Scor H1 results dented by emerging risks and historic abuse claims

French reinsurer Scor’s 2022 first half results were negatively impacted by key emerging risks, including a drought in Brazil, flooding in Australia and other weather events, the war in Ukraine, and further losses related to the COVID-19 pandemic .

In total the carrier reported a net loss of EUR239 million for the period (H1 2021: EUR380 million profit).

The net loss includes an impact of EUR193 million from the worst drought in Brazil in 91 years, an event which Scor said has entailed a review of its agriculture portfolio with a 50% reduction in PML targeted for 2023.

Scor also experienced losses related to the COVID-19 pandemic of EUR254 million in H1 2022. Within its life and health (L&H) business, it noted that it is actively managing the portfolio and is diversifying away from pandemic risk to focus its growth on transactional lines of business such as longevity and financial solutions.

Additionally, the period was marked by heavy floods in South Africa and Australia, and storms in France.

During H1 2022, the result was also impacted by the materialisation of latent claims related to sexual molestation from the 1980s in the US, as well as potential claims relating the war in Ukraine, booked in the first quarter of 2022.

Scor reported an 8.3% rise in gross written premiums (GWP) in H1 2022 to EUR9.7 billion, with growth in property and casualty (P&C) offsetting a decline in L&H business.

Within the P&C segment, Scor reported GWP growth of almost 21%. In this part of the business, the firm said that it is currently adopting a more selective approach in reinsurance P&C lines, but noted that H1 2022 GWP expansion is still benefitting from recent underwriting years.

Denis Kessler, chairman of SCOR, commented: “The recent past has been a stark demonstration that uncertainties and instabilities of all kinds are multiplying: the Covid-19 scourge continues, entropic forces are running riot on the international geopolitical stage, inflation is reaching multi-decade highs, the economy is slowing down, the fear of a global recession is growing, the frequency and severity of natural catastrophes are on the rise – a change that is most likely linked to global warming… In this volatile environment, risk aversion, and the need for protection, will continue to soar.”

“The multiplication of uncertainties and risks demonstrates more than ever the crucial role of the reinsurance industry to act as a cornerstone and guarantor of the resilience of the global economy.”