PARIS-LA-DEFENSE CEDEX, FRANCE--(Marketwire - Jul 27, 2012) -
Press Release
27 July 2012
In a challenging environment, SCOR meets its targets
and records net income of EUR 206 million
in the first half 2012
-- SCOR's growing franchise provides underlying profitability levels in
the first half 2012 in line with its operational assumptions:
-- Strong gross written premium growth to EUR 4,635 million, up by
10.2% on a pro forma basis (+36.3% on a published basis[1]), from
both business engines:
-- growth of 16.0% for SCOR Global P&C gross written premiums,
to EUR 2,255 million;
-- growth of 5.3% on a pro forma basis for SCOR Global Life
gross written premiums, to EUR 2,380 million.
-- Net combined ratio of 93.8%, SCOR Global P&C having exceeded
Strong Momentum V1.1 profitability assumptions;
-- Life technical margin of 7.4%, as SCOR Global Life continues to
deliver a technical performance consistent with Strong Momentum
V1.1 assumptions;
-- SCOR Global Investments achieves a return on invested assets
before impairments of 3.4%, in line with prior indications.
The return on invested assets after impairments stands at 3.0%;
-- Continued focus on cost control, with a group cost ratio of 5.3%,
while actively investing in the future, with more than 20 ongoing
projects.
-- SCOR delivers a strong net income of EUR 206 million, compared to
EUR 40 million in the first half 2011 on a published basis, and a
return on equity of 9.3%. Excluding impairments[2], the net income
is EUR 226 million and the return on equity reaches 10.2%.
-- Operating cash flow stands at EUR 239 million.
-- Shareholders' equity increases to EUR 4,588 million at 30 June 2012,
compared to EUR 4,009 million at 30 June 2011, after the distribution
of EUR 203 million in dividends for 2011 (EUR 1.10 per share).
-- Book value per share of EUR 25.01 at the end of the first half 2012,
compared to EUR 21,97 at the end of the first half 2011.
Strict adherence to the Group's cornerstones for many years has played
a key
role in the recognition of SCOR's strategy and business model by all
of the
rating agencies, which have upgraded SCOR to "A+" or equivalent over the
past
few months. SCOR has also been distinguished by insurance and
reinsurance
industry professionals, who named the Group "Reinsurer of the Year"
at the
Reactions London Market Awards 2012.
Denis Kessler, Chairman & CEO of SCOR, comments: "Throughout the first
half
2012, SCOR has further enlarged its footprint, with a solid 10% increase
in its
topline, combined with robust underlying technical profitability. This has
been
achieved through the strong mobilisation of all underwriters in the
Life and
Non-Life teams. All the Group's engines have delivered a solid
performance, in
line with the assumptions set out in our strategic plan Strong Momentum
V1.1. As
a result, book value per share is now over EUR 25. The upgrades delivered
over
the past few months by all the rating agencies bear witness to the
effectiveness
of our business model, which has managed to meet the challenges of a
very
difficult economic and financial environment ".
In the first half 2012, SCOR Global P&C (SGPC) continues to deliver
strong and
profitable growth
SGPC records strong performances in the first half 2012, with gross
written
premiums up by +16.0% (+10.2% at constant exchange rates) to EUR 2,255
million,
compared to EUR 1,944 million in the first half 2011. This positive
dynamic,
combining favourable seasonality, strong renewal growth since the
beginning of
the year (+13.9% in January and +11% in April), a strict underwriting
policy and
active portfolio management, enables the Group's Non-Life business to
confirm
its expectations of annual growth of 9%, as set out in the strategic plan.
The combined ratio stands at 93.8%, an excellent level, which has been
achieved
thanks to:
-- A good net attritional loss ratio of 60.4%, in line with the objective
set out in the strategic plan.
-- A net natural catastrophe loss ratio of less than 4.5 points over the
first half 2012. In the second quarter 2012 alone, the ratio stands
at 5.2%, including EUR 20 million for Italian earthquakes,
EUR 11 million for US tornadoes and an upward revision of
EUR 17 million for the Thai floods.
SGPC's positive momentum, sustained by the recent rating upgrades, has
led to
strong June-July renewals, with a 24% premium increase at constant
exchange
rates to EUR 462 million, and a 3% price increase under conditions
meeting
expectations.
SCOR Global Life (SGL) delivers a performance anchored to
technical
profitability
In the first half 2012, SGL gross written premiums reach EUR 2,380
million,
compared to EUR 2,261 million in the first half 2011, representing an
increase
of 5.3% driven by foreign exchange rate effects. The successful
integration of
Transamerica Re (TaRe), and the significant increase of SGL business in
emerging
countries (Latin America, Asia/Australia), in Central and Eastern
Europe, in
Canada and in the UK/Ireland, have offset the decrease in the Middle
East and
enabled SGL to record these results.
