SCOR reports combined ratio of 93.8% for first half of 2016, up from 90.9% for the first six months of 2015

Global reinsurer SCOR announced on Wednesday that its Global P&C segment recorded “strong technical profitability with a robust net combined ratio of 93.8% despite a high number of events in all perils and regions in the second quarter of 2016 and with reserve releases of 40 million [euros] accounting for 1.6 [points] of the H1 2016 combined ratio.”

The combined ratio of 93.8% for the first half of 2016 ending June 30 compares with a 90.9% combined ratio for the first half of 2015. For Q2 2016, the combined ratio was 97.5%, up from 92.6% in Q2 2015.

The Group net income reached 275 million euros in H1 2016, down 15.9% compared to H1 2015 (327 million euros) “due to a high number of natural catastrophes and a challenging macroeconomic environment,” SCOR said in a press release. “The technical profitability and net income generation recorded by the Group demonstrate SCOR’s capacity to absorb various shocks, such as a high number of natural catastrophe events, the U.K. referendum results leading to the announcement of Brexit, low and prolonged interest rates and a long-lasting P&C soft cycle.”

A high level of nat cat events across various perils and regions had a12-point impact on the Q2 combined ratio, SCOR reported, leading to a net nat cat ratio of 6.9 points in the first half of 2016. Preliminary net pre-tax estimates for these events include, in particular, the Fort McMurray wildfire for 65 million euros, earthquakes in Japan, Ecuador and Taiwan, storms in Germany and floods in Sri Lanka, as well as a late June hailstorm in the Netherlands.

SCOR reported gross written premiums (GWP) increased from 6.493 billion euros in H1 2015 to 6.735 billion euros at the end of the first six months of 2016, up 5.9% at constant exchange rates compared to 2015 (+3.7% at current exchange rates). For Q2 2016, SCOR reported GWP of 3.452 billion euros, up from 3.369 billion euros in Q2 2015. SCOR said in the release that these results included a strong contribution from SCOR Global Life, with gross written premiums reaching 3.934 billion euros over the semester (+10.2% at constant exchange rates and +8.3% at current exchange rates) and a 0.6% increase in SCOR Global P&C GWP at constant exchange rates (-2.0% at current exchange rates), which stand at 2.801 billion in H1 2016, and “excellent renewals in June and July 2016.”

“In the first half of 2016, SCOR has proved its capacity to absorb shocks thanks to its high level of diversification,” said Denis Kessler, chairman & CEO of SCOR, in the release. “Despite numerous natural catastrophe events and the political uncertainty following the U.K. referendum, SCOR continues to post strong results. SCOR keeps on expanding its footprint in the first half of 2016, with both the Life and P&C divisions delivering strong technical profitability.”

Other results for the first half and second quarter of 2016 include:

• The normalized net combined ratio (with a nat cat budget of 6% and without the 1.6 points of reserve releases) stands at 94.5% in H1 2016, “in line with the latest assumptions communicated at the beginning of the year”;
• SCOR Global P&C achieved strong renewals in June and July, with renewal premiums increased by 14.2% at constant exchange rates (P&C Treaty gross premiums increased by 15% to 453 million at constant exchange rates, mainly driven by the United States; Specialty Treaty gross premiums increased by 12% to 107 million euros at constant exchange rates); and

• SCOR’s estimated solvency ratio at June 30, adjusted for the redemption of the two debts callable in Q3 2016, stands at 210%, within the optimal solvency range of 185%-220% as defined in the company’s “optimal dynamics” plan.