Scor says turnaround 'imperative' after full-year loss

Reinsurer Scor has reported a €301 million ($473 million) net loss after a sixth consecutive year marked by a high frequency of natural catastrophes and other weather-related events.

“The group’s annual results are very disappointing despite a solid performance in the fourth quarter,” Chairman Denis Kessler said. “A sustainable return to profitability is imperative.”

France-based Scor announced in January that former Swiss Re Group Chief Underwriting Officer Thierry Leger would be joining as CEO from May 1, taking over from Laurent Rousseau.

Mr Kessler says Mr Leger will move ahead with a new strategic plan for the business, which operates in property and casualty (P&C) and life and health (L&H), after presenting the outlines at the annual general meeting on May 25 and at an investor day in September.

“This will enable the group to take full advantage of its global underwriting platform and technical expertise to seize the opportunities available in the L&H and P&C reinsurance markets, building on its status as a Tier 1 reinsurer,” he said.

Scor’s full-year loss compared to a profit of €456 million ($716 million) a year earlier and came after impacts from the war in Ukraine and strong inflationary pressures that led to central banks raising interest rates.

Gross written premium (GWP) rose 4.9% at constant current rates to €19.73 billion ($31 billion), with property and casualty (P&C) GWP rising 13.5%.

The P&C net combined operating ratio was 113.2%. Catastrophes during the year included Hurricane Ian, floods in Australia and hailstorms in France, while Brazil experienced one of its worst droughts in history.

Interim CEO Francois de Varenne says January reinsurance renewals confirm the continued hardening of the market, while reinvestment rates are expected to remain high, increasing the financial contribution of the investment portfolio.

Fitch Ratings says the results demonstrate the scale of the turnaround challenges facing new CEO Mr Leger.

“The implementation of a new strategy could expose Scor to material execution risk and a potential weakening in the group’s competitive position in a challenging operating environment,” it says.

“However, a well-designed turnaround plan could return Scor to sustained profitability levels, consistent with higher-rated peers, while consolidating its very strong business profile and capitalisation.”