Scor hit by ‘unique combination’ of Covid and storm losses in Q1

Covid-19-related life reinsurance claims and natural catastrophes have dented Scor’s first-quarter 2021 results. The French reinsurer reported a 72.2% drop in net income to €45m in the first quarter of 2021, driven by a “unique combination” of Covid-19 claims development and a series of large natural catastrophes, namely Texas Winter Storm Uri. Scor’s operating result fell almost 61% to €102m. “As expected, Scor’s Q1 2021 results are significantly impacted by Covid-19, in particular on the life side. In addition, on the P&C side, Scor had to face in Q1 2021 a series of natural catastrophes driven by a polar vortex causing Winter Storm Uri in Texas, a remote tail-risk event in this region of the US,” said Denis Kessler, chairman and chief executive officer of Scor. “The probability of a polar vortex and a pandemic occurring in the same quarter is extremely low but is nonetheless one of the extreme scenarios within our risk appetite,” he said. Pandemic-related life reinsurance claims totalled €162m in the first quarter, of which €145m were from the reinsurer’s US mortality portfolio. P&C Covid-19-related claims were described as stable since 31 December 2020. “Covid-19 claims are manageable, developing as expected and tracking closely in line with what was previously communicated,” Scor said. In February, Scor estimated its Covid-19 losses for 2020 at €640m, of which €284m are from P&C business and €314m from life. Scor’s P&C combined ratio deteriorated 2.6 percentage points to 97.1% in the first quarter of 2021, reflecting higher-than-expected natural catastrophe losses. At the first-quarter mark, Scor’s nat cat ratio stood at 12.6%, well above its budget of 7%. Texas Winter Storm Uri cost the reinsurer €98m net of retrocession, while European storm Filomena resulted in a loss of €15m net of retrocession. Scor also suffered a €38bn deterioration in losses from the 2020 US Hurricanes Laura and Sally. Normalised for natural catastrophes, Scor’s net combined ratio was 91.4% in the first quarter, above the target set in its ‘Quantum Leap’ strategy. The full-year 2021 normalised net combined ratio is expected to trend toward 95% and below. Scor Global P&C gross written premiums grew 2.9% to €1.85bn in Q1. “As demonstrated by the successful January and April renewals, Scor is very well positioned to benefit from improvements in pricing and terms and conditions, in particular in the P&C (re)insurance market, which should continue,” Mr Kessler said. Separately, Scor announced it is accelerating its transition to a net-zero investment portfolio by 2050. The reinsurer aims to reduce the carbon intensity of its corporate bonds and listed equities portfolio by 27% by 2051. François de Varenne, chief executive officer of Scor Global Investments (SGI), said: “As a responsible investor, SGI achieved key milestones in 2020, by joining the Net-Zero Asset Owner Alliance and by signing the Finance for Biodiversity Pledge. Through these new interim net-zero targets, SGI is going a step further in its commitment to financing the sustainable development of economy and society.”

Scor hit by ‘unique combination’ of Covid and storm losses in Q1

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