- Gross written premiums stand at EUR 7,539 million, up 4.5% (+7.7% at constant exchange rates), driven by the combined impact of healthy SCOR Global P&C renewals and major contracts signed by SCOR Global Life:
o SCOR Global P&C records gross written premium growth of 7.1% at constant exchange rates to EUR 3,647 million, in line with the full-year expected growth rate of 6%;
o SCOR Global Life records gross written premium growth of 8.3% at constant exchange rates to EUR 3,892 million, notably supported by new contracts signed in Asia, the UK and the Iberian Peninsula.
- SCOR Global P&C’s net combined ratio stands at 94.1%, in line with 2013 expectations.
- SCOR Global Life’s technical margin reaches 7.3%, in line with 2013 expectations.
- Thanks to its active portfolio management, SCOR Global Investments records an ongoing return on invested assets of 3.3% (excluding equity impairments). SCOR Global Investments pursues its prudent asset management policy, whilst starting to slightly increase the duration of its fixed income portfolio. At current market levels, SCOR does not expect further impairments on the equity portfolio.
- Operating cash flow is up sharply toEUR 722 million (+30%), with contributions from both business engines.
- The Group continues its cost control policy with a cost ratio of 5.0%. This is an improvement versus the 5.1% recorded in the first nine months of 2012 and it puts the Group on track to achieve the 4.8% assumed in the “Optimal Dynamics” plan. SCOR continues to invest in accordance with its strategic plan, currently pursuing more than 15 projects.
- SCOR’s net income reaches EUR 302 million in the first nine months of 2013. Despite the high level of natural catastrophes, the Group records a high level of profitability, with a ROE of 8.5% (9.8% excluding equity impairments).
- Shareholders’ equity reaches EUR 4,813 million, or EUR 25.6 per share, as at 30 September 2013. This compares to EUR 4,807 million as at 31 December 2012 and is after distribution of dividends amounting to EUR 223 million.
- SCOR’s financial leverage stands at 21.6% at 30 September 2013, below the 25% ceiling indicated in the “Optimal Dynamics” plan. Moreover, SCOR has actively managed its liabilities in 2013, providing liquidity to its outstanding debts by acquiring a total face value of USD 46 million at an average price below 90% of par and by issuing CHF 250 million of perpetual subordinated debt.
As well as the notable financial performance, Q3 was marked by a series of major developments for the Group.
Most notably, SCOR finalised the acquisition of Generali U.S., which closed on 1 October. SCOR is nowthe market leader in the US life reinsurance market. Integration is proceeding smoothly and the new management team for the combined activities of Generali U.S. / SCOR is in place. This acquisition is fully in line with the Group’s strategic cornerstones and also meets the Group’s financial objectives. Badwill generated by the deal is likely to exceed EUR 150 million (an upward revision to SCOR’s original estimate of in excess of EUR 100 million), and will be disclosed with the Q4 results.
Also in the quarter, SCOR issued two capital market instruments which were met with strong demand. A CHF 250 million perpetual subordinated debt was issued for the financing of the Generali U.S. acquisition. The Group also launched an innovative mortality risk transfer contract (Atlas IX), which provides protection against pandemic risk.
On 4 September 2013, SCOR published its new three-year strategic plan, called “Optimal Dynamics”, which aims to strengthen the Group’s position on the global reinsurance market. This plan combines profitability, solvency, and a strong shareholder remuneration policy, through two main targets: (1) aROE of 1,000 basis points above the three-month risk-free rate over the cycle; (2) asolvency ratio in the 185-220% range (percentage of Solvency Capital Requirements or SCR, according to the Group Internal Model).
Denis Kessler, Chairman & Chief Executive Officer of SCOR, comments: “I am pleased with the strong results we have achieved year-to-date, particularly in light of the heavy burden of nat cat losses. These results are a promising first step of our new “Optimal Dynamics” plan. Moreover, the successful acquisition of Generali U.S. and the launch of its integration further strengthen our presence in the important US life reinsurance market.”
SCOR Global P&C delivers healthy growth and robust technical profitability on a year-to-date basis, as well as a quarterly performance already in line with the “Optimal Dynamics” plan targets
SCOR Global P&C records gross written premium growth of 3.7% YTD (+7.1% at constant exchange rates) to EUR 3,647 million.
In view of the impact of exchange rate headwinds, this growth rate favourably compares with the full-year expectation of around +6%.
