SCOR in 2019: profitable growth, strong capital generation, high solvency - Net income of EUR 422 million and dividend of EUR 1.80 per share
2019 Annual Results
PUBLISHED AT 7:12 PM CET
SCOR navigates 2019 with disciplined and profitable franchise expansion, leveraging its balanced portfolio of risks between Life reinsurance and P&C reinsurance, and continues its strong value creation through delivering solid capital generation. In line with its consistent capital management process and dividend policy, the Group is proposing a dividend of EUR 1.801 per share for 2019.
- Gross written premiums total EUR 16,341 million in 2019, up 4.1% at constant exchange rates compared with 2018 (up 7.1% at current exchange rates).
- SCOR Global P&C gross written premiums are up 12.7% at constant exchange rates compared with 2018 (up 15.8% at current exchange rates). Altogether SCOR Global P&C adds approximately EUR 1.0 billion of gross written premiums in 2019 whilst absorbing a high level of natural catastrophe and man-made claims, and demonstrating technical profitability with a net combined ratio of 99.0% in 2019.
- SCOR Global Life gross written premiums are slightly down 1.8% at constant exchange rates compared with 2018 (up 1.2% at current exchange rates). This variation is largely driven by the renewal of certain Financial Solutions transactions as fee business (rather than as premiums) in 2019. Excluding these transactions, Life gross written premiums have grown by 4.5%2 at constant exchange rates. SCOR Global Life continues to successfully expand its franchise and delivers a strong level of technical profitability in 2019 by recording a technical margin of 7.5%.
- SCOR Global Investments pursues a prudent asset management strategy and delivers a strong return on invested assets of 3.0% in 2019, benefiting from capital gains.
- The Group cost ratio which stands at 4.7% of gross written premiums, is better than the “Quantum Leap” assumption of ~5.0%.
- The Group net income stands at EUR 422 million for 2019, up 31.1% compared to 2018. The return on equity (ROE) stands at 7.0%, 636 bps above the risk-free rate3. The normalized4 return on equity for the year is 9.0%, exceeding the profitability target of the strategic plan “Quantum Leap”.
- Group net operating cash flows stand at EUR 841 million in 2019, with robust cash flows from SCOR Global P&C in line with expectations despite significant payments on 2017 and 2018 natural catastrophe events. SCOR Global Life experienced lower cash flow as a result of the volatility on claim payments. 2018 was positively affected by a large one-off transaction. The Group’s total liquidity stands at EUR 1.5 billion at December 31, 2019.
- Shareholders’ equity stands at EUR 6,374 million at December 31, 2019, up by EUR 546 million compared with December 31, 2018, after the net income contribution of EUR 422 million and dividend payment of EUR 325 million in May 2019. This results in a strong book value per share of EUR 34.06, compared to EUR 31.53 at December 31, 2018.
- Financial leverage stands at 26.4% on December 31, 2019, improving by 1.1% points compared to December 31, 2018. Allowing for the intended call of the debt5 callable on October 20, 2020, the adjusted financial leverage ratio would be at 25.5%.
- The Group’s estimated solvency ratio stands at 226%6 on December 31, 2019, above the optimal solvency range of 185% - 220% as defined in the “Quantum Leap” strategic plan. This elevated solvency level is driven by strong capital generation and efficient capital management.
Denis Kessler, Chairman & Chief Executive Officer of SCOR, comments: “In 2019, the third consecutive year marked by a high level of natural catastrophes and man-made claims, as well as the persistence of a low interest rate environment, SCOR demonstrates once again its capacity to absorb shocks. The Group continues its development and its strong value creation, recording sustainable growth, an increase in profitability, and further strengthening of solvency. Our shareholder return is attractive with a proposed dividend of EUR 1.80 for 2019 subject to the approval of the Annual General Assembly. SCOR as an independent global Tier one reinsurance company is fully mobilized to reach the targets of its “Quantum Leap” strategic plan.”
SCOR Group Full-Year and Q4 2019 key financial details
1 2019 dividend subject to approval of the 2020 shareholders’ Annual General Meeting, pursuant to the decision of the Board of Directors at its meeting of February 26, 2020, to adopt the Group’s accounts and consolidated financial statements as of December 31, 2019.
2 The 2018 GWP include EUR 547 million coming from Financial Solutions transactions which were renewed as fee business under deposit accounting (rather than premiums) in 2019
3 Based on a 5-year rolling average of 5-year risk-free rates (65 bps in Q4 2019)
4 Normalize for nat cat (7% budget cat ratio), reserve release and Ogden rate
5 CHF 125 million undated subordinated note lines, issued on October 20, 2014, and callable in October 2020
6 Solvency ratio based on Solvency II requirements. The Group solvency final results are to be filed to supervisory authorities by May 2020 and the final Solvency ratio may differ from this estimate
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