SCOR net income for 2015 Q1 reaches 175 million euros

SCOR’s rigorous implementation of its strategic plan, coupled with profitable growth in both its Life and Property and Casualty businesses, helped propel the company’s net income for 2015 Q1 almost 30% higher than it was in 2014 Q1.

The net income (consolidated net income, Group share) for the first quarter of 2015 was 175 million euros compared to 135 million euros for the same quarter in 2014, representing a 29.6% increase, notes a SCOR statement Wednesday.

The company reports that strong net income contribution and very strong foreign exchange impact (of around 414 million euros) were the main drivers for the rise in shareholders’ equity for 2015 Q1. Specifically, shareholders’ equity was 6,415 million euros as of March 31, 2015 compared to 5,162 million euros in 2014 Q1 and 5,729 million euros at the end of 2014.

SCOR is on track to achieve the targets set out in its strategic plan, Optimal Dynamics, notes the statement.

Growth in SCOR Global P&C and SCOR Global Life contributed to gross written premiums (GWP) reaching 3,124 million euros in 2015 Q1 over 2,669 million euros in 2014 Q1, representing a 17.0% increase at current exchange rates or a 5.1% hike at constant exchange rates.

Looking specifically at SCOR Global P&C, GWP increased to 1,398 million euros compared to 1,202 million euros in 2014 Q1, representing a 16.3% hike at current exchange rates or a 5.2% increase at constant exchange rates.

The increase was “driven by USD-based growth, particularly with Global Clients and thanks to the Client Focus Initiative in the U.S. market, and with expected profitability at target,” notes the company statement.

In an environment of low natural catastrophe losses, the p&c business had a net combined ratio of 89.1% in the first quarter of 2015 compared to 88.9% for the same quarter in 2014. SCOR reports that the aforementioned result was driven by the following factors:

• an excellent net attritional loss ratio of 56.1%;

• a low level of nat-cat losses, with Storm Niklas being the only material event and accounting for 20 million euros, mostly from Germany; and

• a commission ratio at 24.7%.

“The normalized net combined ratio (with a natural catastrophe budget of 7%) stands at 94.4%,” SCOR reports. “For the full year, SCOR Global P&C reaffirms its normalized net combined ratio assumption of 94%.”

Investments also saw gains in the first quarter of the year. Total investments (at current exchange rates) were 27,119 million euros in 2015 Q1 compared to 22,731 million euros in 2014 Q1, a 19.3% change year over year. [click image below to enlarge]

Both the return on investments (annualized, including interest on deposits) and return on invested assets (annualized, excluding interest on deposits) increased in the first quarter of 2015 over the same quarter of 2014. The former was 2.9% compared to 2.4%, while the latter was 3.5% compared to 2.6%.

“In an exceptionally low-yield environment, SCOR Global Investments continues its policy of progressively rebalancing its portfolio during the first quarter of 2015 while selectively increasing the duration of the fixed income portfolio, in line with the indications given in the Optimal Dynamics plan,” SCOR reports.

“During the first quarter of 2015, investment assets generated a very strong financial contribution of 149 million euros. The active management policy employed by SCOR Global Investments has enabled the Group to record capital gains of 73 million euros in 2015 Q1, coming mainly from the equity portfolio.”

Other 2015 Q1 results include the following:

• SCOR Global Life’s Market Consistent Embedded Value (MCEV) reaches 4.7 billion euros in 2014, a 6.2% increase over 2013;

• the Group’s annualized return on equity stands at 12.1%; and

• SCOR Global Investments achieves an enhanced 3.5% return on invested assets.