Fourth quarter 2023 results – EUR 162 million net income in Q4 2023, contributing to a record full year 2023 net income of EUR 812 million Proposed regular dividend of EUR 1.8 per share

Press release
6 March 2024 – N° 03

Fourth quarter 2023 results
                

EUR 162 million net income in Q4 2023, contributing to
a record full year 2023 net income of EUR 812 million

Proposed regular dividend of EUR 1.8 per share

Group net income of EUR 162 million in Q4 2023 (EUR 179 million excluding the mark to market impact of the option on own shares). For the full year 2023, the net income stands at EUR 812 million (EUR 780 million adjusted1)
Group Economic Value2 under IFRS 17 of EUR 9.2 billion as of 31 December 2023, up +3.0%3 (+8.6% at constant economics3,4) compared with 31 December 2022, implying an Economic Value per share of EUR 51 (vs. EUR 50 as of 31 December 2022)
Estimated Group solvency ratio of 209%5 as of 31 December 2023
Proposed regular dividend of EUR 1.8 per share for 2023
Annualized Return on Equity of 15.0% (16.6% adjusted1) in Q4 2023. For the full year 2023, Return on Equity stands at 18.1% (17.5% adjusted1)
Insurance revenue of EUR 3,832 million in Q4 2023 (+3.0%6 compared to Q4 2022)
P&C combined ratio of 75.6% in Q4 2023 (-22.8 pts compared to Q4 2022)
L&H insurance service result7 of EUR 64 million in Q4 2023 (vs. EUR -463 million in Q4 2022)
Investments regular income yield of 3.7% in Q4 2023 (+0.6 pts compared to Q4 2022)

 

SCOR SE’s Board of Directors met on 5 March 2024, under the chairmanship of Fabrice Brégier, to approve the Group’s 2023 financial statements.

Fabrice Brégier, Chairman of SCOR’s Board of Directors, comments: “In 2023, SCOR delivers record results, achieving its solvency target and exceeding its value creation target. With the launch of its new strategic plan Forward 2026, SCOR intends to fully benefit from the most supportive P&C market environment of the past two decades. The Group’s financial strength and business outlook have led the Board to propose a regular dividend of EUR 1.8 per share for 2023, subject to shareholders’ approval at the General Meeting. I am confident in SCOR’s ability to pursue its profitable growth and achieve the ambitious targets set out in its Forward 2026 strategic plan.“  

Thierry Léger, Chief Executive Officer of SCOR, comments: “In 2023, SCOR delivers a strong performance across all business activities, with an Economic Value growth of 8.6% and a Solvency ratio of 209%. SCOR’s balance sheet remains strong in 2023, with an increased confidence level within the best estimate range in P&C reserves. This is confirmed by an external independent review and proves that the prudent reserving strategy we have adopted since the second quarter of 2023 is bearing fruit. Looking ahead, our objective is to continue to grow in selected lines of business, as we did at the 1.1.2024 renewals. Building on this solid base and on SCOR’s strong client relationships globally, we are hitting the ground running for the Forward 2026 plan, with a firm commitment to profitable growth.”

Group performance and context

SCOR records EUR 162m net income (EUR 179 million adjusted1) in Q4 2023, driven notably by a strong P&C performance and an increasing return on invested assets:

In P&C (re)insurance, the combined ratio of 75.6% in Q4 2023 is primarily driven by a lower-than-expected natural catastrophe claims ratio of 1.5%, benefiting from positive developments in mature natural catastrophe claims accounting for -7.2 points. In addition, P&C (re)insurance benefited from a satisfactory underlying attritional loss performance and a favorable discount effect.
In L&H reinsurance, the insurance service result7 stands at EUR 64 million in Q4, impacted by a change in the CSM amortization pattern on a full year basis, and by a negative onerous contract impact of EUR 50 million, mainly driven by a change in risk adjustment.
In Investments, SCOR benefits from high reinvestment rates and reports a noticeable increase in the regular income yield, which reaches 3.7% in Q4 2023 (+0.3pts vs. Q3 2023).
The effective tax rate stands at 49.4% for Q4 2023, including the prudent actions on the deferred tax assets.

Over the full year 2023, SCOR delivers a strong performance with a net income of EUR 812 million (EUR 780 million adjusted1), implying an annualized Return on Equity of 18.1% (17.5% adjusted1). The Group grows its Economic Value by 8.6% at constant economics3,4.

SCOR’s Solvency ratio stands at 209% at year-end 2023, in the upper part of the optimal range of 185%-220%.

External independent review confirms SCOR P&C reserves at best estimate

SCOR performed its annual P&C reserves review in Q4 2023, setting all lines of its P&C reserves at best estimate, with an increase in the confidence level compared to Q4 2022.

In addition, Willis Towers Watson (WTW) performed an external independent in-depth review covering 92.2% of the gross held P&C reserves of EUR 9.3 billion. WTW confirmed that “as at 30 September 2023, SCOR Group’s global P&C claim reserves gross of retrocession are greater than WTW’s corresponding best estimate” 8.

