Press ReleaseSeptember 8, 2021 - N° 25
Investor Day
2021
SCOR builds on its global tier 1
reinsurer positionand creates sustainable value
for its stakeholders
- SCOR
builds on its leadership position as
a global tier 1
reinsurer, which relies
on its four tested
strategic cornerstones
(a robust capital shield, a strong
franchise, a high diversification, and a controlled risk
appetite), as it embarks in its
next chapter and adapts to
a fast-changing
environment.
- SCOR
takes proactive actions to create
sustainable shareholder
value,
focusing on delivery
and operational performance
improvement:
- The recent Life transaction
delivers immediate value, while increasing the Group’s degrees of
freedom for value accretive capital deployment in
the P&C business.
-
P&C:
in
an attractive
market, estimated GWP
growth for 2022 is
revised upwards to 15%
˗ 18% from 4-8% in
“Quantum Leap”, with a net
combined ratio trending towards 95%
and below. This absorbs
a Nat
Cat budget increase from
7% to 8% for 2022
to reflect an increasingly volatile
environment. Going forward, SCOR
will adopt a forward-looking approach to estimate its Nat
Cat budget.
-
Life: SCOR continues
its focus on value and impact.
The recent Life in-force
transaction reduced the
share of US mortality business by c.
20%.
The assumption
for the 2022 net
technical margin (excluding
potential Covid-19
impacts)
is revised upwards by 100 bps to
8.2% ˗ 8.4%,
while the GWP growth for 2022 is revised
downwards from +3-6%
to
+~1%.
-
Investments:
SCOR intends to reduce
its excess
liquidity from 16% to 9% by year-end
and actively continues diversification into
accretive value-creation assets.
The Group
expects a return on
invested assets of 1.8% ˗ 2.3%
for 2022.
- In
an environment
of heightened risk awareness,
SCOR sees
very attractive
long-term growth
opportunities in its
business and will
optimally deploy capital
in line with its internal framework
to create
long-term
value. The upcoming strategic
plan will demonstrate SCOR’s
commitment to delivery
and will be the opportunity to engage
proactively with all of our
stakeholders.
At the annual Investor Day taking place this
afternoon, SCOR’s Executive Committee, led by Laurent Rousseau,
Chief Executive Officer, will present an overview of the extension
of the “Quantum Leap” strategic plan, which will run until the end
of 2022.
SCOR’s global Tier 1 position relies on its four
tested strategic cornerstones: a robust capital shield, a strong
franchise, a high diversification, and a controlled risk appetite.
The Group builds on its leadership position to seize the attractive
long-term growth opportunities emerging from the fast-changing risk
environment. The current environment represents an opportunity for
the Group to adapt and embark on its next chapter. SCOR will
leverage its strong track record in its capacity to evolve over
time. The evolution of the governance structure and the new Group
Executive Committee will enable SCOR to focus on execution and
delivery and will bring momentum to its transformation and its
sustainability journey.
The long-term fundamentals of the (re)insurance
businesses offer clear opportunities to further improve the Group’s
performance. SCOR will make the most of the current heightened risk
awareness environment, leading to higher demand and greater
discipline, and will rebalance its exposure towards P&C
business to seize the opportunities created by the hardening market
and attractive pricing conditions. SCOR’s focus on business and
delivery will enable the Group to extract value from underlying
risk pools and offer a differentiated value proposition to its
stakeholders. The solvency ratio is expected to trend towards the
higher end of the optimal solvency range of 185% ˗ 220% within the
next two years, given strategic choices made by the Group, as it
targets to create sustainable, franchise-strengthening value for
its shareholders.
The upcoming strategic plan will be unveiled in
March 2022 and will be the opportunity for SCOR to demonstrate its
commitment to delivering and to engaging with all stakeholders.
SCOR will lead a sustainable growth agenda building on three key
themes: Culture & People, Business Leadership, and Financial
Performance.
Laurent Rousseau, Chief
Executive Officer of SCOR, comments: “SCOR’s franchise has
never been stronger, the Group is poised to reap the benefits of
its leadership position and seize the attractive long-term growth
opportunities emerging from the fast-changing risk environment. The
Group Executive Committee is focused on delivery and operational
improvement to create sustainable, franchise-strengthening value
for our shareholders. In the next strategic plan, to be unveiled in
March 2022, we will focus on Culture & People, Business
Leadership, and Financial Performance to transform the Group and
build a differentiated value proposition for all stakeholders.”