SGL has also delivered double-digit growth in the financing, critical
illness
and disability lines, whilst maintaining a steady increase of around
3% in
traditional Life reinsurance. The Group's Life reinsurance business
continues
its dynamic policy of development and diversification through
strong new
business production (+15% compared to 2011 results on a pro forma
basis),
particularly in France, Southern Europe and Asia-Pacific, with the
USA
leveraging on the ex-TaRe platform.
Despite a troubled financial market, SGL's portfolio is not impacted
by the
reduction in savings related books throughout the European insurance
industry.
Protection products are holding steady, with the exception of credit
Life
business in France and Southern Europe.
SGL's technical margin is strong (7.4%), in line with the objective set
out in
the Strong Momentum V1.1 plan, and remains stable compared to the 2011 pro-
forma
technical margin which included 1 percentage point of non-recurring items
(GMDB
run-off portfolio reserve release).
SCOR Global Investments (SGI) records a robust return on invested
assets of
3.0 % in the first half 2012, in a record low-yield environment
In an economic and financial context marked by historically low interest
rates
in the major currency zones and by volatility that remains very high,
SGI has
continued its so-called "rollover" strategy, which consists of
maintaining a
relatively short duration of the fixed income portfolio and generating
recurring
financial cash flows, whilst actively managing its invested assets
portfolio. At
30 June 2012, expected cash flows on the fixed income portfolio over the
next
24 months stand at EUR 5.1 billion (including cash and short-term
investments),
the duration of the fixed income portfolio having been kept relatively
short and
stable at 2.9 years (excluding cash).
Since the beginning of 2012, SGI has maintained its prudent strategy.
Cash and
short-term investments have been reduced by EUR 702 million (-6
points),
standing at EUR 2,348 million at 30 June 2012 compared to EUR 3,050
million at
31 December 2011. Having identified the risk of sovereign debt as
early as
2008, SGI has continued to reduce its exposure to this risk (-1 point
over the
first half of the year), and still has no exposure to the sovereign
debt of
Greece, Ireland, Italy, Portugal or Spain, or to the debts issued by US
states
and municipalities. Over the same period, the invested assets portfolio has
been
mainly reinvested in covered bonds and agency MBS (+3 points) as well
as in
corporate bonds (+2 points). The fixed income portfolio (including
short-term
investments) is of high quality, with an average rating of AA-.
In the first half 2012, the invested assets portfolio generates a
financial
contribution of EUR 194 million, representing a return on invested
assets of
3.0% compared to 3.7% for the whole year 2011. The active management
policy
practised by SGI has enabled the Group to record EUR 62 million of
realised
capital gains in the first six months of 2012. The Group has rigorously
applied
an unchanged depreciation and impairment policy to its investment
portfolio, for
a total amount of EUR 30 million in the first half 2012. Excluding
impairments
on the equity portfolio, the return on invested assets stands at 3.4%
in the
first half 2012, in line with the assumptions formulated at the beginning
of the
year. Taking account of funds withheld by cedants, the net rate of
return on
investments is 2.7% over the period, compared to 3.2% for the whole of
2011.
Invested assets (excluding funds withheld by cedants) stand at EUR
13,238
million at 30 June 2012, composed as follows: 8% cash, 80% fixed
income (of
which 10% are short-term investments), 5% equities, 4% real estate and 3%
other
investments. Total investments, including EUR 8,379 million funds
withheld,
stand at EUR 21,617 million at 30 June 2012, compared to EUR 21,053
million at
31 December 2011.
In the 2012 half-year results presentation and in this press release, two
sets
of financial data are used, published accounts & pro-forma information:
1- Unaudited 2011 published half-year report
The unaudited published accounts of H1 2011 do not include
Transamerica Re
figures since it was acquired on 9 August 2011.
2- Unaudited pro-forma information: Half year 2011 information &
quarterly
information
-- Following IFRS 3 guidance - an acquirer shall disclose information that
enables users of its financial statements to evaluate the nature and
financial impact of business combinations that were effected during the
period.
-- The unaudited pro-forma financial information as of 30 June 2011 is
presented to illustrate the effect on the Group's income statement of
the Transamerica Re acquisition as if the acquisition had taken place
on 1 January 2011. These illustrative figures are based upon estimates
and may not comply with generally accepted accounting principles.
-- As a reminder, the disclosure of pro-forma gross written premiums and
pro-forma net income for the period ending 31 December 2011 is included
in 2011 "Document de reference".