Proposed regular dividend of EUR 1.8 per share, setting the floor for future years

Considering a strong performance delivered by SCOR in 2023, as evidenced by the Solvency ratio of 209% and the Economic Value growth of 8.6%3,4, SCOR proposes a regular dividend of EUR 1.8 per share for the fiscal year 2023.

As per SCOR’s new capital management framework, presented during the Investor Day on 7 September 2023, the regular dividend for the current year is expected to be at a level at least equal to that of the regular dividend for the previous year.

This dividend will be submitted for shareholders’ approval at the 2024 Annual General Meeting, to be held on 17 May 2024. The Board proposes to set the ex-dividend date at 21 May 2024, and the payment date at 23 May 2024.

Very strong P&C underlying performance in Q4 2023

In Q4 2023, P&C insurance revenue stands at EUR 1,940 million, up +0.7% at constant exchange rates (down -3.9% at current exchange rates) compared to Q4 2022. This slower growth compared to Q3 2023 (+6.4% at constant exchange rates) is mainly driven by a seasonality effect in Q4 due to a significantly higher share of the 2023 underwriting year premiums in the business mix.

As a reminder, insurance revenue is calculated on an earned basis and reflects blended premiums from the 2023 and 2022 underwriting years. The contribution of the 2023 underwriting year premiums to the mix increases quarter after quarter.

New business CSM in Q4 2023 stands at EUR -76 million, impacted by IFRS 17 stabilization measures from Q1 2023 of EUR -153 million. Excluding these, the underlying new business CSM of EUR 77 million in Q4 2023 comes mainly from Specialty Insurance.

P&C (re)insurance key figures:

In EUR million

(at current exchange rates)
Q4 2023
Q4 2022
Variation
FY 2023
FY 2022
Variation

P&C insurance revenue
1,940
2,019
-3.9%
7,496
7,371
1.7%

P&C insurance service result
353
27
1,215.5%
897
-902
n.a.

Combined ratio
75.6%
98.4%
-22.8 pts
85.0%
114.9%
-29.9 pts

P&C new business CSM
-76
 n.a.
n.a.
952
 n.a.
n.a.

The P&C combined ratio stands at 75.6% in Q4 2023, compared to 98.4% in Q4 2022. The combined ratio is improving due to (i) a Nat Cat ratio at 1.5%, including -7.2 points related to mature Nat Cat developments, mainly Hurricane Ian (excluding these developments, the Cat ratio for Q4 2023 is better than expected at 8.7%); and (ii) an attritional loss and commission ratio of 79.3%, reflecting a good underlying performance, a positive one-off technical income of -1.4 points, and a negative impact from an IFRS 17 stabilization effect of 3.8 points.

The P&C attributable expense ratio stands at 6.4% of net insurance revenue in Q4 2023.

The P&C insurance service result of EUR 353 million is driven by a CSM amortization of
EUR 252 million, a risk adjustment release of EUR 49 million, a positive experience variance of
EUR 64 million which is primarily driven by mature Nat Cat developments, and an onerous contract impact of EUR -12 million.

Good L&H underlying performance in Q4 2023

In Q4 2023, L&H insurance revenue amounts to EUR 1,892 million, up +5.4% at constant exchange rates (stable at current exchange rates) compared to Q4 2022.

SCOR continues to build its L&H CSM through new business generation, mostly from Protection
(EUR 90 million new business CSM9 in Q4 2023, including EUR 75 million from Protection).

L&H reinsurance key figures:

In EUR million

(at current exchange rates)
Q4 2023
Q4 2022
Variation
FY 2023
FY 2022
Variation

L&H insurance revenue
1,892
1,892
0.0%
8,426
8,539
-1.3%

L&H insurance service result7
64
-463
n.a.
589
-316
n.a.

L&H new business CSM9
90
 n.a.
n.a.
466
 n.a.
n.a.

The L&H insurance service result7 amounts to EUR 64 million in Q4 2023. It is negatively impacted by a change in the CSM amortization pattern on a full year basis, and by an onerous contract impact of
EUR -50 million mainly from changes in risk adjustment, with negligible contribution from new business.

Investments continue to deliver favorable results with a regular income yield of 3.7% in Q4 2023

As of 31 December 2023, total invested assets amount to EUR 22.9 billion. SCOR’s asset mix is optimized, with 79% of the portfolio invested in fixed income. SCOR has a high-quality fixed income portfolio with an average rating of A+ and a duration of 3.0 years.

Investments key figures:

In EUR million

(at current exchange rates)
Q4 2023
Q4 2022
Variation
FY 2023
FY 2022
Variation

Total invested assets
22,914
22,179
+3.3%
22,914
22,179
+3.3%

Regular income yield*
3.7%
3.1%
+0.6 pts
3.2%
2.4%
+0.8 pts

Return on invested assets*, **
3.7%
2.9%
+0.8 pts