SCOR records net income of EUR 189 million in the first half 2013, despite high Nat Cat activity, a continued low yield environment and equity impairments

SCOR's first half of 2013 results.

In this first half 2013, SCOR has demonstrated its ability to generate robust results and to cope with major natural catastrophes in the second quarter, in an economic environment that remains highly uncertain.
  • Gross written premiums stand at EUR 4,984 million, up 7.5% at current exchange rates, driven by very healthy SCOR Global P&C renewals and business growth in Asia and Latin America, and by the signing of major new contracts by SCOR Global Life, particularly with BBVA in Spain and Longevity contracts concluded in the UK:
  • SCOR Global P&C records gross written premium growth of 5.5% at current exchange rates to EUR 2,378 million;
  • SCOR Global Life records gross written premium growth of 9.5% at current exchange rates to EUR 2,606 million.
SCOR expects premium income to cross the EUR 10 billion threshold in 2013.
  • SCOR Global P&C’s net combined ratio stands at 94.3% in the first half 2013, i.e. at a better level than the assumptions set out in the Strong Momentum V1.1 strategic plan.
  • SCOR Global Life’s technical margin stands at 7.3%, in line with the assumptions of the Strong Momentum V1.1 strategic plan.
  • SCOR Global Investments maintains its prudent asset management policy and records an on-going return on invested assets of 3.4% (excluding equity impairments). This quarter should mark the last significant round of equity impairments impacting the Profit & Loss statement (under current market conditions).
  • Operating cash flow is up sharply to EUR 319 million (+33.5%) with robust contributions from both business engines, once again highlighting the relevance of the Group’s strategy.
  • The cost ratio of 5.0% is in line with the assumptions of the Strong Momentum V1.1 strategic plan.
  • Shareholders’ equity reaches EUR 4,737 million at 30 June 2013, with a net book value per share of EUR 25.21 (compared to EUR 26.16 at 31 December 2012)1 after distribution of EUR 1.2 of dividends per share.
  • SCOR’s net income stands at EUR 189 million, compared to EUR 206 million in the first half 2012. ROE stands at 8.1% (9.9% excluding equity impairments).
The Group is strengthening its position in the US Life reinsurance market through the successful acquisition of Generali US. This will give SCOR Global Life Americas (SGLA) the unique opportunity of becoming the leader in the US Life reinsurance market2, with a portfolio centred on mortality risks. This acquisition is fully in line with the targets and requirements defined by the Group in its strategic plan. The total cash consideration for this transaction stands at EUR 579 million3, plus the 2013 earnings through the closing date, representing a discount of approximately 35% to SCOR’s preliminary Embedded Value estimate of the Generali US in-force portfolio. This transaction is expected to close during the fourth quarter 2013. No results for Generali US are included in the SCOR 2013 first half results.
This first half 2013 has been rich in terms of developments for the Group, with the strengthening of its position on new markets and lines of business - for example the purchase of the BBVA mortality and disability portfolio in Spain and the acquisition of a controlling stake in the real estate company MRM. SCOR has also continued to reinforce its image as a top-tier reinsurer that is recognised on the global reinsurance market, as demonstrated by prestigious new awards (Denis Kessler was elected “Reinsurance Company CEO of the Year” at the Reactions London Market Awards, while SCOR was elected “Most Popular Foreign-Capital Insurance Company” 2013 at the fifth China International Insurance Summit).
Denis Kessler, Chairman and Chief Executive Officer of SCOR, comments: “SCOR’s positive results in the first half 2013 and its ability to absorb major natural catastrophes demonstrate, once again, the relevance and robustness of its business model based on four strategic pillars, namely a strong and diversified franchise, a mid-level risk appetite combined with a very comprehensive and solid Enterprise Risk Management policy, high diversification between Life and Non-Life business and an effective capital shield policy. All of SCOR’s teams are now mobilised to define the main objectives of the Group’s new strategic plan, which will be announced at the Investors’ Day on 4 September 2013”.

1 2012 shareholders’ equity has been adjusted due to the retrospective application of IAS 19 “revised”: (i) Q4 2012 published shareholders’ equity amounted to EUR 4 810 million; (ii) shown book value per share has been recalculated – published figure for book value per share was EUR 26.18 at 31 December 2012.

2 In terms of new business and in-force, source Preliminary 2012 SOA Munich Re Life reinsurance survey.

3 FX rate as of 31/05/2013: 1 EUR = 1.2960 USD.

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