P&L Key figures (in EUR millions)
2012 2011 Variation 2011 Variation
H1 H1 (%) H1 (%)
(unaudited*) (unaudited*) (pro-forma)
(unaudited)
--------------------------------------------------------------------------
Gross written 4,635 3,400 36.3% 4,205 10.2%
premiums
-------------------------------------------------------- -----------------
P&C gross
written
premiums 2,255 1,944 16.0% 1,944 16.0%
-------------------------------------------------------- -----------------
Life gross
written
premiums 2,380 1,456 63.5% 2,261 5.3%
-------------------------------------------------------- -----------------
Investment
income 278 343 -19.1% 366 -24.2%
-------------------------------------------------------- -----------------
Operating
income** 320 45 F 74 F
-------------------------------------------------------- -----------------
Net income 206 40 F 185 11.4%
-------------------------------------------------------- -----------------
Earnings Per
Share
(EUR) 1.12 0.22 F 1.02 10.0%
-------------------------------------------------------- -----------------
Net income
excluding
impairments*** 226 37 F 183 F
-------------------------------------------------------- -----------------
F: favourable
* The presented H1 2012 financial results have been subject to a limited
review by SCOR's auditors
** Within operating income, other current operational expenses for
H1 2011 published include EUR 12 million of acquisition related
expenses that have been reclassified in the interim financial
report to the line acquisition related expenses in order to conform
to the presentation within the 2011 Document de Reference. A
conservative approach has been taken for H1 2011 pro-forma figures and
EUR 12 million of acquisition related expenses have also been
included within other current operating expenses.
*** The H1 2012 net income excluding impairments excludes EUR 25
million of impairments, taxed at the year to date effective tax rate of
20.8%.
P&L Key ratios
2012 2011 2011
H1 H1 H1
(unaudited*) (unaudited*) (pro-forma)
(unaudited)
-----------------------------------------------------------------------
Net return on investments(1) 2.7% 3.6% 3.6%
---------------------------------------------------------- ------------
Return on invested assets(1,2) 3.0% 4.4% 4.5%
---------------------------------------------------------- ------------
P&C net combined ratio(3) 93.8% 113.1% 113.1%
---------------------------------------------------------- ------------
Life operating margin(4) 5.4% 7.2% 6.9%
---------------------------------------------------------- ------------
Life technical margin(5) 7.4% 9.3% 8.5%
---------------------------------------------------------- ------------
Group cost ratio(6) 5.3% 5.6% 5.2%
---------------------------------------------------------- ------------
Return on equity (ROE) 9.3% 1.9% 8.8%
---------------------------------------------------------- ------------
1: annualized; 2: excluding funds withheld by cedants; 3: Combined ratio
is the sum of the total claims, the total commissions and the total
P&C
management expenses, divided by the net earned premiums of SGPC;
4: The Life operating margin is the sum of the technical results, the
total investments income from SGL and the total SGL expenses, divided
by the net earned premium of SGL; 5: The technical margin for SGL is
the technical result divided by the net earned premiums of SGL;
6: Cost ratio is the total management expenses divided by the gross
written premiums
Balance sheet Key figures (in EUR millions)
2012 2011 Variation
H1 H1 (%)
(unaudited*) (unaudited*)
-----------------------------------------------------------------------
Total investments(1) 21,617 19,559 10.5%
-----------------------------------------------------------------------
Technical reserves (gross) 23,813 20,819 14.4%
-----------------------------------------------------------------------
Shareholders' equity 4,588 4,009 14.4%
-----------------------------------------------------------------------
Book value per share (EUR) 25.01 21.97 13.8%
-----------------------------------------------------------------------
1: total investment portfolio includes both invested assets and funds
withheld by cedants
* The presented H1 2012 financial results have been subject to a limited
review by SCOR's auditors
Forward-looking statements
SCOR does not communicate "profit forecasts" in the sense of Article 2 of
(EC)
Regulation n°809/2004 of the European Commission. Thus, any forward-
.looking
statements contained in this communication should not be held as
corresponding
to such profit forecasts. Information in this communication may include
"forward-looking statements", including but not limited to statements that
are
predictions of or indicate future events, trends, plans or objectives,
based on
certain assumptions and include any statement which does not directly
relate to
a historical fact or current fact. Forward-looking statements are typically
identified by words or phrases such as, without limitation, "anticipate",
"assume", "believe", "continue", "estimate", "expect", "foresee", "intend",
"may
increase" and "may fluctuate" and similar expressions or by future or
conditional verbs such as, without limitations, "will", "should", "would"
and
"could." Undue reliance should not be placed on such statements, because,
by
their nature, they are subject to known and unknown risks, uncertainties
and
other factors, which may cause actual results, on the one hand, to differ
from
any results expressed or implied by the present communication, on the other
hand.
Please refer to SCOR's Document de référence filed with the AMF
on 8 March 2012 under number D.12-0140 (the "Document de
référence"), for a description of
certain important factors, risks and uncertainties that may affect the
business
of the SCOR Group. As a result of the extreme and unprecedented volatility
and
disruption of the current global financial crisis, SCOR is exposed to
significant financial, capital market and other risks, including movements
in
interest rates, credit spreads, equity prices, and currency movements,
changes
in rating agency policies or practices, and the lowering or loss of
financial
strength or other ratings.
[1]For more information on pro forma data (related to the
acquisition of
Transamerica Re), please refer to page 4 of this press release and page 3
of the
financial presentation, available at www.scor.com.
[2]The H1 2012 net income and return on equity excluding impairmentsexclude
EUR
25 million of impairments, taxed at the year to date effective tax rate of
20.8%.
SCOR Press Release:
http://hugin.info/143549/R/1629644/522258.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Scor via Thomson Reuters ONE
[HUG#1629644]