SCOR Global P&C
accelerates its development
in the current hardening market environment
SCOR Global P&C successfully delivers upon
the key pillars of the “Quantum Leap” strategic plan based on
redeploying capital in value-creative segments and clients, growing
P&C Partners as an innovation enabler, and accelerator as well
as fostering operational excellence, and building a 360° risk
taking platform. While the profitability has been impacted by the
Covid-19 shock and an elevated CAT activity, SCOR’s exposures are
in line with its peer group.
SCOR Global P&C is ready to accelerate its
development in the current hardening market environment, with an
increased focus on non-Natural Catastrophe lines of business. The
outlook for the P&C (re)insurance market is attractive and
sustained by strong fundamentals. In Reinsurance, there are strong
growth opportunities in Europe, Fast Growth Markets, and Global
Lines, with the best market dynamics in a decade. Specialty
Insurance remains the most attractive segment of the market, the
share of this business unit is expected to trend towards 30% of
SCOR Global P&C’s gross written premiums. The increased capital
allocated to P&C will accelerate planned growth at a very
attractive point in the cycle. SCOR Global P&C will
pro-actively reduce the adverse impact of Nat Cat volatility on its
portfolio by limiting growth on Cat business, as well as further
optimizing the P&C retrocession program in 2022 to better cover
against Cat frequency claims.
Leveraging the improving market conditions, in
2022, SCOR Global P&C expects to deliver stronger growth than
provided for in “Quantum Leap”. SCOR Global P&C’s revised
assumptions for 2022 are:
- An Estimated Gross Premium Income1
growth between+15% to +20%2, translating into Gross Written Premium
growth between 15% to 18%2 at constant exchange rates;
- A combined ratio trending down to
~95% and below, better than the “Quantum Leap” assumption of ~95%
to 96%, with an increase in the nat cat budget from 7% to 8% to
reflect the influence of climate change and rising trends of
mid-sized catastrophic events.
SCOR Global Life delivers “Quantum Leap”
despite the pandemic and builds the future of Life
insurance
SCOR Global Life is successfully executing on
the “Quantum Leap” plan while absorbing the Covid-19 pandemic costs
thanks to its large, global and diversified franchise.
The pandemic has accelerated the transformation
of the Life insurance industry with changing consumer demands and a
massive increase in digitalization. SCOR Global Life’s offering has
transformed with a much richer Purpose-driven proposition to
clients leading to deeper strategic relationships. Its value
proposition focuses on value and impact and is enabled by an
operational transformation based on agility and technology, leaving
the business unit well positioned to build the future of
insurance.
Looking forward, the financial impact of
Covid-19, largely driven by the US, will remain manageable although
2021 impacts will be higher than expected due to the emergence of
the delta variant. However, the impact on the reinsured population
is still expected to be significantly lower than on the general
population with vaccines continuing to give strong protection from
severe Covid-19. While much uncertainty remains in the short term,
learnings from past pandemics would suggest long-term positive
impacts on mortality driven by advances in the healthcare and
pharmaceutical industries.
SCOR Global Life’s revised assumptions are:
- Gross Written Premium for 2022 up
1.0% at constant exchange rates, pursuing profitable growth in the
core protection business of 3-4% and focusing on markets where SCOR
Global Life can have an impact;
- Net technical margin for FY 2021
estimated at ~10%, or between 5.5% and 6.0% excluding the “day one”
impact from the recent in-force transaction;
- New run rate of 8.2%-8.4%,
excluding Covid-19 impact, for the net technical margin in 2022 (vs
7.2%-7.4% provided for in “Quantum Leap”) reflecting faster profit
emergence following the in-force transaction. This net technical
margin increase is non-dilutive on 2022 earnings;
- Maintaining a strong value creation
with an annual VNB3 above EUR 300 million over 2021 and 2022.
