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SCOR delivers strong half year results, thanks to the rigorous implementation of its strategic plan “Optimal Dynamics” and the profitable development of its franchise driven by both its Life and P&C business engines. SCOR is on track to achieve the targets set out in its plan.
Gross written premiums reach EUR 6,493 million, up 19.6% at current exchange rates compared to H1 2014 (+5.3% at constant exchange rates). This significant growth is driven by the contribution of the two business engines:
- SCOR Global P&C gross written premiums increase by 19.1% at current exchange rates (+5.9% at constant exchange rates) to EUR 2,859 million;
- SCOR Global Life gross written premiums reach EUR 3,634 million, up by 20.1% at current exchange rates (+4.9% at constant exchange rates).
- SCOR Global P&C delivers excellent H1 2015 technical profitability with a net combined ratio of 90.9%, stable compared to H1 2014, in an environment of low natural catastrophe losses but with an unusually high number of major industrial losses.
- SCOR Global Life’s technical margin stands at 7.2% for the first six months of 2015, stable compared to the same period in 2014.
- SCOR Global Investments achieves a 3.4% return on invested assets thanks to its active portfolio management.
- Group net income reaches EUR 327 million in the first half of 2015, an increase of 27.7% compared to H1 2014. The annualized return on equity (ROE) stands at 11.1%1 or 1,112 bps above the risk-free rate2.
- Shareholders’ equity increases by 5.2% in the first six months of 2015 to reach EUR 6,026 million at 30 June 2015, compared to EUR 5,729 million at 31 December 2014, after the payment of EUR 260 million of dividends for the year 2014. This translates into a book value per share of EUR 32.29 at 30 June 2015, compared to EUR 30.60 at 31 December 2014. This increase is driven by a high net income contribution and strong foreign exchange impact of EUR 280 million.
- SCOR’s financial leverage stands at 24.1% at 30 June 2015, up from 23.1% at 31 December 2014 following the successful placement of EUR 250 million dated subordinated debt issued with a coupon set at 3.25%. In addition, SCOR has called two debts due in 2029 and 2020 respectively for EUR 10 million and EUR 93 million. The latter will be accounted for in Q3 20153.
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The first half of 2015 demonstrates the pertinence of the long-established strategy put in place by SCOR and set out in the “Optimal Dynamics” plan. The Group was able to deepen the franchise by leveraging on its diversified portfolio and to enlarge its global presence, notably with the planned opening of a branch in India and a representative office in Kenya.
The relevance of SCOR’s strategy was affirmed by Fitch Ratings, which upgraded SCOR’s Insurer Financial Strength (IFS) rating to ‘AA- stable outlook’ from ‘A+ positive outlook’. The rating agency notably mentioned having taken into account “the development of SCOR’s reinsurance franchise, the scale and diversity of which have improved significantly through external growth and swift integration of acquired operations, helping to generate a more stable level of profitability”. The rating agency also noted “the level of capitalisation that Fitch considers to be very strong” as well as “a consistent and prudent reserving philosophy”.
Denis Kessler, Chairman & Chief Executive Officer of SCOR, comments: “In H1 2015, SCOR continues to deploy its strategy based on the diversification of risks and deepening of the franchise and to deliver high quality results. During the second quarter, the Group has marked a significant milestone in terms of the preparations for Solvency II, with the filing of its internal model to our primary regulator. SCOR strengthens its positioning worldwide and is on track to meet its “Optimal Dynamics” targets.”
1 The ROE calculation method was adjusted to take into account material foreign exchange rate movements that did not occur evenly through the reporting period. A daily weighted average is applied for the currency or currencies that experienced such movements and a simple weighted average is applied for the other currencies. The ratio previously reported was 10.3% for H1 2014.
2 Three-month risk-free rates.
3 The financial leverage would be 23.2% if the EUR 93 million debt was called and accounted for in Q2 rather than in Q3.
