April 27, 2016 by Canadian Underwriter
Despite a low natural catastrophe-loss environment that helped SCOR’s Global Property and Casualty segment record strong technical profitability and a solid contribution from the Life segment for gross written premiums, the company’s net income fell slightly to 170 million euros in 2016 Q1 compared to 2015 Q1.
Financial results issued Wednesday by SCOR, an independent global reinsurance company, show the group’s net income fell 2.9% to 170 million euros in the first three months of 2016 compared to 175 million euros in the same period of 2015. Operating results were also down slightly, with SCOR seeing 283 million euros in 2016 Q1, down 1.4% from 287 million euros in 2015 Q1, notes a statement from the company.
Things were more positive in terms of gross written premiums (GWP), which increased 5.1% at current exchange rates to 3,283 million euros in the first quarter of 2016 compared to 3,124 million euros in the prior-year quarter.
SCOR Global Life served to buoy results, with the segment recording a 10.5% hike in GWP to 1,907 million euros in 2016 Q1 compared to 1,726 million euros in 2015 Q1. The division recorded “a strong technical margin of 7.1% in the first three months of 2016, constantly delivering above the ‘optimal dynamics’ assumption of 7.0%,” the company reports.
SCOR Global P&C, however, saw GWP decrease 1.6% to 1,376 million euros in the first three months of 2016 compared to 1,398 million euros in the same period of 2015. Results were “affected by the cancellation of the division’s participation in a Lloyd’s syndicate as well as by lower activity on the Aviation book of business,” the company statement explains. “Excluding these particular effects, which are expected to have a much lower impact by year-end, the premium growth at constant exchange rates stands at 2.7%.”
Also viewed as encouraging, Global P&C saw a net combined ratio of 89.7% in the first quarter of 2016 (compared to 89.1% in the same quarter of 2015). The strong technical profitability and net combined ratio was driven by the following factors:
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“SCOR continues to deliver excellent results, with resilient technical profitability and strong net income generation, along the same lines as in 2015,” the company notes of first quarter results.
“In the first quarter of 2016, SCOR continues to post excellent results, along the same lines as those recorded by the Group in 2015, benefiting from the full deployment of the initiatives launched under the ‘Optimal Dynamics’ plan,” comments Denis Kessler, SCOR’s chairman and CEO, pointing out that both the Life and P&C divisions deliver strong technical profitability.
At its Apr. 1 renewals, the company reports that SCOR Global P&C increased premiums by 4.7% at constant exchange rates. “Pricing at the April renewals is nearly flat overall for SCOR Global P&C despite the pressure recorded on non-proportional accounts. The expected profitability of the business booked is in line with the Group’s target,” the statement adds.
“The reinsurance industry is facing economic, social and political uncertainties in 2016 in an increasingly competitive environment. Our teams are taking this fully into account in the preparation of the Group’s new strategic plan, which is due to be unveiled in September,” Kessler adds.
Other SCOR results for 2016 Q1 and 2015 Q1 include the following: