French reinsurer SCOR reported Group net income of EUR 311 million in the first quarter of 2023, compared to a net loss of EUR 35 million a year earlier, although the income of insurance decreased 4% to EUR 3.9 billion.
Across the Group, gross written premiums (GWP) fell by 0.7% year-on-year to EUR 4.7 billion, driven by a decrease in P&C GWP of 3.1%, partially offset by growth in L&H premiums of 1.6%.
The company said that during the quarter, the reinsurance industry continued to be driven by three favorable developments that emerged and accelerated.
This includes the ongoing positive phase of the P&C reinsurance cycle. SCOR recorded a 7% average rate increase for the revised P&C portfolio as of April 1, 2023, which it said should lead to a significant improvement in technical revenue. It expects this favorable trend to continue in mid-year changes, against a backdrop of continued high natural disaster losses.
In L&H reinsurance, SCOR explained that the excess mortality linked to the Covid-19 pandemic has decreased significantly.
And then, on the asset side of the balance sheet, SCOR expects that the increase in interest rates and consequently in reinvestment rates will increase the financial contribution of investments to reinsurer results in general.
Within SCOR P&C, insurance income increased by 5.4% at constant exchange rate, with a combined ratio of 85.2%, which includes a nat cat ratio of 9.9%, in line with the 10% budget announced on April 12, 2023. New business CSM amounts to EUR 588 million.
Within SCOR L&H, insurance income fell 11% at constant exchange rates, while insurance service results stood at EUR 272 million and new business CSM stood at EUR 192 million in Q1 2023.
The return on SCOR Investments, and the share provided a return on invested assets of 2.9% and a regular income yield of 2.8% in the quarter.
Denis Kessler, Chairman of SCOR, said: “SCOR generated excellent results in Q1 2023. The Group is taking full advantage of the current favorable environment. Our new CEO, Thierry Léger, is in charge of creating a new three-year strategic plan under IFRS 17. This plan will define the best ways and means for the Group to consolidate its position as a leading global reinsurer, leveraging its Tier 1 global underwriting platform and technical know-how. The Board of Directors is confident in the Group’s ability to actively pursue its growth, with the dual objective of solvency and value creation.
Thierry Léger, Chief Executive Officer (CEO) of SCOR, added: “The results of Q1 are very satisfactory. All business units – P&C, L&H and Investments – generated positive results, and the Economic Value of the Group increased significantly. In the same way, our Finance teams successfully managed the transition to the new IFRS 17 framework: we want to thank them for this success. I am now looking to the future: the present market is very supportive, and all teams are mobilized to take advantage of this favorable environment. I look forward to presenting the outline of the new strategic plan at the Annual General Meeting.