Good Group underlying performance in Q3 2024, driven by:
Very strong performance of P&C, with a combined ratio of 88.3% in Q3 2024 and allowing for ongoing reserving discipline
Positive underlying trend in L&H performance, with an insurance service result1 of EUR 81 million in Q3 2024 adjusted for one-offs2, or EUR -210 million on a reported basis
Strong investments regular income yield of 3.5% in Q3 2024
Estimated Group solvency ratio of 203%3 as of 30 September 2024, comfortably within the optimal range of 185%-220%, considering the full impact of the 2024 L&H assumption review as well as the implementation of an efficient third-party capital solution this quarter
Group net loss of EUR -117 million in Q3 2024 (EUR -117 million adjusted4) impacted by the 2024 L&H assumption review. Adjusted for one-offs, the Group net income would stand at EUR 150 million
Annualized Return on Equity of -10.2% (-10.3% adjusted4) in Q3 2024 implying an annualized Return on Equity of -6.7% in 9M 2024 (-6.6% adjusted4); adjusted for one-offs2, the annualized Return on Equity would stand at 14.0% for the first nine months of 2024
Economic Value per share of EUR 47 (vs. EUR 51 as of 31 December 2023) and IFRS 17 Group Economic Value5 of EUR 8.4 billion as of 30 September 2024, down -7.0%6 at constant economics7, compared with 31 December 2023
SCOR SE’s Board of Directors met on 13 November 2024, under the chair of Fabrice Brégier, to approve the Group’s Q3 2024 financial statements.
Thierry Léger, Chief Executive Officer of SCOR, comments: “We are pleased to announce today the completion of the 2024 L&H assumptions review, with an outcome close to our best estimate view of H1 2024. The very comprehensive review allows us to draw a line and move forward with confidence. The underlying L&H performance shows a positive trend, and we have made significant progress in the implementation of our 3-step L&H remedial strategy which will be presented in full at our Investor Day on 12 December 2024, in London. P&C is doing very well, and we are taking strides towards our strategic journey of diversified and profitable growth while continuing to build reserve buffers. We expect the P&C reinsurance market conditions to remain attractive in 2025 and look ahead with confidence. Investments continue to benefit from high reinvestment rates, with a higher regular income yield in line with our long-term targets. Last but not least, the 203% Group solvency ratio at Q3 2024 demonstrates the resilience of our balance sheet and the effectiveness of our management actions.”.
Group performance and context
Q3 2024 net income is EUR -117 million (EUR -117 million adjusted4), driven by a negative insurance service result (ISR) in L&H reinsurance, partially offset by very strong P&C and Investments performances:
- In P&C (re)insurance, the Q3 2024 combined ratio stands at 88.3% in Q3 2024 including a natural catastrophe claims ratio of 13.2%, in an active period with several mid to large sized events. Over the first nine months of 2024, the natural catastrophe ratio of 10.1% remains in line with the budget. The attritional loss and commission ratio stands at 76.5% in Q3 2024, reflecting a very satisfactory underlying performance allowing for continued reserving discipline.
- In L&H reinsurance, the insurance service result1 stands at EUR -210 million in Q3 2024, mainly impacted by the completion of the L&H assumption review8 (EUR -163 million), and by a one-off negative true up adjustment on identified arbitration positions (EUR -128 million). Adjusted for those one-offs, the Q3 2024 L&H insurance service result stands at EUR 81 million.
- In Investments, SCOR benefits from elevated reinvestment rates in Q3 2024 and records a strong regular income yield of 3.5% (+0.1pt vs. Q3 2023).
The annualized Return on Equity stands at -10.2% (-10.3% adjusted4) in Q3 2024 and the Group Economic Value over the first nine months of 2024 decreases by -7.0%6 at constant economics7, impacted by the outcome of the 2024 L&H assumption review accounting for EUR -0.7 billion (pre-tax) in insurance service result and EUR -0.8 billion (pre-tax) in contractual service margin (CSM). Over the first nine months of 2024, SCOR reports a net loss of EUR -229 million (EUR -224 million adjusted4), implying an annualized Return on Equity of -6.7% (-6.6% adjusted4).
Group solvency ratio is estimated at 203% at the end of Q3 2024, within the optimal range of 185%-220%, compared to 209% at year-end 2023 and to 201% as of 30 June 2024. In line with its current approach, SCOR continued to accrue a portion of the FY dividend during the quarter.
Group Economic Value5 under IFRS 17 stands at EUR 8.4 billion as of Q3 2024, down -7.0%6 at constant economics7 compared with 31 December 2023, driven by the 2024 L&H assumption review with a EUR -1.1 billion (post-tax) impact. As a result, the Group Economic Value growth target at 9% per annum at constant economics is unlikely to be met in FY 2024.
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Footnotes
1 Including revenues on financial contracts reported under IFRS 9.
2 Excluding the mark to market impact of the option on own shares, the impact of the 2024 L&H assumption review and the impact of the Q3 true-up on identified arbitration positions.
3 Solvency ratio estimated after taking into account the dividend accrual for the first nine months based on the dividend paid for the fiscal year 2023 (EUR1.80 per share).
4 Adjusted by excluding the mark to market impact of the option on own shares.
5 Defined as the sum of the shareholders’ equity and the Contractual Service Margin (CSM), net of tax. 25% notional tax rate applied on CSM.
6 Not annualized. The starting point is adjusted for the dividend of EUR 1.8 per share (EUR 324 million in total) for the fiscal year 2023, paid in 2024.
7 Growth at constant economic assumptions as of 31 December 2023, and excluding the mark to market impact of the option on own shares.
8 There are a few non-material open items that can only be processed with our normal annual close.