SCOR Global Investments actively
continues diversification into accretive value-creation
assets
SCOR Global Investments delivers on its
commitment to act as a responsible investor. SCOR is finalizing the
reinvestment of its excess liquidity into corporate bonds exposure
by the end of 2021 and actively diversifies invested assets into
value-creation assets (private equity, private debt and
infrastructure), which are expected to represent over 10% of total
invested assets by the end of 2022. Under current market
conditions, the return on invested assets is expected to be between
1.8% and 2.3% for the full year 2022.
SCOR expands its third-party asset management
franchise and is actively preparing for the transition to IFRS 9 on
January 1, 2022.
The SCOR Investor Day
2021 webcast starts at
1:00pm
CEST todayClick here to watch it
live.
*
*
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Contact details
Media RelationsLauren Burns Carraud+33 (0)1 58
44 76 62lburns@scor.com
Investor RelationsOlivier Armengaud+33 6 86 34
85 59oarmengaud@scor.com
www.scor.comLinkedIn:
SCOR | Twitter:
@SCOR_SE
GeneralNumbers presented
throughout this document may not add up precisely to the totals in
the tables and text. Percentages and percent changes are calculated
on complete figures (including decimals); therefore the document
might contain immaterial differences in sums and percentages due to
rounding. Unless otherwise specified, the sources for the business
ranking and market positions are internal.
Forward-looking statements
This document includes forward-looking
statements and information about the objectives of SCOR, in
particular, relating to its current or future projects. These
statements are sometimes identified by the use of the future tense
or conditional mode, as well as terms such as “estimate”,
“believe”, “have the objective of”, “intend to”, “expect”, “result
in”, “should” and other similar expressions. It should be noted
that the achievement of these objectives and forward-looking
statements is dependent on the circumstances and facts that arise
in the future. Forward-looking statements and information about
objectives may be impacted by known and unknown risks,
uncertainties and other factors that may significantly alter the
future results, performance and accomplishments planned or expected
by SCOR.The full impact of the Covid-19 crisis on SCOR’s business
and results can still not be accurately assessed at this stage,
given the uncertainty related both to the magnitude and duration of
the Covid-19 pandemic and to the possible effects of future
governmental actions and/or legal developments in this context.
This uncertainty follows from the considerable difficulty in
working on sound hypotheses on the impact of this crisis due to the
lack of comparable events, the ongoing nature of the pandemic and
its far-reaching impacts on the global economy, on the health of
the population and on our customers and counterparties.
These hypotheses include, in particular:
- the duration of the pandemic, its
impact on health on the short and long term,
- the availability, efficacy,
effectiveness and take-up rate and effect of the vaccines;
- the response of government bodies
worldwide (including executive, legislative and regulatory);
- the potential judicial actions or
social influences;
- the coverage and interpretation of
SCOR’s contracts under these circumstances;
- the assessment of the net claim
estimates and impact of claim mitigation actions.
Therefore:
- any assessments and resulting
figures presented in this document will necessarily be estimates
based on evolving analyses, and encompass a wide range of
theoretical hypotheses, which are still highly evolutive;
- at this stage, none of these
scenarios, assessments, impact analyses or figures can be
considered as certain or definitive.
Information regarding risks and uncertainties
that may affect SCOR’s business is set forth in the 2020 Universal
Registration Document filed on March 2, 2021, under number
D.21-0084 with the French Autorité des marchés financiers (AMF)
posted on SCOR’s website www.scor.com.In addition, such
forward-looking statements are not “profit forecasts” within the
meaning of Article 1 of Commission Delegated Regulation (EU)
2019/980.
Financial informationThe Group’s financial
information contained in this document is prepared on the basis of
IFRS and interpretations issued and approved by the European
Union.Unless otherwise specified, prior-year balance sheet, income
statement items and ratios have not been reclassified. The
calculation of financial ratios (such as book value per share,
return on investments, return on invested assets, Group cost ratio,
return on equity, net combined ratio and life technical margin) is
detailed in the Appendices of the H1 2021 presentation (see page
15). The first half 2021 financial information has been subject to
the completion of a limited review by SCOR’s independent auditors.
Unless otherwise specified, all figures are presented in Euros. Any
figures for a period subsequent to June 30, 2021 should not be
taken as a forecast of the expected financials for these
periods.
The solvency ratio is not an audited value.
1 EGPI - Underwriting Year2 Could be revised down if market not
improving as expected3 Value of New Business after Risk Margin and
tax
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