At the end of the third quarter, the Group’s non-life operations record an excellent combined ratio of 94.1%, with a further improved net attritional loss ratio of 57.7%. The latter:
- is in line with the 2013 assumption set out in the “Optimal Dynamics” plan of 59% on a normalized basis, i.e. after reintegration of the 1 point impact of the EUR 31 million reserve releases effected in the second quarter of 2013;
- includes two movements of precautionary reserves that broadly offset each other. These two movements correspond respectively to a negative impact from surety bonds for cooperative-based housing developments in Spain and to a positive impact from the case reserves accounted for the World Trade Center-related recourses against aviation insurers reinsured by SCOR.
SCOR Global P&C records a combined ratio of 93.7% for the third quarter standalone, in line with the “Optimal Dynamics” target of 93-94% over 2013-16. In the third quarter, nat cat losses contributed 6.6% to the combined ratio. They include EUR 53 million of losses from German hailstorms and EUR 14 million for Toronto flooding.
SCOR Global Life couples a healthy technical margin with solid growth, thereby confirming the dynamism of its franchise
In the first nine months of 2013, SCOR Global Life has taken advantage of a number of opportunities in the market, enabling it to record solid gross written premium growth of 5.3% (+8.3% at constant exchange rates) to EUR 3,892 million.
This is thanks notably to double-digit life reinsurance business growth in the UK and Ireland, in Spain and in Asia. Similar growth has also been recorded in longevity, life financing reinsurance and health.
This growth offsets the negative impact of exchange rate developments and of selective portfolio decreases in the Middle East, France and Northern Europe, as well as in disability and personal accident lines.
SCOR Global Life has also achieved robust new business production of around EUR 704 million, with significant increases in the UK, Spain, North America and Asia-Pacific, especially in the “financial solutions” strategic segment. This will generate strong future cash flow in the long run.
SCOR Global Life estimates premium income of around EUR 6 billion for 2013. This once again confirms the dynamism of its franchise.
SCOR Global Life records a strong technical margin of 7.3%, including a 0.2% non-recurring positive item. This performance is in line with “Optimal Dynamics”.
SCOR Global Investments delivers an ongoing return on invested assets of 3.3% (excluding equity impairments) for the first nine months of 2013
In an environment still marked by historically and persistently low interest rates in the major currency zones, SCOR Global Investments maintains a prudent investment strategy, whilst generating recurring financial cash flows and actively managing the invested assets portfolio. At 30 September 2013, expected cash flow on the fixed income portfolio over the next 24 months stands at EUR 5.6 billion (including cash and short-term investments).
The quality of the fixed income portfolio has been maintained, with a stable average rating of AA- and no exposure to the sovereign debt of Greece, Ireland, Italy, Portugal or Spain, or to any debts issued by US States or municipalities. In accordance with the orientations of the strategic “Optimal Dynamics” plan, the duration of the fixed income portfolio has increased slightly to 3.2 years (excluding cash), compared to 2.9 years at 30 June 2013.
For the first nine months of 2013, the invested assets portfolio generates a financial contribution of EUR 277 million. The active management policy practised by SCOR Global Investments has enabled the Group to record capital gains of EUR 107 million YTD. The Group has rigorously applied its amortization and impairment policy to its investment portfolio. Impairments stand at EUR 87 million YTD, of which EUR 64 million apply to equities which are net asset value neutral. This quarter marks the last round of equity impairments impacting the profit & loss statement (these impairments are marginal in Q3). At current market levels, SCOR does not expect further impairments on the equity portfolio. Excluding equity impairments, the ongoing return on invested assets reaches 3.3% for the first nine months of 2013 (2.7% including equity impairments). Taking account of funds withheld by cedants, the net rate of return on investments is 2.4% over the period.
Invested assets (excluding funds withheld by cedants) stand at EUR 14.2 billion at 30 September 2013, composed as follows: 13% cash (up slightly compared to 30 June 2013, taking account of the finalisation of the acquisition of Generali U.S. that took place on 1 October 2013), 73% fixed income (of which 5% are short-term investments), 2% loans, 4% equities, 6% real estate and 2% other investments. Total investments, including EUR 8.1 billion of funds withheld, stand at EUR 22.3 billion at 30 September 2013, compared to EUR 22.2 billion at 31 December 2012
 Shown Shareholders’ Equity is adjusted due to the retrospective application of IAS 19 “revised”: Q4 2012 published Shareholders’ Equity amounted to EUR 4,810 million.
 See SCOR press release n° 30 of 10 September 2013.
 See SCOR press release n° 29 of 6 September 2013.
 See SCOR press release n° 28 of 4 September 2013.
 This is the ratio of available capital over SCR (Solvency Capital Requirements).
 Pro forma including Generali U.S.