French reinsurer SCOR has reported a group net loss of €-117 million in Q3 2024, driven by a negative insurance service result in L&H reinsurance. However, its P&C segment saw a very strong performance, with a combined ratio of 88.3%.
At the same time, the firm’s insurance revenue in Q3 2024 was down 6.9% to €3.94 billion, while gross written premiums expanded 2.4% to €4.99 billion.
In Q3 2024, SCOR’s P&C insurance revenue stood at €1.84 billion, down 2.5% at constant exchange rates compared to Q3 2023.
This was driven by the effect of a large multiyear contract not being renewed this year and by a reduction in the SCOR Business Solutions (SBS) insurance revenue.
As mentioned, the reinsurer’s P&C combined ratio stood at 88.3% in Q3 2024, compared to 90.2% in Q3 2023. It includes a Nat Cat ratio of 13.2%, mainly impacted by losses related to central European floodings (4.0 pts), Hurricanes Helene (3.6 pts), Debby (3.4 pts), and Beryl (2.2 pts).
Meanwhile, SCOR’s P&C insurance service result of €159 million is driven by a contractual service margin (CSM) amortisation of €272 million, a risk adjustment release of €49 million, a negative experience variance of €-151 million and an impact of an onerous contract of €-11 million.
The negative experience variance reportedly reflects the Nat Cat losses in Q3 2023 and continued prudence building.
According to the firm, the impact of Hurricane Milton, which made landfall on the west coast of the US state of Florida in early October, is currently expected to be in the mid to high double-digit million euro range in Q4 2024, pretax and net of retrocession.
At the start of this year, SCOR launched a comprehensive L&H assumption review with deep dives covering the US, Canada, South Korea and Israel.
The firm has now reported that the L&H assumption review has been completed. The reinsurer explained that for Q3 2024, the completion of the L&H internal assumption review led to a negative impact of €-0.2 billion included in the L&H ISR driven by an increase in the loss component on onerous contracts, mainly from Israel (€-0.1 billion) and the internal reallocation of a provision (€-0.1 billion) with a neutral impact on the Group Economic Value.
In addition, the pre-tax L&H CSM at the locked-in rate is adjusted by €+0.2 billion, mainly driven by a positive PVFCF adjustment in the US protection portfolio for €+0.1 billion and by the internal reallocation of a provision for €+0.1 billion.
In Q3 2024, SCOR’s L&H insurance revenue amounts to €2.1 billion, down -10.3% at constant exchange rates compared to Q3 2023.
The firm said it continues to build its L&H CSM through new business generation (€116 million new business CSM in Q3 2024), notably from Financial Solutions and Protection.
As a consequence of the 2024 L&H assumption review, the L&H insurance service result amounts to €-210 million in Q3 2024.
Thierry Léger, Chief Executive Officer of SCOR, commented on the results, “We are pleased to announce today the completion of the 2024 L&H assumptions review, with an outcome close to our best estimate view of H1 2024. The very comprehensive review allows us to draw a line and move forward with confidence.
“The underlying L&H performance shows a positive trend, and we have made significant progress in the implementation of our 3-step L&H remedial strategy which will be presented in full at our Investor Day on 12 December 2024, in London.
“P&C is doing very well, and we are taking strides towards our strategic journey of diversified and profitable growth while continuing to build reserve buffers.
“We expect the P&C reinsurance market conditions to remain attractive in 2025 and look ahead with confidence. Investments continue to benefit from high reinvestment rates, with a higher regular income yield in line with our long-term targets. Last but not least, the 203% Group solvency ratio at Q3 2024 demonstrates the resilience of our balance sheet and the effectiveness of our management actions.”
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