Global reinsurer SCOR, following negative variance in experience in the first quarter of 2024, announced that it has accelerated the review of annual life and health (L&H) reserve assumptions and included the best estimate in its second quarter of 2024 results.

According to SCOR, the Life & Health Services result in the second quarter of 2024 is expected to be around € -0.4 billion. This result is due to the updates related to reserves and the continued negative variance in experience, which is partly offset by the positive effects from portfolio measures.

The final assumption updates in the second half of 2024 could result in additional negative adjustments to the Company’s Health & Fitness income index of up to € -0.1 billion by the end of 2024. Consequently, the Company’s Health & Fitness income index in 2024 is expected to be significantly lower than the € 500 million indicated during the presentation of the results for the first quarter of 2024.

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The pre-tax contractual service margin for the hospitality and travel segment for the second quarter of 2024 is adjusted at the current yield curves by approximately € -0.9 billion, mainly due to the retention of assumption changes in anticipation of the year-end review.

Final updates in the second half of 2024 are likely to result in additional negative adjustments to pre-tax CSM at current yield curves of up to € -0.4 billion by end-2024.

The Group’s economic value in the second quarter of 2024 is expected to be between €8.3 billion and €8.5 billion, or approximately €46 to €47 per share. As a result, the Group’s economic value growth target of 9% per annum at constant economic rates is unlikely to be achieved during the 2024 financial year.

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Score said these amendments will not impact the group’s liquidity position by the end of 2024. The group’s Tier 2 solvency ratio is expected to be above 200% in Q2 2024, taking into account the aforementioned impacts.

The company confirmed that it is actively managing its solvency position and remains confident that it will maintain the solvency ratio in the optimal range of 185% to 220% by the end of 2024. SCOR’s capital management framework, including the dividend policy, remains unchanged.

These adjustments are intended to enhance the robustness of cash flow projections and reduce the risk of future earnings volatility. The second quarter 2024 results are scheduled to be published on July 30.

More details will be provided with the third-quarter results on November 14, and a detailed presentation of L&H’s business strategy and Forward 2026 plan update will be provided on December 12. All figures are provided net of recoveries.

Thierry Leger (pictured above), CEO of SCOR, said today’s statement is in line with SCOR’s proactive and transparent communication policy.

“After reviewing L&H’s quick reserve assumptions, we have decided to launch the first of a series of decisive actions aimed at restoring the profitability of our L&H business in a sustainable manner. We will update our Forward 2026 plan to improve margins and our product mix with a strong focus on diversification. L&H’s new business strategy and Forward 2026 KPIs will be presented on December 12, 2024. Our property, insurance and investment businesses continue to deliver very strong performance. We have full confidence in the L&H franchise and in our ability to deliver higher quality and more stable results in the future,” he said.

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