Moody’s assigns A1 IFSR to SCOR & entities, outlook retained at stable

Global ratings agency Moody’s Ratings has affirmed the A1 insurance financial strength ratings (IFSR) of French reinsurer SCOR and its key operating entities, with the outlook on all retained at stable. Simultaneously, all debt ratings were also affirmed by Moody’s.

Despite rebalancing its underwriting portfolio, SCOR has maintained the strength of its franchise in the global reinsurance market and a high degree of business and geographic diversification, as reflected in this rating action.

The affirmation also reflects SCOR’s improvement in the property and casualty (P&C) reinsurance underwriting performance since 2023, partially due to a reduction in natural catastrophes and negative prior-year claims experience.

SCOR has started implementing a more conservative P&C claims reserving approach which, if concluded successfully, should support lower volatility earnings going forward, Moody’s stated positively.

However, this improvement has been tempered by an assumption review in SCOR’s Life reinsurance segment, which has already adversely affected the firm’s net result for the first half of 2024, which was a negative €112 million. It has also reduced the life contractual service margin and a measure of future profitability.

Moody’s noted SCOR’s capitalisation remains strong, in line with the rating level, however, it is now expected that the firm will maintain its Solvency II ratio closer to the lower end of its target range of 185-220%, at least in the short term, defying previous assumptions of the upper end of its target range.

The stable outlook reflects Moody’s expectation that SCOR will maintain its strong franchise both in the global P&C and Life reinsurance sectors, gradually improve its profitability in both, earnings levels and volatility, and maintain its Solvency II ratio within its target range.

Moody’s will continue to monitor SCOR’s future actions to update its ratings.

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