October 26, 2017 by Canadian Underwriter
“An exceptional series of large natural catastrophes, with Hurricanes Harvey, Irma and Maria and earthquakes in Mexico,” has led to a cost of 430 million euros, net of retrocession and tax, for SCOR SE for the third quarter of the year.
The Paris-based global reinsurer said in a press release on Thursday that the hurricanes and earthquakes resulted in a cost of 598 million euros net of retrocession and pre-tax. As a result, SCOR registered a net loss of 267 million euros in the third quarter of the year, ending Sept. 30, but a net income of 25 million euros for the first nine months of 2017 (versus 438 million euros in 9M 2016).
For the third quarter of the year, the combined ratio was 136.7%, up drastically 45.3 points from 91.4% in Q3 2016. For the first nine months of the year, SCOR’s combined ratio was 107.5%, up 14.5 points 93% in 9M 2016.
Overall, SCOR reported gross written premiums (GWP) of 3.6 billion euros for most recent quarter, up 3.4% from 3.48 billion euros in Q3 2016. GWP for 9M 2017 were 11.1 billion euros, up 8.9% from 10.2 billion euros in 9M 2016. SCOR said in the release that this growth comes from both Life (+8.7% at constant exchange rates) across all product lines, particularly in the Americas and Asia-Pacific, and from P&C (+10% at constant exchanges rates), leveraging on successful January, April and June renewals, notably in the United States.
Despite the large nat cat events in the third quarter, SCOR reported in that “the in-force retrocession program have responded as expected, demonstrating SCOR’s efficient capital shield policy. SCOR’s retention amounted to approximately 60% of the total gross losses from the five events. If SCOR had had to face the same series of events with Irma being a US$125 billion industry event, there would only have been a marginal net impact on the Group. SCOR’s P&C underwriting capacity remains unaffected by this series of large events.”
Denis Kessler, chairman and CEO, commented in the release that the financial results show that “SCOR once again demonstrates its capacity to absorb shocks. The natural catastrophe events that occurred in the third quarter of 2017 are a serious wake-up call for the reinsurance industry and the Group is in a very good position to benefit from the new market environment.”