurance book.
Estimated premium income across the renewal business is up 24$ year-on-year, with significant growth in alternative solutions a key driver, the reinsurance company explained. In addition, specialty lines business grew 25%.
SCOR said that the pricing trend observed in prior renewals was maintained at the mid-year 2024.
It resulted in a +2.2% price increase overall and a year-to-date improvement on the net expected technical profitability of -1.4 points of underwriting ratio.
SCOR said that for 2024 so far, it has achieved +15.5% gross premium growth for its renewed portfolio with an average 3.0% price increase.
This results in an expected improvement of the underwriting ratio of -1.4 points, for the first-half renewed book.
In property and property catastrophe reinsurance, last year SCOR said EUR 332.82 million or 43% of its renewal was in those lines, while this year it is reported at EUR 401.52 million which is now slightly smaller component of the whole at 42%.
Within the mid-year renewals, SCOR grew fastest in the United States, with 30% growth in premiums reported there.
The company said, “In a slightly more competitive environment, SCOR anticipates a continued disciplined market for the upcoming renewals.”
The company expects underwriting discipline in the reinsurance market will remain “persistent” for the foreseeable future.
