AM Best

A.M. Best Upgrades Credit Ratings of SCOR SE and Its Main Operating Subsidiaries


Myles Gould
Senior Financial Analyst
+44 20 7397 0267

Victoria Ohorodnyk-P/C
Financial Analyst
+1 908 439 2200, ext. 5326

William Pargeans-L/H
+1 908 439 2200, ext. 5359

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - SEPTEMBER 01, 2017 12:07 PM (EDT)
A.M. Best has upgraded the Financial Strength Ratings (FSR) to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa-” from “a+” of SCOR SE (SCOR) (France) and its main operating subsidiaries. Concurrently, A.M. Best has upgraded the Long-Term Issue Credit Ratings (Long-Term IR) on SCOR’s rated instruments. The outlook of all Credit Ratings (ratings) has been revised to stable from positive.

The rating upgrades reflect SCOR’s track record of strong and resilient operating profitability and its very strong risk-adjusted capitalisation, despite persisting challenging market conditions. SCOR’s business model and conservative risk appetite relative to reinsurance peers support low volatility in both earnings and capital adequacy. The ratings also reflect SCOR’s excellent business profile as a tier 1 reinsurer, its well-diversified portfolio of non-life and life reinsurance, and the group’s excellent enterprise risk management (ERM) framework.

SCOR’s operating performance has been strong and stable over the past five years (2012-2016), proving resilient to the prevailing competitive market conditions in the global reinsurance sector and the persisting low interest rate environment. This has been driven primarily by solid underwriting performance over the period, demonstrated by non-life combined ratios consistently below 95% and life technical margins continually above 7%. Overall earnings have been further bolstered by a robust five-year average net investment return (including unrealised/realised gains and losses) of 3.3%, despite the difficult market conditions and the group’s conservative investment strategy.

The group reported a net income of EUR 292 million for the first six months of 2017, compared with EUR 275 million for the same period in 2016. The improved result primarily reflects profitable growth from both life and non-life operations, partially offset by reserve strengthening in Q1 2017 arising from the revision of the Ogden rate in the United Kingdom. Strong underwriting performance during the first six months of 2017 is demonstrated by a life technical margin of 7.1% and a combined ratio of 93.5%. The annualised return on equity ratio of 9.1% for the first half of 2017 surpassed the group’s target as per its “Vision in Action” strategic plan and depicted improvement against the 8.9% ratio achieved for the same period in 2016.

SCOR’s risk-adjusted capitalisation has strengthened continually since 2013, reaching a very strong level in 2016. The group’s shareholders’ equity has grown by approximately 30% since year-end 2013, increasing from EUR 4.9 billion to EUR 6.4 billion at the end of June 2017. SCOR’s net available capital also benefits from hybrid debt issuances, a contingent capital facility, and the value of in-force life business, which are given partial equity credit in Best’s Capital Adequacy Ratio (BCAR) model. Capital requirements in the BCAR are largely driven by underwriting activities (premium and reserving risks), with the company maintaining a conservative investment portfolio. Prospective capital adequacy is expected to remain at a very strong level and subject to a low level of volatility, reflecting SCOR’s conservative risk appetite compared with peers and its comprehensive retrocession programme, designed to shield its capital base. The group’s capital management strategy over the next two years incorporates a planned programme of up to EUR 200 million of share buy-backs, subject to market conditions, as well as controlled underwriting growth and robust retention of earnings.

SCOR has strengthened its competitive position within the global reinsurance market and increased its scale over recent years through a combination of organic growth from its non-life and life businesses, as well as by its acquisitions of U.S.-based life reinsurance operations. The group has developed an internationally recognised franchise with leading positions in its key markets, offering a wide range of insurance and reinsurance solutions. SCOR is viewed to have an excellent business profile as a tier 1 global reinsurer, which has enabled the group to develop a diversified portfolio which is well-balanced between life and non-life. This excellent profile enables SCOR to effectively manage local and global market cycles, which has become increasingly beneficial considering the persisting challenging market conditions of the global reinsurance sector.

Further underpinning the group’s stability of both earnings and risk-adjusted capitalisation is its excellent ERM framework. SCOR’s ERM framework incorporates sophisticated capital management tools, which are fully integrated into the operational and strategic decision-making processes of the group.

The FSRs have been upgraded to A+ (Superior) from A (Excellent) and the Long-Term ICRs upgraded to “aa-” from “a+” with the outlooks revised to stable from positive for SCOR SE and its following operating subsidiaries:

  • SCOR Global Life SE

  • SCOR Global P&C SE

  • SCOR Switzerland AG

  • SCOR UK Company Limited

  • SCOR Reinsurance Asia-Pacific Pte Ltd

  • SCOR Global Life USA Reinsurance Company

  • SCOR Global Life Americas Reinsurance Company

  • SCOR Global Life Reinsurance Company of Delaware

  • SCOR Reinsurance Company

  • SCOR Canada Reinsurance Company

  • General Security National Insurance Company

  • General Security Indemnity Company of Arizona

The following Long-Term IRs have been upgraded with the outlooks revised to stable from positive:


— to “a” from “a-” on EUR 500m 3.625% subordinated notes, due 2048

— to “a” from “a-” on EUR 600m 3.00% subordinated notes, due 2046

— to “a” from “a-” on CHF 315m 5.25% undated subordinated notes

— to “a” from “a-” on CHF 250m 5.00% perpetual subordinated notes

— to “a” from “a-” on CHF 125m 3.375% perpetual subordinated notes

— to “a” from “a-” on EUR 250m 3.875% perpetual subordinated notes

— to “a” from “a-” on EUR 250m 3.25% subordinated notes, due 2047

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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