Following the negative experience variance in the first quarter of 2024, global re/insurer SCOR has announced that it has accelerated its annual life and health (L&H) reserving assumptions review and included a best estimate view in the Q2 2024 results.
Final assumption updates in the second half of 2024 could potentially lead to additional negative adjustments to the L&H ISR of up to €-0.1 billion by year-end 2024. Consequently, the L&H ISR in 2024 is expected to be significantly less than the €500 million indicated during the Q1 2024 results presentation.
The Q2 2024 pre-tax L&H contractual service margin (CSM) at current yield curves is adjusted by approximately €-0.9 billion, mainly due to reserving assumption changes in anticipation of the year-end review.
Final updates in the second half of 2024 could potentially lead to additional negative adjustments to the pre-tax CSM at current yield curves of up to €-0.4 billion by year-end 2024.
The Q2 2024 Group Economic Value (EV) is expected to be approximately €8.3 billion to €8.5 billion, or approximately €46 to €47 per share. As a result, the Group EV growth target of 9% per annum at constant economics is unlikely to be met for the fiscal year 2024.
SCOR said that these adjustments will not impact the group's liquidity position at year-end 2024. The Group Solvency II ratio is expected to be above 200% at Q2 2024, considering the mentioned impacts.
The company emphasized that it actively manages its solvency position and remains confident it will maintain the solvency ratio in the optimal range of 185% to 220% at year-end 2024. SCOR's capital management framework, including its dividend policy, remains unchanged.
These adjustments aim to strengthen the robustness of cash flow projections and reduce the risk of future earnings volatility. Q2 2024 results will be published on July 30.
Further details will be provided with the Q3 results on Nov. 14, and a detailed presentation of the L&H business strategy and the update of the Forward 2026 plan will be presented on Dec. 12. All figures are provided net of retrocession.
Thierry Léger (pictured above), chief executive officer of SCOR, stated that today’s communication aligns with SCOR’s proactive and transparent communication policy.
“Following the accelerated L&H reserving assumptions review, we have decided to launch the first of a series of determined actions aimed at restoring the profitability of our L&H business in a sustainable way. We will update the Forward 2026 plan to improve the margins and mix of our products with a strong focus on diversification. The new L&H business strategy and the Forward 2026 KPIs will be presented on 12 December 2024. Our P&C and Investment activities continue to deliver a very strong performance. We have full confidence in our L&H franchise and in our ability to produce higher quality and more stable results going forward,” he said.
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